Extreme Makeover: Resort Edition

A resort used to mean a lovely hotel with a beach and a pool, perhaps golf, and more recently a spa. Increasingly, resorts offer everything from extreme sport opportunities, to full-time programs for children, to a second home in the form of condos and time-shares. As resorts evolve and add more expensive amenities, management companies have been feeling increased pressure to ensure that their properties live up to expectations, their offerings are top notch, and that prices don't spiral out of control. Here are some trends to watch, covering a wide variety of issues—from branding to room inventory to property design—that will impact the planning of meetings at resorts for years to come.

The Name Game
Past glory is no guarantee of future success. Any resort that has been around long enough to earn the adjective "venerable" is always in danger of losing its relevance. To maintain market appeal, many of these resorts have embarked upon renaming strategies. The Registry Resort in Naples, FL, which has served as an upscale destination since 1986, changed its name and look last month. Newly christened the Naples Grande Resort & Club, the property has been completely overhauled by LXR Luxury Resorts. John Tolbert, president of sales and marketing for LXR, believes that the name change was an important step in the process of tying the resort more closely to the destination, as well as indicating a connection with the Naples Grande Golf Club, where resort members have exclusive access.

The formerly opulent resort property is taking on a more modern look; with rich, hip colors such as "Hermès orange" the property is clearly looking to retain its discerning clientele, but perhaps skew a bit younger and more stylish. "This is a total transformation of what was a very good hotel into what we think will be a superb hotel," Tolbert explains.

A similar transformation is under way at the Bonaventure Resort & Golden Door Spa outside of Fort Lauderdale, FL, where a change of ownership spurred more significant changes. Tom Ireland, principal partner at The Ireland Companies, bought back the Bonaventure in November, 2004; Ireland was the original owner and developer of the property in the 1980s and spent somewhere between $75 and $90 million last year, to "improve the property to bring it up to above the standard it was in the 80s," he says. The hotel is undergoing "not just a renovation; we're rebuilding some of it," according to Ireland.

For a while, the Bonaventure was being called the Wyndham Resort & Golden Door Spa, but a permanent name change never took effect. Wyndham has been running the property, though Bonaventure management is currently looking for new managers. "We will end up with a brand operating the hotel," says Ireland, and "we are going to put a brand name on the hotel." That brand will be determined early in 2006, at which time the name change will likely take effect, though "we are remaining with Golden Door as the spa operator," so the final name will be The [brand name] Bonaventure Resort & Golden Door Spa.

This middle ground between legendary name and brand resonates with industry members, particularly for the meetings market. "A brand name with a great reputation for delivering successful meetings is a tremendous advantage," says Bob Pfeffer, director of sales and marketing at the Marco Island Marriott Resort, Golf Club and Spa. "A unique or legendary property can help boost attendance and create the right atmosphere . . . A legendary property that carries a brand name is the best of both worlds and is the ultimate for meeting planners."

"People look for the reputation behind a known brand, so they tend to look at chain or branded hotels first. I think they look at 'historic' hotels when they are familiar with the property, for instance, The Breakers, The Greenbrier, et cetera," says Mark E. Ginna, vice president of national sales for Loews Hotels in New York City. "I believe that the consumer, as well as the planner or travel agent, relies on a brand promise when making a travel decision. People don't want surprises these days; they want to be assured of a good experience."

The Pros of Condos
In order to ensure that good experience, resorts are changing in a profound way as properties incorporate condominium elements. The benefits of condo properties include additional financing for the resort and additional owners who have a vested interest in ensuring that the resort is top quality. It also allows some room for experimentation, including playing with the typical resort setup.

While some planners are concerned that shifting to condos will reduce the number of available rooms, or that condo owners will bump groups from room blocks, the reality is not as frightening. Any interruption would likely be limited to the renovation period, during which guest rooms are converted to condos. Following that, there should be no discernable difference between condo properties and traditional hotels.

"From a consumer's perspective they really shouldn't know the difference. It should look like a hotel, act like a hotel, and serve like a hotel," says Scott Berman, U.S. leader for the hospitality and leisure ad-visory group at PricewaterhouseCoopers in New York City. "I think too much is probably made of the condo hotel versus a traditional hotel. At the end of the day there shouldn't be much of a difference at all, aside from who the owners are . . . The bricks and mortar had better operate as a hotel to be successful."

