Travel: Do Big Time Resorts Feel Pinch in Tough Times?

Both high end and chain resorts around the world have to manage the same economic times that chew into our travel dollars.

John Scott Lewinskiby John Scott Lewinski

Though the economy shows signs of recovery, business tied to our travel and recreation are still hustling to draw a larger share of that steadily growing pool of disposal income.

Some say the recent recession slowed the resort and luxury travel business. Others say, while that recession might’ve hurt the mid-range resort business in Las Vegas and elsewhere, the high end luxury travel market was immune to the recession and stayed strong for the last couple of years.

Managing in Mexico

Quivira – a popular resort on the tip of the Baja Peninsula in Cabo San Lucas – braved the ravages of the recent Hurricane Odile and a multimillion dollar renovation just as the economy began to warm up in the second half of 2014. While say

According to Quivira spokesperson Karen Moraghan, decision makers at the Mexican destination saw an overall slowdown throughout the region.

“Even desirable, high-end destinations like Los Cabos experienced a setback following the financial meltdown in 2007-08,” Moraghan said. “As for Quivira, the original real estate master plan and Jack Nicklaus-designed course pre-dates 2008. The owner (Ernesto Coppel) waited it out and built when the U.S. and world economies strengthened.”  

“Success in business, specifically tourism, is all about the timing. Once the economy freshened, Cabo developers regained the confidence to move ahead with new developments or upgrade existing properties. It’s probably a balance between actuarial considerations and the vision (and resources) of the ownership group.”

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Moraghan added, “It should be noted that while most golf destinations are shrinking, Los Cabos is expanding, with three courses opened between Dec. 2013 and Dec. 2014.”

Rather than assume would-be customers have unlimited resources and will come no matter what the economic climate, according to Moraghan, resorts need to stay in touch with their guests to find out what they’re looking for and figure out ways to cater to their preferences.

“Cabo is now one of Mexico’s elite eco-adventure destinations, with ATV off-road tours, zipline experiences and jet ski tours. And, new this year to Cabo is camel trekking, which has proven to be an excellent, popular and unique way to tour the Baja desert.”

Hustling in Hawaii

A couple thousand miles west, the minds running luxury properties on the elite Hawaiian Island of Lana’i are also deciding when to upgrade, when to renovate and what to add to keep the people coming.

Tom Roelens, General Manager at the Four Seasons Resorts Lana’i, said luxury hotels and resorts were certainly not immune to the impact on incentive travel.

“We have seen in more recent times that independent travelers also weighed value along  with a sensibility that travel isn’t necessarily a ‘luxury’ but rather part of one’s experiences during the year ,” Roelens said. “Today, we’ve seen a substantial growth in consumer confidence. There is a trend to more conscious consumption, and a growing appreciation of people and organizations offering products and services that value a personalized and one-of-a-kind experience, craftsmanship, appreciation, culture, heritage and experiences when speaking about luxury these days.”   

While other properties might lay low during recession, Roelens’ property opted to use the downturn as the time to start enhancement programs: “There is less competition for construction labor. Here in Lanai, we started the enhancements to the properties in 2012, including all the improvements.”

The add-ons included the opening of the Four Seasons Resorts Lana’i luxury airport lounge in Honolulu’s International Airport, the introduction of a luxury transportation fleet, newly designed guest rooms and suites, totally transformed public areas and landscaping, new restaurants and additional high end retail boutiques.

“Pools, golf courses and spas,are all very important, and have been included in our enhancement projects, of course,” Roelens said. “Today’s traveler is very much seeking experiential travel, and private experiences that are unique.  Whether our guests are traveling with extended family, their partner, their business colleagues or friends, they come to Lanai to enjoy a very unique proposition and distinctive activities such as clay shooting, mountain hiking and horseback riding.”

So, different economic strata of vacation and resort destinations deal with that problem in distinct ways. From Hawaii to Miami Beach, family budgeted and mid-range properties rely on advertising, marketing and specials. But, the upper, luxury levels of vacation travel can enjoy some amount of insured business as the presence of 1% money bulletproofs their business to some extent — as long as they continue evolving and adding to their attractions.