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Andre Tatibouet: Maximizing asset value
Profile
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Asset Value Andre Tatibouet’s philosophy of paying attention to owners’ assets has made Aston Hotels the largest condominium-hotel operator in Hawaii. by Al Glanzberg and Glenn Withiam THE FIRM THAT began in 1968 by managing a 12-room familyowned hotel is today the largest manager of condominium hotels and resorts in the Hawaiian Islands. The company, Aston Hotels & Resorts, is also the third largest manager of all accommodations in Hawaii, behind Outrigger and Sheraton. From its corporate headquarters on Waikiki, in the heart of the Oahu 0 1994, Cornell University
APRIL 1994
tourist district, Aston Hotels & Resorts manages some 30 properties comprising 4,500 rooms on four major islands. Most of those properties are true condominium hotels, in which the rooms or units are owned by many individual investors who as a group hire Aston to manage and market their joint property. From the guests’ point of view, Aston properties are simply resort hotels that have housekeeping facilities. The moving force behind all of this is Hawaiian-born Andre S. Tatibouet. The company name, Aston, is based on his initials. 25
Originally the company was called Hotel Corporation of the Pacific, but that monicker seemed too ungainly when Tatibouet wanted to expand his business to managing other people’s assets. A privately held firm, Aston’s managed properties are all in Hawaii. Tatibouet also owns a Al Glanzberg is a travel writer who was covering the 1993 Pacific Asia Travel Association (PATA) annual meeting at the time of his interview with Andre Tatibouet. Glenn Withiam is executive editor of The Quarterly.
Seattle-based firm that operates lodging properties on the Pacific coast, including two hotels in San Francisco (the Pickwick and the Hotel Mark Twain), but that business is entirely separate from the Aston operation.
Mostly Mid-Market Aston maintains a variety of properties, ranging from twodiamond inns to four-diamond resorts. Managing differentiated hotel and resort properties was not part of Tatibouet’s original plan, however. He originally anticipated that he would operate a homogeneous chain of condo properties. However, as he worked with travel agents, he found that travelers wanted
various experien Hawaii and a “plain vanilla” approach wouldn’t work. Aston now offers a variety of products and prices. None of those products are at the bottom of the market, but neither are any at the ultra-luxury level. “Realistically, most of Aston’s properties are three-diamond properties. We have quite a few fourdiamond resorts and a few two-diamond inns,” Tatibouet said. “Honestly, I wouldn’t want a five-diamond resort. When I look at the great job Ritz-Carlton and Four Seasons do operating five-diamond properties, I salute them. But I’d rather not operate those properties because it’s an entirely different kind of lodging operation. Everything must be done to perfection, and I didn’t want to be operating at the level of amenity required for fivediamond operation.” Tourism authorities agree that Aston does its job well. For instance, in her authoritative guidebook Birnbaum’s Hawaii 1993, Alexandra Birnbaum calls the Aston Waikiki Beach Tower “Waikiki’s most exclusive rentable condominium.” She contin26
ues: “The views, particularly from floors 25 to 40, are magnificent, and large lanais offer front-row seats as the sun slides into the Pacific.” Many Aston properties have restaurants, but those are leased to independent operators. Because the properties comprise condominiums, many of Aston’s units have cooking facilities in the rooms. “Westerners especially like the condominium vacation, because you can fix your own food if you want to,” Tatibouet said. “In practice, though, people don’t come here on vacation so they can spend their time cooking.”
Distribution The key to Aston’s marketing success is its relationship with travel agents and wholesalers, who supply 85 to 90 percent of Aston’s business. “I differentiate between my customers, who are the travel agents, and the consumers, who are the people who actually stay in the units,” he explained. “We maintain a single toll-free number for all agents to call. That is, a single number covers all the properties on the four islands where we operate. We offer seasonal promotions, and we can provide agents with a number of price points on each island. That means agents can start by quoting one type of unit at a given price and then offer their clients nicer rooms for not much more money.” Tatibouet believes that Aston properties can handle about 80 percent of consumers who want to travel to the islands.