Also, according to a report that ran in The New York Times, with data from Lodging Econometrics and Smith Travel Research, the number of hotel rooms off the market between August 2004 and August 2005 because of renovation or conversion to condos is quite small. The Orlando market lost only 1.8 percent of its total inventory, Anaheim lost 0.5 percent, and Miami lost 1.4 percent. With most of these rooms returning once work is complete, the overall effect for groups should be minimal and short term.

Intrawest Corporation, a Vancouver, British Columbia-based development group, has found success with mountain resorts and has begun exploring other destinations. "Our villages do such a great job in the mountain environment; we thought, 'Let's do something in an urban environment,' " explains John Heiser, vice president for Intrawest Placemaking, part of Intrawest Corporation. Heiser is the leader for the development team in charge of creating and constructing The Village of Imagine, a project under construction in Orlando, across the street from the Orange County Convention Center, and scheduled to open in 2008.

The "village" resort concept has long flourished in ski communities, offering dining, shopping, activities, and guest rooms in a highly planned, coordinated environment. But that concept has rarely been brought to sea level with the same level of success it has found on the slopes; Heiser and his team believe The Village of Imagine and similar developments are poised to change all of that. The Village of Imagine is a 30-acre project comprising two Westin hotels, fine-dining establishments, a spa, boutiques, recreation options, and two lakes—and all of its units are condos.

"The owners can use the unit as often as they like, but most like the rental income," explains Heiser, who says that average use of Intrawest condo properties is in the range of 10 to 14 days per year.

Heiser says planners should rest assured that their groups will never feel the pain of being bumped from condo units. "We have a sophisticated reservation system. Owners can't override that. When [an owner's condo is part of a group's room block] we would put them in a different unit," Heiser says. The owners know going into a condo deal that if their unit is booked then they simply cannot stay in that unit—they must choose to visit at a different time or stay in another unit. Also, owners choose one of two Westin-approved color packages, so décor is standard across units and guests have a consistent experience.

"There is a zoning limit, so each condominium unit can be used 90 days per year and must be a second home, instead of a primary residence," explains Ireland of the Bonaventure's condo units. Ireland also says that his owners typically use a unit for only two weeks during the year—once during the high season and once during the low season—and it is available for rent during the rest of the year.

"The owners pick the time they would like to use the unit a year in advance . . . so you can calculate pretty well how many rooms you have to rent," Ireland says, which in turn means that groups are unlikely to be affected by owners, unless the group books years in advance and during a popular time; even then, disruption will be minimal as usage patterns among owners emerge. The Bonaventure also has a commitment to the group market, since "65 percent of this hotel's business is corporate meetings and association business," according to Ireland.

The Bonaventure is uniquely positioned in that it was originally built in 1982 to be used as condos and many of the units were in the process of being sold before Ireland and his partners decided to operate the property as a hotel. The foresight to develop the property for use as condos meant that the transition would have been relatively easy, had The Ireland Companies not decided the resort needed a great deal of work. "A condominium hotel is a better economic engine for everybody," Ireland says, but "that is a potential problem because there is only so much leisure business out there to fill up rooms."

"In South Florida, I think one of the concerns is that everyone is going to a condominium hotel," Ireland continues. In the span of a few years, "We went from 1,000 condo-hotel units proposed down here to 50,000."

"For the most part," Heiser says that Intrawest's future projects will be condo hotel based. "We're seeing more and more of the convention-slash-meeting-slash-condo-hotel resort development," says Heiser. "Our operators are screaming for more of that."

In response, Intrawest has looked to "create a resort environment attached to the convention market," he says, because the company "is seeing more convention and business travel as part of leisure travel." As such, The Village of Imagine and other Intrawest developments look to occupy every hour of a guest's day by offering spousal and family activities ranging from boating and tennis to wine tastings and concerts. The resort is becoming less of a place to relax for a few days, and more of a place to enrich body and mind over extended stays, while providing opportunities for both business and personal time.

The Crystal Ball
Today's trends will set the stage for the resorts of the future. So what would the ultimate, fantasy resort of the future look like? That was the question posed to KSL Resorts' Incentive Advisory Board at a meeting at the Grand Wailea Resort in Maui, HI. Over the course of two days, this group of incentive and resort industry veterans—with some 900 years of combined experience—was tasked with creating the resort destination of 2010. Here's what they predicted.

