I've been investing in one market for 10+ years and my vendor list continues to evolve and never had the mindset of assembling a team I can rely upon.

I'm sure the BP community would love to be continually updated as well on your progress.

Needless to say we were extremely disappointed and have decided that the best way to expand our network is simply to continue doing deals.  

Do you think it will affect the types of deals they pursue, or will the demand for flexible financing options like private lending continue to grow regardless?

Many of them won't be convinced by facts, such as how much revenue STR's facilitate in and around Asheville, and will continue to push debunked sentiments about affordable housing, but the threat of lawsuits might make them play nicer.

End of rant - continue!

Interest rates atm seem quite high so will ride this out a bit longer (and ratios will continue to improve over time.) 

To me STR and hotel caters to different groups of travelers and so despite competition as long as the travel demand of Hawaii remains (as you pointed out is a robust assumption) I think both will continue to do well.  

Functionally, it operates as a 2-story home since the downstairs area has multiple windows in each room and plenty of natural light.

I'd expect prices to continue to appreciate, so the longer you delay, the more expensive things may be.