Kapalua Bet, AI Making Us Dumber, and Hilton’s Next Move

April 06, 2026

Aloha !

Welcome to the latest edition of the Hawaiʻi Hotel Hui Insider.

Whether we are watching brands swap logos at Kapalua or tracking the latest management shuffle in Waikīkī, it is clear the industry never sits still.

A big mahalo to our title sponsor for this quarter, Castle Resorts & Hotels. With decades in the game and properties across the islands, Castle continues to shape what hospitality looks like in Hawaiʻi, and we’re stoked to have them as part of the Hui!

In this issue, we break down the structural hurdles facing the St. Regis transition at Kapalua Bay and look at the management shuffle at the world’s largest Holiday Inn Express. We also explore the stacking effect of Kona lows and fuel spikes, and a new model for Hilton to bring independent brands under its flag.

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Mahalo for coming along for the ride!

Let’s dive in.

Mahalo,

Dan Wacksman
Hawaiʻi Hotel Hui Insider Editor-in-Chief 😄

Montage Out, St. Regis In… Same Old Condo Challenge at Kapalua Bay

On the surface, this looks like a simple brand and management switch. It’s not. What most of the coverage misses is that this was never built to be a traditional hotel. It started as ultra-luxury residential, think second homes with services, where owners could choose whether or not to enter a rental program.

Then it got messy. Whole ownership units, fractional Ritz-Carlton Club Residences, and inventory that came out of bankruptcy and was later consolidated and resold. At one point, the rental pool was a mix of whole owners, fractional owners, and whatever inventory ownership could piece together, layered across multiple operators. Not exactly a recipe for a consistent five-star experience.

Montage stepped in and tried to “hotel-ize” the asset, bringing structure, tighter standards, and segmenting top-tier units to drive rate premiums. Big units, great location, all the right ingredients, but fragmented ownership, inconsistent participation, and multiple rental managers meant guests weren’t always getting the same product, or even booking through the same channel (a quick search found several units listed on Airbnb).

To their credit, Montage brought structure and discipline to a complex asset. The core structural constraint, though, never went away: this is a condo-hotel trying to behave like a luxury resort.

What’s just as interesting is what wasn’t announced. No key money/investment, no unit buybacks, no ownership restructuring. Which means Marriott is stepping into the same structural challenges, just with a stronger brand and bigger distribution engine. And with several Marriott properties already in West Maui, they may end up competing with themselves for the same guests.

If they can align owners, control inventory, and enforce true St. Regis standards, there’s real upside. We’ve seen this move before. You can reflag it, rebrand it, and plug it into a bigger distribution engine, but you can’t easily fix what’s broken underneath.

Another Waikīkī Management Company Shuffle

As you may recall, we previously covered PM Hotel Group’s merger with Sightline Hospitality, which marked its entry into Hawaiʻi with three Waikīkī assets: Holiday Inn Express Waikīkī, Hyatt Place Waikīkī, and Queen Kapiʻolani Hotel. PM also lists two additional projects on the west side of Oʻahu as “coming soon,” signaling a broader push into the market.

Now, there’s been growing chatter locally that PM may be stepping aside at the Holiday Inn Express Waikīkī, with Springboard Hospitality potentially taking over management of what is often touted as the largest Holiday Inn Express in the world (~600 rooms). We haven’t seen a formal announcement yet, but it’s far from a well-kept secret.

When PM first entered the market, we questioned how a mainland operator would adapt to Hawaiʻi’s unique dynamics. If this shift plays out, management would move back toward a management company with deeper local roots.

When performance isn’t where it needs to be, changing the operator is often one of the first moves on the table for owners. Sometimes it works. Sometimes it doesn’t. Either way, the musical chairs continue.

As a reminder for those who don’t live and breathe hotels, a property typically has three key players: an owner, a brand, and a management company. In this case, ownership stays put, the brand remains Holiday Inn Express, and the only thing changing would be the management company, from PM to Springboard.

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Kona Lows, War, Fuel Spikes… What’s Next, Locusts?

Just as Hawaiʻi’s visitor industry was starting to find its footing again, it got hit with a perfect storm, literally and figuratively. Kona lows wiped out bookings and stalled momentum heading into spring, while global chaos is now driving fuel prices up, pushing airfares higher, and threatening airline capacity. Layer in geopolitical instability, airport disruptions, and a still-soft international market (looking at you, Japan), and you’ve got a fragile recovery walking a tightrope.

The real issue isn’t any one event; it’s the stacking effect. When storms, rising costs, and global uncertainty hit at the same time, travelers don’t reschedule; they sit out entirely.

The one bright spot? Hawaiʻi’s safe destination” halo might pull demand away from international destinations… but that only works if flights stay affordable and consistent. If this makes you nervous, you might want to skip the next story.