Bumps on the Road Tatibouet is concerned about the future of Hawaiian tourism. He believes that development of new hotels throughout Hawaii is about finished except on Oahu. On the neighbor islands, he THE CORNELL
H.R.A. QUARTERLY
foresees no more than three to five new hotels between now and the beginning of the millennium. On Oahu, he expects several more hotels to be opened. “Demand has fallen off from North American tourists who visit there [the outer islands],” he said. “There is still some upside on Oahu, because Asians visit Oahu. They generally don’t stay on the neighboring islands.” Waikiki and West Maui remain the most popular destinations and have the greatest concentration of hotel rooms, while Kauai is “back looking nice” after being ravaged by Iniki. Aston lost one client on Kauai as a result of the storm because the owners and insurance company of the badly hit property could not bring it back up to Aston’s standards. While most of that island’s properties are refurbished and open, perhaps a half dozen remain c1osed.l On balance, Tatibouet detected a stronger market during the winter of 1993-94. His midwinter assessment was that the season was “a good one on its way to being great.” He cited the recovery of the U.S. economy and an improvement in consumer confidence. (Advance reservations provide a quick barometer of those changes.) Even with the heartening increase, tourist arrivals were still some 10 percentage points below the 1991 high. Like all Hawaiian businesses geared to tourism, Aston keeps a wary eye on airlines’ ticket prices. “Virtually all of our guests come by air,” Tatibouet said. “We are at the carriers’ mercy and we encourage them to do what they *See: Joseph Durocher, “Recovery Marketing: What to Do after a Natural Disaster,” in this issue of The Cornell Hotel and Restaurant Administration Quarterly, pp. 66-71.
APRIL 1994
can. However, just as we are practicing yield management to maximize our revenues, so are they.”
Snagging Talent As property manager, Aston chooses the general manager and takes responsibility for training employees. Tatibouet added, however, that “we’re not going to put someone in who’s not a good fit with a property.” Charles Brookfield, Aston’s executive vice president, explained that Aston rarely needs to hire management candidates from the mainland because the islands are a magnet that draw talented people from all over the world.
Hotelier in Spite of Himself It was apparent to Tatibouet in the 1960s that Hawaii’s fortunes would not rest on sugar and pineapples forever. At that time, Hawaii averaged 150,000 visitor arrivals per year, most of them from California. By 1985, the total was nearly 7,000,OOO arrivals from all around the world. “I really felt that Hawaii had a big, exciting, dramatic future in tourism, and I decided to get into the hotel business.” Ironically, when he graduated from the University of Hawaii in 1964 (having majored in American and Russian history), he didn’t want to join his parents in their hotel operation. Instead, he went into real-estate sales and later became a developer. When he returned to the hotel business, he decided to focus on management contracts instead of the more traditional individualoperator form of hotel operation. “There was really nobody here in the islands who was doing professional hotel and condominium-resort management. There were some halfway at27
tempts, but I felt it really wasn’t being done properly,” he said. With his parents’ 12-room property, the Royal Grove Hotel, as his first management contract, Tatibouet founded Hotel Corporation of the Pacific. A family memento painting of that original hotel, which was opened by his parents in 1948, hangs on the wall in Tatibouet’s office. In the next ten years, he purchased a few hotels and developed some others. But in 1978, he focused his business on managing other people’s condominium-hotel assets. From that time on, Aston Hotels, as it was then known, managed only a few properties for its own account. “I saw that developers were building condominium units that were purchased by absentee owners who used their units for two or three weeks each year at most. The units were vacant the rest of the time and their owners wanted some income from that asset,” he said. “The owners turned to their real-estate agents to rent the condos, but although the brokers were willing to rent out the units, their focus was not on optimizing those assets. I could see a real need.” Tatibouet began marketing the condo developments as hotels. “The individual owners appreciated the income and also the management that we provided that allowed better upkeep,” he said. At first, he offered Aston’s services to owners whose condominiums were in weak properties. It wasn’t long before word got around and developers made arrangements with Aston as part of the original offering to improve the salability of new properties to individual investors. The message Tatibouet brought to condo owners was simple, as he explained it: “We manage your assets for you. We
believe we can do a better job than you can yourself. I think we have demonstrated that we can do so, and we plan to do a better job than any other company you can find to do it.”
