Tourism is the state’s biggest industry and accounts for about 20 percent of the Islands’ economic activity. 

For Japanese tourists, the U.S. dollar’s high exchange rate against the yen has boosted the cost of a Hawai‘i vacation. The yen has been in a broad weakening trend against the U.S. dollar since 2021, caused by a mix of U.S. tariff threats, divergent monetary policies between the two countries’ central banks, as well as years of wage and price stagnation.  

While a weak yen has helped Japan’s export-led industries, it also has made travel to Hawai‘i a budget-busting prospect for many Japanese families.   

As if that weren’t enough, President Donald Trump caused a self-inflicted wound on U.S. tourism even before officially taking office. Thousands of Canadian citizens are boycotting U.S. travel after he repeatedly insulted their national pride, threatening to subjugate our northern neighbor as a 51st state. 

Even if the threat of annexing Canada was only a rhetorical flourish in a larger tariff-negotiating ploy, Canadians interpreted Trump’s posturing as an unforgivable slight: Voting with their pocketbooks, many are now avoiding travel to the U.S. entirely, including the previous popular destination among the frost-bitten throngs — our tropical 50th state. 

Those twin threats have left Hawai‘i’s hotels, restaurants, airlines, tour guides and travel services — and all the trickle-down businesses and employees that benefit from tourist spending — scrambling to adapt to the lull during the summer.  

Peak winter tourism months ahead could be even bleaker. 

In the articles that follow, Hawaii Business Magazine takes a closer look at the causes and impacts of tourism declines from Japan and Canada and highlights local efforts to lure reluctant travelers so businesses can weather the approaching storm. 

Every month, Japanese tourists join local residents to fling small balls containing bacteria and yeast into the Ala Wai canal that defines the northern edge of Waikīkī. 

These so-called “genki balls” are designed to kill the organic matter that fills the canal and causes unpleasant odors. The activity, organized by Hawaiʻi Tourism Japan and a Japanese-based travel company, aims to give Japanese tourists a stake in preserving the places they love to visit. 

“Responsible tourism works because Japanese understand island nations,” says Eric Takahata, Managing Director of Hawaiʻi Tourism Japan. “Groups and incentive travelers want to do more corporate social responsibility and give back.” 

It’s one of a few strategies that local and Japanese companies are deploying to bring more Japanese visitors to Hawaiʻi. 

For decades, Japanese travelers have been a vital source for Hawaiʻi’s tourism industry, but in recent years, the flow of visitors from Japan has slowed. 

Now, Hawaiʻi’s tourism leaders are working to rewrite the playbook by targeting younger travelers and harnessing the power of social media in hopes of rekindling Japan’s love of the islands despite a weak yen. 

Photo courtesy: Genki Balls

The recent decline in visitors echoes prior downdrafts. In 2019, nearly 1.5 million Japanese tourists visited Hawaiʻi. By 2024, that figure had plummeted to just over 720,000, and forecasts for 2025 predict a 20,000 decrease. The main reasons cited by tourism officials is the weak yen rate, continuously rising travel costs and lingering aftershocks of the pandemic. 

According to JTB Tourism Research & Consulting Co., more Japanese residents are now choosing destinations such as South Korea, Thailand and the continental United States over Hawaiʻi. 

“The consumers in Japan will continue to look at Hawaiʻi as the top destination that they want,” says Ted Kubo, President and CEO of JTB Hawaiʻi, the state’s largest travel company for Japanese visitors. “The problem is figuring out how to bring the tourists back.” 

JTB Hawaiʻi is adapting by meeting travelers where they are – online. The company has ramped up its presence on YouTube and Instagram, showcasing the islands’ beauty and culture to a new generation of Japanese consumers. The travel company offers hotel, transportation and flight packages. 

Japanese flights to Hawaiʻi increased in frequency from late spring into the summer of 2025, with All Nippon Airways resuming daily flights and some incremental upgrades by Japan Airlines. Kubo says that while he cannot disclose visitor numbers, he predicts that online promotions will show an increase by the end of the year. While visitors were cautious at the beginning of the year, he says that August through October numbers show more activity. 

“I hear this from other companies in the industry as well, this springtime wasn’t very active,” he says. “Back then, there were discussions about this new administration coming up with tariffs, and people didn’t know how that would play out in their corporate environment. 

“And when the economy is uncertain, then consumers, due to the uncertainty, kind of wait and see, not spending a lot of money…. 

“People’s behavior has changed,” Kubo adds. “People’s experiences have changed. It is important for Hawaiʻi to be on top of their mind, in every consumer’s mind, when they consider overseas travel.” 

But the financial barriers are steep; Japanese visitors today are paying nearly twice as much for their trips compared to pre-pandemic years, Kubo says, primarily due to the unfavorable exchange rate. While first-time visitors often report that their trips exceed expectations, repeat travelers, who make up more than 70% of the market, are harder to impress and retain. 

The DBEDT’s 2025 forecast is cautious and predicts that Japanese arrivals aren’t expected to surpass 2019 levels until 2030. 

“The Japan market has been kind of recovering in 2025, but it’s been a long road since the pandemic,” says Jennifer Chun, Director of DBEDT Tourism Research. “We see a negative growth for Japan in 2025, but we do expect that the situation with the federal government and our international relations with all the countries, including Japan, should normalize in 2026, [even] 2028.” 

Social media, famous landmarks and movies filmed in Hawaiʻi remain powerful lures for visitors. A recent DBEDT study found that 40% of Japanese visitors cited these influences in their decision to visit Oʻahu. In April 2025, there were 393 scheduled flights from Japan to Hawaiʻi, offering 110,945 seats which was an increase in flights but not in capacity. 

“For Japan, Hawaiʻi is still a very much desired destination, it’s just harder for them to come,” Chun says. “It’s not that they don’t want to come versus Canadian visitors who have said that they don’t want to go to the U.S.” 

The competition for Japanese tourists is fiercer than ever. South Korea and Okinawa offer similar tropical experiences at a lower cost. Mitsue Varley, country director for Hawaiʻi Tourism Japan, says that direct flights to more of the island chain, especially Hawaiʻi Island, could help attract more visitors. She works with airlines and wholesalers to develop new travel products tailored for the Japanese market. 

Photo courtesy: Genki Balls

There isn’t much that can be done in Hawaiʻi about the Japanese yen rate, so Hawaiʻi Tourism Japan, under contract with the Hawaiʻi Tourism Authority, is focused on keeping the market open through partnerships with airlines, hotels and attractions. Campaigns like “Yappari Hawaiʻi” (“Gotta Be Hawaiʻi”) use a multimedia approach, racking up nearly 90 million impressions in 2024 alone. 

With splashes of Waikīkī beach and the big whale from Bishop Museum, one of the most viewed videos of this campaign, features a multi-generational family enjoying the sights. A young couple brings their children and parents around Oʻahu. The short video with 6.2 million views depicts how Hawaiʻi can be a destination location that is fascinating for visitors with young kids or adults. 

The Malama campaign, meanwhile, leans into regenerative tourism highlighting how visitors can give back to the land, and collaborates with Instagram influencers, children’s book publishers, and skincare brands to promote Hawaiʻi’s culture and natural beauty. 

But while Japanese people spend more per trip, their stays are getting shorter. Varley believes the focus should be on attracting so-called “quality tourists” rather than focusing on overall numbers. 

“Japanese visitors are ideal, and people who are coming currently are ideal visitors,” she says. “The Japan market is over 70% repeat visitors, so we need to increase the first-timers.” 

Varley says the Sister City Summit, where 33 Japanese cities send representatives, can be a great start in the process, by creating relationships with two-way exchange programs. The next event will be in Honolulu in May 2026. 

The event will host hundreds of government, business and cultural leaders from Hawaiʻi and Japan to create new projects and initiatives that will mutually benefit both areas. 

Carl Bonham, executive director of the University of Hawaiʻi Economic Research Organization (UHERO), says its 2025 forecast projects a 4 percent total arrivals decline over the next two years, with a $1.6 billion reduction in real visitor spending by 2026, largely due to tariff wars and higher vacation costs. 

Financial concerns remain the biggest obstacle for Japanese travelers. UHERO said more than 64% of vacationers told DBEDT they won’t return because of high costs, financial constraints and the yen exchange rate. 

Yet, HTJ’s Varley remains optimistic. “The Japanese market has a long history of relationships, and also still the largest market in international market,” he says. “So you’ve got to be patient, and we cannot give up. We have to keep putting the resources [in], and then when it’s slowly coming back, it’s coming back.” 

Canadians have long been Hawai‘i’s second-largest source of foreign visitors, behind Japan, but this year many are staying home or choosing other destinations. 

The reasons are varied, but the main one was largely avoidable – President Trump’s pugnacious comments aimed at Canada’s leaders, but even more importantly, at its 41 million citizens. 

In the first seven months of the year, more than 245,000 Canadians came to Hawai‘i, down 9.4% from the first seven months of 2024 and 27.3% from the first seven months of 2019, the last year before the pandemic interrupted normal tourism patterns, according to the Department of Business, Economic Development and Tourism.   

Although the Islands receive far more Japanese visitors (an estimated 288,168 more in 2024, according to data from the Hawai‘i Tourism Authority), Canadians are “oftentimes registering ahead of Japan in relation to some of the key performance metrics,” says Colin Wood, a Canadian citizen and senior account director at Hawai‘i Tourism Canada. For instance, year-to-date July 2025 data published by the HTA indicates that Canadian visitors’ average stay of 11.36 days is nearly double that of Japanese visitors, who average 5.99 days.  

HTA also estimates that in the first seven months of 2025, Canadian visitors spent $635.3 million while Japanese spent $551.7 million. That works out to about $2,590 per person per trip for Canadian visitors versus $1,472 per person per trip on average for Japanese tourists.   

“So it’s interesting, right?” says Wood. “Because I think the perception is that Japan is leaps and bounds ahead of Canadians in terms of visitation and spend and all those metrics, but that’s not always the case.” 

Still, the amount of money spent by Canadian visitors in the first seven months of 2025 is down 4.9%, from $668.3 million in the same period of 2024, and 7.5% lower, from $686.1 million, in 2019. That’s a deficit already being felt by hotels, restaurants and other businesses in the tourism industry. Even more worrisome – the normal peak period for Canadian tourists is the upcoming winter season. 

A few local restaurateurs emailed impact statements to Hawaii Business via the Hawaii Restaurant Association. Mike Palmer, managing partner of Kuhio Avenue Food Hall, wrote: “We have noticed a decline in tourism, including a drop in Canadian tourists. From my understanding there has been about a 5-6% drop in Canadians visiting Hawai‘i compared to last year, and we have noticed that drop at restaurants, especially in Waikīkī.  This is in addition to a decrease from other countries such as Korea (-8%) and Australia (-10%) compared to 2024.” 