RIMPAC Risk?

For those in the hotel space, RIMPAC is always on the radar. Held every two years in Hawaiʻi, it’s the world’s largest international maritime military exercise, bringing 25,000+ personnel from 20+ countries… and a whole lot of hotel demand.

There’s no clean number of room nights produced, but anyone in Waikīkī knows the impact. Thousands of rooms get absorbed, driving compression and pushing rates across the market.

Lately, I have been hearing from hotels that demand is a bit softer than usual for RIMPAC, and many feel that this year’s exercise could be scaled back, or worse, canceled, given rising global tensions and frayed alliances.

If that happens, we could see some “decompression” (yes, we’re calling it that), and with higher airfares already pressuring leisure demand, losing that block of reliable room nights is not ideal heading into summer.

For what it’s worth, the official line still points to full steam ahead, with plans for the “largest RIMPAC ever” moving forward as scheduled.

Based on what you’re seeing, what do you think happens to RIMPAC this year?”

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Outrigger Names VP of Americas (AKA Hawaiʻi)

Outrigger has appointed Steve Nickerson as VP of Operations for the Americas. He brings a background across Sonesta, IHG, and, most recently, Midas Hospitality, with experience spanning full-service, select-service, and extended-stay portfolios. He will report to EVP Operations, Mike Schaff.

According to the press release, he’ll oversee hotel operations across the region, focusing on performance, consistency, and alignment with brand standards. He’ll definitely have his hands full with the renovation in progress at Outrigger Waikīkī, juggling guest expectations while upgrading a busy, high-traffic property (for the old timers, yes, Outrigger Main).

While the title covers the Americas, all of the current properties in the region are, well… Hawaiʻi. Are they foreshadowing something?

Aloha Steve, and welcome to Hawaiʻi.

Hotel Performance

Quick Summary (So You Sound Smart in Meetings): Statewide through February, we’re slightly up in occupancy and ADR, translating to a modest RevPAR bump of 1.8%. Maui is filling rooms the old-fashioned way, discounting, but still holding an eye-popping $554 ADR and pushing RevPAR up 5%. Hawaiʻi Island is the quiet overachiever, driving rate, and leading the pack with 6.4% RevPAR growth. Oʻahu… well, treading water, down across the board with RevPAR off 2.4%.

Worth noting, with the latest “excursion” in the Middle East at the end of February, combined with the Kona low storms, March is likely to come in softer. And beyond that… your guess is as good as mine 🤷‍♂️.

*Hotel performance data will be published in the first issue of each month.

Code Share for Hotels?

Hilton rolled out its new “Select” platform (they call it a brand, but it’s really a platform) with Yotel, the UK-based hotel company with 23 properties, as its first partner, and this one is interesting; it isn’t just another soft brand.

Instead of individual hotels joining Hilton, entire brands plug in. They keep their identity, run their own operations, and tap into Hilton’s distribution and loyalty engine. Or in Yotel’s words: “access, not identity.”

The best analogy we can think of? Airline code sharing. Ever book a United flight and end up on ANA metal? Same idea. Yotel runs the hotel, and Hilton helps fill the rooms, giving guests more options within the Hilton ecosystem.

This goes a step further than your typical soft brand. It’s not about individual hotels signing up anymore; it’s entire brands plugging into the system. More brands, more inventory, more reach. Hilton calls it “network effect.” You could easily see independent brands looking at this closely, keeping their identity but adding a much bigger sales, marketing, and distribution engine behind it. Assuming the fee structure makes sense, of course, because if all you’re looking for is volume, OTAs already do that pretty well.

And the appeal is pretty clear. Brands get scale without giving up control. Hilton gets growth without owning anything new or dealing with pesky brand standards. The trade-off? Potential dilution of brand identity, added fees, and, for Hilton, less control over standards, though you could argue that the ship has already sailed.

Call it a brand, call it a platform, call it whatever you want. It’s a different model. And if it works, it won’t be the last.

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You Can’t Make This Stuff Up (Tourism Edition)

We’ve talked in recent issues about the real barriers to travel, visas, phone checks, and the growing perception that the U.S. just isn’t as welcoming as it once was. Layer in tariffs, geopolitical tensions, and ongoing conflicts, and the list of headwinds isn’t exactly getting shorter.

And now we have… this.

The U.S. has appointed Nick Adams as Special Presidential Envoy for American Tourism, Exceptionalism, and Values. The title alone requires a minute. A “special envoy” is typically a government-appointed representative tasked with promoting U.S. interests abroad, in this case serving as a global face for American tourism (and apparently, exceptionalism and values).

Adams is best known as a social media personality who brands himself an “alpha male,” with commentary on culture and politics that has drawn plenty of attention and criticism. At times, it almost feels like a parody. He was born in Australia and became a U.S. citizen in 2021, an interesting backdrop for a role centered on “American exceptionalism.”