Despite a shakeout in Hawaii, this is a pleasant time for Aston, because people are asking the company to pick up management of their properties.
Fired Even when Aston represents a given condominium property, the owners of the individual units are under no obligation to rent their units through Aston. The decision of how to manage and market their asset remains theirs. In practice, most owners are willing to pay Aston for its marketing and pricing expertise. That expertise means that Aston is able to maintain ADRs slightly above those of competitors because the Aston name guarantees certain standards for the guest experience. Still, Tatibouet is careful to ensure that Aston’s properties always remain competitively priced. By the same token, Aston is also not shy about removing units from the rental pool if their owners do not maintain them at appropriate levels. “As manager, Aston mandates certain levels of upkeep and maintenance,” Tatibouet said. Not all owners’ groups retain Aston in perpetuity. From time to time, owners decide that they can do the same marketing job as Aston and save the management fee. In one case where the owners took back management of their 120-unit property on Maui, Tatibouet related that the owners believed they had two substantial factors in their favor. They were certain they could save money by not paying the management fee, and they were secure in the idea that their condos were so impressive that people would return to them year after year. “It didn’t happen that way,” Tatibouet explained. “Operating 28
costs did not go down, and the owners didn’t have the requisite human-resources skills. They cut their rates and still occupancy fell. It’s a lovely property in a lovely location, but the owners’ group didn’t understand how condominium distribution works. Now, I think it’s difficult for the group to admit that this all was a mistake.” Tax reform. Aston continued to prosper even after the tax-law change in 1987 that effectively killed passive real-estate ownership as a tax shelter.2 “The tax reform didn’t cause trouble for Aston itself,” Tatibouet recalled. “But it did cause trouble for purchasers who bought units for the wrong reasons. We shared their heartache.” While the condominiummanagement business has been a good one for Tatibouet, he sees some negative aspects. A particular difficulty is reaching consensus among an owners’ group when Aston recommends capital projects or remodeling. Balancing that negative aspect is the favorable point that Aston’s contract for a given property is not controlled by a si.ngle owner who can unilaterally cancel the management contract at the end of a term.
A Hotel Family Now 52 years old, Andre Tatibouet’s partner in business and life is Jane Tatibouet, who is a graduate of the Cornell University School of Human Ecology and an associate member of the Cornell Hotel School’s alumni association. She participates in long-range planning for the business and is also active in state politics. The Tatibouets 2 See: Peter M. Gunnar and C. Starr Atwood, “The 1986 Tax Reform Act: Its Effect on Condominium Hotels.” The Cornell Hotel and Restaurant Admini&ation Quarterly, Vol. 27, No. 4 (February 19871, pp. 32-33,39.
THE CORNELL
H.R.A. QUARTERLY
have two grown children, one of whom, Cicele Tatibouet, is a graduate of Cornell’s School of Hotel Administration. Andre Tatibouet himself never attended a hotel school but learned the business through practical experience. His forte is marketing rather than day-to-day operations, which are handled primarily by Brookfield. The Tatibouets are investors in some of the properties that Aston manages, but most of the units are held by absentee owners who may or may not personally use their units and are counting on Aston to maximize the income from those units. As the owners of a home on Cape Cod, the Tatibouets are sensitive to the concerns of absentee owners, notably in maintaining the value of the asset, and can readily identify with the owners whose Hawaiian condos they manage. The properties owned by Aston are treated like any other property’s management account.
