Travel Weekly's contributing editor for Hawaii, Shane Nelson, spoke recently with Roseann Grippo, the general manager at the Kahala Hotel & Resort on Oahu, about the luxury segment in Hawaii's hotel industry and her expectations for the market in 2012Travel Weekly: How was your business in the luxury sector during 2011 compared with 2010?
It's great. We've seen a tremendous amount of pickup, especially in the luxury segment. We've truly enjoyed some great new business from New Zealand and Australia, and the Chinese market continues to grow, as well. We think there is definitely a trend for people enjoying life more with the economy coming back a little bit from 2010.
We've [also] seen great pickup from the West Coast. The California market is very strong, and again, we [saw] more people travel in and out of Hawaii in 2011 than we did in 2010. You can look at vacation production numbers and see that, but more so in the luxury segment, because people may not be taking vacations quite as often. What they are doing is making sure that the vacation they take is more meaningful. We're also seeing a lot more families and honeymoon couples from the West Coast. That's a strong part of our business.
The luxury market has been a little bit more resilient than, say, your conference business or your business travelers. People were using more technology to do meetings and things. Corporate America wasn't doing as many meetings as they had in the past. People who generally tend to travel and stay in luxury-segment hotels didn't really slow up a whole lot for us. The only time that we saw a significant downturn in business was after the tsunami [in Japan], because we have so many visitors from Japan and that market definitely came to a quick halt. TW: Did you increase average daily rates for rooms and suites at your property in 2011?
Yes. I would just say that it's not been a considerable amount but definitely within our forecast. The reason for that is, again, the economy coming back and our rates staying strong, and that's not only at our hotel but at our competitors, as well. We have new hotels in our luxury segment with Trump [International Hotel at the Waikiki Beach Walk] coming onboard, the Modern Honolulu coming onboard and another strong contender, that always will be, is the Halekulani. All of our competitors' rates really have been in a very competitive race. TW: In 2009 and 2010, there was a lot made of shrinking booking windows to the Hawaii market. Did you see those windows increase any in 2011?
I don't think it really makes a difference whether it is people in the luxury market or not. You may plan a vacation three months out, whereas a few years ago it may have been a year out. And I think that has to do with what people are doing in their personal lives and what the airlines are doing. The airlines make a huge difference. If the airlines go on sale, you might decide from L.A. that you're going to jump on a plane and go to Hawaii. It certainly has everything to do with what the airline rates are, what the flight loads are. So those windows have definitely shrunk over the course of the last couple of years. TW: No sign of those growing this year vs. last year?
I think maybe a little in our group segment and with our travelers from New Zealand, Australia and China. For them, there's a much a larger booking window than that of our domestic and West Coast travelers. TW: Can you talk about what your property offers agents looking to sell to the luxury market?
Suites, resort amenities; we try to customize as much as we can for our wholesalers or our travel agents for what their customer is looking for. Believe it or not, in the luxury segment, it's becoming more family-oriented than I've ever seen it in the past. We're doing a lot more things geared toward the family, and I think that shows that while luxury is still very important to individual travelers, it's also become important to the Generation Xers who say, "I now have children, and I still want to travel to a luxury hotel. What things do you offer my children?"
We do educational programs for children. At our particular property we have a Dolphin Quest program, which teaches children about [marine] mammals and all of the different things that happen in the water. We're doing a lot of family activities where they can do hikes, bike tours. We're doing things that allow a lot of interaction, we offer stand-up paddle-boarding, a lot of health and fitness, children's menus that are geared toward nutrition, things that are very important to our customer and to their family facet, as well. TW: What distinguishes the Hawaii luxury market from some of its competitors, such as Mexico or the Caribbean?
Our philosophy in Hawaii is teaching people about the Hawaiian culture, where we came from, [which] countries contributed to the melting pot in Hawaii and made Hawaii what it is, whether it be the Portuguese, the Japanese, Okinawans. We have about seven distinctive ethnic backgrounds that really created the melting pot for Hawaii. We have a lot of educational opportunities, whether it's going to see the volcanoes, going to see our natural reefs. The fact that Hawaii has flowers and plants and birds indigenous only to Hawaii makes this place amazingly different than other vacation destinations. We also have, in Hawaii, some of the best chefs in the country. Most people 10 years ago didn't think of Hawaii's food as anything more than a pineapple on a plate, and we have actually created some of the best chefs that have been honored at the James Beard House. TW: What's your advice for agents looking to increase their luxury business to Hawaii?
I think the first thing is getting out to Hawaii. A great way to sell it is to not only come to Oahu but then also do a neighbor island trip. The nice thing about Hawaii, that really is different than anywhere else, is in 20 minutes you can be on Maui. By the time you're on the plane, you're up, you're down and you can be on another island, and you really can't do that anywhere else. Our islands are distinctly different, and you can really sell that. TW: What are your expectations for the Hawaii luxury market in 2012?
People aren't waiting anymore. After the tsunami and the different natural disasters that I've seen, whether it be domestic or abroad, people are saying, "I'm not going to wait for that vacation. I'm going to do it." I think that's made the future for Hawaii better and brighter than ever. ... And if you look at the flights, we now have more than we've ever had coming in and out of Hawaii, and it makes it a pleasure to fly directly to Hawaii. I think that's why we're seeing more children, because it's not as difficult. You don't have to do the layovers and flight changes, because there are so many direct flights in to Hawaii. The fact that they're adding flights into Hawaii is a great sign. Let's hope that the airlines continue to understand the importance of keeping pricing reasonable. ... I think that if each one of us could give the airlines any kind of advice, it would be keep the price reasonable, and we'll fly on your airlines.