Saturday Briefing

By Dr. Richard Kelley

The past 12 months have been the most challenging our company has ever faced. Visitor arrivals have been down a little over five percent, and room rates have fallen sharply, as hotel managers everywhere compete to attract travelers. Hawaii’s Department of Business, Economic Development & Tourism (DBEDT) reports the average per-person, per-day spending by air visitors dropped to $162 from $178 in the first ten months of 2009. That adds up to a $1.3 billion decrease in revenues from 2008. And 2008 was not exactly a good year either, with hotel occupancy, rates, and visitor spending dropping significantly from 2007, the last boom year of the decade.

In spite of economic and political challenges, we have, nonetheless, continued to make progress with our renovation program and to give our guests exceptional service and warm hospitality in Hawaii, Guam, Fiji, Australia, and Bali. We added new properties in Thailand, continued to work on an exciting project in Hainan, China, AND we just announced that our company will take over the management of Maui’s beautiful, upscale Kapalua Villas, effective January 4.

Within our company, the Ke ‘Ano Wa‘a Voyage of Discovery, Renewal, and Inspiration has sailed forth, and Alaka‘i from all properties have been busy coordinating many activities and events in celebration of the 6-Paddle Process.

Together we are a powerful team. Whether you are at the Front Desk, in Engineering, Housekeeping, Accounting, Reservations, Renovations, or some other area, your individual efforts are what has made our success possible. You are all hugely appreciated.

This was also a year in which many individual members of our ‘ohana were recognized with prestigious awards. Among these:

• Danny Ojiri received our company’s Chairman’s Award for his outstanding leadership in developing the Japanese market.
• Monica Wong was named Statewide Housekeeper of the Year by the Hawaii Hotel & Lodging Association.
• Nancy Daniels was named the Gregg W. Perry Public Relations Professional of the Year by the Public Relations Society of America – Hawaii Chapter.
• Nelida Dimatatac and Paulina Perkin were given the Above the Call of Duty Integrity Award by the Guam Hotel & Restaurant Association for returning guests’ valuables to them safely.
• Fran Kirk was honored by the City & County of Honolulu with a special “Forever Young” recognition of her tireless work in many projects throughout the community.
• David Carey received a Special Alumni Award from Santa Clara University for his many lifetime achievements.

Many of our properties received accolades from leading travel companies such as Expedia, TripAdvisor, and Orbitz for meeting and exceeding expectations of outstanding value, hospitality, and operations.

Ronald McDonald Charities of Hawaii recognized Outrigger and the Kelley family for all the assistance we have given them and the many out-of-town families of children who have come to Honolulu for medical and surgical treatment over the past 20-plus years.

As we look ahead to 2010, we know there will be challenges. The United States, indeed the world, is struggling.

I am quite concerned about the future. Globally, radicals using religious fundamentalism to promote their political agenda are attacking the Western concept of civilization. It is a centuries-old struggle that has intensified in recent years with attacks on U.S. embassies, barracks, the destroyer U.S.S. Cole, the Pentagon, and the World Trade Center’s twin towers in New York.

For the first time in history, technology has given single individuals the ability to inflict mass destruction and mass casualties with easily concealed and transported packages of explosives. I was warned in recent briefings in Washington, D.C., that the planting of car bombs on America’s streets is not out of the realm of possibility.

Nationally, we are witnessing an attempt to drastically change the free-market system that has made the U.S. the greatest nation on earth for the past 200 years. Massive federal spending is predicted to more than double the national debt in the foreseeable future. The value of the U.S. dollar has plummeted this year, and there is every indication that a rise in interest rates will soon follow.

