Resorts Management Operation

MILL (Wiley)
SECOND
Resorts
EDITION
MANAGEMENT AND OPERATION
Robert Christie Mill, Ph.D.

School of Hotel, Restaurant, and Tourism Management
Daniels College of Business
University of Denver
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MILL (Wiley)
Resorts
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MILL (Wiley)
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MILL (Wiley)
SECOND
Resorts
EDITION
Robert Christie Mill, Ph.D.

School of Hotel, Restaurant, and Tourism Management
Daniels College of Business
University of Denver
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N John Wiley & Sons, Inc.
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MILL (Wiley)
This book is printed on acid-free paper. 嘷

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Library of Congress Cataloging-in-Publication Data:
Mill, Robert Christie.

Resorts : management and operation / Robert Christie Mill.—2nd ed.
p. cm.
ISBN: 978-0-471-74722-2
1. Resorts—Management. I. Title.
TX911.3.M27M538 2008
647.94068—dc22
2006037901
Printed in the United States of America

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CONTENTS
FOREWORD xi Chapter 3
MOUNTAIN-BASED RESORTS:
PREFACE xv MANAGING THE
OPERATION 57
Chapter 1 INTRODUCTION 58
ECONOMICS 60
RESORTS: AN DEMOGRAPHICS 64
INTRODUCTION 1 SKIOGRAPHICS 67
TRIP CHARACTERISTICS 72
INTRODUCTION 2
SNOWBOARDERS 75
TYPES OF RESORTS 8
SNOWTUBING 77
INDUSTRY TRENDS 18
EXPANDING TO MULTI-AGE VISITORS 79
SUMMARY 19
ECONOMIC FEASIBILITY 79
ENDNOTES 19
ANALYZING FINANCIAL STATEMENTS 82
OPERATING CHARACTERISTICS
Chapter 2 BALANCE SHEET 83
INCOME STATEMENT 84
MOUNTAIN-BASED RESORTS: CRITICAL RATIOS 86
THE IMPACT OF SUMMER IN THE MOUNTAINS 88
SUMMARY 95
DEVELOPMENT ON ENDNOTES 95
OPERATIONS 21
INTRODUCTION 22
THE DEVELOPMENT PROCESS 22 Chapter 4
DESIRABLE SITES 26
GENERAL DESIGN GUIDELINES 33 BEACH RESORTS AND
CAPACITY 34 MARINAS: THE IMPACT OF
SKI RUNS 39 DEVELOPMENT ON
SKI LIFT NETWORK 40
BASE AREA 43 OPERATIONS 96
OTHER WINTER SPORTS ACTIVITIES 46 INTRODUCTION 97
SUSTAINABLE DEVELOPMENT 51 THE DEVELOPMENT PROCESS 98
MOUNTAIN RESORT MATURATION MARINAS 104
CYCLE 54 GENERAL DESIGN PRINCIPLES 111
S SUMMARY 55 SUMMARY 122
N ENDNOTES 55 ENDNOTES 122
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viii CONTENTS
Chapter 5 PRO SHOP 200

GOLF CART FLEET 202
BEACH RESORTS AND USE OF TECHNOLOGY 208
MARINAS: MANAGING THE RENOVATION PLAN 211
SUMMARY 211
OPERATION 124 ENDNOTES 211
INTRODUCTION 125
BEACH RESORTS: PROFILE OF THE
BEACH RESORT GUEST 125
MANAGING THE RESOURCE 128 Chapter 8
DESTINATION RESORT MARINAS 134 RESORT OPERATIONS:
BOATERS 135
MANAGING THE OPERATION 135 THE IMPORTANCE OF
BLUE FLAG 139 RECREATIONAL AMENITIES 215
SUMMARY 144 INTRODUCTION 216
ENDNOTES 144 THE DEVELOPMENT PROCESS 216
DEVELOPING AN AMENITY STRATEGY 219
Chapter 6 COMMUNITY MANAGEMENT
STRUCTURES 223
GOLF/TENNIS–BASED MANAGEMENT AND OPERATIONS 226
RESORTS: THE IMPACT OF SUMMARY 231
DEVELOPMENT ON ENDNOTES 231
OPERATIONS 145
INTRODUCTION 146
GENERAL GUIDELINES 147 Chapter 9
PLANNING AND DEVELOPMENT 148 THE UNIQUENESS OF
GOLF COURSE TYPES 155
DESIGN PRINCIPLES 163 TIMESHARE RESORT
TENNIS 174 OPERATIONS 233
SUMMARY 179
RESORT MANAGEMENT 234
ENDNOTES 179
INTRODUCTION 234
TIMESHARE GUESTS / OWNERS 235
Chapter 7 ACTIVITIES 240
MARKETING 240
GOLF-BASED RESORTS:
MARKETING THE TIMESHARE PRODUCT 241
MANAGING THE OPERATIONS 244
OPERATION 182 RESERVATIONS AND THE FRONT DESK 247
INTRODUCTION 183 HOUSEKEEPING 250
GOLF RESORTS 183 MAINTENANCE AND ENGINEERING 253
GOLFERS 183 ACCOUNTING AND FINANCE 256
MARKET SEGMENTS 186 FINANCING THE TIMESHARE 256
OPERATING CHARACTERISTICS 190 SUMMARY 258
S TOURNAMENTS AND EVENTS 194 ENDNOTES 258
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CONTENTS ix
Chapter 10 ROOM SETUP: DRY ROOMS 326

COMBINATIONS 326
RESORT OPERATIONS: MARKETING 326
THE IMPORTANCE OF TRENDS 327
SWIMMING POOLS 328
GUEST ACTIVITIES 260 WATERPARKS 330
INTRODUCTION 261 SUMMARY 334
GUESTS’ NEEDS 263 ENDNOTES 334
DEFINING GOALS AND OBJECTIVES 266 RENNAISANCE CLUBSPORT:
CLUSTER AND ACTIVITY ANALYSIS 267 THE CONCEPT OF THE UPSCALE
PROGRAM AREAS 273 HOTEL / HEALTH CLUB UNIFICATION 335
PROGRAM PLANNING 273
PROGRAM EVALUATION 281
SUMMARY 283
ENDNOTES 283
Chapter 13
SPECIALTY RESORTS 343
RESORT OPERATIONS: THE NATURE-BASED ENVIRONMENTAL
ACTIVITIES 344
IMPORTANCE OF RETAIL 284
ECOTOURISM 347
INTRODUCTION 285
ECOLODGES 347
TOURIST SHOPPING 285
ADVENTURE 350
RESORT RETAIL 290
ADVENTURE TRAVEL IN AMERICA 352
LAYOUT AND DESIGN 291
SUMMARY 364
MERCHANDISING 293
ENDNOTES 364
GETTING YOUR MESSAGE NOTICED 296
OPERATIONS 299
CUSTOMER SEGMENTS 300
PROFIT RATIOS 303
SUMMARY 305 Chapter 14
ENDNOTES 305 CRUISE SHIPS:
FLOATING RESORTS 367
MARKETING THE CRUISE PRODUCT 372
SPAS, POOLS, AND INDOOR STAFFING THE CRUISE SHIP 384
WATERPARKS 307 MANAGING THE HOTEL DEPARTMENT 387
INTRODUCTION 308 MANAGING FOOD AND BEVERAGE 391
DEVELOPMENT OF SPAS 308 MANAGING FACILITIES 393
LAYOUT AND DESIGN 313 HEALTH, SAFETY, AND SECURITY 396
TREATMENTS 316 MANAGING THE OPERATION 400
WATER THERAPY 319 CRUISE DESTINATIONS 403
CLIENT PREPARATION 324 SUMMARY 411
S ROOM SETUP: WET ROOMS 324 ENDNOTES 412
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x CONTENTS
Chapter 15 CASINO CAGE, CREDIT, AND

COLLECTIONS 432
CASINOS 413 SLOT MANAGEMENT 434
INTRODUCTION 414 TABLE GAME OPERATIONS 439
THE GAMING MARKET 415 CASINO ACCOUNTING 441
U.S. GAMING MARKET 415 PLAYER RATING SYSTEMS 443
FROM CASINOS TO RESORTS 417 TABLE GAME HOLD AS A
MARKET 421 MANAGEMENT TOOL 448
CASINO MANAGEMENT 428 CASINO MARKETING 450
ORGANIZATIONAL STRUCTURE 428 SUMMARY 459
STAFFING 430 ENDNOTES 459
CONTROL 430
INDEX 461
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FOREWORD
I wrote the foreword to the First Edition of Bob Mill’s definitive book, Resorts:
Management and Operation, almost seven years ago. Reflecting on my own
lifetime of experience in the lodging and resort industries, I remember thinking at
the time that a tutorial on managing and operating a resort doesn’t get any better
than this. Well . . . I was wrong.
With his Second Edition, Bob has enhanced an already seminal look at this
unique industry. He deserves high marks for assuring that this text remains not
only relevant, but cutting-edge. Resort management is a business that changes
every day . . . literally. In fact, the industry is changing faster now than ever before.
The elements that catalyze this change are the exact elements Bob expands on in
his Second Edition.
With my new position as President and CEO of Hershey Entertainment and
Resorts—a company that provides family entertainment in a clean, ‘‘green,’’ family-
fun format—I’m even more aware of the importance of the family to the resort
business. It’s not just about mom and dad going to golf school at a resort . . . it’s
about the whole family doing it together. It’s not just about mom and dad enjoying
a 5-Star or 4-Diamond resort experience . . . it’s about the whole family creating
memories together that will last a lifetime. Bob’s second edition includes an en-
hanced focus on the role of these entertainments in creating the type of reality
that customers want to perceive while they are on holiday.
This intense focus on the resort industry is important because, as I wrote in
2000, perhaps no word in the English language evokes the immediate and electric
response of the word ‘‘resort.’’ For an over-worked, under-rested, and mega-stressed
populace, a week at a resort is often seen as THE ANSWER. It is salvation. It is the
key to everything that ails, exhausts, and maddens us. The mantra of our time
seems to be, ‘‘I don’t have any problem that two weeks of sun and fun won’t
solve!’’ This visceral response to the word resort is the product of personal expe-
rience, lavish color photographs that leap from the pages of travel magazines, and
the gloating post-vacation reports from coworkers who return from ‘‘ten days in
heaven.’’ Each of these sales, marketing, and public relations hits gives us a
glimpse of the public face of the resort experience. And they make us yearn to be
a part of it.
As current and future resort industry professionals, however, we can’t be sat-
isfied with the public facade. We have to dig deeper. To be successful, we have
to be a little like Toto who pulled back the curtain and unmasked the secret of
S The Wizard of Oz. We, too, need to look behind the scenes to get a clear under-
N standing of what makes a resort . . . well, a resort. We must study the sometimes
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xii FOREWORD
overwhelming details, facts, figures, data, particulars, minutia, fine points, and yes,
even the sweat, that produces the awesome resort experiences that the world so
eagerly anticipates.
It is no secret that until the First Edition of this book was published, the
detailed study of the resort was not possible. There was no clear, comprehensive
guide to understanding the myriad components of the modern resort. With
the advent of Resorts: Management and Operation, this hole in the hotel,
restaurant, and tourism management curriculum closed. Seven years ago I said,
‘‘Thank you, Bob! You have performed a great service for the entire resort man-
agement industry.’’ Now that we have a second, updated edition, I can say again
. . . Thank you, Bob!
After spending 13 years as general manager of commercial hotels and 24 years
in resort management, I believe that hotel management and resort management
are two entirely different industries. Ensuring that hotel operations run like clock-
work, in a clean, carefree, and visually stunning environment, is just the beginning
of resort responsibilities. As Bob’s illuminating text clearly details, the modern
resort is also responsible for meeting the various and unique needs of the widest
variety of vacationing guest: golfers, boaters, skiers, snowboarders, adventure trav-
elers, climbers, gamblers, backpackers, and cruise aficionados, at the least. Golf,
in particular, is an absolute must for many resorts and, potentially, creates two
seasons for the winter resort. Multiple sales and marketing programs must be de-
veloped that appeal to each of these market segments; retail shops must be built
to provide merchandise specific to each group; guest activity programming must
be developed to appeal to each sex separately, together, and with one eye keenly
focused on age and cultural differences. And don’t forget children. Children must
have their own planned activities each and every day. What about spas? In my
experience, a true resort offers a complete spa—not just a hot tub, tread mills,
and a weight rack. A spa offers a wide variety of treatments in gracious surround-
ings, including exfoliation, spot and full body treatments, water therapy, massage,
aromatherapy, wet rooms, dry rooms, and combinations. The list of resort ‘‘musts’’
goes on and on and on. Clearly, a comprehensive book covering the facilities,
operations, and activities of the resort is long overdue.
Thankfully, Resorts: Management and Operation addresses each of these
subjects in detail. If you are a developer considering the construction or purchase
of a resort, this text gives you a roadmap for much of what your new facility will
have to encompass. If you currently manage a resort, this book is a confirmation
of the thousand-and-one things you should be doing to ensure the growth and
competitive position of your property. And, if you are in college—with your entire
life ahead of you—this text is an excellent window into the nuts-and-bolts, work-
aday world you may soon join.
In his Second Edition, Bob keeps the three sections that comprised his
earlier edition: 1) Recreational Facilities, 2) Lodging / Food and Beverage, and 3)
Guest Activities. However, the earlier chapters on marketing, operations, guest ac-
tivity programming, design, and dealing with the future, are no longer separate
S chapters, but have been incorporated throughout other chapters so that readers
N can more easily see how each of these activities impact other topics.
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FOREWORD xiii
Other elements from the First Edition are now given greater prominence. A
consistent theme is the impact of the three elements on resort operations. There
is now a separate chapter on recreational amenities, guest activities, the unique-
ness of resorts, and the importance of retail shopping opportunities. The chapter
on spas has been expanded to include pools and indoor waterparks. Three types
of resorts (mountain-based, beach, and golf / tennis) are each given two chapters.
And there is a greatly expanded emphasis on sustainability issues in the chapters
dealing with management—especially as it concerns mountain and beach resorts.
The Second Edition also features new chapters on cruise ships, specialty
resorts, and, in particular, casinos. With the advent of ‘‘racinos’’—racetracks that
have been granted the opportunity to add slot machines; Native American casinos;
and the continued expansion of casino gambling at resort destinations, this chapter
is a welcome addition to the resort education milieu.
Regardless of who you are, you are either in or entering one of the great
professions of the world. Resort management is often exhilarating. It is often re-
warding. It is always a lot of hard work. But, frankly (don’t tell my board of direc-
tors), even the hard work is a heck of a lot of fun! In no other service industry
can a group of like-minded individuals have such a profound impact on the phys-
ical and emotional well-being of their customers. We are guides through a world
of fantasy. A world that soothes rattled nerves, calms pounding hearts, and envel-
ops weary bodies in a delicious cocoon of heightened senses.
The challenge for our industry is to consistently deliver these unique experi-
ences at a level that is beyond guest expectations. Our reward is . . . well, our
reward is obvious. It is in the warm greeting from generations of the same family
who return to our resorts year after year. It is in the look of absolute contentment
as a guest settles in to a good book while surrounded by gardens of magnolias,
begonias, and orchids . . . or a crystal blue ocean. Or both. And it is in the wide-
eyed excitement of a guest who regales an audience about a hole-in-one on #5 at
The Hershey Country Club where Ben Hogan scored 6 aces. The Second Edition
of Bob Mill’s, Resorts: Management and Operation is the first step in trans-
forming each of these fantasies into breathtaking reality.
Ted J. Kleisner
President and CEO
Hershey Entertainment & Resorts, Inc.
Hershey, Pennsylvania
February 2007
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PREFACE
PURPOSE
Resorts: Management and Operation, Second Edition, is the summary of
over 25 years of thought, analysis, and research into the field of resort manage-
ment. As I moved from teaching in a business-based hotel school into a Depart-
ment of Park and Recreation Resources (both at Michigan State University), I
developed a conviction that an academic program in Resort Management should
be a blend of information from these two academic areas. Resorts are, in fact, a
combination of three elements:
Recreational attractions that draw guests to the facility

Housing and food and beverage services that cater to people away from
home
Activities to occupy guests during their stay
The traditional hotel school deals very effectively with the second element. De-
partments of Park and Recreation Resources have traditionally dealt with the topics
of recreational facilities and guest activity programming, typically within the con-
text of public rather than private recreation.
WHAT’S NEW IN THIS EDITION

Resorts: Management and Operation, Second Edition, is written from a busi-
ness viewpoint yet takes into account the unique structure of resorts. Resort man-
agers in ski areas, for example, should know something about the mountain upon
which their resort depends. They should know the process by which a virgin moun-
tain is transformed into a viable ski area. They need to be aware of how the
capacity of the mountain is determined. They are not, and this book will not turn
them into, developers and planners. They do, however, need to know enough
about planning and development to communicate effectively with these special-
ists.
After an introductory chapter the text is divided into three sections. Each
S section has a philosophical basis for the inclusion of the subsequent principles
N and practices. The first section covers major types of resorts: those that are
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xvi PREFACE
mountain-based, beach-based and golf / tennis based. Two chapters are devoted to
each of the various resort types.
The first set of chapters focus on development issues with the impact on
operations noted throughout. Attention is given to the relationship between the
natural resource base and the recreational facilities that are developed from that
base. The belief is that it is both environmentally-conscious and business-smart to
develop facilities in such a way that the integrity of the natural base is maintained.
This is, after all, the major reason guests visit. Management is doing nothing more
than protecting its competitive differential advantage.
The second chapter in each of the three categories deals with guest profiles
and management issues. There is an emphasis on sustainability issues in the chap-
ters dealing with management—especially mountain (Chapter 3) and beach
(Chapter 4). Chapter 3 has an extensive section on summer activities in the moun-
tains.
The second section highlights what makes managing a resort different from
managing a ‘‘regular’’ hotel. There are separate chapters on resort operations, rec-
reational amenities, guest activities and retail.
The final section features an expanded chapter on spas, pools and indoor
waterparks and new chapters on specialty resorts (Chapter 13), cruise ships (Chap-
ter 14) and casinos (Chapter 15), reflecting the importance of these types of prop-
erties.
The sidebars are an important feature throughout the book. Titled Quick Get-
aways, they bring the text to life with practical examples of the principles es-
poused in the book. Provocative questions are intended to interest readers into
inserting their own points of view into the book.
INSTRUCTOR RESOURCES
An Instructor’s Manual (ISBN: 978-0-470-13504-4) is available for instructors teach-
ing this course. It contains the learning objectives for each chapter along with the
corresponding major lecture points. An electronic version of the Instructor’s Man-
ual, along with Power Point Presentations can be found on the book’s website
at www.wiley.com / college.
ACKNOWLEDGMENTS
I am grateful to the faculty of the Department of Park and Recreation Resources
at Michigan State University for exposing me to the specialized knowledge that
goes into managing resorts that depend on the natural resource base for their
S success. In addition they provided the foundation of the material on guest activity
N programming.
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ACKNOWLEDGMENTS xvii
The administration at the University of Denver’s Daniels College of Business

in general and the School of Hotel, Restaurant and Tourism Management in par-
ticular have always been supportive of my research and writing activities.
Thanks to Wiley and, in particular Melissa Oliver and Julie Kerr, who saw
potential in this effort and provided guidance and encouragement throughout the
entire process. This Second Edition is all the better for the detailed, helpful and
insightful reviews. The following people generously took the time during the writ-
ing of this and the previous edition to provide thoughtful comments and sugges-
tions, the vast majority of which are incorporated into the book to make it an
improved text. They are:
Shane C. Blum, Texas Tech University

Percival Darby, Florida International University
Donald Getz, University of Calgary
Andrew Holdnak, University of West Florida
Thomas Jones, University of Nevada—Las Vegas
Felicia Lui, Vancouver Premier College
Melih Madanoglu, Florida Gulf Coast University
Brenda Montgomery, Arkansas Tech University
Emily Burger completed most of the research for the Quick Getaways. Laura
Johnson, a graduate student in English at the University of Denver, has worked
with me for years. Her contributions to these projects grow with each book. In this
book she is responsible for some of the research and all of the writing for the
Quick Getaways. Working from my outline she completed the chapters on
Mountain-Based Resorts: Managing the Operation, Cruise Ships: Floating Resorts,
Golf / Tennis-Based Resorts: Managing the Operation and Casinos. I am truly thank-
ful that this talented writer has been around to collaborate with me. Rachel Wein-
house completed most of the work for the Instructor’s Manual. I, of course, take
full responsibility for any errors throughout.
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Chapter 1
RESORTS: AN INTRODUCTION
INTRODUCTION Setting and Primary Amenities
Roman Empire Residential and Lodging
Europe Properties
North America Mixed-Use Developments
Lessons INDUSTRY TRENDS
TYPES OF RESORTS SUMMARY
Proximity to Primary Market ENDNOTES
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2 Chaper 1 RESORTS: AN INTRODUCTION
INTRODUCTION
To understand where the resort industry is today, it is important to consider how
resorts have evolved through the ages. A historical perspective leads to a picture
of the modern types of resorts.
HISTORY OF RESORTS1 The sole purpose of a resort, in the

classic sense, is to afford its users a place for escape or
restoration from the world of work and daily care.
—CHUCK Y. GEE
Resort Development and Management
Roman Empire
Prior to the eighteenth century, pleasure travel was not available for the masses.
Lack of time and money combined with poor transportation and a general lack
of facilities to make travel something that one had to do rather than wanted to do.
However, the roots of the resort concept can be traced to the Romans. Ex-
tending from the public baths, resorts were initially built in and around Rome
before being developed for the pleasure of Roman legionnaires and consuls
throughout the empire—from the coast of North Africa to Greece and Turkey, from
southern Germany to St. Moritz in Switzerland, and on through England. In fact,
Bath in England still has relics dating to A.D. 54, when it was known as Aquae
Sulis (Waters of the Sun).
The first baths, introduced in the second century B.C., were small and mod-
estly furnished. Men were separated from women. Later, the baths became inte-
grated, larger, and more ornate. They served both health and social purposes. The
public bath allowed for relaxation, while the sale of food and drink on the prem-
ises encouraged social interaction. A typical structure consisted of an atrium sur-
rounded by recreational and sporting amenities, restaurants, rooms, and shops.
Outside the major centers of population, baths were located by mineral
springs, which were known for their restorative powers. The Greeks had earlier
associated mineral springs with the gods and had built holy wells and altars on
the sites. Roman legions appropriated these sites for the construction of baths.
The Roman Empire began to decline at the beginning of the fifth century A.D.
Social life at the English resorts languished until the seventeenth century, when it
was refueled by improvements in roads and the introduction of the stagecoach.
Europe
In A.D. 1326, Colin le Loup, a Belgian ironmaster, was cured of a long-term illness
by the iron-rich waters of a spring near Liège. As thanks, he developed a shelter
S there to welcome others. The popularity of the area grew so much it was renamed
N Spa, meaning fountain.
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INTRODUCTION 3
A Roman bath in Bath, England. Courtesy Peter Adams / Digital Vision
Back in England, King Charles II restored the monarchy in 1660 after years of
Puritan rule. He spent time at the popular resorts of the day—Bath, Tunbridge
Wells, and Harrogate. Thus began a long history of attractions being popularized
by the rich and famous, a tradition that continues today. In other parts of the
world, royalty continues to be the trendsetters, while in North America, stars of
the popular culture determine the ‘‘in’’ places. There is an old saying in tourism
that mass follows class. Destinations are initially made popular by a small band of
influential people. This puts the place on the map. Seeking to emulate this group,
others are attracted to the location.
A second factor leading to the popularity of the spas was the endorsement of
the medical profession. The waters of Tunbridge Wells, for example, were pro-
moted as an aphrodisiac. Likewise, bathing in and even drinking salt water was
regarded as a cure for numerous diseases and helped promote seaside resorts.
Popular activities at the baths included gambling, dancing, and other forms of
entertainment, including concerts, grand parades, and the pump room, where
health-seekers ‘‘took the waters.’’
The rise in popularity of the spas created a demand on the part of the affluent
S for more private facilities. This led directly to the development of the Swiss resort
N industry. Before railroads were built, guests traveled long distances over poor roads
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to arrive at their destination. Having spent so much time and effort in reaching
the spa, they wanted to spend a long time—up to two months—to get their
money’s worth. This led to the development of facilities more extensive than those
offered by a modest inn. In Zurich, the most famous resort was the Hotel Baur au
Lac, opened by Johannes Baur in 1844. After several expansions, the hotel was
completely rebuilt with an innovative design that still is used today. While all other
hotels faced the town, Baur built the new resort facing Lake Lucerne. He became
the first developer to recognize the benefit of a scenic view.
In the early 1800s, Switzerland was known as a summer resort. However, in
1860, several English visitors were convinced to stay on for the winter. Skating was
already a favorite activity. In Switzerland, the guests were introduced to skiing and
tobogganing. While the initial attraction was the promise of health cures, the pop-
ularity of the resorts was due more to the social activities organized by manage-
ment. One example was the Bains de Monaco, renamed Le Mont Charles (Monte
Carlo) in 1863. Operating in the winter months when traditional summer resorts
were closed, it offered guests year-round gambling. While the health spa was the
overt attraction, the real source of the resort’s success was the gambling.
North America
The earliest resorts in the United States were developed in the East and, as in
Europe, were established around spas. Resort hotels were opened in Virginia, New
York, and West Virginia in the eighteenth century. At approximately the same time,
the seaside resort became popular. Examples include Long Branch, New Jersey,
and Newport, Rhode Island. The latter was a commercial port where molasses was
distilled into rum, which was then traded for slaves from Africa. When the slave
trade was abolished at the end of the eighteenth century, the town turned to
tourism for its economic future. Wealthy southerners ventured north to escape the
heat and malaria of South Carolina in the summer.
Amenities Early hotels were rather barren in terms of amenities. The forerunner of many
upgraded facilities to be later found in resort hotels was not a resort hotel itself.
The Tremont Hotel in Boston, built in 1829, is credited with introducing a number
of innovations in service, including:
elegant marble
carved walnut furniture in private rooms
a pitcher and bowl and free cake of soap in each guestroom
gaslight instead of candles
French cuisine and silver table service that included forks
bellboys to handle guest luggage
an ‘‘annunciator’’—the forerunner of the room telephone
Civil War The American Civil War changed the nature of many Eastern resorts. Saratoga
S Springs, New York, had long catered to southern gentlemen who brought their
N horses (and their slaves) with them to race while they took the waters. As the
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INTRODUCTION 5
popularity of the springs declined, the resort focused on its social activities. A new
racetrack was built, but ultimately it could not compete with the higher purses at
Newport and Monmouth Park in Long Branch, New Jersey. The resort turned to
gambling and drew some interesting and some notorious characters until the early
twentieth century, when reformists took their toll.
White Sulphur Springs, West Virginia, changed too after the war. A shortage
of eligible men and a surplus of eligible women led the resort to position itself as
a place to find a worthy husband. The addition of a railroad line through the town
in 1868 gave it a leg up on the competition. Not until 1891 a spur was extended
into Hot Springs, enabling The Homestead to compete successfully with the Green-
brier of White Sulphur Springs, as it does to this day.
Resort Cities America’s first resort city was Atlantic City. Developed in the late 1800s, it attracted
the middle as well as the upper classes. It built the first boardwalk to accommodate
those seeking the health benefits of sunshine and fresh air, the first amusement
pier that extended over the Atlantic, and the Observation Roundabout—later
S The Greenbrier in White Sulphur Springs, West Virginia, is a traditional resort.

N Courtesy The Greenbrier
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MILL (Wiley)
renamed the Ferris wheel. The railroad brought day trippers; other guests stayed
for the season in boardinghouses and resort hotels. Today, buses bring day gam-
blers from New York City and other metropolitan areas.
The Twentieth The typical resort hotel in North America at the beginning of the twentieth century
Century was a summer operation. Improvements in transportation changed the structure
of resorts. The railroads were instrumental in opening up areas of the country that
were previously inaccessible. Both railroads and resorts targeted the relatively few,
very wealthy individuals who, before the enactment of a federal income tax law,
had a great deal of disposable income.
Winter resorts did not become popular until the development of the auto-
mobile, which provided access to areas of the country suitable for winter vaca-
tions. California, in contrast, was the first area to develop as a warm winter resort,
appealing to those looking to escape the winter cold. Florida, as a warm winter
resort, was developed later and more slowly. There, Henry Flagler saw the impor-
tance of transportation in opening up new destinations and was instrumental in
laying railroad tracks to the south of the state. By 1920, Florida had surpassed
California in popularity as a winter retreat for North Americans.
The economy had barely climbed back from the stock market crash of 1929
when the Second World War erupted. Resort development was put on hold. The
end of rationing after the war precipitated a period of economic prosperity. Leisure
travel was available to a much broader segment of the population. The develop-
ment of the interstate highway system in the 1950s gave the average American
great mobility. The development of Disneyland in California in 1955 was followed
by numerous other theme parks in the 1960s and 1970s. Disney World opened in
1971 in Florida and has set the standard for destination family resorts.
In the mid-1950s, the development of jet travel opened up, for North Ameri-
cans, areas of Europe and the Pacific that were previously inaccessible. Air travel
was still costly, however, and relatively few could afford it.
The early 1960s saw the development of the four-season resort. Realizing the
risk involved in relying for business on one season of the year, hotels sought to
develop year-round attractions. The Homestead added skiing in 1959, while resorts
in Colorado extended their season by developing golf and tennis packages and
summer music festivals. Others went after group business by constructing conven-
tion centers. It can be argued that the shift to conference business is the most
significant economic trend in resorts in the past 20 years. In fact, for most large
resorts, between 45 and 70 percent of occupancy come from group business.2
Resorts are attractive to corporate meeting planners because the resort is self-
contained. Attendees do not have to leave the premises and can enjoy various
recreational activities as a break from meetings.
Planned resort communities—large scale communities with a variety of ac-
commodation options, recreational facilities, and infrastructure—like Sea Pines
Plantation on Hilton Head Island in South Carolina and Costa Esmeralda on the
island of Sardinia in the Mediterranean have also emerged in recent years.
S The past decade has seen a new type of resort entering the marketplace—
N mega-resorts or family resorts. These properties are not necessarily the largest of
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INTRODUCTION 7
resorts. Rather they are properties that have upscale amenities on-site such as a
spa, fitness center, shopping, recreational activities, and a fun nightlife. Examples
include the Hyatt Regency Waikaloa in Hawaii and the Disney and Hyatt Grand
Cypress hotels in Orlando, Florida. Because of the high cost of amenities provided
and the often fantasy themes that are part of the resort experience, the properties
require high room rates and occupancies to be financially viable.
In contrast to the large resort hotel is the small boutique resort hotel. Targeting
the high-end market and emphasizing service, quality, and privacy, these proper-
ties—such as the Ventana Inn in Big Sur, California—have a strong focus on lodg-
ing and related amenities and offer limited shopping and residential development.
In Eastern Europe, Japan, and some parts of Western Europe, social tourism
contributed to resort development. Social tourism involves offering employees va-
cations that are wholly or partially subsidized. While government and unions sub-
sidize much of the social tourism in Eastern Europe, the equivalent in Japan is the
corporate resort that is owned and operated by a major company to provide va-
Quick Getaway 1.1

Resolving Resort Parking Problems
Resorts have legendary traffic and parking Limiting the number of vehicles allowed in
problems. Managing vehicle traffic can be a the resort area (either by metering vehicles
very tricky business, because although the re- or by letting congestion become self-
sorts often rely on motor vehicles to bring vis- limiting).
itors and supplies, too much traffic can destroy Using road pricing. A charge may be levied
the elements that made the resort so attractive for driving on certain roads or into an
in the first place. area, which discourages automobile travel.
Fortunately, there are a few steps that can Implementing traffic calming strategies,
be taken to prevent a resort from becoming a which limit traffic speeds and volumes,
vehicular disaster: particularly around pedestrian areas.
Source: Litman, Todd. ‘‘First Resort: Resort Community

Implementing total or partial prohibitions
Transportation Demand Management.’’ Victoria Trans-
on driving in certain areas. Visitors will eas- port Policy Institute, November 1999. http: / / www.
ily understand, especially if it is made clear vtpi.org / resort.pdf
that too much traffic threatens their enjoy-
ment of the resort.
Creating restrictions on times when certain DISCUSSION QUESTION:
types of vehicles may use certain road- Do you think that resort visitors would ac-
ways. cept a severely restricted traffic management
Limiting certain lanes or roads to high oc- strategy better if they were told that it was
cupancy vehicles to ensure that buses and designed with their interests in mind? Do
other group transport vehicles don’t get you think it’s necessary for the resort manag-
S caught in bad traffic. ers to explain themselves to the visitors?
N
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cations for white-collar workers. A common alternative in Western Europe is the

holiday fund. Equal contributions are made by the employee, the company, and
the government to provide funds that employees use for vacation travel.
Lessons
Four things can be learned from a brief review of the history of resorts:
1. The history of transportation has, to a large extent, determined where,

when, and what types of resorts have evolved.
2. The desire for pleasure travel is deep-rooted.
3. Resorts began as seasonal operations. To minimize the risk of relying on
one season of the year, resorts developed year-round attractions and
appealed to the group market.
4. Resorts develop through life cycles. To be successful, resorts have had to
adapt to changes in transportation, consumer tastes, demographics, and
competition.
TYPES OF RESORTS
Resort communities work best when they are not 100 percent
resort but have a mix of full- and part-time residents. Full-time
residents provide customers for the doctors, the lawyers, and
the restaurants year round. [This] enables the community to
provide a myriad of services that would not be possible with
just seasonal residents.
—CHARLES E. FRASER
Founder and Chair, Sea Pines Company
Resorts can be characterized in terms of:
proximity to primary market

setting and primary amenities
mix of residential and lodging properties (2)
Proximity to Primary Market

Resorts are either destination resorts or nondestination resorts. The difference de-
pends on how far the resort is from its primary market; how visitors reach the
resort; and the patterns of stay—how many times a guest visits, how long the stay
is, and the quality of the setting. Destination resorts tend to be at least several
S hundred miles from the market. Visitors tend to fly rather than drive there and visit
N once a year for one to two weeks. Further, the resorts are located at places attrac-
L tive enough to entice people to travel large distances to get there.
MILL (Wiley)
TYPES OF RESORTS 9
Nondestination resorts tend to be within a two- to three-hour drive of the

primary market. Guests arrive by car, visit more frequently, and stay three to four
days each time. As a result, destination resorts have a higher ratio of hotel rooms
to second homes than do regional resorts. Within these generalities, it should be
mentioned that a resort may fit into both categories. Colorado resorts, for example,
draw visitors from Denver several times over the season while also attracting peo-
ple from Europe for a once-a-season experience.
Setting and Primary Amenities

Visitors categorize resorts by their location and amenities. Defined thus, resorts
can be either ocean resorts, lake / river resorts, mountain / ski resorts, or golf re-
sorts.3 Ocean resorts depend on the quality and extent of their beaches, views,
climate, and water sports activities. Lake / river resorts obviously rely on water but
rely even more on the recreational activities that are water-oriented than do ocean
resorts. They are more likely to be located several hours by auto from the resident’s
home and marketed as second-home communities. Mountain / ski resorts have, in
recent years, moved away from their traditional reliance on the winter season to
become four-season resorts. Capitalizing on their spa heritage, many are using
health as their theme. Mountain resorts in the West tend to be destination resorts,
while those in the Midwest and Northeast, because of their proximity to large
population bases, tend to be regional in scope.
The increased popularity of golf has helped spawn an increase in the number
of resort properties themed around this activity. Growth is also a function of supply.
As the number of waterfront locations expanded, fewer sites associated with water
were available. As a result, golf course resort developments have sprung up in
Florida, North Carolina, and southern California. They are also popular in desert
settings, which, lacking water, rely on scenery, climate, and golf to attract visitors.
Other resorts rely on specialized amenities, including tennis, equestrian facilities,
ranches, health, natural attractions, sporting expeditions, and entertainment.
Residential and Lodging Properties

Real estate people like to categorize resorts based on the type and mix of residen-
tial lodging facilities. There are four specific parts to what is being called the hybrid
lodging or alternative lodging sector:4
traditional lodging
timeshare or vacation ownership
condominium hotels
destination clubs
Traditional The resort hotel is the most common form of resort development. It requires a
Lodging relatively modest financial investment. The guest at a traditional hotel selects the
S property on the basis of convenience. For the business traveler, convenience might
N mean the hotel is close to the highway or to the businesses to be visited. For the
L leisure traveler, convenience translates into proximity to the beach or other tourist
MILL (Wiley)
attractions. The resort hotel guest, on the other hand, visits the development simply
for relaxation. A growing number of resort hotels, however, are seeking to attract
the businessperson, usually as part of a conference or meeting. The company
holding a business meeting in a self-contained resort setting keeps the outside
distractions of a city to a minimum while utilizing the recuperative effects of rec-
reation to improve business productivity.
Resort hotels differ from their commercial counterparts in other ways. They
are located in areas that take advantage of attractive natural features, and they
offer more amenities, either on-site or with easy access to off-site facilities. They
can range from as few as five rooms to as many as 1,500 or more. Facilities under
25 rooms are independently owned and managed guesthouses, bed-and-breakfasts,
inns, cabins, or motel-type properties. They tend to be located in rural areas and
cater to short-stay guests.
Facilities in the 25- to 125-room range can include properties from the above
group as well as small specialty resorts. Many are called lodges and cater to hikers,
hunters, and skiers. Part of this category is the growing number of boutique resort
hotels that cater to a small, upscale segment of the market. These are often located
in beautiful and delicate settings that are not appropriate for larger-scale devel-
opment.
S Fine dining is just one attraction of many

