News for the Hospitality Executive
|By Kyle Stock, The Post and Courier, Charleston, S.C.
Knight Ridder/Tribune Business News
Nov. 24, 2003 - The Wild Dunes Resort got a good wallop when Hurricane Hugo roared through in 1989. It took $15 million to patch up the property, but in many ways, the Isle of Palms resort still is recovering.
A new executive running the place and a new way of thinking may have finally restored its luster.
Destination Hotels & Resorts, a unit of Los Angeles-based Lowe Enterprises Inc. that scooped up the storm-battered property in 1990, has never seen the profit levels it anticipated. Last year was a money-losing year. This year, however, matters are looking up.
Wild Dunes' expenses should be about a quarter lower than 2002. Revenues likely will be higher. And the books will show a profit, according to Terri Haack, the resort's managing director and the driving force behind the financial renaissance.
"It's a substantial turnaround when you look at where we were and in a time when there isn't a great upside in revenue," Haack said.
There are a lot of changes, both big and small, that produced those results, and most of them start with Haack, a no-nonsense veteran known for getting results fast. She took the helm in June 2002.
"I've built my career on turnaround -- turnaround in quality, employee satisfaction and profit, and a lot of times you can't say those three things in the same sentence," Haack said. "I certainly don't want to be unkind to the people before me, but I do think that the property didn't focus on the nuts and bolts of the business as they should."
Haack arrived at Wild Dunes amid a storm of a different sort, a threatening mix of recession and travelers left skittish by 9-11 and the fighting in Iraq. Group business, the bread and butter of big golf and tennis resorts like Wild Dunes, was in especially bad shape.
Haack got to work battening down the hatches.
Her major accomplishment to date is a 25 percent reduction in total costs, money that has come mostly out of the payroll. Although Haack didn't lay off staff, she switched a lot of titles and duties and kept some positions unfilled as employees quit or moved on. Now the resort has about 60 managers, rather than 80 or so. A lot of part-time positions have been combined under full-time employees. And management is more aggressive in hiring and firing short-term help.
Haack, who reviews her employee roster up to once a week, puts an emphasis on keeping workers accountable by giving them more responsibility.
Chris Haviland, who has been with the property for six years and is the resort's general manager, said Haack has brought a "renewed sense of energy" to Wild Dunes.
"There is just a higher level of consciousness," he said. "We realize that it's a new day and it's a new environment out there, and we've had to react on the fly."
While Haack was trimming costs, she also was pushing some ideas to help tighten things up. The resort enlisted a buying service to get the best deals possible when stocking its restaurants or upgrading room decor. It also sank $500,000 into a new computer system to keep track of inventory, staffing and where money comes and goes on the 1,600-acre resort.
Haack said investments like these have allowed the resort's profit to increase three times faster than its revenue.
"It was a huge undertaking and a huge amount of money when we needed so many other things," she said. "We needed a lot of sprucing up, a lot of bricks and mortar, but the way I strategize, we really needed to take care of the heartbeat first -- how to manage all the money coming in."
One of the resort's biggest investments was in an overhaul of its marketing. Instead of trying to wrestle Kiawah and other local convention centers for group and meeting business, Wild Dunes is looking to draw more leisure traveler dollars to tide it over until a new, state-of-the-art meeting facility can be OK'd, funded and built.
The new ads target families and are a big departure from the wide-angle golf course and boardroom photos that big resorts so often buy into. Haack said they are intended to tug at people's heartstrings and convey a nostalgic feel.
For example, instead of a picture of a perfectly groomed guest room, glossy magazines like Southern Living will feature pictures of kids jumping on messy -- yet lavish, of course -- beds.
The whole campaign is aimed at grabbing people who want luxury accommodations but still wear flip-flops to the beach, according to Bruce Murdy, president of Charleston-based Rawle-Murdy Associates, an advertising agency hired by the resort to help it with its marketing.
"Most resorts don't tend to go this way," Murdy said. "They tend to go very, very upscale or they tend to be budget-oriented. This is a very distinct and differentiated position."
Whether it's a wise decision to focus its marketing away from group business -- a demographic that accounts for about 27 percent of the country's hotel guests -- is debatable. Group guests tend to provide bigger profit margins to lodgings, according to Meeting Professionals International, the world's largest trade group of people who plan group powwows.
Meeting Professionals' 19,000 members are predicting a significant increase in meeting budgets next year, as pent-up demand hits the market, according to Kelly Schulz, a spokeswoman for the trade group.
Kiawah Island Golf Resort gets about 35 percent of its business from groups, according to Managing Director Prem Devadas.
Devadas expects that number to jump to 45 percent in March when the Sanctuary, a luxurious, 255-room hotel, opens for business on Kiawah.
Wild Dunes' group business, like most lodgings nationwide, took a big hit this year. It also has a relatively old conference facility that is somewhat out of date.
Haack and company say Wild Dunes is not neglecting its group business, but rather playing to its strengths until it once again can promote itself as a business destination.
"I think that a lot of brands have the challenge of maybe getting a little too comfortable with who they are," said Murdy. "Sometimes the marketplace moves beyond who they are, and I think that's what happened at Wild Dunes."
While it appears that Wild Dunes' focus on family travel is paying off, Haack is pushing a master plan to put the shine back on some of the resort's traditional calling cards. The plan would include a new 25,000-square-foot conference building and an overhaul of the resort's swimming pool, tennis courts and golf courses.
The last major capital projects the resort tackled were the construction of the $12 million Boardwalk Inn, which was finished in 1998, and the $8.2 million purchase of the Links golf course in 1993.
"The employees understand that it's the good, the bad and the ugly right now," Haack said. "They understand what's right, they understand what we have to fix, and they understand what's downright ugly and will take a few years."
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(c) 2003, The Post and Courier, Charleston, S.C. Distributed by Knight Ridder/Tribune Business News.