Javier Barberi, owner of Mala Ocean Tavern in Waikīkī and Coco Deck Lahaina and Pizza Paradiso on Maui, stated: “Recent Hawai‘i Tourism Authority figures show Canadian visitor arrivals to Maui remain significantly lower (April 2025 was down 28% compared to April 2019) and while Canadians spend more per day on average when compared to the average [in 2019], the reduced numbers have translated to fewer seatings, especially in our breakfast and lunch service. Our restaurant has seen a notable decline in Canadian visitors this year, and we have been working hard to ensure that they go home with great memories to share with their neighbors.” 

Zooming Out 

It’s not just Hawai‘i – all of the U.S. is experiencing a decline of Canadian tourism. According to new data from Statistics Canada, Canadian road trips to the U.S. – their primary mode of entry – fell by 33% this June compared to June 2024, following a 38% decline in May. Air travel from Canada also saw a 22% year-over-year decrease. June marked the sixth consecutive month of sharp drops in Canadian inbound travel, with double-digit year-over-year declines in both car and air travel to the U.S. every month since April.  

While the unfavorable exchange rate plays a role ($1 CAD / $0.73 USD at the time of publication), escalating geopolitical tensions appear to be the primary driver behind Canadians staying away.  

These tensions stem from various actions and statements by the Trump administration. For instance, on July 10 President Donald Trump announced a 35% tariff on Canadian goods, effective August 1, citing a purported “flow of fentanyl” across the border as justification.  

The latest friction in the ongoing tariff negotiations emerged after Canadian Prime Minister Mark Carney’s July 30 announcement that Canada will join France and the United Kingdom in recognizing a Palestinian state at the United Nations General Assembly in September.  

President Trump swiftly responded on his social media platform the following day, posting, “Wow! Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a Trade Deal with them.” 

But the tone was set much earlier by Trump’s recurring annexation rhetoric, including this comment made during a Fox News interview in June: “Frankly, Canada should be the 51st state, they really should. Because Canada relies entirely on the United States, we don’t rely on Canada.”  

Trump has also publicly made jabs at Canadian leadership, such as referring to then-Canadian Prime Minister Justin Trudeau as “governor” of the “Great State of Canada.” Such sentiments have been echoed by other U.S. officials, further exacerbating the strained relationship. 

Déjà Vu  

Some Canadians feel an affinity for Hawai‘i because of its own history of having its sovereignty forcibly trampled. Trump’s rhetoric about Canada becoming the “51st state” evokes injustices that led to Hawai‘i becoming the 50th.  

The Hawaiian Kingdom, a globally recognized sovereign nation with its own constitutional monarchy and diplomatic ties, was overthrown in 1893, led by a small group of American and European businessmen with the support of U.S. Marines. Their aim was for U.S. annexation.   

The overthrow was investigated in The Blount Report, commissioned by President Grover Cleveland, which concluded that the United States was complicit in the lawless overthrow of the legitimate, peaceful government of Hawai‘i. With President Cleveland’s opposition, the first two annexation treaties failed in the Senate. 

In 1897, two Hawaiian organizations actively resisted the third annexation attempt: The Hui Kālai‘āina gathered 17,000 signatures petitioning for the monarchy’s restoration, while the Hui Aloha ‘Āina collected approximately 21,000 signatures protesting annexation. The 1896 census  recorded 39,504 Native Hawaiians, and even accounting for the significant number of people who may have signed both petitions, these documents provided evidence that the majority of Native Hawaiians did not consent to the overthrow of their homeland’s leaders. 

Their resistance was disregarded when President William McKinley signed the Newlands Resolution, leading to the unilateral annexation of Hawai‘i in 1898. Hawai‘i became the 50th state in 1959.  

Given that history, new threats of annexation of Canada can’t easily be dismissed as theoretical.  

“Elbows Up” 

Polls indicate that Canadians’ favorable outlook toward the U.S. is plummeting. One survey, published by Gallup in August, found that just 15% of Canadians approved of U.S. leadership, while 79% disapproved. This unfavorable view is higher than that for China’s leadership, which stood at 64% disapproval, and is only slightly better than the 82% disapproval rating for Russia’s.

Merchandize emblazoned with slogans like “Canada is Not For Sale” and “Elbows Up” (a hockey defensive tactic symbolizing a defiant stance and readiness to push back) are gaining popularity in Canada.  

A growing number of Canadians are now boycotting U.S. tourism and goods, instead opting to explore their own country or other parts of the globe and making a concerted effort to buy more Canadian products.  

A Longwoods International study conducted in April found that 60% of Canadians are less likely to travel to the U.S. in the next year due to current American policies, trade practices and political statements. Of those, 36% had already canceled planned trips. 

“The main reason why Canadians are upset is really the ‘51st state’ rhetoric and [Trump] threatening to annex our country,” says Canadian YouTuber Guard The Leaf, who said he didn’t want to reveal his name on his popular channel because of safety concerns.  

After hearing stories about foreigners being detained, interrogated and deported upon arriving at American airports, Guard The Leaf says he doesn’t want to risk being detained simply because he runs a channel critical of Trump and his policies. Despite the boycott, he says he might need to cross the border “whether it’s a family emergency or something, because,” like many Canadians, “I do have friends and family in the U.S.” 

His channel bio, in part, reads, “Guard The Leaf is a proudly Canadian voice covering the rising tensions between Canada and the U.S., from trade and tourism to sovereignty and survival. If it affects Canada, we talk about it. This channel is about standing up for Canadian independence, calling out disrespect, and making sure our side of the story gets told, because no one else will.” Since posting his first video in late April, he’s already uploaded more than a hundred videos and amassed over 63,400 subscribers as of September 3. 

Guard The Leaf frequently uploads videos about the decline of Canadian tourism in America, commenting on news footage that reports on what’s driving the decrease and its impact on different destinations’ economies, including videos specifically on Maine, Buffalo, Las Vegas, Florida and, yes, Hawai‘i. 

“The media is portraying it as being a tariff issue or the currency exchange. But if that’s what the message is being delivered, then many U.S. citizens may not know that we’re actually pissed off with the annexation and 51st threats,” he says. 

When asked how Trump’s second term compares to his first, Guard The Leaf says, “It’s 100% different. I mean, during his first term, I was still going to the U.S. Yes, he did impose tariffs on us and there were things going on, but it wasn’t to this extent.” 

Guard The Leaf acknowledges in his video titled “Hawaii’s Tourism in CRISIS Without Canadian Visitors” that although Hawai‘i is “considered a solid Democrat stronghold, … they’re not putting enough pressure where it matters – on Washington.”  

He says his decision not to travel to Hawai‘i for the foreseeable future hit especially hard as he and his family used to frequently travel here. “My first visit was in 2010. … When I came, there was something about Hawai‘i, the people and just the nature, that I loved it the second I got at the airport.”

Guard The Leaf’s fondness for the Islands even led to him and his wife deciding to get married on O‘ahu in 2018. Regardless, he still doesn’t feel comfortable coming back anytime soon. “Every state in the U.S., including Hawai‘i,” has “Republican supporters, and not all of them, but you know, there are still going to be supporters that are going to be repeating the rhetoric and annexation threats and whatever else, right?”  

For a video titled “Canadian Tourists Are Spending Elsewhere Now, Here’s Proof,” Guard The Leaf asked viewers who had canceled or scrapped planned trips to the U.S. to comment where they are going instead and how much money they’ll be spending elsewhere. Several comments featured in that video highlighted money originally earmarked for Hawai‘i trips being redirected elsewhere: 

 – “Cancelled our trip to Hawaii. Spending that $10,000 + to take Via Rail to Montreal and Quebec City.” 

– “My wife and I have gone to Maui 9 times in the last 10 years. We will not step foot into the U.S. and spend our money there until the orange clown is out of the White House. This year we are going to the Philippines.” 

– “We cancelled a trip to Hawaii and went to Bali. Hawaii lost $36k.” 

– “Cancelled my trip to San Diego and Hawaii. We are currently travelling in Amsterdam and the UK instead. I estimate we will be spending about $14,000 to $15,000.” 

A Special Case? 

On the bright side, Hawai‘i is enduring the Canadian boycott on U.S. tourism better than most other American destinations. “Currently, the statistics are telling us that there’s a range of U.S. travel by Canadians that has been reduced between 20 to 30%, depending on the metric,” but there’s been “a considerably smaller downturn when we talk about Canadians visiting Hawai‘i”, says Wood.  

He attributes this to the popular perception that the Islands have both a geographical and cultural separation from the rest of the States. “I think Canadians’ considerations around travel to Hawai‘i are different because they appreciate that the destination is different,” says Wood. “One of the things that I found myself using in relation to language when we’re communicating out about Hawai‘i within the Canadian market is we refer back to ‘the Aloha spirit’ and the welcoming nature of Hawai‘i and Hawaiians. … It seems within the Hawaiian DNA to be welcoming, to encourage positive experiences from mindful travelers that are coming to Hawai‘i.” 

Hawaii Business spoke to one Canadian couple still planning to visit the Island of Hawai‘i in November for their third time. Jean Mcrae, a retiree from British Columbia, says her past two trips have “been very pleasant. … It’s an easy holiday. People are very friendly, and the service is nice.” 

McRae says she feels Canada-U.S. relations are “a bit strained” because of the tariffs and “accusations and comments that have been leveled, mostly by the President but also by others, against Canada.”  

This has led her and her family to alter some of their decision-making. “We actually just returned from a trip to the Yukon. Originally, we had plans to go to Alaska, but we decided that we wouldn’t do that this time.”  

But McRae says visiting Hawai‘i feels different than other parts of the U.S. for a few reasons. “Part of it is the distance from the mainland United States,” she says, and the culture feels different, too: “I think the indigenous Hawaiian presence, that’s something that, you know, we’ve enjoyed very much. … I think it’s also the politics. The fact that it’s a Democratic state makes it feel a little less like we might run into any problem.” She says she plans on spending about $6,000 to $7,000 on her upcoming trip. 

Snowbird Season and Beyond 

Looking ahead, the decline of Canadian tourists may hit Hawai‘i harder. That’s because the most popular season for Canadians to travel is winter, when ‘snowbirds’ flock to warm-weather places to escape the cold.  

“Canadians tend to come at times when it’s going to be the shoulder season in relation to U.S. visits. It’s a little different from the Japanese visitation pattern,” says Wood, so Canadian tourists are seen as especially important “because they kind of balance out the overall visitation over the course of the year.” 

During a follow-up conversation with Guard The Leaf, he mentioned that he’s heard some of his compatriots say they are following through with trips to the U.S. booked before geopolitical tensions escalated, because cancelling the trips would be too costly. He anticipates that once these pre-scheduled trips conclude by year-end, Hawai‘i and the broader U.S. will likely experience an even sharper decline in Canadian tourism in 2026. 

In one promising sign, Wood noted: “WestJet, one of the two major Canadian airlines bringing Canadians to Hawai‘i, has released its winter flight schedule and has increased its total seats to Hawai‘i while reducing capacity on many continental U.S. flights. I see that as a very positive sign that they are anticipating a stronger winter for Hawai‘i visits from Canada.” 

