Outrigger Splits Brands In Market Repositioning Strategy

<B> Outrigger Splits Brands In Market Repositioning Strategy</B>

By Judy Jacobs

Outrigger Hotels & Resorts, the Hawaiian homegrown hotel group long associated with midprice properties, is reinventing itself as a primary player in the meetings and incentives market. As a major step in this process, Outrigger officially is splitting into two brands, Ohana Hotels of Hawaii and Outrigger.

The newly created Ohana brand will debut Dec. 19 with the company's 15 midprice hotels in Waikiki, which together represent nearly 5,000 rooms. Outrigger will be dropped from the name of all of these hotels, substituted in most cases by Waikiki. For example, the Outrigger West will become the Waikiki West; the Outrigger Edgewater, the Waikiki Edgewater.

The separation of the company's midrange properties into Ohana Hotels is intended to reestablish the Outrigger name as one associated with upscale hotels, not only in Hawaii but also around the Pacific.

During the past 10 years, Outrigger's product has diversified greatly, said Perry Sorenson, Ohana Hotels' COO. "We've added full service resorts on the neighbor islands and have entered the condominium market," he said.

Outrigger also has been aggressively expanding into new geographic areas, with first-class properties now open or under development throughout the

Pacific. "It was getting difficult for our customers to understand just what an Outrigger was," Sorenson added.

That should not be the case any longer, however.

Now that the company plans to develop in new directions, Outrigger will be a name with which more corporate travel buyers and meeting planners will be familiar. The company plans to pursue the meetings and incentives market with its Outrigger brand name and establish an increasing infrastructure of resorts suitable for the market.

As a step in this direction, the company purchased the Royal Waikoloan, located on the Kohala Coast of the Big Island, which it previously managed. Outrigger closed the hotel June 1 for a $25.5 million total renovation and will soft open it on Oct. 15 as the Outrigger Waikoloa Beach Resort.

"The Waikoloa Beach Resort will have a retro-nostalgia 1930s and 1940s Hawaii feel. The public areas will reflect this era, which was a very gracious one. Back then there were only 6,500 visitors to Hawaii. Now there are more than 6 million," said Peter Thoene, the hotel's director of sales.

The theme will be evidenced in the d&eacute;cor--wrapped leather chairs and fluted columns inlaid with coconut wood in the lobby--and in food and beverage. The Clipper Lounge will bring back the days of the Pan Am clipper ship, which brought visitors to the Big Island in the early days of tourism.

"The experience we will provide will be very interesting for meetings and incentives," Thoene said. He expects at least 30 percent of the hotel's business to come from that market during the first year. "We hope to grow that number to 40 percent within two years," he added.

To help do that, the Outrigger Waikoloa Beach Resort is adding a junior ballroom, which will measure about 3,000 square feet, and a 1,700-sq.-ft. board room. The meeting space will total nearly 15,000 square feet. The company also is creating a day spa and fitness center, and is tripling the size of its swimming pool and adding slides and jacuzzis, all improvements that will appeal to the meetings and incentives market.

"The ideal group size for us is between 175 and 200 rooms, while the largest group we can handle will be 275 rooms," said Thoene.

The Outrigger brand has further reason to pursue the meetings and incentives market since it assumed management of the old Aston Wailea Resort in February and finalized the purchase of the property in May. The company has renamed the hotel the Outrigger Wailea Resort and is putting together what it calls a restoration.

"The restoration plan will be focused on changing everything in the guest rooms and making the decor more modern, but still retaining its traditional Hawaiian feel," said Alex Doyle, the hotel's director of sales and marketing. The new guest rooms will take on a silversword theme, paying tribute to the endangered Hawaiian plant that grows on the slopes of Maui's Mount Haleakala, and the color scheme will be a sea foam green. The company is spending between $28 million and $35 million to upgrade the guest rooms, which will be completed by the third quarter of 2000.

Outrigger also will redo the carpet and the wall coverings in the hotel's 2,375-sq.-ft. Lokelani Ballroom. The ballroom was redecorated last year with a series of murals depicting a day in the life of an ancient Hawaiian village.

While meetings and incentives currently play a very important role in the Outrigger Wailea's market mix, Doyle expects it to be even more significant in the future. "Groups are currently about 45 to 48 percent of our total business. Half of our group business is association meetings, 30 percent is incentives and the remaining 20 percent corporate meetings. Incentives and corporate meetings will grow significantly, as the market finds this a more appropriate place than it was. We expect the number of incentives and corporate meetings to double."

In addition to its two new Hawaii hotels, Outrigger has plans for at least two--and possibly three--Tahiti resorts, the first of which opened on July 15, as well as a resort in Fiji (<I>BTN,</I> July 5). These will complement the company's other Pacific island properties, which include the Outrigger Guam Resort on Tumon Bay, Guam; the Outrigger Palasia Hotel Palau on Koror Island, Republic of Palau; and the Outrigger Marshall Islands Resort in Majuro, Marshall Islands.