The Great ’80s Although Tatibouet made the right call in 1978 when he decided to focus on managing condominiums, he admits that his crystal ball has sometimes been cloudy. “In 1979, I made the mistake of making some major hotel investments. Then in the early ’80s tourism got soft, real estate got weak, interest rates hit 22 percent, and I dropped some major money. Later, in 1990, I didn’t realize that the real-estate market was near its peak and that it would have been a good time to get out.” Between the early ’80s and 1990, however, Tatibouet said the lodging business in Hawaii was a dream. “It was wonderful in the 1980s unbelievable, unparalleled,” he said. “But few things go up forever.” APRIL 1994
Photos courtesy of Aston Hotels i& Resorts ii
“I should have taken out my chips, waited until the market went down, and then stepped back in,” he continued. “In 1993 you could purchase hotels for discounts of between 30 and 50 percent of what they were three years earlier. There are some great values out there now.” Today, he added, there is a shakeout underway in Hawaii’s lodging business, Weak operators are being washed aside, and he sees a wave of consolidation. “Oddly, this is a pleasant time for Aston, because people are asking us to pick up management of their properties, especially independent hotels that were trying to run things themselves. For example, we took over management of a small Waikiki property in February 1994,” Tatibouet said. “For every six to eight projects we examine in a year, we might add three or four of them.” Other Hawaiian condo operators are much smaller than Aston. The largest of those manages no more than eight hotels. 29
Although he believes he didn’t time the market as well as he could, Tatibouet did make a good move by liquidating a portion of his Hawaiian real estate late in the 1980s to launch Northwest Lodging, Inc., his Seattle-based firm that operates hotels and highway-motel properties.
Advice Tatibouet recommends that aspiring hoteliers and developers do “a lot of looking and listening; learn more about your customers; find out what their needs are; and determine what price they would be willing to pay for the lodging products they desire. Also find out as much as you can about your competitors.” CQ
.
nd
Asset Value Andre Tatibouet’s philosophy of paying attention to owners’ assets has made Aston Hotels the largest condominium-hotel operator in Hawaii. by Al Glanzberg and Glenn Withiam THE FIRM THAT began in 1968 by managing a 12-room familyowned hotel is today the largest manager of condominium hotels and resorts in the Hawaiian Islands. The company, Aston Hotels & Resorts, is also the third largest manager of all accommodations in Hawaii, behind Outrigger and Sheraton. From its corporate headquarters on Waikiki, in the heart of the Oahu 0 1994, Cornell University
APRIL 1994
tourist district, Aston Hotels & Resorts manages some 30 properties comprising 4,500 rooms on four major islands. Most of those properties are true condominium hotels, in which the rooms or units are owned by many individual investors who as a group hire Aston to manage and market their joint property. From the guests’ point of view, Aston properties are simply resort hotels that have housekeeping facilities. The moving force behind all of this is Hawaiian-born Andre S. Tatibouet. The company name, Aston, is based on his initials. 25
Originally the company was called Hotel Corporation of the Pacific, but that monicker seemed too ungainly when Tatibouet wanted to expand his business to managing other people’s assets. A privately held firm, Aston’s managed properties are all in Hawaii. Tatibouet also owns a Al Glanzberg is a travel writer who was covering the 1993 Pacific Asia Travel Association (PATA) annual meeting at the time of his interview with Andre Tatibouet. Glenn Withiam is executive editor of The Quarterly.
Seattle-based firm that operates lodging properties on the Pacific coast, including two hotels in San Francisco (the Pickwick and the Hotel Mark Twain), but that business is entirely separate from the Aston operation.
