Mauna Lani Bay Hotel & Bungalows to close in October for renovations

KAILUA-KONA — The Mauna Lani Bay Hotel &Bungalows will shut its doors in October, sending roughly 400 employees back out into the job market.

Then, roughly 14 months later, the resort will reopen to the public and invite each employee back to his or her original position at the same salary and tenure, as well as hire around 100 extra workers to staff the revamped property following large-scale renovations projected to cost in excess of $100 million.

Patrick Fitzgerald, a partner at DiamondHead Land, which purchased the Mauna Lani last August from a subsidiary of the Japan-based Tokyu Corp., said renovations have been in the works since his group acquired the resort. He announced the plan and its timeline to employees and the media Monday.

Fitzgerald added the company is hopeful all its employees will remain through Oct. 1 and has plans to help its workforce with transitional employment — a process that will begin in August and September.

Considering the state’s low unemployment rate, talks with the International Longshore and Warehouse Union, which represents union-member employees at the Mauna Lani, and overtures the company plans to make to neighbor resorts on behalf of the employees, Fitzgerald said he’s hopeful DiamondHead Land can help find work for most of the staff — tiding them over until their opportunity to return on more or less the eve of 2020.

“We want them back,” he said. “But we also understand the impact our closure has on them and their families, and we just want to be as helpful as possible.”

The tourism industry is robust throughout Hawaii, setting record year after record year and likely on course to do so again in 2018. The year’s first quarter saw a 10.1 percent bump in visitor spending to $4.82 billion and a 9.4 percent hike in visitor arrivals, according to Hawaii Tourism Authority statistics released last week.

Increased air travel from the mainland and abroad to Ellison Onizuka Kona International Airport at Keahole, located only about 20 miles from the Mauna Lani, has played a significant role in that tourism uptick.

All things considered, it would appear an odd time for DiamondHead Land to shut down a major West Hawaii resort for 14 months just a little more than a year after purchasing it only to go an additional $100 million into the red on upgrades. But Fitzgerald explained the company’s strategy is centered on the long game.

“We felt the resort really needed this level of capital improvement and investment,” he said. “We understand it’s a strong market right now. But again, we’re thinking about our investment and also the staff (and) how we create an asset that’s going to be successful for 20-30 years rather than just (looking) at the next two or three.”

DiamondHead Land considered closing down only parts of the hotel but ultimately decided that construction and the irritants that accompany it would have had too adverse an impact on the guest experience. Fitzgerald said there are some advance reservations the hotel will have to cancel, but added the Mauna Lani intends to assist those guests with other arrangements.

While the resort will not be accepting guests, not all its amenities will be shuttered. Both golf courses, for instance, will remain open to the homeowners of roughly 1,000 permanent units scattered across the property. A letter explaining details of the construction will be sent out to homeowners within the next several days, Fitzgerald said.

The renovations will be extensive, including the addition of three pools to the south lawn and $30 million spent on room upgrades. Renovations are planned for the Canoe House, as well as for the atrium and common areas. A bar will be added and Bay Terrace restaurant will move from a breakfast establishment to an all-day dining option.

Additions include a second fitness center and a smaller market for those interested in “grab-and-go” purchases. Currently, Fitzgerald doesn’t expect renovations will lead to opportunities for outside businesses to operate on resort property.