Resort Operations and Management - La Costa Resort and Spa - Case Study Example

Part A: Resort overview The location and the facilities of the resort – La Costa Resort and Spa is in California, situated north of San Diego in Carlsbad. The unique feature of this resort is facilities for all age groups. There is a Kidtopia for kids, that spreads in 6,000 sq ft area; Vibz, which caters to the teenagers. The resort has a 100,000 sq ft of meeting space in both indoor and outdoor. There are two classic golf courses. For past forty years, PGA Tour events have been taking place here and that assures a first rate tennis court for the tennis lovers. For the connoisseurs there is a facility for California coastal cuisine. The main reason for visiting the resort – La Costa Resort and Spa was set up in 1965 as a resort for relaxation and rejuvenation. Now they have added a new spa as part of the renovation. People can relax in a 15,000 sq ft courtyard that is totally in the outdoor and enjoy the thundering waterfall and spa café. They can pamper themselves with massage, body treatment and tonics. A major attraction at this resort is the Chopra Center. This is a center for Ayurvedic therapies aimed at the alignment of mind and body. There is the acclaimed Yamaguchi Salon and a series of special events all round the year. For the privacy seekers there are VIP suites who may like to experience the soul-stirring facilities of this resort without any disturbance. The resort provides luxurious therapies like - couple’s treatment, Day spa journeys, massages, facials, body treatment, private hydrotherapy or a tub bath apart from the Yamaguchi Salon and Chopra center for well-being. The style of the resort – It has been declared No. 2 Most Family-Friendly Resort in the U.S.. It has different facilities for all age groups and all kinds of interests. Its one of its kind luxury hotel resort. in America. It exudes Spanish Colonial charm and spreads in 400 acres of lush gardens. Situated in sprawling coastal foothills it is the place that is synonymous to relaxation. The ambiance is soothing and it has a whole range of restorative treatments. They have recently added few more services like 100 minutes of La Costa Massage, 100 minute of Deep Tissue. They are also providing a 100 minute Indoceane which is a shorter version of Indochine Indulgence. This is being promoted as a special preview to the Signature ritual. The transport infrastructure- It is connected by three airports – San Diego airport is 35 miles from the resort, Orange Country John Wayne Airport is 50 miles and Los Angeles International Airport is 90 miles. It takes just two hours from the Resort to the Palm Springs. For the shopoholics, it is at stone’s throw from the shopping area of San Diego. The beaches are also quite close to the resort. The climate – The weather here is nice with cooler mornings and evenings. The interesting thing is that one can find variations in weather in the same place. There are four different forecasts for each day- coast, inland, mountains and deserts. People can move to their preferred weather area and that is an interesting concept. The ocean is always cold but some people like to go in anyway. The current target markets- There are various modes of transport available for coming to this place. Car, airplane and trains are the most popular modes. If one is coming by car from Los Angeles or San Diego then Interstate 5 is the best option. Most of the people fly directly to Lindbergh Field, San Diego. There is one small commuter airport in Carlsbad also called Cerlasbad McClellan Palomar Airport. One can catch flights to Los Angeles via United Express. The other route is to Pheonix, AZ via U.S. Airways. For coming by train one can get down at Oceanside, which is just outside Carlsbad. Both Amtrack and Metrolink have regular trains stopping here. Thee is a commuter type train as well running between San Diego and Carlsbad. In Carlsbad city there are two Coaster stations – Poinsetta which is close to Legoland and Carlbad Village station which is close to the village of Carlsbad. Cars and flights are more popular modes as most of the people come here on a family holiday. There are many motels for the road travelers. Being a family destination, safety and points of interest are the main concern of the visitors. They like to find out if it is a safe place to be in with family. Many parents are concerned when they are coming over with teenage children about some interesting things for the teenagers. There have been some negative news about crime in the Oceanside that creates concern in people. Some people come here as an extension of their visit to San Diego. There is another place called Four Seasons in its vicinity and people may choose between the two as a luxury trip. Another option is Grand Pacific Palisades Resort. La Costa has both water games and golf course whereas the other two have either of them. Another factor that works in its