Mostly Mid-Market Aston maintains a variety of properties, ranging from twodiamond inns to four-diamond resorts. Managing differentiated hotel and resort properties was not part of Tatibouet’s original plan, however. He originally anticipated that he would operate a homogeneous chain of condo properties. However, as he worked with travel agents, he found that travelers wanted
various experien Hawaii and a “plain vanilla” approach wouldn’t work. Aston now offers a variety of products and prices. None of those products are at the bottom of the market, but neither are any at the ultra-luxury level. “Realistically, most of Aston’s properties are three-diamond properties. We have quite a few fourdiamond resorts and a few two-diamond inns,” Tatibouet said. “Honestly, I wouldn’t want a five-diamond resort. When I look at the great job Ritz-Carlton and Four Seasons do operating five-diamond properties, I salute them. But I’d rather not operate those properties because it’s an entirely different kind of lodging operation. Everything must be done to perfection, and I didn’t want to be operating at the level of amenity required for fivediamond operation.” Tourism authorities agree that Aston does its job well. For instance, in her authoritative guidebook Birnbaum’s Hawaii 1993, Alexandra Birnbaum calls the Aston Waikiki Beach Tower “Waikiki’s most exclusive rentable condominium.” She contin26
ues: “The views, particularly from floors 25 to 40, are magnificent, and large lanais offer front-row seats as the sun slides into the Pacific.” Many Aston properties have restaurants, but those are leased to independent operators. Because the properties comprise condominiums, many of Aston’s units have cooking facilities in the rooms. “Westerners especially like the condominium vacation, because you can fix your own food if you want to,” Tatibouet said. “In practice, though, people don’t come here on vacation so they can spend their time cooking.”
Distribution The key to Aston’s marketing success is its relationship with travel agents and wholesalers, who supply 85 to 90 percent of Aston’s business. “I differentiate between my customers, who are the travel agents, and the consumers, who are the people who actually stay in the units,” he explained. “We maintain a single toll-free number for all agents to call. That is, a single number covers all the properties on the four islands where we operate. We offer seasonal promotions, and we can provide agents with a number of price points on each island. That means agents can start by quoting one type of unit at a given price and then offer their clients nicer rooms for not much more money.” Tatibouet believes that Aston properties can handle about 80 percent of consumers who want to travel to the islands.
Bumps on the Road Tatibouet is concerned about the future of Hawaiian tourism. He believes that development of new hotels throughout Hawaii is about finished except on Oahu. On the neighbor islands, he THE CORNELL
H.R.A. QUARTERLY
foresees no more than three to five new hotels between now and the beginning of the millennium. On Oahu, he expects several more hotels to be opened. “Demand has fallen off from North American tourists who visit there [the outer islands],” he said. “There is still some upside on Oahu, because Asians visit Oahu. They generally don’t stay on the neighboring islands.” Waikiki and West Maui remain the most popular destinations and have the greatest concentration of hotel rooms, while Kauai is “back looking nice” after being ravaged by Iniki. Aston lost one client on Kauai as a result of the storm because the owners and insurance company of the badly hit property could not bring it back up to Aston’s standards. While most of that island’s properties are refurbished and open, perhaps a half dozen remain c1osed.l On balance, Tatibouet detected a stronger market during the winter of 1993-94. His midwinter assessment was that the season was “a good one on its way to being great.” He cited the recovery of the U.S. economy and an improvement in consumer confidence. (Advance reservations provide a quick barometer of those changes.) Even with the heartening increase, tourist arrivals were still some 10 percentage points below the 1991 high. Like all Hawaiian businesses geared to tourism, Aston keeps a wary eye on airlines’ ticket prices. “Virtually all of our guests come by air,” Tatibouet said. “We are at the carriers’ mercy and we encourage them to do what they *See: Joseph Durocher, “Recovery Marketing: What to Do after a Natural Disaster,” in this issue of The Cornell Hotel and Restaurant Administration Quarterly, pp. 66-71.
APRIL 1994
can. However, just as we are practicing yield management to maximize our revenues, so are they.”
