Tourism on record trajectory. Visitor arrivals hit all-time high.

The headlines reflect the good time Hawaii tourism is having this year. But one Hawaiian island is missing out. Badly.

Lanai’s two major hotels shut down for renovations in June. The Manele Bay Hotel is getting a makeover to dramatically increase its opulence, and The Lodge at Koele is housing the construction workers. Without the hotels, visitor spending is down more than 70 percent. Even more than the other main Hawaiian islands, Lanai depends on tourism to sustain its economy.

It’s almost as if the engine in a single-engine plane has been switched off midflight for an overhaul.

“If you don’t keep the engine going, they’ll starve to death,” said Leroy Laney, professor of economics at Hawaii Pacific University. “The story there is how undiversified Lanai is.”

Yet something remarkable is happening on Lanai to keep its fragile economy from crashing.

It hasn’t been painless. Some small businesses have closed. Others are struggling. But the biggest single pool of workers on the island — 675 hotel employees that represent 42 percent of Lanai’s total workforce — have continued earning full wages.

The owner of 98 percent of Lanai, billionaire Larry Ellison, has redeployed most of the hotel workers in a variety of other jobs on the island, such as preserving native plants, rebuilding ancient Hawaiian cultural sites and assisting teachers at Lanai High and Elementary School.

Other hotel workers, such as maintenance personnel and some housekeepers, have continued with their normal jobs while another group accepted opportunities to work at other hotels, from Miami to Shanghai, within the Four Seasons family.

Stephen Castro Sr., Maui division director for the International Longshore and Warehouse Union representing Lanai’s hotel workers, said what Ellison has done is unprecedented as far as he knows in terms of a hotel owner paying every employee during a shutdown for renovation work.

“We were very fortunate that he decided to do that,” Castro said, adding that medical benefits also are being paid. “We welcomed that with open arms.”

Meanwhile, small businesses owned by Lanai residents developed strategies and enlisted help from Maui County, the Better Business Bureau and Island Air to help offset the economic downturn until the hotels reopen.

“It’s hunker down and survive,” said Brad Bunn, president of the Lanai Chamber of Commerce.

Big upheaval

It’s the biggest upheaval on the island since the pineapple plantation established in 1922 by James Dole was uprooted and replaced by the two luxury hotels in 1990 and 1991 under the island’s previous owner, David Murdock.

Murdock, a billionaire who acquired control of the island in 1985 with a buyout of Castle & Cooke Inc., saw the pineapple business in Hawaii was withering in the face of cheaper foreign production, and sold his vision as a way of survival for Lanai.

So what was once the world’s largest pineapple plantation went fallow, and the island’s longtime “Pineapple Island” nickname was supplanted with a new one: the “Private Island” that later became “Hawaii’s Most Enticing Island.”

The 102-room Lodge at Koele opened first with an 18-hole golf course in a cool upcountry spot roughly 1,700 feet above sea level within walking distance of Lanai City’s commercial core.

Styled somewhat after an English hunting lodge, but with Hawaii plantation-era accents, the hotel catered to upper-crust visitors. A travel story in the Los Angeles Times not long after the lodge opened described a scene in which a hotel employee dressed in a double-breasted suit and silk tie welcomed an arriving guest by bowing slightly and proclaiming, in a British accent, “I am your butler … . Would madam care for afternoon tea?”

The oceanfront 249-room Manele Bay Hotel, featuring Mediterranean-style architecture with Asian decor, opened soon after with its own lavish offerings — such as the golf course it touts as the only one in Hawaii with ocean views from every hole.

Murdock poured a lot of money into his resort, including $100 million to renovate both hotels in 2006 as part of a move that included switching to Four Seasons management and temporarily laying off 142 employees.

Ultimately, Murdock failed to achieve his envisioned financial return, which hinged on selling 1,100 million-dollar luxury homes around the hotel golf courses. So, with no end in sight to what Murdock said were eight-figure annual losses in recent years, and after a fizzled attempt to turn Lanai into a wind farm feeding power to Oahu, he sold the island to Ellison in 2012 for a nine-figure sum reported to be $300 million.

Sustainable plan

Ellison, who founded software giant Oracle Corp. and was ranked this year by Forbes as the fifth-richest person on the planet with $54.3 billion, has a vision to diversify Lanai’s economy and make the island more sustainable.

The new owner’s long-term vision includes adding a university research center, film studios and a professional tennis academy as well as establishing large-scale organic farming, expanding the constrained housing supply, switching to renewable energy and desalinating seawater to relieve strained freshwater aquifers.

To lead the initiative locally through a company called Pulama Lanai (cherish Lanai), Ellison tapped Kurt Matsumoto, a Lanai-born resident who once oversaw the hotels under Murdock.

Immediate plans focused on upgrading the hotels, which had lost some of their luster under Murdock, who let many parts of the island deteriorate after his pineapple-to-tourism bet turned sour.

Pulama early last year began reconfiguring the Lodge’s golf course to comply with a new design by golf legend Jack Nicklaus.

Next, Pulama took aim at the Manele Bay Hotel. The initial phase was a $75 million modernization, beginning with half the rooms, the spa and the lower lobby. A Nobu restaurant, a steak and seafood restaurant named One Forty and a Seaside Luxe retail store also opened. Other new enhancements for guests included a fleet of Mercedes-Benz Sprinter transport vans and a VIP airport lounge in Honolulu.

In fall 2014, Four Seasons opened the refurbished rooms and offered a special rate of $650 per night, compared with $539 for their unrenovated counterparts, ahead of an anticipated grand reopening with rates starting at $950.

From a tourism and economic stability standpoint, it appeared that the changes under way wouldn’t be too jarring. But then, serious gear shifting occurred.

Abrupt changes

In January, the Lodge was converted into temporary housing for construction workers. Matsumoto said the initial plan was to turn only half the Lodge into housing for construction workers . A full closure, he said, was made with much reluctance, but was based on being able to more quickly complete the remaining Manele Bay Hotel renovations.

“It was a logistical challenge,” he said.

Then, in June, the Manele Bay Hotel was closed after Pulama Lanai concluded that the remaining work — which included gutting the main lobby, replacing the hotel’s fire-suppression system, and demolishing and replacing the pool — would be too disruptive for guests.

“Nobody wants to close a hotel,” Matsumoto said. “That hotel is the economic engine for the island.”

Matsumoto said the second phase of renovation work was going to be so invasive that the Four Seasons couldn’t deliver an appropriate experience. “It would be impossible,” he said. “The guest experience would be horrible.”

Pulama made efforts to complete the work as fast as possible: It doubled the frequency of barge service to the island and worked 24 hours a day from July through September until a seabird nesting season prohibited nighttime work. Still, complications — including weather and limitations in getting resources to the island — resulted in pushing back the anticipated reopening date from mid-December to Feb. 1.