 Think Tech Hawaii, civil engagement lives here. Good afternoon. My name is Ray Tuchiyama, your host on Business in Hawaii. And today we have a co-host, Jay Fidel, whom I kind of missed through the month of October when I had to do our daughter's wedding, and it was a positive experience. And it's all over. And a long time without Jay is like a day without sunshine, and we're here today to talk about what I wrote and published recently in the Star Advertiser, Obed, on teaching hotels. And for many of you out in the audience, very simply, a teaching hotel is a hotel, a working hotel that people come and become guests. But they are staffed by students in hospitality and hotel management. In fact, the oldest and most significant teaching hotel in the United States is the Marriott Statler Hotel on campus at Cornell University in beautiful Ithaca, New York. And adjacent to that hotel is the building with classrooms for the hospitality program of Cornell ranked number one in the United States and probably in the world. The oldest, it goes back to the 1920s when the American Hotel Association came to Cornell and even proposed that they have a teaching hotel. And this was way, way back. And Cornell did launch the Inn at Cornell in the 50s, which evolved into the Marriott of today. And that gives a practical education in hotel management and the visitor industry by having students work on the front of the house and hotel and the back of the house where they do finance and operations, cleaning, serving and management. And that propels them into general manager roles for the hotel industry globally after graduation. And that was my proposal because I feel Hawaii is lacking innovation in hospitality and tourism, although the visitor industry has over nine million people coming to Hawaii, enjoying Hawaii, a $17 billion industry, yet we have a hospitality education program that is not looking to the future. And that's what I want to talk with Jay about and have a conversation. What can we do to really transform the future of hospitality education that would create leaders and some of them, I hope, will become general managers of Hawaii hotels where the majority of the GMs come from the United States, mainland and Europe today. Some reflections. OK. You know, Mufi Haneman has a thing called Tourism 101. He's the Hawaii, what is it, Lodging and Tourism Association. He was here yesterday, I think, with Rick Eggett, Waikiki Improvement Association talking about the structure, the infrastructure, the management and business infrastructure in Waikiki and the hotel industry. And really, it does raise the question about whether Waikiki is still the engine of our tourism economy because there are other hotels in other parts of the state. And most of the hotels, of any consequence, I'm just reflecting on your statement of case here, are, they're owned by someone else offshore. The bigger they are, the more likely they'll be owned by someone because of the need for large capital concentrations. And they're held by REITs, usually, which don't pay Hawaii income tax. There are bills from time to time in the ledge calling for that, which could pass, but they don't pass. The hotels are very influential. After all, they are the largest industry in the state and they would oppose any tax that affects them. So all we have is the transient accommodations tax. What was the point, did they have any points for the future of the industry out of Waikiki? They look at Waikiki as the economic engine for the state. Yeah, well, sure, of course. And we have to take care of it and we have to connect with it. And obviously those fellows are part of the connection, connection with the community, with the legislature, with the government in general, so that there's a kind of togetherness here. But the kind of togetherness that you and I had when we were younger, you know, in Waikiki going there for a movie or a meal, it's really no longer the case. It's not all that friendly to locals. They want to be friendly. I mean, they want it to be friendly, but it isn't really that friendly. There's no movies there to speak of anymore. The restaurants are hard. There's no local experience. There's no local experience or local people. Nobody I know goes there for it. And it's hard for parking to go to a restaurant there. Yeah. Right, right. You know, you have a formal dinner where there's no other venue, but you don't go there regularly. You don't go there on a Saturday night for a date or anything. So I mean, what's happening is there's a separation of sorts, and I hope we can put that back together again. Those guys are working at doing that. But here's the thing. If you go to the Shangri-La hotels all over Asia, not in the U.S., all over Asia, you will see the most effective employees, management and employees. Those guys are trained. And in fact, Shangri-La has a school just for that hotel chain, sort of like the Marriott, I suppose, must have dibs on the one at Cornell. And this school trains people to really, really do it up first-class. You need to have first-class. You need to have a reputation for first-class. It's a five-star chain. Five-star chain. Do we have five-star here? I don't really think so. And I think we could have. Okay, that's one kind of gestalt response to you. Another one, which sticks in my mind, which is really worth discussing, is years ago at the Hawaii Venture Capital Association, we had a program. I organized a number of programs in those days about Waikiki, the engine of our economy. And we talked to this one fellow who left an impression from then until now. He had been in the military. He had gotten out of the military. He was writing code for some tech company. And he got up and made a speech. He said he didn't understand why the hotels, as many other large companies in Hawaii, rely on programmers and computer people from the mainland, when this could be the best laboratory for writing the best code. After all, it's what we do. And we understand, presumably understand the way the accounting works, the way the tour arrangements work. We could write, if we put our minds to it and