Pelican Hill plays the value card
Tuesday, November 30, 2010
NEWPORT COAST, Calif. – Less than 10 minutes into an hour-long conversation, Giuseppe Lama, managing director of The Resort at Pelican Hill, acknowledged a recurring theme.
“I must have used the word ‘value’ 20 times already,” Lama said.
Not quite, but close. Lama is cognizant of the fact that “value” isn’t a word commonly associated with a AAA/CAA Five Diamond property – a distinction his two-year-old resort achieved this year. Nor is “value” often used when referencing a hotel where rooms start at $395 per night and rates can eclipse $1,000.
But it has become the mantra at Pelican Hill, which opened in late 2008 to much fanfare, but in the face of a miserable business climate, particularly for luxury resorts that are heavily dependent on corporate and group sales. The “AIG effect,” a malady that could not have been anticipated, took root just as the resort was opening and, Lama said, helped drag down business in the first half of 2009.
The latter half of 2009, corporate business began to rebound at Pelican Hill and elsewhere.
“All of a sudden, corporate America said, ‘We have to reward our people,’ ” Lama said. “People realized (they hadn’t) done any trips in a year.”
Lama and company facilitated that revival by becoming more aggressive on their rates and leveraging their two golf courses to attract more group business. Lama, for instance, cut spa rates in half Monday through Thursday, in an effort to build a new clientele that would return and upgrade.
“We found that being arrogant doesn’t work,” Lama said.
Steve Friedlander, the resort’s general manager of golf operations, added an extra golf sales manager to ply away group business from competing properties.
“I’ve said it a million times: I refuse to participate in the recession,” Friedlander said. “If there are golf outings happening in Southern California, why aren’t they happening here? . . . We got more aggressive in our sales and marketing efforts. Instead of waiting for business and playing the woe-is-me game, we went out and said we want to get all the market share we can get.”
The resort also has been marketing extensively in cities such as Dallas, Chicago, Minnesota and New York that have direct flights to John Wayne Airport, which is just a 15-minute drive from the resort. Some 220,000 residents in affluent ZIP codes in those cities recently received a glossy, 26-page brochure touting the seaside resort.
Pelican Hill does not release exact numbers on the state of its business. Lama said that resort sales have risen 40 percent over 2009, and that golf rounds increased more than 25 percent. He added that there is a 62 percent return rate at the resort’s 128 villas. (Pelican Hill also has 204 bungalows.)
This is all happening despite a business climate that remains dismal, particularly in California. The state has an onerous tax and regulatory regime, and a perpetual budget crisis that has led many people to suggest bankruptcy might be the state government’s best option.
“The state of California is a horrible state in which to conduct business,” Friedlander said. “The challenges of doing anything in this state are extremely difficult.”
Nevertheless, Friedlander and Lama remain optimistic. Lama said bookings are strong through March. In 2011, he wants to bring increased attention to the resort’s Epicurean experience, the wellness program at its spa, and its golf academy, headed up by noted instructor Glenn Deck.