However, the outlook is not entirely positive. Sean Dee, EVP and Chief Commercial Officer at OUTRIGGER Hospitality Group, said in an email that the company’s Hawai‘i resorts and hotels had a strong start to the year before conditions changed. “Q1 2025 performance exceeded the same period in 2024, signaling robust early-season demand. However, recent developments, including the announced tariff, have led to elevated cancellations from April onward. Additionally, forward bookings for the upcoming core Canadian travel season (November to April) are pacing slower, indicating potential softening in the months ahead. This trend is more specific to our Hawai‘i portfolio, as our other international markets are not experiencing the same headwinds at this time.” 

Dee states that although Canadians constitute a “relatively modest portion” of their business, making up 5% of their guests on O‘ahu, 2.8% on the Island of Hawai‘i, 3% on Maui and 2.3% on Kaua‘i, “it remains a valued and strategic audience. We’re actively monitoring these trends and adjusting our approach to help re-engage Canadian travelers in the months ahead.” He says this includes collaborating with their “airline and wholesale partners to create compelling offers tailored to this audience. Whether through seasonal promotions, exclusive vacation packages or coordinated campaigns with travel trade partners, we’re focused on keeping Hawai‘i top-of-mind for Canadians considering a warm-weather escape.” 

 For the upcoming winter season, the hotel chain is hoping to entice Canadians to Hawai‘i’s warmer climes with a lineup of home-grown entertainment. 

“Last December, we were proud to debut ‘Auana, the first-ever resident Cirque du Soleil show in Hawai‘i, hosted at our craft property, OUTRIGGER Waikīkī Beachcomber Hotel,” Dee noted. “With Cirque’s global headquarters in Montréal, we see this as a special full-circle moment, welcoming a world-class Canadian cultural brand to the heart of Waikīkī. It’s an exciting new chapter in Hawai‘i entertainment and one more reason we invite our Canadian guests to rediscover the Islands with us.” 

Outstanding beaches, targeted entertainment and vacation package deals may not be enough to draw many Canadians back to the U.S.  

Asked if he has any advice for tourism leaders and public officials to navigate the situation, Guard The Leaf offered this response: “I’ll be honest, I think it’s a little too late, but if they do want to  see if they can get Canadians and international tours back, you have to be insistent here, right? 

“I know your bottom lines are hurting, but you have to be able to sympathize with why we are actually boycotting. Make sure that you’re addressing the real problem and sympathizing with Canadians, versus trying to convince us and sell us to come back.” 

“As early as the Kalākaua years (1874-1891), you do have a tiny bit of tourism,” says John Rosa, a UH professor focused on the history of modern Hawai‘i. But “it’s mostly world travelers, and people who are related to missionaries, or missionaries themselves, or, like Robert Louis Stevenson, they write.”

Even if few people actually traveled here, the alluring image of the islands also spread through postcards and early filmmaking: Thomas Edison’s 1906 film clips of Hawai‘i’s panoramic sights and colorful people, like surfers and paniolo, can still be seen on the internet.

What first accelerated tourism was the opening of Waikīkī‘s first hotel, the Moana, in 1901, and the Royal Hawaiian in 1927, along with the engineering of the Ala Wai Canal in 1928, which enabled further development of Waikīkī in decades to come, Rosa says.

“A lot of it has to do with Waikīkī having a very desirable climate that even Native Hawaiian ali‘i liked. Even Kamehameha lived here in Waikīkī for a while; so did Ka‘ahumanu. This whole ahupua‘a was – outside the month of August – very cool. And you’ve got trade winds, pretty much, and it’s pleasant to live at,” he says.

“And what works for the ali‘i is going to work for the tourists.”

In the first half of the 20th century, most tourists arrived on “white ships” – the term for the luxury ocean liners that sailed between Hawai‘i and the West Coast.

“Developing a Dream Destination” 

Rosa and UH economist James Mak say tourism took off after World War II.

“One of the things that World War II did for people was to demonstrate the viability of airline travel,” Mak says. “People said, ‘All these planes are flying around, it must be safe. It must be efficient.’ ”

Mak, a UH professor emeritus of economics, has written reports for UHERO, the UH Economic Research Organization, and in 2008, authored the book “Developing a Dream Destination: Tourism and Tourism Policy Planning in Hawai‘i.”

He says Hawai‘i hosted nearly a quarter of a million visitors in 1959, a tally that surged with the start of jet flights between Hawai‘i and the continent.

That transition to large-group tourism involved a significant degree of government regulation, which persists today. The federal Civil Aeronautics Board was tasked with authorizing the flights and overseeing the airlines to ensure they were properly equipped.

“The CAB was created by Congress in 1938,” he says. “The motor carriers were also regulated – even today here in Hawai‘i, even though in most states they have been dismantled. The tour buses you see here, they still have to be approved by the PUC (state Public Utilities Commission). Existing firms can actually object to granting additional players in the field.”

Although federal authorities retain oversight of matters such as airline mergers because of antitrust concerns, other government intervention has eased over time, beginning with reduced oversight of airline route expansion.

“More and more people began to realize, in the 40 years of the CAB’s existence, that this was counterproductive; it’s not efficient,” Mak says. “They started to open up the various markets, including the air carriers, to open competition.”

Cheaper Flights 

Jumbo jets began regular routes to Hawai‘i in 1970, and starting in 1978, airlines were free to set their own prices, he adds, which made flights more affordable.

Concurrently, hotels built up their capacity, Mak says, and the construction crane, the saying went at the time, became the “state bird.”

“Initially, the hotels that were built, they were not by national chains like Hilton and the like. They came later actually,” Mak says.

“The first hotel, as I recounted in my book, was the Armed Forces YMCA Hotel, which (hotelier) Chris Hemmeter took over to build his palatial office building, and which was sold to the state.” The YMCA Hotel is now Capitol Modern: The Hawai‘i State Art Museum.

Even the first large hotels, such as the complex constructed by developer Henry J. Kaiser before it became the Hilton Hawaiian Village, were individual private enterprises.

There was also some synergy with airlines, Rosa notes. “The Ala Moana Hotel, which is fairly large for when it got built, American Airlines helped raise the capital,” he says.

Large group packages were common. Although Japanese visitors ultimately became more comfortable with traveling independently, in the 1960s and ’70s, they benefited from the time savings and language support that group travel provided, Mak says.

“The jumbo jets made it possible, because they were carrying large groups of people, and they were able to move en masse,” he adds. “And this was particularly important among Japanese travelers because they are time-constrained. Take a look at how long Japanese travelers were staying in Hawai‘i – like five days. Efficiency was extremely important.”

The speed of jet travel hastened the decline of ocean liners. According to a paper co-authored by Mak and UHERO’s Andrew Kato, “Technical Progress in Transport and the Tourism Area Life Cycle,” by the time the first Boeing 747 arrived in Hawai‘i in 1970, vacationers arriving by sea represented less than one-half of 1% of Hawai‘i tourists from North America. The last sailing of a white ship followed soon after, in 1978.

Far Fewer Japanese Tourists 

The annual tourist tally started from a maximum of roughly 10,000 visitors before World War II, Rosa says. The numbers steadily increased after the war and by 1967, Hawai‘i had hit the 1 million annual visitor mark; by 1988, there were 6 million visitors.

At its peak in the early 1990s, the Japanese market alone topped 2 million a year, Mak says, but it has shrunk to a fraction of that today. For all of 2023, there were 572,979 visitors from Japan.

In those early boom years, Hawai‘i was marketed to potential tourists in a straightforward fashion, says Frank Haas, a marketing consultant and former VP and director of marketing for the Hawai‘i Tourism Authority.

“In the early days of volume tourism to Hawai‘i, the big tour operators were selling Hawai‘i as a fun-sun-sand-surf destination,” Haas says. “There wasn’t much competition from other markets. But as people become more aware of the nuances of the place, you can fold in more nuanced messaging.”

There have been other major changes in recent decades. For example, apps and social media have led to the increase of vacation rentals within residential neighborhoods.

Haas says microtargeting enabled by the internet has allowed the industry to market to visitors more specifically.

“The message went from ‘Sun, sand, surf, Hawai‘i is a playground’ to, over time, what was different and special about the place,” he adds. “And the last 10 years, we can now talk to people interested in different things.

“The market went from mass market to particular markets. Now you can find people interested in bird-watching, heritage tourism, agritourism, voluntourism – these narrowly defined interests that we can connect with.”

“Those Are Wish Lists, Not a Plan” 

Marketing, as well as the development of the Hawai‘i Convention Center, are two aspects of the otherwise privately developed visitor industry that have taken significant government investment, Mak says.

According to the Kato/Mak paper, in 1988, tourism’s share of the state’s gross domestic product peaked at 24.7% and has been declining ever since.

Hawai‘i’s economic slump in the 1990s, driven partly by the bursting of the Japanese economic bubble in 1991, prodded the tourism industry to accept a hotel room tax to help pay for marketing and to finance the convention center, all in hopes of boosting visitor numbers and spending, Mak says.

Another long-standing arena for government involvement has been tourism planning, he says. That’s only going to intensify as the industry works to adapt to changing trends through destination management.

Whether or not this will work is uncertain.

“Today we talk about sustainable tourism,” Mak says, “but Hawai‘i’s tourism plan in 1976, which became the Hawai‘i Tourism Functional Plan in 1980, that was truly what sustainable tourism was all about.

“On the other hand, these plans express the community aspirations for tourism. That doesn’t mean they’re actually carried out.”

Today, he says, “the Legislature is really hot on the DMAPs – the destination management action plans – even though (economist) Paul Brewbaker, Frank Haas and I don’t think it’s a plan. Those are wish lists, not a plan.”

In 2000, Waikīkī businesses acted boldly: they voluntarily increased their commercial property taxes to generate funds for a “BID.”

“Business improvement districts are a model nationwide. Most cities you go to have these business improvement districts or community improvement districts to provide supplemental services,” says Trevor Abarzua, president and executive director of the Waikīkī BID Association.

For Waikīkī, these added services include hospitality support, trash pickup, power washing, landscaping, security and homeless outreach.

The Waikīkī BID is organized into three precincts, each with its own supplemental property tax rate for the fiscal year 2025: Kalākaua/Kūhiō Corridor at 38.75 cents per $1,000 of assessed value, Kalākaua Makai at 12.92 cents per $1,000 of assessed value and Greater Waikīkī at 9.69 cents per $1,000 of assessed value.

“These businesses elected to tax themselves more because they want that bucket of money to then stay in Waikīkī for these extra services,” says Abarzua. The nonprofit BID was created to manage that money and provide the services.

Does Downtown Need a BID?

If Waikīkī’s BID has improved safety, cleanliness and vibrancy, should something similar be adopted in Downtown Honolulu?

Colbert Matsumoto, chairman of the investment company Tradewind Group, has been working Downtown since 1978. Over the years, he says, he’s observed unfortunate changes in the area.

“We’ve lost a lot of large companies that have been consolidated into larger national or international organizations and companies that have suffered business downturns and have gone out of business. To a certain extent, some people have called it a hollowing out of the local business community, because with a lot of these changes, the profile of the business community has changed a lot in terms of the people, the leadership and the resources that are available to the community at large,” says Matsumoto.

