The Makaha Resort & Spa is poised to close on Oct. 31, according to workers at the hotel. Employees were told the closure is temporary, they said, but no date has been set for reopening.
The resort’s managers have set a staff meeting for 3 p.m. today to discuss the closure, said one worker who asked not to be identified because management had not authorized employees to speak to the media.
On Wednesday, the hotel was no longer taking reservations over the phone or online beyond October.
The hotel’s closure would leave about 100 employees without work.
Resort managers did not return several phone calls Wednesday seeking comment.
"It’s unfortunate because it provided jobs for down here," said former employee Ku‘uipo Kim. "It’s too bad to hear that they’re closing."
The state Department of Labor and Industrial Relations said it hasn’t received a plant-closure notice from the resort owned by Canadian firm Northwynd Resort Properties Ltd.
Federal law requires employers to give employees 60 days’ notice of plant closings or mass layoffs.
Northwynd announced in April that it had sold its adjacent golf course to Hawaiian Golf Properties LLC to pay for improvements to the 173-room hotel. The 18-hole golf course closed for renovations on May 14.
"It’s not very common to see a hotel owner sell off the golf course amenity. That was a little unusual," said hotel consultant Joseph Toy, president and CEO of Hospitality Advisors LLC. "Typically you want to try to retain the golf course and resort together in order to have some more integrated market positioning."
However, the deal was intended to provide a new owner and operator to improve the golf course in an attempt to keep the resort competitive.
Northwynd took ownership of Makaha Resort in July 2010 when it acquired the assets of another Canadian firm, Fairmont Resort Properties Ltd., through a court-supervised debt restructuring.
The 300-acre resort in Makaha Valley, developed by the late financier Chinn Ho in 1969, has traditionally been challenged by its remote location off the beach, as well as its relatively small inventory of rooms, Toy said.
When resort owners sold the golf course in April, that only made matters worse in terms of its market position as a golf resort, he said.
ANA Hotels Hawaii Inc. acquired the property in 1979 but closed the hotel in 1995 after mounting losses, though the golf course remained open. Wisconsin real estate development firm Towne Realty Inc. bought the property in 2000 and reopened the hotel a year later after renovations. Fairmont purchased the resort in 2004 for $13.5 million and tried selling 40 hotel units as time shares three years later to raise money for improvements. The company eventually ran into financial trouble and was acquired by Northwynd.
Owners of the property have had mixed success over the years, while the market has become increasingly competitive, given the reinvestment that has occurred in Ko Olina and Waikiki and, to a certain extent, Turtle Bay, Toy said.
"The market has become more competitive with a lot of reinvestment going on in a lot of Oahu’s resorts during the past 10 years," Toy said. "Waikiki, Turtle Bay and Ko Olina have been able to raise the profile of their destinations. It’s hard for a small property to compete as an independent."