I believe the attempt to ram through Congress a change in the way we pay for health care is part of an agenda to transform our free-market system – and not for the better. Earlier this year I offered a four-point plan to reform health care economics and make the cost of health care affordable. The four elements of the plan I offered were:

• Individual Choice & Free Market Competition
• Tax & Geographic Equity
• Personal Responsibility
• Tort Reform

Sadly, none of these concepts are included in the bills now being seriously considered by the U.S. House or Senate. In fact, items that would advance each of these points are either eliminated or made far more difficult in the current drafts. I fear we may end up with runaway costs, increased taxes, and, of course, bureaucratic control of personal health decisions, declining quality of care, and rationing, as is prevalent in Canada and England.

A majority of U.S. voters agree with me. The latest (December 21) Rasmussen Reports tracking update shows 55 percent of voters nationwide are opposed to the bill recently passed in the middle of the night by the Senate, and only 41 percent support it.

Many reasonably conclude that the real agenda is not health care reform but the imposition of government control over a major segment of our nation’s economy.

Stepping back for a moment, it is important to remember that, over time, civilizations change and, usually, disappear. In my 76 years on this earth, I have been fortunate enough to see the haunting remnants of magnificent bygone civilizations. I have climbed the ruins of the Mayan temples on Mexico’s Yucatan Peninsula, stood in the shadow of the Egyptian pyramids and the Great Sphinx at Giza, wandered through the rubble of the iconic Parthenon in Athens (where democracy first flowered, then perished) centuries before the appearance of Christ, and walked through the ruins of the coliseums built all around the Mediterranean by the Romans around the time of Christ. At each location, I wondered how such great civilizations could have crumbled. What led to their fall?

In the first half of the 20th century, Germany was one of the most cultured, advanced countries in Europe. It was full of music, art, museums, hospitals, laboratories, and universities. My first wife’s grandmother, Agnes Stamm, who was of German ancestry, told me how beautiful Berlin was when she honeymooned there in 1897. She vividly described the wide, well-cared-for streets, particularly Unter den Linden, a lovely, tree-lined boulevard running through the center of the city to the Brandenberg Gate.

Then, following the wrenching changes in Europe resulting from World War I and again during the Great Depression of the 1930s, the economic crisis spread, with runaway inflation and bank failures creating social and political chaos. Eventually, an appeal for “change” in Germany resulted in the restoration of order … but at the price of freedom. Many objected, but those seeking “change” silenced them. Again, I ask myself, how could this have happened?

Recently, as I watched reports on CNN showing activists slandering and maligning Sen. Joe Lieberman for expressing his valid concerns about the current drafts of health care legislation, I could not help but hear echoes – faint echoes, thank goodness, but echoes nonetheless – of the intolerance and the contempt for their opponents that marked Germany’s advocates for “change” some 75 years ago, as they set off the events that soon plunged Europe into darkness.

Are we in the United States approaching a tipping point, in which the way of life we cherish will be eroded, and perhaps even washed away, in the swirling tides of history? I certainly hope not.

We must be careful, and remain active and involved.

When we get through the current economic downturn – and I am confident we will – I hope we will not find that we have voted ourselves more government at the expense of freedom, individual choice, and personal responsibility, which are the basis of everything that has made our country great for over 233 years.

In any case, I am confident that whatever happens in the world around us, here at Outrigger and OHANA, if we continue to work as a team, we will get through the current economic turmoil and grow in coming years, both as a company and as individuals.

Again, my thanks to everyone for all the great things you accomplished in 2009, and my warmest wishes to you and your families for a happy and healthy 2010.

Bill Comstock, Myra Kuboyama, Statewide Housekeeper of the Year Monica Wong, Kim Agas, and Barry Wallace

By Barry Wallace

(Dr. Richard Kelley is traveling this week. His column will return on December 26, 2009)

On Wednesday, December 16, we extended a warm aloha to 62 new members of our Outrigger ‘ohana – the outstanding management and staff of The Kapalua Villas, as we assumed management of the rental program at this prestigious property. The employees were all very excited to be joining Outrigger and extended their aloha as well. Read the rest of this entry

