Patrick Fitzgerald

What follows is a quarterly interview I did with Patrick Fitzgerald, CEO of Hualalai Resort.

HOW DO YOU FEEL THE MERGER BETWEEN HUALALAI RESORT AND THE FOUR SEASONS IS GOING?

When I first came to Hualalai Resort ten years ago I saw the potential of merging various components with the Four Seasons.  It seemed to me that it was common sense to have one Human Resources Department, one Accounting Department, one Food and Beverage Department, etc.  At the time, the two entities—the Four Seasons and Hualalai Resort operations —were not in sync and often competing with each other.  (“Our restaurant is better than your restaurant, etc.”)  With both the new ownership and subsequently, when the recession hit, the Four Seasons and Hualalai Resort decided to move in the direction of working more closely together merging some back of the house departments just to reduce costs.  We found ourselves working well together and when the tsunami hit, the entire staff worked together 24/7 to get the hotel and various facilities operational.  This led to a much more collaborative effort where the Four Seasons and Hualalai Resort teams shared ideas of how to optimize the various restaurants on property and most importantly how to jointly make everyone’s experience here at Hualalai better.

It was shortly after that experience that we moved in earnest to focus on merging the two organizations together and both Hualalai Investors and Four Seasons Corporation was interested in expanding their footprint into the residential club area.

This has been a major undertaking.  There are about 625 Hualalai Resort Staff and a similar number of Four Seasons Staff.  The first thing we wanted to be sure of was that when the Resort staff became Four Seasons Staff the benefit programs were in alignment and if anything it looked like they were stepping into a better situation.  It took time to set up this process and the HR departments of both Four Seasons and Hualalai Resort deserve many kudos for this effort.  Finally the change was made six months ago and Hualalai Resort Employees became Four Seasons Employees.

We decided that we needed a person to lead this effort and Florian Riedel, who had been the Resort Manager for the hotel for several years, moved over from the Four Seasons and took the position of VP of Resort Operations in heading the Hualalai Club.  Also a Resort Executive Committee was established that includes:  Florian Riedel (VP of Resort Operations), Mitch Sipiala (Senior Director of Human Resources), Todd Swaggerty (VP of Finance), Robert Whitfield (Regional VP of Four Seasons), John Freitas (Club General Manager) and myself.

I think that the merger has been going as well as can be expected over the past 6 months.  There have been a few bumps in the road and I’m sure there will be more.  When you are moving over 600 people to a new employer, as well as establishing many new systems—systems ranging from how you request vacation days to how you handle employee reviews—as well as changing accounting systems and reservation systems, you are bound to have a couple of hiccups.

We are also launching some new ideas.  We have had an executive retreat and have begun the process of putting a diverse group of employees from various departments together to discuss how to improve service all around.

We are also going through almost a full year of training.   All the “new” Four Seasons personnel are having extensive training by Four Seasons in providing service and hospitality.  Four Seasons brings a depth of talent and experience in this realm.  As well, the Four Seasons team are being introduced in a more personal way to what is the culture of Hualalai Resort.  I am confident with the blending of these two efforts   our residents will see a better overall Member experience over time.

We are also focusing on improving the experience this year at Ke ‘Olu.  Both teams’ objective is to re-energize Ke ‘Olu in upgrading everything from golf course service to food service.  New personnel have been or will be being brought in to make this happen and new programs are about to be launched.  We will look forward to the member feedback at the end of the year to our efforts in this area.

NOW FOR THE QUESTION WE ALWAYS ASK, WHAT’S HAPPENING WITH KONA VILLAGE?

 It still remains a bit of a quagmire but recently there are some small bright spots.  The respective parties in the litigation including Kona Village Investors, Deutsche Bank, Kennedy Wilson and Kamehameha Schools agreed to mediation in early July. With that said, we are in the middle of depositions, which will probably go through June and the trial date is set for September.  We hope the mediation will prove fruitful as I would imagine almost all parties are not interested in going through a trial and the uncertain outcomes that could bring.  I have my deposition this week and we are already working on some analyses that would be helpful in the mediation.  Keeping my fingers crossed.

IF WE DO NOT SUCCEED WOULD IT BE POSSIBLE THAT THE FOUR SEASONS COULD STILL OPERATE THAT PROPERTY?

We have an agreement with Four Seasons to manage Hualalai and also have a restriction that they cannot operate any other hotel on the Big Island. Obviously if we owned Kona Village we could waive that restriction but as it is early in the process – we have not made any final decision on the operator of Kona Village.  We don’t want to get ahead of ourselves.