Snagging Talent As property manager, Aston chooses the general manager and takes responsibility for training employees. Tatibouet added, however, that “we’re not going to put someone in who’s not a good fit with a property.” Charles Brookfield, Aston’s executive vice president, explained that Aston rarely needs to hire management candidates from the mainland because the islands are a magnet that draw talented people from all over the world.
Hotelier in Spite of Himself It was apparent to Tatibouet in the 1960s that Hawaii’s fortunes would not rest on sugar and pineapples forever. At that time, Hawaii averaged 150,000 visitor arrivals per year, most of them from California. By 1985, the total was nearly 7,000,OOO arrivals from all around the world. “I really felt that Hawaii had a big, exciting, dramatic future in tourism, and I decided to get into the hotel business.” Ironically, when he graduated from the University of Hawaii in 1964 (having majored in American and Russian history), he didn’t want to join his parents in their hotel operation. Instead, he went into real-estate sales and later became a developer. When he returned to the hotel business, he decided to focus on management contracts instead of the more traditional individualoperator form of hotel operation. “There was really nobody here in the islands who was doing professional hotel and condominium-resort management. There were some halfway at27
tempts, but I felt it really wasn’t being done properly,” he said. With his parents’ 12-room property, the Royal Grove Hotel, as his first management contract, Tatibouet founded Hotel Corporation of the Pacific. A family memento painting of that original hotel, which was opened by his parents in 1948, hangs on the wall in Tatibouet’s office. In the next ten years, he purchased a few hotels and developed some others. But in 1978, he focused his business on managing other people’s condominium-hotel assets. From that time on, Aston Hotels, as it was then known, managed only a few properties for its own account. “I saw that developers were building condominium units that were purchased by absentee owners who used their units for two or three weeks each year at most. The units were vacant the rest of the time and their owners wanted some income from that asset,” he said. “The owners turned to their real-estate agents to rent the condos, but although the brokers were willing to rent out the units, their focus was not on optimizing those assets. I could see a real need.” Tatibouet began marketing the condo developments as hotels. “The individual owners appreciated the income and also the management that we provided that allowed better upkeep,” he said. At first, he offered Aston’s services to owners whose condominiums were in weak properties. It wasn’t long before word got around and developers made arrangements with Aston as part of the original offering to improve the salability of new properties to individual investors. The message Tatibouet brought to condo owners was simple, as he explained it: “We manage your assets for you. We
believe we can do a better job than you can yourself. I think we have demonstrated that we can do so, and we plan to do a better job than any other company you can find to do it.”
Despite a shakeout in Hawaii, this is a pleasant time for Aston, because people are asking the company to pick up management of their properties.
Fired Even when Aston represents a given condominium property, the owners of the individual units are under no obligation to rent their units through Aston. The decision of how to manage and market their asset remains theirs. In practice, most owners are willing to pay Aston for its marketing and pricing expertise. That expertise means that Aston is able to maintain ADRs slightly above those of competitors because the Aston name guarantees certain standards for the guest experience. Still, Tatibouet is careful to ensure that Aston’s properties always remain competitively priced. By the same token, Aston is also not shy about removing units from the rental pool if their owners do not maintain them at appropriate levels. “As manager, Aston mandates certain levels of upkeep and maintenance,” Tatibouet said. Not all owners’ groups retain Aston in perpetuity. From time to time, owners decide that they can do the same marketing job as Aston and save the management fee. In one case where the owners took back management of their 120-unit property on Maui, Tatibouet related that the owners believed they had two substantial factors in their favor. They were certain they could save money by not paying the management fee, and they were secure in the idea that their condos were so impressive that people would return to them year after year. “It didn’t happen that way,” Tatibouet explained. “Operating 28
costs did not go down, and the owners didn’t have the requisite human-resources skills. They cut their rates and still occupancy fell. It’s a lovely property in a lovely location, but the owners’ group didn’t understand how condominium distribution works. Now, I think it’s difficult for the group to admit that this all was a mistake.” Tax reform. Aston continued to prosper even after the tax-law change in 1987 that effectively killed passive real-estate ownership as a tax shelter.2 “The tax reform didn’t cause trouble for Aston itself,” Tatibouet recalled. “But it did cause trouble for purchasers who bought units for the wrong reasons. We shared their heartache.” While the condominiummanagement business has been a good one for Tatibouet, he sees some negative aspects. A particular difficulty is reaching consensus among an owners’ group when Aston recommends capital projects or remodeling. Balancing that negative aspect is the favorable point that Aston’s contract for a given property is not controlled by a si.ngle owner who can unilaterally cancel the management contract at the end of a term.
