Not many people can say they narrowly escaped enemy bombs during World War II, and then participated in the birth of an economic success story that employs tens of thousands and creates memories every year for millions of world travelers.
But that is the story of Richard Kelley, who with his mother Estelle, father Roy and other family members, helped build Outrigger Hotels into a tourism powerhouse that was an integral part of the development of the Hawaiian vacation paradise.
Roy and Estelle had moved to Hawaii in 1929, when Roy joined an architectural firm in Honolulu. As they raised three children, the Kelley’s also started purchasing small apartment buildings in and around the city, funded in part by military tenants based at nearby Pearl Harbor.
Richard Kelley, born in Honolulu in 1933, the oldest of three children, was at Sunday school on the morning of Dec. 7, 1941, when his father burst into his classroom and rushed his children to the family car.
Richard Kelley (bottom left) standing with his father Roy and Mother Estelle, and his sisters Pat and Jeannie, left to right.
The sky had been exploding with shells that morning, and most civilians assumed they were part of military drills. Then news got to the Kelley home near Waikiki beach that the island was under attack.
In the book “Kelley’s of the Outrigger,” Richard’s sister Pat recalled buildings exploding into flames as errant American anti-aircraft shells missed their Japanese targets and fell to earth. When they returned home, the family ventured to the top floor of one of the Kelley’s apartment buildings.
“I can remember very vividly a big black cloud over Pearl Harbor,” Richard Kelley told Travel Market Report, in a recent telephone interview. “I could see small planes diving into the clouds and coming out the other side, and then hear the boom, boom, boom of the bombs exploding.
“Then we heard something whine over our heads and an eruption close by.” A shell had fallen in their neighborhood. The family “made a beeline” for the cellar of one of the Kelley’s apartment buildings across the street.
Martial law was declared by the U.S. military that night, and the Kelley’s lived with uncertainty about whether or not a land invasion was imminent. When the threat dissipated, and some semblance of military order settled, Estelle Kelley and her children, and most other civilians living on the island, were ordered back to the U.S. mainland.
They settled back in southern California with family, rejoined soon with their father, when a military physical revealed he was going blind.
The beginnings of an empire
By 1945, the allies were winning back the Pacific from the Japanese, and the Kelley’s were able to return to Hawaii. Waikiki was a bedroom community for people commuting to Pearl Harbor and downtown Honolulu, and it was mostly dotted with private homes and apartment buildings like the ones the Kelley’s owned. There were two luxury hotels, the Moana and the Royal Hawaiian.
Roy and Estelle built their first hotel, the 33-room Islander, in 1947; and two years later, started plans on their second property, the 100-room, six-story Edgewater. (The first hotel to carry the Outrigger name was the Outrigger Waikiki on the Beach, which opened in 1967.)
While the Moana and Royal Hawaiian catered to one group of travelers, the properties the Kelley’s were building provided a more affordable form of lodging. It was this strategy, combined with an increase in commercial air service, and eventually the introduction of jet aircraft in the late 1950s, that would enable the Kelley’s and several other local families to build one resort after another dotting the Hawaiian islands, creating a vacation destination for travelers from around the world.
At its peak, Outrigger operated more than 11,000 rooms in 40 hotels worldwide, including marquis properties like the Royal Waikoloan Hotel and the Kauai Hilton.
A family business
The Kelley children worked at the family properties and learned the hospitality industry from an early age. “I remember doing everything, from washing towels to serving pineapple juice and snacks to the guests under the palm trees,” said Richard Kelley, who eventually enrolled in pre-med at Stanford University, graduated Harvard medical school, and returned to Honolulu as a general practitioner.
While Roy Kelley could perceive some objects out of his right eye, he was essentially blind, and relied on his son for business and development advice, taking advantage of Richard’s schedule as a doctor to have him spend some of his mornings working for the hotel business. In 1972, as the elder Kelley looked to step down, Richard Kelley stopped practicing medicine, and joined the family business full-time.
In 1999, Outrigger spun off 15 of its hotels to create the more moderately priced Ohana Hotels and Resorts chain, while the Outrigger brand represented the higher-end, four-star and luxury hotels. Finally, in November 2016, Outrigger was acquired by Denver-based KSL Capital Partners, and the Kelley’s stepped aside.
When you speak to Richard Kelley, he is very humble about his personal role in the development of Hawaii’s tourism industry, and reminds you of the other families (like the Childs, Kaisers and Kimballs) who contributed as well.
“It was one big community and our interest was in developing the industry,” Kelley said. “We all wanted the best for Hawaii. It was always about the economy and its people.”