Outlook Is Positive For The Resort Segment

FORT LAUDERDALE, FL? The resort segment is outperforming the lodging industry by almost double and will continue to prosper through 2000 due to sustained high barriers to entry, significant property reinvestment programs and the value of consumers? leisure time. These trends will drive resort profitability upwards as other segments of the hotel industry struggle with issues such as oversupply and providing value to consumers. In a panel at the Resort Forum held here, Chase Burritt, national director of the hospitaity services group at E&Y Kenneth Leventhal, and several other panelists said demand for resorts is on the rise. Driving this trend is the emergence of a demographic called the ?new luxurian,? which classifies younger wealth, said Paul Leone, president of The Breakers. This consumer group emerged a few years ago and continues to grow, he said. In addition, generational travel? several generations in a family traveling together, and the aging of baby boomers are boosting business in this sector. ?People are looking more and more for quality of experience, especially the baby boomers, and resorts tie in directly with this,? said Steve Weisz, president of Marriott Vacation Clubs International. Consumers are increasingly strapped for leisure time, so when it comes to planning vacations, they want to make the most of them, said panel participants. This translates into minimal time spent planning the vacation. To ensure that expectations are met, more and more consumers gravitate toward recognized names. These can either be brands or well-known independent resorts that represent a certain standard in level, said John Sharpe of Four Seasons. ?Brands do make a difference, they are a promise,? he said. ?Vacation ownership in particular is a way of minimizing decisions made and fixing costs,? said Weisz. With that said, more and more is riding on resorts delivering on their promise. Service plays a big part in being able to meet and exceed consumers? expectations. But a growing concern among resort owners is finding and retaining labor. ?The biggest risk we have right now is the quality of our workforce. Retention is the most important factor when it comes to labor. We invest a lot in our employees and don?t want to loose them after that. Right now, it is hard to find new quality people. We are turning over every stone to create supply of labor,? said Leone. Another major impact on the resort segment is the growth of the cruise business, which many executives said they see posing a threat to the health of resorts over the next several years. ?High-end incentive groups are using cruise ships instead of resorts already,? said Sharpe. ?Once the cruise industry matures and gets overbuilt, it will start discounting and it?ll be even more competitive.? Rising consumer expectations has put traditional resort models under a lot of pressure to change, said Peter Yesawich, president/CEO of Yesawich, Pepperdine & Brown. Resorts have become decompression centers with a strong emphasis placed on value-added amenities that people are willing to pay additional dollars for in order to relax, he said. During a panel that talked about preparing for the new millennium, owners noted that resort dining has become more of a recreation, and spas are a necessity. In addition, watersports and ancillary pool features are in higher demand than ever before. ?You need a broader variety of amenities including f&b venues, watersports and full-service spas,? said Yesawich. ?People are looking for novelty and change. Success is no longer measured by material items, it is measured by quality of experiences. This is driving demand for leisure travel services. Consumers are seeking new resort destinations each time,? he said.