The employees and businesses at the Outrigger Keauhou Beach Hotel learned Wednesday afternoon that the hotel will close effective October 31, 2012. Kamehameha Schools President Dee Jay Mailer, Kamehameha Investment Corporation CEO Kyle Chock, and Outrigger Hotels executives had a meeting with the hotel employees at 2 p.m., the businesses at 3 p.m., and the hotel management team members at 3:30 p.m.
Kamehameha Investment Company is the for-profit subsidiary of Kamehameha Schools. They own and manage not only the hotel, but the Keauhou Shopping Center. In a release, Kamehameha Schools said they will close the hotel because financial losses have been significant for the past six years, the cost of renovating the hotel would be prohibitive, and the vision of Kamehameha Schools has shifted away from resort operations and towards a culture and ‘aina based learning center. They plan to tear the hotel down. One Kamehameha Investment Corporation executive said they’re waiting for demolition permits now, indicating this move has been in the works for some time.
Wally Ishibashi of the union, ILWU, was at the meeting. He said the union learned at 12:30 p.m. Wednesday that the hotel would close. He said he was disappointed that the hotel’s owners did not give them more than 90 minutes advance warning, although they did tell them last evening they would be having an employee meeting but not what the topic was. Ishibashi said they have full confidence the employees will find good jobs at other local resorts. Kamehameha Schools said there are 112 employees affected by the closure.
Anabelle Smith is the Director of Sales for Outrigger Keauhou Beach Resort. She said she was very disappointed that Kamehameha Investment Corp. did not focus more on the hotel. She was angry that thirty days ago, KIC Chief Executive Kyle Chock told her and other management employees that the hotel would be open for the forseeable future, and they could feel confident in booking group meeting reservations. She said the question came up specifically about the Aloha Music Camp, which Keola Beamer holds twice a year, with the next scheduled for early 2012. Smith said now she has dozens of groups to try to rebook into other area hotels. She said the groups’ reservations include meetings, hotel rooms, and food and beverage events and go from November 1 into 2014.
Outrigger Hotels Executive Vice President Barry Wallace said their focus, as the union’s, is to assist the employees in transition and ensure all that want them, receive good jobs. They plan to hold a job fair in September and bring in other hotels to interview the employees.
The employees were saddened at the news. Most had been part of the Keauhou Beach Hotel team for years. There were lots of tears.
Business owners said they were told that Kamehameha Investment/Kamehameha Schools will help them find other space at Keauhou Shopping Center if they wish to stay in the Keauhou area. Some of the businesses affected include Aloha Kona Realty, the Kailua Village Artists Cooperative, and Kalona Spa. There is also a separate tennis operation, Island Slice, under the management of Rudy Embernate. Embernate said Wednesday that he has a five-year contract with KIC, with four years left to go. KIC said the tennis courts may stay open after the closure, but Embernate said he has not yet spoken with KIC about the matter. There was also no word on what happens to the annual fees paid in advance by the members if the courts shut down.
Kyle Chock of KIC and Dee Jay Mailer of Kamehameha Schools left through the back door of the meeting room, saying they had a press briefing to attend, and did not speak with reporters waiting for them at the front door of the meeting room.