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Kahunaville looks to make splash in malls

By Kathryn Dube

As developers look for new concepts in the beleagured theme restaurant category, Kahunaville, with a primary emphasis on food, is building its business in malls in smaller markets traditionally ignored by its larger competitors.

Unlike Planet Hollywood and others, Kahunaville has been successful, founder David Tuttleman said, "because nobody focused on food. We want to offer an incredible culinary experience for our guests.''

Kahunavilles are more than just restaurants. The tropical decor includes truckloads of faux greenery, smiling Tiki idols, dancing waterfalls and animatronic turtles. Each Kahunaville has an interactive sports bar, high-tech arcade, disc jockey and a dancing wait staff that doubles as "the Cast,'' performing routines to entertain guests.

Kahunaville's demographics are geared toward women and families, while the corporate culture is focused on eatertainment, blending a positive food experience with entertainment. According to Tuttleman, "We offer the entire package, because our competition is TV, special events, the weather. Competition comes in all flavors. The world is round. To be successful, you need a product that appeals to everyone from kids in strollers to [folks in] walkers. We're in places where we can rekindle the marketplace.''

Tuttleman built the business from the ground up — with his own money — starting with Big Kahuna, a surf-themed nightclub that opened in Wilmington, Del., in 1993. When Tuttleman and partner Robert Rosenblit decided to expand the nightclub into a tropical-themed restaurant, they hired Mark Green, a veteran of Atlantic City casino restaurant trade, to head operations. The first Kahunaville restaurant opened alongside the nightclub, located at the Wilmington Riverfront redevelopment area along the Christiana River, in April 1996. The partners called their venture Adventure Dining, and began targeting malls in secondary markets for further expansion.

By November 1997, Adventure Dining opened a Kahunaville at the Oxford Valley Mall in Langhorne, Pa. There were five more openings over the next two years: at the Eastwood Mall, Youngstown, Ohio, in August 1998; Carousel Center Mall, Syracuse, N.Y., in November 1998; Holyoke (Mass.) Mall in April 1999; Walden Galleria, Buffalo, N.Y., in August 1999; and RiverTown Crossing, Grandville, Mich., in November 1999. Next year Adventure Dining plans to expand to markets in Raleigh, N.C.; Miami, Tampa and Orlando, Fla.;Myrtle Beach, S.C.; and Cincinnati.

Some regard Kahunaville as a blend of Rainforest Cafe, Dave & Buster's and The Cheesecake Factory, but Sharon Banta, director of marketing for Kahunaville, said it competes more with local restaurants.

"We don't compete head-to-head with Rainforest, but we are lumped in the same category of eatertainment. We compete more with local restaurants because we want people coming back.'' While Kahunaville has sought out high-traffic areas in primary malls in smaller markets, Banta said larger markets are now pursuing the company. Although some of its restaurants are larger, the Kahunaville prototype is 22,000 square feet, according to Banta, because larger mall restaurant sites are harder to find.

Adventure Dining is banking on the fact that guests may be lured in by the Tiki idols and the other tropical decor of Kahunaville, but the food will keep them coming back. The exuberant Tuttleman, self-proclaimed Mayor of Kahunaville, stressed the primary importance of the dining experience at Kahunaville: "It's important to concentrate on food every day. Ninety-five percent of what we offer is freshly prepared. We go for what's best. Our food cost is higher than that in some restaurants, but the games and bar business help. It's what sets us apart and ahead of the pack.'' Banta maintains that Kahunaville is a restaurant "that leads with its food and service and follows with its entertainment elements.''

Yearly sales per Kahunaville restaurant unit average $7 million, Banta reported. Overall sales for 1999 were in the range of $53 million, climbing from $34 million in 1998, largely as a result of the new openings. Seventy-five percent of Kahunaville sales are derived from the food and bar business. The menu reflects American, Mexican, Italian, Asian and Caribbean tastes. Kahunavilles also have an extensive drink and dessert menu. Contributing to the success of each Kahunaville is a unit-level marketing coordinator who concentrates on special events and promotions specific to that community, according to Banta.

Tuttleman is confident that Kahunaville won't make the same mistakes some theme restaurants have made, such as Planet Hollywood, which saw its stock plummet in 1997 in the wake of too-rapid expansion costs. The proliferation of restaurant chains with a focus on theme rather than food led some mall developers to eschew big-name theme restaurants in favor of local ones that offered better food quality.

Tuttleman, who is also the chairman, owns the entire company and oversees the design of all new Kahunavilles. His goal, beyond 2000, is to expand to two to four more sites in 2001, and four in 2002. Kahunaville's philosophy is that 60% to 70% of its guests, who average 460,000 visits per restaurant unit per year, come to malls primarily for the Kahunaville experience. Malls where Kahunavilles are situated, though, obviously experience residual benefit. Jim Soos, marketing manager of the Walden Galleria, said the Kahunaville that opened at the 1.6 million-square-foot mall in August has exceeded expectations. "It's been very well-received. It's a destination, a super addition for the shopping center as far as the restaurant and entertainment venue.'' A leasing representative from Walden's owner, the Pyramid Cos., Syracuse, N.Y., was attracted to Kahunaville after seeing one of the first locations, Soos said, adding, "Pyramid is an aggressive developer/manager, and we want the best of the best.''

Barbara Ashkin, general manager of the Carousel Center Mall, another Pyramid Cos. property, said Kahunaville is the only theme restaurant in Syracuse. "It's been outstanding, a truly family destination. Their numbers have held this year because the food is fresh and very good." Ashkin said overall traffic at the 1.6 million-square-foot mall was up 12% during 1999, with Kahunaville a contributing factor.

Peter Haback, who is in charge of restaurant leasing for General Growth Properties, Chicago, said business at the Kahunaville that opened shortly before Thanksgiving along with the grand opening of General Growth's new RiverTown Crossing has exceeded expectations.

"A lot of people are coming in that might not have otherwise'' because of the attraction of Kahunaville, Haback said. "It's more than a theme restaurant, because the culture is different. They take the same pride and desire into the business from the top to the bottom. Kahunaville has gone into markets that most theme restaurants have not gone into, accomplishing more in smaller markets.''