The role, at least on paper, is to promote the U.S. ahead of major global events like the World Cup and the Olympics. Tourism as diplomacy. Cultural exchange.

At a time when the industry is already working to counter perceptions that the U.S. is difficult to enter or less welcoming, this is… a choice.

You can’t make this stuff up.

Why Your AI Might Be Making You Dumber

Two studies have been rattling around in my head lately, and together they tell a somewhat unsettling story.

The first, from Harvard Business Review, looked at how people actually use AI. Most treat it like an answer machine: ask a question, get a clean response, move on. Fast, efficient, and a little dangerous, especially when the answer is wrong, which happens more than people realize. The smaller group using it as a thinking partner, pushing back, asking it to challenge assumptions, forcing some friction into the process, catches those mistakes, and gets a lot more out of it.

The second story adds another layer. MIT published a paper earlier this year showing that even a perfectly rational person can develop strong confidence in a wrong belief just by chatting with an agreeable AI long enough. They called it “delusional spiraling” (sounds a bit like a new owner’s forecast model). Stanford followed up with a study in Science, testing 11 major models, including ChatGPT, Claude, and Gemini. Every single one was more agreeable than a human, nearly 50% more, even when users described behavior that was flat-out wrong. People who got flattering responses walked away more convinced they were right and less willing to reconsider.

Put those together, and the picture gets uncomfortable fast. If you’re using AI to do your thinking for you, and the tool is designed to keep you happy, you’re not just saving time; you’re reinforcing your own assumptions while getting more confident in the process.

I keep telling everyone to start using these tools, and I stand by that. But the caveat matters: don’t use it as an answer machine. Use it as a sounding board. Correct it. Disagree with it. Ask it where you’re wrong. Have it argue the other side. If you’re not pushing back, you’re probably just reinforcing what you already think.

Same tool. Two very different outcomes.

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Industry Events

*If you have industry events to share, please email me at [email protected].

Spotlight on Hawai‘i Hospitality Opportunities

*If you happen to have any job openings, let us know. We will be glad to include them in the newsletter, space permitting; send the job link to [email protected].

Every issue, I tell myself I’ll skip this section if nothing is interesting. And every issue, you all prove that wrong.

I read every single note that comes in, even the ones that call me out. Mahalo for the support, the reality checks, and the occasional stroll down memory lane.

Here is what is landing in the inbox lately.

Praise (The fuel that keeps us going)

  • “Aloha Dan, didn’t realize you were behind Hotel Hui. Not surprised [you're] quite the [entrepreneur]. Will definitely follow; keep up the good content!”

  • “The podcast is finally happening! Congrats on the first episode.”

  • “I always look forward to your newsletters! 🤙🌺”

Strong Opinions & Industry Takes

  • “Real shifts are happening in the industry. Local operators need to stay adaptable as these ownership changes unfold. 🌴”

  • “Interesting that [a] software company [Mews] in the hotel space is getting this funding and valuation… at the same time, publicly traded software companies… are getting slaughtered in the stock market…”

  • “What is the top-line the company [Mews] is realizing? It's probably based on room count or users. Hard to see the margins justifying the valuation… But great for the company, if they can raise that much cash.”

  • “This will be an interesting case testing the limits of AI in many different forms. Collusion used to be two or more executives discussing rates and setting a strategy.”

From the Ops Trenches (This One Hit Home)

  • “When [a Hotel I worked at] opened in 2010, payroll and staffing were… calculated based on rooms sold… I still remember the graph showing daily occupancy and payroll expense… sent to ownership on a weekly basis.”

  • “It took some time for owners to understand why Housekeeping labor lagged peak occupancy by a day… but the relationship between business levels and hourly labor was an absolute focus.”

Agree? Disagree? Have a hot take of your own? Fire back at [email protected], and your response might be featured anonymously in the next edition.

About Us

Hawaiʻi Hotel Hui was started by hotel industry veteran Dan Wacksman, CEO of Sassato, a Hawaiʻi-based consultancy that combines deep local expertise with a global perspective.

Our team brings decades of experience across operations, marketing, revenue, tech, and finance, all aimed at helping hotels and travel companies make smarter decisions and move faster. Whether you need additional expertise, extra horsepower, or just someone who thinks like you and moves things forward, we’ve got you. From local independents to global brands, we show up with a no-nonsense, results-focused mindset. To be blunt: we get sh*t done.

Recent projects include brand transitions, system selection (PMS, CRS, CMS — all the acronym soup), implementations, project management, feasibility studies, training, audits, and everything in between.

A lot of organizations deal with stretched teams, siloed processes, and messy tech stacks that quietly stall important work. We fix that. Happy to chat if this hits close to home.