WHAT’S HAPPENING TO THE PROPERTY NOW?  ARE THE PLANTS BEING WATERED?  IS THERE SECURITY?  WE HEARD THERE MAY BE PEOPLE CAMPING ON THE BEACH; IS THAT TRUE?

 A receiver has been appointed by the courts to oversee Kona Village now.  As far as I know they have a skeleton security operation and some of the plants are being watered.  Right now we do not see it as a fire risk. I, personally, have not heard of anyone camping there, however camping is allowed on all Hawaii beaches, thus people may be camping on the beach, but there are no services like restrooms, etc.

MOVING BACK HOME, WHEN ARE WE GOING TO SEE THE TRADING COMPANY AND KE ‘OLU COMFORT STATIONS REMODELED?

 The remodel of the comfort stations at Ke ‘Olu will begin sometime this month.  We are hoping they will be completed by the beginning of July.

Designer rendering of the feel of the comfort stations on the Ke ‘Olu course. Ideas include coffee/espresso machine, trash compactor, locking doors and more.

The Trading Company’s remodel will probably begin in early September.  We will be bringing the coffee shop inside so we will be able to expand the point of sales outlets  to three lines during busy times..  We are also planning to incorporate a soda fountain so if you want a milk shake or an ice cream soda, you can slide onto a stool and sip away.  We are also going to expand the shaded area for the tables as well as add additional furniture.  We will be making the path to the tennis courts ADA accessible.  Lastly, we will be removing the volleyball court and constructing  two Bocce Ball courts, with seating.

The designers of the new Trading Company offer these photos as the feel of what the Trading Company will be like.

SOME MEMBERS WANT TO KNOW IF YOU WILL BE PUTTING SOLAR PANELS ON THIS NEW CONSTRUCTION?

No, we’re not.  We are constantly reviewing whether solar power works economically for us and if it does where does it make sense to put it.  One of the issues is that HELCO has different programs for businesses with solar energy than residential services.  We also have a main plant for the hotel and resort operations that provides hot water and air conditioning so at this time, unfortunately it just doesn’t work.

More design elements but also a feel for the trellis component of the trading company.

ARE THERE ANY CHANGES TO ALAKA’I NALU IN REGARDS TO ACCESS TO THE WATER?

At this time there are no planned changes.  We talked about accessing the rib craft further down the Kukio beach, but that is not any safer than the current location.   We will continue to review the situation.  Our staff is ready and willing to help those who wish to use the facilities.  The good news is that we ordered a new rib craft that should arrive early next year – it takes a year to build these type of boats.  We also recently purchased new stand up paddleboards and canoes so the experience should be terrific for this summer and going forward.

WHAT’S HAPPENING WITH THE TWO NEW TENNIS COURTS?

 We are planning to construct them this fall.  Right now we are getting set to send the plans to the residents who live near the location where the courts are going to be installed.  We not only want their input but also would like to hear their concerns before we begin.

ANY OTHER CHANGES COMING?

The hotel is 19 years old and we are in the initial stages of planning a remodel and upgrade to the rooms.

WHAT CHALLENGES ARE YOU FACING RIGHT NOW?

 I think the biggest challenge right now, which is a good challenge, is that the economy has bounced back and we are hitting an employment cycle that makes it hard to find new quality employees.  The competition is stiff and we, at Hualalai, have to make sure our employees are happy and want to stay as well as being attractive to new employees.

 Also, we’re always focused on dealing with the higher utilization of facilities and making sure our members continue to enjoy all of our venues.  We will be communicating some new plans to the members in the next couple of months.

 As you know as of last year we have a new partner, Kohala Partners, and they along with MSD Capital are very supportive of our plans.  Lastly we are in the process of refinancing – we will be closing a new 7-year loan early this summer giving us very stable and long term financing.

PAT, ANYTHING YOU WOULD LIKE TO ADD?

Just that I’m very excited about a lot of things coming to fruition for Hualalai this year.  I’m sure over the coming year members will see an uptick in all kinds of things from communication to service, programming, fun, facilities and relaxation.  We will be reaching out to the members via questionnaires and surveys, and, of course, will continue to just plain listen to be sure we are reaching our goals.  I want to thank everyone for his or her patience.  We appreciated members taking the time to do the extensive survey last summer and we hope the dialogue continues until Hualalai becomes the best it can ever be.

Interviewer: Mike Sack