HILO, Hawai'i — The new owner of the newly named Naniloa Volcanoes Resort plans to keep the landmark Hilo hotel open during renovations, closing off two floors at a time to overhaul the rooms and meeting areas.

Ken Fujiyama, chairman and chief executive officer of Hawai'i Outdoor Tours, Inc., said he also plans to hire "a lot more people" after Fujiyama laid off almost the entire original Naniloa staff. About 120 unionized hotel employees lost their jobs after the sale of the hotel.

The ILWU, which represents about 4,000 Big Island hotel workers, said Outdoor Tours apparently wanted to drive out the union with its mass firings.

Fujiyama, a Hilo businessman, was the high bidder at a public auction last year for the state lease on the land under the hotel and a golf course across Banyan Drive from the hotel.

The hotel had about 200 rooms filled this weekend, and is booked up for next weekend, Fujiyama said. He said he is operating the facility with new staff, with staff hired from the old Naniloa operation, and staff from other properties Fujiyama's company operates, including Volcano House and Nani Mau Gardens.

As a condition of the state lease Fujiyama is required to spend $5 million on renovations of the hotel, which he said has 325 rooms, including 10 that are "out of commission." He said another 65 rooms were never opened, and the renovation effort will bring those rooms on line, he said.

In a written statement released yesterday, Fujiyama outlined plans to "create Hilo as a destination resort" that is the closest resort to Hawai'i Volcanoes National Park and many of the adventure spots on the Big Island.

To assume the new 65-year lease for state land under the Naniloa and the Banyan Drive golf course, Fujiyama's company had to agree to pay $6.1 million to the former owners, Hawai'i Naniloa Resort LLC.

Fujiyama also agreed to pay the state a base land lease rent of $500,000 a year or 2 percent of gross revenue, whichever is greater.

Reach Kevin Dayton at kdayton@honoluluadvertiser.com.