Some public spaces have become seedier. The broken windows theory suggests that areas that aren’t kept clean and cleared of broken windows, litter, graffiti and other problems will attract more crime and drive away law-abiding people.

“That’s why we do the power washing and the landscaping” in Waikīkī, says Abarzua. “If it looks nicer, people treat it nicer, right? So I think Downtown could totally use that face-lift.”

Left: Brandon Lizardon power washes the sidewalk to help keep Waikīkī clean and beautiful. Right: Saul De La Rosa wipes down the newly installed trash bins, donated by JTB Hawaii, which are a major upgrade from the previous trash cans.

Matsumoto believes Downtown business and property owners may not initially support higher taxes to create a BID because they “feel these are things that the city should be doing.”

“But I think most people recognize that if they just wait for the city to kind of get their act together and address these concerns, it may not happen. So I’d like to think that rational business owners would look at this as maybe a necessary investment, but it depends on whether or not they think that they’ll be getting good value in return for the investment that they make. And that’s why the Waikīkī BID example is one that I think is very powerful and potentially persuasive,” says Matsumoto.

Aloha Ambassadors

The most visible parts of the Waikīkī BID are its 60 or so Aloha Ambassadors. They’re spread across Waikīkī and easy to spot in their neon yellow shirts, ready to help visitors and residents alike.

When I got lost on my way to interview Abarzua at his office, I was relieved to see an Aloha Ambassador nearby and asked for help. He didn’t just point me in the right direction, he kindly escorted me all the way to the door and saved me from being late.

“It’s a huge benefit for the community to have these ambassadors around,” says Abarzua.

“It’s a paid position to be an Aloha Ambassador. If you work over 20 hours, you get medical care. We offer full prescription coverage (and) a lot of different benefits that other employers do not. So it’s a great job,” he says.

The ambassador program also provides second chances: “If we see people that are homeless now and they get cleaned up, we’re willing to hire them because people need a second chance at employment too,” says Abarzua.

Ambassadors who have been homeless, substance abusers or involved in other criminal activity are some of the “hardest workers,” he says, and tend to be especially adept at helping those with similar struggles now.

Safe & Sound

Paul Kosasa is president and CEO of ABC Stores and has served as Waikīkī BID’s board chair for nearly a decade. A grant from his Kosasa Foundation and the city funds the Safe & Sound operation, a supplemental service that launched in September 2022.

“When the BID was set up, it was primarily just to provide maintenance, cleaning the streets and having ambassadors that would connect with the visitors and give them directions and advice, those type of things, but that’s morphed over the years to more services. I guess you call them security – people that aid the HPD, being eyes and ears, so it’s just a sign of the times,” says Kosasa.

The Safe & Sound initiative brings together different parties and stakeholders to come up with collaborative solutions, including HPD, the offices of the prosecuting attorney and mayor, and other community outreach programs.

“In year one, the focus for Safe & Sound was reducing habitual crime in the district by all working together and sharing data amongst organizations,” says Abarzua.

Kosasa says the biggest problem at his company is shoplifting, which has escalated over the years: “It’s not kid stuff anymore. They’re carrying weapons sometimes and threaten the safety of our employees. So, it’s a little scary.”

In addition to theft, Kosasa says, common crimes include “property damage, graffiti (and) some assault on visitors or locals.” The Waikīkī BID found a pattern in the crime data.

“It’s the same people every day committing those same little offenses, and they’re not getting arrested for it, or if they are getting arrested for it, they’re going in front of a prosecutor and a judge and (getting) a slap on the wrist,” says Abarzua.

He says the BID persuaded the prosecuting attorney’s office to enforce temporary geographic restrictions on habitual offenders. However, that’s a short-term solution that doesn’t address the root of the problem, he says, so in year two the BID is focusing on the “Sound” part of Safe & Sound.

Waikīkī bid has hired about 60 Aloha ambassadors, seen in neon yellow shirts, who assist visitors, clean sidewalks, remove graffiti, report problems and handle other tasks that make the area attractive and safe. Top left: Josephine “Josie” Baird is a Hospitality Ambassador pictured handing out maps. Bottom left: Saul De La Rosa is another Aloha Ambassador.

The BID has two full-time staff members strictly focused on outreach; they work closely with Safe & Sound Executive Director Katie Kaahanui. “So we have those three individuals that work well together, that tackle the homelessness piece and the mental health piece,” says Abarzua.

Waikīkī BID also provides a grant to the Institute for Human Services every year that allows the nonprofit serving homeless people to provide more outreach and medical and psychiatric services to the district, says Abarzua.

According to the HPD, the Safe & Sound program has contributed to a 67% reduction in drug and alcohol-related crimes, a 35% decrease in robberies, a 32% drop in burglaries and a 27% reduction in criminal property damage in its first year.

Although Annie Tan has long wanted to experience Hawai’i’s natural beauty and multicultural communities, she has recently decided to vacation elsewhere for the foreseeable future.

“After the fires in 2023, I remember seeing in the media that a lot of aid efforts were going to tourists and not necessarily to local people. When I started to understand how dependent Hawai‘i is on tourism, that got me thinking that visiting is not a good thing. Maybe it’s not what the people want, especially when I hear of people saying you’re not helping us, and you shouldn’t come and use our land and take away resources from people who are here. But at the same time, I know that people are dependent on tourism there,” says Tan, who lives in the Queens borough of New York and works for a nonprofit.

“It’s confusing as a person who tries to do the right thing. So I straight up have decided that it’s better if I just don’t go.”

Her mixed feelings are echoed among other potential visitors who aren’t sure how to be respectful tourists while so many are still mourning after the Maui wildfires and at a time when anti-tourism sentiment is rising not only in Hawai‘i but around the world. This summer, for example, demonstrators in Barcelona marched through areas popular with tourists, chanting “tourists go home” and squirting them with water pistols.

Mysti Berry has been traveling from the Bay Area to Hawai‘i for the last 20 years but has also started questioning whether her presence is inflicting more harm than good.

“During the pandemic, I started reading articles about how tourism has contributed so much pollution and harm to the environment. And this gave me pause because I had never considered any of that before,” says the San Francisco-based writer.

State leaders have signaled that managing such tensions between tourism, as the state’s biggest revenue generator, and the needs of community members, is one of their biggest priorities. In June, Gov. Josh Green signed a bill incorporating regenerative tourism into the Hawai‘i State Planning Act. The goals of such legislation include reducing tourism’s ecological footprint as well as supporting more education and job training for residents within the visitor industry.

“By 2028, we have set as our goal to be known as a regenerative destination,” says Daniel Nahoopii, the interim president and CEO of the Hawai‘i Tourism Authority. “What this means is a tourism that not only supports communities but adds back to them by protecting environments, acknowledging Indigenous communities as critical to this change, creating destination stewardship programs and seeing what infrastructure is needed. There will be more programs to make sure visitors get safe, clean experiences and that residents feel empowered.”

Nahoopii adds that the kinds of travelers such initiatives will target include mindful ones. “We know they will follow rules, want a cultural and historical experience, and want to make sure they don’t have a negative impact on the environment.”

But it will take time to make these initiatives reality. For now, mindful travelers like Tan aren’t sure what to do.

Mana Up co-founder Meli James says: “Someone who is culturally sensitive and wants to do the right thing will think, ‘I don’t know what’s right, so maybe I just shouldn’t come.’ When tourists get confused, they are going to err on being conservative because they don’t know the right way to be a tourist. And that’s not helping anyone.”

James adds, “What we need to do is create clearer messaging and examples for how visitors can add value. And be a model for how to do this the right way.”

What should that message be? This article explores that question from a range of perspectives, including those of potential visitors, tourist industry leaders, travel influencers and those whose communities are affected most by tourism. While this can be a complex and contentious topic, the people we interviewed all agree on the importance of articulating a clear message on how to be a good traveler in the age of anti-tourism sentiment. Here are the three key points that emerged.

Seek Out the Voices of the People Who Call Hawai’i Home

Britney Alejo-Fishell recalls a moment right after the Maui wildfires that made it painfully apparent how disconnected some visitors were to what was happening.

“We were getting supplies, and all the shelves at the stores were empty. All of us normal everyday people and first responders were panicking. I remember seeing a lady who had just lost everything, wandering around looking for a pair of shoes that could fit. And at the same time, there was a tourist family with a pineapple in their cart, complaining how there was nothing to buy,” says Alejo-Fishell, the owner and founder of Haku Maui, based in Makawao.

“It was this kind of insensitivity to their surroundings that heightens so many of the emotions in our community,” she says.

Despite the grief, Alejo-Fishell emphasizes that she is ultimately hopeful, having seen the transformation visitors go through when they learn more about Native Hawaiian culture through her store, which specializes in traditional lei and lei-making workshops.

“You can go to Costco and buy a lei, or you can come here and we can tell you where this flower was picked, the time it was picked and who the farmer is. Your lei tells a story and when we give lei, it also tells a story. People tell us they are forever changed by their time with us and that it changed their view of this place,” she says.

This is what she wants for every tourist: to get out of their exclusive resorts, head to small, historical towns and meet the people. Most of the time, the people behind the cash registers will be the business owners. “This is a way that tourists can come learn but also play a part in helping us heal,” says Alejo-Fishell.

Several people interviewed for this piece mentioned the latest Hawaiian Airlines in-flight video as a great example of emphasizing the importance of Hawai‘i not just as a destination, but as a home to people who care deeply about their environment and everything it comprises, from its mountains and beaches to its taro fields and farmers markets.

“The video they produce is exactly the type of message we want to get out to more visitors. And they did it on their own, it wasn’t a mandate,” says James Kunane Tokioka, director of the state Department of Business, Economic Development & Tourism.

Likewise, Chris – who started a YouTube channel called “Hello From Hawaii” – also saw a need for more content from a local’s point of view. Most of the videos out there were about tourist sites.

“If it’s just vacation stuff, that’s the primary narrative out there. And people won’t know what it’s actually like for residents, and what our culture is really like. I wanted to talk about Hawai‘i from the perspective of one local. That doesn’t mean I speak for all locals or for the Native Hawaiian community. But I’m someone who was born and raised here and just trying to share what that’s like,” says Chris, who says he doesn’t use his last name online to protect his family’s privacy.

Some topics in the videos featured on his channel include the differences between Native Hawaiian, local and Western cultures; everyday problems that locals face; hotel strikes; the issue of affordability; and what it’s like to raise children in the state.

Another video is a response to the article “Hawai‘i is not and never will be your vacation ‘paradise’ ” by Native Hawaiian writer and university student Gisele Bisch and published in the Daily Princetonian, a publication at Princeton University. In the article, Bisch argues that “one cannot claim to respect, advocate for, or try to empower Indigenous people while also traveling to Hawai‘i.”

Chris hopes that instead of only relying on social media or Reddit forums, ambivalent travelers can find a variety of in-depth views from people who live in Hawai‘i to help them make the right decisions for themselves.

“If people choose not to come, it’s their right, but I hope that if they come across my video, they will understand that not everyone is pushing that narrative of ‘stay away.’ Not everyone believes that tourism is this bad thing that is hurting everyone in Hawai‘i. I hope they can hear both sides and a well-rounded discussion about that topic.”

