David Carey, Outrigger Enterprises Group president and CEO, makes waves in Hawai’i’s hospitality industry.
President and chief executive officer of Outrigger Enterprises Group, W. David P. Carey III, is enjoying a banner year for Hawai’i tourism—and for the kama’aina company that helped make the state’s visitor industry the economic driving force that it is today.
“We’ve got good times now,” says Carey, gesturing at the crowds walking down Kuhio Avenue, the second-most trafficked street in Waikiki. “But I never take success for granted.”
That’s because the 59-year-old Carey is a take-charge kind of guy, whether he’s leading the state’s largest family-owned hotel company, parenting four children, serving on the board of trustees for Punahou School, advocating for a strong military presence in Hawai’i, playing competitive soccer while studying electrical engineering at Stanford University, going back to school to earn a simultaneous MBA and law degree, or, to add to his impressive list of activities, meeting the high handicap standards of a scratch golfer.
Carey, who hails from Denver, Colorado, is one of two children born to Margaret “Marbie” and Bill Carey, who ran the Denver Boulder Franchise of Music, an elevator music company. In high school, he worked as a neighborhood gardener and for an electronic shop, repairing car tape decks and telephone answering units. He ended up in Hawai’i as a result of meeting his wife, the former Kathy Kelley, granddaughter of Outrigger founders Roy and Estelle Kelley, at a Stanford University fraternity party and getting to know her better on the soccer field—where both were members of the men’s team.
Carey eventually accompanied Kathy on a visit back to Hawai’i. Shortly after, her father, Dr. Richard Kelley, hired Carey as a front desk clerk for what was then called the Outrigger East.
“I worked there for about a year and a half and then left to go to graduate school,” Carey says. “My future father-in-law is all about learning. He inspired me to up the game.”
Following graduate school at Santa Clara University, Carey returned to Hawai’i, where he worked as an attorney for Jim Case. He left a promising law career in 1986 to join Outrigger’s leadership team as executive vice president and general counsel. He became president in 1988 and CEO in 1993.
“Every once in a while, I think about how fate takes you places that you don’t predict and a lot has to do with who you meet,” Carey says. “However, I’m convinced that if I hadn’t had been in the hotel industry that I still would have been running something. It’s inherent in my nature to be in charge—probably because I think that I can do it better.”
Carey’s proven that theory many times over during his roughly 30-year tenure at Outrigger Enterprises. Under his leadership, Outrigger has become one of the fastest growing, privately held hospitality companies in the Asia Pacific region.
“Most of my career has been about modernizing the company and taking it global,” says Carey, who also engineered the Waikiki Beach Walk, a $535 million project that renewed tourist and investor demand when it opened in 2007 in Waikiki.
The “Carey Way” is something that his wife’s grandfather, Roy Kelley, probably wouldn’t have wanted to imagine. According to local lore, the founding Kelley was such a micromanager that he didn’t want to own or manage a hotel that wasn’t within walking distance of his Waikiki office. To be sure, Outrigger didn’t venture outside of Waikiki until 1989, when it added The Royal Waikoloan Hotel on Hawai’i Island.
But the differences between Carey’s style of management and Roy Kelley’s didn’t just end there. The elder Carey, who died in 1997, didn’t like computers and did everything by hand. He shunned managers who sat behind desks, abhorred lawyers and preferred to close most deals with a handshake.
“Some of his leases were on napkins. He had a whole different way of doing business,” Carey says. “We called him the unguided missile … sometimes he would interfere.”
In contrast, Carey has a healthy respect for the law and formal contracts. He’s also a self-proclaimed techno-geek who is always looking to take things to the next level.
“He’s one of the smartest guys that I know. Given the breadth of his training, I think he could have done anything,” says Punahou president James Scott. “We’ve benefitted from his many talents here.”
For instance, Scott says Carey’s engineering, hotel background and technology skills have been invaluable to Punahou’s buildings and grounds committee.
“He routinely emails me computer-aided design graphics that can be used to challenge school architects,” Scott says. “He’s great at keeping everyone on schedule and budget because of all the growth that Outrigger has been doing in Hawai’i and around the Asia-Pacific. He raises everyone’s game. ”
That’s been true at Outrigger, too, where Carey engineered the company’s push into the Asia-Pacific, says Carey’s sister-in-law Bitsy Kelley, who serves as Outrigger’s vice president of corporate communications. With the recent acquisition of the Konotta Island Resort situated in the Gaafu Dhaalu Atoll of the Republic of Maldives, Outrigger operates or has under development 45 properties with approximately 11,000 rooms located in Hawai’i, Australia, Guam, Fiji, Thailand, Mauritius, Maldives, Vietnam and Hainan Island, China.
“We are a conservative family when it comes to risk, and this was a huge departure from what we were doing,” says Bitsy Kelley, who first met Carey in the 1970s when her sister Kathy brought him home from college to meet the family. “In hindsight, this was a fabulous decision for the family. If we had gone to the mainland we would have been a very small fish in a big pond. Instead, we are at the beginning of a new era.”
Carey’s globalization strategy, which came in the aftermath of Hurricane Iniki and 9/11, is a classic example of how necessity is often the mother of invention. Iniki, which left 80 percent of the homes on Kaua’i damaged, missed Waikiki and didn’t damage any of the Outrigger’s Waikiki holdings. However, it did affirm the need for Carey to convince the Outrigger’s decision makers that it was time for the old-fashioned company to embrace a diversification strategy, which accelerated after the company’s recovery from 9/11, a tragic event that nearly brought Hawai’i’s entire tourism industry to its knees.
“The time where I was most sweaty-palmed was right after 9/11,” Carey says. “We went from about 85-percent occupancy to 15 percent. You could walk out to Kalakaua and lie down and not be hit by a car.”
Outrigger did what it could to mitigate the impacts on employees. However, the slow down resulted in the first layoffs at a company that, from its start in 1947 with the opening of The Islander, a four-story Waikiki walk-up, had regarded all workers as members of its ‘ohana.
“It was a gut-wrenching time,” says Carey, who cares deeply about the welfare of the 4,000 employees who work for the ‘ohana-style chain. “Eventually, we recovered. God’s given me a lot of great skills. I try to use them to make the lives of my family and the workforce better.”
Carey’s concern for others also extends to the community, where he has helped the Department of Education as facilities volunteer, and to Hawai’i’s military forces, which recently honored him with the U.S. Navy League’s American Patriot Award.
“He’s my kind of leader,” says Admiral Tom Fargo, former commander of the U.S. Pacific Command and a member of Outrigger’s board of directors. “He’s not afraid to take charge, obviously of Outrigger and all that entails, and [of] key issues within the business community and tourism and the Military Affairs Committee of the chamber of commerce. Also, he’s not afraid of a little risk; we saw that in the company’s expansion into Asia and in Outrigger’s Waikiki Beach Walk development.”
While Waikiki Beach Walk has proven successful, Carey remembers it as one of his toughest sells to Outrigger decision makers.
“It was different, and it was a lot of money. It was hard to convince people to do. Some members of the family felt that it was the worst thing that could ever happen to the company. We bought a whole branch out of the business. Luckily, it turned out that they were wrong. There were about 2,000 people at the Waikiki Beach Walk’s opening party. For me, that was the culmination of about 10 years of a dream.”
Jay Talwar, senior vice president of marketing for the Hawai’i Visitors and Convention Bureau, says the project was a landmark moment for Waikiki tourism.
“One of the things that I admire about David is that he has an engineer’s brain.