Hawaii Hotel Hui Insider - Issue #3

March 18, 2025

Aloha !

Welcome to this month’s Hawaiʻi Hotel Hui Insider! 

When I started this newsletter as a passion project, I wasn’t sure what to expect—but I’ve been thrilled to see our subscriber base has grown beyond expectations! That said, we still need your help to grow our hui. If you’re enjoying the newsletter, please share it with colleagues and friends—more voices make for a stronger community.

This month, we’re covering everything from Waikiki’s first capsule hotel to new tourism tax proposals, hotel performance trends, and AI’s growing role in travel. Plus, don’t miss insights from The Hospitality Show and our new Anonymous Comments to the Editor section, where your fellow industry pros share their unfiltered takes.

Let’s dive in!

Mahalo,

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

Entombed in Hawai‘i?

OK, entombed might be a slight exaggeration. Still, First Cabin, a “compact hotel brand,” has taken the 14th floor of the Waikiki Business Place and created a “luxury” capsule hotel in the heart of Waikiki. There are 90 cabins, most of which are 27 square feet in size and 4 feet high! There are also nine business-class and first-class cabins where you can stand upright (now that’s an amenity!).

I lived in Japan during the ’90s when capsule hotels became popular. Their main purpose was to house drunken salarymen who missed their last train. I’m not sure that’s a demographic we have here—at least not until the rail reaches Waikiki.

Joking aside, I’m scratching my head as to who would stay in these besides backpackers. But then again, back in the ’90s, I couldn’t figure out how Google would make money, so I don’t have the best track record. Now, if you can only convince your owner to put this in your compset. 😉

Here is an example of some premium economy cabins found at First Cabin’s competitor hotels.

We’re From the Government and We Are Here to Help

From left to right: Moderator Kekoa McClellan, City and County of Honolulu Mayor Rick Blangiardi​, Kauai County Mayor Derek Kawakami​, and Maui County Mayor Richard Bissen.

I recently attended The Hospitality Show Hawai‘i, sponsored by The Hawai‘i Hotel Alliance (HHA) and the American Hotel and Lodging Association (AHLA). It was really great to hear the latest hotel updates from a legislative perspective, as well as to hear directly from Governor Green and three out of the four county mayors. The event also included some tech talk and an inspiring update from Dr. Aaron Sala on the new direction of HVCB. Some interesting items that were mentioned:

  • The convention center will be closed to large events in 2026 as it undergoes long-needed repairs that the legislature consistently failed to fund.

  • January saw a 55% drop in government, military, and contractor business (see Trump Effect below).

  • After the latest union contract, the average housekeeper will earn $85K in salary, benefits, and tips, and bartenders will earn $165K.

  • While Governor Green expressed support for hotels, he also said he supports additional taxes. He did assure us that the taxes will be used for their intended purpose (isn’t that what they said about the TAT that got sucked into the general fund?)

  • Of the fines levied on illegal vacation rentals, only a tiny portion has been collected, leading VR owners to simply ignore the regulations.

Attending the event put on by HHA and AHLA got me thinking about the alphabet of organizations and associations that are super helpful to Hawaiʻi hoteliers, but that not everyone might be familiar with. If you are interested in learning more about Hawai‘i and Global associations worth joining, we have created a “glossary” of organizations here.

On the left Dr. Aaron Sala, and on the right Governor Green.

Note: For those unfamiliar with the headline, it is from Ronald Reagan. The full quote is: “I think you all know that I've always felt the nine most terrifying words in the English language are: ‘I'm from the Government, and I'm here to help.’”

Hawaiian Voices in Ko Olina

Ko Olina Resort has announced a partnership with the Council for Native Hawaiian Advancement (CNHA). CNHA will act as a cultural consultant at Ko Olina and help improve balance between the Native Hawaiian community and tourism.

CNHA will also be responsible for two parcels of land that will be dedicated to Native Hawaiian cultures and traditions. Jeff Stone, the owner and developer of Ko Olina, said, “Ko Olina has always been a place of significance for Hawaiians — historically, culturally, and spiritually. We recognize our responsibility to respect and preserve that legacy.” It will be interesting to see how the Atlantis Resort, slated for Ko Olina, embraces this initiative—because let’s be honest, throwing a lei on Mickey and Poseidon doesn’t make them mea Hawaiʻi.

In other CNHA news, CNHA has appointed Blaine Miyasato as its new chief brand officer. Those who know Blane know he did great work at Hawaiian Airlines but was a casualty of the merger with Alaska Airlines.  Blane resigned from his position on the HTA board due to his relocation to Las Vegas, though CNHA has brought him home once again! We hope this means Blane might consider returning to the HTA Board, which could really use some pragmatic industry experts.