When I spoke directly with Bisch, who was born on O‘ahu, she explained the impetus of her article was to point out the historical impact of tourism on her Native Hawaiian community. “A lot of elements in relation to Native Hawaiian culture or conceptions of Native Hawaiian identity are used in the tourism industry and marketed internationally. And yet when it comes to benefiting from tourism in our economy, our voices are not a part of the conversation. Hawai‘i likes to market itself as solely a vacation to other people, but that flattens what this place means to actual Native Hawaiians,” she says.

Council for Native Hawaiian Advancement CEO Kūhiō Lewis is hoping to change all of that. In fact, as he points out, there has never been as much Native Hawaiian representation as there is right now among the state’s tourism leadership – which includes HTA’s Nahoopii; DBEDT’s Tokioka; and Aaron Salā, now CEO of the Hawai‘i Visitors and Convention Bureau. And they’re all collaborating on regenerative tourism initiatives.

“What has made Native Hawaiians so upset is seeing the tourist industry define their identity. So what we are doing is shifting the focus, making sure we are telling the right stories in alignment with our people. And we are taking it to the level of integrating Hawaiian culture into the fabric of regenerative tourism. Our values will become part of the DNA as we work toward fixing the model of tourism,” says Lewis.

Adds Tokioka: “We want to make sure the people we grew up with, the people we know from our communities, that their voices are heard.”

Vintage travel poster: Getty Images

Buy Local but Just As Importantly, Explore the Stories Behind the Products

There are many ways visitors can volunteer their time while on vacation. The Mālama Hawai‘i Program, launched by the Hawai‘i Tourism Authority during the pandemic, for example, offers participation in activities such as beach cleanups and native tree planting in exchange for hotel discounts.

But as Mana Up co-founder James acknowledges, volunteer work isn’t the only way to define “doing good,” and people on vacation may not want to spend their time that way. Instead, she says, doing good can be fun when it comes to supporting local businesses. “People can stay at a locally owned hotel, eat at a locally owned restaurant, go to locally owned grocery stores. They can go to Kō Hana Rum, have a mai tai with locally made rum. They can go to Mānoa Chocolate for a tasting. They can go to one of the farms and support our local farming initiatives. They can end up having a great experience while knowing that every dollar they are spending will stay in our community.”

James says equally important as buying local is understanding the story behind those locally made products. Mana Up, which supports companies based in Hawai‘i that produce consumer products, also works with company founders to tell the stories of their brands, and it’s evident throughout their retail locations. “We love seeing folks come in and get that delight when they are looking at our entrepreneur cards and learning something different about Hawai‘i while contributing and investing in the state.”

The hope of Karli Rose, founder of a company called To Be, is to continue supporting her community on Maui by keeping the manufacturing of her all-natural skin and body products in Hawai‘i. She explains that she and her team craft all of their botanical products from start to finish in their Wailuku store. But, like James, she wants visitors to take away more than just the products. To keep her customers connected to her community, even when they are back home, she sends a regular newsletter.

“In general, most people have a good heart and maybe I’m optimistic, but it’s up to us as small businesses to educate our customers so that when they return, they have a level of awareness because we’re fostering that connection we have with them. And they love it. They love learning about Hawai‘i. And that helps bridge the gap. It’s all about education, and doing it with the aloha spirit,” says Rose.

But she also emphasizes that small businesses need more help. Hawai‘i’s tourism strategy has been primarily centered around big hotels and brands. There’s been less guidance for individual businesses on how to plug in to the visitor economy so travelers know how to make local businesses a bigger part of their itineraries.

HTA’s public affairs officer, T. Ilihia Gionson, says that as the state enacts more regenerative tourism measures, this will change. “When we talk about local businesses, how do we make sure people know about these local businesses? If we know that visitors are coming to enjoy a day at the beach, how do we make sure that they know that there’s a growing fashion scene and they can buy a Hawai‘i-made swimming suit? This is one of many examples of work we want to do to optimize tourism for the benefit of local businesses and communities.”

Don’t Just Drop in. Commit to Being Part of the Larger Fabric of This Place.

Maui resident Roselani Aiwohi says it angers her when tourists film in her community and then brag that they’ve “discovered” something off the beaten path. “The next thing we know we get 50 tourists at a little freshwater pond. And with that comes degradation because they don’t know how to treat the place respectfully. Hawaiians are getting very frustrated with people treating our home as their playground.”

George Thompson, a Kaua‘i resident and former VP and director of public relations at Wizard Publications, agrees that friction often arises when tourists wander into local communities that aren’t designed to accommodate them.

“People want to experience the Hawai‘i lifestyle. They want to have those authentic adventures and they go out and look for them in our neighborhoods. Waikīkī is a tourist spot, so if you’re a local and you go there, you’re not frustrated at tourism; you expect it there. It’s when tourism starts to impact our existence, when it brings traffic or people blocking the aisles at Safeway or degradation of sacred sites that it becomes frustrating,” says Thompson, who has worked in and around the tourist industry for 45 years.

For Aiwohi, owner of her own clothing shop at Queen Ka‘ahumanu Center, travel shouldn’t just be about taking and leaving but finding ways to commit to the places that you love. Her perspective was shaped by her own travel to Bali. She says it was a wonderful trip, but while staying in touch with her driver there, she discovered he was struggling to feed his family. Eventually, she figured out a way to help his family by hiring his wife as a pattern maker and seamstress. This gave her the idea for Waiwaolani, which sells clothing featuring native plant patterns. To this day, she continues to support the Balinese family with work at her company.

“What we should work toward is educating tourists to come and leave this place either in the exact same state or even better,” Aiwohi says.

Popular but ecologically fragile places, such as Diamond Head State Monument and Ha‘ena State Park now require visitors to make reservations, resulting in less congestion and impact on surrounding neighborhoods. Hawai‘i County Council Chair Heather Kimball also hopes for more education to go along with the restrictions. She offers Waipi‘o Valley on Hawai‘i Island as an example.

“What I would think would be wonderful to see is some sort of visitor experience where they are educated at the top of the valley or offered a guided tour,” she says. “Then we don’t have to worry about people driving around, getting stuck in the river or hiking back to the waterfalls through private property.”

But in addition, she hopes that there can be ways for visitors to learn about the deeper meanings behind such places. She describes looking at some historical texts about Waipi‘o. “The general theme is that it is an ever-changing, evolving place and that if you go, you should have a purpose. So how do we allow folks to establish a purpose and understand that aspect of Waipi‘o as well as its dynamic nature as a valley of cultural significance?”

Some countries have established tourism pledges to educate visitors. Palau, for example, requires each visitor to sign a passport pledge to act in an ecologically and culturally responsible way on the island, for the sake of Palau’s children and future generations.

Likewise, the Island of Hawai‘i Visitors Bureau features The Pono Pledge. It encourages safe, sustainable and respectful tourism through eight principles, including admiring wildlife only from afar and embracing the concept of being a steward of the land.

While there is no required pledge to enter Hawai‘i, some believe it is important to establish messages on how to be a good tourist.

Jamie Borromeo Akau is the managing director of Mālama Kōkua, a nonprofit that promotes holistic health and wellness while perpetuating Hawaiian cultural values. “This is not about telling people what to do,” she says. “It’s about reminding them that they are a part of a larger fabric. You are not an individual when you’re coming to Hawai‘i. And it’s not just that you are coming to enjoy the land. You are a guest and steward of the land. And you are there to learn about the keepers of the land,” says Akau.

Ultimately, says HTA’s Nahoopii, we can shift our paradigm of the tourism industry so that it is no longer an extractive economy that degrades our resources.

“Tourism is a strong industry that continues to produce tax revenue and money flowing in. But it can also be used for social change, when money can get down to the level of the communities in order to empower them.”

“Tourism can be a change agent.”

That’s the kind of message that will likely connect with potential visitors like Annie Tan. “I think really listening to the people who live there and having them be the primary messengers of what kinds of things make Hawai‘i a special place for them and what outsiders can do to make sure the special culture stays alive is what’s most important to me. Of course, I would love to vacation there. But I need to know how I can give back and not be part of the problem.”

MacNaughton is a relatively small local company, so I was surprised when I added up all the diverse projects it has developed and invested in.

That includes local hotels, housing projects in various price ranges, health care development, a restaurant, insurance company and investments in seven states.

To learn more, I spoke with MacNaughton’s COO, Emily Reber Porter, who has her own vast set of accomplishments: graduate of Punahou, Princeton and Harvard Law, plus 15 years of experience in law, tech and business in Hawai‘i, D.C. and California before she joined MacNaughton in 2015.

She was part of our 2017 cohort of the 20 for the Next 20 and has served on the boards of Punahou, Child & Family Service, Oahu Transit Services, Young Brothers and Kualoa Ranch, and advisory boards for Kupu and UH’s Shidler College of Business. And in case you were wondering what she does with all her spare time, she received an Outstanding Mother Award from the American Lung Association of Hawaii in 2022.

Q: How would you characterize MacNaughton?

Porter: MacNaughton is a family owned, multigenerational real estate development and investment company. Our founder, Duncan MacNaughton, is celebrating 50 years in real estate development and investment in Hawai‘i next year.

We only have about 20 people in our corporate office but are diverse in our expertise and bring in relevant expertise as we need it. We have local values: We all live, work and play here, and have deep connections to the community. We take global sophistication and pair it with local sensibilities.

Q: Why the recent focus on hospitality investments?

Porter: It’s definitely an expansion, but we’ve been involved in hospitality since 2002, when we invested in Twin Farms, Vermont’s only luxury five-star hotel.

In the recent expansion, the hotels we bought are Lotus Honolulu at Diamond Head in 2018, Hotel Renew two years later and then co-ownership of Waikiki Malia and management of all three in 2023.

The hospitality expansion is a natural progression from our development of iconic and innovative residential condominium projects, beginning with Hokua, where our office is, and then Capitol Place and One Ala Moana, and, most recently, the billion-dollar Park Lane Ala Moana.

In those properties, we worked hard to re-envision living in those properties, combining the best of single-family living and condominium living: floor plates, high ceilings, big balconies and amenities, plus the service provided – this concept of residential specialists and bringing in the right people. For instance, the GM at Park Lane Ala Moana has a hospitality background.

It was a natural progression from these residential properties to an interest in ultimate hospitality services at hotels. That’s one reason for our investment in and refresh of those hotels.

The second reason is we’re a local company and tourism is one of Hawai‘i’s top industries, and it made sense for us to participate more in that important sector and bring in our global sophistication and local sensibilities. We take a lot of pride in knowing we are one of the few remaining locally owned and operating multiproperty hoteliers.

Q: That’s true, you are. Do you feel intimidated competing against much larger companies with huge hotel investments in Hawai’i?

Porter: We don’t think of it that way. We look at each opportunity to see if it makes sense for us to invest. We have Lotus Honolulu, this beautifully located property right between Diamond Head and the Pacific Ocean; we have Hotel Renew, half a block from the beach, looking out to the Pacific Ocean; and then Waikiki Malia in the heart of Waikīkī on Royal Hawaiian Avenue. Each of those were compelling enough opportunities to make us feel confident that they were good investments, and we could add something to them through our management.

