Keeping the party going.

It will be years before Gregg Yamanaka's mind obscures the details of a dinner on Maui. The 41-year-old executive in late February was considering a move to Mary Charles & Associates, a $15-million company that organizes events and entertainment for corporate group travelers to Hawaii. Maui

was Yamanaka's first glimpse of a Mary Charles "event": "There were 800 people in the Young Presidents' Organization--they had come from all over the world, they go all over the world, they're jaded," he says. "For their opening night banquet, Mary arranged for all-white tables along the fairway at Makena Golf Course overlooking the ocean, and women in white holokus holding candles to light the way. Then when it got pitch dark, the green became a stage and Carolyn Sapp came out into a spotlight singing 'God Bless America,' with the ocean erupting in a curtain of fireworks."

It was impressive--a one-shot that dazzled the audience and helped convince Yamanaka to leave the presidency of real estate conglomerate Resco Inc., for the number two post at MCA. After climbing corporate ladders at Honfed and 1st Nationwide banks and a year of fielding reports from the heads of Resco subsidiaries, Yamanaka saw the destination management company as appealingly nimble, with a seat-of-the-pants style that reflected Charles's sales background in a competitive field. In nine years MCA had grown to handle, by Yamanaka's estimate, about 55 percent of the $250-million local market for servicing corporate groups--which meant doing airport lei greetings, arranging submarine rides, booking speakers and movie stars, and putting on theme parties for corporations that offer Hawaii trips as incentives for top producers.

By the time Yamanaka came aboard in March, Mary Charles was also heavily into diversification. The nine-year-old company's phenomenal early growth had stalled with the fortunes of corporations caught in the national recession and the rise of competing destinations. And with the departure of a key executive on the eve of the peak incentive travel season last winter, Charles was looking for a strong businessperson to take over her job of running the firm while she filled the vacancy in sales and servicing. She outlined those plans at a New Year's Eve dinner party and was delighted when Gregg Yamanaka, a silent guest at the table, showed up in her office a few days later.

PARTY ANIMAL. The economic climate was decidedly warmer when Charles started MCA. An Arizona native, she had visited Hawaii midway through her business curriculum at Arizona State University in 1968 and stayed, working as a waitress, secretary at Milici Advertising, and sales and advertising executive for Sea Life Park and Waimea Falls Park.

A decade later she was at Holiday Tours, a wholesale tour package company where her job was to develop the budding incentive market. When Holiday reorganized under new management several years later and laid off its vice president of sales, Charles had established a credible enough reputation that mainland corporations like IBM and The Prudential, and specialty firms that manage incentive travel plans, followed her to the three-person operation she started with her savings in 1983.

The aim, she recalls, was to grow into a company of about a dozen employees. But within two months Simmons mattress company and Sebastian beauty products each sent 500 top sellers to Maui. The surge of business created immediate cash flow that, combined with Charles's client list and pitches to other companies, pushed the venture to 15 employees and a $4-million gross in 1984. "Incentive travel was in its infancy stages and Hawaii was growing as a destination," says Charles, 42. "The travel industry was coming out of a down time, new resorts were opening, the economy was booming."

By 1988 her incentive business had quadrupled to $16 million. The growth came with a built-in vulnerability: That brand of corporate travel boomed between January and June, when companies celebrated the previous year's performance, and in October, when they prepared for the coming year and when conventions were scheduled; in the summer and winter months in between, the drop-off was sharp.

It was to ease the peak-and-valley cycle that Charles in 1986 went after and won a contract to service clients of Flyaway Vacations, American Airlines' wholesale tour package division. The move ensured a year-round flow of arriving tourists who would require at least an airport greeting, transforming Charles's airport staffing from seasonal to permanent mode and streamlining her hiring and training. On the bottom line, the decision translated into an extra 10 percent in yearly revenues.

There was one more built-in twist. MCA's clients were mostly repeaters, who came to Hawaii every few years wanting new activities. Charles, who happens to like parties, from the late '80s found herself doing mental backflips to come up with themes that would seem fresh and off-the-wall. "We probably have more repeat incentive corporate meeting business than any destination in the world," Charles says. "When we started, we did the usual luaus or paniolo parties. Today there are few programs that don't have at least one team-building event and three or four major themed evening functions. Luaus are a thing of the past unless it's a first-time client, or we'll do a twist like a Blue Hawaii party, end it with Elvis and go into rock 'n' roll."

The business was also showing signs of peaking. Revenues rose slowly to $19 million in 1990, when the payroll topped out at 120. In 1991, the numbers slid to $15 million and a staff of 90. "Take a company like Bandag, which has come to Hawaii every three years for the last 15 years. Now they're going to come every five because they have put Puerto Rico and Scottsdale into their cycle. Hawaii is losing business to those places," says Charles. "Couple that with the economy and the Gulf War, and it's been a really tough three years. We're doing everything we can to cut costs without cutting employees."

BRANCHING OUT. With MCA's growth staging an obvious reversal, Charles last year created three subsidiary divisions in rapid succession. Hawaiian Golf University sells lessons with professional golfers at Makena; Events Extraordinaire capitalizes on MCA's specialty by arranging activities and parties for customers who don't need MCA's full services; and Diamond Head Hawaii is set up to expand the wholesale arm beyond Flyaways. Charles's intention was that these would account for at least 20 percent of total sales and, more important, bolster the company's slim margins.

The cost of staging lavish parties--complete with theatrical props, professional performers, limousines and other accoutrements--and frequently shipping items from the West Coast and to the neighbor island resorts favored by MCA clients, pads overhead and eats into profits. Part of Yamanaka's job as president and COO is to find more countercyclical lines, including exploring joint ventures with some of the 600 vendors.

"Our goal now is to see if we can streamline operations as well as reexamine our total client base. We cannot take every client that comes to us," Yamanaka says. "The simpler programs, primarily airport and transportation, can really be handled by others. We want to emphasize what we bring to the marketplace--talent and creativity--and downsize programs that don't have a lot of events."

Prospects for Hawaii tourism, and particularly the westbound market that constitutes nearly all the company's business, indicate its belt-tightening may be prolonged. Charles expects more difficulty in 1992 and 1993 as continued volatility among airlines erodes the fare guarantees that allowed corporations to plan incentive trips to Hawaii two to four years in advance. Without those, she says, the market is diverted to cruises, Puerto Rico, mainland and other destinations.

That lends more of a push to the company's diversification. "In our marketplace we are where we're going to be, and we either have to get a lot bigger or a little bit smaller. We're kind of in the no man's land," Charles says. "That's why we're diversifying--so we can become more manageable from an overhead standpoint and still maintain the excellence."