Another limited-service hotel, under the broad Hyatt umbrella, is on the way for Oahu’s second city, the sprawling Kapolei area that encompasses Ho‘opili and Ewa Beach, and it’s a location that makes perfect sense.
Limited service means that the units are geared for guests who may not want to pay for on-site restaurants or entertainment common in resort districts, or for daily housekeeping services, because they use them primarily for sleep and informal household needs. This also keeps operational costs low and profits high, which is why they’re popular among the hotel corporations that own them.
The site of the new hotel, with work set to begin next year, presents few complaints. The project will have 250 units, including 86 with kitchenettes. The amenities appealing to visitors include an outdoor swimming pool and spa, 3,009 square feet of space for meetings, a dining room, a business center and a fitness center.
Demand for lower-cost visitor accommodations has been filled in the past by vacation rentals — many of them illegal, drawing a crackdown from Oahu officials. The Hyatt, and properties like it in properly zoned areas, at least are less likely to disturb residential neighborhoods than short-term rentals.
The question is whether continuation of this development track could run into conflict with one crucial need in this county in particular: workforce housing.
The new hotel’s site is 3.49 acres at 91-3456 Nana Hope St. in the Ho‘opili development. It is within reach of the University of Hawaii-West Oahu and a Skyline rail stop; rail should offset some of its traffic impact.
Its far-from-Waikiki setting has appeal for some budget-minded visitors as well for local mainland transplants who may be visiting, or kamaaina from neighbor islands, here to see family.
In addition, however, the project by Alaka‘i Development serves as a signal that this sector of the tourism industry, once constrained in this state, is growing. People who have traveled in most mid-size or larger cities are familiar with accommodations similar to this property, which has units under both the Hyatt Place hotel brand and the Hyatt House suites meant for extended-stay visitors.
However, not even densely populated Oahu has had an actual airport-hotel district like those in other cities, well established for decades. Many of these cities have seen competition shrink as small motels were bought by larger chains.
Even with such consolidation, those communities have not seen lost housing potential on properties already in use for visitors. In fact, the National Association of Realtors conducted a study in 2021 on the impacts from the COVID-19 pandemic and found that many midprice hotels and motels were actually converted to housing of various types.
On Oahu, the limited-service hotels have been built on undeveloped land: There has been little hotel/motel stock to repurpose. Instead, the supply remains relatively low while the demand, according to industry experts, is quite high.
This latest trend line began in 2016 with the opening of Hampton Inn &Suites Oahu/Kapolei; Embassy Suites followed in 2017 and the Marriott Residence Inn opened in 2019. Another Kapolei hotel, the Element by Westin, is expected to open soon, with the Hyatt Place/Hyatt House development becoming the latest addition.
These hotels have done well, said Mark Bratton of Colliers International; he described the demand for more as “almost insatiable.”
That might be positive for the tourism industry and tax base, but should send up a flag to the Honolulu City Council and others managing land use. These officials shouldn’t need reminding that residential housing is a critical need and must not get short shrift as hotel proposals on Oahu’s limited lands come before them.
