the polynesian cultural center recaptures control of its transportation market

A Strategic ‘victory’ transformed Center operations and guest experiences: This story is based on interviews with Alfred Grace and J. Alan Walker, as reported and historically observed by Mike (Mikaele) Foley, who authored the following. (Foley spent the majority of his full-time PCC career working in marketing communications out of the Sales & Marketing Department in Waikiki, alongside colleagues President Grace, Alan Walker, and Terry Montgomery.) 

⬤ Alfred Grace has served as president & CEO of the Polynesian Cultural Center since 2013. He previously worked as Chief Operations Officer, and prior to that, he played key roles in the PCC’s Waikiki sales and marketing office starting immediately after he graduated from BYU–Hawaii in travel and tourism management in 1988. 

⬤ J. Alan Walker, formerly an Asian Sales Executive for the Center and then head of the Waikiki Sales office team (before serving on a three-year church mission president assignment in New Zealand), is currently the Center’s strategic research and development officer and is still involved in working with outside businesses on behalf of the Center. 

⬤ Mikaele Foley (who has an MBA degree) has intermittently done marketing communications work for the Center for over 50 years (and is currently content editor for the Center’s new historical website, legacy.polynesia.com). 

He wrote the following article for that site because he believes, from a business perspective, this story ranks among the top ten most important developments at the Center, ever. He interviewed Grace and Walker during the summer of 2025 and believes they deserve a large share of the credit for recapturing a significant portion of our market that had been under the control of transportation and tour companies — both in Waikiki and offshore — for decades. 

The Problem? When Third Parties Control Your Business 

For more than four decades — from the 1960s through 2002 — major transportation and tour companies in Waikiki and abroad exerted an extraordinary amount of control over Polynesian Cultural Center sales policies and practices. It’s hard to realize now, but old-timers who worked in PCC sales and marketing from the earliest days remember that more than the Center itself, transportation and tour companies “controlled” many of the Center’s customers before they even arrived in Laie. 

“When I was a student worker at the Center in the late 1960s and even into the early 70s, I noticed the transportation companies had a huge controlling factor,” recalls Foley. “They virtually dictated who would get tickets for the evening show. That always seemed very strange to me.” 

This control extended far beyond ticket allocations. Transportation companies could dictate PCC sales and operational practices, influence and redistribute sales commission arrangements, and most critically, controlled the guest experience from the moment visitors left their hotels until they returned to Waikiki. 

Understanding the Business Model: To understand how this situation evolved, it’s important to recognize that tourism businesses, including the Polynesian Cultural Center, serve customers through two basic channels: 

⬤ FIT (Free Independent Travelers) who purchase tickets and make direct reservations, much of that now accomplished online 

⬤ GIT (Group Inclusive Travelers) who come through tour agents and other operators, often purchasing packages that include transportation, transfers, accommodations, meals, guides, and optional tours 

Tourism businesses invariably pay tour operators and agents commissions based on a percentage of sales. Similar arrangements have existed for centuries. The challenge has always been to ensure that businesses on both sides of the equation maximize their respective returns while maintaining high-quality service. 

The Commission Override Trap: The root of PCC’s problem lay in what Grace describes as “our agency agreement” and its commission override program. Typical of many businesses in Hawaii, for years the Center’s standard commission structure was 20%, but agents could earn additional overrides based on monthly revenue volume: 3% additional commission for $50,000 in monthly ticket sales, 4% for $150,000, and 5% for $250,000. 

“In today’s ticket prices, which are at least double, probably close to quadruple what they were then, that was an extremely difficult amount,” Grace explains. “So, agents were basically stuck with the reality they would not be able to qualify for the override; but a few companies, such as Pleasant Hawaiian Holidays were large enough to reach those thresholds independently.” 