HTA 2025 Spring Tourism Update

I attended this via Zoom earlier this month, and while I’m sure it was better in person, the sheer volume of information packed into a short time made it hard to digest. Each key market and sector made a presentation. I can’t help but think there’s a more engaging way to deliver it all. 

Just for fun (I know I have a strange sense of “fun”), I used Notebook LM to turn the Canada presentation into a podcast—you can check it out here (btw I simply uploaded the presentation, and it created the podcast on its own). I’m not saying this is the solution. Still, with so many new tools available, there are probably better ways to present these valuable insights more effectively (let’s be honest, PPT feels very last decade 😉).

That said, I was stoked that my company, Sassato, was mentioned for our deep-dive study with Kilohana on the potential of a tourism app! We really enjoyed working with Kilohana and HTA on this project. 

If you’re interested, you can find the presentations delivered at the tourism update here.

Politician Math

Hawaiʻi lawmakers are looking for ways to fund their $1.4 billion climate resilience program, with a proposal to raise the state’s transient accommodations tax (TAT) by 1.75 percent.  

This would bring the total tax on visitor lodgings to 19.712%, the proposed TAT rate of 12%, the county surcharge of 3%, and the Hawaii General Excise Tax (GET) of 4.712%. As we noted last month, Hawaiʻi already has one of the highest tourist taxes in the world.

I often hear people say, ‘It’s only 1.75%.’ But that’s misleading. Since the TAT is rising from 10.25% to 12%, that’s a 1.75 percentage point jump—which actually means the tax is increasing by 17.1% relative to the current rate. That’s a big difference.

Another bill floating around proposes to collect $20 a night on bookings made using loyalty points or membership reward points.

As of this writing, both Senate Bill 1396, which proposes an increase in the room tax, and House Bill 504, which introduces a $20 per night surcharge on 'free' room nights, are still active.

Hotel Performance – Courtesy of Powell and Aucello

January 2025 Hotel Performance
The state had a 1.5 percentage point decrease in occupancy and a 1.8% increase in ADR, resulting in flat RevPAR compared to last January. RevPAR was up 1% on Oahu, down 9% on Maui, up 12% on Hawai‘i Island, and up 8% on Kauai. All islands experienced an increase in occupancy from last January.

Visitor Arrivals
Total visitor arrivals to Hawai‘i were up 4% for January compared to last year, with Hawai‘i Island up 11%, Kauai up 5%, and Oahu up only 1%. Maui was up 16% over last year, but this is still 11% below the pre-fire arrivals.

For more destination data and development news, check out Powell & Aucello’s monthly newsletter.

The Trump Effect

Love him or hate him, President Trump’s recent actions are likely to have an impact on tourism. Besides the potential economic turn (don’t look at your 401K!), most Hawaiʻi hoteliers I speak to are very concerned about Canada.  

Our Canadian friends have been a very stable market segment for us, often in shoulder periods and for longer visits. The trade war has led to heated rhetoric and a newfound nationalistic feeling in Canada. 

A recent report contained the following comment from a frequent visitor. "Obviously, out of loyalty to Canada and our values and just holding our ground, we had to cancel, but now we're looking at Costa Rica." 

According to an Oxford Economics Report, this is how potential impacts may look to the US travel sector in an expanded trade war:

“US inbound travel spending in 2025 would be 10.9% lower than in the baseline outlook, totaling an estimated $18B loss. Total US travel spending (domestic & inbound) would be 3.7% lower than the baseline, implying a $64B loss.”

Tripadvisor’s Bold Move: No More Rounding

Tripadvisor is refining its bubble rating system, shifting from half-star increments to more precise tenth-of-a-point ratings (e.g., 4.2 instead of 4.0 or 4.5). While this may seem like a minor tweak, it makes subtle differences in guest satisfaction more visible, meaning every decimal point counts. 

This update comes as Tripadvisor’s influence in hotel reviews has evolved, with travelers increasingly relying on multiple platforms to research accommodations. Despite this shift, Tripadvisor remains a key player in the industry, with millions of users still turning to its reviews before booking. For hotels, this means maintaining top-tier service is more important than ever, as both Tripadvisor and Google continue to shape traveler decisions.

More Layoffs At Expedia

In March, Expedia Group laid off hundreds of marketing staff worldwide as part of another reorganization. The cuts mainly impacted content creation teams, with global events and corporate communications also affected. This follows last year’s layoffs and aligns with Expedia’s shift toward AI-driven content and performance marketing. This marks the company’s second major workforce reduction since last year when it cut 1,500 jobs, about 9% of its staff. I’m hoping our Expedia Ohana here has been spared.

Agentic AI: The Terminator of Travel Jobs?