By Dr. Richard Kelley

The 37th running of the Honolulu Marathon will kick off at 5 a.m. tomorrow, Sunday, at the Ala Moana Park starting line, just outside Waikiki. The event always amazes me. Considering Honolulu’s small population, our marathon’s popularity is phenomenal. According to the Honolulu Advertiser, it is Hawaii’s largest sporting event. Read the rest of this entry

By Dr. Richard Kelley

Those of us connected with Hawaii’s multifaceted Travel & Tourism industry were thrilled and excited two Sundays ago when President Barack Obama announced in Singapore that the 2011 Asia Pacific Economic Cooperation (APEC) summit will be held in Honolulu. Read the rest of this entry

By Dr. Chuck Kelley
Dr. Richard Kelley is traveling. His column will return December 5.

For the Kelley family and the Outrigger Enterprises Group and its ‘ohana, the spirit of Thanksgiving arrived a few days early this year, as Ronald McDonald House Charities of Hawaii (RMHC-Hawaii, www.ronaldhousehawaii.org) honored them at its fourth annual “Share a Night” fundraising gala last Saturday evening in the Coral Ballroom of the Hilton Hawaiian Village. Read the rest of this entry

By David Carey
(Dr. Richard Kelley is traveling. His column will return on December 5.)

Jim Heather; Honolulu Mayor Mufi Hannemann; Terry Telfer, President, Reynolds Recycling, David Carey; Senator Brickwood Galuteria; and Alan Naito

On Monday, November 16, I had the pleasure of accepting on behalf of Outrigger Enterprises Group the inaugural “Green Leader Award” from Reynolds Recycling, recognizing our company as a recycling and sustainability leader in Hawaii’s tourism industry. The presentation was made at a press conference held at Waikiki Beach Walk® and was attended by Terry Telfer, President of Reynolds Recycling, Honolulu Mayor Mufi Hannemann, Senator Brickwood Galuteria, whose district includes Waikiki, and representatives of many of our Waikiki hotels who participate in the bottle and can recycling program.

Since 2006, Outrigger’s owned and operated hotels in Waikiki have prevented over 48,000 pounds of recyclable material from entering Honolulu’s landfill by recovering more than one million beverage containers from our Waikiki guest rooms.

One of Outrigger’s core corporate values is “Wahi,” the Hawaiian word meaning ‘”place,” which signifies that “we protect, care for and live in harmony with the land, our workplace, its people, and cultures.”

This “Green Leader Award” from Reynolds Recycling is a great example of our company’s and employees’ commitment to living our values, and I’m particularly pleased that it is our employees who have suggested and driven many of our eco-friendly efforts.

Such is the case with our recycling efforts. At the press conference I asked Jim Heather and Alan Naito to join me on stage. Jim, now the General Manager at the Outrigger-managed Courtyard by Marriott property, can be credited with starting our Reynolds Recycling efforts several years ago at the Outrigger Waikiki and Outrigger Reef hotels when he was the General Manager at the Outrigger Waikiki.

A year or so ago Jim passed the baton to Alan Naito, General Manager at the OHANA Waikiki East. Alan instituted the recycling program at his own hotel, which soon carried over to the OHANA Waikiki West, OHANA Waikiki Malia and OHANA Waikiki Beachcomber hotels, as well as to the Outrigger-managed Embassy Suites® – Waikiki Beach Walk and the Outrigger Luana Waikiki.

Thanks to these two gentlemen’s leadership, and with the assistance of our Housekeeping and Maintenance staffs, we’ve been able to make a significant contribution to keeping Hawaii green by simply collecting and recycling the bottles and cans left by our guests in their rooms.

But our sustainability initiatives go far beyond recycling. I am proud to say that we have long practiced energy-saving techniques at many of our properties in an effort to be more eco-friendly and to preserve our island’s natural resources. For example, the installation of low-flow toilets and showers reduces the amount of water – including hot water – that we use every day; and to lower our energy consumption, we have replaced incandescent light bulbs with compact fluorescent bulbs. Also, a number of our properties have installed the INNCOM Energy Management System, which allows hotels to adjust thermostats so as to minimize unnecessary use of air conditioning when rooms are vacant.

