Compete with a Click

Compete with a Click

hospitality by Jean Gruss | Editor/Lee-Collier

Small resorts can compete with the big boys online. Here's how 'Tween Waters Inn boosted online reservations by 200% in a single year.

Independent resorts don't have the marketing budgets that their giant corporate cousins do, but that doesn't mean they can't score big on the Internet.

Consider 'Tween Waters Inn on Captiva Island near Fort Myers, a 137-room beachfront hotel that includes 19 uniquely decorated cottages. It's owned by Rochester Resorts, a group of investors from the upstate New York town of the same name.

Besides two smaller properties on nearby Sanibel Island, 'Tween Waters is Rochester's largest hotel. It can only afford to spend half the typical 5% of gross sales that larger competitors generally spend on marketing.

But with some ingenuity and creativity, the resort revamped its Web site and promoted it widely. The result was a surge in online reservations, increased Web traffic, publicity in travel magazines and thousands of dollars of savings in printing and mailing costs. The effort also captured four Flagler finalist awards for excellence in tourism at the recent Governor's Conference on Tourism in Boca Raton from Visit Florida, the state of Florida's tourism arm.

Working with a Sanibel-based branding firm called Noise Inc., 'Tween Waters' general manager, Jeff Shuff, wanted to boost online reservations. That's because they're less costly than generating business from travel agents who typically require a 10% commission.

What's more, South Seas Resort, a 465-room resort just down the road on Captiva owned by the giant luxury chain LXR was about to reopen after two years of renovations following Hurricane Charley.

Shuff won't share financial results. But he says the hotel's marketing efforts have boosted occupancies and revenues, far outpacing the general hotel trend in the Fort Myers area.

Come to a better place

Working with Noise Chief Creative Officer John Sprecher, Shuff spent six months in 2005 redesigning the hotel's Web site (www.tween-waters.com). They launched it in November 2005, just in time for the hotel's 75th anniversary in 2006.

The 30-page Web site, dubbed "come to a better place," cost 'Tween Waters $20,000. But Shuff says it was well worth it. For example, visitors downloaded 5,000 brochures last year that would have cost more than $3,000 to print and mail.

The Web site was designed with search engines in mind. For example, Sprecher made sure the site software included "meta tags" that make it easier for search engines such as Google to find using keywords such as Captiva, Sanibel, resort and hotel. Type "Captiva resort" in Google's search function and 'Tween Waters regularly appears among the top three search results.

Once users get to 'Tween Waters' site, it's important to make it easy to book a room online. Every one of the site's 30 pages lets users book with a reservation link. Previously, users had to click to another page to book online.

Online booking is the holy grail of hotel reservations. That's because it bypasses travel agents. Now, when someone books online at tween-waters.com, a Chicago-based Internet service called TravelClick handles the back-office functions and charges 6% commission plus $5 per reservation. Although that's less than the 10% travel agents charge, it's still enough of a penalty that Shuff is considering buying a property management software system that would include online booking via the Web.

What's more, 'Tween Waters can sell other things on its Web site. Now, it asks anyone making a reservation whether they want a $35 welcome basket of wine, cheese, crackers and fruit when they book. "I sold 10 baskets last Friday," Shuff says. They're considering expanding e-commerce on the site to include apparel and other items from the resort's gift store.

Shuff and Sprecher took advantage of the resort's anniversary by promoting a chance to win 75 two-night vacation packages at the hotel. To enter, a participant had to provide an email address and could opt out of receiving future promotions via e-mail. Only 1% of the respondents opted out of receiving future promotions.

The hotel had never collected guest emails in the past. But by the time the promotion ended, it had gathered 15,000. What's more, the giveaway garnered international media attention when the resort distributed a news release announcing the contest, including a spread in a British magazine that focuses on Florida.

Subsequently, Sprecher landed airline partnership deals with Midwest Airlines and USA 3000 for 'Tween Waters, which boosted the resort's database of prospects to 50,000 today (see related story).

