posted in: September 2008 | 0

Does O`ahu’s visitor industry even need Kuilima to expand? Given the fact that occupancy rates reach about 90 percent during peak months, some might say yes. But in 1986, in justifying its decision to approve the redistricting of Kuilima’s 236 acres, the Land Use Commission relied on projections that have fallen so astronomically short that they inevitably lead to the question of whether the expansion should have been approved in the first place.

In 1985, O`ahu’s 38,600 visitor units made up 58.6 percent of the statewide total and many people believed the island could handle thousands more. The 1985 Ko`olauloa Development Plan anticipated an additional 4,000 units at the Kuilima resort, and an October 1985 report by Hallstrom Appraisal Group, Inc., predicted that the demand for resort units on O`ahu would grow to 59,700 by the year 2000.

In the “need for the proposed development” section of its decision and order, the LUC wrote, “Hallstrom anticipates that [Kuilima] Resort could absorb between 5,000 and 6,000 resort units. Hallstrom also indicated the demand for resort condominiums at the Resort will exceed demand at other resort destinations because: lack of proximate competing inventory, O`ahu’s recognition as a visitor destination area, and a low sales price.”

But between 1985 and 2007 (the most recent year for which data is available), resort units statewide have increased by only 7,301, and all of that growth has occurred on the outer islands. On O`ahu, the number of units has actually dropped to a little less than 34,000. According to the Hawai`i Tourism Authority, the decrease on O`ahu can be attributed to the renovation of several older Waikiki properties and the transition from hotel to condominium properties.

While the number of units has decreased, hotel occupancy has increased on O`ahu, and the HTA’s O`ahu Tourism Strategic Plan states that the island may not have sufficient units to attract many more visitors.

“By 2010, it is estimated that there will be a net loss of 1,396 hotel rooms, offset by gains of 1,185 new timeshare units, and 1,169 new visitor condominiums. The greatest hotel room losses will occur in Waikiki, with growth in hotel rooms occurring on the Leeward Coast. This trend will affect the mix of visitors attracted to O‘ahu because timeshare and condominium visitors tend to be repeat visitors who visit fewer attractions and undertake fewer activities. Hotel visitors are more likely to be first-time visitors who participate in a greater number of activities. Likewise, the conventions, meetings, and incentive market for business events rely on hotel room availability to support these events,” the plan states.

While this scenario seems to suggest that KRC’s plans to build 2,500 more hotel rooms and 1,000 more condo units might offset the loss of visitor units on the island, questions remain over whether the communities surrounding the resort still favor that much growth.

During the most recent public hearings for the update of the Ko`olauloa community plan, which was supposed to have been updated a few years ago, Defend O`ahu Coalition’s Mark Cunningham says, community members had drafted language that would have amended the plan’s previous support of the expansion. However, he said, that process has stalled since “the city seems to have run out of money for that and ceased having meetings.”

— Teresa Dawson

Volume 19, Number 3 September 2008

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