The OHANA Waikiki Beachcomber received an ENERGY STAR designation earlier this year from the U.S. Environmental Protection Agency (EPA); and the Outrigger Waikiki and Outrigger Reef hotels collect items such as grass beach mats, plastic body boards, air mattresses, inner tubes, and other beach toys left behind by departing guests. Working with local retailer Kini Beach, these items are then transformed into eco-friendly bags and paddle covers.

It was appropriate that the press conference for the Green Leader Award was held at Waikiki Beach Walk, since that project is another great example of recycling and sustainability. During its construction, much of the concrete rubble from the various buildings that were demolished was crushed on site and recycled as fill to plug the holes left behind by the basement cavities of the previous properties – an initiative that not only reduced debris going to the landfill, but also enabled us to avoid hauling the debris away from the site and trucking fill material into the site, thereby reducing traffic on the roads by an estimated 1,800 heavy truckloads and saving a lot of diesel fuel and cutting air pollution as well.

Clearly, the phrase “going green” has taken on big meaning for Outrigger. The Reynolds Recycling Green Leader Award is a shining example of our company’s and employees’ commitment to living our values and being contributing members not only of the island community in which we live, but of the global community.

Mahalo to Jim Heather and Alan Naito for their leadership role in our Reynolds Recycling partnership, and to our housekeepers and maintenance crews for the hard work they put into the program each and every day.

Hawaii’s attractiveness as a visitor destination and the natural beauty its residents enjoy every day rest heavily on keeping our environment pristine. As tourism industry leaders, it is our responsibility not only to maintain, but to improve our Hawaii home for future generations to enjoy. We pledge to continue growing Outrigger’s efforts to help achieve a more sustainable and greener Hawaii.
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Some Impressive Facts and Figures Regarding Outrigger Enterprises Group’s Recycling Efforts

• 14,595 pounds — the amount of aluminum recycled since 2006. This has saved 109,465 kilowatts of electricity, conserved 11,530 gallons of gas, and if  the cans were lined up end to end, they could wrap around Kapiolani Park 18 times!

• 36,317 pounds —  the amount of plastic recycled since 2006. This has saved over 69 barrels of petroleum, preserved 135 cubic yards of landfill space, and if the containers were lined up end to end, they could go up and down Diamond Head over 54 times!

• Half a million —  the number of containers that Outrigger Enterprises Group is projected to recycle in 2009 alone. Compared to 2008, the hotel properties will more than double the number of recyclables they remove from the waste stream in 2009.

By Dr. Richard Kelley

The Honolulu Marathon has always attracted a large number of runners from Japan.  For the past five years, over 60 percent of the registrations come from that country, significantly contributing to the total impact of the event on Hawaii’s economy. Read the rest of this entry

By Dr. Richard Kelley

I have always been proud of the fact that the Hawaiian Islands, remote and small in size and population, have over the years produced an astounding number of national and international leaders. This feeling was reinforced once again two weeks ago during my visit to Washington, D.C.

I did not get a chance to speak with the most prominent Hawaii-born Washington resident, President Barack Obama, but I was able to spend some time with Maj. Gen. Kelly K. McKeague, who was raised on Oahu.

Gen. McKeague received his commission in 1981 through the Georgia Institute of Technology Air Force Reserve Officer Training Corps program. During his military career, he has served in a number of positions where he has been able to use his expertise in engineering, as well as his leadership skills. He has also taken advantage of the educational opportunities offered by the armed services, including two years of graduate work at Georgia Tech leading to a master’s degree in industrial engineering.

He is currently working at the Pentagon as Assistant for National Guard Matters to the Chairman of the Joint Chiefs of Staff. He is responsible for making sure the interests and the capabilities of the National Guard are considered and coordinated, as policies and decisions are made at the highest levels of the government. With the National Guard having over a half million members, that is no small task.

