The Kahala Hotel & Resort has been sold to Japanese-based Resorttrust Inc. for $300 million, which equates to $887,000 per room, the next-to-highest per-room price paid for a Hawaii hotel and the highest per-room price paid for an Oahu property.

That’s a pretty penny for a resort that cost its original owners Charlie Pietsch and Conrad Hilton just $12 million to build. Opening rates at what was called the Kahala Hilton in 1964 averaged about $26 a night for a regular room and $150 a night for the Presidential Suite. Today nightly room rates start at about $495, and the resort’s two-bedroom Presidential Suite goes for $4,000, while its two-bedroom Imperial Suite nets about $10,000.

"Four Seasons Resort Hualalai on the Big Island is the only property in Hawaii that ever traded for more money on a per-key (room) basis," said Joe Toy, president and CEOof Hospitality Advisors LLC.

"It went for $1.1 million per key, but it was fee simple. This property, on the other hand, is leasehold and it’s a pure hotel transaction. The reaction from investors will be, ‘That’s a pretty high price,’" Toy said.

A traditional ownership model might not support that price, Toy added, but the buyer is a Japanese company that will use it as part of its time-share network.

Katsuyasu Ito, president and COO of Resorttrust, said in a statement issued Wednesday that the company is contemplating property membership sales.

"We believe that such sales will make a significant contribution to early investment recovery and steady operation of the hotel," he said.

Toy said strong demand for Hawaii hotels has raked in $1.2 billion in total transaction volume through July. However, this appears to be the first Hawaii venture for Resorttrust.

Ito’s statement said that the company decided to acquire the Kahala because it is a "high-class resort hotel, widely known throughout the world as a hotel which overwhelms the others with an exceptionally high brand power."

Toy said Hawaii was clearly an attractive market last year, when statewide sales volume hit a record $2.1 billion for the year, and that this latest deal proves that it will continue to draw investors who are lured by its barriers to entry, limited supply and strong average daily rate, which in May was the highest in the nation at $219.

The $300 million price paid by Resorttrust is more than what the average daily rate at the Kahala Hotel would suggest the property is worth, said Keith Vieira, principal of KV and Associates, Hospitality Consulting.

"Since their average daily rate is no where near the $800 that you would expect to see for that price, I think it sends a message to others who are looking that there is strong faith in the continuation of the market on Oahu," said Vieira. "It also speaks to the strength of Hawaii’s time-share, vacation ownership and the condotel market. There is lots of demand as seen by the success of Trump and strong interest in the coming Ritz-Carlton towers. These kinds of owners usually have higher occupancies and can get more per key."

Ito said the 50-year-old resort’s long legacy in Hawaii and its record of hosting celebrities also played a role in the decision. Former Honolulu Advertiser columnist Eddie Sherman coined the term "Ka-hollywood" due to the glitterati who were spotted lounging at the resort’s lounges, restaurants and pools. Resort entertainers have included Don Ho, Hilo Hattie and Danny Kaleikini, whose long run at the Hala Terrace earned him a nomination in the Guinness Book of World Records.

Japanese and British royalty and every U.S. president from Lyndon Johnson to Barack Obama have been among the celebrity guests, which in recent times included Adam Sandler, Kareem Abdul-Jabbar, Desmond Tutu and the Dalai Lama.

"We decided to acquire the property since we expect that by including the hotel in our group of hotels, we would be able to provide new value to our existing customers," Ito said, adding that based on the hotel’s operating income, he expects an annual cash flow of about $9.7 million.

The new owner plans to retain Landmark Hotels Inc., the Trinity affiliate that took over management of the hotel in March 2006. All employees are expected to be retained by Resorttrust, which will assume the collective bargaining agreement between the hotel and UNITE HERE! Local 5.