Does Halekulani Closure Forecast Future of Hawaii Hotels?

Does Halekulani Closure Forecast Future of Hawaii Hotels?

Halekulani closed in March for a planned shuttering through April. Now, however, plans have changed drastically given today’s circumstances. The hotel plans to remain closed until July 2021. Let’s hope by then the world will be different. The question remains however as to whether this may hint to the future of Hawaii hotels?

With circumstances changing almost daily, including with the prevalence of the virus, governmental guidelines and decrees, personal protective equipment, social distancing, and new cleaning and hygiene protocols, we’ve also had to calculate how soon domestic and international tourism might rebound, and how quickly business in Hawaii ― and Waikiki specifically ― might recover.” – Halekulani COO Peter Shaindlin.

Tens of thousands of Hawaii jobs are at stake with the University of Hawaii reporting more than 43,000 worked in the accommodations sector last year, and another 112,000 worked in restaurants and bars.

Hawaii hotels previously indicated that they needed a start date to be certain and were planning August 1. The governor’s further extension this past Monday to August 31, leaves hotels in doubt, because the new date is not a sure thing.

The state’s hundreds of millions in hotel tax revenue is at stake. Also not helping is the closure of the former Princeville Resort Kauai (aka St. Regis Princeville).

That was mostly part of a planned multimillion-dollar makeover. It is scheduled for reopening in November 2021, as 1 Hotel Hanalei Bay, which is the flagship wellness brand of Starwood. When it reopens, it will have 252 guest rooms, of which 51 are suites, and an 18,000 square foot spa and fitness center together with a wellness center. Again, it’s future may be in doubt.

On the national scale, Chip Rogers of the American Hotel and Lodging Association said 8,000+ U.S. hotels could be forced to close by September.

“If business travel doesn’t pick up by this fall, and the PPP funding has run out, then the really bad problem that exists today is going to result in massive foreclosures for hotels,” he said. 

Rogers has asked Congress to help before that happens. “Give them a low-interest loan, give them something where they can just stay afloat because that is all they are asking for.”

The summer should have been the peak season for Hawaii hotels. But it has been anything but. Without hotels, tens of thousands of Hawaii workers will be without jobs. Federal legislation may be coming to help save these properties and the future of travel.

17 thoughts on “Does Halekulani Closure Forecast Future of Hawaii Hotels?”

  1. Hopefully the Federal legislation to save the hotel properties extends to owners of short term vacation rentals. So far, we haven’t qualified for the PPP program (we pay 1099 wages and cleaners send us invoices), SBA small business loan program (can’t use it to pay down mortgages), and the Hawaii small business relief program (must have a business address, can’t be your home address) have all disqualified us. In addition, we have to pay hotel property taxes at 4 times the rate of residential real estate while having no business since the end of March. We’ve had to cash out our retirement to pay the mortgage, homeowners association and property taxes.

  2. Halekulani and Royal Hawaiian were favorites. I lived in Honolulu for 12 years and spent many an evening enjoying sunset Hula and dinner across from the ocean. Let’s hope that this and other iconic historical spots like it survive and thrive!
    Suzanne and Ron S.

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