our investment in it, we could write the best code in the world. And this would be exportable. These programs would go everywhere if you assume that Hawaii has the talent and has the industry and knows the systems. If you know the systems, you write code around them and extend them into even better systems. So but he said, you know, they're not doing that. They call somebody in the mainland to do it. And we could have had, you know, referred to this in your opening. We could have had, you know, this huge juggernaut industry that knows about our hotels and exports that knowledge. So you know, to me, I'm concerned about that. I would like to see a hotel school here. I would like to see five-star hotels. I would like to see people writing code. I would like to see the hotels more, you know, integrated with the local community. I would like to see us all coming up around them. That's not happening. And I leave you with this one last thought, Ray. We talked about it before the show. You know, the travel industry management school was at Walter G., somebody G., the dean, Chuck G., thank you. The Chuck G. was managing that school for years and years. And it had a reputation around the world, TIM, here in the University of Hawaii. And it's gone. It's been merged into Scheidler. And you don't hear anything about it. It's, you know, the lights of its faculty, the leading lights of its faculty are gone, unless you're doing anything. These days, certainly, its reputation is not what it was. We should have TIM, a separate school, or at least we should hear about it. We should see it in action. We should see it training people. We should see them happy and proud that they have hotel educations that are useful around the world in the biggest change. After all, hotels are a big industry, travel, big industry. Well, let me respond to all that. Please, please. I want to get you stimulated here, Ray. Multiple points. I missed you too, Ray. Yes. First of all, there is a hotel in Hong Kong that's doing something very similar to what you're proposing. It's a hotel icon, and it's owned and operated by the Hong Kong Polytechnic University School of Tourism there. And in fact, it's a five-star hotel, staffed by hospitality students, and it contains in the building a fine wine laboratory and a Samsung digital IT lab for hospitality. Interesting. And you're correct that there is a disconnect. When we look at the future, you're correct. It's coding and it's software, it's programs, mobile apps with phones, with watches, with tablets and PCs. There's a disconnect between IT and hospitality. You're absolutely right. That's the future. Right now, Waikiki, I feel, is looking at the future, and it fears the future. It's robots and automation, and we're like Luddites in Waikiki. Instead of transforming and using that, and you're correct, why isn't there a connection between the computer science department and hospitality into a new lab that really designs and develops applications that could be sold and used by every resort destination in the world. Right. Come from Hawaii. That's right. It's made in Hawaii, but you have to have a top-leading computer science department and global hospitality group and the venture capital and the apps to really drive that. And incentives for small companies, for entrepreneurs. Correct. You could have startups, you could have labs, but again, there are examples of that, which I just told you, that is moving the envelope to include IT in hospitality studies. Absolutely. Where did I see this? You know, the future is in these kiosks where you can buy travel packages or tour packages for the day. They can say, that's pretty cold and everything, and we like Aloha, whatnot. But the fact is that in the industry, the kiosks are the business end of things. And I know people who are involved in the travel package business, they are very profitable. Young kids can get into this and make a lot of money, and those kiosks are ultimately going to rule the business end of all the tour packages that you have, the daily tour packages. And they're efficient. You can get what you need, you can pay a better price for it, you can do the competition, and the apps are the same thing. I mean, you take it a step further and go to an app. An app is better than a kiosk, isn't it? So I mean, really, I don't know why nobody's focusing on this, or not enough people in my view are focusing on it. The legislature in its wisdom should be incentivizing this area so that there's no disconnect, so that it's all together. We realize our destiny the way we've been trying to realize our destiny since David. And you're correct that we are operating a paradigm that goes back, interesting to me, Chin Ho, because he saw the 707 coming in the early 60s that was mass tourism. Before, remember, ships brought people here, wealthy people from the West Coast, Hollywood stars, and they would stay here month, maybe a month and a half. And then you have, for five days, they would stay here, and they'd go back to the mainland, where are the hotels, and that infrastructure of the Ilikai that Chin Ho invested in and the whole rise of smaller hotels and resorts, family-oriented resorts sprung up. Before, it was the Moana or Royal Hawaiian that was much more focused to very small, wealthy individuals, so groups. So the paradigm has not changed from the early 60s, you're absolutely right. And we're reliant on all kinds of mass tourism. Yeah, I think so, and we're working on an empty tank. We're stuck in a paradigm that's at least 20, 30 years old. And what we have to do is not just put ads in the New York magazines or whatever they do with all that money at HTA, lots of money at HTA, but we ought to make a product that's really irresistible, an American product, a Hawaii product. I mean, for example, the product should include, could include, ideally would include, reference to local people, local things, local trips, local, it's not just adventure tourism. Let's mingle. Let's get together. And then we'll get back to the mingling right after this great break. Hey, loha. My name is Andrew Lanning. I'm the host of