A recent PBN article made me stop and think. It also brought to mind a few recent walks through Waikīkī, where watching waves lap directly against the sides of hotels felt less like a beachfront resort and more like standing on the deck of a cruise ship. In the PBN piece, attorney Norman Cheng noted that one trend popping up more often in Hawaiʻi real estate deals has nothing to do with interest rates or RevPAR. Sea level rise concerns are now impacting transactions for oceanfront assets.
This concern is not unique to Hawaiʻi. Coastal hotel markets around the world are grappling with similar questions, from rising insurance costs in parts of South Florida to tighter setback and retreat rules in Europe and island destinations that now factor long-term shoreline stability into underwriting.
What makes this more than a theoretical discussion is the growing reliance on intervention. Waikīkī’s last major beach replenishment wrapped up in 2021, when sand was dredged offshore and placed along Waikiki Beach to restore lost shoreline. The roughly three and a half million dollar project was funded through a public-private partnership between the state and Waikīkī hotels. That effort followed a similar effort in 2012; it is clear that Waikīkī’s beachfront now depends on recurring intervention rather than natural recovery.
You might recall that shoreline protection and beach replenishment were cited as potential uses for the recently approved Green Fee. So far, things have been relatively quiet on how those funds will actually be deployed, even as the need becomes more obvious. And this is not just a Waikīkī issue. Kā‘anapali, Kahana, and many other beaches continue to wrestle with erosion and beaches that are literally disappearing.
This isn’t climate modeling or long-term speculation. It is underwriting, capital planning, and real money. And it is beginning to influence how buyers value some of the world’s most desirable oceanfront hotel assets, Hawaiʻi very much included.
