Business Monday: Historic Manago Hotel drops sale price after year on the market

The historic Manago Hotel, which opened in 1917 in Captain Cook, is perched at 1,350 feet above sea level, providing a vast view of the Pacific Ocean overlooking the South Kona coastline, including Pu‘uhonua o Hōnaunau.

About 1-1/2 years ago, the family-owned property that sits on about 2.4 acres of lush land at 82-6151 Māmalahoa Highway was listed for $6.5 million by Standard Commercial and at one point had gone as high as $7.5 million in 2024.

But after negotiations in January 2024 with a Honolulu-based nonprofit to turn it into workforce housing ended, and another recent deal with an unidentified buyer fell through, the sale price is now at $5.75 million.

“You don’t see a lot of boutique hotels,” on the market,” Standard Commercial Realtor Ian Clagstone said. “We think it’s a great opportunity for someone to come in and get it to reach its full potential.”

The property includes the 64-room hotel, commercial spaces, a residential apartment, two residential studio units and a two-story home.

The Manago Hotel still has much of its old charm. The lobby hasn’t changed much over the decades, with the same front desk.

Just off to the right of the lobby is the beloved Manago Hotel restaurant, which also opened in 1917. While the family stopped renting rooms more than a year ago, the restaurant is still running and offering its famous pork chops.

In 2023, the restaurant was recognized by the James Beard Foundation as one of six America’s Classics Awards, which recognizes locally owned restaurants that have timeless appeal and reflect the character of their community.

Japanese immigrants Kinzo Manago and his “picture bride” Osame Manago founded the hotel. In 1942, it was turned over to Harold and Nancy Manago, the second generation. They managed the business for 42 years, according to the hotel’s website.

In 1984, Harold and Nancy’s youngest son, Dwight and his wife, Cheryl, took over the hotel and are still running it today. Their 35-year-old daughter Britney Manago is the hotel’s general manager.

“I can’t remember not being at the hotel,” Britney Manago said. “The earliest childhood memory I have is being with my grandparents at the front desk or working in the garden.”

The hotel rooms still do not have televisions. Britney Manago said the hotel has a communal TV room for guests.

One of Britney Manago’s favorite spaces at the hotel is the koi pond. She has fond memories of running around the pond, which was full of fish, with her sister and cousins.

“Unfortunately, we only have one fish right now,” Manago said.

Britney Manago said the hotel hasn’t changed much over the past 30 years, although during the COVID-19 pandemic the communal TV room was converted into additional space for the restaurant.

She said it took the family a long time to decide to put the hotel on the market, but when they finally came to that conclusion, it felt like it was the right time.

“I was fortunate to be part of this great family legacy,” Britney Manago said.

Several experienced hotel management companies have expressed interest in taking over operations, enabling a smooth transition.

Yifan Chen, assistant professor of finance and real estate in the Shidler College of Business at the University of Hawai‘i, said commercial real estate transactions in Hawai‘i often take time, and overall deal volume tends to be lower due to the state’s relatively small market size and higher capital costs.

“The Manago Hotel has attracted significant interest, and understandably so — it’s a historic property with deep roots in the community and a long-standing, award-winning restaurant,” Chen said. “Any potential transactions or renovation of the property must balance multiple considerations: preserving the building’s historic legacy, maintaining its appeal to visitors, and ensuring the operations remain compatible with the needs and values of the local community.” 

The hotel has generated a lot of interest. In January 2024, the Honolulu-based nonprofit Mental Health Kokua was interested in turning the hotel into workforce housing. The nonprofit acquired $5.5 million in funding from Hawaiʻi County, but the deal fell through.

Recently, Clagstone said there was a buyer for the hotel, but it fell out of escrow.

“It’s really about finding the right buyer,” Clagstone said.

Despite parts of the property being more than 100 years old, Clagstone said the hotel is in pretty good condition. He said: “The family has always taken good care of it.”

According to the offering summary published by Standard Commercial, there is some undeveloped land at the property that could be developed into new amenities like a swimming pool or a grand lawn.

Clagstone said every interested buyer has expressed interest in keeping the hotel’s beloved eatery open.

When it comes to a potential buyer, the Manago family wants to find someone who understands the importance of the hotel and what it means to the community.

“I’d prefer to get someone willing to run it as is,” Britney Manago said. “We just want it to be maintained.”

Ku‘ulani Auld, the archivist for the Kona Historical Society, grew up celebrating birthdays and family parties at the Manago Hotel Restaurant.

Auld, who ate there just last week with her extended family visiting from California, said the establishment is one of those places “you feel at home.”

As always, she ordered the pork chops, however, Auld said the restaurant also makes a good simple hamburger and potato salad.

“I hope whoever takes it over loves it and wants to be part of the community,” Auld said.

Britney Manago said the restaurant has continued to be successful over the years because they don’t overcomplicate things and continue to use the same recipes that opened the restaurant.

“People come to our restaurant because it’s nostalgic,” Britney Manago said. It brings people back to their childhood. People want to come home and feel at home. We wanted to maintain that and have a sense of comfort.”

Auld said the Manago family is deeply rooted in the community and believes they will do what’s best for their family and the business.

When news broke in January 2024 that the hotel was being considered to be turned into workforce housing, Auld thought that was a great idea.

But she said she hopes “the restaurant never closes. I know that would be important to the Manago family.”