Hilton Waikoloa 600 room conversion moves ahead

[holdaer]

On March 2, 2017 Park Hotels & Resorts sold 600 rooms to Hilton Grand Vacations Club from the Hilton Waikoloa Village hotel.

As mentioned in previous threads, looks like we'll soon have rooms at the HHW hotel.

http://www.bizjournals.com/pacific/news/2017/03/02/hiltons-600-unit-hawaii-timeshare-conversion.html

 

[jestme]

On March 2, 2017 Park Hotels & Resorts sold 600 rooms to Hilton Grand Vacations Club from the Hilton Waikoloa Village hotel.

As mentioned in previous threads, looks like we'll soon have rooms at the HHW hotel.

http://www.bizjournals.com/pacific/news/2017/03/02/hiltons-600-unit-hawaii-timeshare-conversion.html

So it looks like Hilton Grand Vacations club paid $177M but Park Hotels and Resorts gets exclusive use of it until at least Dec 2019, maybe longer. Sounds like a very sweet deal for Park. It seems that the "split" may not really have created two arms length companies. I'd love to know who actually legally owns the rest of the HGVC buildings, especially the HGVC buildings at the HHV. Park Hotel and resorts, or HGVC.

 

[1Kflyerguy]

Interesting that this deal covers 600 room out of a bit over 1200 at the hotel. That will essential cut the number of hotel rooms in half once the conversion is complete. The Big Island tourist and convention business must have really dropped off.

 

[alwysonvac]

From Parks and Hotels presentation at the 2017 Citi Global Property CEO Conference in March (see slides 30 to 33) - http://www.pkhotelsandresorts.com/~...esentations/pk-citi-conference-2017-final.pdf

Impact of Schedule of Room Transfer to Hilton Grand Vacation

• Hilton Waikoloa Village is a 1,243 room resort hotel located in Waikoloa, HI (Big Island)
• As previously disclosed, Park has an agreement with Hilton Grand Vacations (NYSE: HGV) whereby Park has transferred 600 rooms to HGV to be used as future time-share inventory
• Park has leased back all 600 rooms for an amount that covers the cost of HGV’s taxes, insurance and overhead, and will continue to generate room revenue until HGV starts the actual construction on the rooms
• The physical release of rooms will occur in increments over the next four years, with approximately 20% of the inventory transferred in ’17 and the balance of the rooms (~460) will be released by end of 2019.
• The EBITDA impact is as follows:
  • Hilton Waikoloa generated $40mn of EBITDA in 2016 across 1,243 rooms
  • With the first transfer of rooms in mid-2017, we estimate this impact in 2017 will be ~($7.5mn)
  • Once the 140 keys are renovated, and guests begin occupying those rooms, the benefit to Park is as follows: 1) Park will recognize resort fees, F&B income and ancillary revenues from those rooms; 2) no additional renovation disruption; and 3) HGV will compensate Park for its pro-rata share of operating expenses (2018-2019).
  • The next major room transfer will be in ‘19 when HGV takes the remaining ~460 rooms to begin renovation. The impact to Park’s EBITDA will be approximately $15mn in 2020.

Overall Hawaii Travel Statistics

• 8.9mn inbound travelers to Hawaii in 2016, 3% Y/Y growth, and 1.3mn more than the prior peak (’07)
  - 5.3mn (or 62%) arriving from the US
  - 1.5mn (or 17%) arriving from Japan
  - Europe and China each make up ~2% of
•  Tourism Board is forecasting arrivals to moderate to 1.6% per annum over the next 3 years—still 50bp above the annualized growth rate over the last 25 years
•  The islands have experienced solid growth from China, Korea and Australia
  

 

[Blues]

Did you read the article to the end? It appears they're planning further development at Hilton Hawaiian Village, too.

"Park Hotels, in a recent presentation to investors, revealed that a future project at the Hilton Hawaiian Village could involve developing a luxury hotel, timeshare or residential project that would include retail at its “Ala Moana Land Parcel,” located between the Grand Waikikian Tower and the Kalia Tower along Ala Moana Boulevard in Waikiki."

 

[alwysonvac]

Did you read the article to the end? It appears they're planning further development at Hilton Hawaiian Village, too.

"Park Hotels, in a recent presentation to investors, revealed that a future project at the Hilton Hawaiian Village could involve developing a luxury hotel, timeshare or residential project that would include retail at its “Ala Moana Land Parcel,” located between the Grand Waikikian Tower and the Kalia Tower along Ala Moana Boulevard in Waikiki."

This was also mentioned earlier this year.
http://tugbbs.com/forums/index.php?threads/hilton-hawaiian-village-getting-another-tower.250060/

 

[Blues]

Thanks, I guess I missed that. I find HHV unbearably crowded now; and I haven't even been back since they started on the Grand Islander. I can't fathom what it will be like if they build yet another tower between Kalia and GW.

