BERLIN and HONOLULU—Life really is a beach for Outrigger Enterprises Group, and executives for the Hawaii-based company want to make sure it stays that way as they expand its global footprint in the sand.
“We’re constantly on the lookout for opportunities in iconic, tropical beachfront destinations in the Asia/Pacific and Indian Ocean,” said David Carey, president and CEO, in an email. “We are also focused on resorts where our global marketing power can be leveraged to key source markets. In the future, we hope to add at least one to two new properties to our portfolio each year.”
That ownership philosophy has evolved over the past decade, said Bitsy Kelley, a third-generation member of Outrigger’s founding family and the VP of corporate communications.
“We’re focusing on purchasing and owning,” Kelley said during a meeting held in conjunction with last month’s International Hotel Investment Forum in Berlin. “We have found we like being an owner and operator because we have control over the destiny of the brand. It really enhances the opportunity to do long-term planning.”
Carey agreed.
“Our distinctive approach to integrating the local culture into both the employee and the guest experience is one we pride ourselves on,” he said. “As such, ownership investment provides more control over how we operate the property, allowing us the opportunity to provide a true and authentic experience for our guests that reflect the cultures and destinations where we operate.”
Outrigger possesses a multi-branded portfolio of hotels, condominiums and vacation resort properties, including Outrigger Hotels & Resorts, Ohana Hotels & Resorts, Embassy Suites, Holiday Inn Resort, Best Western, Wyndham Vacation Ownership and Hilton Grand Vacations. The company operates and/or has under development 46 properties with approximately 11,000 rooms located in Hawaii; Australia; Guam; Fiji; Bali; Thailand; Mauritius; Vietnam; and Hainan Island, China. Twenty-eight of the hotels in the portfolio carry the Outrigger brand name.
The portfolio is destined to grow, according to the executives.
“In the next five years, Outrigger will continue to grow our global profile and expand operations beyond Hawaii’s shores to new international markets,” Carey said.
The CEO said the company has purchased four properties during the past 12 months: Outrigger Laguna Phuket Beach Resort in Thailand; Outrigger on the Lagoon, Fiji; Castaway Island, Fiji; and the recently opened Outrigger Mauritius Resort and Spa.
“While we want to work with local owners as well, ownership offers greater potential for long-term return that will span multi-generations,” Carey said. “This approach comes with more financial risk. However, the company’s strengths in branding, distribution, operations and cultural programming give us a competitive advantage.”
Finding the right balance
The CEO said Outrigger’s biggest opportunity is to find a balance in its portfolio between its Hawaii holdings and its global properties.
“(That opportunity is) essentially leveraging our Hawaii roots with an investment strategy focused on growth in new emerging markets,” Carey said. “These global markets are likely to attract a diverse mix of international consumers, which will not only benefit our global properties but introduce those customers to the Outrigger brand and lend visibility to our Hawaii properties. We believe this strategy will ensure a robust pipeline of new Outrigger customers.”
Outrigger’s growth will come from a combination of new-build properties and conversions, Kelley said.
Outrigger has new-construction projects under way in Quy Nhon, Vietnam, and Hainan Island, China. Both beachfront properties are scheduled to open in 2015.
“Outrigger standards are not just in the building, but the location, too,” Kelley said. “We want to make sure our guests know they are on vacation.”
The wish list for expansion includes Seychelles, the Maldives, Okinawa and more properties in Indonesia and Australia.
Kelley said there’s no magic number for properties in the portfolio.
“We’ll keep expanding until we feel we have property in all of the prime locations,” she said.
One of the most important elements of expansion is for Outrigger to make sure it doesn’t force the Hawaii look and feel onto another location.
“We’re good at figuring out how to adapt an existing building and put the Outrigger stamp on it without trying to pick up Hawaii and put it someplace else,” Kelley said. “Guests want to know they’re in a particular location so the building, the amenities … they have to reflect that community.”
Some of the company’s existing properties—including many of its Hawaii locations—offer condominiums, which add a layer of difficulty to the operations, Kelley said. Outrigger has no all-inclusive resorts and at this point doesn’t plan to venture down that path.
“Our guests want to experience the area the resorts are located in,” she said. “We have a tremendous tie-in with the local community that usually can’t happen with an all-inclusive resort.”
A family affair
Kelley is a third-generation family member to be part of Outrigger, which traces its hotel lineage to her grandparents, Roy and Estelle Kelley. In 1963, the couple leased the oceanfront land occupied by the Outrigger Canoe Club. That was followed by the development of the Outrigger Waikiki in 1967. Carey is the son-in-law of Richard Kelley, Outrigger’s chairman of the board emeritus and Roy and Estelle’s son.
“The next generation is coming, and we’re committed to continuing being the largest, fastest growing lodging group in the Pacific,” Kelley said.
Being on the water, and being a good steward of the culture and environment in a local community, play an important part of Outrigger’s customer experience as well as the family heritage, Kelley said.
“The beach and reef system are such an important part of communities,” she said. “To protect them is of the utmost importance, and part of that is educating guests and employees about the importance of being aware.”
Maintaining that balance is among the biggest challenges for Outrigger, Carey said. With such robust expansion, the company’s biggest challenge is integrating its philosophy into the local culture in a timely fashion.
“Understanding the needs of our new guests and tailoring our hospitality model to fit them is a top priority,” he said.