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Jul 13, 2016

Pacific Beach Hotel Undergoing $115 Million Makeover

By Allison Schaefers, Honolulu Star Advertiser

The Pacific Beach Hotel is undergoing a $115 million redevelopment, the property’s largest overhaul since the 1970s and its first major investment from majority owner Highgate.

The property, which will continue to operate during renovations, is expected to reopen as the ‘Alohilani Resort at Waikiki Beach next summer. The 18-month renovation began in March with a revamping of the property’s 839 guest rooms and suites. Redevelopment will enter its second phase next month with major improvements to the hotel’s exterior facade and public areas. The renovation is geared to changing the hotel from a 3.5-star property into a 4.5-star property, with attributes worthy of an upper, upscale hotel category and higher average daily room rates. The Rockwell Group, which did the luxurious Andaz Maui at Wailea, has been selected as the resort’s designer.

The reinvestment, which is on the scale of Blackstone’s infusion after purchasing the Hyatt Regency Waikiki Beach and the Sheraton Waikiki’s 2011 renovation, also aims to make guests aware of the property’s heritage. The hotel sits on Queen Liliuokalani Trust land, and the area surrounding it once housed the last reigning monarch’s home and beach-side cottage. The resort’s new name, ‘Alohilani, which means “heavenly brightness,” honors Queen Liliuokalani, who named her property Kealohilani, which means “royal light.”

“Understanding the hotel’s reputation as a top resort on Oahu, coupled with its ideal location in the heart of Waikiki and spirit to serve, our team is delighted with the opportunity to welcome our guests to an all-new experience next year,” Rob Robinson, Pacific Beach Hotel general manager, said in a news release. “We’re committed to honoring our unique history and the Hawaiian culture in a thoughtful and authentic way which will serve as the foundation for everything that we do, from our cultural programming to our elevated levels of service.”

Robinson said redevelopment plans began when Highgate took over management of the property for former majority owner HTH Corp. in November 2012.

“We had not identified the scope, but we realized pretty early on the opportunity to spend the extra money and have it be a repositioning project,” he said. “We’ve been working on those plans for about three years. It’s the largest reinvestment project at this property in decades.”

The hotel, which was built by Andre Tatibouet, opened in the 1960s. It was later purchased by Herbert Hayashi, who added a second tower and the hotel’s 280,000-gallon saltwater aquarium. In the past decade, little investment was made in the hotel, which was locked in acrimonious legal battles as workers fought for a union contract under the International Longshore &Warehouse Union Local 142. Shortly after Highgate’s entry, workers ratified their first contract.

Robinson said the property’s location across the street from a beach park and the configuration of its two towers provide virtually unobstructed ocean views. That’s part of what made it so attractive to Highgate, whose global property portfolio exceeds $10 billion in assets, said Kieth Vieira, principal of KV and Associates Hospitality Consulting, a project consultant. Vieira said Highgate is a dominant player in U.S. gateway markets including New York, Boston, Miami, San Francisco and Honolulu, and has an expanding presence in key European markets.

“They are good at renovations and at revenue management, and they saw tremendous opportunity in Waikiki,” he said.

Rick Egged, president of the Waikiki Improvement Association, said the redevelopment, which is one of the largest single-property reinvestments in Waikiki, shows Highgate’s commitment. The company also owns the Ambassador Hotel Waikiki and the Courtyard by Marriott Waikiki Beach, he said.

“The fact that they have become a significant Waikiki player is a very positive addition to the flags that are in Waikiki,” Egged said. “The Pacific Beach Hotel hasn’t had this kind of makeover since it was built. I think it will be a tremendous addition to Waikiki. “

With the added investment, Vieira said, the property likely will increase its average daily room rate from a range of $190-$210 to $260-$280.

Robinson said the transformation planned for the hotel’s public spaces also will include new guest services and concierge areas, an exclusive group arrival lounge and a business and education center. These improvements will allow the resort, which has the third-largest ballroom in Waikiki, to make greater strides into the group travel and incentive markets as well as the wedding market, Vieira said.

“They’ll also see more honeymooners, silver-market travelers, office ladies and higher-spending U.S. travelers,” he said.

Robinson said Highgate is putting all its managers and associates through a retraining process leading up to the relaunch of the hotel, which will have higher delivery expectations. While there will be some reprogramming of the resort’s food and beverage offerings, Robinson said that Highgate is doing its best to retain everybody.

“We are working very closely with the union to make sure that we have good outcomes,” he said.

If there is an impact on jobs, it’s most likely to come from restaurant changes. The Oceanarium restaurant is scheduled to close Aug. 31, and the Aloha Center Cafe will close after the New Year’s holiday. A new lobby bar that will offer drinks, snacks and morning coffee service is slated to open in February. The new 17,000-square-foot fifth-floor pool deck, which will feature two pools and beach concessions, also is expected to begin offering all-day food and drink service in the fourth quarter of 2017.

The second-story 24 Hour Fitness is moving out Nov. 1 to make way for a Morimoto Asia, which features Japanese, Chinese, Korean, Malay and Asian-street food specialties by celebrity chef Masahuru Morimoto. Morimoto’s Momosan, a casual beer garden, which serves ramen, yakitori and various small plates, will take the Aloha Center Cafe’s ground-floor space.

The aquarium, which closed May 9, also will be overhauled. Vieira said the saltwater aquarium will be home to more than 1,000 marine animals. The interior of the aquarium also will include all-new coral reef formations that mimic those found in the water off Waikiki Beach.

“Education will play a key role in our new Oceanarium experience, and we look forward to offering unique programming to our guests that will promote greater awareness and appreciation for the ocean,” Robinson said.

Vieira said other ways that the resort will develop its Hawaiian sense of place will be by developing pocket gardens to bring the queen’s favorite tropical flowers inside. There will also be a music room with information about Queen Liliuokalani’s musical endeavors.

“She composed more than a hundred songs,” Vieira said. “She has such a revered position in Hawaiian culture. We want to make sure that the hotel experience accurately tells her story.”

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