“Ticket consolidators”: This created a perverse incentive. Because of the PCC’s high commission override structure, transportation companies went into business as “ticket consolidators.” They began to act as travel agents and sales agents for the PCC, but instead of selling directly to customers, they approached other travel agencies — including Outrigger Actvities Center, American Express, Sheraton Travel Service, and others — with an attractive proposition: 

“They went to these companies and said, ‘Listen, if you all book through us, we’ll qualify for a commission override, and we will give you back much of that commission override,'” Grace recalls. “In other words, a travel agent could qualify for 23% commission by booking through a transportation company rather than booking directly with PCC and getting 20% — and they’d still had to arrange transportation anyway.” 

The Big Players: The major consolidators included Trans-Hawaiian (which Grace described as “the biggest”), followed by Roberts Hawaii, Gray Line, Polynesian Adventure Tours, and Polynesian Hospitality. There were also specialized operators, including Travel Plaza Transportation (which primarily handled Japanese customers through JCB) and various mini-coach companies, such as the Cornejo brothers. 

For the Japanese market, which Walker managed, the situation was even more constrained. “Almost all Japanese visitors, and there were good volumes of them back then, were coming on buses,” Walker explains. “We had absolutely no control over the Japanese customers because they were all coming through the bus companies. The bus companies dictated when they would arrive at the PCC, what they would experience, and so forth.” 

The Ralph Rodgers Confrontation: An incident in the mid-1980s actually made the situation worse. Ralph G. Rodgers Jr., president of the PCC at the time, called all the transportation operators to a meeting at the Center. 

“Ralph Rodgers had called them all into a PCC meeting in a Waikiki ballroom and essentially said (paraphrasing), ‘We will no longer support your circle island tour with a short-stay ticket (1-2 hours). You will sell our PCC packages instead,'” Grace recounts. 

The transportation operators were upset: Foley, who was present at that meeting, remembers it vividly: “There was a smaller operator, a Filipino guy with a big smile who ran micro buses. I can’t remember his name, but I remember he was one of the few who actually walked out of the meeting, and I followed him. He was so upset.” 

The transportation companies didn’t forget that confrontation, either. “Believe it or not, these tour operators had not forgotten that meeting,” Grace says. “They basically said, ‘So if we can, let’s stick it to the PCC because of Ralph Rodgers telling us, “Don’t call us, we’ll call you.'” 

Initially, transportation companies attempted to bypass PCC entirely on circle island tours, but they soon discovered they couldn’t run a successful circle island tour without a Cultural Center stop. This realization, however, didn’t improve relations. It simply reinforced their determination to control the PCC business they did handle. 

The guests’ experiences suffer: By the 1990s, the consequences of this arrangement had become severe. “Transportation companies were stopping wherever they wanted to on the way out to the PCC, and they were receiving kickbacks from different stops along the way,” Grace notes. “Noriko’s in Kahaluu was huge. They had a big building about 30 minutes away from the PCC, and most of the westbound customers (i.e. those who originated in Canada and the U.S.) were stopping at Coral Kingdom (near Kualoa).” 

For the Japanese market, Noriko’s was a particularly problematic stop. “Initially, we did that stopover, and we were compensated by Noriko’s and Coral Kingdom,” Walker admits. “I didn’t particularly like it, but Osamu Ozaki [then PCC’s director of Japanese sales] had built the Center’s relationships with the Japanese on them, and didn’t want to put those entities out of business.” 

The impact on the guest experience was devastating. “The buses were arriving around 2 p.m., but they were leaving Waikiki around noon,” Grace continued. These extra stops meant guests were “arriving late at the PCC, so the guests’ were saying they didn’t have ‘enough time to see everything’. The second issue for the PCC was we were losing retail business. The guests had already made retail stops down the road, and we also weren’t getting any lunch business because they arrived around 2 o’clock.” 

Transportation companies set their own package pricing: Even worse, the transportation companies “were literally controlling our price because their package ‘buried the cost’ of the PCC ticket,” Grace says. “They were controlling our marketing, and they were telling us all the time it was good for us because they took care of marketing for us. We didn’t have to worry about doing the sales calls and promotions. All we had to do was deliver the experience inside the PCC gates.” 