N traditional resorts. Courtesy The Greenbrier
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TYPES OF RESORTS 11
Resort hotels ranging in size from 125 to 400 rooms tend to be affiliated with
a chain and located in major resort areas. They can be either low-rise or high-rise,
though they are usually more horizontal than vertical in design. They have large
balconies and larger rooms than comparable commercial hotels, and offer more
amenities as well. Hotels with more than 400 rooms are located in prime resort
locations offering major attractions such as beach frontage (Florida, the Caribbean,
and Hawaii), ski facilities (Colorado, Utah), large theme parks (Orlando), gaming
(Las Vegas), and golf (Arizona, Palm Springs).
Timeshare and Timesharing began in France in the late 1960s and was first seen in the United
Vacation States in the 1970s.5 Over 4,300 timeshare resorts owned by almost 10 million
Ownership households are located in more than 80 countries. The U.S. and Europe account
Resorts for a combined 40 percent of the total.6 The term vacation ownership is also used
to mean timeshare. Timesharing is defined as ‘‘the right to accommodations at a
vacation development for a specified period each year, for a specified number of
years or for perpetuity.’’7 Each condominium or unit is divided into intervals by
the week or as points and sold separately. Owners pay a lump sum up front (a
fraction of the total ownership costs), either in full or financed over a seven- to
ten-year period, in addition to an annual maintenance, management, and opera-
tions fee. Units are priced differently based on unit size, resort amenities, location,
and season of the year. The purchaser owns the accommodation for the amount
of time it is used. This is usually one or two weeks out of the year. Fractionals
allow the purchaser to buy longer intervals—usually 4 to 12 weeks a year. They
can cost as much as $600,000.
Five types are available:8
The luxury product, in the $20,000 per interval range, is found in tourist
destinations and is often a penthouse with 1,500 square feet.
The up-market, priced between $15,000 and $25,000 per week, is also
found at destination resorts and offers anywhere from 1,100 (one bed-
room) to 1,800 (two bedroom) square feet.
The quality unit goes for $9,000 to $17,000 and offers 800 square feet for a
one bedroom unit.
Value units are found at regional resorts and are priced from $7,000 to
$10,000 for 800 to 1,000 square feet.
Economy units, also found in regional markets, offer 600 square feet
(studio) to 900 square feet (one bedroom) for $5,000 to $8,000.
Annual fees cover the cost of management and maintenance of the resort.
Timeshare owners can exchange weeks through membership in exchange com-
panies like Interval International and Resort Condominium International.
Entry into the field by such companies as Marriott, Hyatt, Hilton, Thomas
Cook, and Disney has helped improve the image of the industry while blurring the
S distinction between timeshare and hotel. Expansion by these established compa-
N nies also has an effect on the popularity of the concept. Forty percent of those
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MILL (Wiley)
interested in purchasing a timeshare prefer a branded product, while 21 percent

rate it as very or extremely unimportant in their decision making.9
Timeshare Options. Several timeshare options are possible.10 The fixed week
option allows consumers to buy a specific week—for example, the first week in
August. Under the floating week option, consumers buy a week within a given
period. For example, consumers may buy one week within weeks 6 through 12. A
combination option allows weeks in high-demand periods to be fixed and those in
low-demand periods to float. School holidays, for example, might be fixed at a
specific week, while, for the rest of the year, people buy the right to use the resort
for a nonspecific week during the off-season. Four Season Resort Club operates by
selling a fee-simple deed for both floating and fixed weeks.
Recently, resorts have introduced points-based memberships, which give mem-
bers points that can be used to ‘‘buy’’ resort stays. Marriott Vacation Club Inter-
national and Hilton Grand Vacations are both point-based programs. Times of high
demand require more points than times of low demand. Guests can bank, borrow,
or split up how and when they use their points. Many properties are finding that
they can cut back on marketing expenses because they sell the points program to
a captive audience. It is, however, initially confusing for the guest and, as such,
more complex for the operating company to run.
Points programs make particular sense for a company with multiple sites. To
work effectively, choices must be available for the customer, and multiple sites
allow for this. The keys to successful implementation of a points system are:
setting the dollar-per-point ratio and sending the corresponding message

to the community
having a staff sophisticated enough to track point values and inventory
effective communication between the marketing staff and the operator
implementing the technology and a central reservation system with suffi-
cient capital to back it up11
Finally, the club concept does not involve any ownership of real estate. Instead,
consumers buy shares or points in the club; these are exchanged for accommo-
dation or travel. Hyatt’s Hyatt Vacation Club and the Sunterra Corporation brand
(Embassy Vacation Resorts, Westin Vacation Club Resorts, and Sunterra Resorts)
are examples of the club-based concept.
Timeshare options have evolved in recent years. They started with traditional
fixed units in a set week, then added a floating week option and, most recently,
the flexible points option.12 Segments tend to be region focused—based on a
specific geographic region—or theme-focused such as golf, fishing, skiing.
‘‘The baby boom generation is at an age when building a

custom vacation home is very complex, time-consuming and
frustrating, especially if it’s in a remote location. They’d rather
S buy a turnkey unit, and let someone else take care of it.’’
N —ROB LOWE, PRESIDENT OF DESTINATION DEVELOPMENT
L Wall Street Journal, February 1, 2006, D8
MILL (Wiley)
TYPES OF RESORTS 13
Condominium In a condominium hotel, or condotel, guests buy fee-simple equity in the unit—
Hotels buying a hotel guestroom. They can be used as permanent or second (sometimes
third) homes. They are especially popular in hot real estate markets such as Miami,
Hawaii, and Las Vegas. They have developed to meet the needs of individuals,
especially baby boomers, interested in ownership of vacation real estate (approx-
imately 1,000 baby boomers turn 60 every day in the U.S.).
Owners can earn income (depending on the policy of the hotel) by renting
out their units independently or through the rental program of the management
company. Condo hotel salespeople cannot promise the units will generate income.
To do so might mean that the Securities and Exchange Commission would classify
condo hotels as securities. This would subject them to more stringent regulations.
Thus, buyers can only be told that they may have the opportunity to place their
units into a rental arrangement. While most developers prefer to avoid registration
due to the time and paperwork involved, it means that they are unable to require
that owners participate in a rental pool. This makes it difficult to project realistic
income forecasts for those owners who do participate in the pool. There are also
potential problems as owners react to the realities of the hotel business—
seasonality, Average Daily Rates (ADR) versus rack rates, frequent renovation (and
its attendant costs), etc. For the project to have the best chance for success, it
must make sense from a market and economic point of view as a hotel before
being considered as a condotel.
Some developers feel that the capital markets will no longer finance traditional
high-end hotels anymore. Rather than spending several years looking for financing,
they produce a brochure, a model room and are often able to get 80 to 85 percent
financing of the project by pre-selling all of the rooms as condominium residences.
Individuals cannot get mortgages for hotel rooms but they can for condo apart-
ments that have kitchens and dining areas. Owners are responsible for mainte-
nance and operating expenses. Chicago’s Trump International Hotel and Tower
pre-sold over 70 percent of its 286 units two years before it opened. Prices range
from $815,000 for a studio with a small kitchen and bathroom to $3 million for a
two-bedroom with a large living room, dining room, and two and a half bathrooms.
In addition, if owners want their unit rented out, they must pay for upscale furni-
ture, plasma televisions, linens, and china that cost from $45,000 to $90,000.13
Condo hotels can be:14
Ownership structure where rooms are sold to individuals as an invest-

ment. Owners stay for the minimum time required by law.
Mixed-use project with a hotel and a primary residence piece. Owners
live in residences similar to those sold by companies such as The Ritz-
Carlton and Four Seasons.
Mixed-use in a resort area with a hotel where the condo can be used as
a second home. When the owner is not using it the unit is placed into a
rental program to generate income for the owner.
S Typically, the first type is not a good investment while the latter two can be.
N There is no guarantee that resale prices will be greater than the initial cost of the
L condo. The latter two options offer owners the opportunity to generate income
MILL (Wiley)
throughout the life of the project. Condo hotel unit owners can receive anywhere
from 30 to 60 percent of the revenue when their unit is rented.
Destination This newest niche targets affluent travelers. Initiation fees can be as high as
Clubs $500,000 in addition to annual fees of $25,000. Customers stay for weeks at a time
in luxury residences and villas in both urban and resort locations. Exclusive Re-
sorts, formed in 2002, has 200 homes to offer their 1,500 members. Customers join
as they would a country club by paying initiation fees that range from $200,000 to
$400,000 with yearly fees of between $10,000 and $25,000. Eighty percent of the
initiation fee is refundable. Members stay between 15 and 25 days a year at these
$3 million homes.
Quick Getaway 1.2

The Condo Revolution
Condo ‘‘villages’’ and hotels have long been the day there shouldn’t be much of a difference
popular in mountainous ski areas. This success at all, aside from who the owners are. . . The
has inspired many Florida chains to experi- bricks and mortar had better operate as a hotel
ment with hotel-condo combinations, which to be successful.’’
have proved very popular so far. ‘‘In South Florida, I think one of the con-
Some planners have been nervous that cerns is that everyone is going to a condomin-
shifting to condos will reduce the number of ium hotel,’’ says Tom Ireland, principal partner
available rooms at the hotel, or that the condo at The Ireland Companies. In the span of only
owners will bump groups from room blocks. In a few years, ‘‘We went from 1,000 condo-hotel
reality, neither problem is likely to be a signif- units proposed down here to 50,000.’’
icant issue. The disruptions would last only dur- John Heiser, vice president for Intrawest
ing the construction process, and owners are Placemaking says that Intrawest’s future
made to understand when they buy the condo projects will be condo-hotel based. ‘‘We’re
that they can’t disrupt the reservations process. seeing more and more of the convention /
If their condo has been rented, then they have meeting / condo-hotel resort development,’’
to stay in another condo or wait for their condo says Heiser. ‘‘Our operators are screaming for
to free up. more of that.’’
‘‘From a consumer’s perspective they re- Source: ‘‘The resort marketing changing—here’s a look
ally shouldn’t know the difference. It should at what’s happening now and what’s happening next.’’
look like a hotel, act like a hotel, and serve like Successful Meetings (January 2006).
a hotel,’’ says Scott Berman, U.S. leader for
the hospitality and leisure advisory group at DISCUSSION QUESTION:
PricewaterhouseCoopers in New York City. ‘‘I Would you buy a condo at a condo hotel if
think too much is probably made of the condo you knew that it would not always be at
S hotel versus a traditional hotel. At the end of your disposal?
N
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TYPES OF RESORTS 15
Mixed-Use Developments
The majority of high-end hotel and resort properties in the U.S. now incorporate
some type of residential component. According to the Lodging Industry Investment
Council—an independent industry think-tank with 70 high-profile members from
the lodging-investment community—this trend will increase dramatically with
condo hotels and timeshare units becoming commonplace in parts of the luxury
hotel market.15 Increased numbers of resorts are utilizing mixed-use developments,
which feature a timeshare component.16 In the past, developers built a property,
then created demand for it. Nowadays, the demand for timeshare products dictates
production. Preferred configurations are:
two-bedroom suite (55 percent)

one-bedroom suite (27 percent)
three-bedroom suite (16 percent)
studio (2 percent)17
A major reason for mixed-use developments is the high cost of amenities.

Because high-quality amenities cost a great deal of money, being able to spread
out the use and cost of these facilities makes it cheaper for everyone. In addition
to the cross-utilization of amenities, hotel guests are exposed to timeshare products
and may well be induced to buy. In this way, timeshare operators can reduce their
marketing costs. The timeshare component brings a steady stream of revenue into
the resort; everyone benefits. It does, however, take an experienced staff to meet
the differing needs of timeshare owners and hotel guests.
Because of the unique nature of timeshare financing, specialized timeshare
lenders have emerged. The financing of a timeshare property is different from that
of a traditional hotel. Most hotel mortgages are long-term deals wherein the pay-
back comes from the hotel’s cash flow, which is generated from daily operations.
Timeshare loans, on the other hand, are shorter-term loans based on the devel-
oper’s ability to market and sell interest in the timeshare.18 In addition, the lending
process is more complex because of the regulatory issues involved in timeshare.
However, in many respects, timeshare financing is simpler and more predict-
able than hotel financing. Both revenue and expenses are more foreseeable for
timeshares. Once the timeshare unit is sold, revenue is accounted for. The hotel
room has to be resold each and every night, with no guarantee that it will produce
revenue. Hotels incur many costs whether they are full or empty, while timeshare
costs are easier to predict. High customer satisfaction with and solid growth of
timeshares, together with the financial characteristics noted above, means fewer
timeshare defaults compared to hotels.
Second-Home A second-home development consists of a project that consists primarily of second

Developments homes and does not include a resort hotel. A second home is ‘‘a home that is
owned fee simple by an individual or family that also owns or rents another home
S as a primary residence.’’19 In other words, the family owns both a primary and a
N second home. While second homes are not necessarily found in resort areas,
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Quick Getaway 1.3

Mixing Resort Options:
Good or Bad Plan?
Mixing up condos with rented hotel rooms can Cons
have great results, if it’s the best option for the
situation. But how do you know if a mixed-use Planning and executing the project takes
project is the right choice? more time, patience—and money.
Pros If one component fails, it can taint the
whole project.
There’s a greater need for capital—both
Every aspect in the project supports the
equity and debt.
others.
Planning and governmental approval of
The customers’ money remains in your
larger, multiple-use projects are more com-
own development.
plicated.
Timeshare sales provide capital for the
There’s a need for higher levels of exper-
continued expansion of the entire resort.
tise in many areas.
There’s opportunity for an ongoing revenue
Large projects require more management
stream through management fees after the
and control of product consistency.
resort is sold out.
Customers attracted by retail, hotel, and Source: ‘‘To Mix or Not to Mix.’’ Timeshare Business
other features are potential leads for a (January / February 2003): 22.
timeshare operation.
A bigger project may mean bigger profits. DISCUSSION QUESTION:
More amenities and entertainment options Is it advisable to mix condos with rented ho-
allow guests a richer experience. tel rooms?
second-home developments are. They consist of a variety of types of properties—

detached, attached, multifamily—and can be combined with other uses. The
Miami region of Florida, the Phoenix region of Arizona, and the Palm Springs
region of California are examples of combination retirement, primary-, and second-
home developments.
Developments are one of four types:
1. Resort condominiums are usually high-rises located on oceanfronts.

2. Small, low-density residential communities are typically located close to a
beach or lake.
3. Single-family developments incorporate a golf course or clubhouse.
4. Large planned communities include a variety of housing types as well as
S a number of amenities.20
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TYPES OF RESORTS 17
Compared to primary homes, second homes place more emphasis on outdoor

areas, they are developed at lower densities, and their design is less formal. They
are managed under a long-term arrangement by a community association rather
than by a developer or resort operator. However, the latter may be involved in the
management of a principal amenity, such as a golf course.
Multiuse Resort A multiuse resort community combines two or more of the above categories of
Communities facilities. As such, they tend to be larger than the other types. By offering more
than one type of ownership and use pattern, they can appeal to a larger variety
of markets. Their amenity package is more extensive and usually consists of at
least two major amenities, such as a beach and a golf course, or ski slopes and a
Quick Getaway 1.4

Which Is the Real All-Inclusive Deal?
A seven-day stay at an all-inclusive resort or a nightly entertainment, use of all non-motorized
seven-day all-inclusive cruise? At first glance, water-sports equipment (things like snorkeling
the only factor that seems to matter in the de- gear, sailboats, and windsurfing boards) and
cision is whether you get seasick. But buyer be- gratuity. That’s a lot more than the cruise offers
ware! Not every all-inclusive package includes . . . land resorts just seem to include
everything, and the difference between the more.
cruise and the land stay could be more than It appears that the decision between an all-
you think. inclusive cruise and an all-inclusive resort va-
Cruises and resorts tend to include dif- cation involves more than simply asking
ferent amenities in their base prices. On a yourself ‘‘do I like boats?’’ However, it’s impor-
mainstream cruise, you’ll generally receive tant to remember that if what you really want
accommodations, onboard activities and enter- is a cruise, no amount of amenities at a land
tainment, all meals and snacks, certain bever- resort will make up for missing out on a vaca-
ages during meal times, the use of the ship’s tion at sea.
facilities (such as the pool, kids’ club, and fit-
ness center), and transportation between ports- Source: ‘‘Are you a cruise or resort vacationer?’’
www.usatoday.com / travel / deals / inside / 2004-12-22-
of-call. However, you’ll have to fork over some column x.htm
extra cash for soft drinks and alcoholic bever-
ages, gratuity, spa visits, onshore excursions,
airfare, and airport transfers. Keep in mind that DISCUSSION QUESTION:
luxury lines sometimes include gratuity and al- Do you think that labeling a vacation as ‘‘all-
cohol in the base price. inclusive’’ is deliberately misleading advertis-
Of course, all-inclusive resort packages ing, when it’s more than likely that the
usually include accommodations, all meals consumer will have to pay additional
and beverages, access to the resort’s facilities, amounts after arriving?
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golf course in a four-season format. As the needs of the resort user change, the
development offers appropriate units for rent or purchase. A resort guest may end
up buying a second home for eventual retirement. The diversity of property types
requires more sophisticated management.
INDUSTRY TRENDS
The most significant trends in the resort industry are:
Health Spas and Fitness Facilities

Because more people are concerned with health, fitness facilities are
Quick Getaway 1.5

Hotels, Resorts, and Condos
Due to the current success of many condo- Calculate the costs of needed property up-
hotel properties, many hotel and resort owners grades, remodeling, and furnishings
are considering the ‘‘condo conversion.’’ How- Select a quality management company,
ever, owners should keep in mind that pulling preferably one with a name-brand fran-
off a successful and profitable condo hotel con- chise
version can be a real challenge. Hire a savvy sales and marketing company
Luckily, there exist suggestions that a hotel with a proven track record
owner can use as a guideline to ensure the best Price units to sell at a good pace, but not
result. To convert a resort or hotel property into so low as to leave money on the table
a condo hotel, you should: Estimate potential profits as a condo hotel
versus continuing the existing operation
Determine your target prospect without conversion
Measure the demand for a product like
yours Source: ‘‘Condo Hotel Conversions.’’ Condo Hotel
Center: Condo Hotels and Fractionals. http: / /
Consider whether your location is one that
www.condohotelcenter.com / for-developers /
will attract hotel guests and will also have conversions.html
appeal as a second or vacation home
Evaluate the competition which includes
other hotels and also straight condos DISCUSSION QUESTION:
Determine the unit mix (studios, one bed- Given your knowledge of hotels, resorts, and
rooms, two bedrooms, etc.) resort hotels, do you think a resort owner or
Put together an amenity package that will a hotel owner faces a greater challenge if
S appeal to your target market they both decide to convert to condos?
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INDUSTRY TRENDS 19
now a basic amenity for resort properties. Many resorts have on-site spas
as a complement to existing fitness facilities. They offer a mixture of pam-
pering, education, and medical programs. They require a high capital
cost and highly skilled personnel that can result in high payroll costs.
Soft Adventure Programs
Offering a combination of adventure and fantasy, ‘‘soft’’ adventures such
as white-water rafting, multiple day hikes, and wild-game hunting, need
guides to provide safety to guests seeking a thrill as part of their vacation
experience.
Gaming
Increasing numbers of states are looking to the legalization of gaming as
a way to raise revenue through taxes. More than 12 states allow casino
gaming on land or water. The increase in the number of resorts offering
gaming may reduce its uniqueness as a draw.
Ecotourism
Ecotourism is increasing as a subset of the environmental movement. Ex-
amples include trips to the rain forests of the Amazon and to study the
Galapagos tortoises. Because these trips involve visits to fragile environ-
ments they are best handled by smaller ‘‘boutique’’ resorts.21
SUMMARY
A brief history of resorts demonstrates that transportation has, to a large extent,
determined where, when, and the type of resorts that have evolved; that the desire
for pleasure travel is deep-rooted; that resorts developed year-round operations to
minimize the risk of relying on one season of the year; and that resorts move
through life cycles. Today, resorts can be characterized in terms of their proximity
to primary markets, the setting and primary amenities, and the mix of residential
and lodging properties. Industry trends are identified and will be explored in detail
in the remaining chapters.
ENDNOTES
1. Gee, Chuck Y. Resort Development and Management, 2nd ed. East Lansing, MI: Educational
Institute of the American Hotel and Motel Association, 1988, 26–50.
2. Schwanke, Dean, et al. Urban Land Institute, Resort Development Handbook. Washington, D.C.:
Urban Land Institute, 1997, 4.
3. Ibid., 5.
4. Ibid., 7.
5. The United States Timeshare Industry: Overview and Economic Impact Analysis. Washington,
D.C.: American Resort Development Association, 1997, 5.
S 6. The Nevada Timeshare Industry: An Industry Overview and Economic Impact Analysis. Washing-
N ton, D.C.: American Resort Development Association, 1997, 1; Upchurch, Randall, and Conrad
L
MILL (Wiley)
Lashley. Timeshare Resort Operations: A Guide to Management Practice. Oxford, England, 2006, 10,
22.
7. The United States Timeshare Industry, 5.
8. Timeshare Resort Operations: A Guide to Management Practice, 20–21.
9. Baumann, M.A. ‘‘Study Indicates Timeshare Buyers Have Carolinas on Their Minds.’’ Hotel and
Motel Management (July 5, 1999): 31.
10. Sparks, Beverly, and Jo Anne Smith. ‘‘Development of Timeshare Resort Management: Edu-
cational Opportunities.’’ Journal of Hospitality and Tourism Education 11, no. 2 / 3 (1999): 54–59.
11. Baumann, M.A. ‘‘New Points System Points Industry in Right Direction.’’ Hotel and Motel Man-
agement (May 17, 1999): 22.
12. Ibid.
13. Bennett, Julie. ‘‘The Ritzy Route to Condo Ownership.’’ Wall Street Journal (February 1, 2006):
D8.
14. Hayward, Philip. ‘‘Lodging’s Fourth Dimension.’’ Lodging Magazine (September 2005): 30.
15. Ibid., 27; ‘‘Survey Reveals Top 10 Trends in Hotel Industry.’’ CYN Business Journal (June 25,
2004).
16. Baumann, M.A. ‘‘Mixed-Use Projects Possess Right Ingredients.’’ Hotel and Motel Management
(September 20, 1999): 10.
17. Baumann, M.A. ‘‘Exchange Companies Provide Flexibility and Expertise.’’ Hotel and Motel
Management (July 19, 1999): 22.
18. Baumann, M.A. ‘‘Specialized Lenders Cater to Timeshares.’’ Hotel and Motel Management (June
3, 1999): 20.
19. Schwanke et al. Resort Development Handbook, 11.
20. Ibid., 12.
21. McElyea, J. Richard, and Gregory L. Cory. ERA Issue Paper. Resort Investment and Development.
An Overview of an Evolving Market. Economics Research Associates, undated, accessed January
11, 2006, 5. http: / / www.econres.com / documents / ip.html#
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Chapter 2
THE IMPACT OF DEVELOPMENT
ON OPERATIONS
LEARNING OBJECTIVES
1. Identify the key elements in the development process that help maintain a
balance between the physical capacity of a site and the economic needs of
the developer.
2. Define the main factors affecting the attractiveness of a site.
3. Explain the role of general design principles in site planning and maintaining
community identity.
4. Describe the process used to determine the capacity of a ski area.
5. Indicate the impact of capacity on site design, ski lift network, and the types
of base area facilities.
INTRODUCTION Access Roads

THE DEVELOPMENT PROCESS Food Service
Balance Accommodation
Planning Process Maintenance
Permits Emergency Care
DESIRABLE SITES OTHER WINTER SPORTS ACTIVITIES
Site Feasibility Cross-Country Skiing
GENERAL DESIGN GUIDELINES Snowmobiling
CAPACITY Tobogganing
Potential Capacity Ice Skating
SKI RUNS SUSTAINABLE DEVELOPMENT
Site Design MOUNTAIN RESORT MATURATION
SKI LIFT NETWORK CYCLE
Types of Lifts SUMMARY
BASE AREA ENDNOTES
Parking
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22 Chapter 2 MOUNTAIN-BASED RESORTS: THE IMPACT OF DEVELOPMENT ON OPERATIONS
INTRODUCTION
Compared to other major amenities, ski areas are much like-
lier to be profitable business ventures that may, as a logical
adjunct, also engage in real estate development.
—URBAN LAND INSTITUTE
PLANNING CONSIDERATIONS FOR WINTER SPORTS RESORT DEVELOPMENT
The physical facilities of a ski area figure prominently in skiers’ evaluation of the
overall quality of the resort complex. In one study, skiers at four Vermont resorts
rated the most meaningful potential indicators of quality as:
1. daily lift ticket price

2. maximum waiting time in lift lines
3. type of food service
4. walking time from parking lot to base lodge
5. percentage of terrain covered by snowmaking
6. attitudes of ski area employees1
Three of these items—2, 4, and 5—are design issues, while item 3 deals with
the provision of specific services.
In this chapter, the process of developing a ski resort is outlined. Care must
be taken to strike a balance between the physical capacity of the site to accom-
modate skiers and the economic need of the developer to make a profit. Char-
acteristics of desirable sites and general design principles are noted. The
all-important order in which decisions are made is defined.
THE DEVELOPMENT PROCESS

Although private land values are affected by the location of re-
sort areas, maximizing the value of individual tracts of private
land must be a secondary consideration of the Forest Service.
—U.S. FOREST SERVICE
Balance
The conceptual design philosophy involves a balance—a physical balance, first,
between the ski area and the market, and, second, an economic balance between
investment and earning power.2
S Physical Physical balance means that the size of the ski area must be sufficient to meet the
N Balance needs of the market without being so large that the area is underutilized. Within
L the resort area itself, balance is also required. The capacity of the mountain dic-
MILL (Wiley)
THE DEVELOPMENT PROCESS 23
tates the number of skiers that can be accommodated, both from a safety angle
and from the viewpoint of skier enjoyment. The capacity of the mountain to handle
skiers, in turn, dictates the ski lift network capacity required. In other words, the
capacity of the lifts to bring people up the mountain must be in balance with the
trail capacity to bring them down the mountain. Capacity, in turn, indicates
the support facilities needed at the base and surrounding areas.
Economic The second area of balance suggested by Ted Farwell, noted ski area consultant,
Balance brings together the amount of money invested in the project and its earning ca-
pacity. Investors put money into developing infrastructure and buildings—physical
plant—which is then used to generate revenue. The quantity and quality of phys-
ical plant must be sufficient to generate enough revenue for investors to get a
decent return on their investment. Revenue generation is a function of number of
skiers, revenue per skier visit, and the length of the season. At the same time, to
ensure a return, management must keep costs in line.
Planning Process
The general process for developing a ski area is outlined in Figure 2.1.
Concept and An initial concept is created. Ski areas, because of their high cost of development,
Objectives are more likely than other recreational facilities to be developed as for-profit rec-
reational developments first and real estate opportunities second. However, the
trend is toward ski areas using land development as a way of increasing the profits
of the operation.
Ski areas can be designated as:
Type I resorts—These international destinations feature excellent moun-

tains and a wide variety of lodging and real estate. Whistler Blackcomb
in British Columbia, Canada, would be in this category.
Type II resorts—These resorts are not as well known in the marketplace
as Type I resorts; they offer fewer activities and appeal to a more limited
market, such as ski clubs and groups. Powderhorn on the western slopes
in Colorado is one such example.
Type III resorts—These resorts offer high-quality skiing but little real estate
development. Many operate only on weekends.3
Small, often marginal developments—These resorts operate only on week-
ends. For example, the typical club hill in Ontario has no snowmaking, is
less than a 300-foot drop, and has a T-bar lift and a chalet without a liq-
uor license.4
Real estate buyers at Type I resorts tend to be older, more loyal to the area,
more family-oriented, and less likely to rent out their units. Those at Type II resorts
S are younger, ski more often and at more areas, and are more interested in their
N real estate as an investment rather than its use potential. The smaller weekend
L areas cater to families, children, and beginning skiers. Important to local residents,
MILL (Wiley)
FIGURE 2.1 The development process for ski areas.
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they do not attract out-of-towners. They can, however, help develop a pool of skiers
eager for bigger challenges.
The specific objectives for the development are then established. A survey of
the potential market and a comparison of sites, together with an examination of
the likelihood of financing, produce a determination of the most desirable site.
This site becomes the subject of a detailed analysis.
General design guidelines are then established and the ski and base area
capacities are determined. Detailed design guidelines can then be formulated and
the ski runs laid out. As noted above, the ski runs determine the layout and size
of the ski lift network, which will, in turn, influence the layout of the base area.
At each step, the ski area capacity might have to be revised and the layouts revised.
Next, the access route is laid out and a final check made to ensure that the
ski runs, the ski lifts, the base area, and the access route are balanced. If necessary,
the design can be revised, development phased in, and a master base area, con-
struction, and operating plan developed. An environmental statement is then
drafted, a profitability or pro-forma analysis made, and final design approval
sought.
Permits
Most of the largest and most visible ski areas in the United States are built, at least
partially, on land managed by the U.S. Forest Service (USFS). Over 90 percent of
ski areas in the Rocky Mountain and Pacific West operate under USFS permits.
This compares to 35 percent of areas in the Northeast, 8 percent in the Midwest,
and none in the Southeast.5 The 1960 Multiple Use Sustained Yield Act allows
private ski areas on national forest land. This policy was codified by various mem-
oranda of understanding between U.S. Skiing, the National Ski Areas Association
(NSAA), and the U.S. Forest Service. U.S. Skiing is the governing body for skiing
and snowboarding in the United States. The NSAA is the trade association for U.S.
ski areas and represents most of the ski areas permitted to operate on lands ad-
ministered by the United States Forest Service. The USFS is responsible for man-
aging multiple activities in national forests in a way that is environmentally
sustainable. Together they seek to emphasize:
public / private partnerships in developing recreational facilities

multiple use public land management
sustainable communities
viable local economies
ecosystem health
Because development requires a permit from the USFS, developers are ex-
pected to show that the resort development will provide a public benefit in ad-
dition to a profit benefit to the developer. The permit process has six steps:
S 1. identification of a potential site by both a developer and the USFS

N 2. issuance of a study permit by USFS to allow close physical examination
L of the site by the developer
MILL (Wiley)
3. issuance of a development prospectus by USFS giving the developer

(and others) the opportunity to bid for development rights
4. awarding of development rights by USFS to a developer
5. preparation of a master plan and environmental assessment by the se-
lected developer
6. issuance of a special use permit by USFS. This is the legal contract and
operating agreement between the USFS and the concessionaire. A term
permit, usually 20 to 30 years, is issued for areas at the base of the
mountain, while annual permits cover the rest of the development.6
Future development is subject to negotiation. The concessionaire is charged

an annual fee for the right to use public land. The fee is based on the amount of
physical improvement and on revenue generated.
Three points can be made relative to operations on USFS land:
1. The USFS permit process for initial development and / or expansion can
be extremely time-consuming and costly.
2. Changes in USFS policies relative to fees, long-term land ownership, and
so on directly affect resort operations.
3. Resorts operating under USFS permits may be required to shut down late
in the season even if late spring snow conditions are such that opera-
tions could continue.7
The point is that resorts operating under USFS jurisdiction do not have the
flexibility that areas operating on private lands enjoy.
In France, since the Environmental Protection Act of 1976, an impact study
must be conducted for any project whose cost exceeds 6 million francs. In Ger-
many, the political acceptability of the project is a major factor in determining
whether or not it will be approved. In contrast to the United States, no ski area in
France has been stopped because of environmental concerns. Skiing is not viewed
as detrimental to the mountain.8
In Australia, the state of Victoria created the Victoria Alpine Commission, an
agency totally independent from the Parks Service. Recognizing that skiing is very
different from other activities taking place in the parks, this agency handles all of
the skiable terrain in addition to a few potential sites.
DESIRABLE SITES
The guiding principle is clear: wherever conflicts occur be-
tween resource protection and increased use and develop-
S ment, protection will take precedence.
N —BANFF NATIONAL PARK MANAGEMENT PLAN, 1988
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DESIRABLE SITES 27
Site Feasibility
The development of mountain sites is a particularly challenging endeavor. The
USFS has developed an inventory form for evaluating the development potential
of a site (Figure 2.2, pages 28–29). The overall physical feasibility of the site is a
function of four factors:
scope and attractiveness of the site

access and proximity to markets
environmental limitations
unusual site-specific costs9
Attractiveness The attractiveness of the site is determined by various factors. First, in terms of the
environment, people look for a desirable mix of climate, snow conditions, expo-
sure and snow retention, and forest cover.10
Extreme temperatures should be avoided and wind problems should be infre-
quent. The best snow is dry. A minimum of 250 inches of snow is the standard for
a modern ski area.11 Machine snowmaking, in recent years, has allowed previously
marginal ski areas to operate profitably. In New England and other Eastern states,
the wide temperature variations followed by periods of rain and freezing weather
mean that the length of the season depends on the quality of man-made snow.12
Increasingly, natural snow is being supplemented by artificial snow.
Similar to the irrigation system of a golf course, a snowmaking system requires
a water reservoir, a distribution network of piping and pumps, and numerous
nozzles or guns to spread the snow over the slopes.13 The system works because,
at certain temperature and humidity levels, water can be broken into small drop-
lets and forced into the atmosphere under pressure provided by compressed air
or large fans; the water returns to the ground as snow. It is denser and contains
more water and less air than natural snow. Compressorless systems are less ex-
pensive to operate and, because they are quieter, are attractive around base areas.
Compressed air systems require less maintenance and last longer. They also op-
erate effectively under a greater range of temperatures. Compressorless systems
perform best under colder temperatures, ideally 0⬚F.
Snowmaking equipment requires a dependable, high-quality water supply to-
gether with easy access to utilities. Machine snowmaking, for example, requires
180,000 gallons per acre-foot of snow.14 This translates into usage of between 500
and 10,000 gallons of water per minute. Once the water is converted to snow, 78
percent of it returns to the watershed during spring melting and runoff.
GROUP DELTA, a major ski resort consultant, has pioneered a method of
combining low snowmaking cost and maximum attractiveness to skiers. One or
more trails, 300 to 400 feet in width, are built with islands in the middle to enhance
the aesthetics by breaking up the monotony of empty trail. A single set of snow-
making pipeline is buried up the center of the trail, where strategically placed
hydrants, 140 feet apart, can service both sides of the run.
S Fully automated snowmaking systems have been available since the mid-
N 1980s. These systems mean few people are needed to handle hoses and nozzles.
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S
FIGURE 2.2 Inventory form—potential winter sports development sites. Source: Wingle,
N
H. Peter. Planning Considerations for Winter Sports Resort Development. Washington,
L
D.C.: USDA Forest Service, 1994, 3.
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DESIRABLE SITES 29
FIGURE 2.2 (Continued )
This is particularly helpful in countries like France, where labor laws are strict and
scheduling flexibility is restricted.15
In North America, a north and northeast exposure helps protect the terrain
from the effects of sun and wind. Steep slopes and those at lower levels increase
the problem of exposure. This also depends on location. At Mount Hood, Oregon,
there is so much snow that even the south-facing slopes above timberline are ideal
for skiing late in the season.
Forest cover adds to the aesthetics of the experience while providing protec-
tion from the wind to both the skier and the slope. It adds contrast when the light
is flat and challenge to experienced skiers.
Terrain is the second factor affecting the attractiveness of a site. The grade of
the terrain should match the ability level of the market to be served. A variety of
grades and views make for an aesthetically pleasant experience. Developers must
be especially aware of the following:
steep and unstable slopes and rockfall zones

S heavy snowfall
N avalanches
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microclimate conditions, such as wind hazards

watersheds and wetlands
flooding and unstable water flows
air quality problems due to inversion (the brown cloud effect caused by
cold air trapping warm air close to the ground)
vistas
sun orientation and shadows
impact of seasonal changes on the resort’s activity patterns16
The skier carrying capacity is noted in skier density per acre of terrain and
takes into account that just under half of the skiers are on the ski runs at any one
time. The others are riding the lifts, resting in the lodges, or waiting in lift lines.
Acceptable density depends on the market being served. Vacation destination
areas average 10 to 15 skiers per acre. This is a question of economics in addition
to safety and attractiveness. The higher the development cost and / or the shorter
the season, the higher the density needed to operate economically. New England
ski areas average 20 skiers per acre while, in the Midwest, the average increases
up to 100 per acre.
Density is also related to snow cover, slope and trail design, and slope main-
tenance.17 Higher densities are acceptable when snowfall and snow retention is
greater, where snow maintenance is practiced, and where the design of the slope
keeps skiers on the fall line.
A major constraint for ski areas, and the third factor affecting the attractiveness
of a site, is lack of space at the base. This is especially true for parking facilities.
The most effective way for a mountain to operate is by way of a lift system that
disperses skiers across the resort. The lifts radiate from one or two points. The
staging area at the base must be large enough to permit this.
The density of housing units lessens the farther away they are from the base
area. High-density, expensive units—typically hotels—surround the base area to
meet the needs of skiers who stay a relatively short time. Farther away are medium-
density condominium or timeshare units. Farther away still are single-family homes
where premiums are paid for attractive views. Direct access to the ski slopes in-
creases the room rate or real estate prices.
Retail development is structured similarly, with restaurants, ski shops, and
specialty stores located close to the slopes, convenience services farther out, and
services and larger stores even farther out.18
The fourth and final factor affecting the attractiveness of a site is the potential
length of the season. The typical ski season of 130 days runs from Thanksgiving to
Easter, with variations depending on climate. For example, northern Ontario and
northern Michigan have a season of 131 days, while in southern Quebec the season
is 10 days shorter. Central and southern Michigan have a season of 100 days, from
the middle of December until the third week in March. In southern Ontario, the
70-day season starts just before Christmas and lasts until the end of February.19
By adding night skiing, resorts can significantly increase the number of skiers
S who can be accommodated, thus making the resort area more economically
N viable.
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DESIRABLE SITES 31
Quick Getaway 2.1

What Attracts Skiers and Riders?
There are many different variables that attract slope or terrain area; the lifts, facilities, and sur-
skiers and riders to resorts. However, the single rounding village must support the outdoor el-
most important variable may be the role of ements to maximize the attractiveness of the
snow. As long as snow cover is exceptional, resort for various demographics.
skiers and riders will find ways to participate Another area that resort owners should pay
despite recessions, wars, gasoline shortages, close attention to is the availability of outside
and increases in lift ticket prices. Even in many resources and utilities to support the resort. Is
high-snowfall regions, resorts have found that there adequate water, both for potable con-
snowmaking is a requirement to attract visitors. sumption and machine snowmaking? How is
Snowfall is not always a predictable variable, wastewater handled, solid waste? Is there ade-
but any resort owner can tell you that a steady quate and reasonably priced power?
flow of customers is necessary for a successful Source: Farwell, Ted. ‘‘What’s Your Area Worth?’’ SAM:
season. ski area management. http: / / www.saminfo.com / issues
The second variable in attracting custom- / article.php?tid⫽3421
ers to a mountain resort is the scope and di-
versity of the ski and snowboard terrain. A DISCUSSION QUESTION:
poorly developed slope can discourage visitors Do you agree with the author when he says
from returning, but never fear: a simple evalu- that snow is the most important variable in
ation can identify problem areas and help you attracting customers to a mountain resort? If
zero in on ways to improve the overall terrain. not, what is the most important variable?
Balance is very important when designing a Why?
Access to The more attractive the site, the farther people will travel to get there. The flip side
Markets is that, as distance from major markets increases, the scope and attractiveness of
the area must increase. Skiers are willing to travel one to two hours at most to ski
at a day area aiming for a local market. Weekend ski areas targeting a regional
market can expect skiers to travel up to half a day to enjoy the slopes, while the
national or international market seeking a vacation destination will travel more
than a half day for this option.
Environmental In large part, skiers are attracted to a winter resort because of the opportunity to
Limitations experience nature. Balancing the economics of skier numbers with the aesthetics
of the outdoor experience is important for the long-term profitability of the resort.
Resorts may face such environmental limitations as the presence of wildlife habi-
tats that are home to endangered species, the existence of special cultural or
S archaeological sites deemed worthy of preservation, and a scarcity of natural re-
N sources. Ski areas have to be particularly sensitive to:
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minimizing impact during construction

preserving wildlife patterns
using storage ponds or reservoirs to minimize the impact of snowmaking
on streams and rivers
providing employees with public transportation and guests with shuttle
service to help improve air quality
developing recycling and waste management programs
conserving energy20
Site Costs The cost of the land must be balanced against the revenue an area can generate.
In the West, where over three-quarters of all ski areas are on public land, an annual
lease payment is made. In other regions, land cost is a major item in determining
Quick Getaway 2.2

Going Green with the
World’s Largest Ski Resort
For an outdoor activity, skiing can actually provides some fire protection: about a quarter
have a very large environmental impact. For of its 123,000 cubic meters are available year-
years resort owners have simply worked round for putting out fires.
around the environmental difficulties they face The installation of the area’s new Chapa-
in the everyday operation of the area. One re- lets Chair is another example of sustainable en-
sort, however, has decided to address the issue. vironmentally conscious development. The lift
The Three Valleys, located in France, is the pylons are anchored directly in existing rocks
world’s largest ski resort. The resort operates to avoid the need to create new concrete tower
1,920 snow cannons, 183 ski lifts, and 67 trail bases, which disrupt the soil and cause erosion.
groomers that use only hydro-electric power for Also, the lift cables are marked in order to warn
their electricity requirements. This fully renew- birds away from the dangerous steel lines.
able energy is provided by the Gaz Electricité Marking cables is not the only thing the com-
Company of Grenoble, which uses power gen- pany is doing to protect native birds: they have
erated by small hydropower centers in the also created new meadows to help preserve the
French Alps. The Three Valleys also uses bio- endangered black grouse.
degradable diesel in all of its company vehi-
cles. Source: ‘‘Three Valleys Go Green.’’ SAM: ski area man-
agement (October 2005). http: / / www.saminfo.com /
For snowmaking, the Three Valleys chose news / article.php?tid⫽643
the Ariondaz Dam. The location is ideal be-
cause of its hilltop orientation, which has a
minimal impact on the existing topography. DISCUSSION QUESTION:
The Ariondaz Dam area is also a good snow- What other environmental issues could ski
S making location because of the absence of areas potentially address? Why is it impor-
N protected species in the area. A nearby lake tant that the area addresses these issues?
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GENERAL DESIGN GUIDELINES 33
the economic viability of an area. Anything more than $1,000 per acre makes the
area too expensive, unless other favorable factors are present that would offset the
high cost.
Increasing numbers of areas have added snowmaking as a way of increasing
capacity. Careful analysis must be made, as snowmaking requires a capital in-
vestment of $25,000 to $70,000 per acre. In addition, it costs $2 per hour per acre
to operate the equipment. The costs of power and water must be carefully consid-
ered against the potential extra revenue.
GENERAL DESIGN GUIDELINES

