Groundbreaking for the Westin Princeville on 18.5 acres above 'Anini Beach follows Starwood's April announcement that it would add a second time-share property with 258 units on Maui next to its recently completed 280-unit Westin Ka'anapali Ocean Resort Villas time-share.

"There is a great demand for high-end vacation ownership in Hawai'i," said David Matheson, spokesman for Starwood's time-share division, Starwood Vacation Ownership Inc. "Hawai'i is a very good market for us, and we continue to look at the opportunities on all the islands."

Starwood and other major hotel companies such as Marriott International and Hilton Hotels & Resorts have largely driven the explosion of time-share sales over the last few years in Hawai'i, a state with time-share inventory that is exceeded only by Florida, California and South Carolina.

Industry officials say the time-share boom is good for Hawai'i's hospitality business because it brings repeat visitors who tend to travel in larger parties, stay longer and spend significantly more per trip.

According to a recent state Department of Business, Economic Development & Tourism report, there were 6,026 registered time-share units as of May 2004, representing 8 percent of all visitor lodging units in the state.

An industry study last year put Hawai'i's time-share inventory in 2003 at about 5,000, up from about 4,000 in 2000 and about 2,000 in the early 1990s. The study said about 700 units were under development, with another 2,500-plus planned for delivery in the next five to 10 years.

Among some of the planned projects are a 38-story tower by Hilton in Waikiki, a 1,000-room hotel/time-share combo at Ko Olina Resort & Marina, a separate 750-unit Marriott project at Ko Olina, and conversions of the Maui Marriott hotel, two Outrigger hotels in Waikiki and 80 units in the Ilikai Renaissance Waikiki hotel.

Time-share sales, which typically consist of 52 buyers owning one week's use of a unit per year, can generate big up-front returns for developers that often collect annual maintenance and management fees on top of sales proceeds from time-share properties.

For instance, Hilton projected that sales from its planned tower could be $474 million over six years based on one-week interval prices between $21,000 and $47,000 for 350 units.

Matheson said prices for one-week intervals at the Westin Princeville have not been finalized. At the Westin Ka'anapali, prices for one-week intervals ranged from about $30,000 to more than $100,000 and are virtually sold out.

The Westin Princeville consists of two-bedroom villas in seven two- and three-story buildings with 179 time-share units and six hotel units plus a two-story clubhouse.

Starwood bought the property in August 2002 for $15 million, according to property records. Matheson said the company spent more than two years collecting community input, designing the project and obtaining permits.

During that time, a partnership of investors led by Ko Olina master developer Jeff Stone bought Princeville Resort, including 9,000 acres under and around the 252-room Princeville Hotel managed by Starwood, two golf courses, undeveloped land and other property from three Japanese companies doing business as Princeville Corp.

Stone intends to make the underperforming Hanalei resort community one of the state's major resorts by adding one or two more name-brand hotels, homes, employee housing and other improvements over the next decade.

Kaua'i Mayor Bryan Baptiste in a statement yesterday said the Westin Princeville will bring valuable jobs and revenue to the island, and enhance its tourist industry.

"We want to congratulate Starwood on an outstanding project design and look forward to the opening of the Westin Princeville Ocean Resort Villas," he said.