The board divided into three groups and although each group developed very different resorts, concrete themes emerged. International destinations prevailed and there was a sense of avoiding destinations that are currently widely used. As people increasingly travel on their own to unique locations, the groups concluded that standard-fare resorts and destinations will not be sufficient in the future. People are looking to explore the globe and although they want the spa and golf, it is important that resorts offer more in the way of activities.

The groups were also careful to include specific details to keep guests in touch with the office. Every group indicated a commitment to "state-of-the-art" technology—in 2006 it makes little sense to speculate on the specifics of must-have technological tools for a 2010 guest room, but the idea for all groups was to create an office space in the room, eliminate the need for guests to travel with laptops, and offer sufficient meeting space at the resort to allow for business to be conducted during the stay.

One team chose to design a hypothetical resort property in Puerto Vallarta, based on the belief that Cabo San Lucas is overbuilt but a great destination and that while there are appealing high-end properties in Mexico, they are too small for many groups.

The property, called La Vida Dulce (The Sweet Life), would have a lifestyle focus. Running $300 to $500 per night, with 350 to 450 rooms—including restricted ownership villas—the resort would incorporate current and expected lifestyle trends, such as a major destination spa, on-property golf (deemed "critical" by the group), and state-of-the-art technology. Moving outside such traditional resort trappings, the group included sailing lessons, cooking and nutrition classes, and eco-tours, as well as high-end offerings along the lines of having celebrities in residence to provide specialized offerings. (Golf clinics with Tiger Woods, anyone?) In an effort to offset costs, high-end items such as sailboats would also be offered for partial ownership.

A residential feel and a noncluttered environment would define the guest rooms and La Vida Dulce would include a signature bath with U.S. outlets, ample storage, and considerable space, as well as enough counter space for makeup and bath products. The group felt that the signature bed idea popular with many hotels has evolved as far as it can go, but the bathroom provides an opportunity to expand the idea into new territory by making guests feel at home and by transforming the bathroom into more of a room. Other high-end offerings include a butler service to take guests to their rooms and assist with unpacking, pressing, and personal shopping.

The second group chose the Tuscany region, specifically a location just outside of Siena, for a resort called Villa Siena, in keeping with a trend toward associating properties with their locations. The property would be created from an old Italian villa, preferably in the Palladio style, which would serve as the central building or for function space. The resort's 175 to 250 rooms, as well as private villas, would offer guests an upscale sleeping environment.

Three restaurants—fine dining, a café, and a daily family-style restaurant—would provide a variety of dining options, and the fine-dining facility would also offer a wine cellar that functions as a private room and wine education center. A culinary academy would complement the wine school and provide additional space for spousal programs, teambuilding activities, and continuing education. The destination spa would incorporate hot springs that are natural to the region. Finally, a youth center would offer educational elements in addition to entertainment, golf would—of course—be on property, and equestrian facilities would provide additional activity options.

An in-house DMC would provide support for groups and be knowledgeable not only of the immediate area, but also of how best to promote the resort to organizations within the U.S. A property expert would make routine calls on U.S.-based companies and present Villa Siena as a both a destination and a hotel using virtual sales tours and videos. Villa Siena would be easily accessible via airports in Florence, Milan, Rome, and Venice, as well as ample rail service, and Siena itself provides a location for dine-arounds and other activities.

Panama has garnered some mainstream attention of late, particularly after Matt Lauer made it a stop on his 2005 "Where in the World is Matt Lauer?" tour, and the third team chose the small country for its resort of the future. Although Panama is unlikely to be on many people's must-visit list at this time, it is a country that Americans are increasingly hearing about and beginning to express interest in visiting—which makes it perfect for incentives and for a unique resort destination in a few years.

The country is considered safe, exotic, clean, and disaster free, and offers virtually any environment a group could want—rain forest, jungle, lakes, the Pacific Ocean, and the Caribbean Sea. Activities abound, including sport fishing, ziplining, and rapids. There is a sophisticated downtown, described by one group member as "Little Miami, but nicer, cheaper, and cleaner." Lastly, the area is eco-friendly, English-speaking, and has decent airlift with reasonable travel time from most U.S. destinations.

The resort itself would offer 300 to 500 all-suite guest rooms, each with a balcony, oversized tub, ample storage, spa products, specialty coffeemakers, and flat-screen televisions. A minimum of 20,000 square feet of function space would include lawn and beach space, breakout rooms, boardrooms, and themed restaurants. The group emphasized a family experience with a fully contained facility for children, offering a camp, pools, and additional activities to keep them occupied without leaving the resort grounds.