The Kona Sugar Company started in 1899 with ambitious plans to create a major sugar plantation in Kona. From 1899 to 1926, Hōlualoa was a sugar town; coffee was cut down to make way for fields of sugarcane, which surrounded Hōlualoa. The sugar plantation carried the region’s economy, and Hōlualoa became its commercial center. But water was not sufficient to properly process the cane; in 1903, the company went broke.

Sugar’s collapse spelled economic ruin for many people. Coffee kept Hōlualoa alive, but just barely. Young people looking for employment left North Kona in droves, finding work in Honolulu or the mainland. It was at this time (1926,) when Zentaro and Hatsuyo Inaba opened their 11-room Kona Hotel in 1926, they advertised “Rooms and Meals”. They also welcomed the traveling salesmen and the occasional tourist traveling from Hilo, via Volcano.