Jeff Wagoner, CEO of Outrigger Hospitality Group, discusses the company’s coral preservation initiatives and sustainable practices at their hotels and resorts.
00:00Despite economic uncertainty and shifting travel habits from consumers, the global hospitality industry continues to evolve.
00:07And today we're taking a closer look at how one hospitality group is navigating these changes and positioning itself for the future.
00:14Jeff Wagoner joins us now. Jeff is president and CEO of Outrigger Hospitality Group.
00:19Jeff, welcome. Good to have you.
00:21Great. Thanks for having me, J.D. I appreciate it.
00:23Let's talk first and foremost about what's in your family of businesses here.
00:28What should people know about Outrigger Hospitality Group if they're a bit unfamiliar and key markets you're prioritizing these days, Jeff?
00:36You know, Outrigger has been around since 1947.
00:39We've got 31 properties across the globe.
00:42A lot of those are here in Hawaii, but we're also in Thailand, in the Maldives, Mauritius and Fiji.
00:49Really, we're a we call it barefoot luxury.
00:53And so we try to create a really comfortable environment for the travelers who come into all of our resort locations across the globe.
01:01What are you seeing?
01:02I know Hawaii is one of your bigger portfolio priorities.
01:06Talk to me about the major projects that are underway there and why there.
01:12Yeah, over 20 of our properties are here in Hawaii.
01:14We've acquired nine assets in the last few years, several of those here in Hawaii.
01:20And as we acquire those assets, we've taken the opportunity post-pandemic to be able to improve the assets.
01:26We've been able to invest a little over $450 million not in purchasing of the assets, but actually revitalizing and modernizing these assets to really take the brand to the level that we want to see it as we move into the future.
01:40So we're excited about the future.
01:42Obviously, there's a lot of uncertainty that people are seeing out there in the travel market today, but we're really bullish on Hawaii and really bullish on the locations we've been able to acquire assets.
01:53Jeff, who do you see as being among your core constituency, your demographic of traveler?
02:00Yeah, you know, it's really broad.
02:01You know, we've got a really wide group of travelers that come, families.
02:06When you look at the U.S. mainland and California in particular, significant base of family travel, but we've got a lot of beach locations that are ideal for weddings and for couples who travel with us as well.
02:20We actually just opened up a wedding chapel at one of our properties in Waikiki.
02:24We opened about three months ago and we already have 50 weddings that have come to us for this wedding chapel.
02:31So a really neat way to be able to enhance, I think, the experience here in Waikiki.
02:38You mentioned earlier some of the headwinds may be facing the industry writ large.
02:43We're talking a lot more about a weakened consumer, at least a U.S. consumer that may feel a little bit more bearish about their own economic circumstances and what the year ahead may bring.
02:55How do you stay resilient on a backdrop with that much uncertainty?
02:59You know, luckily, leisure travel is pretty resilient.
03:02You know, we go through our little bumps here and there.
03:04But for the most part, when you've got the base of travelers that we've got, that we've had for over 75 years, our occupancy and our results have stayed pretty strong.
03:17When you think about what has occurred, you know, you've got all these different elements that occur.
03:22You've got international travel that we've seen tap down a little bit.
03:25You've got currency issues in some destinations like Japan or Australia.
03:29And so we're always, I think, navigating some of that to some degree.
03:36But Hawaii is a destination that travelers from the U.S. mainland continue to focus on.
03:42Believe it or not, it is an affordable travel trip right now.
03:46When you look at airfares, when you look at hotel rates, you may look at some resorts and they're very expensive and someone may get the narrative of tough to travel there.
03:55It's expensive.
03:56But if you do your research and you take a look at the broad spectrum of properties that there are in Hawaii, it's a very reasonable travel trip or vacation for U.S. mainland customers.
04:07How do you have to navigate things like central bank interest rate policy?
04:13And I know that sounds wonky, but you're dealing with a reality where when you do business in the U.S., borrowing costs are still relatively elevated, given where they were at least around 2020.
04:23And you've got central banks around the world for other properties that impacts travelers from those countries who are also dealing with their own pricing pressures and therefore out of balance borrowing costs.
04:35What does that mean for your business?
04:37It is very meaningful for us, not only with existing debt, because you've got the ability for rates to fluctuate with the existing debt that we have.
04:47But if we're out there attempting to acquire assets, it can get in the way as well.
04:52But luckily, we are seeing interest rates start to come down.
04:55We're seeing the refinancing ability start to tick up a little bit in some of these locations.
05:01And then there are some destinations like Japan where interest rates are extremely low and you have the ability to go in and look for assets in Japan to acquire with debt from Japan.
05:13So, you know, there's when you look across, I think, the spectrum of the entire world and entire globe, there may be some pockets that might be complicated at certain times.
05:23But there's other areas, including the U.S. mainland, that is getting a lot more reasonable to be able to go out, acquire assets and take on debt.
05:32Jeff, we've talked a lot about the so-called experience economy, especially climbing out of COVID.
05:36Do you still see an experienced economy traveler being willing to expend and kind of live their lives, especially after those few years of shutdown?
05:47I do, J.D. I think there's a new traveler, a new generation of travelers out there, and they're wanting to experience something.
05:54And it's different for everybody.
05:56One of the keys, though, is authenticity and that it's real.
06:02For example, we were able to bring Cirque du Soleil to Hawaii.
06:05They had never been here before.
06:08It's an amazing show.
06:09We're getting ready to come up on our first anniversary on December the 5th of that show being here.
06:15An 84-seat showroom that we were able to build.
06:19And that has brought, honestly, travelers to us.
06:23And the way I look at that, it wasn't bringing Cirque here for Outrigger.
06:27It was for everybody in Waikiki, everybody in Hawaii.
06:30And so the more we can create those types of experiences that are unique, that are fresh here in Hawaii, I think it will continue to bring travelers here.
06:38Where does Jeff Wagoner go to vacation?
06:43That's a great question.
06:45You know, I love Singapore.
06:48It's one of my favorite places on the planet.
06:51It's a beautiful place to travel.
06:54I travel on the mainland all the time.
06:56You know, it's funny, J.D.
06:57When you think about it, we're here in Hawaii, and I moved here from New York City.
07:03I traded in my suits and ties in New York, came here, and have my Tori Richard shirts and love it every day.
07:10But I love traveling to the U.S. mainland, and I try to get there as often as I can.
07:15And I also enjoy Thailand.
07:18You know, there's so many amazing resorts in Thailand.
07:21It might be a little bit of a white lotus effect that everybody's feeling and going there.
07:25But whether it's Phuket, Koh Samui, all the different islands, we've just bought another property on Phi Phi Island.
07:33It's under renovation right now.
07:34It will open in February.
07:36This is going to be a spectacular, fun resort.
07:39So I'm looking forward to getting back there and seeing that one finished.
07:42Jeff, you're singing music to my ears because here I am in New York City in my suits doing the rat race.
07:49It's very cold here in New York right now, the week before Thanksgiving.
07:52So you're painting a beautiful portrait.
07:55I will have to come join you out there in Hawaii, and I'm sure a lot of our viewers as well.
08:00Jeff Wagoner is the president and CEO of Outrigger Hospitality Group.
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