Spill proof

Paul and Barb Garfold started noticing the impact of the BP oil spill just before Memorial Day, much earlier than many other Fort Myers Beach businesses.

Credit the Garfolds' investment in technology and their experience as executives for Fortune 500 companies. Paul Garfold is currently a senior vice president at Pittsburgh-based PNC Financial and Barb Garfold is a former steel-company marketing executive.

The Garfolds own and manage Lahaina Island Accommodations in Fort Myers Beach, assisting homeowners rent165 condos and single-family homes with just four employees. To do that efficiently, they've invested tens of thousands of dollars in technology that tells them nearly everything about their customers. The couple acquired the business in 2005 from Larry Kiker, now the mayor of Fort Myers Beach.

So when calls started to slow and guests started canceling their vacations here, the Garfolds immediately filed a claim with BP using data gathered with their sophisticated software. They're now offering a “white sand guarantee” and promise full refunds if the oil spill forces the closure of beaches. They're lowering rates another 10% to 15%, on top of the 15% drop since the financial crisis began in earnest in the fall of 2008.

So far, call volume is down about 20% since the spill and four guests have cancelled their stays. Others have changed their reservations to later this year or even next year.

Fortunately, about 40% of guests in the summer are Floridians. “For them it's more weather than water,” Barb Garfold says. Another 30% are international travelers who still plan to visit the area.

The company doesn't have business-interruption insurance and Paul Garfold says even if he could find coverage it would probably be prohibitively expensive. He acknowledges that Lahaina probably wouldn't offer the “white sand guarantee” in the busy winter season because it would be too risky. The company draws 70% of its revenues in winter, charging owners an 18% commission on rentals (the Garfolds decline to cite annual revenues).

Because the Garfolds have invested in technology, they have a detailed database with 6,000 customers that they can mine. They pay Navis Technologies $2,700 a month for software that automatically tells them detailed information about callers before they pick up the phone. “Banks do that automatically,” says Paul Garfold, who oversees the operations of PNC's wealth-management division. “We track every campaign and the software shows the ROI on each one.”

Navis provides Lahaina with unlimited toll-free numbers so the Garfolds can track the effectiveness of any marketing campaign. The company spends about $125,000 annually on marketing, mostly Web-based (its own Web site is iPhone enabled).

Lahaina pays employees bonuses to accurately gather information about callers and make follow-up calls to secure reservations. Barb Goldfarb tells the story of how it took seven months to book one customer. It paid off because the guest ended up paying $7,700 to stay seven weeks.

Lahaina has been so successful that the Vacation Rentals Managers' Association recently awarded the company “best of class” in reservations excellence. Barb Garfold was also selected as a speaker at the annual industry conference this year.

With so much data at their fingertips, the Garfolds bet they could weather the negative effects of the oil spill better than their competitors, even if no oil ever washes up on Fort Myers Beach. “Technology is such a great leveler,” Paul Garfold says.