After upgrading its marketing and services to franchisees, Coast Hotels & Resorts, Vancouver, Canada, says the return on investment is validating the cost.
Although the economy remains troubled, travel on the U.S. and Canadian Pacific coasts has rebounded. Coast, which has a portfolio of 28 properties in Canada and 12 in the United States on the Pacific coast, reported a year-on-year RevPAR increase of 11.4% in 2011 and 8.6% in the first quarter of 2012.
To find out more about Coast’s marketing efforts, operating strategies and expansion plans, HOTELS recently spoke with Doug Rigoni, Coast’s executive vice president and COO.
HOTELS: How is Coast working to drive revenue at its hotels and save on costs?
Doug Rigoni: Within the last 12 months we have dramatically upped the level of expertise that our company offers to franchisees. We brought on a revenue manager in January, and she has tremendous experience with a number of large franchise companies.
We rebranded the messaging for all our hotels. We like to capture the essence of our properties. We have kicked up the level of marketing that we are doing
When I talk to franchisees, there are a lot of companies that don’t do this kind of marketing. For example, we have done direct marketing with Seattle’s Paramount Theatre for Broadway Across America productions. The response from guests has been amazing.
HOTELS: What are some other marketing initiatives Coast has taken?
Rigoni: What we did is go to each of the properties, we met with the hotels, studied them and listened and drew out the essence of the property in the new messaging. The Benson, located in Portland, Oregon, was “legendary,” a reference to its stature and 100-year history while The Roosevelt is “Downtown and Pine,” referring to its location in Seattle.
It’s not about us as the franchisor, it’s about the individual properties and the local experiences guests are going to enjoy it’s very experiential.
HOTELS: Do you have any success stories from hotel operations you would like to share?
Rigoni: Here is a fun one. A couple stayed at The Benson that had married there 22 years ago. They were married there on a Friday the 13, so they wanted to come back to The Benson and stay in a room that had a 13 in it. Well, The Benson has neither a 13th floor nor any rooms that end with the number 13. However, the staff made it work as they put them in 1134.
HOTELS: What do you think about the current state of the market?
Rigoni: This summer has been a very good summer on the West Coast. It will be interesting to see how it flows through the elections to next year. The acceleration of the market was really wonderful to see. It would be difficult for me to forecast sustained growth into 2013. I would expect that it will not grow as robustly, that growth will level off going forward.
HOTELS: Given that, what are Coast’s prospects for portfolio growth?
Rigoni: It is interesting how when economies are good, your prospects for growth are good. However, hotel owners, they are about capturing their fair share and how you can help them, so when the economy is down, that is a great time to consider us.
Key markets are Arizona, specifically Phoenix and Scottsdale. We have a strong customer base in Western Canada, and our Canadian customers love traveling to the desert in the winter, and there are so many direct flights from Western Canada to Arizona.
San Diego and Los Angeles are important and San Francisco is so hot now. The demand on the West Coast is very strong this year, even with the unemployment numbers.
HOTELS: What is the typical ownership/management structure at Coast hotels and how will you expand?
Rigoni: We own, we manage and we franchise. Of our 12 properties in the U.S., we own/operate four and we franchise eight. We are looking to grow through acquisitions with equity partners and also through pure franchise agreements.
As part of this company, as an owner, I understand hotel ownership from an owner’s perspective. We will not ask an owner to do something we would not do as owners, we don’t ask our franchisees to spend a lot of money on things that benefit the brand, it’s all about driving revenue at the hotel. Our overhead is low and our fees are lower than the large franchise company. We don’t have a lot of people we have to support, but we have these services hotels can use to drive revenue at the property level.