Sheraton Keauhou Bay Struggling to Stay Alive

January 23, 2009 at 9:38 AM | by AndrewC | 0 Comments

Add the Sheraton Keauhou Bay to the list of hotels struggling due to declining travel and tourism, according to the Honolulu Star Bulletin. The hotel re-opened as a Sheraton in 2005 after a major renovation and is considered to be located on a one-of-a-kind property atop a cliff overlooking the ocean.

Along with several other hotels in Hawaii, this hotel has been averaging 50 percent occupancy since September 2008 and is having trouble paying for its loans -- even though it has free rent from the owner of the land. Not only that, but the owners spent $70 million to renovate the hotel inside and only to have the county say the resort is worth a little over half of that, $43.8 million.

We went to TripAdvisor.com to see what recent guests had to say about the property. There were a number of reviews mentioning how the property seemed empty, staff was hard to come by and the concierge had signs saying to go to the front desk for service. One reviewer seemed to be upset it was considered a resort since it has no beach. But other reviewers loved the 18,000-sq.ft. pool. WTF? Perhaps the pool maintenance bill did the hotel in.

Even if the hotel does go into foreclosure, it will probably stay open, but its unclear if any jobs would be lost or what other changes would be made in the interim.

We have a feeling we'll be hearing more news like this in the weeks to come as travel and room rates continue to decline and property financial models never intended on such occupancy levels so low.

[Photo: Rgreenbl]

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