Increased Foot Traffic Potential on Kalakaua Ave May Boost Retail Rents
Executive Brief
The opening of a prominent new retail store on Kalakaua Avenue indicates increased investor confidence in Waikiki's prime shopping district. Tourism operators and small businesses should monitor potential shifts in consumer spending and rental costs.
- Tourism Operators: Monitor potential for increased visitor engagement with retail.
- Real Estate Owners: Observe rental rate trends in prime retail locations.
- Small Business Operators: Assess competitive landscape and potential partnership opportunities.
- Action: Watch foot traffic and retail sales data in the Kalakaua Avenue corridor over the next 60 days.
The Change
Reyn Spooner, an established aloha wear brand, has opened its third Waikiki location in early February 2026. This new store is strategically situated on Kalakaua Avenue, a location widely considered Waikiki's most prestigious retail thoroughfare. This move signals a continued investment in high-traffic, prime retail spaces within the island's primary tourism hub and suggests an expectation of robust visitor spending.
Who's Affected
Tourism Operators
While the direct impact is indirect, increased retail draw on Kalakaua Avenue can contribute to a more vibrant visitor experience. This could translate into longer stays or increased spending on ancillary activities, potentially benefiting hotels, tour operators, and restaurants that cater to visitors who engage heavily in retail tourism. Be aware that increased retail competition for visitor dollars might divert some spending from other leisure activities.
Real Estate Owners
For property owners, particularly those with commercial real estate along Kalakaua Avenue and adjacent streets, this expansion is a positive indicator. It suggests that brands perceive strong, sustained demand for retail space in these prime locations, potentially leading to upward pressure on rental rates. Owners should monitor lease renewal negotiations and consider how this increased demand might influence future valuations. The move by a well-known brand to a high-profile address may set a new benchmark for desirable retail rents.
Small Business Operators
Retail businesses operating in the vicinity of the new Reyn Spooner store, especially those targeting similar demographics, may face increased competition. However, a high-profile store can also draw more foot traffic to the area, creating opportunities for businesses that can capture impulse purchases or offer complementary goods and services. Small business operators should assess their product offerings and marketing strategies to capitalize on any increased flow of potential customers or to differentiate themselves from new competition.
Second-Order Effects
The expansion of retail in prime Waikiki locations like Kalakaua Avenue can lead to increased demand for commercial leases. This heightened demand, in the constrained market of Waikiki, could drive up rental rates. Consequently, higher operating costs for retail tenants may necessitate price increases for goods and services, impacting the discretionary spending of both tourists and local residents. This, in turn, could put pressure on wages for retail and service staff if wage increases lag behind the rising cost of living.
What to Do
Tourism Operators
Action: Monitor visitor engagement with retail venues on Kalakaua Avenue. Observe if spending patterns shift towards retail over other experience-based tourism activities. Consider potential collaborations with new retail tenants for cross-promotional events, especially if they align with your target visitor demographic.
Real Estate Owners
Action: Watch foot traffic data and retail sales trends in the Kalakaua Avenue corridor over the next 60 days. Note any changes in lease inquiries or proposed rental rates for comparable spaces. If sustained increases in activity are observed, begin evaluating your portfolio for potential rent adjustments at renewal.
Small Business Operators
Action: Assess your competitive positioning against the new Reyn Spooner store and other retailers on Kalakaua Avenue. Review customer traffic near your business and identify if the increased activity benefits or hinders your operations. Consider marketing initiatives that highlight your unique offerings or target specific customer segments that may not be directly served by the new tenant.
