The word "resort" means different things to different people. Some think of a small cottage operation on a lake while others think of a large hotel with extensive dining, recreation, meeting and entertainment facilities. Regardless of the exact definition, resorts are all in the business of hospitality and the creation of pleasurable and memorable experiences for their guests.
Business is getting tougher for resorts. Customers have become more sophisticated and demanding. With the availability of low air fares, the local resort now faces stiff competition from operations throughout the country. This edition of Lets Talk Business describes a few of the market trends facing the industry and possible opportunities and challenges facing tourist lodging operators in your community.
Changing Market Segments
As demographic, lifestyle and economic characteristics of the population change, so do market segments available to resorts today. Some of the segments that have become more important to resorts in recent years include:
The first three segments are influenced by the Babyboomers. They represent guests who are making more money than ever and are the most sophisticated travelers of any generation in history. They will be setting aside more time and money for travel in years to come.
According to a 1996 study commissioned by the Wisconsin Department of Tourism "The Economic Impact of Expenditures by Travelers on Wisconsin," business travel/meetings and conventions accounted for over half, (54%), of all tourism-related expenditures in the hotel/motel/resort lodging category. Business related travel is a significant portion of the overall travel industry market in Wisconsin.
Changing Consumer Preferences
Along with changing market segments come changing consumer behaviors and preferences. According to the 1997 "Yankelovich Monitor and Consumer Trend Information", consumers, particularly the babyboomers, are time starved, stressed and focusing on the family. As a response to these challenges, the goals and ambitions are defined as "Home and Leisure". Time is an increasingly precious commodity where trust, simplicity, convenience, quality and service are demanded.
Resort guests today seek shorter but more frequent trips, travel closer to home, hassle-free arrangements, and all-inclusive pricing with lots of activities. Resorts are now offering more inclusive packages that offer perceived value to customers similar to that offered by the cruise industry. Some resorts are reintroducing meal plans while others are offering complete themed experiences such as golf or culinary packages.
This trend is also reflected in both quantitative and qualitative studies conducted on the Wisconsin vacationer. Focus group research indicates the increasing need for convenience. Consumers are far too busy in their general day-to-day lives. Packaged activities and quick access to user friendly information is vital to compete in this competitive environment.
How Consumers Make Vacation Decisions
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Watching the Competition
As market segment and consumer preferences change, so do the types of resort facilities available throughout the country. While the number of U.S. resort rooms have not increased as fast as the overall lodging industry, many resort properties have been sold to new investors, renovated and repositioned in the marketplace. Some of the resort concepts that have emerged in recent years include:
In Wisconsin, new tourist lodging facilities are typically smaller in scale, but nevertheless threatening to the traditional motel or cottage resort. In Wisconsin Dells, three new year-round resort hotels are under construction that will feature indoor water parks. Throughout the state, new chain-affiliated, limited-service hotels are being developed. However, many note the charm of the older lodging facilities as part of their attraction to Wisconsin. Consideration should be given to providing modern amenities within the ambiance offered by these Bed & Breakfasts, Cabins and Cottages.
Resort guests no longer want to simply escape for rest and relaxation. They now want to be engaged in interactive activities, adventures and experiential learning. Examples include:
Wisconsin resort operators should continue to keep an eye on national trends that may impact the industry. It is especially important to be reminded of Wisconsin’s large base of loyal and repeat guests. Resort operators should strive to maintain guest satisfaction with service, safety, natural beauty and friendly people, the most frequently mentioned reasons for their positive vacation experiences.
*Drawn from: Resort Investment and Development: An Overview of an Evolving Market, J. Richard McElyea and Gregory Coy, Economics Research Associates, Davidson-Peterson, The Economic Impact of Expenditures by Travelers on Wisconsin-1996, Wisconsin Department of Tourism, 1996 Focus Group Series, Wisconsin Department of Tourism Seasonal Wave Series, 1997 Yankelovich Monitor and Consumer Trend information.
Ryan is a business development specialist with UW-Extension. Scheler is a research analyst with the Wisconsin Dept. of Tourism
All material Copyright © 1997 by the Board of Regents of the University of Wisconsin System. University of Wisconsin-Extension, Center for Community Economic Development, all rights reserved. If you have questions or comments about this page email us at: cced@aae.wisc.edu.
