The Shack Waikiki Sports Bar & Grill will close later this month, ending its turbulent four-year ride in the state’s top tourist spot.

"We are closing due to a 40 to 50 percent decrease in gross sales over the last two years," said owner Brendan Burchfiel, an 18-year veteran of The Shack chain. "We will continue to stay open as long as possible."

While Burchfiel would not give a closing date, speculation is that the business could shut down as early as Sunday.

The bar and eatery was expected to become The Shack’s flagship Hawaii location when it opened in 2008 in an 8,500-square-foot space at the Waikiki Trade Center at 2255 Kuhio Ave. It followed the opening of Oahu’s first venue in Kailua in 1989, and others in Hawaii Kai (1991) and Mililani (1999).

The Waikiki location fell victim to higher expenses, declining sales and circumstances beyond its control, said Burchfiel, who is also a managing member in Shack Hawaii Kai and handles upper-management training there and at Mililani.

The business fell behind on its building dues because of "outrageous" common area maintenance (CAM) fees, he said.

The fees, which vary by property, are the tenant’s share of a landlord’s expenses such as building repairs, insurance, property maintenance, taxes and administrative labor costs.

"Our CAM went up approximately 100 percent," Burchfiel said. "Via the leases held by the Waikiki Trade Center, lessees must pay for all CAM for the building, creating a lack of urgency to fill vacancies in the building."

Leasing agent CB Richard Ellis did not have an immediate comment. However, recent commercial property reports from Colliers International Hawaii indicate that some 15,000 square feet of retail space is available in the building, said Mike Hamasu, the firm’s director of consulting research.

"That’s high compared to some of the other buildings," Hamasu said. "They’ve had a few nightclubs come in and out, especially on their second level, which doesn’t draw as much foot traffic."

Increasing rates also have been an issue in a number of recent business closures, said Waikiki-based retail analyst Stephany Sofos.

"If sales go down and expenses go up, that’s a recipe for killing a business," Sofos said.

The business also may have suffered from Waikiki’s changing demographics. Military deployments and a visitor mix that increasingly includes more high-spending and international guests have made it difficult for budget businesses to thrive in the high-rent district.

"Well over $1 billion of investment has gone into Waikiki," said Sam Shenkus, director of marketing for The Festival Cos., which manages the Royal Hawaiian Center.

More than 2,500 moderately priced hotel rooms went away when Lewers Street was redeveloped into Waikiki Beach Walk, Shenkus said.

"The Embassy Suites and Trump Waikiki are totally different than the older Outrigger properties that used to be there. It’s not a bad thing, but you’ve had a shift."

Starwood, Hyatt and Hilton also have upgraded their hotels and retail offerings, she said.

"We are in constant daily competition with cities like Las Vegas, San Francisco, Los Angeles, New York City and Tokyo," Shenkus said. "Discerning travelers want a wide array of world-class shopping, dining and entertainment."

Young travelers and locals seek high-quality entertainment venues, said Vincent Brunetti, executive assistant manager and food & beverage director at the Hyatt Regency Waikiki Beach Resort and Spa.

Capital at Japengo, the Hyatt’s Saturday-night ultra lounge with bottle service, has found a strong following among college students and the 25- to 28-year-old crowd, Brunetti said.

"Our University of Hawaii Grad Party on May 12 brought in over 600 graduates," he said. "We’ve hosted this party before, but this year it did extremely well."

Young people are willing to adhere to a dress code to party in a safe, clean location, Brunetti said.

"They want an environment where they don’t have to worry about bar fights," he said.

While The Shack Waikiki had strong appeal among local customers, some of it may have dissipated because of negative publicity, Sofos said. Since its opening, the bar has been plagued by several well-publicized bar fights and lawsuits, she said.

"They have had major fight issues, and when that happens two to three times, that gets people nervous and they don’t want to hang out there," Sofos said.

The other Shack locations appear to still have strong followings, she said.

"Every Shack in Hawaii is a separate entity and we look forward to continuing our 24 years of service to our communities through our other three locations daily and for a long time," Burchfiel said.

"The closing chapter of The Shack Waikiki is a sad conclusion, but we are eager to continue giving back through weekly fundraisers and multiple sponsorships islandwide."