The Dividends of Paradise : Tour Operator’s Fascination With Hawaii Develops Into a Multimillion-Dollar Idea

Twenty-nine years ago, Ed Hogan had to resort to making speeches in order to convince residents in Point Pleasant, N.J.--where he was a travel agent--that Hawaii really was heaven on Earth and not paradise lost.

Hogan had gone to Hawaii many times as a charter pilot, but folks in the Garden State thought it was too far away, too exotic and not as hospitable as Europe or the Jersey shore.

“Hawaii seems so distant to so many people that they primarily would only go in groups; people told their mothers that it was only safe if they went with a local of Chamber of Commerce,” Hogan said.

“So I took the Point Pleasant Chamber of Commerce to Hawaii and I took the Point Pleasant Elks Club to Hawaii and then I took the New Brunswick YMCA.”

But Hogan was barely making a living selling Hawaiian tours, so in 1962, he decided to move to California, where he thought it would be easier to sell people on an island vacation. He packed his wife Marilyn, their four children and a poodle into his 1959 Plymouth station wagon and headed West. His net worth was $26,000.

Today, Hogan, 60, is a multimillionaire and, with his wife, they own Pleasant Hawaiian Holidays, a Westlake Village company that annually sends 350,000 people to Hawaii, more than any other tour company.

“He is definitely the largest tour operator to Hawaii,” said Gene Cotter, senior vice president of the Hawaii Visitors Bureau. The Hawaiian Senate last year officially proclaimed Hogan “Mr. Tourism Hawaii.”

Pleasant Hawaiian, which Hogan named for the New Jersey town of Point Pleasant--puts air travel and hotel accommodations into affordable tour packages that travel agents sell to their customers. Last year, Hogan says the company did $310 million in sales and usually makes a 1.5% to 2% after-tax profit. Hogan has spent some of his booty acquiring six hotels in Hawaii, including a Hilton and a Sheraton. The hotels are worth an estimated $270 million.

From the Los Angeles area, Pleasant Hawaiian’s average charge for a weeklong stay in Hawaii--including air fare and hotel accommodations--is $600. But the company also offers rates as low as $379 a week.

Since 1962, Hogan figures he’s sent more than 2 million tourists from 200 cities to Hawaii. Today, his company has 1,900 employees--350 in Westlake Village and many of the rest in Hawaii.

Despite its size, Pleasant Hawaiian has had very few consumer complaints. The Better Business Bureau in Hawaii says the company has an excellent record. And within Los Angeles County, fewer than 15 Pleasant Hawaiian customers have filed lawsuits since 1981. One man complained that his room “overlooked two construction sites” and that, beginning at 7:30 a.m., he heard “the constant roar of a digging crane.”

Hogan has about 35 employees working on solving problems. For example, if a travel agent calls and points out that his honeymoon clients have been booked into a hotel room with twin beds, Hogan’s people try and put them in a room with a double bed.

Travel agents ranked Hogan’s company among the top five tour operators for customer satisfaction in a July survey by the American Society of Travel Agents. Pleasant Hawaiian placed above both American Express and Walt Disney Travel.

“Pleasant Hawaiian is very well-regarded in the industry,” said W. Ray Shockley, president of ASTA. “Ed Hogan is a real success story.”

Hogan’s career took several detours before Hawaii helped make him rich. After the end of World War II, Hogan retired from the Naval Air Corps and became a co-pilot for a series of charter airline companies operating out of Burbank. His last pilot’s job was at TransOcean Airlines, which went out of business in the early 1960s.

Hawaii was one place where Hogan often touched down and he started making friends, particularly with hotel owners. He noticed that many of them regularly had empty rooms. He also knew that many of the airplanes that flew to Hawaii were often only half full.

Hogan said he saw all the ingredients--cheap rooms and cheap transportation--for what is known today as a package tour. What Hogan proposed was a no-frills vacation. “We were the McDonald’s of tours,” Hogan said.

Pleasant Hawaiian got its customers a plane seat and a place to sleep. What tourists did while they were over there was their business. The company has since expanded its offerings. But early on, Hogan recalled, “we had very limited service.”

His hotel owner friends let him buy some rooms at a deep discount. The airlines soon agreed to do the same. All he needed were customers.

After his move to Panorama City in 1962, he worked out of a shopping mall hut similar to the ones used today for dropping off film. “It was practically a grass shack,” Hogan said. “It didn’t have any running water and it could be picked up and moved if need be.”

His immediate goal was to get the attention of travel agents, so he started running outlandish advertisements in trade publications.

Dressed in a monk’s robe and his wife’s wig, Hogan urged travel agents in one ad to “Do the proper and pious thing for your clients when they make their pilgrimage to the islands. Give them a pleasant Hawaiian holiday.”

‘Off the Wall’ Ads

In another ad, Hogan posed bare-chested with a blond wig and and stood next to two female mannequins. “Don’t be a dummy,” the ad read. The implication was that smart travel agents sent their clients on a pleasant Hawaiian holiday. “They were the talk of the industry,” recalls Cotter. “Completely off the wall.”

Some ads featured Hogan’s four children, all of whom now work for Pleasant Hawaiian.

Hogan followed up every ad by bombarding hundreds of travel agents with Hawaiian greeting cards. Travel agents started sending him business and haven’t stopped.

Hogan’s company reserves its 3 million room-nights per year at 100 hotels in Hawaii, including 2,000 rooms at Hogan’s six hotels. It also reserves 500,000 airline seats annually. United Airlines, Delta Air Lines and Hawaiian Airlines all have contracts with Pleasant Hawaiian. Pleasant Hawaiian has negotiated the airline contracts so that it can reserve the seats but doesn’t pay for them unless they are filled. If the seats aren’t taken, the airlines will lose money, but not Pleasant Hawaiian.

$10-Million Ad Budget

The company’s ads--which have toned down considerably--run in more than 70 newspapers throughout the United States, and Pleasant Hawaiian’s advertising budget is $10 million a year.

Pleasant Hawaiian long ago grew out of its Panorama City shack. At the Westlake Village headquarters, Hogan has installed a computer system that is so refined it breaks down calls by the half hour so reservation agents know how many calls they received on this date last year at, for instance, 5:30 a.m. His 140 reservation agents take more than 10,000 calls a day, mostly from travel agents.

“We watch the phone lines very carefully,” Hogan said. “It’s important for us to see which packages are selling and which aren’t.”

Hogan tries to keep his employees motivated. Above the agents’ desks is a scoreboard with such messages as “Book ‘em Danno.” Every employee is allowed two free trips to Hawaii a year and, on their fifth anniversary with the company, they receive a free trip to Europe. “They could take their mother or father or anybody on the trips. They just can’t sell them,” Hogan said.

He also fills their heads with what he calls Hoganisms. For example, to get employees to make the extra effort, he tells them: “The difference between a masterpiece and a good painting is a few brush strokes.”

Son of Immigrants

Hogan, whose mother died when he was 2, is the ninth son of Irish immigrants. He admits not being entirely comfortable with having money. He owns a Rolls-Royce--”Every Irishman dreams of having a Rolls-Royce and living like the rich English”--but most of the time, he drives a Toyota Supra. He flew a glider and went hot-air ballooning with hotel giant Barron Hilton two weeks ago, but says his best friends are his high school buddies.

And he still lives in Westlake Village, but he could easily afford a luxurious home in Hawaii. “If you’re going to be a missionary, you have to be near the people who need to be converted,” Hogan said. “People that live in Hawaii already are in the church.”