Good design evolves as a process that articulates goals and
values, identifies design-determining forces, targets strategic
priorities and concepts and facilitates change over time with-
out the loss of community identity.
—ELDON BECK AND SHERRY DORWARD
RESORT DEVELOPMENT HANDBOOK
Mountain resort communities must have goals intended to meet the expectations
of guests while emphasizing what is special about the local area. This link between
people and the natural environment should aim at creating livable year-round
communities of people who have strong emotional bonds to the area.
Physical, aesthetic, and social forces help determine the design of a com-
munity. Concepts that must be taken into account include:
subordination of the automobile

human scale
pedestrian amenities
physical and visual links between the community and its natural resource
base
provision for the needs of a permanent population21
Certain design principles provide an umbrella for the specifics of site planning.
1. To avoid land use conflicts, it is important that the design of the ski area
conform to the existing physical site. This makes for an environmentally
sound project. In addition, by minimizing changes to the terrain, costs
are significantly reduced.
2. The ability of skiers approximates a bell curve, with 5 percent to 15 per-
S cent on either end of the curve and approximately 70 percent in the
N middle. Participation at resorts tends to follow these proportions. The
L ideal ski area matches the difficulty of its slopes to this bell curve.
MILL (Wiley)
3. Newly groomed slopes attract skiers one or two classes below the design
difficulty of the slope. On the other hand, slopes with many moguls or
icy conditions increase the slope difficulty.
4. A given ski area supports fewer and fewer skiers as their ability level in-
creases. More experienced skiers are more expensive to take care of
than beginners as they demand more vertical feet of skiing per day. Be-
cause of their slope demands, they ride the lifts more often and prefer to
ski at the top of the mountain where development, construction, and
maintenance costs are greater. Because they ski faster than less experi-
enced skiers, fewer can be accommodated on a trail.
5. Novices and intermediate skiers bring in more money than do advanced
skiers.
6. Access road design should be based on expected peak traffic where
weather is not a factor. Generally speaking, skiers arrive at an area over
a two-hour period in the morning. This principle means that traffic can
be handled approximately 60 percent of the time. Weather can be ex-
pected to be poor 20 percent of the time during the peak season, requir-
ing more than two hours to access the area. Additionally, another 20
percent of the time, more than two hours will be needed when crowds
over capacity want to ski.22
CAPACITY
Think about how to separate skiers that have different skiing
abilities. They should not interfere with each other; a mixture
of difficulty on a single trail may either make the entire trail
too difficult for the less able, or sections that are too easy for
some skiers may render the entire trail unpopular for that
group.
The general process of identifying capacity is to use the amount of skiable area
for each skier classification to determine ski area capacity, which is used, in turn,
to determine the ski lift and base area facilities necessary.
Potential Capacity
The capacity of the ski area is determined by carefully following these seven steps.
S 1. Legal boundaries—First, identify the legal boundaries of the area and de-
N lineate them on an area map.
L
MILL (Wiley)
CAPACITY 35
2. Total skiable acres—Next, determine the total skiable acreage that is

available. Terrain can be classified as unskiable, marginal, or attractive.23
Terrain may be unskiable because it is too steep, too flat, has an excess
of rocks, is subject to avalanches, or is in an extremely windy area. Base
and cliff areas as well as areas of excessive soil instability should be ex-
cluded.
Marginal terrain is skiable but is not attractive. It might consist of
narrow, flat ridges. This type of terrain can be used for access and egress
to base areas or for linking attractive ski runs. It is not included as skia-
ble acreage.
3. Skier classification—The total skiable acreage is made up of slopes of
various gradients. The steeper the slope, the more advanced the skier
has to be. Advanced skiers prefer less crowded conditions than are toler-
ated by novice skiers. Additionally, the safety factor dictates that steeper
slopes have fewer skiers per acre on them. Thus, the next step is to
break down the total skiable acreage by type of skier.
The U.S. Forest Service suggests that beginners have a 15 to 25 per-
cent slope gradient, intermediate skiers a 25 to 40 percent slope gradient,
and advanced skiers a slope gradient greater than 40 percent. The guide-
lines suggested by noted industry consultant Ted Farwell are shown in
Table 2.1.
4. Ideal ratios—Next, compare the actual number of acres in each gradient
category to ideal ratios. The ideal takes into account that about 20 per-
cent of skiers are beginners and advanced skiers, while approximately 60
TABLE 2.1 Ski Area Planning

Terrain Capacity
Skiers / Acre
Terrain Skier Vertical Vertical
Skill Class Gradients Market Slopes Total Feeta Metersa
Beginner 10–15% 5% 22–44 50–100 421 128

Novice 15–25% 10% 18–26 40–60 946 288
Low Intermediate 25–35% 20% 13–22 30–50 1,262 385
Intermediate 30–40% 30% 9–15 20–35 1,683 513
High Intermediate 35–45% 20% 7–9 15–20 2,322 577
Advanced 45–60% 10% 4–7 10–15 2,709 673
Expert 60%⫹ 5% 4–7 10–15 3,871 962
Average 10–17 23–38 2,000 497
Daily Averageb 9,299 2,834
a
Vertical feet of skiing demand per hour.
b
Based on 5 hours of skiing for beginners through intermediates and 6 hours of skiing for high intermediates through experts.
S Source: Farwell, Ted. The Concept of Balance, Ski Area Design Analysis, and the Mountain Design Process. Boulder, CO: Ted Farwell &
N Associates, Inc., n.d., 26ff.
L
MILL (Wiley)
percent are intermediate. The actual average distribution of terrain by

skier ability is actually 24 percent beginner, 45 percent intermediate, and
31 percent advanced / expert. The tendency is toward more beginner ter-
rain in the Southeast and Midwest and more expert terrain in the Rocky
Mountains.24 Refer again to Table 2.1 for a more detailed breakdown.
Additionally, note that advanced skiers spend significant time on inter-
mediate slopes.
The development ratio for any particular resort depends on the char-
acteristics of the target market, the unique characteristics of the site, the
continuity of the total ski run and lift network, and the overall concept
of the ski resort.
5. Developed acres—Determine the number of acres to be developed in
each category. The result should be the most desirable ski run mix
rather than a maximum potential number of skiers who can fit onto the
mountain.
6. Acres cleared—Next, determine the total number of acres to be cleared.
Typically, ski areas leave from half to two-thirds of the mountain in its
natural state.25 The goal is an approximately equal amount of trails and
buffer zones. This arrangement provides shelter from winds for both the
trails and the skiers while serving as a visual reference in foggy condi-
tions. Aesthetically, the effect is pleasing, while good forest management
is practiced by taking soil stability, water runoff, and environmental pres-
ervation into account. The result is the number of net skiable acres.
7. Number of skiers—Calculate the total number of skiers, which is equal to
the number of net skiable acres times the appropriate skier density fac-
tor. This latter figure depends on:
type of ski area—Day areas have a greater density factor than do week-
end areas and both have a density factor greater than vacation resorts.
planned snow grooming—The degree of slope difficulty varies with snow
conditions. However, grooming the slopes accommodates more skiers per
acre with, up to a point, no loss of skier experience. Grooming the run
takes the terrain down to another skier level.
skier preference for different types of runs
extent of ski schools
extent of snowmaking—Between 80 and 85 percent of U.S. ski areas re-
quire snowmaking. Making this capital investment increases the skier den-
sity factor.
width of run—The wider the run, the greater the skier density.
ground configuration
lift network capacity
Various estimates of skier density per acre are contained in Table 2.2. Vacation
resorts prefer variety and lower densities, while higher densities are acceptable to
S areas in the Midwest, day-night places, and resorts that rely on snowmaking equip-
N ment for much of their snow cover. The wide range of figures means that the
L above criteria must be carefully adapted to each unique situation.
MILL (Wiley)
CAPACITY 37
Careful planning of ski slopes creates a safer environment for skiers of all ages.
Courtesy PhotoDisc, Inc.
TABLE 2.2 Density per Acre Estimates

Ted Aspen Pacific NW Various Ski
Farwell Corp. Area USFS Consultants
Beginner 50–100 15 35 25 50–100

Novice 40–60
Low Intermediate 30–50 10 15 15 20–35
Intermediate 25–35
Advanced Intermediate 15–20
Advanced 10–15 5 5 10 10–15
S Expert 10–15
N Source: Farwell, Ted. The Concept of Balance, Ski Area Design Analysis, and the Mountain Design Process. Boulder, CO: Ted Farwell &
L Associates, Inc., n.d., 5.
MILL (Wiley)
Quick Getaway 2.3

Resort and Resort Community:
Working Together
Mountain resort communities must carefully 4. Encouraging public officials and commu-
balance the amount of land to use for public nity residents to visit other communities
infrastructure against the amount reserved for where space is limited and land values
private development: because of the very high and pressure for lucrative private develop-
price of land in mountain areas, and the pres- ment are extreme, in order to observe the
sure from developers and clients, communities consequences of poor decision-making.
often find it difficult to obtain land for neces- 5. Thinking creatively about ways to
sary infrastructure systems such as schools, li- strengthen the community or regional
braries, parks, government services, or water identity of social services.
treatment facilities. Poorly made land decisions 6. Supporting activities which enhance a
can create tensions between the community sense of community and membership in
and the resorts. At times, poor decisions can an interdependent regional ecosystem.
even damage the community identity or the de-
pendent resorts’ image. Creating and sustaining a sense of com-
Thankfully, these resort communities don’t munity and regional identity is particularly
have to make land decisions in a vacuum. They critical in destination resort communities. It’s
can look to their neighbors’ previous decisions also particularly challenging, because commu-
for guidance. The following are examples of nity identity is continually reshaped and rede-
successful initiatives undertaken by various fined by powerful corporate interests.
mountain resorts: Source: Morris, Lynne Clemmons. ‘‘Community Strate-
gies for Addressing Regional Impacts of Destination
Resort Development.’’ http: / / www.socwk.utah.edu /
1. Building regional community recreation rural / pdf / 7-B2.pdf
trail systems.
2. Creating workforce or community housing. DISCUSSION QUESTION:
3. Giving priority to airport expansion and Why do you think it’s so difficult to make
hospital improvements, which benefit both land decisions in mountain resort towns?
the resort community and the area resorts. Whose fault is this?
Skiers at One Within a ski resort, not all of the skiers will be on the slope at the same time. The
Time (SAOT) USFS standard is that 50 percent of all skiers are on the slope at any one time.
Using this guideline, the mountain can accommodate twice as many skiers as
are on the runs. The skier density per acre indexes in Table 2.2 do, in fact, in-
S clude this assumption. When this is the case, the skier capacity should not be
N adjusted.
L
MILL (Wiley)
SKI RUNS 39
Persons at One The number of persons at one time (PAOT) takes into account that nonskiers also
Time (PAOT) visit the resort. Perhaps a parent takes the children skiing but remains in the lodge.
The extent to which resort capacity must be adjusted depends on the type and
extent of the facilities. USFS uses a multiplier of 1.15.
PAOT ⫽ SAOT ⫻ 1.15
The resultant figure is the number of people who can be accommodated at the
ski area.
Night Skiing For a relatively small increase in cost, adding illumination can increase capacity
as much as 60 percent. About 45 percent of U.S. ski areas offer night skiing. The
distribution is higher in the Northeast, Southeast, and Midwest (44 percent, 89
percent, and 92 percent respectively) and lower in the Pacific West and Rocky
Mountains (36 percent and 20 percent respectively).26 Because of the increased
illusion of speed, slopes offer more challenge at night than during the day. Thus,
even a gentle slope can be challenging to an intermediate skier.
SKI RUNS
Isolated base areas should be connected to public parking or
public transportation centers with ski trails when possible.
Site Design
Slopes that face predominantly north or northeast have less sun exposure and
retain their snowfall. Wind, however, can be more destructive than snow, stripping
slopes of needed powder. While snowmaking equipment has allowed ski resorts
to develop in regions that would otherwise be uneconomic, certain requirements
remain in effect. A combination of artificial and natural snow that allows 80 to
100 days of skiing a year is necessary. For areas that rely on snowmaking equip-
ment, this means 800 to 1,000 hours of temperatures below 28⬚F.27 This kind of
information can be obtained from local offices of the weather service.
The following guidelines are useful in laying out the ski runs at a resort.
Locate the runs parallel to the fall line. The fall line is the path of natural
descent between two points on the mountain and is perpendicular to the
contour. Following the fall line as much as possible produces efficient,
S high-quality trails. Using natural hollows and depressions reduces costly
N cutting and filling on the mountain.
L
MILL (Wiley)
Offer a variation in gradient for a more interesting experience. At the top

of the trail, skiers should be able to see enough to determine generally
how difficult the run is, but they should discover some surprises as they
go downhill.
Widen the steeper portion of runs from a minimum of 80 feet up to 250
feet.28 Trail widths can vary from 50 to 400 feet. Mostly, they range from
100 feet to 200 feet.29 They should also be wider at the top and bottom to
avoid congestion.
Separate runs and lifts for purposes of safety.
Increase shade and wind control to help keep snow on the slopes.
Keep the cutting boundary feathered and uneven and retain trees at vary-
ing heights and at varying distances from the trail’s center line to help
control wind while maintaining a pleasing aesthetic. Use tress islands to
channel skiers, separate skiers of different abilities, and add visually to
the experience. Avoid clearing vegetation that protects weak or shallow-
rooted trees from wind, which can cause them major damage. This is es-
pecially true for conifers.
Groom all ski runs.
Add moguls to make the slopes more interesting for the more advanced
skier, but be aware that they also reduce density and safety.
SKI LIFT NETWORK

Helicopters used for ski lift construction eliminate the need for
roads to individual tower sites.
The capacity of the lifts to bring skiers up the mountain must be balanced against
the capacity of the trails to take them down. The goal is to spread skiers over the
mountain while ensuring that the time spent in line is no greater than that spent
riding the lift.30
The ideal ski lift system covers 1,000 to 2,000 vertical feet over a slope length
of 4,000 to 5,000 feet.31 These figures take into account skier characteristics as well
as ski area economics. For skiers who live at sea level, the physical exertion of
skiing at high altitude means that periods of skiing have to be balanced by resting
in line or in the lodge. Many skiers feel more comfortable when they can see both
ends of the lift and everything in between. Because most skiers prefer consistent
conditions, they prefer a vertical standard of less than 2,000 feet. Above 2,500 feet,
snow conditions tend to vary. Finally, long ski lifts that are open to the elements
can be cold and unattractive.
S From an economic viewpoint, the earning potential of the lift increases as the
N length increases while cost per foot decreases. Because longer lifts increase po-
L
MILL (Wiley)
SKI LIFT NETWORK 41
tential capacity, more skiers can be accommodated at a lower cost. Each lift re-
quires a minimum of three operators. With longer lifts, more skiers can be
accommodated while labor costs remain fixed.
The hourly capacity required to service a mountain, or part thereof, is deter-
mined as follows:
1. Identify the number of skiers by ability level.

2. Multiply by the appropriate vertical transport feet (VTF) per feet require-
ment.
3. Add to get the total VTF / hour to service the mountain or part thereof.
4. Divide by the vertical rise of the mountain.32
The total is the hourly capacity required to service the mountain. By compar-
ing this number to the hourly capacity of various lifts, the number of lifts required
can be determined.
There is an aesthetic as well as a capacity aspect to the ski lift network. To
attract people in all seasons of the year, ski areas, including the ski lift network,
Chair lifts are a popular type of lift to convey

S skiers to the top of the mountain. Courtesy
N PhotoDisc / Getty Images
L
MILL (Wiley)
must be visually attractive. It may be possible to screen lifts in critical areas. The
color and reflectivity of lifts has been a concern. The international practice of
galvanizing towers has helped in this regard. Light-colored anticorrosion towers
installed at Copper Mountain, Colorado, were approved after it was shown that,
after three to five years, they would darken adequately to blend into the surround-
ings.
Types of Lifts
Four types of lifts are in general use today: tows, surface cable lifts, chairlifts, and
gondolas or tramways.
Tows The early rope tows dragged people up the mountain. Cheap and simple to op-
erate, they were also uncomfortable and potentially dangerous over long distances
and up even moderately steep hills. A modified version exists today, with handles
fixed to a moving cable set a short distance above the ground. These so-called
handle tows or cable tows are effective for distances up to 1,000 feet.
Cable Lifts Cable lifts also use moving cables, but the cable stretches overhead while the skier
remains on the surface of the ground. They go by various names—T-bars, J-bars,
platter lifts, Poma lifts. Like tows, these lifts restrict skier circulation because traffic
is unable to cross the path of the lift.
Chairlifts Chairlifts—the workhorse of the industry—allow skiers to rest as they ascend the
mountain. Unlike the first two categories, they do not interrupt skier traffic across
the path of the lift. Chairs are either single, double, triple, or quadruple. As the
size of the chairs increases, significant capacity is added at a relatively low capital
cost.
The development of high-speed detachable quad chairlifts has increased ca-
pacity safely. The system runs on a high-speed continuously moving cable. Thus,
the chairs travel quickly up and down the mountain. When it comes to loading
and unloading, however, the chair unit detaches from the cable and essentially
comes to a halt. The increased speed allows the lifts to cover greater distances
than tows and cable lifts. They need not travel in a straight line up the hill but
can be angled up the mountain, thereby moving people over difficult terrain.
Crowd problems may develop at the top of the mountain due to the ability of the
lifts to move large numbers of people quickly up the hill.
Gondolas or Where weather conditions make riding in a chairlift uncomfortable, gondolas offer
S Tramways an expensive and slower alternative.
N
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BASE AREA 43
BASE AREA
Building imitation Swiss chalets next to real miners’ cottages
makes both look out of place.
—JOHN COTTLE
HAGMAN YAW ARCHITECTS
The size and number of elements in the base area is determined by the number
and type of skiers on the slopes. At a minimum, base areas should offer equipment
rental, a ski shop, a first aid station, a ski patrol office, a ski school with sufficient
space for people to gather outside, and food and beverage services.33
Parking
The major problem in base area design is reducing potential conflicts between
vehicles, pedestrians, and skiers. Underground parking, while expensive, helps the
separation while freeing valuable space for retail and cultural developments. Skiers
arrive at the base in one of three ways: private auto and / or charter bus, public
transportation and / or shuttle bus, and on foot or skis from resort accommoda-
tions.34
Locating accommodations within easy walking or skiing distance to the slopes
reduces the need for parking, loading, and unloading at the base. The proportion
of skiers arriving by each of these three methods must be estimated to determine
the acreage required for parking and access.
Access Roads
The capacity of access roads is determined by the speed of and the safe distance
between vehicles. This, in turn, depends on the number and width of driving lanes,
the extent and width of the shoulder, how the road surface is constructed, highway
gradients, and weather conditions.35 The patterns of arrival and departure must
also be considered. Most people arrive between 8:00 a.m. and 10:00 a.m. and leave
between 3:30 p.m. and 4:30 p.m. At Keystone, Colorado, ski patrols install fences
on the mountain at the end of the day to slow down skiers hurrying to get off the
mountain. This improves safety and helps control skier egress from the resort. In
addition, congestion is reduced by selling a combination day / night ticket. Of
course, relatively few ski areas have night skiing to spread out demand in this
manner.
A final factor is the average number of persons per vehicle. This can vary from
a low of 2.5 in commuter areas to a high of four per car at destination resorts.
The importance of access is crucial to getting people to the resort. In Califor-
nia, for example, it takes a minimum of six hours to drive from San Diego to Squaw
Valley. In Europe and Japan, where population densities are greater, public trans-
S portation is used. The travel time from Tokyo to a Gala resort terminal is one and
N
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MILL (Wiley)
a quarter hours. Bullet trains travel at up to 150 miles per hour to a modern
terminal, where skiers can board a high-speed gondola to the top of a mountain
and connect with three resorts.
Food Service
Food service areas should be balanced against number of skiers to allow skiers to
refuel quickly and get back on the slopes. Thus, a balance of restaurants and snack
bars on the mountain as well as at the base gives options to the skiers and helps
even demand. Cafeteria seating capacity ranges from 20 percent of design capacity
in the West, where sunshine keeps skiers on the slopes for longer periods, to 35
percent of design capacity elsewhere. Seating capacity is a measure of customer
turnover, which, in turn, is heavily influenced by the weather. Cold, windy weather
brings people indoors more often.
Accommodation
A variety of housing and retail opportunities exists at ski resorts. The types of
housing found in many areas range from resort hotels and second homes to con-
dominiums and timeshares. While whole-unit condominiums were the prevalent
form of housing in the late 1960s and early 1970s, segmented ownership, such as
one-week timeshares and quartershares, have become increasingly attractive to
guests. That easy access to the slopes is important means that higher-density hous-
ing is increasingly common, as this allows more people to be housed closer to
the ski runs.36
A common pattern of lodging development is that the closer to the slope, the
higher the density of accommodation. The base area tends to be surrounded by
high-density, expensive lodging units whose users stay a short time. Farther away
are medium-density housing and timeshares. A premium is paid for direct access
to the slopes. Single-family homes tend to be farther from the activity core and
located on slopes with premium views.
Demand Model Midmountain lodges are difficult to build and operate but offer attractive get-away-
from-it-all environments. Table 2.3 shows a model developed by the USFS for de-
termining the percentage of visitors needing overnight accommodation. This
percentage increases as:
The vertical rise increases.

The skiable area increases.
The variety of terrain approaches the ideal ratio.
Travel time increases.
Access roads are poorer.
Surrounding population density is greater.
The resort draws from a larger geographic area.
S The attractiveness of the site increases.
N
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MILL (Wiley)
BASE AREA 45
TABLE 2.3 Determining the Percentage of Visitors Needing Overnight Accommodation

Method: Sum the ratings for each of the following categories to yield a numerical score to be
applied to the scale at right.
A. Vertical rise 1. 500–1,500 feet
2. 1,501–2,500 feet
3. 2,501–3,500⫹ feet
B. Skiable area 1. 0–200 acres
2. 201–600 acres
3. 600⫹ acres
C. Variety of terrain 1. over 35% of area either advanced or novice
2. 25–35% of area either advanced or novice
3. ideal slope ratio: 20% beginner, 60% intermediate, 20% advanced
D. Travel time 1. 0–11⁄2 hours
2. 11⁄2–3 hours
3. 3⫹ hours
E. Accessibility 1. easy access
2. average access (some storm closures)
3. poor access (frequent road closures)
F. Population within 150 miles 1. 0–30,000
2. 30,001–100,000
3. 100,000⫹
G. Unique qualities other than skiing 0. nothing unusual
1. regional attraction
2. national attraction
H. Climate 1. cloudy, unpredictable temperatures, windy
2. partly sunny, variable temperatures, windy
3. sunny, predictably cold, little wind
I. Length of season 1. less than 115 days
2. 115–130 days
3. 130⫹ days
J. Snow conditions 1. dry less than 30% of the season
2. dry 30–50% of the season
3. dry over 50% of the season
Source: Winter Sports Base Area Study. USDA Forest Service, Region 6, Portland, OR, n.d.
The climate gets better.

The length of the season increases.
The snow conditions get drier.
S Need for overnight accommodation:

N
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MILL (Wiley)
Rating from sum Percentage of

of categories site capacity
14 1
15 2
16 3
17 4
18 5
19 10
20 15
21 20
22 25
23 30
24 35
25 40
26 45
27 50
Maintenance
Maintenance facilities should be located near the base area. They are often com-
bined with the area’s snowmaking facilities. Grooming vehicles are the most useful
and expensive maintenance tools a ski area possesses. The standard is for one
vehicle per 25 acres of skiable terrain in the East and per 50 to 75 acres in the
West.37
Emergency Care
Ski patrol and emergency care facilities must be provided at all ski areas. Some
areas can rely on local clinics for emergency care once the ski patrol has provided
basic first aid. Members of the volunteer National Ski Patrol System (NSPS) are
often used on weekends to supplement resort employees. Insurance companies
may require qualified emergency medical technician (EMT) skills for members of
the NSPS. In addition to sophisticated communications systems, heliports suitable
for flight-for-life helicopter services may be needed.38
OTHER WINTER SPORTS ACTIVITIES

Cross-country ski tour centers and associated activities are an
important part of a resort that wants to provide full service
winter recreation to its guests.
S —U.S. FOREST SERVICE
N PLANNING CONSIDERATIONS FOR WINTER SPORTS RESORT DEVELOPMENT
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MILL (Wiley)
OTHER WINTER SPORTS ACTIVITIES 47
Cross-Country Skiing
Fewer constraints pertain to cross-country or Nordic facilities than to downhill. For
example, a greater range of terrain is suitable for cross-country skiing. Therefore,
areas can be located closer to the market. Development and maintenance costs
are less, lifts are not needed, and trails are narrower. Fewer regulatory permits are
needed, as Nordic skiing is more compatible with the environment than is downhill
skiing. Because of lower costs, cross-country facilities can break even with a season
of 40 to 80 days.
Quick Getaway 2.4

In Harmony with Bears
Many mountain resorts attract and dazzle visi- monia, and they can be sprinkled with moth-
tors with their astounding wildlife. Some of the balls or other strong-smelling chemical agents
most impressive animals found in the moun- to help mask the smell of organic matter. Any
tains are the black bears native to North Amer- openings on the outside of the lodge that are
ica. Unfortunately, bears are also large and used as outlets for vented kitchen air should be
dangerous creatures. When humans mingle inspected and cleaned regularly. Outdoor grills
with bears, it can be a recipe for disaster. (or any grills that are stored outdoors) should
What is a mountain resort to do? On the be thoroughly cleaned of grease after use, and
one hand, having a ‘‘resident bear’’ or two pro- unused kitchen equipment like refrigerators
vides a powerful visitor draw. On the other should be cleaned as well before they go into
hand, a bear who is drawn to the lodge or outdoor storage. Diaper pails and trash bags
campground because of the garbage it can get containing diapers should also be kept in a
into may become accustomed to humans, strong garbage shed. . .remember, nearly ev-
which is extremely dangerous. It’s better to play erything organic smells like food to a bear.
safe, and make sure that the resort area is not Plastic sacks help mask the smell of garbage,
a bear buffet. and taking garbage to a dump right after meal-
The simplest solution is just some outdoor times can help reduce odors. Above all, don’t
housekeeping. Bears are drawn to human set- burn garbage. It only makes the trash smell
tlements for one reason only: easy food. Keep- more appetizing to the bear.
ing garbage in a garage or storage shed instead Source: ‘‘Preventative Measures for Black Bears.’’ New
of the open is one way to prevent bears from York State Department of Environmental Conservation.
getting into it. Even though hummingbird feed- http: / / www.dec.state.ny.us / website / dfwmr / wildlife /
ers and regular bird feeders draw local birds bearprev.html
for visitors to marvel at, they should be taken
down. Bears will be extremely attracted to the DISCUSSION QUESTION:
smell of the feeders, even if they are out of their Can you think of any other practices that at-
reach. Containers used for storing garbage tract bears? How can you deal with the
S should be regularly cleaned with bleach or am- problem practices?
N
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MILL (Wiley)
Site Selection The most important factors for cross-country trails are the suitability of the land-
scape and the development of appropriate facilities.39 Technical information about
the suitability of a site can be obtained from aerial photographs, topographic maps,
master plans from earlier studies, and zoning maps. While aerial photos are useful
for determining the location of trails, paths, roads, rivers, and vegetation masses,
topographic maps are used more because they give more detailed information. Of
particular interest are the contour lines, which give information on slope percent-
ages, drainage patterns, and high and low points.
Water location is critical when planning a trail system. Only frozen water is
safe for skiing over. Running water, because it does not freeze completely, must
be avoided. Season length can be calculated via thawing temperatures.
Vegetation is important because it adds to the enjoyment of the experience.
Heavy groupings of conifers reduce the snow depth and add contrast to the snow
and deciduous trees.
Design Criteria The width of a trail depends on the volume of traffic, type of trail (one-way or
two-way), and steepness of the grade. Trail width can vary from 1.5 to 6 meters,
depending on the above criteria. Grooming increases the speed of the trail. Skiers
will pick up speed on a gradient of 10 percent or more, so trails should be wider
under this condition. Run-outs at the bottom of the trail add to the safety of those
coming down the hill. Wider trails are also needed on turns, especially at the end
of a long downhill stretch. Finally, passing areas should be provided on long, flat
areas, tight corners, and steep slopes.
S
N Cross-country skiing is a spectacular way to view the winter landscape. Courtesy
L PhotoDisc / Getty Images
MILL (Wiley)
OTHER WINTER SPORTS ACTIVITIES 49
Where trees are part of the trail system, care must be taken to ensure sufficient
clearance between the snow line and the lowest branches. Depending on the
amount of snow the trail receives, the snow line can be significantly higher than
the ground line. This safety factor should not be overlooked when trail planning
occurs when the ground is bare of snow.
Standardized signs throughout the trail are a basic requirement. A variety of
signs is common:
Caution signs alert the skier to difficult areas or obstacles.

Trail Closed signs should be placed at all points of access to the trail.
Trail markers should be visible in a snowstorm and close enough to the
trail to prevent straying.
Informational signs are usually found at the trailhead and include the
routing map, the trail length in distance and average time, locations of
rest areas and warming shelters, trail difficulty, location of hazards, and
rules and regulations.
Additional distance and time signs can be strategically placed along the
trails.
Wind, sun, and vegetation must all be considered when planning the trail.
North slopes are exposed to cold winds and drifting snow. The latter makes track-
ing more difficult and time-consuming. Steep, open south-facing slopes lose the
snow early because of exposure to the sun. Open or running water must be
avoided unless a bridge across it is planned. This is because, as noted earlier, it
does not freeze completely.
Variability of terrain adds to the enjoyment of the experience. A convenient
rule of thumb is that one-third of the trail should be uphill, one-third downhill,
and one-third flat. Downhill slopes can be categorized as easy, intermediate, or
difficult. Easy slopes have a maximum drop of 10 percent and consist of short
climb and descent areas. Intermediate slopes consist of a maximum drop of 20
percent, with climb areas that are short but steeper and longer down slopes with
run-outs at the bottom. Difficult slopes have a maximum drop of 40 percent, with
up to one-half of the trail having an uphill grade.
Certain activities are incompatible with cross-country skiing. Snowmobiling is
one of them. While snowmobiles can be used for grooming and track setting, the
two sports should be kept separate for several reasons:
Snowmobiles pack the snow and cause icing. This causes side slippage
of the skis.
Snowmobiles cause bumps and moguls.
Snowmobiles require different turning radii and wider trails.
Snowmobiles cause ridges that makes skiing difficult.
Snowmobiles are noisy.40
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N Snowshoes also compact the snow and create ice spots. Sledding and tobog-
L ganing both create icy runs that make skiing more difficult.
MILL (Wiley)
Maintenance is necessary in both the off and the on season. The off-season is
a good time to clear all rocks and woody material to the ground. Areas where
erosion has taken place can be fixed, overhead branches trimmed, facilities re-
paired, and snow fences installed to help control drifting snow. During the season,
trails should be periodically inspected for fallen branches and areas of erosion. In
addition, the trails should be groomed as often as necessary—at least after every
4 to 6 inches of new snowfall. Grooming does three things: packs the snow, pre-
pares the surface, and sets the tracks. As noted earlier, a snowmobile can be used
for this purpose; however, a snow tractor is preferable. The snow tractor rakes the
snow to the center of the trail and then spreads the loose snow evenly. Tracks are
then set in the snow and allowed to set. Temperatures need to be cold enough to
allow the tracks to set. Wet snow should be allowed to dry before grooming.
The distance covered depends on the experience level of the skier. Beginners
travel about 2 kilometers or 11⁄4 miles per hour; intermediate skiers are capable of
5 kilometers or 3 miles per hour; advanced skiers can cover up to 10 kilometers
or 61⁄4 miles per hour.
The three basic types of trails are point to point, out and back, and looped.
Point-to-point trails connect villages, touring centers, and / or overnight shelters.
Skiers should be able to easily cover the distance in one day. The trail should be
double tracked to allow two-way movement, accommodate the skier ability level
being targeted, and have sufficient trail markings to prevent wrong turns in a
snowstorm.
Out-and-back trails are two-way trails that use the same route for the return.
They require adequate passing areas, marked distances to and from the starting
point, and trail markers that can be seen from both directions. Looped trails can
be stacked or satellite. Both are one-way trails that consist of a major or primary
loop aimed at the beginner and additional loops meant for more advanced skiers.
Snowmobiling
While snowmobiling includes both trail and no-trail experiences, the latter is dif-
ficult to plan for and manage except where a vast amount of land is available.
Warm-up areas are used to check whether or not the machine is operating effec-
tively. The maze is used for beginners or as an instructional trail. It is high-density
and does not cross other trails.
Many of the same criteria noted above for cross-country trails are also impor-
tant to snowmobile trails. Vistas and scenic overlooks add to the enjoyment of the
experience. Marking and periodic packing of trails is important for safety reasons.
Trail gradient should not exceed 10 percent for long distances and 25 percent for
short distances.
Where trails exceed 25 miles, a series of trailheads should be developed to
disperse snowmobilers over the various trails, which can be targeted toward spe-
cific groups (families, organizations) or uses (racing, recreational). Care should
be taken to avoid lake and stream crossings, avalanche hazard areas, cliffs and
S other steep terrain, road crossings on maintained roads, and zones for cross-
N country ski areas.
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SUSTAINABLE DEVELOPMENT 51
TABLE 2.4 Toboggan Hill Classification

Type of Minimum Length Slope Area Gradient
Slope of Run (feet) (%) (%)
Tot 50–75 10 ⬍15

Beginner 150 40 15–25
Intermediate 300 40 25–40
Expert 300 10 ⬎40
Source: Winter Sports Base Area Study. USDA Forest Service, Region 6, Portland, OR, n.d., 259.
Tobogganing
Guidelines for a typical toboggan run are shown in Table 2.4. A minimum of 5
acres is needed for even a small hill. Beginner and intermediate runs should be
straight, a minimum of 150 feet wide, and well groomed. Expert runs can be
narrower and longer, with longer areas for run-out at the bottom. All runs should
be steeper at the top and shallower at the bottom. Return chutes allow participants
to return up the hill. One chute per two runs, separated by strips of vegetation,
should suffice.
On a small hill, the north, east, and west gradients can be used for separate
skill levels, with the south side being used as a return chute, as exposure to the
sun is less important when moving up the hill. The top of the hill should be flat,
with enough space to allow people to congregate.
Ice Skating
A pond or small lake can be used for ice skating if enough extended periods of
cold weather maintain the ice. Shading the pond from direct sunlight will help.
Guidelines call for a minimum ice depth of 8 inches, although others indicate that
less depth is acceptable where there is low visitor density and the ice conditions
are uniform.
Areas can also be flooded in stages, with sideboards used to hold the water.
The sideboards should be twice the thickness of the ice to prevent surface rippling
and screened to help minimize direct solar radiation to both the ice and the
skaters. Lightly watering the surface in the early morning helps maintain the rink
during the season.
SUSTAINABLE DEVELOPMENT
Environmental education and interpretation of the natural re-
S sources and developments at a ski area can improve the pub-
N lic’s understanding about the relationship between ski areas
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and the environment. Programs can attract summer visitors

who might otherwise not visit ski areas. Favorable summer
experiences might dispel concerns by visitors that ski area de-
velopment is detrimental to the environment and wildlife.
A ski area tends to have a major impact on the environment. This fact, combined
with increased concern on the part of the general public for the environment, has
led to ski areas becoming increasingly aware of and concerned about sustainable
development. The Urban Land Institute refutes the mindset that says development
and the environment are incompatible.41 They note certain ‘‘myths’’ and attempt
to lay out the ‘‘facts.’’
Myth: Environmental protection and land development objectives are in-

compatible.
Fact: The careful development of land can enhance environmental re-
sources. This sustainable development uses a variety of land use practices
such as innovative storm water management techniques and open space
protection to improve the site while protecting water quality and improv-
ing habitat for wildlife.
Myth: Development that protects and enhances the environment adds lit-
tle market value.
Fact: Projects that incorporate green features can result in increased sales
prices. Many people are willing to pay a premium for developments or
lodging units that incorporate environmental features.
Myth: Green building practices are too costly and too complicated.
Fact: There is increased demand that recognizes the economic competi-
tiveness of green features. Green features include such things as the use
of recycled materials, increased reliance on natural air and light, and an
avoidance of building materials that emit pollutants. The result can often
be better working conditions for employees that result in improved
health, morale, and productivity.
Myth: Developers and environmentalists are always in conflict.
Fact: Both can and do work together. Increasing numbers of developers
are realizing that the value of a project is increased with the use of envi-
ronmentally sensitive practices while environmentalists find that working
with developers can help them protect natural resources.
In 2000 the National Ski Areas Association (NSAA) coordinated the develop-
ment of Sustainable Slopes, a series of voluntary environmental principles to guide
the planning, development, operations and outreach activities of ski areas. To date
the charter has been endorsed by over 160 ski areas in the United States. The
S document identifies both a vision and a mission statement.
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SUSTAINABLE DEVELOPMENT 53
Environmental Vision Statement: To be leaders among outdoor recreation

providers by managing our businesses in a way that demonstrates our commitment
to environmental protection and stewardship while meeting public expectations.
Environmental Mission Statement: We are committed to improving environ-

mental performance in all aspects of our operations and managing our areas to
allow for their continued enjoyment by future generations.
Principles and options for getting there have been identified in the areas of:
Planning, design, and construction

Operations
Energy conservation and clean energy
Waste management
Fish and wildlife
Forest and vegetative management
Wetlands and riparian areas
Air quality
Visual quality
Transportation
Education and outreach
The overall objective in planning and designing trails, base areas, and related
facilities is to integrate operations into natural systems while considering the en-
vironmental impacts—both short- and long-term—to natural resources. Ski areas
are encouraged to communicate with local communities up front before devel-
opment takes place. Environmental concerns can then be determined and plans
made to minimize these concerns at the local and regional level. Development
can be planned in such a way that the natural setting is respected and outstanding
natural resources can be protected. Water, energy, and materials efficiency can
become priorities throughout development. In so doing, operational efficiencies
can be achieved. High-density development will result in less sprawl while reduc-
ing the need for cars and creating an enhanced pedestrian environment.42
The Aspen Skiing Company is a prime example of how these principles can
be put into operation.43 The company attracts 1.3 million winter visitors a year to
ski approximately 5,000 acres of skiable terrain. During peak season they employ
1,300 people. In 1999 they created an Environmental Affairs Department. The De-
partment has accomplished a number of things. Through its Environmental Foun-
dation they get almost 1,000 employees to contribute annually through direct
payroll deduction. In its first four years the Foundation contributed $360,000 to
local environmental causes. The Foundation serves as a way for employees—who
are entirely responsible for its operations—to make decisions about the commu-
nities in which they live. Eco-Star Performer awards have been created to recognize
those employees who have made contributions to the environment. Recipients
receive gift certificates. Hazardous waste has been reduced from 1,180 gallons in
S 1997 to 427 gallons in 2001. A new zero hazardous waste policy will allow it to be
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the first ski area in the country to eliminate hazardous waste entirely. After con-
ducting an energy audit the company was able, among other things to:
Reduce carbon dioxide emissions by 150 tons by retrofitting the lighting

in a hotel garage.
Reduce water usage for snowmaking by 3 to 4 million gallons (and sav-
ing $15,000 in electricity costs) by building an earthworks for the snow-
board half-pipe.
Utilizing green technology the company recycled the materials from a restau-
rant, lodge, and club facility, thereby keeping over 80 percent of the building’s
materials from the landfill and extended the life of the landfill by three months.
Using the wind to power a ski lift (it operated the only wind-powered ski-lift in the
state of Colorado) has reduced CO2 emissions by 20 tons.
This is not to say that there are no problems. The company initially overesti-
mated energy savings. There were also problems with management who did not
want to replace inefficient light bulbs in hotel guest rooms because the light from
the more efficient light bulbs was not as flattering to the guests. Trade-offs are
inevitable—weed control programs require the use of herbicides. Many people are
opposed to any use of herbicides. There are costs involved. While some cost sav-
ings can be shown, other programs such as wind-power purchases and using re-
cycled paper can be more costly than the alternatives. Finally, there are impacts
over which the ski area has no control. Skiers often fly long distances to reach the
resort, consuming large amounts of fuel. By initiating these practices noted above,
a ski area makes the destination more attractive as a place to vacation and / or
live. This puts additional pressure on housing, prices, and congestion.
MOUNTAIN RESORT MATURATION CYCLE

Successful ski areas mature into year-round resorts through a series of stages.44
The ski area increases midweek use which increases the need for—
Overnight accommodation. Through increased Summer business the area
matures into a—
Resort village that needs year-round utilization to be successful. This re-
quires a variety of additional programs, facilities, conference activities,
and sports to—
Become a mature mountain resort.
S The operational considerations involved in this process are the subject of the
N next chapter.
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MOUNTAIN RESORT MATURATION CYCLE 55
SUMMARY
In developing a ski resort, care must be taken to strike a balance between the
physical capacity of the site to accommodate skiers and the economic needs of
the developer to make a profit. Desirable sites have specific characteristics that
reduce construction and maintenance costs. General design principles, when ad-
hered to, make for a better ski area. Development decisions must be made in a
certain order. The capacity of the mountain is determined by its natural charac-
teristics and the market to be served. This, in turn, indicates the number and type
of ski runs, which dictates the ski lift network, which indicates the number and
type of base area facilities needed. Increased concern over the environment has
resulted in the development of a charter that highlights environmental principles
to guide the development and operations of ski areas.
ENDNOTES
1. Ormiston, D., A. Gilbert, and R.E. Manning. ‘‘Indicators and Standards of Quality for Ski Area
Management.’’ Journal of Travel Research 3, no. 3 (1998): 35–41.
2. Farwell, Ted. The Concept of Balance, Ski Area Design Analysis, and the Mountain Design Process.
Boulder, CO: Ted Farwell and Associates, n.d., 2.
3. Schwanke, Dean, et al. Resort Development Handbook. Washington, D.C.: Urban Land Institute,
1977, 147.
4. Blackbourn, Anthony. ‘‘Restructuring and Growth in the Northern Ontario Ski Industry.’’ In Gill,
Alison and Rudi Hartmann. Mountain Resort Development: Proceedings of the Vail Conference.
Burnaby, British Columbia: Centre for Tourism Policy and Research, Simon Fraser University, 1991,
95.
5. RRC Associates. Economic Analysis of United States Ski Areas. Lakewood, CO: National Ski Areas
Association, 1999, 7.
6. Phillips, Patrick L. Developing with Recreational Amenities: Golf, Tennis, Skiing, Marinas. Wash-
ington, D.C.: Urban Land Institute, 1986, 137.
7. RRC Associates. Economic Analysis, 7.
8. Lazard, Alain J. ‘‘Expanding Recreation and Conserving Beauty—Finding Solutions: European
Examples and Practices.’’ In Gill, Alison and Rudi Hartmann. Mountain Resort Development: Pro-
ceedings of the Vail Conference. Burnaby, British Columbia: Centre for Tourism Policy and Re-
search, Simon Fraser University, 1991, 221.
9. Farwell. Concept of Balance, 5.
10. Ibid.
11. Ibid., 26.
12. Wingle, H. Peter. Planning Considerations for Winter Sports Resort Development. Washington,
D.C.: USDA Forest Service, 1994.
13. Phillips. Developing with Recreational Amenities, 133.
15. Wingle. Planning Considerations, 66.
S 16. Schwanke et al. Resort Development Handbook, 117–118.
N 17. Farwell. Concept of Balance, 28.
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MILL (Wiley)

