Outrigger Hospitality Group plans to buy the Sheraton Kona Resort & Spa at Keauhou Bay on the Big Island as part of an ambitious growth plan that could nearly double the company in five years.
Outrigger currently operates 37 properties and more than 7,000 rooms in Hawaii, the Asia-Pacific and the mainland.
It has been in a growth mode since its 2016 acquisition by Denver- based KSL Capital Partners LLC. At the time, it was anticipated that KSL’s capital would allow Outrigger to make more acquisitions and greater reinvestment into existing properties. The Kelley family, Outrigger’s founders, had gone about as far as they could in their nearly seven decades of ownership without adding substantial capital.
“This property in Kona is just the first of what you will see are many properties coming into the company,” said Jeff Wagoner, president and CEO of Outrigger Hospitality Group, in an interview Tuesday. “We currently have about 30 properties in our growth pipeline.”
The deal to to purchase the 509-room oceanfront Sheraton Kona Resort & Spa at Keauhou Bay, which is on land leased from Kamehameha Schools, is expected to close April 15. The property, at 78-128 Ehukai St., will be renamed the Outrigger Kona Resort and Spa and be managed under the Outrigger brand.
Wagoner said the company would not disclose financial details of the Keauhou acquisition, which was announced to employees Tuesday morning. Wagoner said the company intends to make employment offers to all 270 or so of the property’s current employees and to honor their union contract.
The property, on 22 acres just south of Kailua-Kona, is best known for its historic location at Keauhou Bay, the birthplace of Kamehameha III, and its waters, which draw people from all over the world who want to swim with manta rays. But it also includes meeting space, a wedding chapel, a fitness center and spa, an oceanfront pool and waterslide, a traditional Hawaiian cultural center and two restaurants. Its 10,000-square-foot convention center — the largest meeting space in the Outrigger chain and on the Kona Coast — will allow the company to make further advances into the lucrative meetings, events and incentive group market.
Once the sale is finalized, Wagoner said, Outrigger will begin drafting a modernization master plan to improve the property. Wagoner said significant investment is planned. The property is expected to stay open throughout renovations, which could begin within the next 12 months, he said.
Last year Outrigger acquired a luxury resort rental program at Honua Kai Resort & Spa on Maui for an undisclosed price. It also completed a $35 million renovation of the Outrigger Waikiki Beachcomber, a property near the International Market Place in Waikiki.
Wagoner said Outrigger is looking at the Asia-Pacific, the mainland and certainly Hawaii, which it is bullish on, for future expansion.
“The majority of our Outrigger hotels here are all on Oahu, and so to be able to expand our Outrigger brand on the Big Island and, quite frankly, on the other islands is very important to us,” Wagoner said. “Clearly, Hawaii is where this company was founded. We have an incredible history here, so any growth that we can have in Hawaii will be very strategic and important to us.”
Wagoner said Hawaii is performing well for Outrigger, which enjoyed “a fantastic January,” which came on the heels of a “strong December.”
“We’re really encouraged by what we are seeing in our properties and the industry in general in Hawaii,” he said.
Jack Richards, president and CEO of Pleasant Holidays, said both the Honua Kai and Keauhou properties were real coups for Outrigger, which has been a strong partner for the wholesale travel seller.
“These are very popular and outstanding properties,” Richards said.
Keith Vieira, principal of KV & Associates, said Outrigger is poised to grow under KSL, which has brought needed capital and resources to take the company beyond its status as a mostly Hawaii regional brand.
“Their strength has always been in Waikiki. They’ve been beyond Hawaii, but before, they didn’t really have the resources to keep growing,” Vieira said. “Their numbers might be a little aggressive. But with KSL having the resources for expansion and renovation, I think they are set to grow.”
Outrigger Hospitality Group plans to buy the Sheraton Kona Resort & Spa at Keauhou Bay on the Big Island as part of an ambitious growth plan that could nearly double the company in five years.
Outrigger currently operates 37 properties and more than 7,000 rooms in Hawaii, the Asia-Pacific and the mainland.
It has been in a growth mode since its 2016 acquisition by Denver- based KSL Capital Partners LLC. At the time, it was anticipated that KSL’s capital would allow Outrigger to make more acquisitions and greater reinvestment into existing properties. The Kelley family, Outrigger’s founders, had gone about as far as they could in their nearly seven decades of ownership without adding substantial capital.
“This property in Kona is just the first of what you will see are many properties coming into the company,” said Jeff Wagoner, president and CEO of Outrigger Hospitality Group, in an interview Tuesday. “We currently have about 30 properties in our growth pipeline.”
The deal to to purchase the 509-room oceanfront Sheraton Kona Resort & Spa at Keauhou Bay, which is on land leased from Kamehameha Schools, is expected to close April 15. The property, at 78-128 Ehukai St., will be renamed the Outrigger Kona Resort and Spa and be managed under the Outrigger brand.
Wagoner said the company would not disclose financial details of the Keauhou acquisition, which was announced to employees Tuesday morning. Wagoner said the company intends to make employment offers to all 270 or so of the property’s current employees and to honor their union contract.
The property, on 22 acres just south of Kailua-Kona, is best known for its historic location at Keauhou Bay, the birthplace of Kamehameha III, and its waters, which draw people from all over the world who want to swim with manta rays. But it also includes meeting space, a wedding chapel, a fitness center and spa, an oceanfront pool and waterslide, a traditional Hawaiian cultural center and two restaurants. Its 10,000-square-foot convention center — the largest meeting space in the Outrigger chain and on the Kona Coast — will allow the company to make further advances into the lucrative meetings, events and incentive group market.
Once the sale is finalized, Wagoner said, Outrigger will begin drafting a modernization master plan to improve the property. Wagoner said significant investment is planned. The property is expected to stay open throughout renovations, which could begin within the next 12 months, he said.
Last year Outrigger acquired a luxury resort rental program at Honua Kai Resort & Spa on Maui for an undisclosed price. It also completed a $35 million renovation of the Outrigger Waikiki Beachcomber, a property near the International Market Place in Waikiki.
Wagoner said Outrigger is looking at the Asia-Pacific, the mainland and certainly Hawaii, which it is bullish on, for future expansion.
“The majority of our Outrigger hotels here are all on Oahu, and so to be able to expand our Outrigger brand on the Big Island and, quite frankly, on the other islands is very important to us,” Wagoner said. “Clearly, Hawaii is where this company was founded. We have an incredible history here, so any growth that we can have in Hawaii will be very strategic and important to us.”
Wagoner said Hawaii is performing well for Outrigger, which enjoyed “a fantastic January,” which came on the heels of a “strong December.”
“We’re really encouraged by what we are seeing in our properties and the industry in general in Hawaii,” he said.
Jack Richards, president and CEO of Pleasant Holidays, said both the Honua Kai and Keauhou properties were real coups for Outrigger, which has been a strong partner for the wholesale travel seller.
“These are very popular and outstanding properties,” Richards said.
Keith Vieira, principal of KV & Associates, said Outrigger is poised to grow under KSL, which has brought needed capital and resources to take the company beyond its status as a mostly Hawaii regional brand.
“Their strength has always been in Waikiki. They’ve been beyond Hawaii, but before, they didn’t really have the resources to keep growing,” Vieira said. “Their numbers might be a little aggressive. But with KSL having the resources for expansion and renovation, I think they are set to grow.”
