INTERNATIONAL REPORT — Two years after the wildfires that broke out in Hawaii, predominantly on the island of Maui, Jeff Wagoner said he’s encouraged by the recovery of the area, but emphasizes it is still going to take more time to get back to where the island was three to four years ago.
“We’re excited about the recovery of Maui, but it’s going to take some time still to have it recovered to the degree that it was in three or four years ago. But we are encouraged,” said Wagoner, president and CEO of Honolulu-based Outrigger Hospitality Group, which has eight hotels and resorts in Hawaii and over 30 in its overall portfolio.
Wagoner said Outrigger lost a small hotel in the fires and because the recovery of the area has so far focused on residential, the company hasn’t been able to determine its strategy on whether to rebuild yet.
“There were 3,000 buildings that actually had been burned to the ground,” he said. “We’re starting to see recovery of business in that market. The rate in that market is up and continues to go up,” he said, noting one of Outrigger’s properties ran 80% occupancy last month.
“It’s been a 50-plus percent market for some time now. So to see an 80% (occupancy) month really does become encouraging. You’re starting to see the green shoots of recovery.”
Wagoner said international inbound from Asia Pacific continues to be a headwind for all of Hawaii, noting that on the island of Oahu, where there are 100 resorts (four of which are Outrigger’s), international inbound was 50% of the market pre-COVID (35% from Japan, 10% from Australia and 5% from Canada).
Japan is only back into Oahu at 50% of 2019 levels, which Wagoner believes is primarily currency-driven.
“That is probably not going to change if the currency issues don’t change, but we’d love to see some movement there over the upcoming year,” he said.
Australia is 50-60% back from 2019 levels, but Wagoner said he anticipates that being closer to 100% in the next 12 to 18 months. Canada was almost back to 2019 levels, too, until tariffs and political turmoil cut those numbers.
“We’re hoping that as we move into the rest of 2025 and into 2026, some of that stabilizes, and that we’re able to have those international geo sources, which are critically important to us here in Hawaii, return to the kind of levels we saw in 2019,” he said.
Wagoner was interviewed by the author of this story as part of the HICAP Conversations virtual event on August 20, which is run by The BHN Group by Northstar. Wagoner discussed the company’s portfolio in Asia Pacific and the current environment for M&A in the region.
Portfolio in APAC
When asked about Outrigger’s portfolio in APAC, Wagoner stressed that the hospitality industry as a whole is still working toward getting back to normal.
“Every chance I can, I tell people that we are not, as an industry, stabilized. Anybody that says we are is really not being transparent,” he said, noting factors like the Ukraine-Russian war, outbound travel recovery in China and the currency situation in Japan and elsewhere. “There are so many different dynamics that we’re all wrestling with every day.”
“You’re still trying to figure out all these different geo sources. When do they come back? When do they get better? Who’s going away and who’s going to be new on the scene, like what we’re seeing in Vietnam and Malaysia,” he said.
Wagoner is optimistic about the Maldives, especially with a new airline terminal opening up this summer.
“Thank goodness that’s finally opened,” he said. “That’s going to drive millions of new passengers in capacity into that airport when (before) you basically couldn’t bring anybody else in.”
Current M&A environment
Wagoner said interest rates are still stunting the opportunities for growth to some degree, as well as the number of transactions. But that doesn’t stop Outrigger from pursuing in markets like Japan and Australia.
Overall, Wagoner is optimistic about potential M&A in the Asia Pacific, especially compared to making a deal in the U.S. right now.
“I’m a lot more bullish on our opportunities in Asia Pacific than I am on finding new opportunities on the U.S. mainland, in beach locations, as well as here in Hawaii,” he said. “Recently, though, here in Hawaii, a couple of assets have bubbled up that are on the beach and that rarely happens… There’s typically not a lot of that happening.”
Wagoner said he’s also hearing interesting things about new supply becoming available in Fiji.
“Fiji, to me, is not just going to be a destination [for just] honeymoons. It’s going to be something people really do seek out, not just from Australia, but other places across the globe.”
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