favor is its location. Being very close to the shopping area and a busy road, it is in midst of the activities. The area around is also funky and so is the resort after its renovation. External Analysis of the country in which the resort is located – California is known as the Golden State. The Sunset Cliffs at San Diego are surfing destinations, San Francisco is known for its culture, Napa for its wine, Badwater for being the lowest point and Mount Whitney for the highest mountain. California a very large state , spreading in 423,999 square kilometers. Los Angeles and San Diego are two largest cities that also are among the top ten in the U.S. North America is one of the major markets for international tourism. This has encouraged development of new resorts and tourist destinations. To analyze the state of tourism in USA, The key factors to be considered are: - 1.Changes in political positions and legislation that may affect future outbound tourism – According to the Travel Business Roundtable which is a group of tourism industry CEO’s, the overseas visitors get an unfriendly treatment at U.S. entry point and that is driving the tourists away. It results in huge economic losses. TBR had done a survey of 25 mayors of US. Out of these 19 mayors were from top 20 destinations. 80% of them said that the uncertainty and unpredictability discourages the tourists. Same number of participants said that the treatment of the tourists by U.S. immigration officials is a major factor for decline in the numbers. It has been accepted by the head of U.S. Customs and Border Protection that it is an enormous challenge to balance welcoming the tourists and protecting the security of the country. The immigration reform has been stalled in the Senate but it is being hoped that something will be done to improve America’s visa and entry problems. The bill is not likely to be passed but even if some of the amendments are pulled out of the legislation and if they can be passed separately, it will help the travel industry. Since September 11, 2001, USA has lost about 60 million international tourists. This is mainly due to 9/11 disaster. Orlando that attracts maximum number of international tourists has a breakup of more than 50% from Europe, 24% from Canada, and the rest from Middle East, Asia and South America. This place has also seen a decline in numbers. Only two cities have seen a growth in tourist traffic and they are Philadelphia and New York. The reason behind it has been aggressive marketing. 2. Trends in society's values and habits – Another analysis done by Zogby International shows that the American image in other countries depicts aggression, intransigence and lack of understanding. In a survey done by BBC, 71% of the participants did not believe that Americans have a positive influence. This figure was only 60 % two years back. This shows that the general opinion of Americans has detoriated. According to Zogby, people from the middle east like the Americans and their values but they do not like their policies. Along with unfavorable exchange rates and strict visa requirements, the American image also one road block for international tourism. 3. Economic conditions and growth forecasts – Since exchange programs improve the image of America, government is planning to double its budget of exchange programs. But what counts more is the promotional budge. Currently it is less than $4 million. And that too is focused only on Britain and Japan. Although the government is concerned with fall in tourist traffic after 9/11, the exchange program may not bring the results fast enough. They will have to reach out to the people and market America as a safe and warm tourist destination. These factors affect the resort as much as they affect all other American destinations. Otherwise the resort will be mainly catering to the internal tourists. A small segment of local tourist is alright but total absence or very low international traffic is not a good sign for a luxury resort. With government’s concern and steps in this direction, they can hope to see an increase in the international tourist numbers and hence the profitability. The Internal factors – The internal factors are mainly competition, location, domestic and international markets, personal disposable income, etc. The location of the resort is near two major cities and that gives it an opportunity to attract both domestic and international tourists. The working population of these cities might see it as a quick weekend get away. International tourists normally have these major cities on their travel schedule. That increases the chances of their visiting the resort. An international tourist may not like to miss out on the activities of a city. Here also the location may be favorable for the resort. There are few other resorts in this area like Four Seasons, Beach Terrace Inn, Best Western Beach View, Beach Terrace Inn, Tamarack Beach Resort etc. Out of all these, only