HILO —Renovations worth $5.8 million are under way at the Hilo Hawaiian Hotel.
The work, which began about three months ago, involves the renovation of each of the hotel’s hallways and 268 guest rooms.
The upgrades are expected to increase its rating from 3 stars to at least 3.5, said Robin Graft, vice president of operations for Castle Resorts, which manages the hotel.
The hotel is conducting the work floor-by-floor and is expecting to have it completed by October, he said.
So far, work on the eighth floor has been completed, said Graf, who described the difference as “night and day.”
The hotel is seeking a 37-year lease extension with the state Department of Land and Natural Resources, and it must complete renovations worth at least 50 percent of the property’s value for it to be approved.
The Board of Land and Natural Resources will consider extending the lease to 2068 and approving a proposed development agreement, which includes the renovations, at its Friday meeting.
It approved the extension in concept last October. As part of the upgrades, each room and hallway receives a fresh coat of paint as well as new floor and wall coverings.
Plumbing and electrical fixtures are also replaced and new controls for ventilation and air conditioning are being added.
In addition, the fire alarm system will be replaced and the roof will be resurfaced.
Graf said the requirement that hotels on state land make a substantial investment to receive a lease extension provided an incentive for the upgrades, but noted the company remains focused on renovations.
For the Hilo Hawaiian, the improvements had to exceed $5.5 million.
The lease, without the extension, will expire in 2031.
Graf couldn’t comment on why the lease extension for the hotel, owned by Hilo-Hawaiian Associates, Inc., is being sought now.
Much of the Banyan Drive hotel and condo properties have been the focus of criticism for disrepair and general lack of investment.
Graf acknowledged that the area has suffered through competition with other resort locations in Kailua-Kona and Waikoloa.
Still, he said the Hilo side will remain a player in the tourism industry.
“We’re bullish on the hotel,” Graf said. “We’re bullish on the area.”
Rates will be adjusted as a result of the renovations, Graf said, adding percentage increases in the single digits can be expected.
The plan also calls for the hotel to set aside $200,000 a year for room maintenance.
Elevator upgrades and renovations to the lobby, kitchen and restaurant are also being planned, according to DLNR.
The hotel, which opened in 1975, leases the land for $133,200 a year.
That amount is expected to be revised.
Email Tom Callis at email@example.com.