The synergy between ownership and operation is wonderful, and we have a very long-term investment horizon. We are family owned. We have no mandate to sell in any period of time and that allows us to invest in the properties and people in ways that we see playing out well for us and our community for a long time.

Q: You also consult on hotel projects, including the Hilton Garden Inn in Waikīkī and the Hyatt Regency Waikiki streetscape. That streetscape is described as 150,000 square feet of retail with 60 tenants, almost three football fields. How did you acquire the retail expertise to do that?

Porter: Over the course of Duncan’s nearly 50 years of developing and investing in Hawai‘i, we’ve built expertise across multiple sectors. Retail was the staple of the early years and he’s been involved in building many retail centers.

We developed and currently have ownership and management of Kapolei Commons, Moanalua Shopping Center and Stadium Marketplace on O‘ahu, and Kona Commons on the Big Island, and also the Hokua commercial podium.

We were the first licensee of Starbucks and partnered with Starbucks corporate to bring that to the Islands, built out over 60 stores, operated those stores. Jamba Juice, Blockbuster, P.F. Chang’s. So for decades, MacNaughton has had experience in the retail sector, also leasing, landlord side, tenant side, tenant rep, all of this, and then also building shopping centers around core tenants that we think are really important to have in Hawai‘i.

A lot of these hotels and some condominiums have mixed use – retail on the streetscape, etc. – so it was a natural fit for us to be able to bring the retail expertise together with our knowledge of development, residential, hospitality and also our local sensibilities. A lot of these larger companies aren’t as deeply rooted in Hawai‘i as we are, so we can bring all this expertise together and bring it to bear on a project.

We have a culture that fosters innovation and creativity. We have talented people, but at the same time, we are constantly challenging one another to figure out: Is that the best way or is there something we’re not hearing?

We listen to the market. Understanding the community is important, and this changes over time. So as the world changes, as the community changes, we always want to stay ahead of the curve.

I think that expertise and approach makes us attractive to consult with. We don’t consult on every project that people ask us for; we need to feel there’s synergy, and it’s going to be either a special thing for the community or will result in a further opportunity for us to do something special in the future.

Q: Tell us about other important properties that MacNaughton developed but doesn’t own.

Porter: We have had involvement in Kukui Marketplace in Līhuʻe, Maui Marketplace in Kahului and Waikele Center. We also had a hand in Kapahulu Market, Kukui Grove Center (Līhuʻe), and Kailua Village shops and Henry Street Shops (Kona).

Q: In a different vein, Hawai’i Pacific Health hired you to manage the $20 million-plus renovation and expansion of Kapi’olani Medical Center for Women & Children.

Porter: We weren’t the builders but were approached by the senior leadership at HPH to help consult on the project. They’re wonderful health care providers, but development or renovation is not their core expertise. We have close relationships throughout the community and are, I think, a trusted partner to give expert guidance, honest answers to problems, and innovative and creative solutions.

I don’t know all the details, but I know the parking structure in particular was quite the puzzle that we helped them to figure out how to build. That was a wonderful partnership and something we thought was important to our community.

Q: Thank goodness for the new parking structure, because my daughter was born there and a patient afterward, and I remember the old structure and the many times when we either got the last parking spot on the roof or had to wait for one.

Porter: I’ve been there many times too. Folks with expertise in one area have trusted our guidance in other areas. That’s also how we worked with General Growth Partners, later Brookfield Properties. Duncan and Ian MacNaughton convinced their CEO to develop residential on the old Sears parking lot at Ala Moana Center once it became available. General Growth Properties was clearly a retail expert, and we had other expertise, including development design.

Q: And you opened a restaurant.

Porter: Yes, last October, a phenomenal restaurant in the Lotus Hotel on the second floor called Arden Waikiki. It is spearheaded by chef Makoto Ono and his wife, Amanda Cheng, who’s a pastry chef, and their menu celebrates innovative culinary techniques and locally sourced ingredients.

Our chefs are passionate about partnering with local farmers and purveyors and creating exceptional dishes. We also have live music on Sundays with local artists, and we’re bringing that space to life overlooking Kapi‘olani Park.

Q: How have your properties been affected by the pandemic, the shift to remote work and the growth of online retail – factors that have disrupted commercial real estate worldwide?

Porter: One thread throughout all of those is our emphasis on relationships. Relationships have always mattered to us, and during the pandemic, they mattered through remote work. They mattered with our employees and with the growth of online retail, they mattered with our customers and tenants.

For our customers, we brought in a lot more local restaurants and tenants to fill our properties, especially Kapolei Commons. Through all these experiences – pandemic, remote work, online retail – it’s those connections with people that really matter to us and we leaned into it, and that helps everyone through it.

Q: 2025 is your company’s 50th anniversary. What’s your vision for the future?

Porter: Duncan is still chairman, though day to day, the company is now led by his middle son, Ian MacNaughton, who serves as our CEO. When we think about the future of MacNaughton, obviously Duncan’s mark and oversight is still apparent, and he and Ian are close and talk about the business a lot. The current vision is with Duncan’s guidance and blessing, but it’s really something Ian is carrying forward with his team, including myself.

MacNaughton’s COO Emily Reber Porter and CEO and principal Ian MacNaughton.

I thought you would ask me about this, so I asked Ian about that and he said we’re going to be persevering as an enduring real estate development and investment company based in Hawai‘i, serving the needs of Hawai‘i and bringing innovative solutions and experiences to enhance our community.

From a business standpoint, we’re going to continue to diversify our portfolio in terms of activities as well as geographic holdings, and we’ll continue to seek synergistic partners that share our vision and values on a project-by-project basis.

Speaking with Duncan this morning in the office, we both feel strongly about continuing to serve as a responsible, reliable development and investment partner in Hawai‘i for Hawai‘i.

(The day after my interview with Porter, Ian MacNaughton followed up with an email. “Over the past five decades, our company has grown and evolved, but our core values of integrity, innovation, collaboration and community commitment have remained steadfast,” he wrote. “We owe our success to the dedication of our team and the trust of our partners and clients. As we look to the future, we remain committed to honoring our heritage while embracing new opportunities to serve Hawai‘i with the spirit of aloha that defines us.”)

Q: What is the company’s culture?

Porter: When I joined the company, I led a strategic planning session and met with different people in the company, some of whom had been there for decades and some newer. What was remarkable is that the way the longer-term employees and newer employees described the company was almost identical, and we distilled it all down to innovation, integrity, collaboration, community and balance. That’s how Duncan built the company. That’s how Ian has been perpetuating the company.

Q: The fifth value you listed was balance. What balance are you talking about?

Porter: Balance as applied to many situations. Work-life balance is a part of it. We work hard, we play hard, we make sure that families and health always come first. But we also want to do excellent work. So that’s a part of it.

Also balance in understanding what’s going on in the broader world, making sure we are still driven by the needs, sensibilities and values of our community in Hawai‘i. We try to take things into account and come up with something that’s special and right for the project where it’s situated, the place, everything.

We partner a lot with local nonprofits, either because our employees or our partners are involved, or because those organizations work in areas where we have real estate developments or investments and we want to support the community there, or because these organizations support the health of Hawai‘i’s people and economy.

We started the MacNaughton Foundation several years ago and we meet several times a year to discuss what else we can do to support our community. I personally take a lot of pride in that.

The CEO of the Council for Native Hawaiian Advancement is looking for a boutique hotel to buy. If he’s successful, it would be the first for the nonprofit, which aims to enhance the cultural, political, economic and community development of Native Hawaiians.

Hotels are the foundation of Hawai‘i’s largest industry. In 2023, hotels statewide brought in $5.7 billion in revenue. But it’s not common for Native Hawaiian families or organizations to own these properties. Hawaii Business Magazine found only one hotel still owned entirely by a Native Hawaiian family. The state Department of Hawaiian Home Lands and three ali‘i trusts own land that 18 hotels stand on, but they are not hotel owners themselves. Instead, they use lease revenues to support their missions.

“One thing that’s very prevalent is we are not engaged meaningfully in the economics of the tourism industry as a people that call this place home,” Lewis says. “We get the 9-to-5 jobs, we get capped wages, but we’re not making the kind of money that the owners or the ownership structures are making. We’re not part of the curation of the story that’s being told or how people are presented with what Hawai‘i looks like.”

Some Native Hawaiians view a Hawaiian entity owning a hotel as a step toward economic justice for the Islands’ Indigenous people.

Hotel ownership is one goal of many Hawaiians. Another is that hotel owners and leaders, no matter their ethnicity, embrace Hawaiian values, educate themselves about Hawai‘i’s culture and history, and seek cultural guidance when appropriate. Several hotel leaders already do this, and many properties have cultural directors or advisors to guide their activities and, in some cases, influence property-level decision making.

Hawaiian-Owned Hotels

The Hawaiiana Hotel opened on what is now Waikīkī’s Beach Walk in February 1955. A newspaper article the following month described it as “capitalizing on every inch of its theme – everything Hawaiian.”

Woven calabash baskets and kapa hung in every apartment-style guest room. The hotel’s staff was all local, and its bellboys were accomplished musicians who would perform Hawaiian music several times a week. The hotel owners sought to provide each guest with personalized attention and “genuine old island hospitality,” wrote the author of the March 1955 Honolulu Advertiser article.

That hotel was built and then briefly owned by Kepoikai Aluli and his partners. Aluli also pioneered cooperative apartments on O‘ahu and spearheaded development of the Nāpili resort area on Maui in the 1950s and ’60s.

Aluli first learned of co-ops while attending school on the U.S. mainland, his nephew Nane Aluli says. In co-ops, residents or investors are shareholders in the cooperative, rather than owners of units.

Kepoikai Aluli and his partners built The Mauian and Nāpili Village Hotel as cooperative hotels. The Mauian’s lease returned to Aluli in 1996; he converted the property into a traditional hotel that his family members owned until 2003. The Nāpili Village Hotel’s ground lease returned to the Aluli family a few years ago; today, the family continues to own and operate the property as a hotel.

The Kimi family has also owned hotels across the state. Richard Wassman Kimi built the Kaua‘i Sands and the Kona, Hilo and Maui Seaside hotels in the 1950s, ’60s and ’70s for budget-conscious travelers. He also owned the Waikiki Biltmore for a time. And his brother, William Kimi Jr., built and owned Uncle Billy’s Kona Bay and Hilo Bay hotels. The Neighbor Island hotels remained in their family for decades; the last ones were sold in 2021 and 2022.

Another Native Hawaiian-owned hotel was the 318-room Keauhou Beach Hotel. Amfac opened the hotel in 1970, and it was the first hotel in Kamehameha Schools’ 1,100-acre Keauhou resort and residential complex.

Kamehameha Schools acquired the Keauhou Beach Hotel in 2006. Greg Chun was the president and manager of the KS subsidiary charged with implementing its Keauhou Resort master plan. He says KS did not originally plan to become a hotel owner, but it saw an opportunity to turn the hotel and its neighboring parcel into a cultural destination with educational programming.