19. Gill, Alison, and Rudi Hartmann. Mountain Resort Development: Proceedings of the Vail Con-
ference. Burnaby, British Columbia: Centre for Tourism Policy and Research, Simon Fraser Uni-
versity, 1991, 83.
20. Berry, Michael. ‘‘Corridor of Last Resorts: Sprawling Ski Areas, Wilderness Duel Along I-70.’’
Denver Post (December 20, 1998): 1.
21. Gill and Hartmann. Mountain Resort Development, 65.
22. Farwell. Concept of Balance, 13–14, 18. Schwanke et al. Resort Development Handbook, 149.
23. Farwell. Concept of Balance, 15–16.
28. Ibid., 152.
29. Farwell. Concept of Balance, 15–16.
30. Ibid., 7.
31. Ibid., 34.
32. Ibid., 19–20.
35. Ibid., 16–17.
38. Wingle. Planning Considerations, 32.
39. Rasmussen, Gaylan. Cross-Country Trail Design. East Lansing: Michigan State University Coop-
erative Extension Service, n.d., 3.
40. Ibid., 4–7.
41. O’Neill, David J. Environment and Development Myth and Fact. Washington, D.C.: ULI—Urban
Land Institute, 2002, 6, 8, 18, 20.
42. Sustainable Slopes: The Environmental Charter for Ski Areas. National Ski Areas Association, 2.
43. Sanders, Ed. ‘‘Business Enterprises and Sustainable Travel Best Practices.’’ New York, The
Conference Board, 2002.
44. MacDougall, Bruce, and Sauli Havas. ‘‘Pyha and Luosto Phase 111—Overview and Design
Principles for Mountain Resort Villages.’’ Powerpoint presentation on company website, accessed
July 22, 2005.
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Chapter 3
MANAGING THE OPERATION
LEARNING OBJECTIVES
1. Identify the changing trends in and demographic profiles of the snowsports
market.
2. Identify the critical variables in determining a mountain-based resort’s profit
potential.
3. Identify potential solutions to financial problems faced by mountain-based
resorts.
4. Identify the most important financial ratios relevant to mountain-based
resorts.
5. Identify the challenges of a seasonal resort, along with possible solutions to
stabilizing year-round revenue.
INTRODUCTION Number of Seasons of

ECONOMICS Participation
Number of Ski Areas Ski Trips to Canada and Europe
Ranked Distribution of Ski Areas Season Pass Ownership
by Size Age When First Tried
Ski Areas by VTF/H Snowsports
Number of Lifts Method of Entry into
Snowsports
Top States and Top Regions by
Skier Visits Lessons
Capital Improvements Night Skiing
Terrain Features TRIP CHARACTERISTICS
DEMOGRAPHICS Day/Overnight Trip
Gender Nights in Area
Age Accommodations Type
Family Status Flight
Race/Ethnicity Rentals
SKIOGRAPHICS Lessons
S Equipment Type Participation with a Ski
N Club/Group
Ability Level
L Satisfaction Ratings
MILL (Wiley)
58 Chapter 3 MOUNTAIN-BASED RESORTS: MANAGING THE OPERATION
SNOWBOARDERS Debt Ratio

Participation by Region and INCOME STATEMENT
Resort Size Revenue
Projections Visits by Ticket Type
Attitudes Expenses
Programs and Facilities CRITICAL RATIOS
SNOWTUBING Debt to Cash Flow
Prevalence Operating Profit on GFA
Average Visits (Gross Fixed Assets)
Ratio of Visits Profit, Before Tax, on Equity
Day vs. Night Capital Cost/ Capacity
Age Total Revenue per Skier Visit
Pricing Total Expenses per Skier Visit
EXPANDING TO MULTI-AGE SUMMER IN THE MOUNTAINS
VISITORS Expand Summer Recreation
ECONOMIC FEASIBILITY Outdoor Waterpark
Critical Variables Indoor Waterpark
ANALYZING FINANCIAL STATEMENTS Four-Season Resort
Industry Differences Conference Centers
OPERATING CHARACTERISTICS A New Kind of Resort
BALANCE SHEET
SUMMARY
Networking Capital
ENDNOTES
Current Ratio
INTRODUCTION1
Skis were not widely used for recreational purposes until the mid-1800s. The first
technological innovation that stimulated demand was the stiff toe-and-heel binding
developed by Sondre Norheim of Telemark, Norway. The binding allowed the skier
to perform long, gliding turns. By the end of the nineteenth century, skiing was
growing in popularity in the United States. The Austrians, during the first three
decades of the twentieth century, were responsible for developing the basic tech-
niques of alpine or downhill skiing. By 1930, the downhill and the slalom were
recognized by the International Ski Federation, the sport’s ruling body. The 1932
Olympics at Lake Placid, New York, resulted in even more American interest in
S the activity. By some accounts, as few as four U.S. ski areas were in operation in
N the early 1930s.
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INTRODUCTION 59
In 1934, at Gilbert’s Hill in Vermont, the first ski lift was unveiled. A rope and
a Model T engine dragged people up the slope for a dollar a day. Since then,
innovations in technology, equipment, clothing, and instruction have resulted in
skiing’s increased popularity by making it easier and more comfortable for average
skiers to enjoy the sport. For example, the 1930s and 1940s brought modern bind-
ings with steel edges, which, by giving the skiers more control, led to easier turns.
The first chairlift was installed at Sun Valley in Idaho. The relative remoteness
of this location led to the development of housing at the resort, thus beginning
the marriage of skiing and real estate development.
While development was halted during World War II, two major events oc-
curred as a result of the war that had a tremendous impact on the future of the
industry. First, the Tenth Mountain Division, the most decorated American division
of the war, developed a significant reputation for its skiing activities. After the war,
many of its members migrated into the industry, including the founding members
of the Aspen Skiing Corporation. Second, many of Europe’s best skiers and instruc-
tors came to the United States, bringing their talent and European style.
Innovations in the 1950s, such as easier-turning metal skis, buckled ski boots,
step-in bindings, slope-grooming machines, stretch pants, and the inauguration of
the interstate highway system, all helped popularize the sport. Television coverage
of the 1960 Winter Olympic Games, held in Squaw Valley, California, continued
the momentum.
The condominium form of ownership was formally recognized in 1962 and
helped cement the relationship between skiing and real estate development. Con-
dos could be constructed at higher densities than single-family housing. Scarce
area at the base of the mountain was used efficiently. In addition, condos were
easy to rent for short periods during the ski season. These movements led to the
development of Vail, Colorado, in 1962, as the first planned destination ski resort.
Great growth occurred in the next decades as the number of ski areas in-
creased to 90 by 1947, over 200 by the late 1950s, and over 600 by the late 1960s.
The 1970s, however, added only an additional hundred areas to the inventory.
In 1960, half of all ski sites were located in the West, with slightly less than 40
percent in the East. At the end of the growth decade of the 1960s, ski sites were
more numerous in the East than in the West—50 percent in the East and approx-
imately 33 percent in the West. Over the same period, the share of the Midwest
and the South remained steady at 20 percent. Western areas, however, tend to be
larger than those elsewhere and, as a consequence, account for more skier visits.
Though innovations in the 1970s continued to make skiing more accessible
to more people with less ability, the development of ski areas was slowed by high
land prices, significant interest rates, and the time and money required to obtain
development approval due to an increased concern for the environmental impact
of large-scale developments.
The growing popularity of cross-country skiing, which benefited from the de-
velopment of waxless skis and increased concern for and appreciation of the
environment, offered an opportunity to cultivate another market segment.
S Skiing is heavily influenced by demographics. While many skiers participate
N in the activity well into their golden years, the rate of participation is a function
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of age. If people do not take up the sport early in life, chances are they will not
later. Demand, then, is a direct function of population numbers. The number of
teenagers declined significantly in the 1980s, causing concern throughout the in-
dustry. Children of the baby boomers, however, returned to the slopes not only as
downhill skiers but also as snowboarders.
While concern over the flattening of the skier growth curve has been felt in
most regions of the country, the rapid increase in snowboarding is cause for op-
timism. Overcoming initial problems when skiers and snowboarders came into
contact, a growing number of resorts are developing runs specifically for snow-
boarders. As the sport becomes more mainstream, it is attracting people who have
money to spend.
ECONOMICS2
Number of Ski Areas
The total number of open and operating U.S. ski resorts decreased slightly to 492
in the 2004–2005 ski season. Over the long term, the number of operating resorts
experienced a rapid decrease between the 1983–1984 season and the 1993–1994
ski season, likely because of the increasingly competitive nature of the ski industry
and the difficulties associated with operating smaller ski areas, which are often
undercapitalized. Between the 1993–1994 season and the 1999–2000 season, the
number of operating resorts hovered in the 503 to 521 region, dropping to a lower
plateau ranging between 490 to 494 for the following five seasons. This relative
stability, exhibited over the five seasons after the 1999–2000 season, shows that
the historic ‘‘shakedown’’ has apparently blown over. The remaining ski areas are
exhibiting what can be described as robust staying power.
Ranked Distribution of Ski Areas by Size3

In the 2004–2005 ski season, the bottom quartile of resorts by size reported fewer
than 38,950 visits. The second quartile hosted somewhere between 38,950 and
110,043 visits, the third quartile reported between 110,043 and 233,719 visits, and
the top quartile by size hosted visits of 233,719 or greater. Additionally, the top
decile of resorts by size posted visits in excess of 445,758.
Apparent in this distribution is the fragmented nature of the industry—the top
20 percent of resorts control roughly 60 percent of total visits. However, no indi-
vidual ski area controls even so much as 3 percent of the total skier visits; therefore,
no single resort dominates the national pattern. While certain companies operate
several resorts, no company in particular controls this very fragmented industry.
The Midwest and the Southeast have resorts that are consistently smaller in
size when compared to other regions, which is unsurprising given the areas’ cli-
S mate and topography. The Rocky Mountain region has the greatest variety of resort
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ECONOMICS 61
sizes, from the very large to the very small. The presence of so many small ski
areas is encouraging, given the region’s reputation for large destination resorts. In
the Northeast, a small group of resorts host a large population of participants.
Ski Areas by VTF/H

Vertical transport feet per hour (vtf / h) is a measurement of a ski area’s ability to
transport skiers uphill. The vtf / h number is obtained by multiplying the vertical
rise of the lift by the manufacturer’s lift capacity rating, and total vtf / h is the sum
of the capacities for all of the lifts in a given ski area.
Resorts with 12,000 vtf / h and above are 11.6 percent of all ski areas yet ac-
count for just under half of all skier visits. At the other end of the spectrum those
resorts with less than 3,000 vtf / h are 59.6 percent of all ski areas yet account for
only 16.5 percent of all skier visits. The second smallest category of ski resorts,
with 3,000 to 5,999 vtf / h, accounts for 16.9 percent of skier visits and 17.7 percent
of all U.S. ski resorts. The second largest category, defined by having 6,000 to
11,999 vtf / h, accounts for an impressive 19.4 percent of skier visits despite includ-
ing only 11.2 percent of resorts. It is obvious that the larger ski areas draw a
disproportionately large percentage of total skier visits, as can be seen in the table
below.
Number of Lifts
Average vtf / h has been increasing over time, since resorts have continuously
added and / or upgraded their lift capacity. Resorts of all sizes have participated in
this trend, but the number of lifts have increased the most among the second-
largest resort size grouping (up 9.4 percent) and least among the smallest resort
size grouping (5.3 percent).
Overall, the average number of lifts per resort has been gradually increasing
over time on a national basis, a regional basis, and on the basis of resort size.
TABLE 3.1 Skier Visits and Number of Resorts by Size of Ski Area 2004–2005
Size Percent of Number of Percent of
(vtf / h-000s) Skier Visits Skier Visits Ski Areas Ski Areas
0–2,999 9,407,358 16.5% 293 59.6%

3,000–5,999 9,611,731 16.9% 87 17.6%
6,000–11,999 11,009,877 19.4% 55 11.2%
12,000 and over 26,853,332 47.2% 57 11.6%
Total 56,882,299 100.0% 492 100.0%
S Source: Kottke National End of Season Survey 2004 / 2005. Lakewood, CO: National Ski Areas Association, 2005, 7.
N
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Top States and Top Regions by Skier Visits

Nationally, skier visits declined slightly in the 2004–2005 season to 56.9 million
visits. The number of ski areas in the U.S. has declined over the past 20 years from
727 in the 1984–1985 season to 492 in the 2004–2005 season. Since the beginning
of the century this number seems to have stabilized.4
For the largest ski states, the estimated skier visits in the 2004–2005 season
were as follows:
Colorado’s skier visits increased by 4.5 percent to 11.8 million visits.

California’s skier visits increased by 6 percent to 7.8 million visits.
Vermont’s skier visits increased by 6.2 percent to 4.6 million visits.
Utah’s skier visits increased by 13.6 percent to 4 million visits.
New York’s skier visits increased by 1.7 percent to 3.9 million visits.
Pennsylvania’s skier visits decreased by 3.8 percent to 3 million visits.
Michigan’s skier visits decreased by 4.3 percent to 2.4 million visits.
New Hampshire’s skier visits increased by 11.1 percent to 2.2 million
visits.
The Rocky Mountain region accounts for about one-third of all skier visits,
followed by the Northeast with about one in four visits and the Pacific West with
just under 20 percent of all visits.
Capital Improvements5
During the 2004–2005 ski season, total expenditures on capital improvements
showed an upswing. Spending has increased most on real estate, showing some
impressive jumps. Capital improvements on other on-mountain facilities and sup-
port have experienced steady spending, whereas spending on new and upgraded
lifts rose and is expected to continue rising.
Investigating cumulative past and planned spending over a three-year period
(2003–2004 to 2005–2006) shows that the largest proportion of investment over the
period was earmarked for real estate (43 percent), followed by mountain support
and facilities (41 percent), and new and / or upgraded lifts (16 percent).
Breaking out the industry’s new and upgraded lifts by lift type, the largest
segment of lifts added or upgraded over the past season were chairlifts (48 lifts),
followed by conveyors / carpets (32 lifts), and tows / surface lifts (15 lifts).
Terrain Features6
A large number of ski resorts have terrain parks. Roughly 42 percent have half-
pipes, 34 percent have super-pipes, and about 11 percent boast other specialized
terrain features such as quarter-pipes, rails, kickers, jibs, tabletops, box jumps,
S snowskate parks, kids’ terrain parks, progression parks, snowcross courses, snow-
N deck parks, trail features, and more.
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ECONOMICS 63
Quick Getaway 3.1

Artificial Snow: Worth the Expense?
In the winter months, mountain resorts rely on dicated that capital costs for snowmaking can
snowfall for their income. No snow means no run from $10,000 to $20,000 for each acre to be
skiers and snowboarders, which means no rev- covered. In addition, maintenance costs can
enue. With global warming increasingly being account for as much as 25 percent of the re-
recognized as a factual phenomenon, ski resort’s total operating costs.
sorts must find a way to compensate for the Ski areas whose ski season will be signifi-
shorter winter-sports seasons that accompany cantly affected by global warming may feel the
climate change. One way to prevent an eco- need to turn to artificial snowmaking in order
nomic meltdown is to try to extend the snow to remain economically viable. This is not a
season. bad option, if the resort has affordable water
To keep snow on the ground and profits available. But for those ski areas that don’t
soaring, ski areas are increasingly turning to ar- have sufficient water availability—such as re-
tificial snowmaking. However, artificial snow- sorts in the notoriously water-poor West—the
making may not be economically viable, future will mean dealing with shorter ski sea-
especially for resorts in certain regions. sons.
Snowmaking requires extremely large
amounts of water—for instance, it takes Source: ‘‘Impacts of Climate Change on the Economic
Viability of Selected PNW Ski Areas.’’ Climate Impacts
139,322 gallons of water to make an acre-foot
Group. Site accessed July 21, 2006. http: / / www.
of snow. In the real world, however, the cses.washington.edu / cig / res / sd / cciskiareas.shtml
amount of artificially made snow needed is
based on the topography and the melting rate.
A ‘‘typical’’ ski run, 200 feet wide with a drop DISCUSSION QUESTION:
of 1,500 feet, would take 3 acre-feet of water Do you think it is environmentally accepta-
(55 tanker truck loads!) to cover it with 1 foot ble to use scarce water resources in order to
of snow. artificially extend the period when snow is
A review of ski areas across the nation in- on the ground?
Presence Roughly 90 percent of resorts in all regions provide terrain parks, and every size
category of ski area (with the exception of the smallest resorts) provides some
terrain—this indicates the widespread popularity of the terrain park. Half-pipes are
generally more common at medium and large resorts (45 to 51 percent) than they
are at smaller resorts (19 percent). Super-pipes are very common at large resorts
(70 percent), more common than in any other size category. Super-pipes are also
more likely to be found at resorts in the Northeast, the Rockies, and the Pacific
West than they are at resorts in the Southeast and Midwest.
Number Among resorts with terrain parks, roughly 39 percent have one park, 38 percent
S have two parks, 14 percent have three parks, and 10 percent have four to six parks.
N The overall average number was two parks. Among resorts possessing a half-pipe,
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MILL (Wiley)
94 percent have one half-pipe, 3 percent have two half-pipes, and 3 percent possess
three. Every resort with a super-pipe only has just one.
‘‘Skiing offered a way to personally achieve the strong sense
of individual control over raw nature that American travelers
craved.’’
—HAL K. ROTHMAN
DEVIL’S BARGAINS
DEMOGRAPHICS7
In the 2004–2005 ski season, U.S. resorts logged approximately 56.9 million skier
visits. Who was on the slopes?
Gender
During the 2004–2005 season, the male-to-female ratio remained within the histor-
ical range, with 59 percent male and 41 percent female participants. These num-
bers are remarkably similar to the 59 to 62 percent male and 38 to 41 percent
female mix seen in the previous seven seasons. The ratio is fairly uniform across
all regions of the U.S., and over the past several seasons, the gender mix within
each region has stayed moderately stable.
When examined by equipment type, female skiers have made up between 40
and 43 percent of downhill skiers over the eight seasons prior to the 2004–2005
season. During the same time frame, females composed 31 to 33 percent of snow-
boarders.
Males and females show markedly different characteristics in their skiing and
riding profiles. Males make up the majority of participants who possess the follow-
ing characteristics:
People who first began skiing or riding on their own (77 percent male)
Advanced / expert ability level (72 percent)
Aged 65 and over (71 percent)
Snowboarders (67 percent)
Ski or ride 30 or more times per season (67 percent)
Wear helmets (63 percent)
Singles with no children (62 percent)
Season pass holders (62 percent)
Females, on the other hand, represent the majority who possess the following
characteristics:
S Beginners, excluding first-time participants (58 percent female)

N Participants who first tried skiing / snowboarding with a school group, a
L ski / snowboard club, or another organized group (48 percent combined)
MILL (Wiley)
DEMOGRAPHICS 65
First-time participants (54 percent)

Lesson takers (57 percent)
People who plan to ski or ride just once in the 2005–2006 season (52 per-
cent) or two to three times (47 percent)
Renters of equipment (49 percent)
Participants who have dropped out of snowboarding / skiing at least one
year out of the five seasons prior to the 2004–2005 season (48 percent)
Participants who visit as a part of an organized group (48 percent)
Couples with no children (46 percent)
Participants who are aged between 35 and 44 (45 percent)
Females are rather well-represented in the lower-ability, less-avid segments,

but they are wholly underrepresented in the overall participant base. However,
the data seems to indicate that the snowsports industry is equally effective at
Quick Getaway 3.2

Snowsport Trends and Demographics
Numerous trends drive the snowsports industry. The changing demands of consumers re-
The industry’s reliance upon weather condi- garding the snowsports industry will drive the
tions is probably the most obvious trend. Every market during the next five years. The industry
year, the growth and spending for snowsports will likely find itself providing nonskiing activ-
is dependent on how much snowfall the slopes ities in order to draw a wider range of con-
receive. The winter of 2000–2001 was a lucra- sumers. Additionally, winter sports areas will
tive season because of high levels of snowfall. increasingly offer year-round services (such as
The 1998–1999 season, however, was a rela- hiking, golfing, and mountain biking) for
tively poor season due to the warming effects summertime outdoor-sports enthusiasts. Fortu-
of El Ninõ, which contributed to a lack of nately, younger consumers (primarily snow-
snowfall. boarders) are expected to rejuvenate and drive
There are other factors that drove the the established winter sports market.
snowsports market in the early 2000s. One such
factor is the changing demographic trends on Source: ‘‘Snow Sports Vacation Market: US Report.’’
the slopes—boomers are being replaced by Market Research Report. http: / / www.mindbranch.com
echo boomers, who increasingly prefer snow- / listing / product / R560-464.html
boarding. Non-demographic factors include the
relatively high cost of vacations that include
snowsports; the changing range of services and DISCUSSION QUESTION:
activities desired by consumers, such as non- Do you think that the events of September
skiing activities; the trend toward taking more 11, 2001, continue to affect the winter
frequent, shorter vacations; the impact of Sep- sports industry? If not, can you think of
S tember 11; and the Winter 2002 Olympics in more recent events that might affect the
N Salt Lake City. industry?
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MILL (Wiley)
inducing first-time trial among both males and females, even though it appears
rather less effective at converting females into frequent, accomplished participants.
The industry also seems ineffective at retaining female participation, and at reduc-
ing female drop-out rates over time. It’s interesting to note that groups are a fairly
effective method of introducing women to snowsports.
Age
The median age of snowsports participants has risen from 32 (1997–1998 season)
to 36 (2004–2005 season). The proportion of visitors aged 45 and over has seen
steady gains, but the proportion of young adults (those between 18 and 24 years
old) has been fairly static. Similarly, the proportions of children between the ages
of 15 to 17 and 10 to 14 have not changed significantly.
The growth of the 45⫹ age group was to be expected as the baby boomers
age. However, the data also implies that the snowsports industry has been suc-
cessful at retaining older participants. Those in their late 40s and older continue
to drop out, though at a less extreme rate.
The decline in numbers of snowsports participants aged 25 to 44 is consistent
with the movement of the smaller ‘‘Generation X’’ group (also known as the ‘‘baby
bust’’ generation). Clearly, it’s just as important for the industry to attract younger,
new enthusiasts as it is to retain the older, more experienced participants.
Family Status
On a national basis, 48 percent of skiers and snowboarders are a part of a family
that has children at home. Parents with kids make up 32 percent, and kids aged
17 and under compose the other 16 percent. The second-largest segment is com-
posed of singles with no children, and the rest of the group is roughly equally split
between empty-nesters and couples with no children. Over time, the proportion
of singles has decreased, while the proportion of households with children has
increased somewhat.
The marital status of snowsports participants varies significantly according to
the size of the resort. At the smallest resorts, 33 percent of visitors are children
aged 17 and under. However, at the largest resorts only 9 percent of visitors stem
from this group. On the other hand, the proportions represented by the following
groups is greater at larger resorts: singles with no children (20 percent at small
resorts to 31 percent at large resorts), couples with no children (6 percent, moving
to 14 percent), and empty-nesters (8 percent to 15 percent). The proportion of
people (both singles and in couples) who have children is roughly equal across
all resort sizes (31 to 33 percent on average).
Race/Ethnicity
Eighty-eight percent of skiers and snowboarders in the 2004–2005 season were
S white, which is in the same range as the prior four seasons. This ethnic mix has
N been very stable over time.
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SKIOGRAPHICS 67
There is some moderate variability of ethnicity across regions. The Pacific West
region has the greatest amount of diversity (19 percent racial / ethnic minority),
followed by the Southeast (17 percent), the Midwest (12 percent), the Rocky
Mountain region (8 percent), and the Northeast (6 percent). The Pacific West
boasts the highest concentration of Asian skiers and snowboarders (5.6 percent)
and Hispanics (4 percent). The Southeast contains the highest concentration of
African Americans (2.8 percent).
As a whole, ethnic minorities are far more likely than non-Hispanic whites to
use twintips / snowskates (7 percent) or snowboards (45 percent) as their equip-
ment. They are also more likely to classify their ability level as ‘‘first time / begin-
ner’’ (31 percent, vs. 14 percent of whites) and to rent equipment (38 percent, vs.
26 percent of whites). Racial and ethnic minorities are also more likely to take a
lesson (on the day that they were interviewed—16 percent vs. 8 percent of whites).
Minority participants are on the whole younger than their white counterparts, with
a median age of just 25.
These data point to minorities’ relatively recent adoption of snowports. Whites
are more likely than minorities to have started snowsport participation with their
families (51 percent, vs. 39 percent of minorities). However, minorities are more
likely to have started with friends (39 percent vs. 33 percent) or with a group (18
percent vs. 13 percent) than whites are. This information indicates that minorities
do not have as much family history of snowsport participation as do whites.
Minorities continue to be underrepresented in skiing and snowboarding, as
they make up only 12 percent of visits even though they compose 33 percent of
the U.S. population (as per 2005 census estimates).
SKIOGRAPHICS
Equipment Type
Alpine skiers compose the largest segment of ski resort visitors—in the 2004–2005
season, they accounted for 69 percent. After the alpine skiers come snowboarders
with 26 percent, telemarkers with 2 percent, and other types of equipment with
another 2 percent. After growing remarkably, snowboarding participation levels
have plateaued over the five years prior to the 2004–2005 season. Likewise, alpine
skiers has leveled off after dropping steadily for several seasons. Telemark skiing
has plateaued as well, despite several years of growth, and other types of equip-
ment (twintips, snowskates) have leveled off in popularity after a period of quick
growth. Unsurprisingly, snowboarding lessons have reached a popularity plateau
as well, when examined as a percentage of all lessons (fluctuating in the 23.2 to
23.7 percentage range).
Among younger participants, snowboarding continues to be particularly
popular. Forty-five percent of people aged 10 to 14, 55 percent of 15 to 17 year
S olds and 54 percent of those between the ages of 18 and 24 like snowboarding.
N The percentage who enjoy snowboarding in the 25 to 34 year old age group drops
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MILL (Wiley)
to 38 percent. When examining this trend, it appears that the flattening of snow-
board growth is mostly the result of the general shift to an older visitor base, and
a decrease in the rate of snowboarding’s adoption by younger participants.
Ability Level
The majority of snowsports participants have an intermediate skill level (46 per-
cent), followed by advanced / experts (41 percent), beginners (9 percent), and first-
timers (3 percent). Over time, the proportion of participants with an advanced /
expert level of ability has risen, increasing from 31 percent to 41 percent over the
eight seasons prior to the 2004–2005 season. This ability increase has been largely
universal, without any significant differences between resort regions, resort size
groupings, demographic groups, or skiographic groups. This trend appears to be
driven by increasing experience levels and age, as both factors play a part in the
number of years spent in snowsports.
However, variability in ability levels still exists between regions. Intermediates
account for the majority of participants (46 to 47 percent) in all regions except
for the Pacific West, where advanced / experts lead by several percentage points
(42 percent vs. 46 percent). Overall, the Pacific West accounts for the largest per-
cent of advance / expert visitors. The Southeast, on the other hand, has a greater
percentage of first-timers and beginners (26 percent) than any other region.
Ability levels are strongly correlated with many skiographic, demographic, and
trip characteristics. Beginners, for example, skew young and female, with a rela-
tively high percentage of ethnic / racial minorities and a great deal of equipment
rental, lesson-taking, and prior dropout from snowboarding / skiing. Beginners also
ski more infrequently. On the opposite extreme, advanced / expert skiers skew
male, older, and non-Hispanic white; unsurprisingly, they also have higher rates of
participation days, equipment ownership, and helmet usage. Advanced / expert
snowsports enthusiasts are more likely to have been introduced to their sport at a
young age (ten and under) and through their family, while beginners usually start
later and begin with a group or with friends.
Number of Seasons of Participation

Alpine skiing demonstrates a longer history of participation than snowboarding—
roughly 63 percent of alpine skiers have skied for ten or more seasons, while only
15 percent of snowboarders have done the same. Snowboarding continues to at-
tract many more first-year participants (14 percent) than skiing (6 percent). This
suggests that snowboarding has a great deal of growth potential, compared to
skiing. However, in the past half-decade this growth has not materialized, leading
to speculation that snowboarder retention rates are lower than skier rates.
Ski Trips to Canada and Europe

S In the 2004–2005 season, roughly 5 percent of U.S. resident snowsports enthusiasts
N said that they planned to ski in Western Canada, 3 percent were planning on skiing
L in Eastern Canada, and 4 percent had plans to ski in Europe. These figures were
MILL (Wiley)
SKIOGRAPHICS 69
roughly comparable to the figures for the previous season. Residents of Pacific
states (Alaska, California, Hawaii, Oregon, Washington) were more than four times
more likely to ski in Western Canada than U.S. skiers overall. Residents of the
Middle Atlantic were to some extent more likely to ski in Eastern Canada than
overall U.S. skiers.
Season Pass Ownership

Roughly 27 percent of interviewed snowsports enthusiasts reported owning a sea-
son pass to at least one resort during the 2004–2005 season. This was similar to
the 26 to 28 percent levels recorded in previous seasons, but slightly below the
29.6 percent recorded by the 2004 / 05 Kottke survey. As might be expected, those
who owned season passes fit the avid, experienced profile: they were mostly
advanced / expert participants, and on the day they were interviewed, they were
more likely than average to be spending a day trip at the resort.
Age When First Tried Snowsports

In the 2004–2005 season, the median starting age reported by snowsports partici-
pants was 12 years old—identical to the previous season’s result. This strong ori-
entation toward youth as the primary entry point only underscores how important
it is to get children and teens engaged in snowsports. In general, the younger a
participant starts, the more avid a participant they become.
Males generally start earlier than females, and snowboarding in particular is
associated with a young starting age (15 or less). Generally, the older a participant
was when he or she started, the more likely it is that that participant is an alpine
skier.
Interestingly, ability level varies greatly with age of first trial. Of participants at
the advanced / expert level, more than half started when they were five or younger
(56 percent). Obviously, early learning is crucial for gaining snowsport skill levels
later. Also, the younger a participant is when first trying snowsports, the more likely
he or she is to frequently participate later in life.
Method of Entry into Snowsports

Most snowsports participants started along with their family (50 percent), followed
by those who started with friends (34 percent), with school (7 percent), a ski /
snowboard club (3 percent), another type of group (4 percent), and alone (3
percent).
The participant’s method of entry greatly depends on age of entry. Most par-
ticipants who started at the age of ten or under started with their families. Family
drops in importance for starters between the ages of 11 to 25, and gains in im-
portance thereafter. Friends emerge as an important entry group among the 11 to
15 age group, and they remain important for beginners aged 16 to 30.
S Other methods of snowsports introduction fulfill relatively niche roles. School
N becomes important for the 11 to 15 age group, ski clubs are most important for
L older first-timers, and ‘‘other groups’’ are instrumental for beginners aged 41 to 60.
MILL (Wiley)
Children who start snowsports at a young age

are more likely to become avid participants as
they get older. Courtesy Corbis Digital Stock
These figures are especially important to consider when designing age-appropriate

measures to introduce snowsports to newcomers.
Lessons8
Models of skier visitation suggest that sustainable long-term growth in the industry
is strongly tied to retaining entry-level snowboarders and skiers, largely through
improved and upgraded lessons.
In the 2004–2005 ski season, both alpine and snowboarding lessons were up.
According to ability level, Level 1 lessons were slightly increased, whereas Level
2⫹ lessons were practically flat. Alpine lessons still compose a larger share of total
lessons than snowboarding lessons (76.4 percent vs. 23.6 percent). Level 2⫹ les-
sons continue to account for a greater share of lessons than Level 1 lessons, and
adult lessons were slightly more numerous than children’s lessons. During the four
seasons prior to the 2004–2005 season, total kids’ lessons grew moderately in pro-
S portion to adult lessons, but the proportion of total snowboarding lessons stayed
N at a plateau.
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SKIOGRAPHICS 71
Total snowboarding lessons varied between 22.1 and 25.8 percent of total
lessons across different-sized resorts, but there was no clear correlation to size.
Conversely, Level 1 lessons showed a strong correlation, decreasing from 72.2 per-
cent at smaller resorts to a mere 30 percent at the largest. Like snowboarding,
children’s lessons followed a more irregular pattern, but the highest percentage of
children’s lessons were given at the largest resorts, followed by the second-largest,
the smallest, and finally the second-smallest.
Based on these data, an estimated 8.8 percent of skier visits during the 2004–
2005 season in the U.S. included a lesson, with alpine skiers being the most likely
group to take lessons. In all resort regions and across all resort sizes, snowboarders
were far less likely to take lessons than skiers were, despite the fact that snow-
Quick Getaway 3.3

Setting the Ski-School Record Straight
In some recent media reports, ski schools have America or the American Association of Snow-
been portrayed as unfriendly places where chil- board Instructors, they all must undergo re-
dren are placed in groups that are far too large quired training before the season begins, and
for their inexperienced, parent-hating instruc- keep up with training as the winter progresses.
tors. However, ski resorts have reasons for the Instructors are also required to shadow certi-
manner in which they run ski schools. Let’s ex- fied instructors for at least two lessons before
amine some of the allegations: team-teaching their first classes with more ex-
Complaint: ‘‘Ski lessons are un-family- perienced instructors.
friendly.’’ Complaint: ‘‘What am I going to do with
Response: As with many other children’s my two-year-old?’’
activities (swim lessons, Little League baseball) Response: Children two years old and
parents are encouraged to watch, but not to younger are generally recognized as being too
interact with the children. It’s generally a far young to learn to ski or snowboard. Luckily,
more positive experience for the child when many resorts provide great day-care facilities
she is allowed to work with instructors and her with licensed staff. A young child can have
peers without a parent distracting her. And in- more fun and be safer at a licensed facility than
sisting parents can distract ski instructors’ atten- she will at a friend’s house. Before going to a
tion away from where it should be focused: on resort, check out its day-care options.
the children’s safety. If there’s no way that a Source: Shinn, Peggy. ‘‘Ski schools unfairly raked over
parent will be able to step back, he should look the coals.’’ MSNBC.COM (January 24, 2006). http: / /
into family lessons where instructors work with www.msnbc.msn.com / id / 11008748 /
both parents and children.
Complaint: ‘‘Ski instructors are inexperi- DISCUSSION QUESTION:
enced and don’t know what they are about.’’ Do you think it’s reasonable for ski schools
Response: While not all instructors are cer- to set a ‘‘no-parent policy,’’ in which parents
S tified with the Professional Ski Instructors of are not allowed near the lessons at all?
N
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MILL (Wiley)
boarders were much more likely to be beginners than were skiers. The gap is
largest at the smallest resorts, where skiers were twice more likely to take lessons
than snowboarders were.
Nationally, the percentage of resort visits that include a lesson has been on
the decline for four years prior to the 2004–2005 season.
Night Skiing9
Night skiing is a favorite activity, though it does not account for a large percentage
of skier visits. Over the four seasons leading up to the 2004–2005 season, night
skiing visits only accounted for about 6.6 to 7.3 percent of all visits.
The Midwest has the largest percentage of night visits, although the Southeast
is strong as well. Measuring by resort size, the percentage of night visits decreases
as resort size increases, with 35.1 percent of visits at the smaller resorts and only
2.4 percent at the largest.
TRIP CHARACTERISTICS
The following are based on the responses of skiers / riders, and all answers pertain
to the day on which they were interviewed.
Day/Overnight Trip
The majority (59 percent) of respondents said that they were on an overnight trip
when they were interviewed, while the rest were visiting on a day trip. Overnight
visitation varies in correlation with resort size—the smallest percentage (31 per-
cent) of overnight visits were found at the smallest resorts while the largest per-
centage (71 percent) was to be found at the largest resorts. Accordingly, mid-sized
resorts had between 50 and 60 percent overnight visits. These data, taken from the
2004 / 05 National Ski Areas Association (NSAA) National Demographic Study,
shows a higher share of overnight visitors for the same season than does the Kottke
report. The latter is probably more accurate, however, because of its larger base
of participating resorts.
Snowboarders are less likely than alpine skiers to stay overnight, or so the
interviews for the NSAA report indicate. Overall, participants were more likely to
be on an overnight trip the older they were.
Nights in Area
Out of the overnight visitors, the average stay length nationally was 4.8 nights, with
a median stay of 4 nights—identical with the two seasons prior to the 2004–2005
S season. The longest average stays were logged at resorts in the Rocky Mountains.
N
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MILL (Wiley)
TRIP CHARACTERISTICS 73
Quick Getaway 3.4

Keeping Things Profitable
after the Snowmelt
Summer is no longer a dead, profitless desert vals, as well as Oktoberfest weekends, is higher
at Utah’s ski resorts. For example, eight of than other weekends throughout the summer.’’
Utah’s 13 active resorts now run summer pro- Becoming a year-round resort is also ben-
grams designed to lure visitors to the moun- eficial to good workers. With year-round oper-
tains for things such as thrill rides, mountain ations, the company has an incentive to keep
biking, disc golf, readings by famous authors, them around as full-time employees rather than
bluegrass festivals, and fly-fishing. seasonal workers, and four-season income
It’s not just Utah. Resorts in the rest of the provides the revenue to cover salaries. Small,
country are getting in on the summer cash as resort-town businesses also share the rewards.
well. In its 2005 annual survey, the National Ski However, small resorts can’t usually handle the
Areas Association (NSAA) asked member re- losses associated with summer operations.
sorts to quantify the importance of the summer ‘‘We tried it twice and it was just not finan-
market to their business. Of those who re- cially feasible,’’ said Marc Paulsen of Powder
sponded, 75 percent said that summer opera- Mountain Resort above the Ogden Valley, re-
tions collected revenue, but only a handful of ferring to failed summer programs in the 1980s
resorts reported that summertime income ex- and 1990s. ‘‘We didn’t draw enough people to
ceeded 10 percent of their total. And not every pay the salaries. Larger resorts can afford a loss.
resort is going four-season: a quarter of resorts Summer is not their primary business. But Pow-
nationally still close for the summer. der Mountain is family-owned and needs to be
Food and beverage service, accommoda- profitable.’’
tions, and golf fees provided most of the sum- Source: Gorrell, Mike. ‘‘On many ski resorts, summer’s
mer revenue for ski-resort operators nationally. still a good time to chill.’’ Salt Lake Tribune (July 12,
‘‘If you are going to stay open, it just makes 2006).
sense to have summer activities. The more we
can offer people by way of festivals, live music, DISCUSSION QUESTION:
or food, the more likely they are to want to Can you think of any way that small resorts
come up (Little Cottonwood) canyon,’’ said can use their properties in the summertime
Laura Schaffer, spokeswoman for Utah’s Snow- to gain revenue, since they are unable to
bird Ski and Summer Resort. ‘‘Occupancy over support the events that are often hosted by
the weekends of the bluegrass and blues festi- larger resorts?
S
N
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MILL (Wiley)
The average length of stay increased steadily along with resort size, which is not
terribly surprising as larger resorts tend to have more supportive infrastructure.
Accommodations Type
Rented accommodations were the most popular among overnight guests, with 67
percent of visitors lodging in rentals. Seventeen percent reported staying with
friends or family who lived in the area, while another 16 percent opted to stay at
a vacation unit belonging to friends, family, or themselves.
Those who stayed in owned vacation housing showed marked differences
from the other groups: they had higher proficiency levels (50 percent advanced /
expert), they were more likely to own season passes (38 percent), they stayed
longer (5.5 nights on average), they were older (median age 44), and they fre-
quently skied or snowboarded at the resort in question. Those who stayed with
family or friends were generally younger than other overnight visitors.
Flight
On a national basis, slightly less than half of ski vacationers flew to their destination
(43 percent). This number is slightly higher than the average during the previous
season, during which 41 percent of vacationers flew. In the 2004–2005 season,
there was a high percentage of flight to resorts in the Rocky Mountain region,
moderate flight usage to the Pacific West region, and low numbers of flights to
Northeast, Southeast, and Midwest resorts.
On the whole, fliers take significantly longer trips than their non-flying coun-
terparts.
Rentals
On the day that they were interviewed for the NSAA study, 27 percent of respon-
dents replied that they were renting equipment, a number unchanged from the
previous season.
Today’s renters are usually distinguished by being less experienced and less
avid than equipment owners. Correspondingly, renters tend to be:
female
infrequent skiers / riders
overnight visitors
first-time resort visitors
lesson-takers
visitors traveling with an organized group
S residents of the southern U.S.
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SNOWBOARDERS 75
Lessons
When interviewed, 9 percent of respondents replied that they were taking a lesson
‘‘today.’’ The proportion of lesson-takers is highest at the smallest resorts, and first-
time participants are especially likely to take a lesson, which only illustrates how
critical lessons are for introducing newcomers to snowsports.
Generally, the profile of lesson-takers tends to resemble the profile of less
active, relatively inexperienced participants.
Participation with a Ski Club/Group