Security Matters Hawaii, airing every Wednesday here on Think Tech Hawaii, live from the studios. I'll bring you guests. I'll bring you information about the things in security that matter to keeping you safe, your co-workers safe, your family safe, to keep our community safe. We want to teach you about those things in our industry that may be a little outside of your experience. So please join me because security matters. Aloha. Hey, Stan Energyman here on Think Tech Hawaii, and they won't let me do political commentary, so I'm stuck doing energy stuff, but I really like energy stuff, so I'm going to keep on doing it. So join me every Friday on Stan Energyman at lunchtime, at noon, on my lunch hour. We're going to talk about everything energy, especially if it begins with the word hydrogen. We're going to definitely be talking about it. We'll talk about how we can make Hawaii cleaner, how we can make the world a better place, just basically save the planet. Even Miss America can't even talk about stuff like that anymore. We got it nailed down here. So we'll see you on Friday at noon with Stan Energyman. Aloha. This is your host, Ray Tuchiyama, for Business in Hawaii, and we're just about finished up mingling our thoughts and dissecting everything. And I just wanted to return back that not all teaching hotels are five-star. There are hotels for community colleges that are operated by community colleges, one by Kirkland Community College in Iowa. In fact, they have a double tree. There was a hotel management school in Maastricht in the Netherlands. They bought an old chateau, and they had no money. It was right at the Lehman crisis, the financial crisis. So they got donations of tiles and all kinds of paint from local vendors, from companies. Then they went out to the community and contracted the top ten young designers in the city, and they made every room different using the tiles and paint. One has a huge elephant on the ceiling, another room is all black, another room has a swing in it, and it became a tourist destination by itself. So the point of that story is that you can do it without much money. You have to be innovative, creative, and really cater to tourists or visitors who want a different experience. They don't want a cookie cutter room at one of the major chains. They want to go where it's really exciting and interesting, that they stay, like you say, in a community. So those are other ways that a teaching hotel were developed and really become destinations. What I hear you're saying, O'Rei, is that in Hawai'ine, island to island, from the end of the state to the end of the state, we don't have one. That's correct. Currently, there is no teaching hotel, and it could be on campus at UH. There are some universities that do that, or it could be in Waikiki, it could be in Kanapali, it could be in Kona, it could be in Hilo. You're correct that it could be off the campus, but again, there is one teaching hotel, a Hilton hotel at the University of Houston campus. One building holds a hotel, labs, and classrooms. It's a seamless integrated experience for students and the guests to be there together in one building. What I complaint here is that I can go into the hotel industry and fold hospital corners for my whole career. I can make it for only one job, but I should have to have two jobs, you know, the union thing going on now in Waikiki to complain, and I'll make enough money. And the question really is, is there a glass ceiling where folding hospital corners is not going to get me into management, it's not going to get me into, you know, any level of administration, really. And so gee whiz, and if you want to manage your administrator, get them from outside the state. Local people really don't qualify. Why? There's no training. And, you know, this is terrible, because they're making the lowest wage on the scale. We have to get our people, our Hawaii people, into management. And there's a show going on, we have to train them to do that. No, you're absolutely right. And there are two parts to this. A teaching hotel is about the practical, how to really design rooms that will be sustainable in terms of paint, the rug, how many minutes to change bed, all kinds of things. And also to add what you said, Hawaiian motifs, and really cultural kinds of management education into the staff. That's another area that is very, very exciting that we saw at the Kana Pali Beach Hotel, that introduced and launched this really host culture awareness back in the 80s. But going back to that, yes, there's a practical side, but you're correct that there has to be a strategic high level financing, you know, how do you do M&A? How do you price hotels? How do you do, you know, buy out of them? How do you compete with other destinations? Right. Well, that's a huge strategic issue. We're at great risk that other destinations are going to beat us on everything, on service, on food, on design, on innovation, because we're not thinking about that. We just want the profit right now and the jobs right now, but we're not looking into the future. That's right. And one thing you talked about, which is very key, and in this many hotels and other cities that are having little, like, buildings within communities and the whole community, the shopping malls or shops, or become your hotel, you know, in effect, that you go out and you have cards that allow you to pay for meals and so forth, introduce you to things that you would never have done otherwise, and you're right. How do you get people outside and kind of interact with smaller businesses and people and cultural experiences within Hawaii? You're completely right. Because the history of mega-resorts has been self-contained in Hilton, Hawaii, villages or the Hilton, Waikatoa or Kauai. They're very self-contained mega-resorts that are kind of outside what is normal life. But authenticity, that's one word that visitors, especially young people, want is authentic experience. Sure. They want to go to Haleiva, experience Matsumoto, you know, Shea Vise. They want to go to the North Shore and experience surfing, you know, right there. There's