Keauhou Beach Hotel to Close; 112 Jobs Lost

Kamehameha Schools announced today that it is shutting down the well-known Keauhou Beach Resort Hotel at the end of October, eliminating 112 jobs.

According to officials with KBH Inc., the for-profit arm of Kamehameha Schools, the 309-room oceanfront resort will be demolished.

After the hotel is torn down, the property will go to Kamehameha Schools, which plans to use the site for outdoor education programs. The property contains several heiaus and a summer cottage used by King Kalakaua.

The resort, located on Ali`i Drive next to Kahaluu Beach, has been popular with visitors and residents alike for the past four decades.

KBH Inc. bought the property in 2006 for $24 million and kept Outrigger Hotels as the management company. In the two years that followed, the resort underwent a major renovation.

But Dee Jay Mailer, CEO of Kamehameha Schools, says it was not enough to keep the hotel profitable.

“Despite the good work of many committed and talented people, financial losses at the hotel over the last six years have been substantial,” Mailer said in a statement.

She pointed out that KBH, in collaboration with other consultants, had studied several alternatives to closing the resort, including renovating or re-purposing the hotel, but in the end decided the financial risk was unacceptable.