On the day they were interviewed, 14 percent of respondents replied that they
were at the resort with a ski club or another organized group. This percentage falls
solidly within the 13 to 16 percent range that was recorded in the two seasons
prior to the 2004–2005 season.
These groups are responsible for a higher percentage of visitors to the South-
east and the Midwest. They also account for a larger proportion of guests at
medium- and small-sized resorts than at the very largest resorts.
Satisfaction Ratings
Visitor satisfaction tends to be highest regarding employee friendliness / helpfulness
and enjoyment of the experience. Lift lines, value received for the price, and
variety of trails received mediocre ratings. Visitors are consistently least satisfied
with a resort’s food and beverage services.
Resort satisfaction ratings are very strongly tied to the visitor’s likelihood of
recommending the resort to another person. Visitors who consistently give high
ratings are known in the industry as ‘‘promoters,’’ whereas ‘‘detractors’’ give low
ratings. ‘‘Passive’’ visitors give ratings that are in the middle.
The differentials between promoters and detractors were highest for the variety
of trails, the value for the price paid, and the visitor’s overall enjoyment of the
experience. This suggests that these particular categories are the most important
influences on whether a visitor will recommend the resort to another.
SNOWBOARDERS
In the 2004–2005 season, snowboarding represented 28.8 percent of all skier visits
to U.S. ski areas. The figure did not change from the previous season. To a certain
degree, this plateau effect was a result of the reduced influence of the Pacific
Northwest, which has high snowboard participation. The pattern also reflects a
‘‘plateauing’’ of snowboarding in other regions of the nation, such as the Northeast,
S Midwest, and the Rockies.
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Participation by Region and Resort Size10

As suggested before, the Pacific West has consistently had the highest rate of
snowboarder participation, followed by the Midwest, the Southeast, the Northeast,
and finally the Rocky Mountains. Interestingly, resort size also affects the number
of snowboarders who ride there: the smaller resorts have continually attracted the
highest proportion of snowboarders, a trend that decreases steadily as the resort
size grows.
Projections11
The future of snowboarding looks bright. Nationally, the proportion of visits by
snowboarders is expected to rise approximately four percentage points from 2005
to 2010. This will bring the total from about 30 percent to 34 percent over five
years. The Pacific West and small resorts will likely remain the areas with the
largest concentration of snowboarders.
The gradual slowdown in the growth of snowboarding may signal that equi-
librium in the skier / rider mix may be progressively approaching, although contin-
ued slow growth in snowboarding is still expected to occur for at least five years
(starting in 2005). One reason for this development may be that different regions
are evolving on different trajectories, and some are not embracing (or being em-
braced by) snowboarding as much as others are. Distinctions between these var-
ious regions have been growing sharper in recent years. Also, participants’
preferences have been changing as they are affected by user experience and in-
novations in equipment. This may also affect snowboarding.
Snowboarding is approaching a more mature phase of its development, fol-
lowing its explosion onto the winter sports scene and its rapid growth. The sport
may continue to grow for some time, especially as baby boomers (who mostly
ski) cease visiting the slopes and are replaced by the younger generations, who
are far more likely to be snowboarders. Other new ski technologies have rapidly
arrived on the winter sports scene, such as parabolics, twintips, supershort skis /
snowskates, and more—these may further diversify the snow slider population.
Continued growth in snowboarding, combined with the great new variety of skis,
holds many opportunities for the industry.
Attitudes
While snowboarders and skiers are integrated at most resorts, friction still exists.
Acceptance is better at smaller resorts than at larger resorts. Most snowboarders
feel that relations between the two segments are getting better. Improvements have
come about because snowboarders have gotten older, more skiers have tried
snowboarding or have a snowboarder in the household, skiers realize that snow-
boarding will not go away, and resorts have shown a commitment to snowboard-
ing through the construction of specialized facilities.
S In addition, resorts have developed policies in an attempt to reduce friction.
N Examples include:
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SNOWTUBING 77
treating all guests alike

accepting and showing respect for snowboarders
strictly enforcing rule violations from skiers and riders alike
educating snowboarders about rules and safety on the mountain
maintaining an active on-slope ski patrol presence
determining whether it is better to separate snowboarders from skiers or
to let them mix (both have worked well at different resorts)
Programs and Facilities

Virtually all resorts offer separate snowboard lessons and lessons for children. The
average minimum age for the latter is six, with a range from two to ten years.
Almost all resorts rent snowboards, and over 90 percent offer specialized repair
services. While between 70 and 80 percent of resorts have special racks, tools, and
benches for snowboarders, less than 60 percent have retail shops selling snow-
board equipment and less than a third offer a separate snowboard shop. Resorts
that do not have separate facilities give as reasons a lack of space, insufficient
demand, or that they do not wish to antagonize local ski shops.
Two-thirds of all resorts have special half-pipes for snowboarders. These are
more commonly found at larger rather than at smaller properties, as they require
expensive grooming equipment and high maintenance. By comparison, more than
80 percent of resorts offer terrain parks.
Almost 90 percent of resorts run special snowboarding events to stimulate
visits. It is anticipated that more resorts will schedule more events in the future.
Additionally, resorts are seeking to attract more snowboarders by upgrading moun-
tains, improving customer relations, offering special beginner packages, designing
snowboard-specific ads, and promoting frequent-rider programs and product give-
away promotions.
SNOWTUBING
Prevalence
Snowtubing is present at 46 percent of all U.S. ski areas (12). The activity is more
likely to be found in larger resorts and, to a lesser degree, at medium-sized resorts.
Snowtubing is rather prevalent at resorts in the Southeast and Northeast, where it
is offered by 85 percent and 52 percent of respondents, respectively.
Average Visits
In the 2004–2005 season, average snowtubing visits increased by 0.6 percent to an
average of 18,271 per resort. The most snowtubing visits were reported in the
S Southeast region, followed by the Rocky Mountains, the Midwest, the Northeast,
N and the Pacific West. Visits were down by 37 percent in the Pacific West, a sig-
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nificant drop. In the Rockies, visits were up by an impressive 26 percent. In the

Northeast, Midwest, and Southeast, the number of visits only fluctuated within two
percentage points.
Ratio of Visits
The average ratio of snowtubing visits to skier / snowboarder visits was 6.7 percent
on a nationwide basis, but this is a very general piece of data as the importance
of snowtubing varies wildly from resort to resort. For example, in the Midwest and
the Southeast, where snowtubing is a main activity, the ratio is substantially higher
(18 percent and 16.7 percent, respectively).
The smaller resorts tended to place more emphasis on tubing than did the
larger resorts. The smallest resorts posted an average ratio of 22.9 percent, while
the largest resorts reported only 3.2 percent.
Day vs. Night

The majority of snowtubing visits take place during the day, but roughly 40 percent
occur at night. Night tubing visits are roughly equivalent in the Northeast, South-
east, and Midwest (38 to 45 percent), but the Rockies have a much higher ratio
(60 percent), and the ratio in the Pacific West is very low (2 percent).
The larger the resort, the more likely they are to have a higher night tubing
ratio. However, the effect is not overwhelming.
Age
Snowtubers are roughly equally divided between three different age groups: 12
and under, 13 to 17 years old, and those over 18 years old. On an overall national
basis, this age distribution does not vary largely, but the average age of participants
decreases slightly at larger resorts.
Pricing
Three-fourths of resorts that offer snowtubing charge by the hour. One-fourth also
charge depending on day or night, about one-tenth charge per ride, and one-
twentieth honor snowplay lift tickets. More than half of resorts use some other
means, such as charging based on one-and-a-half-, two-, three-, or four-hour blocks,
or pricing differentially based on time of day and time of week. All these methods
together total more than 100 percent, because some resorts price in multiple
ways.
The average charge per ride depends on the respondent, but the average is
$5.14 with a range from $1 to $8. The average hourly charge is $9.23 (ranging from
$2.50 to $20) and the charge for an entire day or night averages at $15.40 (with a
S range of $5 to $32).
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EXPANDING TO MULTI-AGE VISITORS

Expanding winter activities to draw in more visitors from all ages has recently
become a popular option among ski resorts. Results from a 2004 survey of 138 ski
resorts show that 41 percent of resorts have snowtubing hills, 38 percent have cross-
country skiing, and 36 percent offer snowshoeing.
Resorts are even branching out into activities that very few people think to
participate in, such as sleigh rides (15 percent) and other recreational activities
(10 percent) like dogsledding, air boarding, paragliding, heli-skiing, bobsledding,
orienteering, and ice-climbing.
One innovation is bringing real snow to the indoors. One company in the
Netherlands builds large indoor winter sports domes, which are themed. The
domes can be described as kids’ indoor snow and ice amusement parks.
ECONOMIC FEASIBILITY13
The objective of an economic evaluation is to express devel-
opment design concepts in financial terms to visualize the ec-
onomic characteristics of the project, and to assess the
probability of success.
—TED FARWELL
A MANUAL FOR PREPARING BREAK-EVEN ANALYSES
Critical Variables
Four critical variables determine whether or not a resort will make a profit: ca-
pacity, the length of the season, the amount of capital investment, and the amount
of revenue per visit.
Ski Area While guidelines are given relative to ski area capacity, the number of variables
Capacity that go into determining a range of figures is so great that a certain degree of
subjectivity is unavoidable. It is quite common for a developer to identify the
number of skiers required to break even and earn a specified return on investment
and to make development and design decisions in order to achieve that financial
result.
Capacity can be viewed in a number of ways. Physical and ecological capacity
takes into account the physical and ecological limitations of the site. Social or
normal capacity is where the majority of skiers do not consider the area over-
crowded. Maximum capacity is when no more visitors can be served. The upper
limit for safety can occur when a single element is at maximum use; for example,
S the amount of parking available limits the number of people who have access to
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the ski area. Comfortable carrying capacity is ‘‘the maximum number of partici-
pants who can utilize the facility at any one time without excessive crowding and
without damaging the quality of the environment.’’14
Ski area capacity is, therefore, a measure of three factors: the capacity of the
terrain, the uphill capacity, and the capacity of the supporting facilities.15 Terrain
capacity is affected by the steepness of the slope, the way the trail is designed,
the amount and quality of the snow cover, the way the slopes are groomed, and
the skill level of the skiers.16 Skier skill level also affects the safety of the slope for
all. Because more advanced skiers prefer fewer other skiers on the slopes, density
decreases as slope, speed, and ability increase.
Uphill capacity is a measure of the number of vertical transport feet per hour
needed. Skiers have a finite capacity for skiing per day. That capacity is based on
their physical condition and their ability level. It might, for example, be assumed
that beginners will ski for five hours a day and more advanced skiers for six hours
a day. Thus, an area that targets advanced skiers will need more uphill capacity
per hour than will one that targets beginners.
Finally, the capacity of the supporting facilities contributes to overall capacity.
Facilities in a ski area base lodge comprise:
food service
rest rooms
first aid
ski school
retail sales
rental shop
lockers
ticket sales
employee lockers
bar / lounge
nursery
storage
Length of For ski areas, the main determinants of the length of the season are weather and
the Season climate.17 Ski areas measure season length in terms of skiing periods. One period
is equivalent to seven hours. Thus, a resort that is open from 9:00 a.m. until 11:00
p.m. includes two skiing periods—one day and one night.
Ski area capacity multiplied by the length of the ski season is equal to capacity
skier visits—the maximum number of skier visits the resort can handle.
Capital The third critical variable is the amount of capital investment needed to develop
Investment the ski area. The capital budget is highly specific to design and site. Here are the
major cost elements that go into a ski resort:
ski lifts
S ski slope and trail construction
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snow maintenance equipment

snowmaking equipment
day use lodge building
maintenance center
furniture and fixtures
base area equipment
parking
power and slope lighting
water and sewer
site development
planning
financing
land
access roads
Revenue per The final variable is the amount of revenue generated from each skier visit. De-
Skier Visit termine this figure by totaling all revenue and dividing it by the number of skier
visits. Revenue is generated from ski lift tickets and supporting services.
How well the resort does in maximizing these four variables ultimately deter-
mines its economic success.
Importance of Total Revenue per Guest.18 Because resort hotels are a unique
form of lodging, resort owners should analyze their operations through the use of
some ‘‘nontraditional’’ industry measurements. Average daily rate, occupancy, and
revenue per available room are still important statistics, but they are limited tools
when analyzing a resort hotel. At resort hotels, seasonality may limit and skew the
annual occupancy rate, and resorts are frequently dependent on other revenue
sources.
The importance of these other sources (golf, food and beverage, spas, and
tennis are some examples) only underscores the importance of guest counts as
opposed to occupied room counts. For the resort hotel, total revenue per guest is
just as informative as average daily rate is to a limited-service hotelier.
A recent study of 199 resort hotels showed an average of 366 rooms with an
estimated occupancy of 70.6 percent. In 2005, these hotels’ average daily rate was
$194.84. Rooms revenue composed a little over half (53.7 percent) of the resorts’
total revenue. In fact, rooms revenue has a lesser influence on the growth of total
revenue than other revenue sources did. The relatively profitable revenue from
other operated departments had a positive impact for the resort properties’ bottom
lines.
Bringing back properties during periods of recovery could be achieved
through simply selling more rooms, but during industry-wide periods of prosperity,
resort managers can increase revenue through a combination of raising guest num-
bers and boosting per-guest expenditures such as recreation, retail, and food and
S beverage.
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ANALYZING FINANCIAL STATEMENTS

[A sound cost accounting system]. . .not only reveals our mis-
takes—it shows us who’s doing a good job!
—BROR R. CARLSON
MANAGING FOR PROFIT
Industry Differences
The reader will note variations in the ways the financial information for ski areas,
golf courses, and marinas is presented. Each industry has slightly different ways of
presenting its financial information and deciding which ratios are important. Some
financial problems are, however, common to all businesses. This section identifies
the major potential problems and suggests appropriate causes and solutions.
Low Solvency Solvency and liquidity are measures of the business’s ability to meet its short-term
and / or obligations. Problems with solvency are indicated by a low current ratio, while
Liquidity liquidity problems are identified with a low quick ratio. The causes and potential
solutions are the same. Problems occur when current liabilities are too high
and / or when short-term funds are used to fund long-term assets. The solution is
to move some short-term liabilities to the long term or to sell and lease back some
fixed assets.
High Debt The relationship between debt and equity is a measure of how the business is
to Equity financed. Businesses use the equity in the resort to secure outside debt, thereby
leveraging the business. When the debt load is heavy, the business can grow in
good economic times, but it is more difficult to repay the debt in an economic
downturn. Net worth being too low or liabilities being too high causes a high debt-
to-equity ratio. Capital can be added by selling stock, or company growth can be
slowed and profits used to reduce liabilities instead of buying additional assets.
Low Operating Revenue less operating expenses equals operating income. Low operating income
Income results from insufficient revenue and / or costs that are too high relative to the level
of revenue. Low revenues can come from pricing the services at a level lower than
the market is willing to pay or at a level that does not cover costs. The product
mix may be wrong. Some departments produce a greater operating profit than
others. Enhance operating income by pushing sales of the high-margin depart-
ments.
Because labor costs are such a major factor in running a department, in-
S creased costs are likely the result of low employee productivity—too many em-
N ployees are scheduled for the amount of revenue being generated.
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OPERATING CHARACTERISTICS BALANCE SHEET 83
Low Revenue The importance of controlling labor costs is noted above. The ratio of revenue to
to Employee employee is a measure of how efficiently employees are scheduled relative to the
volume of business being generated. When this ratio is too low, the number of
employees must be reduced or revenue must be increased.
Low Pretax Low profits are caused by an operating income that is too low to meet the level
Profit Margin of overhead that must be paid. If the overhead cannot be reduced, the only other
solution is to increase revenue to raise the operating income. This assumes, of
course, that the level of operating expenses is appropriate for the level of sales.
Low Revenue This ratio is a measure of how well management uses the assets under its control
to Assets to generate revenues. A low ratio means that revenues are too low or assets are
too high. Perhaps unused property can be sold or fixed assets can be sold and
leased back. If not, attention must focus on increasing sales.
Low Return A low return on assets means that net profits are too low and / or assets are too
on Assets high. Net profits can be increased by some combination of increasing revenue
and lowering costs. The strategies noted above for reducing assets might also be
appropriate here.
Low Return on When the return on investment is low, the net profit is too low and / or the net
Investment worth is too high. Profit can be increased in ways noted above. Expanding the
business using borrowed funds can reduce the relative net worth.
Low Accounts This ratio is too high because accounts receivable is too high. The result can be
Receivable a strain on cash flow. The solution is to reduce accounts receivable.
Turnover
The wise man understands equity; the small man understands
only profits.
—CONFUCIUS
ANALECTS
BALANCE SHEET
The following are a few of the key ratios found on a balance sheet. The networking
capital and the current ratio help determine the industry’s ability (and the ability
of individual resorts) to meet short-term financial obligations such as debt service,
payroll, and accounts payable. These also help measure how well each resort uses
payment terms from creditors and deploys its capital resources.
Because the nature of the industry is seasonal, some of the following ratios
S may change throughout the year. At the end of the year, the situation does not
N always accurately reflect the resort’s state throughout the year.
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Networking Capital
During the 2004–2005 ski season, the networking capital position of the snowsports
industry was positive for the first time in recent memory. This was mostly due to
a better working capital balance in the Rocky Mountain region’s largest resorts.
Resorts from all size classes and all regions improved their average working capital
balances, even though some resorts are still negative, as they were the year before.
The largest ski areas are the ones with the highest working capital balances,
though the smallest resorts average a positive balance as well. The regions with
the highest networking capital balances were (in order) the Rocky Mountains, the
Midwest, and the Southeast, which just moved from a negative position to a pos-
itive. Networking capital balances are the least favorable in the Pacific West, fol-
lowed by the Northeast.
Current Ratio
The current ratio is another method of expressing the relationship between current
liabilities and current assets. In the 2004–2005 season, the current ratio was above
one for the first time in recent memory, which meant the current assets outweighed
the current liabilities.
For that season, the lowest current ratios were found in the Northeast and
Pacific West regions, with the highest ratios in the Midwest and the Rocky Moun-
tains. By resort size, the largest and smallest resorts had the highest ratios, while
mid-sized resorts had ratios below one.
Debt Ratio
The debt ratio, also known as percent liabilities, indicates the extent to which a
company is financed through debt sources like long-term loans or bonds (as op-
posed to retained earnings or owner’s equity). The opposite of this measurement
is percent equity, which measures the proportion of assets owned by the share-
holders.
Nationally, the debt ratio declined from 45 percent to 38 percent over the
2004–2005 season. The lowest debt ratio in the country was found in the Pacific
West region, at only 18 percent. The rest of the country averaged above 40 percent,
with the highest in the Southeast region (47 percent). As for ski area size, the
smallest resorts have the highest average debt ratio, whereas larger mid-sized re-
sorts have the lowest.
INCOME STATEMENT
S The income statement indicates three important variables: total revenue, visits by
N ticket type, and expenses.
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INCOME STATEMENT 85
Revenue
As mentioned earlier in the chapter, resorts tend to rely on revenue sources in
addition to that generated by occupied rooms. The following is a closer look at
resorts’ various sources of revenue.
Ticket Yield Obviously, the issue of actual lift ticket yield and ticket lead pricing is of especial
interest to the industry.
During the 2004–2005 season, weekend adult ticket prices averaged $57.82,
while ticket revenues per visit settled at an average of $31.35. This ‘‘yield ratio’’ of
roughly 54.3 percent is a result of promotions, discounting, children’s tickets, sea-
son passes, comps, and other price-reducing elements.
Regionally, the highest yield ratio was found in the Pacific West, followed by
the Southeast, Midwest, Northeast, and Rocky Mountains. Accordingly, the abso-
lute dollar gap between effective yield and lead price was highest in the Rocky
Mountains, followed by the Northeast, Southeast, Pacific West, and Midwest. Yield
ratios have been on the decline in the Rocky Mountain region over the four sea-
sons prior to the 2004–2005 season, but they have fluctuated without any general
trend in other parts of the country.
Interestingly, yield ratios were highest at the smallest resorts, and lowest in the
largest resorts. The ratios have been declining at the largest resorts, increasing
significantly at the second-smallest resorts, and the smallest resorts have seen an
irregular pattern of gains and losses. Taken as a whole, these data suggest that the
factors underlying the long-term yield ratio decline (such as increased purchase
of reduced-price season passes; a greater usage of coupons, discounts, and other
incentives; pricing pressure on resorts that don’t offer season passes; continued
increases in lead ticket prices; etc.) continue, even though different parts of the
country experience the decline differentially.
As a result, many resorts are choosing to focus on non-lift-ticket revenues in
order to diversify their cash flow and overall economic base.
Season Over the past several seasons, resorts in parts of the country have expanded their
Pass Sales sale of moderately to heavily discounted season passes. These discounted passes
have frequently been designed in order to appeal to residents of the local area
and larger day-skier drive markets. Customers in these markets have mostly re-
sponded positively to the reduced-price passes, as can be seen in the number of
the passes sold. It’s also likely that these discounted season passes have contrib-
uted to increased skier visits and / or lower ticket revenue yields in certain markets
over time.
Over the four seasons prior to the 2004–2005 season, the highest percentage
growth in sales was to be found in the Northeast and the Pacific West, followed
by the Southeast, the Rocky Mountains, and the Midwest. Season pass sales have
increased steadily by the size of the resort, as could have been expected. Every
size grouping experienced season-pass-sales increases over the seasons prior to the
S 2004–2005 season, with the largest percentage gains at the smallest and the largest
N resorts.
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Visits by Ticket Type

A skier visit is defined as one person visiting a ski area for any part of or all of a
day (or a night) in order to ski, snowboard, or otherwise slide downhill. This
includes day passes, half-day passes, night visits, complimentary visits, adult, child,
season pass, and any other type of ticket that allows a skier to use the area’s
facilities.
Nationally, overall paid tickets were 61.4 percent of total visits in the 2004–
2005 season—a figure unchanged from the previous season. Season passes ac-
counted for another 29.6 percent of total visits, which represented a slight increase.
The remaining 9 percent of visits during the 2004–2005 season were accounted for
by employee passes (2.6 percent) and complimentary and other types of non-paid
tickets (6.4 percent).
Overall, season pass visits were responsible for 28.9 percent of total visits. In
addition, the average skier visits per pass holder was calculated to be 10.6 days.
This number was arrived at by analyzing the average season pass visits and average
season passes sold.
Expenses
During the 2004–2005 season, a decline in total expenses for the U.S. ski industry
was achieved through declines in operating lease expenses, interest, and insur-
ance. This increased total profitability.
Direct labor is generally the largest chunk of resort expenses, which reflects
the service-oriented nature of the industry. The second-largest expense is the group
of expenses related directly to departments or employees, also known as direct
expense. That direct labor and direct expense are the largest expenses in the ski
industry shows how important proper training and staffing are, especially when it
comes to maintaining a low turnover.
The second tier of expenses is composed primarily of depreciation, general
and administrative costs, and the cost of goods sold. Of these, depreciation went
down the most between the 2003–2004 season and the 2004–2005 season. The cost
of goods sold went slightly up, and general and administrative costs were essen-
tially flat over that time period.
The third tier of expenses include marketing / advertising, payroll taxes, prop-
erty operation, insurance, and interest. The most significant trend in this tier is the
rapid shrinking of interest expense between the two seasons mentioned above.
Smaller expenses are composed of property / other taxes, land use fees, am-
ortization, operating leases, and miscellaneous expenses.
CRITICAL RATIOS
S The following are essential ratios to consider when financially analyzing a resort’s
N performance.19
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CRITICAL RATIOS 87
Debt to Cash Flow

Debt to cash flow, or ‘‘health,’’ is an approximate measure of the years that would
be needed at the current cash flow to eliminate long-term debt. The ratio is
achieved by dividing long-term debt by the before-tax cash flow. This ratio is useful
for comparing the leverage of various resorts and their ability to retire debt.
In the 2004–2005 ski season, health measured at 1.61, a decrease (improve-
ment) from 1.93 in 2003–2004. The result means that at current cash flow levels,
the industry as a whole would be able to retire its current debt in little over a
year’s time. This ratio has been fairly stable for the three years prior to the 2004–
2005 season, suggesting that the industry is in a healthy financial position.
Operating Profit on GFA (Gross Fixed Assets)

Operating profit on GFA is a type of a return-on-assets ratio, which is calculated
by dividing the operating profit by the gross fixed assets. Nationally, this ratio
improved from 12.6 percent to 14.6 percent during the 2004–2005 season. Inter-
estingly, the smallest and largest ski areas posted the highest returns, with an av-
erage between 15 and 17 percent. The mid-sized resorts only returned 8 to 10
percent on assets.
Profit, Before Tax, on Equity

This is a measure of the stockholder’s or owner’s return on investment. The stan-
dard measure of return on equity uses profits after taxes as the numerator. In the
ski industry, many areas are part of larger corporations that consolidate the tax
consequences of their ski area profits with those of the parent company. In addi-
tion, a number of areas carry forward loss balances to offset current profits. By
assuming combined federal and state liability of 40 percent, the after-tax return
can be determined by multiplying the before-tax figure by 60 percent.
In 2004–2005, operating profit on GFA increased to 14.6 percent and profit
before taxes on equity nearly matched it at 14.2 percent. Resorts in the Southeast
showed the largest amount of profit before taxes on equity, while the Northeast
had the smallest at 6.5 percent.
Capital Cost/Capacity
The capital cost / capacity ratio is a relative measure of ski area attributes. It is
calculated by dividing GFA by skier capacity.
This ratio increases when investments in assets do not add to capacity. Ex-
amples include investments in restaurants, lodges, and rental shops. Over the last
few seasons, the industry’s capital spending has focused on capacity-related im-
provements like expanded terrain and trails. Thus, in 2004–2005, this ratio de-
creased to $5,378. The largest decrease was noted in the Rocky Mountains,
S normally the region with the greatest ratio, while the region with the highest ratio
N was in the Pacific West.
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Total Revenue per Skier Visit

Total revenue per skier visit is the actual revenue generated by the ski area for
each skier day. A skier day represents one skier visiting a ski area for all or part
of a day. The ratio is determined by dividing total revenue from ski lift tickets and
other ancillary operations by the number of skier visits.
In 2004–2005, the total revenue per skier visit increased to $67.14. While most
regions experienced an increase over the previous year, the improvement was felt
most strongly in the Pacific West and was not felt at all in the Midwest, where
revenue actually fell.
Total Expenses per Skier Visit

The actual expense for each skier day is calculated by dividing all expenses, in-
cluding direct expenses, depreciation, leases, and interest, by the number of skier
visits. The financial health of the ski area is linked to management’s ability to
budget expenses relative to forecasted revenues. Complicating the equation is the
fact that ski areas are subject to factors, such as weather conditions, beyond the
control of the resort. Constant monitoring of critical variables is essential to finan-
cial success. In 2004–2005, overall expenses increased to $59.19 from the previous
season. The Rocky Mountain region was the only region where expenses per skier
visit were not on the increase, which is unusual for the region. The greatest ex-
penses were in the Southeast and the least were in the Midwest.
The key to profits is to increase revenue while reducing expenses or keeping
them steady.
SUMMER IN THE MOUNTAINS20

The majority of resorts are very seasonal, meaning that they can only generate
revenue for roughly 100 days. They still have expenses for 365 days, however,
which complicates the issue. The secret for financial success is to aim to become
a four-season resort through adding recreational activities during non-peak seasons.
Expand Summer Recreation

Forty-six percent of ski resorts have mountain biking trails that they offer their
guests during the summer, and another 38 percent have hiking. Other summer
recreation activities offered by U.S. ski resorts include:
Scenic lift rides (33 percent)

Ball courts (28 percent)
Mountain bike lift service (22 percent)
S Fishing (19 percent)
N Horseback riding (16 percent)
L Climbing walls (15 percent)
MILL (Wiley)
SUMMER IN THE MOUNTAINS 89
Disk golf (11 percent)

Miniature golf (11 percent)
Another summer revenue idea is the installation of an artificial slope, which

allows skiers and riders to do their thing on a water-covered incline. The artificial
slope allows normal equipment, which is an extra bonus.
Quick Getaway 3.5

Bouncing Back to Business in the Summer
Staying open in the summer is fine, but blues One reason for the strong revenue stream:
festivals and wine tastings are probably not go- these are high-thrill, short-term experiences. A
ing to attract those breakneck snowboard stunt two-minute turn on the bungee tramp is a blast;
riders that crowded the resort during the win- if it goes for five minutes, jumpers can become
ter. So what’s a resort to do? bored.
Gravity sports, including climbing walls, Given the low investment and high return,
ropes courses, bungee towers, and giant swings it’s a little surprising that many areas turn tram-
offer one answer. Gravity sports appeal to poline and climbing operations over to con-
the same thrill-seeker audience that rocked the cessionaires. The reason? Many resorts are
half-pipe during snow season, making the reluctant to invest even $25,000 in summer op-
sports a good option. These sports, not unlike erations, especially since many of their winter
alpine slides and ziplines, involve getting the ops can use the money. Turning the gravity
participant off the ground. Also, they have an games over to an independent operator keeps
apparent element of danger (far more apparent an area’s investment to zero, and still provides
than real, fortunately). Gravity sports can offer a (reduced) cash flow.
visitors a spectacle that gives them a reason to Whether a resort brings in a concession-
stay around. Best of all, these sports usually re- aire to run gravity sports facilities or decides to
quire only a small investment, but the return operate them itself, these activities can gener-
can be sizable. ate cash flow while they create excitement and
Gravity sport systems make good sense fi- an incentive for thrill-seekers to stick around.
nancially. A four-station bungee tower can And the starting cost is low. Gravity sports look
serve from 60 to 100 persons an hour, and a good, all around.
single ropes course can do about the same.
With per-ride costs between $5 and $10 a per- Source: ‘‘Bounce into Summer.’’ Sam Ski Area Manage-
ment (January 2006). http: / / www.saminfo.com / issues /
son, a $30,000 installation can produce $60,000 article.php?tid⫽3425
to $90,000 in a three- to four-month season—
which more than recoups the initial capital in-
vestment. It’s not just the more ‘‘extreme’’ DISCUSSION QUESTION:
facilities that are profitable: on a busy week- In your opinion, should a large resort hire a
S end, the daily take per trampoline can reach concessionaire or run gravity sports by
N $4,000. themselves? What about a small resort?
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Some ski resort owners have been quick to incorporate summer revenue
boosters such as alpine slides, waterparks, waterslides, summer camps, bungee
trampolines, canoeing, kayaking, mountain scooters, wagon / carriage rides, ropes
courses, all-terrain vehicle tours, skate parks, paintball, driving ranges, cable rides,
mountain boards, rock climbing, rafting, orienteering, human mazes, go-karts, riv-
erboat cruises, paddleboats, and skating schools.
Outdoor Waterpark
Lately, the success of outdoor-indoor waterparks has been in the news. Ski resort
owner Sam Newman transformed his winter resort into a highly successful summer
waterpark in 1998. The resort now includes an activity pool, waterslides, and a
lazy river. Camelback Ski Resort’s transformation into Camelbeach Waterpark
made history as the first ski resort ever to make such a huge commitment (with a
$4.2 million initial investment) simply to attract the summertime family market.
Before making the additions, the resort drew only 50,000 visitors in the sum-
mer, compared to its 340,000 wintertime visitors. After incorporating Camelbeach,
the resort receives over 700,000 total visitors. According to Dave Kulis, who heads
the sales and marketing for the resort, summer visitors will exceed winter visitors
in 2004.
The waterpark creates per cap revenue of over $24, and the resort finally has
a positive cash flow during the summertime. Margins are also better during the
summer because ski-resort costs such as snowmaking and utilities are reduced, if
not nonexistent. The resort is also more able to use its full-time staff, who now
have sufficient duties during both the winter and the summer. Also, more than
550 seasonal positions are available to be filled during the summer, making it a
very popular place for local high school and college students to work over the
break.
Obviously, the Camelbeach outdoor waterpark model is not for every ski re-
sort. Feasibility depends heavily on whether the resort in question is a destination
resort or a day-trip resort. Another key determinant is whether the resort is located
near a large population center. Outdoor waterparks are able to draw customers
from 50 to 75 miles away, especially if there is no on-site lodging. On the other
hand, indoor waterparks can draw from 200 to 250 miles away—this is the rec-
ommended model for fly-to ski resorts that have abundant on-site lodging.
Indoor Waterpark
A few years ago, Everett Kircher, an innovator in the ski resort industry, died. He
left behind his children, who took over Boyne USA. Kircher’s son, Steve Kircher,
runs the Boyne Mountain Resort, located in northwestern Michigan. Steve, like
most of the industry, faced a variety of challenges: aging property, aging customers,
new competition, and no revenue growth.
In early 2001, Steve started construction on a new 200-unit condo / hotel known
S as the Mountain Grand. Construction was halted later in the year due to the slowing
N economy, 9 / 11, and Steve’s need to solidify his financing. That was when he
L discovered the hotel waterpark resort phenomenon that was astounding the in-
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dustry. Steve quickly hired Jeff Coy and Bill Haralson to assess the waterpark
feasibility for Boyne Mountain Resort.
In the following two years, Steve Kircher altered the Boyne Mountain Resort’s
master strategic plan. After securing funding for the condo / hotel and resuming
construction on those units, he joined forces with an equity partner to operate and
own a 58,000-foot-square indoor waterpark to be known as Avalanche Bay. The
waterpark was slated to be connected to the Mountain Grand Hotel, and construc-
tion started in April of 2004.
Steve followed in the footsteps of his pioneering father by building the water-
park, which was the first indoor waterpark at a U.S. ski resort. As a result of the
project, the resort’s lodging will increase from 304 to 524 units, and the waterpark
is expected to add roughly $9.9 million to the total resort revenues.
Four-Season Resort
Weather has the power to make or break a ski resort’s financial success, especially
because the resorts rely on individual leisure guests (skiers and snowboarders) to
contribute a great deal of revenue over a short period of time. Resorts tend not to
have individual business guests, since the resorts are rarely located in the midst
of business and industry.
Therefore, the first strategy for becoming a four-season resort is to expand and
create winter and summer facilities and activities in order to attract more individ-
ual leisure guests, whatever their age. Singles, couples, grandparents, and children
of all ages should be kept in mind while designing new four-season attractors.
Of course, once summer and winter are taken care of, ski resorts still have to
fill the spring and fall seasons.
Hence, the second strategy for becoming a four-season resort: attract groups
to fill up the spring and fall seasons. Bringing in conventions and meetings will
help resorts reach their full potential during the typically low seasons. Association
executives and corporate conference planners have a tendency to book their meet-
ings in the spring and in the fall, and they don’t mind coming on weekdays when
resorts have the greatest number of available rooms to sell.
Expenses build up all year round, so most ski resorts simply can’t afford to
close down for eight months. Expanding recreation over the summer is not the
only answer to the problem; building an indoor or outdoor waterpark is not the
only solution. A combination of these factors, along with generous space available
for conventions, will help to balance the resort financially across all seasons. Every
time period and every activity has its target audience, and it needs its own mar-
keting plan to generate sales and increase revenue for a four-season resort.
Conference Centers21
Demand continues to grow for full-service conference centers and meeting desti-
S nations and trend-setting resort concepts can easily fit that bill. The conference
N center is preferable to a traditional hospitality setting, because the center is already
L designed to hold meetings efficiently.
MILL (Wiley)
Snowboarding represents more than a quarter

of all skier visits. Courtesy Corbis Digital Stock
The ideal customer for a conference center is an organization or a company

seeking to create a memorable, effective meeting located at a specialized venue.
The conference center is truly the ultimate interactive environment, ideal for learn-
ing, and it’s adaptable to meet the needs of any industry or content. According to
PKF Consulting, which runs an annual study for the International Association of
Conference Centers, the most popular types of conferences tend to be focused on
education, training, management planning, technical or professional topics, and
sales meetings. Nonprofit organizations also use and enjoy the conference centers.
Why is a conference center preferable, when there is such an abundance of
event space for meeting planners and executives to consider? Simply because a
conference center is tailored to meet the needs of a group meeting. The best
centers can keep a meeting on-target while offering an array of attractive extra-
curricular options in the area.
Many conference centers are now moving past basic requirements to deliver
the latest in services and technology. For example, some facilities include meeting
S rooms that have Internet access, work-surface desks, multiple data ports, ergon-
N omic tables and chairs, tack-on wall surfaces, and drop screens.
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Additionally, some conference centers include specialized recreational facili-

ties such as lighted tennis courts, spa services, and even 36 holes of championship
golf. This encourages meeting attendees to relax on-site.
Conference centers are able to offer Complete Marketing Packages (CMPs)
that can’t be touched by the competition. The CMP usually includes the facilities
and amenities for one set price per person. Often included are continuous refresh-
ment, a dedicated conference planner, three meals each day, a deluxe guestroom,
audiovisual equipment, use of the fitness club, and gratuities. Eliminating hidden
charges keeps the meeting on-budget.
Full-service conference centers offer the best in service. Event planners can
often choose to have the center itself manage recreation, teambuilding, ground
transportation, and even air travel.
The last benefit to having a conference center is the flexibility that it offers its
clients. An independent meeting venue can write its own contracts in order to
best serve its customers, and if there’s a problem during the meeting, on-site man-
agers can quickly resolve the issue.
A New Kind of Resort22