 

[dougp26364]

Thanks, I guess I missed that. I find HHV unbearably crowded now; and I haven't even been back since they started on the Grand Islander. I can't fathom what it will be like if they build yet another tower between Kalia and GW.

We tend to agree. While we had a great stay the first time, before the Waikakian opened, our second stay, actually in the Waikakian, wasn't as pleasant. HHV had become to crowded to relax and enjoy. With the new building plus future planned expansion, neither of us can imagine returning to Oahu unless it's at the Marriott all the way up in Ko'Olina, and that's to far away for us to enjoy Honolulu due to the traffic on Oahu. So we really don't see returning to Oahu anywhere in the near or distant future. There is such a thing as to much of a good thing..........but HGVC is still selling those units and the demand still makes it difficult to book a unit unless you book 9 months in advance, so we must be in the minority.

 

[alwysonvac]

I agree. With each new HHV tower, they're creating less of a relaxing resort experience.
HHV's greatest appeal is the ability to escape and relax from the Waikiki hustle and bustle.

During my last visit in 2014, they had placed a shuttle pickup in front of the great lawn since the old bus depot got replaced with the new Grand Islander tower. As a result the sidewalk was occupied with guests and their luggage along the sidewalk. We had to walk in the street to get by or cross over to the narrow sidewalk near Lappert's ice cream shop.

We used to enjoy strolling through the village. Now, we try to avoid it by leaving the village all together by exiting along the beachwalk path or via the street facing the Grand Waikikian Tower entrance.

This year we're staying in the Kalia and Grand Islander towers which are closer to Kalia Road which makes it easier to avoid walking through the village altogether. Sadly for us, HHV is becoming more of a place to sleep and shower.

 

[Sandy VDH]

If transfer of some Hilton Waikoloa rooms will happen Mid 2017, they should soon have a points chart and limited inventory to add. I suppose they will do like the do for the other 2 new Hawaiian properties, there is a 6 month window, not a 9 month, that give priority to resort owners.

Has anyone seen a point chart yet?

 

[jestme]

If transfer of some Hilton Waikoloa rooms will happen Mid 2017, they should soon have a points chart and limited inventory to add. I suppose they will do like the do for the other 2 new Hawaiian properties, there is a 6 month window, not a 9 month, that give priority to resort owners.

Has anyone seen a point chart yet?

I think they will have work to do before they release them to members. The rooms will need plumbing for a kitchen sink, power for stoves, microwaves, etc. Then they need to be installed. The room will be offline to Park when that happens. If Park are keeping full control of the rooms until 2019 in the deal, don't expect any point chart soon.

 

[Sandy VDH]

It said that 140 rooms would be turned over this year, with the balance of 460 rooms in 2019.

 

[dsmrp]

I didn't see in the article how many timeshare units would be created from the 600 rooms. Although in the alwysonac's post of Parks and hotels presentation indicated a 1:1 room to TS. So these converted/renovated rooms would be at best studios?? Just sounds like they are trying to transfer a good portion of the maintenance costs to TS 'owners'

 

[Sandy VDH]

From this thread http://tugbbs.com/forums/index.php?threads/visiting-at-kings-land.251327/page-2#post-1974348

It states that 601 rooms will be converted to 450 timeshares. Using basic math quadratic equations, hey I have a Bachelors of Mathematics, that should result in 151 1BRs and 299 studios, provided the assumption is that 2 hotels rooms make up a 1 BR and a single hotel rooms makes up a studio. Although there are some bigger curved rooms and standards rooms in these towers, there might be a bit of room size variance. So there likely will be a significant amount of Plus or Premier units and some standard units around the back. These would be based on view and size.

OK, so that is my prediction on the split, 2:1 studios to 1 BRs.

 

[1Kflyerguy]

I think they will have work to do before they release them to members. The rooms will need plumbing for a kitchen sink, power for stoves, microwaves, etc. Then they need to be installed. The room will be offline to Park when that happens. If Park are keeping full control of the rooms until 2019 in the deal, don't expect any point chart soon.

I am sure the units will need quite a bit of work to convert them over to timeshares. I wonder if they will be adding full kitchens to the one bedrooms or just kitchenette type units.

 

[jestme]

I am sure the units will need quite a bit of work to convert them over to timeshares. I wonder if they will be adding full kitchens to the one bedrooms or just kitchenette type units.

