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A Hospitality Marketing Case Study, November 2009

A small luxury hotel prospers in difficult times

Presented by Jamie Holmes and Madigan Pratt

The Challenge
The 2008 – 2009 economic downturn has impacted all businesses. The luxury travel industry is not exempt and in fact, has suffered the greatest decline among all hotel segments1. For Nisbet Plantation, this was only one of thechallenges it faced. While air service to the Caribbean has declined 17%, service to Nevis has become virtually extinct. The island’s largest hotel – a major source of lift demand – closed in October 2008 for 20 months for repairs. Nisbet guests now have to fly to neighboring St. Kitts and take a water ferry to Nevis, making access to Nisbet somewhat arduous. Faced with multiple challenges, many hotelshave taken drastic measures to try to survive. However, Nisbet has remained focused on the basics. The resort has stayed true to its luxury brand, which was built around personal service, and its long-term customer relationship marketing (CRM) program. With a strategy focused on the four P’s of marketing (product, price, place and promotion) and the customer experience, this small, independenthotel is successfully overcoming today’s difficult times. With a limited budget and a lot of ingenuity, Nisbet has fared far better than the region for occupancy and maintained average daily room rates for higher revenue.

Background
Nisbet Plantation Beach Club on the unspoiled island of Nevis in the West Indies is a small, independent luxury resort with 36 cottage-style guest accommodations seton 30 lush acres. The Caribbean’s only plantation resort directly on the beach, Nisbet Plantation has continually earned high accolades from travelers and the travel industry alike for its exceptional personal service. Most recently, Nisbet Plantation was named the number three resort in the Caribbean by the readers of Condé Nast Traveler. For more than ten years, Nisbet Plantation has partneredwith Madigan Pratt & Associates to deploy a Customer Relationship Marketing (CRM) program that builds loyal and profitable customers. This program proved itself by helping Nisbet recover more quickly than other Caribbean resorts after 9/11 without deeply discounting rates.

The Solution
To protect its business, Nisbet addressed each of the four P’s of the marketing mix and how it related to thetotal customer experience, before, during and after a stay.

Product
Nisbet’s management team took steps to minimize the market’s impact by enhancing the customer experience and maintaining fiscal responsibility. Manage staffing Many staff members have been with the resort for more than a decade. They are engaged and committed, directly attributing to Nisbet’s high guest satisfaction. Withgrim predictions for travel, management gathered its staff to discuss the impact and decide whether there should be layoffs or reduction in staff hours. Employees decided to face the challenges together instead of having layoffs. Staff hours were adjusted based on occupancy, but were kept at appropriate levels to ensure consistent delivery of service. In addition, since the staff was involved in thedecision, they remained committed to delivering the brand promise. Cut expenses, enhance the experience Every expense was scrutinized as to its importance on the resort’s operations and to the guest experience. Cost savings were implemented only when it did not have a negative impact for guests. For example, the lowest room category was taken out of service to save on energy costs. However,reservations continued to sell the rooms. When guests who booked these rooms arrived, they received a complimentary upgrade much to their surprise and delight. Expand amenities While many hotels were cutting back, Nisbet was expanding its amenities. Kayaks, sailboards and scooters, which were available through a third party, were added at no cost to the resort.

Madigan Pratt & Associates, Inc....
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