a lot of things that are authentic that they don't want a manufacturer. We used to have them. Don't you think we used to have them? I remember the Royal Hawaiian back in the day, it was so completely Hawaiian. It was the Hapa Halei thing, the Webly Edwards thing, the Moana, all those hotels had a kind of local style, very classy, very appealing, you know, very romantic. You take it home and you never forget it and you're bonded for your whole life. You and your spouse and your family are bonded for your whole life to the romance of Hawaii. If you package it the way these chains package all their hotels everywhere in the world, and if you just put this patina of a Hawaiian on it, it's not enough. We could be capitalizing on our own culture so much more than we do. And part of this theoretical hotel you're building, at least in my mind, it would be exactly that, create a brand that's totally unique, that nobody can copy, that nobody even can compete with, do it right here. You know, if I go down to some of these big hotels, I'm thinking of Disney and all that, big hotels and lots of, you know, lots of ways to make money over there, but it's not really very Hawaii. And automation is something who wants to be served by a robot, you're correct. And I think that authenticity of experience is something that we have lost sight of. And we have to return to our roots and say, what, how can we present a better visitor experience that is very authentic? And all else is comparable, identical to going to Las Vegas or some other resort. You know, there's a question about ThinkTech here. Wouldn't it be interesting to have ThinkTech on the televisions in the rooms of at least some of these hotels? The objection to that is we don't want local television. We don't want to know from, you know, programs like ThinkTech and others what happens on the ground outside Waikiki. We want our clientele to spend money. We want them to walk down, you know, Calacaua Avenue and buy things, you know, I mean the restaurants and so forth. So we don't want to expose them to these local influences. Now this probably makes more money. I mean, as a general concept, it does make more money. But is this the brand we're really selling? You know, it's like when the big money came in back in the day and the Sheraton to start and all these other ones, you know, they were interested in things other than what the brand had been up till that point. And it's regrettable that they've turned their back in some ways on the perpetuation of that brand. It's time to get back to that. There have been many hotel service, though, families at the end of the trip. And what they remember most is a Hawaiian language class or authentic kinds of food experiences or playing a game that reflected Hawaiian history. There's many things that they remember much more than going into the ocean or Hawaiian music and culture. So I think those are things that we have that you're right that cannot be copied or replicated in other places. Yeah. Can you think of a single oka-zu-ya and all of Waikiki? I can't. And yet, to me, that's very important as part of a local experience. Or a center for Hawaiian music and hula in Waikiki. And people can see people practicing or take part of it. I used to call that hula show. Remember, that was on the grounds of public money. It could exist today if somebody funded it. And that ended. But it was a huge occasion for people with cameras. And that's what they brought back to Iowa or New York. Yeah. Don't go too fast away from the music. The music is so important. The music is the statement of the heart of the culture as far as I'm concerned. And we used to have so much more music, authentic local music in Waikiki. In those days, the hotels would promote the music. In other words, they would give you the room and say, come here and we'll split the gate. Okay? Now, they say, no, you need a promoter. The promoter has to hire the room and pay for the room and the promoter will handle the gate. This is a big problem because there aren't that many promoters who can afford that sort of thing. And the musicians certainly cannot afford it. So what we've seen is a huge decline in local music in Waikiki because of that change. And I think we need to get back to it because it has actually undermined the development of local music. That's right. And Don Ho started out in a place in Kailua first. And then he came to the bigger destination or bigger venues in Waikiki. And there was the golden age of the 1970s and the Kimo back then and the Society of Seven. There were many, many, many more acts that used to populate Waikiki. You're correct. Yeah, yeah. And now, you know, a musician, if he's any good, he can't make any money here because Waikiki is really not profitable for him. So he has to go somewhere else in order to play his music and make a living. So this is not what we want. So going back to teaching hotel, maybe this should be a musical venue or a lab for hula and for Hawaiian music in the hotel itself. You know what I'm saying? It's like a barber shop. If I go to a barber school, it's going to be like a fraction of the price, but I'll get a pretty good haircut because the teacher will be watching. That's right. It doesn't, you know, mangle my, my, my hair. It's the same thing with the hotel. If I had a hotel that was a teaching hotel in Kallakawa Avenue and I lit it up right and I made the rooms good and the staff was very good. Food was very good. Gee, that'd be really popular around the world. You could do all kinds of innovations that you wouldn't do in a larger hotel. It's absolutely right. And I think that's, we're going to end it here, but I think there's so many ideas to really revitalize tourism in, in Hawaii. Who's going to do it? Wow. I hope there's people watching who would be entrepreneurial enough to really invest and, and, and really take it away and, and, and do something. Yeah. It's the best start-up of all, really, when you consider the fact that this is the engine of our economy. That's right. And this is Ray Tsuchiyama. Thank you for watching. We're, we're business in Hawaii. Thank you.