LOS ANGELES — The Hawaiian islands suffered acute tourism losses when borders shut down to international travelers, but Jeff Wagoner, president and CEO of Outrigger Hospitality Group, said the lure of resort travel over the last two years has kept Hawaii a destination of choice.
The company has 12 resorts on the Hawaiian islands, with others in Thailand, Mauritius and Fiji.
A boom in travel from the continental U.S. to Hawaii picked up during March and April of 2021, Wagoner said, supported by airlines adding new routes.
“You had Phoenix coming in, you had Long Beach, you had San Jose, flights from Boston, flights from Orlando, all coming into Hawaii,” Wagoner said, creating demand to make up for the loss of international tourism.
Domestic travel picked up even more into last summer. Hawaii's 2021 hotel occupancy hit a high in July of 82.4%, according to STR data. STR is CoStar’s hotel data analytics firm.
That travel boom helped Wagoner and his company learn a lot about travel behavior.
People traveling to the Hawaiian islands in the last year “really did want the Hawaiian experience,” he said. “They wanted a resort experience.”
And the pandemic didn’t alter much about what guests wanted from the company’s resorts.
“We forecasted 70% of people wouldn’t want [daily housekeeping], and in fact, 90% to 95% of people wanted it,” he said. “They still wanted their traditional resort stay.”
In many cases, they wanted more, he said.
“The thing that surprised us the most was that people wanted to pay for services like oceanfront rooms or club-level rooms,” he said. “They had the income to be able to do it, they hadn’t traveled for a long time, and they wanted that experience to be the best.”
The hotel labor picture across Hawaii is not as rosy, however.
Food-and-beverage roles are tough to fill, Wagoner said, and while it’s not been difficult for Outrigger to fill traditional front-desk or housekeeping roles, “there’s going to come a time when we’re going to need more employees on the Hawaiian island, and we’re going to have to start pivoting and thinking about the future of employment in Hawaii,” he said.
Development and Expansion
Denver-based private equity investors KSL Capital acquired Outrigger Hotels & Resorts in 2016, and the brand has been on an accelerated growth trajectory since.
Last August, the company announced its acquisition of three beach resorts in Thailand, which were rebranded as part of the Outrigger portfolio. Two are open now, with the third projected to open this summer.
After the pandemic paused the company’s acquisition of the Sheraton Kona Resort & Spa at Keauhou Bay on the island of Hawaii, Outrigger completed the purchase last July and re-branded and reopened the resort in August as Outrigger Kona Resort and Spa.
In addition to its branded resort hotels, Outrigger includes three hotel properties the company manages outside of the Outrigger brand, as well as 16 vacation condo-resort properties.
Currently Hawaii requires international inbound travelers be fully vaccinated and have a negative COVID-19 test result. Domestic travelers do not need to test or quarantine any longer.
That international travel recovery will provide a big boost not just to Hawaii but to all of the U.S., Wagoner predicted.
“The first half of 2022 is still going to be a little soft, and there will be peaks and valleys we’re going to deal with, but I truly believe when we get into the summer of 2022 and we start to get international trips coming back to all locations, not just Hawaii, I think we’re going to see a more robust recovery,” he said.
For more from Hotel News Now’s video interview with Outrigger Hotels & Resorts’ Jeff Wagoner, watch the video above.