Four Seasons can be called a competitor. Other resorts are much below standard in service and other facilities. It seems to attract a sizable share of domestic travelers who want to come here to celebrate anniversaries or birthdays or want to take the kids out. Since they find the place favorable to their requirements, a repeat visit may be expected. Recommendation are quite high. The SWOT Analysis – The renovation is a good approach and has given the resort a new lease of life. The biggest strength of the resort is that it provides a mix of all. Those who want to relax can do so and those who want to be on the move can also do so. There are activities for all age groups and that is a very important area for a family resort. Today’s families are governed by children’s choices. If the kids are happy, the parents are more likely to come back here. As compared to the reviews of TripAdvisor Traveler rating Four Seasons it gets lesser points on rooms, service, value, cleanliness and pool. These are 3.5, 3.5, 3, 4 and 3.5 respectively whereas Four Seasons has got 4.5, 4.5, 4, 5, and 4.5 for the same. While the presence of a good competitor makes the area known for good luxury resorts and that can be an opportunity, not keeping up to the mark may be a threat. According to the survey ratings, it seems that La Costa needs to improve its quality. A Guest Activity Program for one week (May- June) – Let us consider a family of four – Husband 35yrs, Wife 30 yrs, children 8 and 5 yrs. This is a typical American family with both husband and wife working. Managing work and home and children leaves them with no leisure time. This is a trip that they are giving themselves as a reward of leading a hectic life. They are looking forward to a relaxed and fun-filled week at this resort. Day 1- Arrival in the morning - Check in - A relaxed lunch at the Legends followed by rest - Evening trip to the beach – dinner Day 2 – Husband spends the morning at the Golf course, wife can go to the spa and children can go to Kidtopia – Lunch - afternoon and evening at the poolside – dinner Day 3 – Children go to the pool and both husband and wife go for a massage – lunch – evening shopping outside the resort. Day 4- Entire family goes to the health club to work out - Lunch – relax near the pool side or in the pool – dinner Day 5 – Both husband and wife go for tennis – children go for water games – lunch – massage for the whole family – dinner Day 6 – Husband goes for golf – wife treats herself to a beauty treatment – children go to kidtopia – lunch – massage for the entire family. This Activity program will give them a total change and they will be feeling rejuvenated at the end of the week. Since Spa and massages are the major attraction, they would have availed it to its fullest. Part B La Costa is situated in a good location and has certain advantages. But as discussed in the SWOT analysis above, it has to review its position on a regular basis and keep pace with the market. There should be a strategic plan that the resort may be able to pursue in the future. This will allow the resort to plan for change and to maintain its position within the market place. By maintaining its position the resort should be able to: Increase sales - Increase profitability - Increase market share - These objective are described as a Strategic Plan. There are four strategic options that can be pursued: - 1. Market Penetration- This basically means capitalizing on an organization's existing understanding of its markets and its market position/brand image. La Costa is a luxury resort. Since that is the brand image and it has been so far known for the Spa, it should keep up that part of the resort in good shape. Apart from one competitor, Four Seasons, it does not have any other competitor. With the existing strategies it has established the image and got some market share. By employing aggressive marketing campaigns it can increase demand from its existing markets. It will need to reach out to the local tourists as well as the international tourists. Attracting more international tourists will also increase its brand value. For that it has to mark its presence on the internet. It can link its website to many other websites for wider reach. It may revamp the content to make it more search engine friendly to attract more hits. Most of the international tourists get the information from the internet, so definitely needs to be expanded. The bookings on the internet can be tracked to measure the improvement. At the same time, physical presence in tourism fairs, both domestic and international will give them more exposure. Another strategy could be time share where I could attract more tourists. The network of sales agents needs to be expanded and more direct bookings should be done. Getting corporate bookings is also a good strategy. The number of conventions and seminars should be increased as that brings in many people and they get a feel of the place. The chances of their coming back as guests or recommending others, also becomes high. Advertising will increase their visibility. They need to hire a good media relation company to handle their advertising. Since it is positioned as a luxury hotel, the advertising should also target that segment. 