Hilton Hawaiian Village Mold Costs Mount
Hilton Hawaiian Village is finding that the mold problem in its Kalia Tower is taking a lot more time and money than anyone initially anticipated.
In its third quarter earnings report Wednesday, Hilton Hotels Corp. said it did not expect to reopen the more than 400 guest rooms of the year-old Kalia Tower until the second quarter of 2003, and for the second straight quarter it took a $10 million charge against revenue for mold remediation. The mold news is the Hawaii headline in the Hilton earnings report, but the focus worldwide will be on a third quarter profit of $48 million (13 cents a share) on revenues of $934 million.
Though revenues actually slid slightly from year-ago levels (but not much, about $8 million, or 1 percent) net income doubled from $21 million in the third quarter of 2001. Hilton credited higher market share and lower costs.
The Hilton Hawaiian Village mold remediation charge was listed in the report as one of four factors that kept profits from being better still. The other ones were declining average daily room rates, the lack of travel around the Sept. 11 anniversary, and rising insurance costs.
Concerning the new $10 million mold remediation charge, Hilton said, “Actual costs incurred in future periods may vary from the estimates, given the inherent uncertainties in evaluating these types of situations. Hilton anticipates being able to reopen the hotel’s Kalia Tower guestrooms in the second quarter 2003.”
Honolulu was also cited in a list of five markets where strong occupancy rates at owned-and-operated hotels boosted the company’s bottom line. The other four were Boston, Chicago, New York, San Diego and Seattle-Tacoma International Airport, with smaller improvements in other markets including Portland, OR.
Howard Dicus, Pacific Business News