Expansion plans for the Grand Wailea Maui, a Waldorf Astoria Resort, recently hit another snag when the Maui Planning Commission granted a petition to intervene in the wake of community pushback against the $150 million project.
Three Native Hawaiian groups — Malama Kakanilua, the Pele Defense Fund and Ho‘oponopono — were granted intervenor status Jan. 28. The hui alleges the resort was built on a sacred burial site where kupuna were interred in the traditional way under piled stone or in sand dunes without surface markers. They contend further construction would disturb even more iwi, or bones, which many Native Hawaiians believe carry spiritual power and are protected by state law.
Resistance to tourism-related development has accelerated in recent years as the state’s visitor arrivals have grown. In 2019 the visitor count hit 10.4 million, and Maui residents have become some of the most vocal in expressing over-tourism concerns.
Some say with good reason.
Oahu in 2019 welcomed nearly 6.2 million visitors, the most of any island, according to newly released Hawaii Tourism Authority data. However, significantly less populated Maui welcomed 3.07 million visitors — a gain of more than 5% — and its average daily visitor census grew 3% to 66,414 visitors on an island with only 167, 207 residents, according to the most recent census data.
While the 5% climb in visitor arrivals to the Valley Isle contributed to a visitor spending increase of 2.4% to $5.12 billion, some Maui residents don’t think that’s enough to offset the corresponding strain on infrastructure, affordable housing, natural resources and quality of life.
One of the reasons for Maui’s tourism success, besides the fact many consider the island “no ka oi” — the best — is that air seats to Kahului Airport rose more than 10% last year. In comparison, Honolulu’s air seat growth was only about 2%, and there were fewer air seats to Hilo, while Kona and Lihue stayed flat.
That’s led to an environment where hotel demand is dropping on every major Hawaii island but Maui. That growth is fueling a development cycle that could add 10 or more new hotels and timeshare properties to a market that over the last two decades had lost more than 25% of its hotel inventory.
Maui County hotels in 2019 led Hawaii’s four island counties in average daily rates and the all-important revenue per available room, the amount a hotelier earns per room regardless of its occupancy status. Maui’s average daily rate rose more than 3% to $399 per night, and its revenue per available room climbed nearly 6% to $310.
Leading that charge was the Wailea resort area, which by itself was best in the state last year for occupancy (88.4%, up 1.3%), average room rate ($618, up 5.7%) and revenue per available room ($547, up 7.4%).
Even with such high price points, Maui hotels overall in 2019 saw occupancy rise 1.7 percentage points to 77.7%.
These trends have caused more hotel developers to eye Maui, but many, like the Grand Wailea, are finding that barriers to entry are as tight as ever. It’s why Ben Rafter, managing director of Ampersand Venture 1, which recently bought the Maui Beach Hotel on the Kahului shoreline and plans to build a new hotel next door on the former Maui Palms site, said he doesn’t think all of the hotel development being discussed on Maui will advance.
“This late in the cycle, people historically go negative on tourism. Some of the projects may not happen at all; I’d expect fewer than half to make it. Still, that’s more than we’ve had in many years,” Rafter said.
The Grand Wailea’s owner, BRE Hotels & Resorts, a Blackstone portfolio company, did not oppose the intervenor’s application, although there’s a lot riding on the renovation. New York-based Blackstone Group LP, a private equity firm, purchased the 776-room Grand Wailea for $1.1 billion, a real estate price trumped only by the sale of Manhattan’s Waldorf Astoria for $1.95 billion.
J.P. Oliver, managing director for Grand Wailea, said in a statement, “Grand Wailea understands and is very sensitive to the significance of iwi kupuna. That’s why we welcomed adding these organizations to the conversation about the first renovation of the resort since it opened nearly 30 years ago. With their help, and based on the feedback of the community, our thoughtful plans show the utmost respect for iwi, and demonstrates our commitment to building a strong and more sustainable future for Grand Wailea and Maui.”
Until an agreement is reached through mediation or a contested case hearing is decided, the resort’s permitting is on hold. That’s not really surprising given that it got off to a somewhat rocky start.
BRE in 2019 went before the Maui Planning Commission seeking a “step one” and “step two” planned development permit and a special management area use permit, a regulatory hurdle required for development in Hawaii’s coastal zones.
BRE originally wanted to add 224 units across three new midrise towers to the resort, but after community pushback adopted a scaled-down plan that reduced the number of new towers to two and the number of units to 151. The hotel owner also decided to leave the resort’s Seaside Chapel, although there are still plans to redo the Hibiscus Pool by adding more decking and infinity edges.
While some members of the community viewed the changes favorably, they did not appease all interested parties, especially the Native Hawaiian hui. Their involvement has cast some uncertainty on the resort’s plans, which might give other developers pause.
Keith Vieira, principal of KV & Associates Hospitality Consulting, said: “Unfortunately, the Grand Wailea’s challenges, especially the delays in time, will make some developers and hotel owners think twice about expansion.
“To me this is an ideal situation where you have a resort in a resort district staying on a property footprint but adding more rooms that will bring more employees. It will increase guest satisfaction and lead to higher spending so that the resort brings in more tax revenues,” Vieira said. “To me the benefits outweigh any negatives.”
Ultimately, it’s up to the Maui Planning Commission to decide whether that is true. Next up, the resort and intervenors will head to 30 days of mediation. If that doesn’t progress, the issue enters a contested case phase, which would likely take several months to complete. The commission has the final say on whether to accept the recommendation of the hearing officer.
Clare Apana, an intervenor with Malama Kakanilua, said she has faith the process will come to a “good conclusion.”
“It’s kind of like a David- and-Goliath kind of thing. Nothing would be worth going up against a billion-dollar company except to find a solution for our ancestors,” Apana said. “If we get decreased hotel rooms, better highways and improved water resources, all the better, but we do this for the protection of ancestors. For us the first priority are the burials.”
Apana said the hotel had offered to have a third-party burial monitor present at construction, but intervenors found that inadequate since current plans call for “digging in a burial ground where they have already disturbed hundreds of burials.”
Apana said intervenors believe a compromise would involve the hotel abandoning plans to expand into new ground on the property and instead find a way to grow within the existing footprint.
It’s the resort’s contention that past burials were properly handled and that future plans also are “pono.”
William Meheula of the law firm Sullivan Meheula Lee testified on behalf of the Grand Wailea at the Jan. 28 Planning Commission hearing, saying: “We have done everything we can to … plan responsibly for the proposed project to minimize ground disturbance and locate development activities in areas of low sensitivity.
“(Grand Wailea is) committed to following the burial laws and treating any remains we may find with the utmost respect and care in consultation with recognized lineal and cultural descendants” and the State Historic Preservation Division, Meheula said. “This is not a new project, rather a fully developed resort where proposed excavation will occur in areas excavated before and iwi was not found.”
Mel Silva, business manager of the International Union of Bricklayers and Allied Craftworkers, Local 1, also testified for the project, which he said is anticipated to create 215 construction jobs on Maui over the course of four years, which translates into $46 million in earnings.