posted 10-21-2004 05:29
Waikoloa will get $80M time-share complex
Prabha Natarajan
Pacific Business News
Hilton is building an $80 million time-share project at its Waikoloa Beach Resort on the Big Island.
Developers broke ground last month on 120 two-bedroom villas on 9.5 acres -- about a two-minute drive from the Hilton Waikoloa Village.
This will be the first neighbor island foray for Hilton Grand Vacations Club, Hilton's time-share arm. It has two time-share properties in Hawaii -- the Lagoon Tower and a portion of Kalia Tower at the Hilton Hawaiian Village Beach Resort & Spa in Waikiki.
This also will be the first time the company will build low-density, nonhigh-rise units. This is in keeping with the resort's topography as well as a preference of the high-end buyers that Hilton hopes to attract.
Hilton Grand Vacations Club will use this venture to stake out its claim in Hawaii's highly competitive time-share market that saw record-breaking sales of $665 million in 2003. Since 2000, sales have exceeded more than $2 billion in Hawaii. Much of this unprecedented growth has been attributed to two factors: visitor interest in owning a piece of Hawaii at an affordable price and the entry of hospitality chains that bring brand value and quality.
Hilton, for instance, says it is expanding its Hawaii vacation-ownership options due to continued demand from customers for properties on all islands. And the company is not stopping with Waikoloa but continues to explore other opportunities.
Previously, Kauai was the haven of time-share properties -- most of them offering basic accommodations in no-frills settings. The entry of Marriott, Hilton, Sheraton and other time-share players has turned the industry into a competition over who can do time shares better. Hilton claims its Waikoloa time shares will be better than its competition's, such as Marriott's Ko Olina time-share units in West Oahu and Sheraton's Westin Maui Ocean Villas.
There's no dearth of high-end properties on the Kohala Coast, especially at the Waikoloa Beach Resort. The 1,350-acre planned community already is home to two high-end hotels -- Hilton Waikoloa Village and the Waikoloa Beach Marriott. It also houses luxury condo developments including the Bay Club managed by Hilton, Aston's Shores at Waikoloa and Waikoloa Colony Villas, Outrigger's Fairway Villas, and Vista Waikoloa managed by South Kohala Management.
"Our primary market is the upscale travelers staying at hotels and condos in Waikoloa and the other Kohala Coast properties," said Mark Wang, senior vice president of Hilton Grand Vacations Club in Hawaii.
The company will advertise to guests at its 1,295-room Hilton hotel property, which typically gets a lot of business travelers due to its popularity as a destination for incentive groups.
Hilton's existing customers are a good market niche for new projects as there's a certain level of pent-up demand in the owner base, Wang said. In addition, the company, through its extensive sales efforts in Japan, plans to build on the increasing interest among Japanese visitors in owning a time share. Further, the resort's two 18-hole golf courses are good selling points to visitors from Japan, Wang said. He anticipates the Japanese will make up 20 percent of total buyers while the rest will be high-end travelers from the U.S. mainland.
At Waikoloa, Hilton already manages the Bay Club, a 162-unit luxury condo complex on 15.2 acres. Hilton, which took over its sales and management contract in 2003, still has a few time-share weeks to sell.
"The two are completely different," Wang said. "The new property is of higher quality."
Hilton Grand Vacations Club at Waikoloa Beach Resort, the new property's full name, will have 1,150-square-foot villas, each with two bedrooms and two bathrooms. The rooms will come with fully equipped kitchens, wireless Internet access and lanais. To increase the value of the deal, Hilton will allow its time-share guests to use the amenities of Hilton Waikoloa Village, including its theme pool and restaurants.
"Access to our hotel facilities will increase exposure for our restaurants and facilities," said Leanne Pletcher, marketing manager for the Hilton Waikoloa Village.
The hotel anticipates an increase in revenue from its food and beverage business and increased room nights as potential time-share buyers check out the location.
Prices will range between $30,000 and $60,000 for one time-share week per year. Hilton quietly began sales of the time shares in the first quarter of this year.
"So far the market is strong, mostly to existing owners," Wang said.
Hilton expects the project to open for business in 2006.
Reach Prabha Natarajan at 955-8041 or pnatarajan@bizjournals.com
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posted 10-21-2004 05:29
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