Building your own prospect list is better than buying one because recipients are far more receptive, Shuff says. For example, 'Tween Waters a few years ago bought an email list of 50,000 AirTran Airways customers expecting a good 2% response. Instead, it only got about 100 responses, a dismal result. The resort paid AirTran a dime per email address, which worked out to $50 per response.

With its own database, when 'Tween Waters sends emails to guests and prospects with a promotional rate, as many as a third of the recipients open the email and 15% click the link to the Web site, triple industry norms.

The resort plans to expand the site to allow guests to post photos and videos to keep them coming back. Shuff is also thinking about letting guests post comments about their stay, but he's apprehensive because of the potential for harmful reviews. "It's a double-edged sword," Sprecher acknowledges. For example, comments about 'Tween Waters on the popular Tripadvisor.com Web site range from "roach motel" to "dream come true."

Measuring results

While Shuff and Sprecher can measure the number of visitors to their Web sites and whether prospects open their emails, it's difficult to track individual booking trends from promotional efforts. You'd need more sophisticated software to do that, Shuff and Sprecher say.

But bookings using the Web site surged from 5% before the online redesign to 12.5% in 2006 and 20% this year. "This year we're running 24% ahead in online booking," Shuff says. His immediate goal is to get 30% to 40% of reservations via the Web site.

Clearly, the Web and email marketing efforts have paid off in 'Tween Waters' results. Occupancies are up seven percentage points over last year, restaurant and gift-shop sales are up 25% and revenue per available room - an important measure of performance in the hotel business - is 25% ahead of last year at the same time. And the resort has done all this without raising room rates more than 3%.

'Tween Waters' performance this year far exceeds the trends in Fort Myers. For the year through July, Fort Myers hotels have seen a 5.6% decline in occupancies and a 2.6% increase in revenue per available room, according to Smith Travel Research.

Two tickets to paradise

How does a relatively small resort land an airline-partnership deal?

"The fact that it's Captiva doesn't hurt," says John Sprecher, chief creative officer for Sanibel-based branding agency Noise Inc.

Sprecher dreamed up a promotion for 'Tween Waters Inn in Captiva dubbed "Two tickets to paradise" that he hoped would generate a list of email prospects and boost traffic to the resort's Web site. The idea was to get airline passengers to sign up for a contest where they could win a trip for two for a three-night stay at 'Tween Waters that included a seaplane ride, golf, dining and other perks. The partner airline would provide travel.

But he figured large airlines such as Delta or United would snub a relatively small resort property. So he targeted the smaller airlines that were increasing service to Southwest Florida International Airport in Fort Myers.

JetBlue, Spirit, Midwest Airlines and AirTran were among the airlines Sprecher courted early in 2006 on behalf of 'Tween Waters. But a Pennsylvania-based startup airline called USA3000 Airlines was the most receptive. "We wanted a partnership in which we both could build our databases," Sprecher recalls.

Sprecher says the hotel's location on Captiva helped open doors at the airline's marketing department, but it took several months to work out a deal. "You've got to sell it," Sprecher says.

It was good timing because the airline, which was launched in 2001, was just starting an in-flight magazine and was expanding into the Fort Myers area. For the promotion, USA3000 agreed to give 'Tween Waters four full-page color ads in its new magazine, 30-second television commercials on its in-flight television program, a banner ad on the airline's home page, a link to the resort on all e-ticket confirmations, and two round-trip tickets. In return, 'Tween Waters provided the contest winner with a three-night stay at the resort packed with activities that included a seaplane ride around the islands. It also paid $4,000 for a full-page ad in USA3000's new magazine.

The terms seemed to favor 'Tween Waters, but the partnership worked, Sprecher says. "We were aggressive," he says. The first promotion generated a list of 18,000 emails. A second similar promotion with the airline generated 22,000 emails and only about 10% were from people who had entered the first contest.

Now, 'Tween Waters has partnered with Midwest Airlines in a similar contest and it gathered 6,000 more emails.

REVIEW SUMMARY

Industry. Hotels

Company. Rochester Resorts

Key. The Internet can level the playing field for small resorts.