When the ski business began to stagnate beginning in the 1980s and continuing
through the 1990s, a lot of resorts took a look at developing real estate as a way
of increasing profits.
Base Village Along the way, developers stumbled onto the concept of the resort community, a
Resorts sort of year-round village where skiing is not always the main attraction. Nowadays,
people come to resort towns in order to ride horses or mountain bikes as much
as they do to ski. Shopping, dining, and strolling the streets are just as pleasurable,
especially since the guest never has to leave the resort to do all these things.
The village center is the key feature, as developers are well aware. Often
restaurants, lodging, condominiums, and retail are clustered in near the chairlifts
along with heated outdoor pools, ice skating, and other amenities. Ski resorts have
in the villages a central destination, much like a town center. Vehicles are re-
stricted within the village, giving pedestrians free rein. This in turn allows the
village to become a hub of activity, with scheduled special events and features
such as symphonies and conference centers.
Changes in technology and the economy have made it so that mountain re-
sorts are more attractive than ever, for permanent residents as well as short-term
visitors. Some visitors initially spend only a few weeks a year at the village, but
over the course of their ownership, they can end up spending six months or even
a year there. Today’s technology, which allows instant connection to the rest of
the world, is certainly a catalyst for this transition.
The condo / hotel, typically located near the village center, is increasingly
emerging as the alternative to the second home. Units in these hotels are typically
purchased for a specific number of weeks during the year, usually by people who
S prefer to visit resorts about once a month. While the owners are not there, the
N resort or the owners can rent the units to other people. Even condo owners with
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full ownership are able to arrange with the resort company to rent their units while
the owners are away. The resulting reduction in ‘‘cold beds’’—resort units left
empty during much of the year while the owners are away—financially benefits
both resorts and the surrounding municipalities.
Resorts During the summer months, a successful ski resort will not consider itself a ski
Focusing on resort. Smuggler’s Notch, located in northeastern Vermont, is considered remote.
Programming Guests coming from New England and the mid-Atlantic have to pass by Vermont’s
more attractive and successful resorts, before spending another two to three hours
simply to reach Jeffersonville. Smuggler’s Notch does not offer spectacular infra-
structure or incredible amenity packages. It does offer a lot of extremely well-used
(some might even say ‘‘tired’’) amenities. Why is it, then, that Smuggler’s Notch is
ranked as one of the very best family resorts in the nation? And why is it busier
and more profitable during the summer than in the winter?
The resort bills itself as a family resort that offers skiing in the winter, not as
a ski resort that offers family activities in the summer. With lodging capable of
handling thousands of guests at a time, the resort’s best strategy is not to fill its
rooms for just one or two nights, but to keep guests for as many as seven days at
a time.
The concept is simple: Smuggler’s Notch aims to keep children entertained,
occupied, and engaged, which gives parents a little time for some much-needed
R&R. The resort even offers a ‘‘Family Fun Guarantee,’’ whereby a family member
can be reimbursed for any activity that they did not find fun. Although the concept
itself is simple, the result is a time- and human-resource-intensive undertaking.
Children are organized into five groups by age, and they spend their days (10:00
a.m. to 4:00 p.m.) with specially trained counselors. Often, evening programs are
available too.
Smuggler’s Notch has extensive programming that ensures that it’s even busier
during the summer than it is in the wintertime. Utilizing existing resources and
innovative planning can help practically any resort overcome the summer dol-
drums.
Problems There are many benefits to converting a winter-only ski resort into a full-use four-
season resort, and base villages can add a great deal of atmosphere and revenue
to an operation. However, these changes can bring negative consequences as well.
Housing Crunch. Because of the real estate boom in these high country desti-
nations, many of the resorts’ employees have been forced to seek housing far away
from the resort town, which leads to traffic problems for them and for tourists.
In Utah, Summit County is attempting to resolve the issue by changing the
master plan of a planned development at the Canyons, over which the county has
jurisdiction. The new plans will ensure that sufficient lodging is constructed to
house at least one-fifth of the development’s employees.
Growing Smartly. Other resorts are learning how imperative it is that they con-
S trol the form and pace of their expansion. The Canyons severely restricts how many
N vehicles are able to get to its village area from the main access road. As a result,
L many visitors get to the village via a people mover, after parking their cars some-
MILL (Wiley)
where else. Because so many visitors fly into Salt Lake City, which is only 40 miles
away on the interstate, less than half of all visitors arrive by car. Even so, being so
close to the big city creates gargantuan traffic problems for Park City and the Park
City valley.
The traffic issue is not a new concern, nor is it only a problem in Utah. At
Crested Butte, the town is taking charge. Two new housing ordinances were re-
cently implemented, one of which is very similar to Mt. Crested Butte’s inclusionary
zoning ordinances. The other ordinance is actually a linkage fee, which applies
to existing residential buildings that add square footage. The income from these
fees goes into a general fund to be used for creating deed-restricted or affordable
housing.
SUMMARY
Over the last decade, the mountain resort industry has undergone a huge shift. As
the resorts have grown, they have created—and solved—many problems. How-
ever, the changing customer demographic, increasingly new types of snowsports,
and the challenge of operating a four-season resort will all test the industry in the
years to come. To flourish, resorts must change from being businesses focused on
skiing to enterprises with a much broader focus.
ENDNOTES
1. Phillips, Patrick L. Developing with Recreational Ameni- 14. Phillips, Patrick L. Developing with Recreational Ameni-
ties: Golf, Tennis, Skiing, Marinas. Washington, D.C.: The Ur- ties: Golf, Tennis, Skiing, Marinas. Washington, D.C.: Urban
ban Land Institute, 1986. Land Institute, 1986, 126.
2. Kottke National End of Season Survey 2004 / 2005. Lake- 15. Farwell, Ted. A Manual for Preparing Break-Even Analy-
wood, CO: National Ski Areas Association, 2005, 46–48. ses. Boulder, CO: Ted Farwell & Associates, 1993, 3.
3. Ibid., 60–61. 16. Ibid.
4. Ibid., 17. 17. Ibid., 5.
5. Ibid., 47–48. 18. Mandelbaum, Robert. ‘‘Resort Hotels.’’ Lodging Maga-
6. Ibid., 67. zine (May 2006): 19–21.
7. National Ski Areas Association National Demographic 19. 2004 / 05 Economic Analysis of United States Ski Areas.
Study 2004 / 2005. Lakewood, CO: National Ski Areas As- Lakewood, CO: National Ski Area Association, 2005, 85–91.
sociation, 2005. Kottke National End of Season Survey 2004/ 20. Coy, Jeff and Bill Haralson. ‘‘Ski Resorts Expand Year
2005. Lakewood, CO: National Ski Area Association, 2005, Round Revenues, Add Outdoor & Indoor Waterparks.’’
46–48. Hotel Online Special Report, accessed February 15,
8. Kottke National End of Season Survey 2004 / 2005. Lake- 2005. www.hotel-online.com / News / PR2004 2nd / May 04
wood, CO: National Ski Area Association, 2005, 34–41. SkiWaterPArks.html
9. Ibid., 42. 21. Swyney, Michael. ‘‘Conference Centers: Today’s Choice
10. Ibid., 29. for Meetings.’’ Los Angeles Business Journal (February 14,
11. Ibid., 30. 2005).
12. Ibid., 63–66. 22. Holtzman, David. ‘‘Mountain Resorts Grow Up.’’ Urban
S
13. 2004 / 05 Economic Analysis of United States Ski Areas. Land (April 2006): 82–87.
N
Lakewood, CO: National Ski Area Association, 2005.
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Chapter 4
BEACH RESORTS AND
MARINAS: THE IMPACT
OF DEVELOPMENT
ON OPERATIONS
LEARNING OBJECTIVES
1. Identify the key elements in the development process that help maintain a
balance between the physical capacity of a beach resort and the economic
needs of the developer.
2. Define the main factors affecting the attractiveness of a site for a beach re-
sort.
3. Explain the role of general design principles in site planning for a marina.
4. Describe the five developmental criteria that improve guest convenience,
safety, and security.
5. Analyze the interdependencies between the four principles that guide marina
design.
INTRODUCTION Legal and Policy Context

THE DEVELOPMENT PROCESS Development Criteria
Beach Development GENERAL DESIGN PRINCIPLES
Desirable Sites Geography—Engineering
Evolution Engineering—Profile
MARINAS Profile—Layout
The Development Process Layout—Architecture
Onshore/Offshore SUMMARY
Basis for Marina Development ENDNOTES
S
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INTRODUCTION 97
INTRODUCTION
George III, suffering from severe abdominal spasms, came to
drink the waters there [Cheltenham] in 1788 and made it
fashionable as a summer resort.
—PHYLLIS HEMBRY
The English Spa, 1560–1815: A Social History
A variety of recreational activities utilize water as the major attraction:
Natural beaches, which can be used for sunbathing, swimming, and

beachcombing. Very popular, they may require little development,
though maintenance costs can be high. Beaches allow for a variety of
complementary activities, including snorkeling and scuba diving.
Open space and trails, typically found around lakes and wetlands. They
can be used as sites for fishing or camping or for observing wildlife, and
fit well into the ecotourism movement.
Golf courses, developed in Scotland, the reputed home of golf, on the
coast to give participants the benefit of the invigorating sea air. Many U.S.
resorts exploit oceanfront settings to highlight their golf facilities.
Marinas servicing sailboats and motorized crafts as well as windsurfing
and other water sports. Depending on the type of craft catered to, the
amount of development can range from little to extensive.
Residential development, as home sites on the waterfront generate
premium prices. Care must be taken to balance preservation of the
often sensitive ecology and obtaining an economic return on the invest-
ment.
Commercial development, such as hotels, retail stores, and restaurants.
This most intense type of waterfront development must be approached
carefully because of environmental concerns.
Cruise ships, which, after all, are nothing more than floating resorts.
Spas, as noted in the above quote.1
Certain water-based activities are compatible with others, while some do not
mix. Figure 4.1 indicates the types of activities that can and cannot take place in
proximity to each other. This chapter focuses on beach resorts and marinas. The
development process for both is outlined. The characteristics important for an
economically successful and environmentally sensitive water-based resort are ex-
S plored.
N
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98 Chapter 4 BEACH RESORTS AND MARINAS: THE IMPACT OF DEVELOPMENT ON OPERATIONS
Hydroplane/
motorboat Motorboat
Compatible Angling Canoeing Rowing Sailing Sub Aqua Waterskiing racing cruising Wildlife
Activities
Angling ❏ ❏ ❏ ❏ ❏ ❏ ❏
Canoeing ❏ ❏ ❏ ❏ ❏
Rowing ❏ ❏ ❏ ❏
Sailing ❏ ❏ ❏ ❏
Sub Aqua ❏ ❏ ❏ ❏ ❏
Water skiing ❏
Hydroplane/ ❏
motorboat
racing
Motorboat ❏ ❏ ❏
cruising
Wildlife ❏ ❏ ❏
FIGURE 4.1

Geologically, the Hawaiian island chain was formed when
volcanoes on the floor of the Pacific Ocean spewed out mol-
ten lava, which eventually cooled off and formed large resort
hotel complexes.
—DAVE BARRY
Dave Barry’s Only Travel Guide You’ll Ever Need
The designer should begin by considering the reasons people go to beaches.

While, indeed, many people go to swim, others are primarily interested in sun-
bathing, socializing, people-watching, relaxing, or engaging in recreational activi-
ties. Ideally, the beach design should permit a range of uses. This means designing
S the facility for the different types of people who go to a beach. Some go to play
N in the water. Others go to play on the beach. A third group goes because their
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friends want to play in the water or on the beach. Providing tables, chairs, and
shade for this third group makes their visit more enjoyable.
Beach Development
Six important aspects warrant consideration with respect to beach development:
the sea, seashore, beach, back beach, coastal stretch, and surrounding country-
side.2
Sea A variety of factors related to the sea affect the attractiveness of the site:
Air temperature. There is a high correlation between swimming and maxi-

mum air temperature and a fairly high correlation between beach use
and maximum air temperature.3
Amount and intensity of the wind and sun. There is a weak inverse rela-
tionship between both swimming and beach use and wind. There is a
straight-line correlation between sunshine hours and both swimming and
beach use. The correlation is higher than that of maximum air tempera-
ture for beach use and lower for swimming.
Water temperatures, including the temperature range.
Currents, tides, and waves, including their direction, strength, and season-
ality. Wave action, and the corresponding erosion, is greater when
beaches are exposed to the main channel of a lake. On the other hand,
beaches developed on lakes are subject to less erosion when placed on
the side of a bay or inlet.
Ecology, including seaweed and fish.
Pollution. In Jersey, the largest of the English Channel Islands, state-of-the-
art sewage treatment plants use ultraviolet light radiation to destroy bacte-
ria and microorganisms before they pass into the surrounding waters.
Clarity of water. Of the 496 coastal resorts around bathing destinations on
the northwest coast of England, 89 percent passed germ tests and only
146 met standards that are above average for bathing waters.4
Possible attractions, such as islands, coral, and conditions for water recre-
ation. At the 2001 Global Conference on Oceans and Coasts it was stated
that 20 to 30 percent of coral reefs worldwide are threatened in the com-
ing decade while current projections indicate possible losses of 50 to 60
percent in the next 25 years. Dying coral can be helped by limiting the
number of people who scuba dive, improving sewage treatment and
drainage in the islands, and monitoring dumping and draining into the
surrounding waters.5
Seashore The seashore consists of the surface under the water, extending out to a depth of
6 feet. A gentle, uniform slope of 7 percent to this depth is ideal.6 The makeup
and stability of the bottom is important to bathers. It should consist of coarse sand
S or sand and pea gravel to a depth of 12 inches. Mud bottoms have to be stabilized
N with crushed rock as a base and a coarse sand overlay. Bathers should be able to
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Quick Getaway 4.1

Why Water Works
Studies that involve today’s travel habits indi- two major freshwater bird and fish exhibits,
cate that travelers, especially traveling families, and a ‘‘swim with the dolphins’’ experience
desire water experiences as a part of their va- that accounts for a great part of the hotel’s rev-
cations. This should not be surprising, since enue and bookings.
water attractions appeal to a very broad dem- Guests at the Hilton Waikoloa Village can
ographic. Water features are great for the resort cruise on mahogany boats along the saltwater
operator as well, because not only do they pro- river that connects the whole facility. The canal
vide a secondary revenue stream, but they help system infrastructure is extremely important to
increase occupancy and extend the season as the resort, as the primary means of transporta-
well. tion throughout the Hilton Waikoloa Village is
At Hilton Waikoloa Village on Hawaii’s by water taxi.
Big Island, water is the main attraction. The
Source: ‘‘Water Works at Hilton Waikoloa Village.’’
resort was planned with a revolutionary water-
Resort ⫹ Recreation (November / December 2005).
oriented environment in mind, such as never
had been seen before. The result? A sprawling
(yet intimate-feeling) property that features a DISCUSSION QUESTION:
3
⁄4-mile-long saltwater river with waterfalls, a When it comes to beach resorts, is it more
saltwater lagoon filled with exotic fish, three important to include water features than it
major pools with cascades and waterslides, might be for an inland resort?
walk into the water a sufficient distance to allow them to engage in play activities
without risk of danger from tidal movement.
Beach The slope of the beach should be between 2 and 10 percent, with 5 percent being
the ideal.7 Both purity and color of the material—a minimum of 12 inches of sand
or a mixture of sand and pea gravel—and the stability of the beach are important.
Beach erosion can result in heavy annual maintenance costs. Often, sand must be
dredged from the swimming area back to the beach because the grade of the
beach is too steep. While annual dredging takes care of the symptom, it does
nothing to alleviate the cause of the problem. Perhaps the original slope to the
water’s edge can be cut down to a grade of 2 to 3 percent, with a retaining wall
behind the beach to help retard erosion.
The size of the beach is a function of its depth and length. People do not
want to walk too far to get to the water, neither do they want to feel too crowded
(although people-watching on a busy beach is a major motivation for many). A
S good rule of thumb is for square feet of beach per swimmer day. The density
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varies depending on the market being sought. Some estimates are given in Table
4.1.
Beaches themselves are zoned for best use. The 20 to 30 feet nearest the edge
of the water should be designated as a circulation area to allow swimmers to move
in and out of the water and walkers to move laterally along the beach. Lifeguard
platforms are the only service facility in this zone. The next 50 to 150 feet is the
general-use area for sunbathing, play, and sightseeing. Finally, a western exposure
takes advantage of the afternoon sun.8
Back Beach The back beach offers views to both the sea and inland. The geomorphology—
cliffs, dunes, and flatlands—can dramatically add to the setting. Vegetation and
the effect of the microclimate must be considered because of the fragile nature of
the resource. Protection against degradation is a major concern as developers
consider future improvements.
Coastal Stretch The coastal stretch consists of the beach environment between 0.5 and 3 miles
from the back beach. This is where service facilities and access roads are placed.
Parking facilities, bathhouses for changing, comfort stations, and concessions are
located here. Large beaches may require several parking areas, each capable of
accommodating from 50 to 100 vehicles, in order to disperse traffic and beach-
goers.
Two schools of thought exist with respect to the placement of access roads.
One philosophy is to place the access road between the beach and the surround-
ing hotels. People who drive by can view the sea, and everyone has access to the
beach. However, hotel residents, to reach the beach, have to cross the road, cre-
ating safety problems. The other philosophy is to have the access road behind the
hotels. Access to the beach is direct from the hotels—which, in some cases, limits
TABLE 4.1 Beach Capacity

Square Feet / Persons / Feet of Coast
Person Depth of Beach
65.5 ft. 110 ft. 165 ft.
Overdensity 35 6.5 11 16.5

Public Beach 55 4 6.5 10
Resort (Low Standard) 110 2 3.5 5
Resort (Medium Standard) 160 1.5 2 3.5
Resort (High Standard) 215 1 0.5 2.5
Resort (Deluxe) 320 0.7 1 1.5
Source: Baud-Bovy, Manuel and Fred Lawson. Tourism and Recreation Development. London: Architectural Press; Boston: CBI, 1977, 74.
S Reprinted by permission of Butterworth-Heinemann, Oxford.
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With beach property at a premium, there are underwater developments in

progress. Photo courtesy Jules’ Undersea Lodge
access to their own guests. The drivers’ view is of the fronts of hotels. Access to
locals is restricted.
Surrounding The country surrounding the beach development provides the setting for the at-
Country traction. Many people wish to combine relaxing days at the beach with more active
pursuits. Natural attractions, the extent of development, surrounding infrastructure,
and the opportunity for excursions all need to be considered.
Desirable Sites
In selecting a site for beach development, these elements warrant particular atten-
tion:
access to a permanent or transient seasonal population

access to major roads
S minimum water temperatures in the upper 60s during the swimming sea-
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warm, sunny conditions before and during the season to warm the water
and attract swimmers and sunbathers
water quality needs to be analyzed before and after development as
swimmers will add to the existing bacterial count.
This latter point is of greater concern in bodies of standing water than in flowing
streams and rivers. Each year, 2,000 beaches are closed due to sewage overflows,
urban and agricultural runoff, and direct contamination by human waste. Restrict-
ing diaper-age children to toddler wading pools and having adult pools on separate
filtration systems help prevent the spread of disease. Particular care needs to be
taken to prevent runoff into the sea, as heavy rainfall flushes contaminants from
city streets into the surrounding waters.9
Coastal Sites The biggest problem facing developers of coastal resorts is shoreline and beach
erosion. As a result of problems caused by development along the coastline, reg-
ulations tend to restrict building to 200 feet or so from the beach. In addition,
Quick Getaway 4.2

The Basics for a Great Beach Resort
What exactly does a beach resort have to have municipal supervision, first aid facilities,
before it can start down the road to greatness? and public phones
Although there are many variables that affect
the attractiveness of a resort, there are some Remember, resort beaches can also in-
basic elements that cannot be ignored. All the clude beaches in urban settings, such as
beautiful sand in the world won’t make up for beaches in New York City or Los Angeles. Also
an inaccessible location! That said, the first remember that although a beach may fit all of
thing one should look at when considering a the above criteria, it won’t make a great resort
beach resort is its most essential element. . .the site unless it has clean water, an interesting nat-
beach. ural environment, and a lack of natural haz-
According to the Clean Beaches Council, ards.
the following criteria describe a typical resort
Source: ‘‘Management Practices and Criteria: 2004 / 05
beach: Blue Wave Campaign.’’ Clean Beaches Council. Ac-
cessed July 24, 2006. http: / / www.cleanbeaches.org /
bluewave / criteria.cfm
It actively develops its facilities
It makes an effort to encourage visitors and
provide varied recreational opportunities DISCUSSION QUESTION:
It is located within easy access to commer- Do you agree with the Clean Beaches Coun-
cial development cil’s criteria? If not, what would you add or
It typically includes hotels, resorts, restau- subtract? What would the criteria be for a
S rants, shops, toilets, public transportation, poor resort beach?
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building density is usually low, and laws tend to require dune preservation to help
control erosion. The planting of sea grasses helps produce more stable beaches
while encouraging a diverse wildlife.
Evolution
One model of beach resort evolution describes the following stages. At first, no
tourism is present. Some kind of settlement, however, is connected by a road to
the rest of the area. Phase two—explorative tourism—begins with the visit of ad-
venturous tourists with independent itineraries and an interest in the local culture.
Contact between visitors and locals is high.
Major changes begin with the development of the first hotel. Strip develop-
ment along the beach occurs, with each additional property bringing in more
visitors, thus creating the need for additional facilities to serve their needs. As
beachfront property increases in value, residents sell or are forced out because of
higher taxes. They move to new residential communities at some distance from
the beach.
Land next to the beach becomes built out and more hotel development takes
place away from the recreational resource that attracted visitors in the first place.
A second road parallel to and some distance away from the beach is built, im-
proving access to businesses farther inland. Further development in this new area
is encouraged. In the final stage of development, the resort becomes a city with
a recreation business district and a commercial business district.10
MARINAS
One advantage of developing marinas is that they generate
water frontage where beach use is limited, which may then
lead to the development of residential units.
—BILL WHITNEY
Arthur Andersen
The Development Process

The process for developing a marina consists of five steps:
1. Analyze the market.

2. Develop a market strategy and marina concept.
3. Identify the site.
S 4. Perform feasibility analyses and preliminary design.
N 5. Design and develop the marina.
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MARINAS 105
The first step involves an analysis of the market. Taking into account the area’s
economy, analyze both demand and competitive supply to give a preliminary
assessment of current market conditions.
Next, develop a market strategy and a concept for the marina. Determine the
services to be offered, define the size and mix of boats, specify the number of wet
slips and dry storage areas, identify funding sources, calculate fees, and estimate
cash flow.
At this point, begin to identify a preferred site by compiling and mapping
data, scrutinizing development factors, and selecting several alternative sites. Note
state and federal policies controlling proposed uses of the sites and select the
superior site. Take an option on the land.
The next step is to perform a feasibility analysis and approve a preliminary
design. This involves conducting an in-depth financial feasibility study, including
an analysis of cash flow. Determine the preliminary design and technical feasibility
of the site and address local zoning and building permits.
Quick Getaway 4.3

Planning a Marina
Marinas, like any other construction project Minimize the impact of necessary dredging
that significantly involves the natural environ- by only dredging during seasons that are
ment, must be carefully planned and executed not essential to the reproduction and sur-
in order to avoid disrupting the ecosystem. In vival of local species.
the case of the marina, planning and construc- Control shore erosion with natural, non-
tion are often the factors that determine the constructed methods like beach nourish-
success of the operation. ment.
Some rules of thumb to abide by when Conserve water by fixing leaky hoses and
constructing or maintaining a marina: faucets.
Scrape, sand, and paint in-water and land-
Piers and other structures should be placed side structures according to clean marina
to enhance, rather than to obstruct, water practices.
circulation.
Use environmentally neutral materials; that Source: ‘‘Marina Design and Maintenance.’’ Maryland
Department of Natural Resources. Accessed July 24,
is, materials that won’t leach hazardous
2006. http: / / dnrweb.dnr.state.md.us / download /
chemicals into the water and won’t de- cleanmarina / 3MarinaD.pdf
grade in less than ten years.
Limit shaded areas that cover the water to
avoid interfering with water flora. DISCUSSION QUESTION:
Minimize the need for dredging by follow- What additional procedures might be
ing natural canal lines and by building necessary when constructing a marina in a
S docks that extend to naturally deep waters. particularly sensitive area?
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Develop the final design next. Create detailed construction photos, file for and
obtain permits, secure local approvals, obtain construction bids and loans, and
exercise the option on the land.11
Onshore/Offshore
Marinas can be sited onshore or offshore. The major concern regarding onshore
facilities is ensuring enough space. The guideline is that the land space should be
equal to water space. An acre of water can handle anywhere from 25 to 65 boats,
depending on the size of the boats and the layout of the facility. The land on
which onshore facilities will be built should be above the floodplain and have
enough bearing capacity to support construction of necessary facilities.
Two especially important aspects of offshore development are water depth
and water level fluctuations. The minimum depth for a marina is 8 feet below the
low-water datum.12 Anything less than 8 feet limits the number and type of craft
that can be accommodated. Dredging to increase depth is a possibility, but it is
very expensive. On the other hand, if the basin is too deep, it may not offer
sufficient protection for moored boats. In addition, deep basins limit the pier de-
signs that can be accommodated.
Marinas require a stable level of water throughout the year. Differences in
water levels due to tides, storms, rain, and ice flows must be noted and their
impact determined. Water stagnation and pollution from fueling operations will
result in water quality problems if water flow is insufficient.
Basis for Marina Development

A marina can be a private, public, or joint venture. It might serve as the base for
hotels and concessions; profits in such arrangements are dependent on income
from concessionaires, who often manage both lodging and food and beverage
facilities. Pier 66 in Florida is one such example. In Chicago, Marina City is the
basis for a residential development. A multistory apartment complex has a marina
in the basement. Boats are launched from forklifts into the Chicago River in less
than ten minutes. Mystic Seaport, Connecticut, is one of many areas using marina
development for both urban renewal and historic preservation. Marinas are also
developed to stimulate boat sales, as part of a boatbuilding operation, or as the
headquarters of a club or boating organization.
An example of a private / public development is Marina del Rey in Los Angeles
County, California. Launched with federal assistance in the 1950s, the project
opened in 1965 with 5,600 boat slips on 780 acres. On a more ambitious scale, in
the Languedoc-Roussillon region of France, an $800 million private / public invest-
ment involves 20 new harbors capable of berthing 40,000 boats along 120 miles
of the Mediterranean.
Legal and Policy Context

S Even if a marina is developed privately, issues relative to access to public waters
N complicate the process. Developers may have to permit public access, or the proj-
L ect may be required to offer public benefit before permissions are given to build.
MILL (Wiley)
MARINAS 107
Restrictions may be placed on the number of slips that can be developed and the
maximum price that can be charged.
In the United States, federal programs regulating marina development are the
purview of the U.S. Army Corps of Engineers. Most fill activities, including wetlands,
come under their authority. Approval is contingent on both state and local ap-
proval. However, the jurisdiction of the Corps supersedes that of state and local
authorities. It can take as little as six months to obtain a federal permit, although
two years is a more likely estimate.
At both the state and local levels, two goals affect marina development: the
provision of recreational opportunities for residents and protection of sensitive or
scarce environmental resources.13 The degree to which development is favored
over conservation, or vice versa, can be determined from an examination of com-
munity master plans.
At the state level, 28 states, under provisions of the Coastal Zone Management
Act, have coastal management plans that try to balance coastal development and
resource conservation. State permits, required by most marinas, reflect the partic-
ular bias of each governing body. Local governments charged with the implemen-
tation of state requirements may impose even stricter guidelines for marina
development.
The environmental movement has resulted in marina projects taking longer
to get approval, with additional costs to institute environmentally friendly facilities.
The major environmental considerations involved in the siting and design of ma-
rinas come from the loss of habitat from dredging and the construction of shoreline
structures, the impact of storm water runoff and discharge from boats on water
quality, and the effects on coastal aesthetic values.14 Calm, sheltered areas are
ideal spots for marinas. Because such locations usually support wetlands and sub-
merged sea grass beds, the potential for habitat loss is great unless the marina is
excavated from an upland area.
The following checklist will help identify issues regarding permit approval.
The more yes answers to these questions, the more problems are likely to crop up
in getting a permit.
Will dredging be required for the access basin and / or the boat basin?
Will filling be required on wetlands and / or in open water?
Will dredged material be disposed of at locations other than currently
permitted public disposal areas?
Will structures such as bulkheads and revetments (sheathing that protects
riverbanks) be required?
Will the water body at the site be characterized by low flushing rates?
Does the water body presently fail to meet state water quality standards?
Is the site located within 1 mile (1.6 kilometers) of a designated wildlife
refuge or wilderness area?
Are any rare, threatened, or endangered aquatic or terrestrial species or
S their habitats present at the site?
N Do shellfish beds occur within 2,000 feet (600 meters) of the site or
L within 1,000 feet (300 meters) of access channels?
MILL (Wiley)
Are grass beds located within 1,000 feet (300 meters) of the marina or
access channels?
Is the site in an area of historic, archaeological, or scenic value?
Will the proposed activity be inconsistent with state or local coastal zone
management plans or zoning requirements?
Will the project obstruct public land access to navigable waters?
Will the project require structures that extend into or obstruct existing
channels?15
Because of issues like these, potential marina sites are fewer than they used
to be, which has resulted in dramatic increases in the cost of waterfront land
suitable for recreational purposes. Increased costs, together with the popularity of
fiberglass, has resulted in the increased popularity of stack storage marinas, where
boats are housed three high in warehouse-type buildings. The 1980s saw a dramatic
increase (which has since leveled off) of facilities being developed as condomin-
iums or dockominiums, with individual ownership of a slip space and common
ownership of the rest of the facilities.
In an attempt to encourage environmentally sensitive development, the Na-
tional Marine Manufacturers Association (NMMA) sponsors an annual environ-
mental award. Previous winners have instituted such practices as:
S
N
L An onshore marina. Courtesy Digital Vision
MILL (Wiley)
MARINAS 109
constructing wide openings between the breakwaters, docks, and

shorelines to allow easy access to young salmon migrating out of Puget
Sound in addition to allowing for tidal circulation
using more expensive concrete pillars and floats to help sustain algae,
mussels, and barnacles
creating rock beaches at the ends of the marina to serve as feeding
grounds for young salmon16
Carrying In environmental terms, a site’s boat-carrying capacity depends on three factors:

Capacity
The volume of water available at the site to dilute waste ⫽ Q
The amount of pollution generated by each boat ⫽ L
Area water quality requirements ⫽ C
Hence, the number of boats a site can carry ⫽ QC / L.17
Development Criteria
Marinas were originally developed as an alternative to berthing in open waters for
three reasons: convenience, safety, security.18
Any new marina must ensure that these criteria are met. For example, roads
can improve access; breakwater can increase safety; better management can im-
prove security. To meet these criteria, it is important that a marina offers:
proximity to a population base

accessibility by a main road artery
sufficient water in the marina basin for development
sufficient water depth and surface for the proposed activities—A mini-
mum of 8 feet below low-water depth is ideal. Shallow sites can be
dredged at a high cost. Of greater concern are deep basins, as these do
not provide adequate protection from wave action and limit pier designs.
natural protection from winds, storms, and flooding
a stable shoreline
good southerly exposure
good water quality—A healthy flow of water through the marina helps
wash pollutants away, while too strong a flow may make the marina un-
stable for boat storage.
aesthetically pleasing quality surroundings
reasonable fluctuation in water levels—High water levels constitute a
safety threat.
freedom from ice—In northern climates, boats have to be removed from
the water in winter, or expensive aeration systems must be installed to
keep the water moving, which prevents ice from forming.19
S
N The water requirements vary depending on the activities to be undertaken.
L The water access requirements for typical boat uses are outlined in Figure 4.2.
MILL (Wiley)
Deep-Sea Fishing (includes fishing on the Great Lakes and similar bodies of water)
access to open water within no more than 15 miles and access to the fishing waters within 15
to 50 miles
no restrictions on speed or wake, except within the immediate vicinity of the marina
safe access to a port of refuge at all times
easy navigation to and from the marina, with many aids
minimum channel depths of 5 feet
Estuaries and Freshwater Fishing (includes typical inland lake fishing)
access to suitable fishing waters within no more than 5 miles
easy navigation, with readily identifiable landmarks and many aids
Waterskiing and Similar Aquatic Sports
access to suitable open water within 10 to 15 minutes
few or no restrictions on speed or boat utilization except in the immediate vicinity of the
marina
Casual Cruising—Powerboats
access within 30 miles to interesting waters containing many inlets, islands, small beaches,
and safe and quiet anchorages
easy navigation to and from the marina, especially at night
Casual Cruising—Sailboats
access within 15 miles to interesting waters containing many inlets, islands, small beaches,
and safe and quiet anchorages
location such that the course to and from the interesting waters is essentially at right angles to
prevailing winds
easy navigation to and from the marina, especially at night
Long-Distance Cruising
easy access to the ocean or major lake on a course compatible with prevailing winds, easy
access to an inland waterway, etc.
easy access to the marina at night and under fog and storm conditions
minimum access channel of 7 feet
Small Sailboats
access channel very short or wide enough to permit easy tacking
access channel oriented essentially at right angles to prevailing winds
relatively protected waters within 1 mile of the marina
open waters of at least 1 mile in diameter within 1 mile of the marina, with few shoreside
obstructions that would cause variations in wind velocity and direction. (This requirement is
for sailboat racing activity.)
FIGURE 4.2 Deep-Sea Fishing (includes fishing on the Great Lakes and similar bodies of
water)
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GENERAL DESIGN PRINCIPLES 111
Quick Getaway 4.4

Controlling Marina Losses
Ted Crosby, marine surveyor and risk manage- stricted space and unmarked obstruc-
ment specialist, led a seminar entitled ‘‘Con- tions or clearances.
trolling Losses in Marinas’’ at the 1997 IMTEC 7. Boat Handling: While afloat, over the
Marine Trade Exhibition in Chicago in which road, on boat travel hoists or forklifts.
he itemized the following ten common types of 8. Dry Storage: Characterized by improper
marina losses: support while ‘‘on the hard’’ and open or
covered rack storage.
9. Repairs: Losses consisting of improper
1. Theft: Stealing something that doesn’t re- hull, machinery, or mechanical repairs /
quire breaking and entering. servicing.
2. Burglary: Breaking and entering in order 10. Pollution: The improper use and disposal
to steal. of fuel, oil, sewage, trash, and cleaning
3. Slip and Fall: On docks, premises walk- byproducts.
ways, gangways, and in parking lots. Source: Wortley, Allen. ‘‘Safety Aspects for Marina De-
4. Fire: On boats, facility repair shops, fuel sign.’’ Created 1998. Accessed July 24, 2006. http: / /
docks, kitchens, and electrical installa- hudson.dl.stevens-tech.edu / personal / mdelorme /
tions. Tidewater%20Basin%20Marina / design%20research /
5. Boat Sinkings: Due to rain, improper Wortley - Safety Aspects - 1998.pdf
mooring, and launching without the
drain plug in; also caused by grounding DISCUSSION QUESTION:
and bottoming as a result of changes in Pick one of the ten loss sources as detailed
the water level. above. How would you work to prevent
6. Collision Damages: Caused by re- those losses?
The development of a marina is complicated by the requirement that both

land and water uses be suitable for the finished product. Usually the land uses—
hotel, golf course, residential units—exert strong influences on whether or not the
development is viable.
GENERAL DESIGN PRINCIPLES

1882: Indeed, if there were some places to eat and shop,
S working around these docks and warehouses wouldn’t be
N half bad.
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1992: Imagine. . .take away all the food and shops, and this
marketplace pavilion easily could be a 19th-century waterfront
warehouse.
—CARTOONS BY ROGER K. LEWIS SATIRIZING BALTIMORE’S INNER
HARBOR
Four principles guide the design of marinas:
1. The geography determines the engineering.

2. The engineering determines the profile.
3. The profile determines the layout.
4. The layout determines the architecture.20
Geography—Engineering
The major cost in building a marina comes from dredging, locks, bulkheads, break-
waters, and piles.21
Dredging Dredging changes the bottom profile of the basin to allow deeper-draft boats to
dock in the marina. Most pleasure boats need 2 feet of clearance below the pro-
peller at low tide. Most boats can be accommodated with a depth of 7 feet at
mean low water.
Dredging can cause siltation problems if not done properly. The basin bottom
should slope slightly toward the entrance to encourage a natural flushing action.
Deep-water marinas, especially those that are enclosed, can have severe water
quality problems because of the lack of natural flow. Installation of aeration sys-
tems may be necessary.
If the material being dredged has a high clay or organic silt content, it will
tend to trap chemical contaminates, such as hydrocarbons and heavy metals. Bot-
tom testing is necessary to confirm their presence. Permit granting is easier for on-
site rather than off-site disposal, which must be done where the material being
dredged cannot erode away or leach out.22 Material dredged from the bottom can
be used as fill in the area next to the basin. Savings can accrue when only part
of the marina basin is dredged. This means that larger boats are limited to the
dredged parts of the marina, while the smaller-keeled boats are berthed in the
undredged spots. Because of the high cost of disposal of fill material, the ideal
relationship occurs when the amount of dredged material equals the amount of
fill needed.
In general, the degree of difficulty in getting a dredging permit increases pro-
portionately with the amount of dredging to take place.
Locks Locks may be the answer where a site is otherwise inaccessible. They are necessary
where the tidal range is greater than 12 feet or where there is a major change in
elevation between the basin and open water. Because of the expense, locks are
S rarely economical in marinas of fewer than 500 boats. Locks can cause problems
N due to excessive waits to get in or out of the marina.
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MILL (Wiley)
Bulkheads A bulkhead is ‘‘a retaining wall that is backed with solid fill and erected along the
water to extend the upland out to the bulkhead line; serves as protection against
tidal or watercourse erection of land.’’23 Bulkheads prevent erosion of the shoreline
as well as provide safe, convenient access to the water part of the marina. A less
expensive alternative is revetments, made of concrete and laid at the shoreline’s
natural angle of repose. Revetments provide better wave action and are more
environmentally friendly to fish. In some cases, vegetation can be used as an
inexpensive and attractive alternative. Creating a bulkhead precludes development
of the beach area, a potentially popular amenity, and should not be done unless
absolutely necessary.
Bulkheads are of either sheet or gravity types. The former uses sheeting made
of steel, concrete, or wood that is anchored by piles. The latter is made of precast
concrete and retains the shoreline by means of weight and shape. Gravity bulk-
heads allow easy access to boats but, in reflecting the waves, cause greater wave
turbulence at the shoreline.
Breakwaters Breakwaters are used to shield the marina from wave action. Potential wave action
is simulated by engineers to determine the extent of breakwaters needed. Improper
location of breakwaters can reduce natural flushing, exacerbate erosion problems,
and encourage dangerous currents. Breakwaters are commonly constructed of a
long, narrow strip of rubble. Floating breakwaters are less expensive to construct,
though more expensive to maintain, and do not impede water flow. They are not
suitable for areas that suffer from severe weather conditions.
Piles Piles are used to support fixed piers and bulkheads and to anchor floating piers.
They need to be durable, strong, and straight, and tend to be made of timber,
concrete, steel, or a combination thereof, such as PVC-jacketed concrete.24
Engineering—Profile
The four basic marina types are offshore, recessed, built-in, and landlocked.25 They
can be seen in Figure 4.3.
Offshore Because the offshore marina requires minimum bulkhead wall, land take, and
Marina dredging, it can be the least expensive type to build. Many, however, require
expensive breakwaters, the cost of which, in deep water, can negate cost savings
in other areas. It is vulnerable to weather and currents and, on rivers and estuaries,
is a navigation hazard. It is also subject to silting by littoral drift—the movement
of sand by wave action. It offers minimum enclosure and has the least impact on
the environment. The offshore marina, however, presents few opportunities to
place boats directly on the land.
Recessed When conditions on the sea bottom do not allow for an offshore layout, a recessed
Marina marina may be the economical option. Dredging takes earth from the original
S shoreline and deposits it offshore to raise the bottom to an appropriate level.
N Recessed marinas constitute a navigation hazard for passing craft.
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MILL (Wiley)
Water
Land
Water
Land
OFFSHORE MARINA LAND-LOCKED MARINA
Water
Water
Land
Land
RECESSED MARINA BUILT-IN MARINA

FIGURE 4.3 Basic marina types. Source: Adie, Donald W. Marinas: A Working Guide to
Their Development, 3rd ed. New York: Nichols, 1984, 95. Reprinted by permission of
Butterworth-Heinemann Publishers, a division of Reed Educational & Professional
Publishing, Ltd.
An offshore
S marina. Photo
N courtesy of the
L author
MILL (Wiley)
Built-In Marina The built-in marina offers the advantages of an uninterrupted shoreline, a large
land-water interface, and considerable enclosure. Hence, it offers excellent safety
and affords opportunities for many slips. However, it requires a large amount of
land, a long bulkhead wall, and significant dredging. This makes it more expensive
than the categories noted above. Views to the open water are maintained, as are
opportunities for development located close to the boats. Water stagnation is a
potential problem because of poor water flow.
Landlocked The landlocked marina is both the costliest and the safest type of marina. It offers
Marina maximum enclosure and minimum interruption of shoreline (hence the safety
factor), yet requires maximum bulkhead wall and dredging (hence the cost). The
distance from open water can be inconvenient. Some means of circulating the
water is necessary to prevent stagnation. From a revenue-generating perspective,
this layout offers maximum frontage for boat slips.
No matter the type, the amount of land area required should be equal to the
water area. In the water, 77 percent of the area can be used for mooring, while
the remaining 23 percent is needed for clearances. Parking can take anywhere
from 22 percent26 to 40 percent27 of the land area. The remaining land can be
used for other purposes. The ratios of boats to cars and people to cars are highly
characteristic of individual marinas and must be determined case by case to es-
timate the numbers of boats, cars, and people to be accommodated. As a rule of
thumb, marinas plan on between one-half to two parking spaces per boat slip,
with a parking density of 90 cars per acre.28
Entrances to marinas should be built taking local wave conditions into ac-
count. The entrance should be turned away from the prevailing wave direction,
at least four times the width of the largest berthed boat, and perpendicular to
prevailing winds if sailboats are stored in the marina. Care must be taken to min-
imize littoral drift at the entrance, which can impede access and require expensive
dredging.
Turning areas are needed when facilities such as fueling docks are part of the
marina. The amount of space required will depend on the type of boat and the
skill of the sailor. For example, if the marina caters to sailboats and prevailing
winds are strong, the turning area should be larger than average. Generally speak-
ing, the narrowest dimension of a turning basin should be two and a quarter times
the length of the marina’s longest boat.
Profile—Layout
It is, unfortunately, common for mooring circulation and layout decisions to be
made after the shape of the basin is determined. The best basin shape is rectan-
gular, which allows for the greatest density of boats with the easiest maneuvering.
More effective and efficient designs occur when mooring decisions are made early
in the process as part of the overall development and design strategy.
The basic choice in mooring layout is whether to have fixed or floating piers.29
S Which type to select depends on the degree of water level fluctuation, the amount
N of money available, and how important safety is to the users. Fixed piers are
L stronger, more stable, and easier and cheaper to maintain. Floating piers are safer
MILL (Wiley)
where there are major water level fluctuations. They also permit relatively easy
expansion and modification. Floating docks have frames made of wood, concrete,
or metal.30
The layout is determined by the site constraints as well as the demands of the
expected market. The slip or berth—the water space between two piers—is the
safest way to store boats. Slips are usually reached by piers or walkways that
extend from the shore or bulkhead line. The piers can be fixed or float over the
water (Figure 4.4). The latter tend to be attached to piles such that they rise and
fall with the water level. Smaller finger piers allow access to the boats, which are
stored perpendicular to the main or header piers. Tee piers help protect boats
from wave action.
Slips are either single- or double-wide (for storage of two boats). Piles can be
used instead of finger piers as an alternate method of storage (see Figure 4.5).
Storing the boats with the stern to the quay, jetty, or pontoon with the bow tied
to piles is inexpensive, though not as convenient for embarking as alongside jetties
INTERIOR CHANNEL
100´
OF NAVIGABLE WATER
FAIRWAY WIDTH
HEADER PIER
1.25 TO 1.75 ⫻ 8´
LONGEST SLIP TEE
PIER
8´
SLIP
LENGTH
FINGER PIER
DOUBLE-WIDE SLIPS 3–4´
MOORING
PILES
16´
MAIN ACCESS PIER
S FIGURE 4.4 Slip layout. Source: Phillips, Patrick L. Developing with Recreational
N Amenities: Golf, Tennis, Skiing, Marinas. Washington, D.C.: Urban Land Institute, 1986,
L 160. Reproduced with permission of the Urban Land Institute.
MILL (Wiley)
FIGURE 4.5 Mooring layouts. Source: Adie, Donald W. Marinas: A Working Guide to
Their Development, 3rd ed. New York: Nichols, 1984, 130. Reprinted by permission of
Butterworth-Heinemann Publishers, a division of Reed Educational & Professional
Publishing, Ltd.
or pontoons. Alternatively, the bows can be moored to anchors or buoys. This is

also economical and is particularly suitable for large yachts, where the gangway
is attached to the stern. A potential problem involves propellers becoming entan-
gled.
S Storing boats alongside finger piers or catwalks is convenient for embarking
N and disembarking. Where more than one yacht is moored per finger, flexibility in
L accommodating different lengths of boat is greater; however, the finger piers must
MILL (Wiley)
be wider. When boats are placed in a single bank alongside the quay, they are
similarly convenient for embarking and disembarking. Flexibility is offered for ac-
commodating different lengths of boats. Boats can also be placed alongside the
quay, three or four abreast. The economies of this setup are balanced by the
necessity for crews from the outer yachts to climb over the inner boats.
Mooring between piles is the cheapest system because of the high density
involved. However, there is no access to dry land and leaving the mooring is
difficult.
The safest arrangement is when the long axis of the boat is parallel to the
prevailing winds and when boats are secured on all four corners. Finger piers on
both sides of the boat are the most convenient layout for owners. The double-
wide slip arrangement saves the marina manager money and space and offers the
greatest flexibility. However, because the boats are not separated by piles or piers,
they are subject to damage from both wave action and other boats. Finally, star
finger berths offer an interesting alternative.
Layout—Architecture
Architects must take into account the circulation pattern, the social interests of
the boaters, and the need for support facilities. The variety of potential services
and facilities that can be part of a marina development are noted in Table 4.2.
Circulation Consideration must be given to the separation of various marina user groups. Users
Pattern can be divided into social and service traffic and by destination.31 Cars with boats
need to be directed to a launch area, while visitors and owners not towing boats
are diverted to the clubhouse and parking. While parking should be reasonably
close to the slips, many operators question the wisdom of using valuable waterfront
land for parking.
Social Interests It is often said that boaters, like tennis players, place few demands on facilities.
Because of their love for the activity, they are willing to put up with and may, in
fact, enjoy being around the maintenance side of marinas. However, marinas may
also seek to attract nonboaters to retail outlets, hotels, and restaurants. In this case,
care must be taken to separate the attractive elements of boating and the necessary
but less attractive service elements. Facilities might include restaurant and store
operations, hotels, clubhouse, picnicking, and camping. In resorts, marinas must
be developed to serve more than the needs of boaters. Adding facilities to make
the marina look more like a fishing village and less like a boatyard increases its
attractiveness and provides more income opportunities. Care must be taken to
avoid conflicts between the recreational uses of the facility and the more industrial
aspects of boat maintenance.
There are three questions to be asked in order to determine what facilities
can and should be offered:
S 1. What is possible, given the physical characteristics and environmental

N limitations of the site?
L
MILL (Wiley)
TABLE 4.2 Marina Services and Facilities

Water Related Land Related
MARINA SERVICES
Boat launching Boat sales
Mooring service Boat repairs
Water taxi service Marina supply sales
Transient boat service General supply sales
Waste collection Trailer storage
Fueling Parking
Boat towing Overnight accommodation
Fire and rescue services Food service
Navigation and weather information Concessions
Recreational services Utility services
MARINA FACILITIES
Open and covered mooring Boat building and repair
Boat launch ramp Boat dry storage
Marine railway Trailer storage
Crane lift Restaurant
Dry dock Hotel
Fueling pier Picnic areas
Anchorage services Convenience store
Marine service station Boat washing
Entrance and exit channels Parking
Swimming area Swimming pool
Waterskiing course Camping
Basin flushing system Beach area
Storm and wave protection Club room
Marine supply sales
Public toilets and showers
Recreational facilities
Bait shop
Seafood sales
Source: U.S. Environmental Protection Agency Coastal Marinas Assessment Handbook. Atlanta: U.S. Environmen-
tal Protection Agency, 1985, 3–14.
2. What is popular in terms of market demand?