The ‘perfect storm in 9/11’ creates an opportunity: The situation continued until a combination of factors created the perfect opportunity for change. The September 11, 2001, terrorist attacks on the U.S. mainland brought tourism to Hawaii to a virtual standstill, and particularly affected the Japanese market. 

“The Japanese stopped coming after 9-11 for about two, three months,” Walker recalls. “And that was about the same time we were looking at revising the sales agreements to stipulate they couldn’t package PCC tickets with transportation.” 

The ʻideal moment to actʻ: Grace recognized this as the ideal moment to act. “The Center had been planning a big move since 1999–2000, looking for the right time and process to go through with it,” he remembers. “We even made sure legally we were on solid ground, basically telling consolidators they could no longer consolidate smaller operator sales, and that we would no longer sell tickets to any company not selling directly to a guest.” 

“Because there was no volume, that was perfect timing,” Walker agrees. “I think Alfred [Grace] was brilliant in timing it to come in at the beginning of 2002 with new revised sales agreements that stipulated tour operators couldn’t consolidate their sales with transportation packages. Just the shock after 9-11, I think, created the perfect timing because everyone was so focused on other things that we put the new agreement into place with very little pushback.” 

The Great Recapture, 2002: In January 2002, the Polynesian Cultural Center implemented its new sales agency agreement. The key changes were revolutionary: 

⬤ No More Consolidation: Transportation companies could no longer act as consolidators for other agents. 

⬤ Direct Sales Only: Commission overrides were now available only to sales agents who sold tickets directly to end consumers, not as wholesalers 

⬤ PCC Controls Transportation, too: The Center would charter its own transportation and control the guest experience from Waikiki pickup to return. 

Resistance was immediate but short-lived: “We got letter upon letter and file upon file because it was such a huge change,” Grace recalls. “It was like we were taking candy away from a baby and the baby didn’t want to let go, but the Center had prepared well by working closely with operations and the promotional teams.” 

“We went through the process of contacting the sales agents and said we’d like to change the commission structure and provide you with a commission that is superior to what you’re getting from the transportation companies, on the condition that you book directly with us,” Grace explains. 

Taking Control of Operations: The operational challenge was significant. Could PCC actually handle dispatch transportation to the various stops in Waikiki? “The critical thing was, ‘OK, PCC, can you do the dispatch? Can you get the buses at the right pickup locations? Can you get the right people on the right bus?'” Grace remembers skeptics asking. “You’ve never done it. Do you even know how to do that?” 

The Center had a secret weapon — its promotional team performers. “What we had was Polynesian performers — they were the ones doing the bus loading,” Grace explains. “Everyone was happy because of this beautiful girl in a Polynesian costume down at the roadside telling them what bus to get on.” 

Terry Montgomery, former PCC Waikiki ticket office supervisor and Laie reservations manager, took over dispatching operations and proved highly effective. “She worked with the transportation companies and started dispatching buses on specific routes. We had reservation information coming through our reservation system. We had the pickup locations covered with pleasant Polynesian performers logging them onto the buses,” Grace says. 

“We even had a ‘sweeper’ bus for all those guests who arrived late — which happened every day. The ‘sweeper’ picked up all the last-minute guests.” 

The results were immediate, dramatic, successful: Instead of arriving at 2 o’clock, “the buses started arriving at 12 o’clock. So the guests had an extra two hours in the village — giving them more time for lunch and retail shopping at the Center,” Grace adds. 

“It happened very quickly. We were quite surprised. It only took about three months for all the agents to fall in line and the transportation companies to settle down. I think there was a simple realization in the industry that PCC had been the only company allowing transportation companies to consolidate — nobody else let them do that.” 

The transformation was so successful that even former skeptics came around: Frannie Kirk, Outrigger Activities Center President, and mentor to Grace, who had initially opposed the plan, eventually said, “OK, looks like everything’s going well. I’ll be quiet.” 

