Billionaires vs Millionaires in Hawaiian Resort War

by John Youden - May 13, 2016

Billionaires vs Millionaires in Hawaiian Resort War

There’s an interesting “war” going on in Hawaii, written up in Bloomberg Businessweek, that is putting the 1% against the .001%. And it is making it very difficult for resort homeowners who usually rent out their properties.

The Hualalai resort on Hawaii’s Big Island is owned by Michael Dell and operated by the Four Seasons. There is a Four Seasons hotel along with more than 300 homes and condominiums, with seven restaurants at the hotel that are frequented often by homeowners and their guests. But it just got a whole lot more expensive for homeowner guests.

Although there are a number of conflicts taking place to put owners against owners, the rental problem is an interesting one. If you rent out your home, your guests (or you, out of your rental fee), have to pay the resort $150 for each adult and $75 for each child for access to its facilities. So for a family of four, they would have to pay $450 dollars a day just for the right to be within the resort. During peak season the rate goes up to $250 a day per adult.

Concerned homeowners, those who have been renting their properties out for several months the year, are faced with losing tens or even hundreds of thousands of dollars in annual rental income, along with the fact that resale values may plummet once prospective buyers learn about the extra charge for anyone who rents.

A class action suit of 75 homeowners against the resort management has commenced. The Four Seasons says the aggrieved homeowners should read the fine print of their contract, as the management has always had the right to charge fees and restrict use of the hotel facilities.

The problem is that the hotel had been offering these services for free for many years and now is taking those services away. And homeowners who had built up a nice rental business and were used to no-charge free access, are now taking a big hit.

There is a Four Seasons in Punta Mita but no such problem exists. There are plenty of outside facilities besides the hotel’s for homeowners to use and it has been well understood from the beginning of Punta Mita that the hotel facilities, such as the spa and restaurants, are not for homeowners unless there is space - reservations are required.

What do we learn from this? Read the fine print!