Twenty-five acres sit empty today on Kauai’s south shore between The Shops at Kukuiula and the Kukuiula Golf Course. It is a vacant, hotel-zoned land parcel in one of the most expensive places on the island, where an 85-room luxury resort was supposed to already be taking guests. Instead, there is open land and a project that never moved beyond the planning stage.
That parcel was meant to become The Ohia at Kukuiula, a $227 million resort pitched as part of the answer to Kauai’s persistent South Shore hotel shortage. Phase one was projected to debut in 2023 and called for 85 hotel rooms and 65 resort residences. The developer also held an option on another 17 acres for a second phase that would have added 150 additional residences. By Kauai standards, it was a meaningful addition to inventory while still not being a mega hotel.
Kupono Resort LLC, the developer behind The Ohia project, filed for bankruptcy protection on July 28, 2025, and on October 27, the case was converted from Chapter 11 reorganization to Chapter 7 liquidation. A court-appointed trustee is now moving to auction the property, with the bid deadline set for April 13.
What went wrong on one of Kauai’s premier parcels.
Kupono Resort LLC purchased the 25-acre parcel in 2021 for $24.24 million from the Kukuiula joint venture between Alexander & Baldwin and Arizona-based DMB Associates. The location was not speculative. It sits within walking distance of shopping and dining and inside one of the most established resort communities on the island. The land was already designated for hotel use, removing one of the biggest hurdles that typically slows projects on Kauai.
Even with those advantages, the economics did not hold. Construction costs in Hawaii have climbed sharply, labor remains tight, materials must be shipped across the Pacific, insurance costs have risen, and financing terms have hardened. When all of that hits at once, projects stall. On Kauai, stalled projects do not quickly swap hands and restart. They sit.
Kauai’s visitor supply is not expanding.
For visitors, this is not just a developer problem. Kauai’s accommodation supply has barely expanded in recent years. Hotels have been renovated and repositioned, but net new room counts have not meaningfully increased. At the same time, vacation rental inventory has been shrinking under legislative pressure and enforcement. The overall direction has been contraction, not expansion.
The Ohia would have added 85 hotel keys to the South Shore. On an island with limited room inventory, that matters. Its collapse reinforces what readers already experience when they try to book a winter week in Poipu and find high rates and thin availability. The squeeze is not just a busy season spike. It reflects land constraints, construction economics, and policy choices that make new builds difficult to execute even on hotel-zoned land.
Land is moving, but not toward more hotels.
While this parcel heads to auction, other land transactions on Kauai are moving toward housing for residents. The Department of Hawaiian Home Lands acquired an 82-unit Waipouli complex for $44 million to house beneficiaries on its waitlist. It also purchased 260 acres in Lihue from Grove Farm for $18.25 million to support roughly 1,100 homesteads, and additional acreage is under negotiation. The movement of large parcels on Kauai right now is largely toward housing and agriculture, not toward new visitor accommodations.
That shift is welcomed by many residents who see housing as the island’s more urgent need. It also means the pipeline for new hotel inventory is extremely thin. When a fully hotel-zoned parcel in an established resort corridor fails to produce a hotel, it underscores how narrow the path has become.
What happens after the April 13 bid deadline?
If a buyer emerges at the April 13 auction and attempts to revive a hotel concept, any new proposal would still face years of design, financing, and construction before opening. The 2023 debut, once attached to this site, is no longer relevant. If the parcel ultimately shifts toward residential use instead, that would further tighten the future path for new visitor rooms on Kauai’s South Shore.
For those who return to Kauai regularly and have watched it get harder and more expensive to book, this empty stretch between the shops and the golf course is not just a failed deal. It is a visible reminder that new hotel supply is not easily coming.
When you drive past that site, does it look like a temporary pause, or does it feel like the new normal for development on Kauai?
show_temp-compressedGet Breaking Hawaii Travel News
I just passed that open area 20 minutes ago. While a new resort/residence facility would help resolve the south shore’s growing lack of available rooms, I seriously doubt the area could sustain it without some major infrastructure improvements. The road from Poipu to Koloa is already quite busy, and a facility like this would only exacerbate the situation. But, as the saying goes, progress is inevitable.
We seriously do not need more resorts and hotels, or luxury homes on Kauai. We need responsible land management that preserves communities and we need an economic development policy that is not heavily dependent on tourism or real estate sales. There are plenty of hotel room and job vacancies already. Note: the Nov. 2025 ICE operation on Kauai targeted Venezuelans who were working in the hotels. These are jobs that are not being filled because the pay is too low and not that fulfilling. Don’t do this to our kids. Develop an economy that serves the communities, the voters, the residents, the future, Not the offshore developers and you will preserve Kauai as a place people want to visit. Think New Zealand as a model…not Maui. It concerns me that developers get so many breaks on our island, think the Coco Palms, while the kids who grew up here get nothing but low pay and a way of life that serves visitors and second home owners before it honors those who call Kauai home.
Eō! This applies to all of Hawaiʻi. Far too much money and too many resources are spent on low-paying, dead-end jobs servicing visitors, and benefitting only off-island investors. We need to find a way to turn this around to make Hawaiʻi work better for its permanent full-time residents.
Too bad. The Resort was private funds. The ” 82-unit Waipouli complex for $44 million to house beneficiaries” – Is that $536,000 each unit – and are the beneficiaries getting low cost housing? More taxpayer funds that will likely not be a good “investment”.
Hello!! From Texas, um….I have never been to Hawaii. Nor have I ever been in a place. Im 65. One day I would love to see the island on person. I’ve only seen it in movies and pictures. It’s so beautiful. I sure hope that when I do get to visit it will still be beautiful. I love the sea. Thank you.