I would expect them to merge 2 hotel rooms to make 1BR, similar to what they did at the Kalia. One room would be kept as a BR, the other room would be made into the kitchen/LR. It's also possible to make 2BR, depending on the hotel room adjoining doors. Put 3 hotel rooms together, with the kitchen/living room in the middle.
I also agree with dsmrp that they are transferring overhead and maintenance costs to timeshare owners, who will have little to say about how the cost allocations are done. I'm sure if they could have sold the whole thing to another hotel company for more money, they would have.

 

[GregT]

Does anyone know how many units are at KingsLand?

450 units at Ocean Tower is massive. If not really thought about how many units they would be adding, but this is a major addition. I think there are about six (?) units per floor at KingsLand - 18 units per building - 25-30 (?) buildings?

So this would be duplicating Kings Land, just with smaller size units.

Numbers are rough but Wow.

Will be interesting to see this project develop. Thx!

Best,

Greg

 

[Sandy VDH]

It's also possible to make 2BR, depending on the hotel room adjoining doors. Put 3 hotel rooms together, with the kitchen/living room in the middle.

I think it has been stated there will only be studios and 1 BRs, NO 2 BR units. Frankly there are more 2 BR units at Bay Club, Kohola (only 2 BRs), and Kings' Land, adding studios and some more 1 BRs are a nice addition to balance the mix available to HGVC over the entire Waikoloa area.

 

[Sandy VDH]

I am sure the units will need quite a bit of work to convert them over to timeshares. I wonder if they will be adding full kitchens to the one bedrooms or just kitchenette type units.

Like Kalia conversions, I expect studios have kitchenettes and 1 BR have full kitchens. The 1 BR units will obviously take more work, but the kitchen will be put in the place of the bathroom in the HR, thus having water and plumbing already available.

 

[Sandy VDH]

the current website of HWV lists 4 types of rooms, Ocean Front, Oceanview and Partial Oceanview, and Resort View So there is your Premier, Plus (OV rooms) and Standard Room categories.

The website also says there is already 1 BRs and a Presidential Suite 2 BR at the Ocean Tower NOW as well. I believe these units are in the center ring facing across the lagoon facing south, to catch sunset views.

So maybe the numbers of studios and 1 BRs will be different. Maybe they will use the Presidential as onsite concierge, activities or something else.

Who knows.

 

[1Kflyerguy]

Does anyone know how many units are at KingsLand?

450 units at Ocean Tower is massive. If not really thought about how many units they would be adding, but this is a major addition. I think there are about six (?) units per floor at KingsLand - 18 units per building - 25-30 (?) buildings?

So this would be duplicating Kings Land, just with smaller size units.

Numbers are rough but Wow.

I just checked the HGV corporate website, according the "Resort Information One Sheet" Kings Land has 435 units, so this will be larger than that. Definitely adding some serious inventory to the Big Island. Based on the timing they are projecting, I am assuming they won't build any more phases at KL until they sell the new Inventory at Ocean Tower.

Wonder how the point structure and MF will be? With close to half of the hotel rooms going to timeshare, it seems like the MF could be much more than the other resorts. Though perhaps KL and Kohala Suites are already underwriting the upkeep as part of the access agreement.

 

[1Kflyerguy]

Like Kalia conversions, I expect studios have kitchenettes and 1 BR have full kitchens. The 1 BR units will obviously take more work, but the kitchen will be put in the place of the bathroom in the HR, thus having water and plumbing already available.

That makes sense to me.

 

[Sandy VDH]

You can see current hotel rooms here....
https://walkinto.in/tour/-JWBn6X_Fx...6183793|0|1XlUko8wCBkAAAQvPF41mw|false|GOOGLE

 

[dsmrp]

I'm sure having the hotel amenities, pools and dolphin area (not to mention some ocean views) adjoined to TS units will be big selling points. Will make Waikoloa much like HHV, but without the Waikiki busy-ness.

Now that we are older, we still prefer our quieter and larger Bay Club unit. Quite frankly, a really nice large resort with bells & whistles, is wasted on DH, LOL

 

[alwysonvac]

Does anyone know how many units are at KingsLand?...

From http://americanbuildersquarterly.com/2013/rider-levett-bucknall/

When completed, the resort will feature 802 timeshare units.
Phase 1 created 10 three story buildings with a total of 198 one, two and three bedroom units
Phase 2 added 2 additional three story buildings with a total of 97 one and two bedroom units​

From http://www.dckww.com/News.aspx dated June 2016

Phase 3 added 3 additional three story buildings with a total of 124 units of 72 one bedroom units, 42 two bedroom units, and ten 3 bedroom “luxury” suites.
HGVC’s Master Plan for Kings’ Land includes three more phases, as dckbegins working on phase IV of the project.
​

120 timeshare units Hilton Grand Vacations Club at Waikoloa Beach Resort.
142 timeshare units The Bay Club at Waikoloa Beach Resort

​