The hotel was situated among some of Hawai‘i’s most significant cultural sites. To the north was Po‘o Hawai‘i, a pond with an underground connection to the ocean, where ali‘i would bathe. And to the west were Kapuanoni, Hāpaiali‘i, Ke‘ekū, Hale o Papa and Mākole‘ā heiau.

The hotel was managed by Outrigger Hotels & Resorts. Marissa Harman, director of asset management for KS, wrote in an emailed statement that KS worked with Outrigger’s management team to infuse the estate’s vision into the hotel’s activities from 2006 to 2012. The hotel hosted lau hala weaving classes with master weaver Elizabeth Malu‘ihi Lee, wa‘a voyaging and navigation workshops, slack-key and Hawaiian music festivals, and ‘ōlelo Hawai‘i events.

The intent was to have reciprocal relationships with the surrounding land, cultural sites and local communities. KS engaged in conversations with longtime area residents and restored three of the nearby heiau. Hawaiian families were also invited to record family stories and connect with one another and the broader Kahalu‘u and Keauhou ahupua‘a.

KS closed the Keauhou Beach Hotel in 2012 in the aftermath of the Great Recession and the estate’s growing concerns about the hotel being incompatible with the site: It had been built on and around several heiau, and it jutted out over the ocean, Harman wrote. The hotel was demolished in 2017 and 2018, and the area is now a gathering place and educational complex called Kahalu‘u Ma Kai.

Financial Resources Needed

The Aluli family sold The Mauaian in 2003. Nane Aluli, who has served as the hotel’s general manager since 2000, says the family didn’t have the financial resources needed to renovate the hotel and make it competitive.

“When you talk about the old Maui (Seaside) and Kaua‘i Surf properties, those were all owned by local families,” he says. “We didn’t have offshore owners, and then it got to a point the local families couldn’t keep it up.”

He says that the large amount of money required to sustain a hotel operation is one of the greater barriers to Native Hawaiian hotel ownership. “I think that becomes the most difficult piece,” when it comes to sustaining a property and passing it on to future generations, he says. “You’ve got to be able to financially make it successful, and that’s tough in today’s environment.”

Keith Vieira, principal of KV & Associates Hospitality Consulting, says that’s largely why Hawai‘i’s ali‘i trusts and other major Native Hawaiian organizations have stayed away from owning hotels. Those organizations instead look for guaranteed, steady income from their leasehold tenants.

He adds that the cost to acquire a hotel will vary depending on the property, but it’s hard to find something for less than $500,000 a room. It’s also common for hotel acquisitions and renovations to be funded through debt, and not everyone wants to take on that risk.

“That’s why you have private equity groups who are some of the primary owners because they have the ability to raise hundreds of millions for renovations and repositioning,” Vieira says. “And if you don’t continually renovate and reposition, you’re never going to make money in the long run. So I don’t think that fits directly with what some of these Native Hawaiian groups want to do.”

While Native Hawaiian families have owned hotels here, Vieira says that, to his knowledge, no Native Hawaiian organizations have owned major hotels in the Islands. He adds that he can understand the appeal of having Native Hawaiian groups own hotels and be able to influence employees and the surrounding communities, but he thinks it’ll be difficult to break into the traditional resort space. There may be opportunities, however, to own hotels that focus on health, culture, ranching and other types of diversified tourism.

That’s a concept that Hilo designer Kūha‘o Zane explored about 10 years ago. His plan was to submit a proposal for an ‘āinabased hotel on Hawai‘i Island where guests would get a luxury hospitality experience and help grow the food they’d eat. The land he had his eye on became unavailable, so he never submitted his proposal.

Such experiences would connect visitors with the ‘āina, he says, “so that when you leave Hawai‘i, you feel like you have more of a connection to ‘āina. And that would be more of a goal of Hawaiian-owned hotels.”

Broken Barriers

It’s an anomaly for a hotel to have a Native Hawaiian general manager or director, says Mālia Sanders, luna ho‘okele (executive director) of the Native Hawaiian Hospitality Association. She can only count a handful of them in the Islands, so having a Native Hawaiian-owned hotel would be a significant breakthrough, she says.

About 47,000 Native Hawaiians work in tourism-intensive industries, accounting for nearly 20% of all workers in the sector, according to a 2023 report by the state Department of Business, Economic Development & Tourism. Compared with all employees in the sector, Native Hawaiians are younger, more likely to be single and less likely to have a bachelor’s degree. They’re paid about 12% less than the average tourism worker.

“To have that representation is critical as the industry should be reflective of the community,” Sanders says. “Who knows Hawai‘i better than kānaka?”

Lewis, the CEO of the Council for Native Hawaiian Advancement, says he’s been “hunting high and low” for a hotel for about four years.

“I feel like even if you start with a 12-unit or 15-unit or 20-unit hotel, you provide exceptional Hawaiian hospitality and they experience Hawai‘i, whether it’s being greeted by a hula dancer or having an enriching experience, then the other hotels will start to follow,” he says.

A couple of years ago, CNHA established its Kilohana tourism division. The word “kilohana” refers to the outer layer of kapa and represents the finest of Hawai‘i, Lewis says. That’s what he envisions for a CNHA-owned hotel – the furniture, stories, visitor experiences, employees, management of resources and community involvement would embody Hawai‘i and its values.

“From a cultural lens, it means the elements of Hawaiian culture that are often commodified and sold, maybe they look more like intentional incorporations into the way in which the hotel does business,” says Tyler Iokepa Gomes, chief administrator of Kilohana. “And I think the intentionality is sort of the highlight there.”

That intention also translates to caring for the surrounding community. Lewis says he would want a CNHA-owned hotel to have a line item in its budget for community contributions.

“These hotels have kuleana, the businesses that are benefiting from the visitor industry, our culture,” Lewis says. “And the truth is Hawai‘i’s tourism industry is on the backs of Hawai‘i’s cultures, on the backs of our land. You need to contribute to that in order for it to continue to thrive. And that’s just not happening meaningfully. It’s going to shareholders.”

Lewis recognizes that the hotel industry has made progress in incorporating Hawaiian culture and hiring locals for leadership positions but says there’s too much focus on profit and not enough focus on providing genuine hospitality. The way to shift it back, he says, is for Native Hawaiian organizations like his to force themselves to the decision-making table, which is what CNHA has done by creating the Kilohana Hula Show. The show, a reimagining of the Kodak Hula Show that ran for 60 years, is an effort to revive authentic hula in Waikīkī.

“I’m not OK with the status quo,” he says. “I’m not OK with the trajectory that we’re currently on. And if there’s something we can do about it, then I’m going to try, at least.”

Embracing Hawaiian Values

Kepoikai Aluli, the co-op pioneer, sold his interests in the Hawaiiana Hotel in 1956 to Harry Meyer, who ran the property for 20 years. Maile Meyer is Harry Meyer’s daughter and Aluli’s niece. She says her father, who was from the Midwest, was mentored by Outrigger founder Roy Kelley and ran the Hawaiiana with a Hawaiian sense of place and hospitality.

She grew up with her parents inviting hotel guests for dinner at their Kailua home. Their relationships would be so close that her family would visit the guests at their homes in the continental U.S.

Maile Meyer’s father is an example of how non-Hawaiians in the industry can adopt a Hawaiian way of thinking. Kainoa Daines, senior director of destination education at the Hawai‘i Visitors and Convention Bureau, says it’s important for hotel owners and leaders to have that mindset. He adds that just because a hotel owner is Native Hawaiian doesn’t guarantee he or she will embrace Hawaiian values.

“When you see hotel general managers who may be from elsewhere but embrace and understand local values and they’re not just lip service, but they are living that lifestyle and making decisions based on that, then it really makes a difference,” he says.

He served on a cultural advisory committee when Disney’s Aulani resort was being planned. He saw members of Disney’s creative team, called Imagineers, come to Hawai‘i to learn about the language and culture. They also listened when cultural consultants pointed out elements of the resort that were inappropriate.

“When you go to Aulani, you do feel the Disney feeling,” he says, but when you look around, “you feel like they really applied their time by investing in the thinking process.”

The Kā‘anapali Beach Hotel is another example where nonHawaiian management embraced Hawaiian culture and values, he adds. That hotel is often called Hawai‘i’s “most Hawaiian hotel.” Its former longtime GM, Mike White, studied under Hawaiian cultural authority George Kanahele and created a training program in the 1980s for employees to learn about Hawaiian values, language, geography, food, music and history.

Vieira adds that the major hotels and mainland management companies have long understood the importance of embracing Hawaiian culture and giving back to the community. The annual Visitor Industry Charity Walk is a major fundraiser for local causes, and many Maui hotel owners provided shelter, funds and meals to employees and others displaced by the August 2023 Lahaina wildfire.

Major Landowners

The 18 hotels located on land owned by the three ali‘i trusts and the state Department of Hawaiian Home Lands include some of the Islands’ most prominent hotels, among them the Royal Hawaiian, Four Seasons Resort Hualālai, the Kahala Hotel & Resort, and Outrigger Waikiki. Two of the trusts and DHHL plan to allow additional hotels to be built on their lands.

The Lili‘uokalani Trust plans to allow others to build two hotels with a combined 200 rooms in its planned 70-acre Makalapua Project District in Kailua-Kona. The trust was created in 1909 for the benefit of orphans and destitute children, with preference given to Native Hawaiians. It owns the land under the Waikiki Beach Marriott Resort & Spa. Representatives from the Lili‘uokalani Trust declined to be interviewed for this story.

DHHL Director Kali Watson says his department is exploring whether a 41-acre parcel in Wailua on Kaua‘i is a good fit for a master planned development that could include a hotel, as well as opportunities to support beneficiary businesses and farms and to integrate Hawaiian culture. He likens the idea to the Polynesian Cultural Center on O‘ahu.

“The reality is that tourist dollars are very instrumental in supporting our economy, and if we do it right, we can provide more than just a site for tourists to visit,” Watson says.

The 41-acre parcel is adjacent to the Hilton Garden Inn Wailua, which generates about $366,000 a year in lease revenue for DHHL. The department also owns the land under the Hampton Inn & Suites Kapolei.

Watson says the amount of lease rent the department receives from the Hampton Inn’s sublease is confidential at the hotel owner’s request, but the Ka Makana Ali‘i general lease overall brings in about $4.7 million a year. The department’s lease revenues support homestead development and the homestead associations around the state. The Hampton Inn primarily serves visitors from the Neighbor Islands, and its owners are considering building a second tower, he says.

In addition to Wailua, another potential site is 184 acres in Pu‘unēnē on Maui. Watson says that if the department decides to proceed with hotel development, it will work with private developers who would build and then own the structures.

“To get ownership, you have to invest in the development and pay for the hotel. That’s something we’re not interested in doing,” he says. “We’d rather have other people develop, design, construct and then pay us rent for that. It’s a lot more, I think, appropriate for our department.”

Market studies still need to be conducted to see if the areas can support additional hotels. Watson says the intent is to develop the parcels, which are largely underutilized, to maximize the amount of lease revenue going to the department and to create opportunities for Native Hawaiians. A few years ago, the department unsuccessfully proposed building a casino on its land to generate revenue.