A Hotel Family Now 52 years old, Andre Tatibouet’s partner in business and life is Jane Tatibouet, who is a graduate of the Cornell University School of Human Ecology and an associate member of the Cornell Hotel School’s alumni association. She participates in long-range planning for the business and is also active in state politics. The Tatibouets 2 See: Peter M. Gunnar and C. Starr Atwood, “The 1986 Tax Reform Act: Its Effect on Condominium Hotels.” The Cornell Hotel and Restaurant Admini&ation Quarterly, Vol. 27, No. 4 (February 19871, pp. 32-33,39.
THE CORNELL
H.R.A. QUARTERLY
have two grown children, one of whom, Cicele Tatibouet, is a graduate of Cornell’s School of Hotel Administration. Andre Tatibouet himself never attended a hotel school but learned the business through practical experience. His forte is marketing rather than day-to-day operations, which are handled primarily by Brookfield. The Tatibouets are investors in some of the properties that Aston manages, but most of the units are held by absentee owners who may or may not personally use their units and are counting on Aston to maximize the income from those units. As the owners of a home on Cape Cod, the Tatibouets are sensitive to the concerns of absentee owners, notably in maintaining the value of the asset, and can readily identify with the owners whose Hawaiian condos they manage. The properties owned by Aston are treated like any other property’s management account.
The Great ’80s Although Tatibouet made the right call in 1978 when he decided to focus on managing condominiums, he admits that his crystal ball has sometimes been cloudy. “In 1979, I made the mistake of making some major hotel investments. Then in the early ’80s tourism got soft, real estate got weak, interest rates hit 22 percent, and I dropped some major money. Later, in 1990, I didn’t realize that the real-estate market was near its peak and that it would have been a good time to get out.” Between the early ’80s and 1990, however, Tatibouet said the lodging business in Hawaii was a dream. “It was wonderful in the 1980s unbelievable, unparalleled,” he said. “But few things go up forever.” APRIL 1994
Photos courtesy of Aston Hotels i& Resorts ii
“I should have taken out my chips, waited until the market went down, and then stepped back in,” he continued. “In 1993 you could purchase hotels for discounts of between 30 and 50 percent of what they were three years earlier. There are some great values out there now.” Today, he added, there is a shakeout underway in Hawaii’s lodging business, Weak operators are being washed aside, and he sees a wave of consolidation. “Oddly, this is a pleasant time for Aston, because people are asking us to pick up management of their properties, especially independent hotels that were trying to run things themselves. For example, we took over management of a small Waikiki property in February 1994,” Tatibouet said. “For every six to eight projects we examine in a year, we might add three or four of them.” Other Hawaiian condo operators are much smaller than Aston. The largest of those manages no more than eight hotels. 29
Although he believes he didn’t time the market as well as he could, Tatibouet did make a good move by liquidating a portion of his Hawaiian real estate late in the 1980s to launch Northwest Lodging, Inc., his Seattle-based firm that operates hotels and highway-motel properties.
Advice Tatibouet recommends that aspiring hoteliers and developers do “a lot of looking and listening; learn more about your customers; find out what their needs are; and determine what price they would be willing to pay for the lodging products they desire. Also find out as much as you can about your competitors.” CQ