I met McKeague at a reception at the home of Gen. Craig R. McKinley, Chief of the National Guard Bureau. We quickly found out that we were both raised on Oahu.

As typically happens when two “local boys” meet for the first time, even in Washington, D.C., we quickly asked each other, “Where did you go to school?” For kama‘aina, that question always means “high school.”

I said, “Punahou,” and he responded, “Damien.”

We chatted about the next most important thing, our schools’ football teams! Only later did we discuss some of the weighty topics of the world, such as national defense and the war on terrorism.

(Every culture in the world is different, and probably only guys and gals raised in Hawaii can fully appreciate that conversational sequence.)

The other Hawaii-born leader in Washington, D.C., is Eric Ken Shinseki, Secretary of Veterans Affairs.

Shinseki was born on Kauai in 1942, and his birth certificate, like mine, reads, “Territory of Hawaii.” (Hawaii did not achieve statehood until August 21, 1959, just over 50 years ago.)

Shinseki attended Kauai High School, where he became Student Body President. He was appointed to the U.S. Military Academy at West Point and was commissioned a Second Lieutenant of Artillery upon graduation in June 1965.

A few months later, he was a forward observer for the U.S. infantry in South Vietnam. In 1966, he stepped on an enemy land mine, which severely injured his foot. He was sent to Tripler Army Medical Center in Honolulu to recuperate.

He returned to Vietnam for another tour of duty in 1969 and was wounded a second time in 1970.

After recovering, he held numerous positions in the Army, including Commanding General of the 1st Cavalry Division at Fort Hood in Texas, a place that has been very much in the news this week following the slaughter of 13 servicemen and women on base last Thursday.

Gen. Shinseki’s military career reached its peak in 1999 when he was appointed Army Chief of Staff. He retired from active duty on August 1, 2003.

The U.S. Army Museum of Hawaii at Fort DeRussy, next to the Outrigger Reef on the Beach hotel, has an exhibit dedicated to Gen. Shinseki’s outstanding military career.

Gen. Shinseki’s public service is not over, however. He was nominated by President Barack Obama to serve as Secretary of Veterans Affairs and was sworn in on January 21, 2009. Since then, he has made a huge impact on the Department of Veterans Affairs (VA).

I heard W. Scott Gould, Deputy Secretary of Veterans Affairs and former Vice President of IBM, describe the magnitude of the VA’s domain. There are some 23 million veterans in the U.S., and in 2008 alone, approximately one-third of them received a service from the VA, including health care, scholarships, and insurance payments. Gould noted that some 100,000 burials were conducted in 130 VA cemeteries last year. The VA has nearly 300,000 employees, 153 medical facilities, and 232 counseling centers across the country.

Unfortunately, in the past, VA service has been less than five-star – often far less.

As described in last week’s issue of Saturday Briefing, the VA’s work is even more challenging this year, as it is dealing with large numbers of men and women returning from Iraq and Afghanistan with traumatic brain injuries (TBI) and post-traumatic stress disorder (PTSD).

Secretary Shinseki is tackling those issues, using not only all of the skills he acquired in his military career but, at the same time, trying to make the services provided more personalized and focused on the individual – with the spirit of Aloha and ‘ohana – something he grew up with on the Garden Island of Kauai.

Many other Hawaii-born men and women have achieved national and international prominence, but this week, in honor of Veterans Day, November 11, let’s send our special Aloha to Gen. McKeague, Secretary Shinseki, and all the other men and women who have distinguished themselves by serving in our armed forces.

By Dr. Richard Kelley

At Outrigger and OHANA hotels, we have a long tradition of supporting the men and women who serve our country in the U.S. armed services – Army, Navy, Marine Corps, Air Force, Coast Guard, and National Guard – and, as we approach Veterans Day, November 11, it is appropriate to review that history, renew our dedication, and share a few thoughts about today’s military.