Even a competitor provided validation. As Grace recalls, a Robert’s Hawaii representative told him privately: “I wouldn’t give up my advertising and marketing. Don’t let anyone else do that for you. Don’t tell my guys I told you this, but you need to control your marketing.” Then he added with a grin, “Don’t tell anyone I said that. I have a reputation to maintain.” 

Building new partnerships and packages: The Center began working with multiple transportation providers on a charter basis, initially settling with both motorcoach and mini-coach operators. Transportation companies were still allowed to sell “adventure packages” that included Circle Island tours, but only as part of a complete circle-island experience, not as a destination-only package. 

For major group movements, the Center worked directly with transportation companies on ticketing, “but we would not allow them to consolidate other sales agents’ business into their own,” Grace explains. 

The Japanese market required special attention. Walker’s team began hiring Japanese-speaking BYU–Hawaii students as bus escorts. “We would shuttle them down to Waikiki and put them on the buses to do the tours on the way out, so we wouldn’t have to pay for a Japanese-speaking driver or guide, which was expensive. It was much less expensive to pay a student.” 

This approach allowed the Center to create new package offerings. “In 2004, we started to sell a circle-island and PCC ticket for the Japanese who only had short stays in Hawaii but wanted to get as much in their four-or-five-day stays as they could. We packaged a figure-eight circle island tour where they would go through Kahala,” Walker recalls. “That got so successful, we were selling it to over 200 Japanese a day at peak.” 

Unintended Consequences: Our taking control of transportation most likely contributed to the steady decline in Japanese visitors to the PCC which in the late 90s had peaked at 240,000-250,000 per year. 

The problem was multifaceted. “Japanese agents were not happy with our no longer stopping at Noriko’s, which gave kickbacks that went all the way back to the agents.” 

Secondly, I actually think many Japanese visitors  didn’t want to spend as long as they did at the PCC. I think they enjoyed having time for other activities in the morning before departing for PCC. They also liked stopping along the way to shop and take photos, before arriving at the PCC to enjoy a short tour of the islands, having dinner, watching the show, and heading back to Waikiki.” 

Evolution and Innovation: Over the years since, transportation arrangements continued to evolve. The Center eventually settled on working with single transportation providers for exclusive arrangements. 

⬤ “We ended up going with a single tour operator company,” Grace says. “In return for letting it have exclusive motorcoach business, it also took back the dispatch, and our reservations department sent our guests directly to that transportation company.” 

⬤ The arrangement shifted from charter buses to per-seat pricing, which better aligned incentives. “We negotiated per-seat [pricing], and they agreed to that so now they were motivated to fill the bus as much as possible because if they used an additional bus, that was on them.” 

For many years, the Center worked with Roberts Hawaii, developing what Grace describes as a “much better“ partnership. “Every year they would come asking for an increase, and I would moan and groan that we’re not raising our prices as much. They would explain to me about the cost of transportation — fuel, insurance, drivers, etc. — and so we always had this sort of contentious relationship.” 

The breakthrough came when Roberts “literally opened up their books and then we realized that they were actually escalating [costs] at higher rates [than our price increases]. At that point, we became more lenient, and under the current contract with Roberts, we have an agreement that every year prices go up 2-3% automatically. Since we allowed that to happen, we haven’t had a problem with Roberts at all.” 

Modern quality control, the camera revolution: When Walker returned from his church mission in 2017, he found the COVID-19 pandemic had created another opportunity for improvement: 

The Center had eliminated its dispatch team and BOTG (Best of Oahu Tour Guides) that saved several hundred thousand dollars annually, and everything was turned over to Roberts, whose drivers provided narration. 

But there was concern about quality control. “Past experience was that if you just let them have total control, they’d say bad stuff,” Walker notes, referring to drivers making inappropriate comments about the sponsoring church, or other subjects. 

Walker’s solution was revolutionary: Working with a company called Samsara, the Center installed dash cams on buses and created a scoring system for drivers. 

“We said, ‘We’re going to put these dash cams on your buses. We’re going to randomly select video from your narrated tours. We’re going to grade your tour, and we’re going to make sure you’re doing certain things at certain points that we’re requesting,'” Walker explains. 