3. What is profitable for the operator?32
Support A variety of support facilities will be needed, depending on the type of marina
Facilities development, including toilets / showers, boat service center, boat launching equip-
S ment, boat sewage disposal and water take-on, firefighting equipment, and boat
N storage facilities. Instead of using valuable waterfront land for winter storage, per-
L
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Quick Getaway 4.5

Integrating the Waterfront
When a marina is close to (or a part of) an then the buildings on the waterfront should try
existing town, efforts should be made to har- to emulate that style by placing building edges
monize the two. Doing so can create an aes- close to the street line.
thetically pleasing area that fosters profitable To foster business and a more integrated
businesses and draws customers to the marina, feel, marinas and other waterfront develop-
while creating a unique spot for town citizens ments should create a walkable, enjoyable pe-
to call their own. But how can a town blend destrian environment. Avoiding large blank
seamlessly with a marina, when the two are so walls, providing frequent street-level entries,
different? and creating sidewalk amenities like street fur-
It’s easier than it seems. When constructing niture and lighting will encourage pedestrian
buildings, the marina should aim to reproduce traffic. Open spaces near the buildings should
the historical character of the town. New con- also aim to be pedestrian-friendly. Creating
struction in town near the marina should make trails and installing outdoor benches are two
an effort to bridge the styles. Waterfront build- ways that developers can enhance open
ings need not be clones of downtown styles, spaces.
but they should appear more of an extension
of the town than an addition to it. Source: ‘‘Harbor Area Design Guidelines: Town of
Streets on the waterfront should mimic the Cape Charles, Virginia.’’ Paradigm Design, Renaissance
layout in the rest of the town. If the town is Planning Group, May 15, 2006.
built on a grid system, the marina should try to
extend existing streets and mirror the town’s
style. This design should be reinforced through DISCUSSION QUESTION:
the placement of buildings, travel ways, and In what other ways could marina developers
design elements. If the part of town near the enhance open spaces in order to make them
waterfront has an urban ‘‘main street’’ feel, more pedestrian-friendly?
haps parking lots can serve. An increasingly popular method of storing boats is
dry stack storage, wherein boats are warehoused in stacks of up to three boats
and raised and lowered by forklifts. In a well-managed system of stack storage, 25
boats can be launched in an hour. This system offers advantages to both marina
operator and boat owner.33 For the operator, dry stack boat storage:
Maximizes storage density.

Improves security by allowing employee-only access to the rack storage
area.
Improves profitability when water space is limited by removing from the
S water boats under 30 feet for dry storage, thereby catering to the larger,
N higher-profit-generating boats.
L
MILL (Wiley)
Can mean easier permits than wet storage.

Gives a faster return on investment than does dock storage.
The boat owner, in turn, gets more protection and lower rental than in wet
slips. In one study, the price elasticity of demand for wet slip storage was calcu-
lated at -0.23—that is, a 10 percent increase in the price of wet slips results in a
2.3 percent reduction in demand for wet slips. The demand for wet slips compared
to dry slips increases as boat size and boater income increases.34
Guidelines for pump-out stations vary from 1 per 100 (industry consultants) to
1 per 400 (U.S. government) boats. The tendency is to provide a solitary, stationary
sewage pump-out station. However, pump-out capability can be provided at each
slip at a relatively low cost during new construction.35
Handicap Marina operators have slowly become more conscious of the need to make their
Access facilities accessible to people with physical disabilities. This means developing a
route that offers a safe and unobstructed path to all elements of the facility.36 Of
primary concern to marinas are toilet facilities, parking areas, and gangway or
ramp access to dock systems.
Toilet facilities must allow for the maneuvering of a wheelchair and the pres-
ence of other people in the stall at the same time. An approach 4 feet wide and
a door at least 3 feet wide are required. A 5-foot diameter of clear space within
each stall is needed for turning purposes. Door locks, toilet fixtures, grab bars, and
cost hooks must be within easy reach.37
Parking spaces must be designated for use by people with physical disabilities
when 15 or more parking spaces are developed. Here are general guidelines:
Number of Parking Spaces Spaces Required for Handicapped

15–25 One space
26–40 5 percent but not fewer than two spaces
41–100 4 percent but not fewer than three spaces
101–200 3 percent but not fewer than four spaces
210–500 2 percent but not fewer than six spaces38
The designated spaces should be those closest to the activity. If the parking
spots cannot be located less than 200 feet from the activity, a drop-off area needs
to be created within 100 feet of the activity. Parking spaces can be 12 feet wide
for perpendicular or diagonal parking layouts or consist of 8-foot-wide spaces sep-
arated by a 5-foot-wide aisle to serve two vehicles.
A curb cut at each space allows people to access the sidewalk without having
to enter the vehicular traffic flow.
Gangway access should be as short and direct as possible. Walkways must be
a minimum of 3 feet wide—6 feet is preferred—with a slope not to exceed 1⬊20.
Handrails on both sides of a ramp or stair assist people who favor one side of the
S body. A ramp is defined as a ‘‘pathway with a slope of greater than 1⬊20.’’39 Due
N to large tidal changes, the primary access to marinas is often a relatively steep
L
MILL (Wiley)
slope. This presents the major difficulty for marinas attempting to make their fa-
cilities accessible. Commonly, regulations indicate that ramps should not be
greater than 1:12. This, however, may be too steep for people in wheelchairs. A
ramp 4 feet wide with rails on both sides and a landing for resting every 32 feet
allows people in wheelchairs to negotiate the slope while gripping both rails to
ease the way up or slow the descent.
SUMMARY
The importance of water as the basis for a number of recreational developments
was noted. This chapter focused on beach resorts and marinas. The development
process for a beach resort needs to consider six elements: sea, seashore, beach,
back beach, coastal stretch, and the surrounding country. For a marina, the market
must be analyzed, a market strategy and marina concept developed, and an initial
site identified. Feasibility analyses are conducted and a preliminary design
sketched out. Finally, the marina is developed according to certain design prin-
ciples—the geography determines the engineering, which, in turn, determines the
profile, which determines the layout, which determines the architecture.
ENDNOTES
1997, 143.
2. Harrison, Lynn C., and Winston Husbands (eds.). Practicing Responsible Tourism: International
Case Studies in Tourism Planning, Policy, and Development. New York: John Wiley & Sons, 1996,
74.
3. Paul, A.H. ‘‘Weather and the Daily Use of Outdoor Recreational Areas in Canada.’’ In Taylor,
J.A. (ed.). Weather Forecasting for Agriculture and Industry. Newton Abbot, England: David and
Charles, 1972, 132–146.
4. Brown, Amanda. ‘‘Too Many Coastal Waters Fail Germ Test, Says Minister.’’ PA News (November
19, 1998).
5. Ensuring the Sustainable Development of Oceans and Coasts. Co-Chairs Report from The Global
Conference on Oceans and Coasts held at UNESCO, Paris, December 2001, 9.
7. Ibid.
8. Ibid.
9. Ibid., 234–237.
10. Smith, Valene L., and William R. Eadington. Tourism Alternatives: Potentials and Problems in
the Development of Tourism. Philadelphia: University of Pennsylvania Press, 1992.
12. U.S. Environmental Protection Agency Coastal Marinas Assessment Handbook. Atlanta: United
S States Environmental Protection Agency, 1985, 3.5.
N
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MILL (Wiley)
13. Schwanke, et al. Resort Development Handbook, 145.

15. U.S. Environmental Protection Agency Coastal Marinas Assessment Handbook, 3.2.
16. Ibid., 3.8–3.9.
17. Henschen, Doug, and Peter Shroeder. ‘‘Marinas Good Guys: Finalists for the 1994 National
Marine Manufacturers Association’s Environmental Responsibility Awards.’’ Lexis-Nexus Academic
Universe 57, no. 11: 25.
18. Swanson, J.C., and M.L. Spaulding. ‘‘Marina Boat Carrying Capacity: An Assessment and Com-
parison of Methodologies.’’ Paper presented at the 1990 National Marina Research Conference,
International Marina Institute, Chicago, 1990.
20. Phillips. ‘‘Water-Based Recreation Site Complexes.’’ Developing with Recreational Amenities,
227.
21. Adie, Donald W. Marinas: A Working Guide to Their Development, 3rd ed. New York: Nichols,
1984, 95.
23. Ross, Neil W. ‘‘Dredging Successfully.’’ Boating Industry Magazine (March 1988): 18.
24. Appraisal Institute. The Dictionary of Real Estate Appraisal, 3rd ed. Chicago: Appraisal Institute,
1993, 312.
26. Ibid., 150.
27. Adie. Marinas, 111.
29. Ibid.
31. Appraisal Institute. Dictionary of Real Estate Appraisal, 16.
32. Adie. Marinas, 69.
33. Dodson, Paul E. ‘‘Introduction to Dry Stack Boat Storage.’’ In Marina Investment and Appraisal
Course. Wickford, RI: International Marina Institute, 1990, 1–3.
34. Bell, Fred. ‘‘Demand and Marketing, Part A: Comparison of Dry Stack and Wet Slip Demand.’’
In Dry Stack Marina Handbook, 2nd ed. Wickford, RI: International Marina Institute, 1992, section
6, 4.
35. Tobiasson, Bruce O. ‘‘Marina Design and Development with an Environmental Conscience.’’
Handout at International Marina Institute FMM School, 1995, 16.
36. Tobiasson, Bruce O. ‘‘Handicapped Access in Marina Design.’’ Paper presented at the 1989
National Marina Research Conference, International Marina Institute, 1989, 107–108.
37. Ibid., 113.
38. Ibid., 108.
39. Ibid., 111.
S
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Chapter 5
BEACH RESORTS AND
MARINAS: MANAGING
THE OPERATION
LEARNING OBJECTIVES
1. Identify the changing trends in and demographic profiles of the market for
beach resorts and destination resort marinas.
2. Identify operational environmental standards for both beach resorts and des-
tination resort marinas.
INTRODUCTION BOATERS
BEACH RESORTS: PROFILE OF THE MANAGING THE OPERATION
BEACH RESORT GUEST Managing Environmental
Beaches and Islands Impacts
Scuba Travel BLUE FLAG
Romance-Related Environmental Management
MANAGING THE RESOURCE Safety and Services
Water Quality Water Quality
Environmental Management Individual Boat Owners
Safety and Services SUMMARY
DESTINATION RESORT MARINAS ENDNOTES
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BEACH RESORTS: PROFILE OF THE BEACH RESORT GUEST 125
INTRODUCTION
By all accounts the market for beach resort vacations is in-
creasing. The same is true for activities tied to destination re-
sort marinas. At the same time there is increased concern
about the environment on the part of tourists.
BEACH RESORTS: PROFILE OF

THE BEACH RESORT GUEST
Beaches and Islands1
According to the Travel Industry Association of America, people who travel to
beaches on vacation take longer holidays and spend more money compared
to the average vacationer. They are also more likely to bring the children along,
to fly to the destination, and to rent a car when they arrive. Approximately 110
million person-trips are made annually to beaches. A person-trip is defined as one
person traveling at least 50 miles one way away from home. The top states that
benefit from coastal tourism, in order, are:
California
Florida
New Jersey
Hawaii
Scuba Travel2
Scuba diving is a $2.6 billion annual business in the U.S. alone. Approximately
$640 million a year is spent on equipment with the remainder going to travel,
dining, lodging, and boat hire. There are over three million certified scuba divers
in the United States, a six-fold increase since the 1980s. About one-third are female.
‘‘Live aboards,’’ upscale dive resorts in Asia, and ‘‘big animal encounters’’ are three
fast-growing trends in the business. During ‘‘live aboards’’ 10 to 20 divers travel in
luxury yachts from one isolated dive site to the next. ‘‘Big animal encounters’’
involve such things as swimming with and photographing manta rays at Baja,
California and dolphins in the Bahamas. The top dive areas in the United States,
according to Rodale’s Scuba Diving, are:
Catalina Island, California

Islamorada, Florida
S Channel Islands, California
N Looe Key, Florida
L Key Largo, Florida
MILL (Wiley)
126 Chaper 5 BEACH RESORTS AND MARINAS: MANAGING THE OPERATION
The Caribbean is a popular destination for U.S. divers due to the warm water, good
visibility, and plentiful marine life.
Romance-Related3
According to the Travel Industry Association of America more than 42 million
Americans take at least one trip a year to attend a wedding, go on a honeymoon,
or celebrate an anniversary. Large numbers of this market segment choose to
celebrate the occasion at resorts. In Jamaica about 25 percent of all June visitors
are there for a wedding or honeymoon. Romance-related travel is most common
among baby boomers (those born between 1946 and 1964) and those who live in
the South. The average amount spent on honeymoons is over $3,600—an annual
market (estimates vary) of between $4 and $7 billion. The top honeymoon beach
locations are:
Hawaii
Mexico
S Snorkeling gives a view of a whole different

N kind of world. Courtesy PhotoDisc / Getty Images
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BEACH RESORTS: PROFILE OF THE BEACH RESORT GUEST 127
Jamaica
Tahiti
Cayman Islands
In terms of snorkeling and diving the top five spots are:
Cayman Islands
Mexico
Belize
Quick Getaway 5.1

Mid-Atlantic Beach Weddings
Bring Resort Revenue
When imagining a beach wedding, most peo- friendlier to out-of-state residents. Delaware
ple probably place the bride and groom on hasn’t really promoted itself heavily on a na-
white tropical shores. However, more and tionwide level, either, another factor that is
more people are turning to Delaware for their keeping the state’s beach-marriage market from
nuptial ceremony. truly booming.
Why Delaware? Marketing efforts aimed at Truth be told, Delaware’s image in the na-
brides-to-be have had some success, especially tion’s consciousness could use a good polish.
those marketing campaigns that paint Dela- ‘‘When I think of Delaware, I don’t think of ro-
ware’s resorts as wedding destinations that are mance,’’ said Kathryn Gabriel Loving, a New
geographically well-situated, economically ap- Mexico author whose 100 Best U.S. Wedding
pealing, and even romantically engaging. In sit- Destinations never even came close to includ-
uations where the bride’s family disagrees with ing Delaware.
the groom’s family about where to hold the
wedding, Delaware’s beaches can be a com- Source: Ruth, Eric. ‘‘Delaware beach weddings are roll-
fortable ‘‘neutral zone.’’ ing in.’’ Delaware Coast Press (July 5, 2006). http: / /
www.delmarvanow.com / deweybeach / stories /
Delaware’s resorts are increasingly looking 20060705 / 2303952.html
to weddings to improve their profit margins,
and they are constantly seeking ways to spur
the market’s growth. Tourism promoters hope DISCUSSION QUESTION:
that someday Delaware will be known as the Do you think that Delaware should build up
best place to have a wedding in the mid- local (contiguous state) recognition as a
Atlantic. beach-marriage state first, or do you think
However, many merchants say that Dela- that launching a national advertising cam-
ware is shooting itself in the foot, market- paign is the best course to ‘‘get the word
S wise, by failing to make its marriage laws out’’?
N
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Australia
Hawaii
One of the latest trends in the honeymoon segment is honeymoon registry.

Instead of giving a traditional gift family and friends can contribute to the cost of
the honeymoon. In 2004 Aruba became the first honeymoon registry to be spon-
sored by a destination.
MANAGING THE RESOURCE

In 1987 the Blue Flag concept began as an eco-label ‘‘certifying’’ beaches (and
later marinas) as meeting quality standards relating to water quality, safety, envi-
ronmental management, and environmental education. The program began in Eu-
rope but has now expanded to other regions of the world. In 2005 there were 2,472
Blue Flag beaches and 635 Blue Flag marinas in 35 countries. At the time of writing
there are no Blue Flag beaches in the United States. There are, however, Blue Flag
beaches in Canada and the Caribbean. The following criteria are specified for
beaches:4
Water Quality
It is vital that beaches meet water quality standards for microbiological and
physical-chemical parameters. For the Caribbean and the South Pacific the micro-
biological limit values for faecal colibacteria (E. coli) and faecal enterococci are
set at 100 / 100 ml and 40 / 100 ml respectively. The standards for Canada are the
same for E. Coli and slightly more stringent for faecal enterococci. In terms of
physical-chemical parameters:
The pH should be between 6.5 and 8.5 (Caribbean and South Pacific) or
6 to 9 (Europe).
There should be no visible oil film on the water surface and no odor.
The beach should be monitored for oil pollution deposits and emergency
plans should be in place in the event of such pollution. Potential land
sources of oil pollution should be identified and properly managed.
Nothing floating on the surface (plastic articles, bottles, etc.) should be
present.
Water should be transparent to a depth of at least 6 feet (3.6 feet in Can-
ada).
There should be no abnormal change in the color of the water.
No specific odors from phenols should be present.
S
N It is important to have at least one sampling site on a beach, ideally where
L the concentration of bathers is highest. Samples are taken about 1 foot below the
MILL (Wiley)
MANAGING THE RESOURCE 129
surface except in the case of mineral oil samples which are taken at surface level.
Typically, samples would be taken every two to three weeks.
It is critical that no wastewater, industrial or urban, originating from a source
within or outside the community affect the water quality of the beach. Industrial
facilities in the vicinity of beaches should be carefully monitored to ensure there
are no negative environmental impacts on the resource and the bathers. If such a
situation develops the ideal solution is to remove the source of the pollution. If
this is not possible then any waste that accumulates on the beach must be col-
lected and removed on a regular basis.
Storm water outlets must be clean at all times. Similarly, there should be no
untreated sewage discharged from the local community.
Coral reefs close to a beach require special attention. At least once a year a
team of divers should collect data regarding a site description focusing on the
extent of human imprints on the coral reef—including coral bleaching, the pres-
ence of coral disease, and the presence of trash and coral damage—as well as
fish counts, invertebrate counts, and substrate type measurements.
There are competing views on the presence of algae or seaweed. Some feel
that, as a natural part of the littoral ecosystem, seaweed should be left to decay
on the beach unless it constitutes a nuisance. Those who ascribe to this point of
view consider the coastal zone as a living and natural environment and not just a
recreational attraction to be kept tidy. Visitors may take a different point of view
and be offended by the sight and smell of algae on the beach. Management has
to be aware of the needs of visitors as well as being sensitive to the biodiversity
of the natural resource. Algae should not be allowed to accumulate to the point
where it is a hazard or a nuisance to beach users. Seaweed dried on the beach
can be used as a fertilizer.
Environmental Management
A beach management committee must be established to be in charge of
instituting environmental management systems and conducting regular
environmental audits of the beach facility.
Such a committee would consist of all relevant stakeholders. Examples might

include a representative of the local authority, local businesses such as hotels, a
beach manager, and a spokesperson for the local residents. The committee helps
ensure that the beach meets the environmental management criteria.
It is important that the operation of the beach and its immediate surroundings
comply with local and regional land-use plans including effluent discharge and
regulations regarding environmental health. There are, for example, coastal zone
management principles for back beach areas that include dunes, paths, and park-
ing areas.
A clean beach means that there should be no signs of litter. The beach should
be inspected and cleaned on a daily basis. The people and equipment necessary
S for this maintenance should be planned and budgeted for. For beaches that ex-
N perience high levels of use it may be necessary to periodically sieve and deep
L clean the sand in order to remove such things as cigarette butts.
MILL (Wiley)
Waste disposal bins / receptacles must be available on / by the beach in

adequate numbers, regularly maintained, and emptied.
Trash containers should have covers. Some beaches have been creative in the
placement of containers by sinking them part way into the sand. The containers
still fulfill their function but are less intrusive than if merely planted on the beach.
Trash containers can be aesthetically pleasing as well as functional if some thought
goes into the selection process. The number and placement of containers will
depend on the capacity of the containers, how many people use the beach, and
how often the containers are emptied. The amount of maintenance and emptying
of containers will vary week to week depending upon the volume of people on
the beach.
Facilities for receiving recyclable waste materials must be available on /

by the beach.
Increasing numbers of communities encourage recycling. Separate containers

on the beach for glass, cans, plastic, and paper can help this effort.
Adequate and clean sanitary facilities with controlled sewage disposal.
S Trash containers sunk into the sand, Waikiki

N Beach. Photo courtesy of the author
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MILL (Wiley)
The number of sanitary facilities needed will depend on the average number
of beach users during peak season, the length of the beach, and the number and
location of beach access points. They should be cleaned several times a day and
be handicap accessible. The facilities must have washbasins, soap, and either
clean towels or a dryer.
Sewage cannot go into the ground or sea untreated. The facilities must either
be connected to the municipal sewer system or, in the case of remote beaches,
employ regularly emptied holding tanks. Facilities can be designed and main-
tained in such a way that they complement and fit in with the natural environment.
While certain beaches in Florida encourage driving on the beach as part of
the attraction, such activities are detrimental to the quality of the environment. In
the event that cars are allowed on the beach they should be kept at least 65 feet
away from the water’s edge.
In most Blue Flag beaches dogs and other pets are not allowed on the sandy
part of the beach, with the exception of guide dogs for blind people. If pets are
allowed owners must keep them on a leash and be responsible for picking up
droppings.
Special consideration should be given to the cleanness and condition of

equipment. Ideally environmentally sound products will be used.
Traffic congestion can be reduced through such actions as encouraging the

use of public transportation and the use of bikes, designing pedestrian streets, and
developing circulation plans that reduce peak traffic jams.
Safety and Services

Determining the appropriate number of lifeguards and equipment requires a risk
assessment of the beach. Providing information to and educating beach users
about safety concerns should be additional elements of a safety strategy. The num-
ber and placement of lifeguards will vary according to the demands of the season.
The internationally recognized red / yellow uniform for lifeguards helps make them
easily visible on a crowded beach. The areas patrolled by guards should be out-
lined on maps and on the beach with markers or flags.
Lifesaving equipment includes such things as life buoys, torpedo buoys, hook,
life vests, life rafts, etc. There should also be access to an emergency phone. It is
recommended that equipment be provided every 120 feet when no lifeguards are
present.
Instructions on the proper use of such equipment must be visible. Equipment
must be inspected and maintained on a regular basis.
First aid can be made available in several ways:
a lifeguard on site
an attended first-aid station with trained personnel
S equipment located in a shop or other beach facilities at the beach
N directly available to the public on the beach
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MILL (Wiley)
Quick Getaway 5.2

Beach Resorts Catering to Kids
According to the guidebook Caribbean With traveling. The kit includes the number for a
Kids, the Atlantis Resort is ‘‘one of the most Prompt Response hotline, and several other
lavish properties in the entire Caribbean.’’ That goodies for babies.
means something, in a region peppered with The large Ripples kiddie pool area has
high-class resorts. However, not all of these re- slides, waterfalls, and other fun features (along
sorts are as kid-friendly as the Atlantis. with roomy loungers for parents). For families
Kids love sand, sun, and animals, and the with younger children, there’s a smaller kiddie
Atlantis has all three in abundance. The resort pool as well. New in 2006 is the Splashers water
has waterfalls, streams, lagoons filled with sea play zone, an area designed for kids under 4
creatures, and underwater viewing areas where feet tall, complete with slides, dumping buck-
guests can enjoy what the Atlantis claims is the ets, squirters, and more.
‘‘largest marine habitat in the world.’’ With 11 Perhaps the most child-friendly area at the
exhibit lagoons and 11 million gallons of water, resort is the Atlantis’s Kids Clubhouse where
that’s a hard claim to dispute. kids of all ages can stage parades, learn how
Fish aren’t the only things that splash in the to play instruments, or visit the resort’s Fish
water at Atlantis. Resort guests with swimming Hospital. Other children’s areas include Discov-
in mind can choose from a 7-acre lagoon, mul- ery Kids Adventure, which was designed in
tiple swimming pools, a lazy river, and a white- conjunction with The Discovery Channel; Eve-
sand beach. Kids are especially interested in ning Escape, which runs movies, games, and
waterslides at Atlantis, the steepest of which dancing; and Club Rush for the oldest kids,
starts atop a five-story ‘‘Mayan Temple’’ and which has a dance floor, movies, and video
plunges down 60 vertical feet to a clear tunnel games.
inside of a shark-filled lagoon. Another kid hot Source: Plowright, Teresa. ‘‘The Atlantis Resort.’’
spot is the Challenger, where two people can About.com, Travel with Kids. Accessed July 25, 2006.
race each other down twin slides. http: / / travelwithkids.about.com / cs / sunzonesresorts /
The Altantis Resort is good for families with a / atlantisresort.htm
grade-school children, but the resort really
stands out for the innovative way that it treats DISCUSSION QUESTION:
families with babies and small children. Fami- How would you describe the difference be-
lies with babies have the option of getting a tween the terms ‘‘family-friendly’’ and ‘‘kid-
special kit complete with a nightlight, a lullaby friendly?’’ Do they mean the same thing, or
CD, several baby care products, and a bro- not? If you think they don’t mean the same
chure about keeping baby’s routine while thing, give an example for each term.
S
N
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MILL (Wiley)
First-aid stations need to have stocks of basic first aid commodities such as
bandages, disinfectant, Band-Aids, hot and cold water, first-aid bed, oxygen cyl-
inder and mask, immobilizing trauma board, other location-specific equipment
such as shark attack packs, etc.
Where a variety of activities in and out of the water are allowed there must
be a system in place that manages these multiple uses in order to minimize con-
flicts. Separate geographic or time zones can be set up for swimmers, surfers, wind
surfers, and motorized craft. Areas can be set aside for specific uses, or certain
activities might only be allowed at specific times. Zones should be clearly marked
Quick Getaway 5.3

Palapa Problems Turn to Palapa Profits
Anyone familiar with the beach resort industry expensive rooms could come packaged with a
will no doubt have heard about resorts’ prob- palapa. The best part about this solution is that
lems with palapas. Palapas, thatch-roofed palapa rental will bring in additional revenue
beach structures designed to provide shade for the resort. All the same, resorts should be
and privacy, are often in high demand. For wary of charging too much for palapa usage,
many travelers, spending the day under a pa- as vacationers who have already paid a great
lapa is an integral part of their relaxing vaca- deal for a resort stay may be reluctant to pay
tion experience. Because most resorts don’t additionally for what amounts to a glorified
have as many palapas as they have rooms, beach umbrella.
guests who feel entitled to a palapa frequently Speaking of beach umbrellas, a resort that
find themselves without one, and conflicts over charges for palapa use would be wise to pro-
who ‘‘claimed’’ the palapa are common. All of vide free beach chairs and beach umbrellas to
this can lead to guest frustration and a negative those who cannot or do not rent palapas. This
perception of the customer service at the re- will ease feelings of disappointment, and im-
sort. What can a beach resort do to solve the prove the guest’s opinion of the resort’s cus-
palapa problem? tomer service. However, since renting a palapa
The best approach is to manage palapas implies renting privacy, there should be restric-
like the resort manages rooms. Both palapas tions on the placement of beach chairs.
and rooms are a limited supply with high de-
mand. Rooms are rented, so why not rent pa- Source: Pinchuk, Steven. ‘‘Applying Revenue Manage-
ment to Palapas.’’ Cornell Hotel and Restaurant Admin-
lapas? A straightforward and easily enforceable
istration Quarterly (February 2006). http: / /
rental system would create a way for guests to cqx.sagepub.com / cgi / reprint / 47 / 1 / 84
ensure that they have palapa use, and those
who choose not to rent a palapa do not feel as
slighted as they would if they simply could not DISCUSSION QUESTION:
‘‘claim’’ a palapa early enough. Palapa rental Should palapa-rental systems continue to be
could be linked to room rental; perhaps more utilized during the low season?
S
N
L
MILL (Wiley)
with buoys, beacons, or signs. In general, powered boats should be kept at least
130 to 260 feet away from swimmers.
The beach should be managed in a way that helps protect the environment.
Some beaches are natural habitats for turtle nesting. In those places resorts often
set up walking tours for their guests to view the turtles. Artificial lighting is dis-
couraged as it adversely affects the turtles.
The development of an emergency plan is an attempt to be proactive in plan-
ning for such things as oil spills, hazardous / toxic waste spills entering the beach
from the sea, or hurricanes. It should identify who is to be contacted in case of
pollution and which services and people have to be involved, and specify pro-
cedures for warning the public together with laying out procedures for protecting
and evacuating people from the area.
Ensuring safe access might involve securing steps with handrails, designating
crosswalks on roads, and reserving places for disabled drivers in parking lots.
Public access to beaches can be a source of friction between resort guests—who
feel they have paid a large amount of money for the privilege of using the beach
because they are staying at the resort—and locals who feel that natural resources
are part of the community. Some resorts attempt to provide a ‘‘reserved’’ area for
guests by roping off a small area in front of the resort.
Trained and qualified security guards may be necessary to provide a safe
environment for guests.
A supply of potable drinking water must be available on the beach.

A map of the beach indicating different facilities must be displayed.
A map showing the location of key facilities and services should be posted
showing the location of lifeguards or lifesaving equipment, first-aid equipment,
telephones, toilets (including toilets for disabled people), drinking water, car and
bicycle parking areas, authorized camping sites at / near the beach, larger trash
receptacles, access points and access for disabled, foot paths, zoning (swimming,
surfing, sailing, boating, etc.), and nearby natural sensitive areas.
DESTINATION RESORT MARINAS

There is nothing—absolutely nothing—half so much worth
doing as simply messing about in boats.
—KENNETH GRAHAME
Marinas—the term is adapted from the Italian word for small harbor—have come
to include any collection of slips for pleasure boats. Marinas have developed from
facilities ‘‘long on boatyard ambience and short on creature comforts’’ to attrac-
S tive, bustling waterfronts that often serve as the key recreational attraction in a
N variety of types of development. They have changed from being outgrowths of a
L
MILL (Wiley)
MANAGING THE OPERATION 135
boatyard or commercial harbor to being more like fishing villages in appearance.

The close relationship between real estate, boats, and water has resulted in in-
creased property values.
The International Marina Institute, in its annual benchmark study, defines a
destination resort marina as ‘‘accessible both by land and water, [including] wet
slips for visitors, hotel accommodations, restaurant facilities, swimming pool and
other recreational amenities that create a resort atmosphere.’’5
BOATERS
The National Marine Manufacturers Association (NMMA) estimates that 69 million
people participated in recreational boating in 2004 in 17.6 million boats.6 Twenty
states account for approximately three-quarters of all boat registrations in the U.S.7
The major states are:
Michigan
Florida
California
Minnesota
Texas
The increased interest in boating is a function of a growing economy that

features increases in disposable income, leisure time, and individual mobility.
Technological advances also help. Polyester resins and fiberglass boats make boats
essentially maintenance-free. Their development led directly to the introduction of
small sailboats and outboard-powered runabouts.

Managing Environmental Impacts8
Good environmental practices are crucial to any resort operator. The resort relies
upon the quality of the resource—beaches, water, and the marine environment—
to attract and satisfy guests. Irresponsible activities can seriously erode the health
and aesthetics of near-shore marine environments and coral reefs. There are a
number of specific concerns that need to be addressed.
Anchoring The use of anchors for mooring recreational boats can cause extensive damage
to near-shore marine ecosystems, especially coral reefs. Anchors can damage
S warm water corals by crushing them. The practice can also cloud water with
N disturbed sediment. It takes a coral reef a long time to recover from anchor dam-
L
MILL (Wiley)
age. Preventing anchor damage requires little in the way of investment and few
operational changes. The benefits come from the revenue from tourists who want
to see reefs that are healthy and intact. Anchoring can result in:
fewer fish
fewer living corals
fewer new corals
more stressed corals
more algae growth
cloudy water
destruction of sea grass beds
The resort operator can institute several practices to minimize or even prevent
damage from anchoring. The use of mooring buoys allows boaters to maintain
their position without dropping anchor. Management may have to educate resort
guests as to the problems associated with anchoring and to give instruction on the
proper use of mooring systems.
Boat Operation Improper operation of a boat can result in accidents that crush and kill areas of
coral and other reef-dwelling organisms. Increased sediment from propeller wash
and wave creation tends to inhibit the photosynthetic process of symbiotic algae
that live within coral tissues. Older boats and jet skis that have inefficient two-
stroke engines can generate significant levels of pollution. Boaters should be urged
to follow proper navigation and mooring principles in regard to staying within
designated channel markers and obeying all speed signs. Resorts that hire out
boats are responsible for keeping them in prime condition through regular main-
tenance. Ideally such boats that have older two-stroke engines can have them
replaced with more fuel-efficient, cleaner burning four-stroke outboards. A com-
prehensive maintenance program involves:9
regular inspections of areas susceptible to potential leaks of toxic sub-

stances
keeping toxic-absorbent sponges in bilges
using non-toxic antifouling paints on boat hulls
using biodegradable cleaning agents
avoiding onboard refrigeration units that use chlorofluorocarbons
avoiding pumping oily bilge water or other hazardous substances into the
sea
A comprehensive educational program should be offered to guests prior to the

renting of a boat in such areas as basic navigation, boat handling, and safety
principles.
Boat Sewage When raw or partially treated sewage is dumped in coastal waters people and the
S and Garbage environment are subject to risk. Plastic objects and Styrofoam debris are often
N Disposal consumed by turtles, seabirds, fish, and marine mammals. The result can be death.
L
MILL (Wiley)
Boaters should be urged to use pump-out facilities on land, and—where such

facilities are not provided by the resort—to treat sewage prior to its release from
the vessel. Sanitation devices on the vessel need to be kept in good working order
and the use of plastic and Styrofoam minimized.
Snorkeling, Many resorts offer snorkeling, diving, and snuba as activities to attract guests to a
Diving, and particular property. Snuba is a relatively new water sport for non-certified divers
Snuba that combines snorkeling and scuba. Divers breathe air from a standard regulator
underneath the surface, but do not wear the equipment and air tank associated
with traditional scuba. Instead, a tank is kept on a small raft at the surface, and
air lines are fed underwater to divers.
Irresponsible or inexperienced snorkelers and divers can crush and break
corals and other reef-dwelling organisms with fins, equipment, and body parts.
People who are unable to control their movements in the water, who stand or
walk in a shallow area, or who handle, touch, and feed wildlife can cause a great
deal of damage.
The resort can:10
S Be aware of local laws when touching marine

N life. Courtesy PhotoDisc, Inc.
L
MILL (Wiley)
establish a no-contact policy for divers

conduct environmental awareness briefings for guests
conduct buoyancy refreshers and dive skills training
discourage feeding of fish and wildlife
install permanent mooring buoys at dive sites
regulate carrying capacity to avoid overcrowding
Seafood The near-shore environment is threatened when marine resources are overhar-
Consumption vested for seafood and / or ornamental souvenirs such as coral and turtle shells.
and Souvenir The Caribbean is experiencing serious declines of spiny lobsters, crabs and conchs,
Purchasing and fish such as groupers and snappers. Overconsumption reduces the very re-
sources that attract tourists in the first place.
Resorts can educate guests about which species should not be consumed as
food or purchased as souvenirs. Gift shops should not be selling or purchasing
Quick Getaway 5.4

Sit, Stay, Surf
It used to be that finding a place to stay with Socialization and obedience classes are
your pooch was the hardest part of traveling. only the tip of the iceberg. Loews Coronado
Now, with pet-friendly hotels on the rise, your Bay Resort in San Diego now holds dog surfing
pet can join you at the hotel pool, catch a surf classes. That’s right. . .surfing, for dogs. The ho-
class, and bed down on a high-count linen an- tel started selling a $300 package in the spring
imal bed. of 2006 that includes one night’s accommoda-
Pets are big business. According to the tion, one surfing lesson for Fido (without the
American Pet Products Manufacturers Associa- owner), a meal for the pet, and for smaller
tion, Americans spend more than $38 billion a dogs, board shorts. ‘‘We have sold close to 40
year on their pets. Hotels and resorts have of those packages,’’ says Anne Stephany, the
picked up on this trend: now you can find pet public-relations manager for Loews Coronado
massages at spas, special gourmet pet treats at Bay. ‘‘With a package like that, we usually sell
fine resort restaurants, and even portable pet five.’’
cabanas for the beach.
Pet pampering is fine, but most owners Source: Gunderson, Amy. ‘‘See Rover Run.’’ The
want to interact with their pooches. Keeping New York Times (July 16, 2006). http: / / www.
orlandosentinel.com / travel / printedition / orl-
this in mind, many hotels have instigated pro- pettravel1606jul16,0,7892310.story
grams and activities that guests can do with
their pets, such as. . .drink cocktails? Yes. The
W San Diego started pet-friendly cocktail hours DISCUSSION QUESTION:
in the fall of 2005. In Naples, the Ritz-Carlton Are pooch-friendly programs fair to guests
Golf Resort has initiated obedience classes, in- who do not like animals, or who have animal
S cluding a socialization class for puppies be- allergies? What can be done to alleviate pet-
N tween ten weeks and five months old. free guests’ concerns?
L
MILL (Wiley)
BLUE FLAG 139
marine ornamental souvenirs. Restaurants on the property should not serve fish
that are threatened or endangered.
Recreational Recreational fishing is a popular activity. Sport fishing charters target marlin, dor-
Fishing ado, and wahoo. Spear fishing and pole fishing in coral reef areas have also gained
in popularity in recent years, among both tourists and local people. Recreational
fishing can result in the overharvesting of a number of marine species. Spiny lob-
sters and Hawaiian groupers are now extremely rare.
Management can encourage catch-and-release fishing to help protect endan-
gered species. Many critics think that spear fishing contributes to excessive har-
vesting of fish and should be avoided.
Marine Wildlife Marine species have a greater economic value when they are viewed rather than
Viewing harvested. However such viewing practices can have detrimental impacts if not
properly managed. The major threat comes from improper boating practices and
corralling of animals during viewing. Noise causes stress for animals while power
boat propellers have been responsible for the scarring and the death of slow mov-
ing animals such as manatees and sea turtles. Resorts that offer such tours can
avoid chasing marine animals, practice a no-contact policy, and avoid feeding and
surrounding wild animals. This latter practice can cause a great deal of stress to
the animals.
BLUE FLAG
As noted in the section on beaches, Blue Flag criteria have been developed for
marinas. Criteria cover environmental management, safety and services, and water
quality as follows:11
Environmental Management
An environmental policy and plan must be in place at the marina.
The plan should cover water, waste and energy consumption, health and
safety issues, and the use of environmentally sound products. The system involves
several elements and is illustrated in Figure 5.1.
The Environmental Policy is an effort to reduce the environmental loads from
the activities of the marina. Priorities must be established in the areas of water,
waste and energy consumption, health and safety issues, and the use of environ-
mentally sound products.
The starting point is to establish the actual environmental load of the marina
S and the boats that use the facility. This process is known as mapping and involves
N several steps.12 An overview of the marina and its surroundings is developed and
L an invisible border is drawn around the marina. Next the environmental loads—
MILL (Wiley)
ENVIRONMENTAL POLICY
MAPPING
EVALUATION GOALS AND OBJECTIVES
INTERNAL AUDIT MANAGEMENT PLAN
IMPLEMENTATION
Source: www.blueflag.ord\word\inter\bfi\criteria\marina\marinacriteriaexplanatorynotes2006.doc
FIGURE 5.1 pp. 9-10, accessed January 21, 2006.
energy, water, materials, waste—entering this border are determined. A physical

examination is then made and the environmental conditions are noted.
At this point, general goals and more specific objectives need to be established
for each of the environmental conditions. Suitable objectives might be:13
Changing to energy-saving lightbulbs

Installing water-saving showers and / or toilets
Buying and using environmentally sound products
Putting the management plan together means setting priorities. In establishing

priorities consider whether the positive effects outweigh the effort to be expended.
The cost factor is an important consideration. Will the savings outweigh the costs
involved? How long will it take to ‘‘earn back’’ the costs of the project? How will
the project be financed? Implementing the plan might involve changing the be-
haviors of management, employees, and guests. An internal audit is a way of
ensuring that the plan has been carried out successfully. Have the objectives been
met? Did the expected effects materialize? The reasons for any discrepancies be-
tween what was expected and what actually happened need to be investigated.
This process should be repeated annually.
Hazardous wastes, such as paints and solvents, need to be handled by a

licensed contractor and disposed of at a facility for such wastes.
As with beaches above, the number of trash containers needed will depend
on the capacity of the containers, how many people use the marina, and how
often the containers are emptied.
The marina should have facilities for receiving recyclable waste materials.
Bilge water pumping facilities should be easily accessible and able to
separate the oily bilge water or water extraction from oily residues.
S The marina should have toilet pumping facilities that are easily accessible
N for all boats.
L
MILL (Wiley)
BLUE FLAG 141
All buildings and equipment must be properly maintained and in compli-

ance with national legislation. The marina must be well integrated into
the surrounding natural and built environment.
Adequate, clean, and well signposted sanitary facilities, including washing
facilities and drinking water, should be provided. Controlled sewage dis-
posal to a licensed sewage treatment.
The sanitary facilities should include toilets, washbasins, showers, and drink-
ing water. Washing machines would be an added service. There should be enough
facilities to encourage boat owners to use the marina facilities rather than the boat
toilet facilities during their stay in the marina.
If the marina has boat repairing and washing areas, no pollution must en-
ter the sewage system, marina land and water, or the natural surround-
ings.
The boat repairing and washing should take place in a specific designated
area at the marina with collection filters or equivalent systems from boat repairing
and washing areas to prevent hazardous substances from entering the sewage
system and the marina land / water. These filters have to be emptied regularly and
the contents treated as hazardous waste. Major repair activities such as grinding,
polishing, or sandblasting should take place under cover or indoors because of
the resulting dust pollution.
Promotion of sustainable transportation should be encouraged.

