Best foods forward: T S Restaurants' David Allaire says consumers are changing their dining...

Fresh out of college, David Allaire was intent on becoming an active-duty pilot in the U.S. Naval Air Reserve. First, he thought he'd better get some traveling out of his system and headed from California to Hawaii for some downtime in the early '70s. He took a job washing dishes at The Chart

His career in the restaurant industry has led him from The Chart House to Buzz's Sugarcane Inn, to Lahaina Broiler, eventually landing him at T S Restaurants of Hawaii & California, where he helped open T S' first restaurant in 1977, Lahaina-based Kimo's. Twenty-five years later, T S Restaurants has grown into the Islands' largest locally based restaurant chain, with $79.7 million in gross annual sales last year, and 12 restaurants throughout Hawaii and California.

Its flagship property, Duke's Canoe Club Waikiki, is the busiest restaurant in the state, grossing annual sales "considerably north" of $15 million, and serving anywhere from 1,900 to 2,300 meals a day. As senior vice president and director of T S Restaurants, Allaire is responsible for overseeing all six Hawaii restaurants and their 900 employees and 75 managers.

Both locals and tourists here enjoy such a wide variety of ethnic foods, making Hawaii an ideal location for restaurateurs to set up shop. Has Hawaii maxed out its capacity or can the market withstand more competition?

That's up for debate. I think there are probably as many restaurant seats in Hawaii as I'd like to see, but I think the people with new, fresh concepts can make a go of it. They definitely have to be hitting on all cylinders, meaning they have to have great real estate, wonderful decor and architecture, a well-thought-out and well-executed, high-quality menu, a well-trained, friendly, knowledgeable staff and do all of that for a very reasonable and value-oriented price.

Is there a capital limitation or other barriers to market entry in Hawaii?

I think the available real estate is one barrier, because the concentration of demographics is limited to certain areas, principally on the southern or western coasts of the major Islands.

Is it more important for restaurant chains to offer consistency or diversity from location to location?

I think in a small market like Hawaii, diversity is very important, even throughout the same chain. We've only repeated one of our concepts, and that's Duke's. That was because we felt we could make it successful on Kauai. We learned a long time ago, if you can bring locals and visitors to the same place and make them interact, you've got a winner on your hands, because locals need a nice place to go to. Then the visitors ask, "Where do the locals go?" So if you can blend them and they can coexist happily with a nice local decor and music and good management and menu and price, you've got a winner.

What is the correct way to do the Hawaiian-themed restaurant?

Establish a sense of place. There's a lot of canned aloha out there, but there is a true spirit of aloha, and if you can capture that spirit in your management and staff that will be reflected in your guests. You also have to honor the traditions of Hawaii, in a very respectful way and with integrity. People will see right through you if you're being fake.

How does operating a restaurant in Hawaii differ from the Mainland, and what are the strengths and weaknesses of each place?

We originally felt our Hawaii restaurants might be the most prey to the ups and downs of economic cycles. Arid they did suffer greatly for a while after Sept. 11, while our Mainland restaurants were still easily accessible to our guests. However, the great thing about our Hawaii operations being in high demographic areas is that they're busy seven nights a week. Every night is New Year's Eve. On the Mainland, they have these pesky little things called Monday through Thursday. So ironically, although Duke's Waikiki goes dinner-for-dinner with Duke's Huntington on the weekends, we're making more gains here on the weekdays.

How are recent world consumer trends toward healthy, fresh and natural foods affecting the restaurant industry?

American diners are becoming more and more sophisticated. They pay attention to great cooking vs. just large portions. They're more sensitive to ingredients, and they understand foods of different cultures, like Indonesian and Thai foods, which are very healthy. The trend is away from larger, high-protein meals into a little bit lighter meals. They want more salad, and perhaps more appetizers, then they'll share a main course. We haven't put in the lazy susans yet, but people love to graze and I think people probably end up ordering more things that way.

In terms of the industry's financial expenditures, what changes do you predict in the following year?

No. 1 is insurance. Our experience with insurance is that it's getting very, very expensive. That's inclusive of liquor liability insurance, workman's compensation, health care costs -- insurance overall is just a very real, very high cost factor for restaurants. Another one would be labor, as costs rise along with the minimum wage. Ironically, food and all of our fish and meat costs remain fairly stable.

What are the service industry trends that you feel you have to be most attentive to as you look at your own goals and strategies over the next two or three years?

We just have to take unbelievably good care of each individual customer. I think there's so much indifferent or even bad service around that you need to stand out and just really train your staff to take great care of each person who walks in. And I think everybody got that once we saw no one was coming into restaurants after Sept. 11. You certainly appreciate the hand that feeds you. I think companies that continue to add higher service, even at the cost of higher expenditures, are going to win. People appreciate quality, friendliness and sincere service and will seek out those companies that give it on a consistent basis.

RELATED ARTICLE: David Allaire

AGE: 53

EDUCATION: Point Loma High School, San Diego, Calif., 1966; University of California at Santa Barbara, B.A., Political Science, 1970

MILITARY EXPERIENCE: U.S. Naval Air Reserve

WORK EXPERIENCE: Senior vice president-Hawaii operations. vice president-Hawaii operations, T S Enterprises Inc.; general manager, Kimo's Restaurant; waiter. Chart House Lahaina and Lahaina Broiler

HOBBIES: surfing, sailing canoe, tennis

FAMILY: wife, Jackie; two daughters, Nicole, 6, Danielle, 20.

RESTAURANT REALITY: David Allaire says people appreciate quality, friendliness and sincere service.