It hasn’t taken the local lodging group long to figure out that recessionary economic conditions require a Plan B marketing strategy – a more innovative and aggressive approach to putting “heads in beds.”
John Branciforte, director of sales for Cheyenne Mountain Conference Resort, said his corporate and group business typically accounts for 70 percent of revenue, but, during 2009, that statistic will shift to 55 percent or 60 percent because of canceled or delayed meeting plans spurred by the recession during mid-2008.
But the resort’s sales force doesn’t plan to give up market share without a fight.
“We do it all – corporate, military, leisure stays. Fortunately one of our primary business streams is government,” he said, adding that economists say that’s currently the fastest growing sector, and the Pikes Peak region is home to so many military facilities. “The government bases its per diem on revenue per available rooms so we are paid at a double-digit rate. Denver is in the low $100s. In the future, we’d like to be less dependent on it, but for now, it’s great to have as a base.”
Longtime corporate clients like Texaco, British Petroleum, KPMG and Deloitte might drift off the schedule during 2009, but Branciforte is focused on preserving those relationships for the long term.
In addition to “sharpening his pencil” on upfront meeting package prices, the resort property is now offering free airport pick-up and drop-off.
Another program that has yielded impressive results is Cheyenne Mountain’s rebate program, which rewards companies with more than $25,000 in meeting billings with a 2 percent rebate; those who spend $50,000 get 5 percent back.
“It’s our own ‘stimulus plan,'” Branciforte said, adding that the full-service meeting center also has shifted more resources to the leisure market – adding one-, two- and three-day “sales” throughout the year. “We also spend a lot of time training our employees to understand why each company is meeting and what they hope to achieve. A lot of new products and relationships are built when people get together to exchange ideas.”
The Cliff House in Manitou Springs has honed a business model that combines attracting regional and local business meetings, as well as special events, weddings and receptions. Before 2008, that strategy was working well, winning the historic property national recognition from Travel and Leisure, Wine Spectator and Bon Appetit magazines, as well as consecutive AAA Four Diamond awards.
In the past, group business consisted of about 70 percent of total revenue, but 2009 will be different, said Sales and Catering Manager Kristin Eurich.
“We will probably do about 30 to 45 weddings this year as well as renewal of vows ceremonies, receptions and other social events,” she said. “I’d estimate this year group business may fall to 60 or 65 percent of the total. And what we’re really finding is that that most of our brides are more price conscious, opting for slightly simpler meals or reception arrangements.”
General Manager Paul York said that in order to keep group business, he’s been getting more aggressive in his pricing, moving from a la carte services to more packaged meetings.
“What meeting planners really want to see is a price per attendee per day,” he said. “While we’re trying to keep prices down, we’re also adding value with a new wedding facility that can be opened to an adjacent patio. We also just bought 12 executive chairs requested by one repeat business group for their meetings.”
With his food and beverage revenue – once a dominant income generator – off for year, York is opening the casual Red Mountain Bar and Grill, which overlooks downtown Manitou Springs, to attract new visitors.
“Our indications are that 2010 will be better,” he said. “For now, our ownership is going ahead with plans to renovate and expand the former Wheeler House across the street, betting on the future.”
The Broadmoor Hotel – the city’s five-star, crown jewel of resort hotels – might seem immune to economic downturns.
However the recession hit where it hurts when national corporations and financial services companies, which have been the hotel’s premier clients, were branded “irresponsible” by national media and the new administration.
“We’ve had to fight the perception,” said Vice President of Sales and Marketing John Washko. “As a result, we implemented our ‘Broadmoor Guarantee,’ which assures companies and their meeting planners that we are a responsible choice. If they’re not satisfied with us, they don’t pay their bill.”
In order to meet and exceed expectations, the hotel’s food and beverage staff have suggested ways to save on costs – and more services have been included in package pricing.
But that was just the beginning.
With the help of its advertising agency, The Broadmoor has kicked off an all-hands-on-deck marketing and advertising campaign, designed to win a larger share of the leisure and group event market.
Part of that campaign included a three-day half-price sale, conducted through a variety of untraditional Web sites and with a regional face-to-face sales blitz in Denver and other regional cities.
The result has been “significant” room-night bookings, Washko said.
“We kicked the 50 percent-off rack rate sale on April 24,” he said. “When I walked into the office on Sunday, April 26 at 11 p.m., an hour before the sale deadline cutoff, our whole staff was on the phone taking calls and returning voice mails – and there were 40 calls in queue, waiting.”
In the meantime, a thaw in frozen Fortune 500 meetings has begun.
“On CNN the other night the CEO of Texas Roadhouse, G.J. Hart, was interviewed about why his company chose to hold a big employee event in Orlando during this recession,” Washko said. “Asked if he was uncomfortable with his decision, he said ‘no.’ He reinforced that meetings have measurable value. ‘These associates make us successful,’ he said. ‘They deserve this investment in their business.’ I just wish the head of AIG had said the same thing – that’s how you get through the down times.”
While the surfing continues, and the waves are still high, most area hotels appear to handling choppy economic conditions.
But wait. There’s a new 300-room Renaissance hotel with 50,000 square feet of meeting space scheduled to open during 2010. What will its impact be on the current hospitality mix in Colorado Springs?
“I’m not worried,” Branciforte said. “In fact I welcome it. In the hospitality business, if you’re not expanding, you’re dying. The meeting planners will have a new reason to look at the Pikes Peak region – and while they’re in town they’ll look around at Cheyenne Mountain (Resort) and other properties. We’ll be asked to submit proposals in response to their RFPs. I’m excited. And 2010 into 2011 will bring a return to a new ‘normal.'”