Kokua Hospitality, Host Hotels increase Hawaii hotel's NOI 300 percent

After a $45-million renovation and repositioning, the Hyatt Place Waikiki Beach saw significant jumps in many key metrics.

When the Ocean Resort Hotel Waikiki completed a $45-million renovation that saw a repositioning to the Hyatt Place Waikiki Beach, the hotel’s management company Kokua Hospitality, LLC was able to turn some impressive numbers.

The San Francisco-based company partnered with the actively involved asset-management team from Host Hotels & Resorts, the hotel's owner, to increase net operating income by 300 percent, according to Kokua's president, Kirk Pederson. Together, Kokua and Host achieved a total revenue increase of 68 percent, while the revenue per available room index grew 83 percent. For the year following the renovation and repositioning, the hotel achieved 194-percent RevPAR growth.

“That same year, government and military transient revenue increased substantially and overall group revenue grew by over 100 percent by developing a new marketing strategy to target corporate accounts, government and military demand, and layering in higher-rated groups,” Pederson said.

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To achieve such significant jumps in key metrics, it took a little strategy. The team strategically instilled proper presell best available rates, established group sales selling guidelines and contracted with wholesale partners as early as possible, according to Brian Bolf, VP of profit optimization for Kokua.

“It was key to fully understand and respect the dynamic wholesale partnerships in Hawaii and provide accurate and timely property updates to these critical partners throughout the entire presell and opening periods,” he said. “In addition, marketing campaigns with airline partners were combined with the careful consideration and scheduling of local and national awareness promotions.”

Staying Strong in a Saturated Market

Bolf said that the partnerships established early on with wholesale and online distribution resources helped to strengthen the property in a market saturated with new players.

“Similarly, staying abreast of the changing market conditions, as well as airlift revisions, provides critical insight that impact our marketing initiatives,” he said. “Applying market knowledge and utilizing available distribution channels effectively within all available revenue-management platforms continues to lead to our successful performance for the Hyatt Place Waikiki Beach.”

Reading the constantly changing market dynamics was and still is key to success in Waikiki, according to Pederson.

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“It helps to have an owner like Host that is committed to long-term performance and supports the management team through their highly engaged asset-management efforts,” said Pederson.

“We purposely and continuously attempt to remove hotel bias and try to place ourselves in the shoes of today’s traveler,” Pederson adds. “We make every effort to ensure that our properties are positioned strategically and are top-of-mind for an aligned traveler by highlighting specific key selling advantages.”

To other hoteliers who are trying to drive numbers in oversupplied markets, Pederson offered a bit of advice.

“Never lose sight of what today’s traveler is looking for and what is important to them,” he said. “Embrace the unique personalities of your assets and ensure that your marketing dollars are targeted toward your ideal guest and aligned with each property’s long-term goals.”

Additionally, he encouraged other hoteliers to never be satisfied with their selling practices. Hoteliers need to take risks and test the market, review room type differentials, create upsell opportunities and continue to foster relationships with travel providers within all segments, and further, they should enjoy doing it.

“There are many changes ahead for all of us in this industry. Buckle up and be prepared to shift gears quickly,” Pederson said.

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