Kamehameha Schools is considering building a culturally appropriate boutique hotel as part of its Keauhou Bay Master Plan. Harman wrote that 150 units of low-impact lodging would enable KS to generate funds, improve stewardship of the area, create economic opportunities for Kona kama‘āina, and encourage the community to enjoy and better appreciate the wahi pana (sacred places) of Keauhou and Kahalu‘u.

Current plans, which are not yet final, call for a heritage management corridor to protect the birth site of Kamehameha III and to link to other significant sites along the Kona Coast. It would also be used to promote Native Hawaiian identity.

Harman writes in her email that it’s important that KS, the community, government and businesses “challenge ourselves to innovate and explore regenerative visitor opportunities as part of sustainable community development in our Islands.”

KS currently owns the land under six hotels on O‘ahu and Hawai‘i Island. Jeff Mau, director of asset management for KS, declined to say how much revenue those land holdings generate but wrote in an email that the revenue supports the estate’s educational mission, and that KS is open to investments that can benefit that mission.

The Queen Emma Land Co. is a nonprofit that was created to support and advance health care via The Queen’s Health System. It owns the land under nine Waikīkī hotels.

Bruce Nakaoka, VP of the Queen Emma Land Co., wrote in an emailed statement that the company supports The Queen’s Health System by managing and enhancing the income-generating potential of the legacy lands on O‘ahu and Hawai‘i Island left to The Queen’s Hospital by Queen Emma in 1885, “balanced by our efforts to environmentally restore and sustain” the ‘āina. “QELC continues to look for opportunities to work with the community to be good stewards of the lands.”

Demand for Native Ownership

Visitors want the option of staying at Native Hawaiian-owned hotels, Sanders, of the Native Hawaiian Hospitality Association, says.

“They call all the time asking how they can spend their dollar responsibly, from start to finish of their vacation, not only just with the activities that they want to do, but with the place where they lay their head,” she says.

It’s hard to tell them that option doesn’t exist, she says. And she explains to them that some hotels are situated on Native Hawaiian-owned land, and that by staying at those hotels, some of their money goes to support Native Hawaiian programs.

Sanders, a board member of the American Indian Alaska Native Tourism Association, sees Native Hawaiian-owned hotels as a way for Hawaiians to exercise sovereignty. She says Indigenous groups elsewhere in the U.S. have built and owned casinos and hotels to support their members and to help build and repair hospitals and other infrastructure in those communities.

Daines, of the Hawai‘i Visitors and Convention Bureau, is the official emcee for AIANTA’s annual American Indigenous Tourism Conference. He says that it’s nice to see their cultures live because of the revenue generated from those properties.

Local models exist for Native Hawaiians and local communities to directly receive tourism dollars, Hilo designer Zane says. He cites Hā‘ena on Kaua‘i’s North Shore, where two community nonprofits manage access to the state park and use the revenues to reinvest in the community.

Other examples include the aloha wear and hula industries, where Native Hawaiians have been able to flourish economically and share their unique stories. In those industries, Native Hawaiians have claimed part of the state’s economic pie, he says.

“If we were to have Native Hawaiian-owned hotels … economic justice would be at the top of the page of that, but at the same time, I think the authentic product of what is Hawai‘i would be so unique at that point, that you wouldn’t be able to get that anywhere else,” Zane says. “Like no Hilton, Rosewood, Four Seasons would be able to duplicate that product. And I think that also ensures our economic viability.”

Prince Resorts Hawaii says it’s changing its decades long focus on owning and operating three luxury hotels and three golf courses on O‘ahu and Hawai‘i Island and is set now on expanding its hotel management business in the Islands.

The change comes as Prince Resorts Hawaii’s Japan-based parent company, Seibu Group, pursues an asset-light strategy to help it overcome challenges encountered during the pandemic and make its business model more durable. Seibu runs one of Japan’s largest hotel chains and also has interests in real estate, railway and bus operations, and sports.

Pursuing an asset-light strategy has led to the sale of 31 of Seibu Group’s 76 leisure properties to Singapore sovereign wealth fund GIC and a restructuring of its hotel holdings into two divisions: one for hotel operations and another for holding assets. Seibu’s goal is to grow its hotel operations business to 250 hotels in Japan and abroad.

Shigeki Yamane, president and CEO of Prince Resorts Hawaii, says Seibu has not instructed him to sell the Hawai‘i properties, but the diversified strategy lessens the overall company’s exposure to asset depreciation and any economic downturns and allows for faster expansion.

“Take Hawai‘i, for example: New assets are very difficult to attain at this point,” he says. “By concentrating on management services, we will still have the ability to grow without the obstacles of finding a property or land to purchase.”

What’s Next

As of April, all Seibu hotels, including Prince Resorts Hawaii, will fall under the Seibu Prince Hotels and Resorts brand, and their loyalty programs under Seibu Prince Global Rewards.

Prince Resorts Hawaii currently owns and operates the 563-room Prince Waikiki; The Westin Hapuna Beach Resort and its 249 rooms; and the 252-room Mauna Kea Beach Hotel, an Autograph Collection; plus the Hawaii Prince, Mauna Kea and Hapuna golf courses.

“The positioning of Prince Resorts Hawaii, being more Western and able to handle that domestic as well as international market, is the best of both worlds,” says Rona Young, executive assistant to the Prince Resorts Hawaii president and corporate marketing manager. “So we’re in a prime position to be key in a lot of this.”

Prince Waikiki employees stamp copper hinana fish that now hang in the hotel’s lobby as part of an 800-piece installation by artist Kaili Chun. | Photo: courtesy of Prince Resorts

In the meantime, Prince Resorts Hawaii is preparing to begin an extensive $180 million overhaul of its Mauna Kea Beach Hotel rooms, restaurants, pool, spa and gardens. Construction is expected to wrap up in spring 2025, in time for the hotel’s 60th anniversary.

Prince Waikiki’s fifth-floor public areas will also be renovated, and Hapuna Beach Resort’s carpeting will be redone and its bedspreads, curtains and furniture will be replaced.

Focused on Growth

Yamane says the Hawai‘i-based company was focusing on its own growth prior to Seibu restructuring its hotel holdings in 2022.

Prince Resorts Hawaii spent $55.4 million to renovate the Prince Waikiki in 2017 and $46 million on The Westin Hapuna Beach Resort in 2018. It was also working on distinguishing its brand by using more locally sourced products, reducing waste, and adopting more energy-efficient practices. The resort company says it also wants to create a 100,000-tree forest at its Hāpuna property, and to better engage and care for employees.

Prince Resorts’ three hotels were recognized by the Hawai‘i Green Business award program in 2022, and Hawaii Business Magazine’s Best Places to Work program in 2022, 2023 and 2024. Its Mauna Kea and Hāpuna hotels were also approved as Blue Zones Project worksites in 2022; under the program, the two hotels partner with the Blue Zones Project to create healthier work environments, according to Prince Resorts.

“The new strategy gave us an opportunity to stop and rethink our definition of assets,” Yamane says. “Our greatest asset may just be our staff with our employee program of lokomaika‘i, sharing genuine hospitality, and our management teams with their experience and unique management styles fostered in an environment that encourages innovative growth.”

He adds that employees are key to Prince Resorts’ success and are why the Prince Waikiki has been the No. 1 traveler-ranked O‘ahu hotel on TripAdvisor for over four years.

“Profit is not a singular goal for us,” he says. “We have always operated with operational excellence and longevity in mind. With these distinct values, which are different from other larger domestic hotel chains, and our sales/marketing tools that draw from international expertise, we can provide potential new partners access to the strength of a diverse international company with a much larger hotel selection.”

We’d rather not hear the answer, “It depends and here’s what you need to know” followed by a nuanced explanation, but that factual nuance creates better understanding and can guide smart decisions. Too bad that many people prefer pundits, prognosticators and politicians who always provide answers with conviction in 30 seconds or less.

If that’s what you want, look elsewhere. Discriminating readers know reality’s complicated, and that’s why the team at Hawaii Business Magazine likes to spend their time investigating and telling you what we find. We stress facts, explanations, tight writing, clarity, context and, when warranted, nuance.

Tourism is Hawai‘i’s No. 1 industry and hotels are its foundation, so it’s important to know who owns them and how they operate those properties. That’s why Staff Writer and Engagement Editor Noelle Fujii-Oride spent five months investigating private equity ownership of local hotels.

This is not your father’s hotel industry. Families that helped pioneer the hotel business in Hawai‘i have sold and though iconic hotel companies like Hilton and Marriott still operate and franchise thousands of hotels worldwide, including some locally, they own only a tiny fraction.

The new big players are private equity companies, which have paid billions of dollars to increase their stake from 4% of Hawai‘i hotels in 2003 to 23% today. More importantly, they now own 29% of all local hotel rooms. That’s power and until now, how private equity wields that power has gone largely unreported. Noelle’s 12-page article starting on page 16 remedies that situation. It’s informative and compelling reading.

From Hawai‘i to Bali

Back in April and May 2023, Hawaii Business Magazine hosted Gumilang “Gugum” Reza Andika, a senior impact measurement officer for Kopernik, an Indonesian research and development lab that addresses social and environmental challenges.

Gugum came to study how we create and organize our events to inform people on important issues so he and his team could do the same in Bali. His fellowship was sponsored by the U.S. State Department’s Young Southeast Asian Leaders Initiative.

He was mentored by Hawaii Business Co-Publisher Kent Coules and Events Manager Magdalena Durak Hershey, who also helped him complete one of the fellowship’s requirements: submit a proposal for a project in his home country. I’m not surprised that Gugum’s proposal was one of only two funded by the State Department.

Kent was invited to attend Gugum’s event on regenerative tourism in Bali during November – at the State Department’s expense. Now, you know Indonesia is southwest of Hawai‘i, but you also know the cheapest flight between two points is not always the most direct. And the State Department booked Kent on probably the cheapest flight available.

That’s why Kent started his journey to Indonesia by flying in the opposite direction, northeast to Seattle. Kent’s advice: “Do not let the State Department make your flight plans.”

His outward leg departed Seattle at 10:30 p.m., flying to Seoul, before finally arriving at midnight two days later in Denpasar, the capital of Bali.

He Enjoyed Getting Lost

Nonetheless, Kent enjoyed his stay in the Indonesian province of Bali. “My best travel experiences are never planned and usually involve getting lost. Same on this trip,” he says. “I hit ‘walk mode’ on Google Maps for a planned 49-minute journey. The route eventually takes me through a parking lot, snakes between two restaurants, across a beautiful wooden bridge and onto a trail traversing a farm and rice paddies. It is my favorite memory.”

Bali lags behind the developed world on infrastructure, sewage and garbage, but Kent found several shining examples of regenerative tourism, including one with a Hawai‘i connection.

“Our conference host, Mana Earthly Paradise, was started by a couple who studied at UH. Their next-generation eco-villas were built of earthbags; there was a probiotic restaurant, an eco-conscious store and the wastewater feeds the compost garden. They put sustainability at the forefront of everything.”