Local tourism executives say the key to success of expansion at the Turtle Bay Resort will be community support.

"If we lose (the support of) our residents, we darken the future of tourism," said Rex Johnson, president and CEO of the Hawai'i Tourism Authority. "The most important part of the infrastructure of tourism is not a hotel room. It's our residents who exude aloha to visitors all the time."

The plan for 3,500 new hotel rooms and condos at Turtle Bay may help reverse a trend toward fewer rooms on O'ahu. Many hotel rooms have been converted to time-shares and condominiums or closed for renovation. O'ahu hotels have been enjoying occupancy rates around 85 percent. Travel agents have complained that the lack of rooms means some visitors go elsewhere.

"From a pure product standpoint, the industry is up against a situation where more available accommodation units would probably be good, because we are in a situation where we're running pretty much at capacity during the busy times of the year," Johnson said. "On the other hand, this certainly has to be balanced against the wishes, needs and will of the community because the industry certainly does realize that lifestyle issues come into play whenever developments like this get mentioned."

Tourism executives encourage any hotel developer to work with the community on expansion plans.

"As a member of the community I've always wanted to have the projects that we do supported by the community in which we do business," said David Carey, Outrigger Enterprises Inc. president and CEO. "I think it's incumbent on any developer ... to spend the time to make sure the community is supportive of what you want to do. And if they are, then that's great. If they're not, then that makes it more challenging."

STANDALONE HOTEL

Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawai'i and French Polynesia, noted the falling number of hotel rooms on O'ahu and said visitors are always looking for markets beyond Waikiki.

"So I think the development in these targeted areas of the North Shore or Ko Olina is expected and probably well-received by the visitors," he said. Vieira also said the industry needs to look at sustainable managed growth and what's important to the community.

"All the stakeholders of the community, government, industry, etc. have to make sure that there's good dialogue about what the right thing to do is," he said. "And it's probably a good time for that dialogue. ... When you look at over a length of time strategically, you have to decide what's going to benefit a community balanced with what the effects are on the community. Because these were projects that were discussed for 20 years, it's not a surprise and we'll just have to follow it as we go forward."

Joseph Toy, president of hotel consultancy Hospitality Advisors LLC, said while the North Shore is definitely a niche market with legendary surf spots, the destination is considered seasonal given the high waves and rain during the winter months.

"But Turtle Bay as a standalone hotel would certainly work better if it had the additional infrastructure, if it had more of a critical mass to it," he said. "In general when you have a standalone property in a comparatively remote destination, it's typically more difficult than if you have a critical mass that creates its own activity, such as Ko Olina. In similar fashion, the Ihilani faced a lot of difficult years being the only hotel in a fairly remote location, and it's only now that we begin to see the critical mass developing with the time-shares and the additional condominiums along with the golf course. It is now creating enough activity where it's becoming an attractive destination."

MARKET IMPACT

Toy said he doesn't know enough about the expansion plans to gauge what the impact on the market would be.

"But it certainly will create a lot of jobs and the travel market always looks for new product, so I think that there will be interest, but to what level it's hard to say."

The Outrigger's Carey said that strictly from a hotel standpoint the resort needs the development to draw more visitors and noted it would increase tax revenue and job opportunities for area residents.

"I think for this island it's probably a positive development so that there are multiple resort choices on this island," Carey said. "You have the exciting urban environment that Waikiki now provides, you have Ko Olina, which is much more of a residential type of environment, and then you have the North Shore neighbor island right on the same island. I can certainly see selling that to a customer and having enough stuff out there. I think the basic challenge for them is can the neighborhood support that kind of radical change. And that's obviously what's in play at the moment.

"From just a pure intellectual standpoint it makes sense," he said. "I think the harder question which has obviously been raised is is it right to do that out there at this time. ... You can certainly make the case that there's demand for additional hotel rooms, but the question is, is that the right place for the community."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.