In fact, our personal and corporate loyalty dates back to before the “official” birth of our company in 1947, the year the little Islander Hotel opened its doors on Seaside Avenue in Waikiki. In 1941, our founders, Roy and Estelle Kelley, were operating apartments in Waikiki and invited two of their tenants, Capt. John Schultz and his wife, Martha, to join them for breakfast on the morning of Sunday, December 7. Capt. Schultz arrived in his gleaming dress white Navy uniform and, when the bombs began to fall, he rushed to his ship in Pearl Harbor to begin World War II, as possibly the “Best Dressed” officer on duty at the moment. (That tale is humorous now, but at the time, nobody was laughing.)

We continued our support of the military through World War II, the Korean War, and the Vietnam War, and we are still doing so in many ways, as our troops are currently engaged in Iraq and Afghanistan.

Recently, David Carey and I had an opportunity to visit military installations to get an up-close, personal, and better understanding of what our uniformed personnel are currently facing.

David visited Hurlburt Field, near the larger and better-known Pensacola Naval Air Station in the Florida panhandle. (World War II history buffs – I’m one too – may be interested to know that Hurlburt was the field where Lt. Col. Jimmy Doolittle trained his “Raiders” for short-runway takeoffs and landings before his carrier-launched raid on Tokyo on April 18, 1942.)

Today, Hurlburt is the home of the Air Force Special Operations Command (AFSOC). The men and women stationed here are trained to conduct global special operations missions ranging from precision application of firepower, to infiltration, resupply, and refueling of special operations forces around the world. Similar in ability and employment to Army Special Forces and Navy Sea-Air-Land forces (SEALs), Air Force Special Tactics personnel are typically the first U.S. military forces to enter combat and often find themselves deep behind enemy lines in demanding, austere conditions, usually with little or no support.

My travels took me to Washington, D.C., where I spent the day at the Pentagon listening to high-level representatives from all branches of the service including:

• Gen. Gene Renuart, Commander of the North American Aerospace Defense Command and U.S. Northern Command
• Gen. Norton Schwartz, Air Force Chief of Staff
• Gen. George Casey, Army Chief of Staff
• Vice Adm. William “Doug” Crowder, Deputy Chief of Naval Operations

Both David and I were reminded of and greatly impressed by the quality and dedication of the members of our armed services. David was struck by how capable the young men and women in our all-volunteer forces are. He found them “remarkable and inspiring.” All of them face unbelievable challenges these days, particularly those who are involved in operations in Iraq and the remote regions of Afghanistan.

The numbers of those who have been killed or have suffered traditional wounds in Iraq and Afghanistan are easily documented. However the effects of repeated deployments and of powerful roadside Improvised Explosive Devices (IEDs) have produced many non-traditional casualties, including:

• Post-Traumatic Stress Disorder (PTSD) and similar mental conditions from the stress, strain. and shock of combat.
• Traumatic Brain Injury (TBI) with multiple, microscopic injuries within the brain resulting from nearby explosions that may not produce lacerations or fractures.

Just this week, the Department of Veterans Affairs (VA) and the Department of Defense (DoD) hosted a first-of-its-kind national summit to address the mental health care needs of America’s military personnel, families, and veterans, harnessing the programs, resources, and expertise of both departments to deal with the aftermath of battle.

The effects of PTSD and TBI are long-term, insidious and severe. According to a report in the New York Times, Secretary of Veterans Affairs, retired Gen. Eric Shinseki, noted that more veterans have committed suicide since 2001 than have been lost to combat deaths in Iraq and Afghanistan.

Both David and I came away from our visits with a renewed respect for the members of our armed forces. We pledge that we will continue to offer any type of support we can, following the example set by Roy and Estelle Kelley in 1941 and the years that followed.

By Bill Peters

(Dr. Richard Kelley is traveling. His column will return on October 31.)

Outrigger’s Worldwide Contact Center in Denver has become greener than ever. In fact, as a distinct physical location that can be found on a map, it has ceased to exist. All its employees are now doing the Center’s work from their respective homes, tied together and to Outrigger and the rest of the world by purely electronic means. Read the rest of this entry