You may have heard (or not) about Agentic AI—and if you haven’t, you will soon. It’s called “Agentic” because it acts like an agent—not just following rigid automation, rules but actually making decisions and adapting in real-time. Think booking your flights, rebooking your hotel, or handling customer service—without a single human involved. Unlike traditional automation, which follows a script, agentic AI figures things out on the fly, adjusting to your needs like a human would—but 24/7, with no coffee breaks, and no out-of-office replies.

Big players like Booking.com are all in, calling AI a revolution in travel. They use it to personalize recommendations, improve efficiency, and even rolled out AI-powered trip assistants. OpenAI’s new platform makes it even easier for businesses to automate what used to require, well… people. (See Expedia news above.)

What could possibly go wrong?

Anonymous Comments to the Editor

I am so happy when I get feedback, even when people disagree or point out things I messed up - at least I know they are reading.

In the last issue, I incorrectly stated some things regarding Hawai‘i Island hotels.  This was mostly because I had not been to the Big Island in a while. If any of our gentle readers would like to sponsor a refamiliarization trip, I am always open ;-)

Get your Big Island Info Right! “You Big Dummy” (in my best Fred Sandford) 
For those who don’t get it, Google it ;-) 

  • "As the Big Island IHG projects are up mauka in Waikoloa Village, not the Waikoloa resort, I suspect their ability to drive meaningful ADRs will be somewhat limited.”

  • “You read about properties like Maui’s Courtyard by Marriott and Kapolei’s Hampton Inn and Suites driving strong rates and high occupancies, but you must remember that they serve a corporate/business customer. Waikoloa Village won’t be as effective in attracting that kind of client due to its location.”

  • “I think you might have the Hilo and Kona Uncle Billy’s mixed together. Hilo was demolished and had a bad element to the area. Kona is being revitalized and nearly ready to open. They kept the structures and overall ambiance of the past. It should be open soon.”

Some Kudos and Suggestions

  • “New properties: My favorite section with valuable information for industry and suppliers”

  • “Where is the OTA data? Call Kevin!”

  • “Great to hear about conferences that you participate in, keep them coming, many don’t have the budget to travel. Maybe source a recap from other industry colleagues who attend some of the conferences?”  

  • “Please keep recommendations on podcasts or books that you've come across lately.”

What do you think? Agree? Disagree? Fire back on these issues or others at [email protected], and your response might be featured anonymously in the next edition. 

Severance, Splurges, and the Price of a Coffee

A friend recently asked if I’d seen Severance. I said, “I want to, but I don’t have Apple TV.” She rolled her eyes and said in a somewhat incredulous (and I might add a bit condescending ;-),  “Dan, it’s $9.99.”

And that’s when it hit me—that’s less than a movie ticket in 2000, yet I hesitated. Meanwhile, I’ll spend $8 on an airport coffee without thinking twice. It's funny how we sometimes deny ourselves the simplest pleasures because of old habits and ingrained thinking. So I splurged, signed up, and binged on Severance (I am now caught up and waiting for the next drop!).

Is it a metaphor? An allegory? A fever dream about corporate life? I have no clue and am often left scratching my head. But Severance is weird, unsettling, and completely addictive… The premise? A bunch of corporate workers undergo a procedure that literally splits their work and personal selves. One half of you grinds away in a soulless office, completely unaware of the other half who gets to live a normal life. Aside from procedure, it sounds somewhat familiar, right?  

It’s confusing and unsettling, and I’m not totally sure what it’s trying to say—but I can’t stop watching.

BTW- If you have any good entertainment tips (books, movies, podcasts, restaurants, etc), whether they are industry-related or not please email them to [email protected]. 

Hawai‘i Hospitality & Tourism Industry Events Calendars

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

Spotlight on Hawai‘i Hospitality Opportunities

Hiring managers often ask me if I can recommend any strong job candidates. There is frequently a feeling that there is not enough talent here in Hawaiʻi. Of course, I beg to differ, and when I come across interesting roles, I plan on including them here:

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

About Us

Hawaiʻi Hotel Hui was started by hotel industry veteran Dan Wacksman, the CEO of Sassato, a Hawaiʻi-based consultancy that combines deep local expertise with a global perspective to help hotels and travel businesses overcome challenges and thrive. With a team of seasoned industry professionals who call Hawaiʻi home, Sassato offers an intimate understanding of the market, culture, and key players, paired with decades of experience in marketing, revenue management, operations, technology, finance, and overall strategy.

While Hawaiʻi is our backyard, our global footprint enables us to bring best practices from around the world. At Sassato, we don’t just consult—we deliver results with a no-nonsense approach to getting sh*t done.

Recent engagements include brand transitions, system selection and implementation (e.g., website, booking engine, PMS, CRS, CMS, CDP), feasibility studies, competitive analysis, strategic planning, training, meeting facilitation, audits in marketing, distribution, and technology. If you need help, we’ll either assist you directly or connect you with the right experts. Our ultimate goal is to be a trusted partner and resource for Hawai‘i hotels.