New hotel planned near Honolulu airport

Some new hospitality industry competition is planned for part of Oahu where a new hotel hasn’t been built in nearly a half-century.

A Seattle-based real estate development firm intends to build a 257-room hotel managed under the Homewood Suites by Hilton brand one block from Daniel K. Inouye International Airport.

An affiliate of Hadley Properties applied for a building permit this week for the 15-story hotel estimated to cost $53 million, according to city records.

The project is part of a moderate wave of hotel development on Oahu that several years ago focused on Kapolei and more recently has been focused on Kapiolani Boulevard near Ala Moana Center.

Near the Honolulu airport, three hotels exist and the newest one dates to 1976.

F. Kevin Aucello, principal of local commercial real estate brokerage and hotel consulting firm Pacific Hotel Investments, said barriers to new hotel development around the airport include a pretty intense industrial character for much of the area, major landowners not wanting to sell property, and high costs for land and construction that challenge the feasibility of a project based on achievable room rates.

“There’s not a lot of vacant land to build something on,” he added.

Aucello also said some may perceive a lack of consumer demand for hotel rooms near the airport, but he believes the project planned on the corner of Paiea and Aolele streets just mauka of a consolidated car rental facility slated to open next year, will do well with a mix of customers such as business travelers, former Hawaii residents visiting family and leisure visitors looking for value.

“It’ll be the only big (hotel) brand at the airport, and the nicest,” he said.

Duane Shimogawa, a project manager for local real estate development firm Avalon Development Co., which is building a residential and hotel tower project on Kapiolani called Sky Ala Moana, also said he expects the Homewood Suites project to do well.

“I wouldn’t be surprised if more of these types of hotels pop up near the airport in the not-to-distant future,” he said. “The growth near (the airport) could be similar to the fast expansion of hotels in the Kapolei market.”

The three existing airport-area hotels are Best Western The Plaza Hotel that was built in 1976 and has 274 rooms, the Airport Honolulu Hotel that was built in separate phases in 1966 and 1969 with 307 rooms, and the Pacific Marina Inn that was built in 1960 and has 120 rooms. All three have been renovated over the years.

Hadley Properties aims to start construction later this year and open the hotel late next year.

Lisa Hadley, a principal of the firm, said the hotel is designed with a bar and lounge, fitness center, meeting rooms and a rooftop pool as a great option for extended stays and business travelers.

“Although this is an airport location, we are excited to give guests an opportunity to experience some flavor of the islands by creating an outstanding amenity deck on the 15th floor,” she said.

Hadley Properties has a diverse project portfolio that includes office, warehouse, hotel and residential properties. Hawaii projects by the firm include The Whaler timeshare in Kaanapali, Maui, and the twin Topa Financial Center towers in downtown Honolulu. The company also owns contracting firm Koapaka Construction specializing in low- and midrise buildings.

Hadley said the family- owned company has long envisioned establishing a hotel at the airport site, which is a parking lot next to an office and warehouse complex called Airport Industrial Park.

Hadley Properties developed Airport Industrial Park decades ago in phases on land leased from Loyalty Development Co., a kama aina firm that owns property near the airport and leases the hotel site to Hadley Properties.