2. Product Development – One important step in developing the business is by adding new products/services to an organisation's current product/service range. This could include for example a resort adding on additional leisure facilities and marketing these to its current target markets. It has to improve its quality of service and live up to the standards of a luxury resort. The reviews show that the high end VIP rooms are quite satisfactory but the other rooms are not so satisfactory for the price people are paying. This area needs to be looked into. Although the spa services are good and satisfactory, more attention needs to be paid to the general service provided by the staff. The behavior, courtesy and warmth are as much important as the facilities of the resort. Many reviews have shown lack of these factors. In spite of having the best spa and nice pools, if a guest cannot find a chaise lounge, then he/she will feel irritated. Regardless of the category of the room, it should be ready in time with all amenities that it is supposed to provide like clean sheets, towels etc. any lapse on this part has a bad impact with a bad review. Adding other leisure activities can attract another set of people and also bring back the existing clients with a new attraction. La Costa can add more sports activities and may think of adding a new wing like an amusement park that will be a big pull for the children and teenagers. Amusement parks are major attraction for international tourists on a family vacation and that can bring in more of them. 3. Market Opportunities – This includes expansion of the range of markets the resort currently serves. Currently it is serving majority of domestic market. It needs to expand it to international market. The spa and Chopra centre can be highlighted for the international tourists. Europe and Middle East may be more interested in these features as compared to Asia-pacific. If the marketing agencies in Europe and Middle East focus on selling these features and present this resort as the ultimate in mind, body and soul rejuvenation, it will have a good response. It will be a good proposition to have their own sales office in these two continents. With a team of sales agents, they can cover each continent with one sales office. Most of the domestic traffic here is for family holiday. That has been quite a success with families right from pre-marriage stage to grown up children stage have been coming here for spending some quality time or celebrating some occasion. La Costa can now focus on getting the corporate clients and encourage them to use its facilities for rejuvenating their work force. 4. Diversification – The addition of new services/facilities helps to serve new markets. La Costa should be looking at expanding its market beyond its domestic limits and reach out to Europe and Middle East. It can also expand its domestic market from families to corporate bookings. For diversification it has two options – it can go into oriental healing services and second option is to add an amusement park. So far it is a resort for relaxation and has a number of massages and treatments to offer. La Costa can expand their bouquet of spa services with more of healing services. These oriental practices can help build the brand image of this resort as a complete package for relaxation. Keeping in mind the family destination that it is, amusement park will also be a good option to get back some repeat customers and get more international family holiday traffic. Thus these two additions will help to get more international tourists that it is currently lacking. Diversifying from domestic market to international market can be achieved through these two additions. Reference: Homepage, 2007, http://www.lacosta.com/> Accessed on September 23, 2007. Homepage, http://www.usreasort.com/ Accessed on September 23, 2007 Mill, R.C., 2007, Resorts: Management and Operation Review, 2007, http://www.tripadvisor.com/ShowUserReviews-g32171-d216021-r8229065-Four_Seasons_Resort_Aviara_North_San_Diego-Carlsbad_California.html Accessed on September 23, 2007. Review, 2007, http://www.tripadvisor.com/Hotel_Review-g32171-d76354-Reviews-La_Costa_Resort_Spa-Carlsbad_California.html> Accessed on September 23, 2007. Travel Business roundtable, 2007, A survey of mayors regarding declines in overseas travel to America’s cities, June 2007, Tourism Economics , an oxford economics company. Tourist, J.Q., 2007, Immigration reform stalls, but that does not mean there can’t be progress on visa, border issues, Retrieved from http://www.publicdiplomacywatch.com/2007/06/immigration_reform_stalls_but.html Accessed on September 23, 2007. Read More