Drivers who met quality standards received Amazon gift cards worth $40-$150 monthly. The system was initially met with resistance, but the results were extraordinary.  

When we started, the bus service received about 70% of responses with nines and tens on our customer satisfaction surveys. However, the gift card incentives actually worked out so well, scores are now ranging between 88 and 90% with nines and tens — almost a 20 percentage-point improvement.” 

In fact, Walker says the transformation has been so complete that drivers began requesting buses with cameras. “It had been a big swing from ‘I don’t want that on my bus. I won’t do it,’ to ‘How come I didn’t get assigned a bus with the camera? I’m not getting rewarded for my work.'” 

Roberts was so impressed that they purchased dash cams for their entire fleet to use on other tours. “Everything changed because of that experience with us,” Walker notes. 

Managing the partnership today: Now, Walker maintains the relationship through weekly meetings with Roberts’ executives. “Every week at two o’clock on Wednesdays, I meet with them over (the internet app) Teams™ for 30 minutes. We laugh and enjoy each other’s company. If they have concerns, they’ll bring them up, and I’ll try to see if we can resolve them from our side. When we have concerns, I tell them.” 

The relationship has evolved from an adversarial to a collaborative one. “When I first came back from New Zealand, it was almost like an adversarial relationship — us against them. Now we’re one big team working together.” 

The Business Impact: The financial benefits of controlling transportation have been substantial. “When we took control of transportation, about 45-50% of our business was coming through sales agents,” Grace reports. “Now, only about 20% comes through sales. This shift to direct bookings has improved margins significantly.” 

“It is a good source of additional revenue to the PCC,” Walker adds. “We’re not just doing it at cost. There is a profit margin per ticket, and it could be up to a million to two million dollars a year, depending on the volume.” 

Operational benefits have been equally important: With 80% of visitors now booking directly, “most of them get surveys asking what they thought about the Center experience, and we have an extremely high “Net Promoter Score” — significantly higher than other major attractions,” Grace notes with pride. 

Lessons for the future: The transportation transformation offers several key lessons for tourism businesses: 

⬤ Control Your Customer Experience: Allowing third parties to control guest interactions from pickup to return gives away too much power over our brand. 

⬤ Timing Matters: Major changes are easier to implement during industry disruptions when all players are focused on survival. 

⬤ Operational Excellence: Taking control requires building internal capabilities, but the investment pays long-term dividends. 

⬤ Technology Enables Quality: Modern solutions like dashboard cameras and scoring systems can ensure quality while rewarding good performance. 

⬤ Partnership Evolution: Former adversaries can become collaborative partners with the proper structure and communication. 

Grace reflects on the broader significance: “We weren’t controlling the experience. We wanted to address a major complaint of ‘not enough time to see everything.’ We wanted to regain retail and concession business so people would eat lunch at the Center. We wanted to be able to work directly with agents and find ways to increase sales while creating programs that were agent-specific, not having to just let a consolidator do whatever they wanted.” 

Looking Forward 

While the Asian markets that once provided substantial bus-based business remain challenged by currency exchange rates and post-COVID price increases, the Polynesian Cultural Center continues to maintain its capabilities: 

⬤ “We are right now looking at reinstating a Japanese narration program, but doing it just three days a week,” Walker reports. “We’re beginning to design things so that we can capture that market, because when that market comes back, we have to have programs in place.” 

⬤ The success of the transportation recapture initiative stands as one of the most significant business victories in Polynesian Cultural Center history. It demonstrates how a tourism business can break free from unfavorable third-party arrangements, reclaim control of the guest experience, and build new partnership models that benefit all parties. 

As Grace concludes: “We came from a company that had absolutely no control over ticket sales to what we do now to enhance the guest experience on the bus. It took a while to learn what was going on and make the necessary changes, but the transformation has been remarkable.” 

“Our experience serves as a testament to strategic thinking, operational excellence, and the courage to challenge long-established industry practices when they no longer serve our organization’s mission or our guests’ best interests.”