No parking / driving in the marina, unless in specific designated areas.
Safety and Services

Adequate and well signposted lifesaving, first-aid, and fire-fighting equip-
ment.
At a minimum, lifebuoys and ladders should be present. Other types of life-

saving equipment include boat hooks, rescue boats, and rescue stations at or near
the marina. The fire-fighting equipment in the marina covers fire extinguishers and
water hoses. All safety equipment should be available 24 hours a day.
Emergency plan in case of pollution, fire, or other accidents must be pro-

duced for the marina, and safety precautions must be posted at the ma-
rina.
There should be an emergency plan, the contents of which are known to the
S staff, concerning what to do in case of pollution, fire, or other possible accidents
N affecting the safety of the marina. At a minimum the plan should cover:14
L
MILL (Wiley)
Identification of the people to contact in case of an accident

Involvement of administration services and people necessary to intervene
Procedures for the protection or evacuation of people at or near the ma-
rina
Procedure of public warning and information
Safety precautions should be posted in a public area and cover:15
Information about the location of telephone, lifesaving, fire-fighting, and

first-aid equipment
Information about how to use the above-mentioned equipment (if
needed)
Details on how to warn other people about an unsafe situation
Information about correct storage of hazardous and inflammable waste
Directions for filling gasoline / petrol tanks at the fueling station only
Prohibition of open fire or fireworks at the marina (unless there is a des-
ignated area or permission from the marina)
No swimming in the marina
Signs for safety hazards (e.g., unprotected piers)
Information about whom to contact for further information about safety
at the marina
Information about relevant alarm telephone numbers (police, fire depart-
ment, ambulance, marina manager)
Electricity and water is available at the berths, installations must be ap-
proved according to state / national regulations.
The facilities for disabled people in a marina should include access to and
around the marina, designated car parking spaces, and access to sanitary facilities.
A map indicating the location of the different facilities should be posted at
the marina clearly identifing the location of:16
Reception facilities for hazardous waste and oil waste

Garbage containers and facilities for recyclable waste
Toilet tank pumping / reception facilities (if present)
Bilge water pumping / reception facilities (if present)
Lifesaving equipment
Fire-fighting equipment
First-aid equipment
Public telephone
Sanitary facilities (toilets, showers, washing facilities, drinking facilities,
etc.)
Fueling station (if present)
Boat repairing and washing areas
Marina office / club house
S Facilities for disabled people (if present)
N Designated parking areas
L Boat places reserved for guest boats
MILL (Wiley)
BLUE FLAG 143
Quick Getaway 5.5

Best Beaches
Every year, Stephen Leatherman, Ph.D. (a.k.a. amount of sewage / scum also make an appear-
‘‘Dr. Beach’’), searches the United States look- ance on the list of criteria. Water color, wildlife,
ing for the nation’s best beaches. It’s nice work, and even the scent of the air can make a dif-
if you can get it, but it requires a certain ference. With 50 distinct criteria, Leatherman’s
amount of expertise. Dr. Leatherman isn’t just ranking is a truly exhaustive beach rating sys-
wandering the shores and picking which tem.
beaches he thinks are ‘‘nice.’’ For this profes-
sor, who teaches environmental studies at Flor- Source: Leatherman, Stephen. ‘‘Meet Dr. Beach.’’
ida International University (FIU) in Miami, Drbeach.org. Accessed July 27, 2006. http: / /
determining beach quality is far more science www.drbeach.org / drbeach /
than art.
What criteria does Dr. Beach look for
when he’s compiling his top ten beach list, re- DISCUSSION QUESTION:
leased every Memorial Day? Factors such as When a beach is rated as the best beach in
beach width at low tide, beach material, America, the very qualities for which it was
sand softness, and erosional variation come picked (privacy, little human intervention)
into play. Safety concerns, like frequency of may be destroyed as people rush in. Is there
rip tides, quality of bottom conditions, and any way to avoid this?
Water Quality
In terms of water quality it is important that the water be free of oil spots, litter,
sewage, or other visible signs of pollution.
Individual Boat Owners

The Blue Flag designation is available for individual boat owners. Boat owners
must commit to following an environmental code of conduct that involves:17
I will not throw garbage into the sea or along the coast.
I will not release toilet water in the sea, in coastal waters, and in sensitive
areas.
I will not release poisonous or toxic waste into the sea. I will deliver
these types of waste to the containers in the marina.
I will promote and use recycling facilities.
I will use the most environmentally friendly products among paints, deter-
S gents, etc.
N I will report pollution or other violation of environmental regulations to
L the authorities immediately.
MILL (Wiley)
I will not use forbidden fishing practice and I will respect periods when
fishing is prohibited.
I will protect animals and plants in the sea, which includes not disturbing
breeding birds.
I will respect vulnerable and nature protected areas.
I will avoid damage of the sea bottom, e.g., being careful when anchor-
ing.
I will avoid disturbing a fishery or fishery gear.
I will not buy or use objects made from protected species or from
archaeological underwater findings.
I will encourage other sailors to take care of the environment also.
SUMMARY
The market for beach resorts and destination marinas is large and growing. In
order to attract and satisfy the resort guest seeking the experience of a water-based
resort, attention must be paid to good environmental practices. Criteria laid down
by the Blue Flag campaign can serve as guidelines for the effective management
of a beach resort and destination resort marina.
ENDNOTES
1. Richard K. Miller & Associates, Inc. The 2005 Travel & Leisure Market Research Handbook.
Loganville, GA, 2005, 309–314.
2. Ibid., 313–314.
3. Ibid., 286–293.
4. Blue Flag Beach Criteria and Explanatory Notes, 2006–2007. Accessed January 21, 2006.
www.blueflag.ord \ word \ inter / bfi \ criteria / beach \ beachcriteriaexplanatorynotes2006.doc
5. International Marina Institute. 1998 Financial & Operational Benchmark Study for Marina Oper-
ators, A7.
6. National Marina Manufacturers Association. 2004 Recreational Boating Statistical Abstract. Chi-
cago, IL, 2004.
7. Richard K. Miller & Associates, Inc. The 2005 Travel & Leisure Market Research Handbook.
8. The Center for Environmental Leadership in Business. A Practical Guide to Good Practice: Man-
aging Environmental Impacts in the Marine Recreation Sector. Undated. www.celb.org
9. Ibid., 7.
10. Ibid., 11.
11. Blue Flag Marina Criteria and Explanatory Notes, 2006–2007.
www.blueflag.ord \/ word \ inter \ bfi \ criteria \ marina \ marinacriteriaexplanatorynotes2006.doc
12. Ibid., 10.
13. Ibid., 7–8.
14. Ibid., 16.
S 15. Ibid., 16.
N 16. Ibid., 17.
L 17. Ibid., 6.
MILL (Wiley)
Chapter 6
GOLF/TENNIS–BASED RESORTS:
THE IMPACT OF DEVELOPMENT
ON OPERATIONS
LEARNING OBJECTIVES
1. Identify the major planning and development elements involved in creating a
golf course.
2. Differentiate between the various types of golf course design in terms of land
consumption, frontage, maintenance costs, and integrity.
3. Explain the role of general design principles in site planning a golf / tennis–
based resort.
4. Discuss how to balance the relationship between the integrity of the natural
resources base while increasing the profit-generating capability of the recrea-
tional facility.
5. Identify the major factors affecting the overall development of tennis courts
in a resort setting.
INTRODUCTION Climate
GENERAL GUIDELINES Maintenance
Ownership GOLF COURSE TYPES
PLANNING AND DEVELOPMENT The Regulation Golf Course
Landscape Architect Core Golf Courses
Size of Property Single Fairway Continuous
Shape of Property Single Fairway with Returning
Topography Nines
Natural Hazards Double Fairway Continuous
Soil Characteristics Double Fairway with Returning
Nines
Vegetation
Comparing the Layouts
Clearing Required
Other
Market
Golf Hole Styles
Land Cost
DESIGN PRINCIPLES
S Water Supply
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146 Chapter 6 GOLF / TENNIS–BASED RESORTS: THE IMPACT OF DEVELOPMENT ON OPERATIONS
Safety TENNIS
Design for Play Introduction
Costs Site Selection
Aesthetics Planning and Design
Tournament Qualities Management
Accessibility SUMMARY
Clubhouses ENDNOTES
Remodeling
INTRODUCTION
It looks like an excellent exercise. But what’s the little white
ball for?
—ULYSSES S. GRANT
Golf courses can serve many purposes. Because of their attractiveness to growing
numbers of people, they may help the marketing effort in selling a resort or resi-
dential community. The design of the golf course is dependent on the strategic
role it is meant to play within the resort. If the primary purpose of the course is
to sell real estate, buildings should be designed to take advantage of views. There
should be maximum real estate frontage on the fairways, as these sites command
premium prices. By some estimates, golf course frontage can result in an 8 percent
premium in the price for a home. In contrast, in one study, a home one-tenth of
a mile from the golf course gate had a 3.7 percent reduction in its value compared
to golf course frontage.1
Water elements should be planned as both scenic amenities and as golf haz-
ards, and the most valuable land should be kept for uses other than golf.
Courses can also be used in the marketing effort to sell homes or condomin-
iums. An estimated 80 percent of all new and planned golf courses are associated
with residential developments.2 In these kinds of cases, the course should be de-
veloped early in the development process, designed to support tournament play,
and planned for photogenic and outstanding holes that take advantage of site
characteristics. This, obviously, costs more to build than the typical golf course.
Where the objective is to provide a high-quality amenity to the real estate
target market, the course must be developed with the average golfer in mind. The
integrity and playability of the course become the major design consideration. The
integrity of the golf course is ‘‘the degree to which golfers perceive that surrounding
land uses visually or physically impinge on their game.’’3 The course might be built
in stages as real estate expands. Golf courses undoubtedly raise land values and
S can evolve into profit centers themselves.
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GENERAL GUIDELINES 147
Concerns over the negative environmental impact of golf courses are increas-
ing. The issues revolve around three concerns: land use changes and soil erosion,
the use of chemical fertilizers (controlling pests requires upwards of nine pounds
of pesticides per acre), and the extensive use of water. The positive environmental
aspects of golf courses, on the other hand, include:
Reduced runoff—Turf on golf courses helps reduce water runoff, erosion,

and flooding.
Groundwater recharge—A 150-acre course can recharge the water table
with a net 90 million gallons of rainwater each year.
Water filtration system—Water that has moved through a golf course is
purer than it was before it reached the course.
Effluent water—Golf courses can be irrigated with effluent water that is
filtered by the soil and vegetation before returning to the aquifer.
Oxygen production—A 150-acre golf course produces enough oxygen for
118,000 people per day.
Temperature—The cooling effect of a course is equivalent to several hun-
dred tons of air-conditioning.
Noise abatement—Turf absorbs and deflects sound.
Wildlife—Courses maintain natural habitats for wildlife.
Allergy control—Turf helps trap dust and reduces pollen levels.
Fire breaks—Turfgrass offers a buffer zone to help prevent the spread of
wildfire.
Open space—Many developments require a certain amount of open
space. In some cases, golf courses can qualify as open space to help
meet this requirement.4
The high cost of construction and maintenance means that development must
be approached carefully.
GENERAL GUIDELINES
Golf is the engine that drives most resort destinations.
—DOUGLAS GEOGA
President of Hyatt Hotels Corp.
In the 1960s, the cost of developing a golf course was easily recouped through the
premium prices charged for fairway frontage and the general marketing appeal of
the amenity. Rising interest rates and inflation in the 1970s changed that picture.
The increasingly high development costs led developers to reduce construction
and maintenance costs and look for sources of additional revenue. For example,
S more courses are being designed with water conservation in mind, reusing waste-
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water for irrigation. Courses are also being designed to speed play, thereby in-
creasing course capacity, daily rounds, and revenue.
Ownership
Golf courses can be privately or municipally owned. Private clubs are open to
members only or to the public on a daily fee basis. Today, it is common for a golf
course to be part of a development mix that includes various housing products:
primary homes, vacation residences, a resort hotel, and condominiums. This
means that the old development model is no longer appropriate. Traditionally, the
course was built early in the development of the project, the cost was covered
through sales of frontage home sites, and the developer operated the course for a
few years before turning management and maintenance over to the residents of
the project. The new model involves limiting the up-front development costs, max-
imizing cash flow and the marketing impact of the amenity, and transferring own-
ership in a planned and orderly manner.5
In Japan, where land is at a premium, most of the courses are mountainous.6
Flat land is used for growing crops, and the towns and cities are constructed on
flat land because most of the people, because of spirits, do not like to live in
houses in the mountains or even in the foothills. As a result, golf courses do not
have house lots around them, as is common in North America.
At a self-contained resort, the golf course must be more of a stand-alone at-
traction than when it is part of a larger community of various housing products.
Frontage development becomes less important and might even be discouraged.
Oceanfront holes, uneconomic in most development projects, might be con-
structed for a memorable guest experience.
Courses can be operated in one of three ways: daily fee, nonequity private
club, and membership-owned equity club.7
Even within a real estate development, developers may open the course to
the general public on a daily fee basis during the early years of the project life.
Cash flow helps sustain the development while helping stimulate interest in the
development. An upscale daily fee facility can become a permanent part of the
overall concept.
In a nonequity private club, members pay an initiation fee and annual dues.
The club may be open to nonmembers at a higher fee. The developer keeps
control of the course and hopes to operate it at a profit.
In the equity arrangement, members buy an equal share in the ownership of
the club, the pricing being tied to the cost of the land and the improvements.
Recreational amenities can be operated in all three ways, depending on if and
when the developer transfers control to the residents of the development.
PLANNING AND DEVELOPMENT

The ideal site is in a valley where the land rolls every 200 to
S 250 yards with grades of less than 10 percent, good sites for
N greens, a change in elevation of about 50 to 100 feet, well-
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PLANNING AND DEVELOPMENT 149
drained sandy soil that dries quickly after rain, tall existing
trees of a species suitable for golf and lakes already there.
—DESMOND MUIRHEAD
Article in Urban Land, January 1994
Landscape Architect
A landscape architect is ‘‘one whose profession is to plan the decorative arrange-
ment of outdoor features.’’8 In the development of a golf course, their responsibil-
ities are threefold:
1. to assist the developer / client to attract visitors through design

2. to provide the visitors / users with a rich and memorable experience
3. to protect the natural resources
Size of Property
Many developers underestimate the amount of land needed for a golf course.9
While 120 to 130 acres might suffice for a regulation 18-hole course on a flat site
with few facilities, the same course on more difficult terrain might need upwards
of 150 acres. It goes without saying that the latter alternative is more visually pleas-
ing and recreationally challenging to the golfer.
Shape of Property
Irregularly shaped pieces of land make for potentially more interesting and safer
golf courses compared to square or rectangular sites. Regular developments are
more likely to have a number of parallel holes. Long, narrow sites restrict the
options of the developer. Road crossings also reduce the attractiveness of a site.
The orientation of the course is another item to consider. A long, narrow course
oriented northwest–southeast means that the holes face the morning or afternoon
sun, making play more difficult. A north–south orientation is preferred.
Topography
The topography of the site has the greatest impact on the quality of the finished
golf experience. Gently rolling land is preferred, as flat land is boring and hilly
land is tiring on players, slows play, requires numerous blind shots, and is expen-
sive to maintain. The ideal site should have both sloping and flat areas, with tees,
greens, and fairways adapted to the contours of the land. Steep slopes reduce the
viability of the site. They can be graded, of course, but at significant cost. Many
courses offer excavated lakes and ponds, the extracted fill being used to provide
little hills. A varied topography offers large views that increase the selling price of
real estate lots.
S Designers begin by looking at the existing contours of the land to identify
N suitable areas for tees, greens, and fairway landing areas where well-hit balls can
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come to rest without rolling out of bounds. According to the Urban Land Institute,
‘‘The best holes will drop in elevation from tee to landing area and landing area
to green.’’10 Because the golfer can easily see the hole, play is faster and more
enjoyable.
Natural Hazards
Hazards such as streams, ravines, ponds, and rolling terrain make the course more
interesting aesthetically and more challenging, from a golfing perspective, and
reduce construction costs, as fewer artificial hazards must be constructed.
Quick Getaway 6.1

Perfect Grass
When you see the flawless surface of a well- A good location and a sterile sand medium
maintained golf green, it makes you wonder: can control a huge number of variables, but
‘‘Why can’t I do that for my yard? It can’t be such control comes with a price: the grass is
that hard!’’ It turns out that there is a lot more totally dependent on its keepers to keep it
to the golf green than meets the eye. alive. Because the grass can’t pull any nutrients
The grass on a golf green exists in a prac- from the sterile sand, it needs a blend of water
tically hydroponic system, meaning that the and nutrients to keep it alive and healthy. Fre-
plants take their nutrients solely from nutrient- quently a variety of herbicides (for killing in-
enhanced water. When the green is con- vasive weeds), pesticides (for killing bugs), and
structed, a bulldozer digs a 12- to 16-inch-deep fungicides (for killing disease) are added to the
hole in the ground that is the size of the fin- watering mix. This ‘‘grass cocktail’’ keeps the
ished green. Some green systems are very ad- green flawless.
vanced: after the hole is dug, it’s lined Establishing the green is laborious, but the
completely with plastic, on top of which gravel, lion’s share of the work lies in green mainte-
drainage pipes, and sand are placed. On a nance. To keep the green perfect, it must be
green like that, the grass lives in a sterile sand mown every day with a precision green mower,
medium with perfect drainage! In the last step watered, fertilized, treated, and aerated. In a
of green construction, the surface is shaped to word, it must be coddled.
allow perfect drainage, because puddles on the
green after a rainstorm upset the system. Source: ‘‘How can the grass on the greens at a golf
course be so perfect?’’ HowStuffWorks, Inc. Page ac-
The green’s location is of the utmost im-
cessed July 31, 2006. http: / / science.
portance. To thrive, the grass needs a good howstuffworks.com / question428.htm
amount of sunlight (preferably without any
trees nearby to shade it) and a healthy airflow
above the surface. Obviously the variety of DISCUSSION QUESTION:
grass is important. There are many types of Some golf courses (though not many) opt
S grass with many different strengths; it’s best not for synthetic greens made from plastic. What
N to list them all here. are the pros and cons of such a system?
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Soil Characteristics
Soil fertility depends, to a large extent, on the previous use of the land. For ex-
ample, a course built on a run-down farm that was intensively cultivated and
poorly fed will need more frequent fertilization to bring it up to the level required
for a golf course.
Several types of land that cannot be used for other development can make
excellent golf courses. Examples include wetlands, floodplains, drainage channels,
and dry streambeds.11 The drawback is that construction costs in sites with a high
drainage table are considerably higher.
Insufficient attention to drainage problems can be costly. A widely quoted
story in golf circles is about the superintendent who was asked what it takes to
keep a golf course looking good. The reply was, ‘‘About 5 percent common sense
and 95 percent drainage, and if you don’t have much common sense, then put in
more drainage.’’12 Wet conditions on a site with inadequate drainage can reduce
the number of rounds that can be played during the season. Revenues are reduced,
the round of golf is less attractive to the players, and the course is more expensive
to maintain. The drainage systems needs to take into account runoff from real
estate development around the course. On the other hand, golf course water fea-
tures offer biological filtering as part of a comprehensive storm water management
program.
It is said that a site can never have too much topsoil. Topsoil is crucial to the
healthy growth of turfgrass. The best type is well-drained, sandy loam. If major
grading has to take place, the topsoil should be removed first, stored nearby, then
spread over the graded areas. In coastal areas, alluvial soil allows for low-cost
development. Peat and many soils, on the other hand, are unstable and high in
organic compounds. Clay soil reduces the cost of constructing ponds but causes
problems if the rate of percolation is insufficient for proper drainage. On the other
hand, high percolation rates increase the need for water and fertilizer. Rock out-
croppings add visual appeal to a course, but rocky soil increases development
costs.
Vegetation
Next to slope, vegetation is the most important influence on the overall character
of a course. Wooded areas, for example, enhance the visual and ecological appeal
of a course by separating fairways. At the same time, they provide opportunities
for compatible recreational uses such as walking, cross-country skiing, and bicy-
cling. On heavily wooded sites, a new course looks more mature than it is. If the
area is too heavily wooded, however, the cost of clearing it will be high.
Clearing Required
Clear sites offer the advantage of lower site preparation costs and fewer environ-
S mental challenges. However, landscaping costs are higher and the site will look
N unfinished for several years. The cost of clearing a site is heavily dependent on
L the type of vegetation to be cleared and how easily it can be disposed of. Large,
MILL (Wiley)
mature trees are expensive to clear. It may be possible to sell marketable trees to
loggers. The remaining smaller trees and other vegetation must then be cleared.
If burning is not allowed, the disposal cost can be high, as the material must be
chipped and removed from the site.
Market
Four important market-related items must be considered in designing a course:
relationship within the project between golf and real estate

ability levels and diversity of players
overall level of demand for the course
frequency of play by the same group of users13
For example, courses in second-home communities are typically designed

with single fairways to provide maximum fairway frontage for premium lot prices.
Resort hotel courses are designed to attract serious golfers. The core or parallel
fairways layout helps protect the integrity of the course for these people. At resorts
that do not have many repeat guests, the visibility of the green and all major
hazards from the tee is important. While golfers who play the course often become
aware of greens and hazards placement, the one-time-only golfer is not and needs
assistance to prevent the experience from becoming too frustrating. To improve
visibility, holes should drop in elevation from tee to landing area and from landing
area to green. Where the resort features golf, a number of signature holes should
be built to produce a memorable experience for the golfer. Where time is an issue,
variety, multiple tees, and large greens take on greater importance.
Land Cost
The cost of building a top-rated golf course runs between $200,000 and $400,000
a hole. This translates into between $3.6 million and $7.2 million—perhaps as
much as 10 to 12 percent of the total cost of building the resort.14 These figures
include clearing; grading; drainage; construction of tees, fairways, greens, sand
bunkers, irrigation system, and cart paths; seeding; and grassing.
Water Supply
A regulation 18-hole golf course needs between 1.5 and 3.5 million gallons of water
per week.15 The amount depends on the type of turf, the irrigation system, and the
climate. Water quality is another concern. The concentration of soluble salts
should be less than 2,000 parts per million for grass to grow well. More and more
courses are using treated wastewater for irrigation purposes. In addition, research
at places like the turf management department at Colorado State University is
focusing on native grass species, such as wheatgrass and blue grama, that can
S keep their drought-resistant characteristics on golf courses.
N Well water can be routed into reservoirs that are utilized as water hazards on
L the course. In a similar vein, streams and rivers can be tapped as a source of
MILL (Wiley)
irrigation water. ‘‘The limiting factor in this type of arrangement is the period of
lowest flows in the stream’s watershed.’’16 In dry periods, stream sources can be
supplemented by well water. The vertical difference between the average elevation
of the lake and the highest point on the course determines the extent to which
costly pumping is required.
Irrigation Irrigation systems for golf courses were introduced in the late 1800s. Since then,
System they have become increasingly complex. The amount of coverage has to balance
the need for irrigation and the cost of the system. In desert areas, the system has
to cover the entire course, from fairways to greens and tees. In other places, either
a single-row or double-row fairway system is sufficient.17 A single-row system places
sprinkler heads down the middle of the fairway. Less piping and fewer heads are
Quick Getaway 6.2

Thirsty Cacti Outdrink Dormant Grass
Water conservationists have long advocated gorge themselves on water and grow at tremen-
the use of ‘‘native’’ plants to help golf courses dous rates.
reduce their water usage. However, it seems Golf courses that choose to Xeriscape
that simply planting a few cacti won’t help. . .in should research the true survival requirements
fact, it may worsen the problem. for desert plants in order to manage water
Studies reported to have been run by the more efficiently.
American Water Works Association Research Nevertheless, golf courses don’t have to
Foundation and plant biologists at Arizona give up on grass if all they want to do is con-
State University have both found that so-called serve water. According to the researchers, prop-
Xeriscape or native landscapes actually receive erly established turfgrass that is allowed to go
more water than traditional-style landscapes. dormant during hotter, dryer times of the year
ASU researcher Chris Martin, Ph.D., found can survive on very limited water. This is true
that desert plants such as creosote bush, brittle as long as the plant’s crown is kept hydrated,
bush, acacia, and mesquite are able to use two which requires as little as one-quarter inch of
to three times as much water as turfgrass or water per week.
flooded alfalfa.
According to the study results, the problem Source: ‘‘So-called ‘native’ plants offer no guarantee of
lies not with the plants, but with the water man- water conservation.’’ Golf Course News (November
agement practices of the establishment. Desert 2001). http: / / www.findarticles.com / p / articles / mi
plants are capable of absorbing huge amounts qa4031 / is 200111 / ai n9011792
of water in a short period of time because that
is what helped them survive the infrequent rain-
fall of their native climate. This means that DISCUSSION QUESTION:
when landscape water is made available, in- Given the choice between native plants and
S stead of absorbing less moisture than tradi- turfgrass, which would you choose for a
N tional landscape plants, most desert plants desert golf course?
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needed, making this a less expensive option than a double-row system. The de-
cision of whether to install a single- or a double-row system depends on the width
of the fairways. The amount of water used can vary from 800 gallons per minute
(gpm) for a single-row system to 1,600 gpm for complete coverage of all elements
of the course.
Systems can be either automatic or manual. The former is more expensive to
install but less costly to operate than the latter. The irrigation system for Terravita
in Scottsdale, Arizona, uses an on-site weather station to measure daily evaporation
and adjusts each sprinkler’s run time to replace only the amount of water that is
needed.
Climate
Climate affects the length of the season and the costs of maintenance. Courses in
moderate climates accommodate more rounds of golf per year while incurring
relatively high maintenance costs year-round. In the Palm Springs area, for exam-
ple, the highest irrigation costs occur during the off-season. Northern courses have
lower maintenance costs compared to those in other geographic regions during
the cold season.
Arid While many critics claim that it is irresponsible to build golf courses in arid parts
of the world, others argue that in places like the southwestern United States, golf
courses serve two major roles: flood control and groundwater recharge.18 In Scotts-
dale, natural washes, called arroyos, are fairly common. While arroyos are usually
dry, during summer and winter rains they can turn into raging torrents in minutes.
Because any kind of development increases runoff, care has to be taken to ensure
that the increased water flow does not adversely affect developments and habitats
downstream. The solution is to use a golf course as a means of drainage by di-
recting drainage channels onto the course itself and building them into its features.
Because the soil in the area readily absorbs water, a number of waste bunkers are
strategically built around the course. Most of the year, they act as regular hazards.
However, when the rains come, they fill with runoff, which then percolates back
into the groundwater or is released slowly into the arroyos.
In Sun City, Arizona, the problem was that the soil was so tightly packed that
runoff would take too long to be absorbed. Designers created 17 lakes on the Sun
City Grand course for runoff deposit, where the water is used for groundwater
recharging. In total, the lakes allow up to 4,000 acre-feet of water annually to reach
the groundwater table below.
Maintenance
Maintenance is the largest single cost item for a course. ‘‘Maintenance costs will
depend on a wide variety of factors, including the course’s location, length of
season, type, market size, and purpose.’’19 According to the American Society of
S Golf Course Architects, maintenance costs can run anywhere from $250,000 to
N $650,000 a year. This does not include operation of the clubhouse and the fleet
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of golf carts. The task is to balance the higher quality of the course with the
increased maintenance costs required to produce that quality. At some point,
spending more money on maintenance does not produce a corresponding in-
crease in course quality.
A major factor in maintenance costs is the type of grass selected. In northern
latitudes, it is generally accepted that bent grass provides the best playing surface.
This type is less practical in the South because of summer heat stress. Bluegrass
is criticized for not having the color contrast or playing conditions of bent grass
but it tolerates heat better and requires less pesticides, fertilizer, and water. Main-
tenance savings can be $80,000 a year.20 The point is that maintenance costs
should be considered when designing a course.
The way a course is maintained also has an impact on operations. ‘‘When
greens are kept fast, fairways lush and narrow, roughs long and sand bunkers
soft. . .play will be difficult and slow.’’21 The visual effect of the course also has a
major impact on how enjoyable the experience is.
GOLF COURSE TYPES

God created golf holes. It is up to the architect to discover
them.
—DONALD ROSS
Golf Course Design
Five basic golf course types serve as the models for constructing a course.22 They
are illustrated in Figure 6.1. Which one is used depends on the objectives of the
project and the characteristics of the land available.
Each model is based on the idea of the regulation course which, in turn, is
based on the concept of par. Par is ‘‘the score for a given hole produced by error-
free golf, or the score an expert golfer would be expected to make.’’23 Ordinary
playing conditions are assumed and two putting strokes are allowed. On a par 4
hole, for example, the golfer would reach the green in two strokes. The United
States Golf Association has established the following distance standards for par:
Par Men Women

3 up to 250 yards up to 210 yards
4 251–470 yards 211–400 yards
5 471 yards ⫹ 401 yards ⫹
The Regulation Golf Course

The regulation golf course has a par between 69 and 73, with 72 considered ideal.
S The course probably has three sets of tees ranging from 5,200 to 7,200 yards in
N length for golfers of varying ability. The holes making up the course are a com-
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FIGURE 6.1 The five basic types of golf course. Source: Phillips, Patrick L. Developing
with Recreational Amenities: Golf, Tennis, Skiing, Marinas. Washington, D.C.: Urban Land
Institute, 1986, 35–36. Reproduced with permission of the Urban Land Institute.
S
N
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bination of par 3s, 4s, and 5s, and generally consist of four par 3s, ten par 4s, and
three par 5s. In keeping with the objective of making the course fair and enjoyable
to play, the holes should be evenly spread along two circuits of nine holes each.24
Core Golf Courses

In a core golf course—the oldest and most basic design—the holes are designed
together and either in a continuous sequence with starting and finishing holes at
the clubhouse or in returning nines with two starting and finishing holes at the
clubhouse. It requires about 140 acres and gives 10,000 feet of lot frontage. It
consumes the least amount of land and offers the least course frontage. The core
course can offer the greatest integrity or golf experience because the emphasis is
on golf rather than real estate development. This is the case because the only real
estate potential is around the periphery of the course. The core course is also the
most efficient layout, as play is quick and the course comparatively inexpensive
to maintain.
Single Fairway Continuous

The single fairway continuous 18-hole course comprises holes strung together in a
long loop. It takes about 175 acres, offers 46,800 feet of lot frontage, and requires
a minimum width between developed areas of 300 feet.
The course takes the maximum land area, offers maximum fairway frontage,
and has the least operational flexibility. Because there is only one starting point,
only one foursome at a time can start the course. This means that it can take up
to four hours to fill the course completely. A shorter round of nine holes is difficult
or impossible to play. In addition, play is slower because golfers must avoid out-
of-bounds situations on both sides of the fairway. (The penalty for hitting a ball
out of bounds is two strokes.) The layout does, however, allow maximum flexibility
of layout because of its few fixed elements; only the clubhouse and the starting
and closing holes have fixed positions. The course can, thus, be designed around
difficult terrain.
Single Fairway with Returning Nines

The single fairway 18-hole course with returning nines uses about 175 acres and
offers 44,400 feet of lot frontage with a minimum width of 300 feet between de-
veloped areas. It is second in fairway frontage and a close second in use of land.
Some savings can be gained on land use because of the concentration of holes
and tees at the first, ninth, tenth, and eighteenth holes. Playing flexibility and
the number of rounds that can be played each day are maximized because of the
returning nines. Two parties of four can start at the same time, one group on the
first hole and one on the tenth, and cross over after playing nine holes. Because
of this, the entire course can be filled, with a foursome on each hole, in about
S two and one-half hours. Maintenance costs are moderately higher than are double
N fairways and core courses because tees and greens cover a larger area.
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Quick Getaway 6.3

Designing the Environmentally
Friendly Golf Course
The following is a summary of the eco-friendly and environmentally acceptable. It is im-
design guidelines of the Golf Course Super- portant that recycled water meets applica-
intendents Association of America (GCSAA). ble health and environmental standards
These guidelines were specifically created for and that special consideration be given to
those considering an environmentally sensitive water quality issues and adequate buffer
course: zones.
7. Buffer zones or other protective measures
1. When designing a golf course, it is impor- should be maintained and / or created, if
tant to identify existing ecosystems. appropriate, to protect high quality surface
Utilizing what nature has provided is both water resources or environmentally sensi-
environmentally and economically wise. tive areas.
2. A site analysis and feasibility study should 8. The course should be designed with sus-
be conducted by experienced profession- tainable maintenance in mind. The design
als, so that a design can be achieved should incorporate integrated plant man-
which carefully balances environmental agement and resource conservation strate-
factors, playability, and aesthetics. gies that are environmentally responsible,
3. Cooperative planning and informational efficient, and cost effective.
sessions with community representatives, 9. The design of the course should enhance
environmental groups, and regulatory and protect special environmental re-
agencies should be part of the initial de- source areas and when present, improve
sign phase. This dialogue and exchange of or revive previously degraded areas within
information should continue even after the the site through the use of plants that are
course is completed. well adapted to the region.
4. Native and / or naturalized vegetation Source: ‘‘The environmental principles for golf courses
should be retained or replanted when ap- in the United States.’’ Golf Course Superintendents As-
propriate in areas that are not in play. In sociation of America. Accessed July 31, 2006. http: / /
playing areas, designers should select www.gcsaa.org / resources / facts / principles.asp
grasses that are best adapted to the local
environmental conditions. DISCUSSION QUESTION:
5. Emphasis should be placed upon the de- Golf courses can be extremely environmen-
sign of irrigation, drainage, and retention tally friendly, but golfers may not like the
systems that provide for efficient use of consequences (occasional brown spots or
water and the protection of water quality. fading grass, for example). What do you
6. Water reuse strategies for irrigation should think are some ways that golfers can be-
be utilized when economically feasible come more environmentally conscious?
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Double Fairway Continuous

The double fairway continuous 18-hole course uses approximately 150 acres, offers
25,000 feet of lot frontage, and requires a minimum width of 500 feet between
developed areas. It uses one-sixth less land than a single fairway course. The dou-
ble fairways mean the layout is less flexible. In particular, it is more difficult to
work around existing vegetation. The course is, however, well suited for long,
narrow sites.
Maintenance costs and time are reduced because of the double fairways. The
course’s parallel nature can make it boring, so special care must be taken to design
interesting holes.
Double Fairway with Returning Nines

The double fairway 18-hole course with returning nines uses about 150 acres of
land, with 500 feet being the minimum width between developed areas. It offers
24,200 feet of lot frontage. It uses one-sixth less land than a single fairway course
and offers more integrity than a single fairway course lined with housing devel-
opment. The returning nines, as before, offer the flexibility of two foursomes start-
ing at the same time. Maintenance costs are less than for a single fairway and
supervision is easier.
Comparing the Layouts

In summary, continuous layouts increase frontage but decrease operational flexi-
bility. Returning nines offer much greater flexibility at the cost of some frontage.
Single fairways give the designer maximum flexibility, as far as the layout is con-
cerned, while delivering maximum frontage. The downside is that maintenance
costs are higher and the quality of play for the golfer may be lessened. Double
fairways save on maintenance costs while providing golfers with a better golf ex-
perience—at the cost of frontage development.25 These comparisons are summa-
rized in Table 6.1.
Good design can make the experience better for both homeowner and golfer.
When trees are placed between lots set at an angle to the fairway, both groups
benefit. Golfers tend to see trees rather than houses, while homeowners, because
the angle screens views of homes on the other side of the fairway, also see more
vegetation. This concept is illustrated in Figure 6.2.
While courses tend to follow one of the above models for most holes, they
tend to incorporate elements of other designs for several of the holes to accom-
modate specific elements of the site.
Other
Various other types of course have been developed to accommodate smaller
S pieces of land or to allow for completion of a round of golf in a relatively short
N period of time. Some of these options are nine-hole regulation (including multiple
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TABLE 6.1 Comparison of Golf Course Types

Land Flexibility / Maintenance
Type of Course Consumption Frontage Capacity Cost Integrity
Core low low low* low high

Single fairway continuous high high low high low
Single fairway with returning nines high high high high low
Double fairway continuous medium medium low medium medium
Double fairway with returning medium medium high medium medium
nines
* Low if continuous, high if returning nines.

Source: Phillips, Patrick L. Developing with Recreational Amenities: Golf, Tennis, Skiing, Marinas. Washington, D.C.: Urban Land Institute,
1986, 37. Reproduced with permission of the Urban Land Institute.
tees, which allow the hole to be played in different ways); 18-hole executive, which
allows completion of a round in about half the usual time; the par 3, consisting
entirely of par 3 holes; the 27-hole regulation laid out in three returning nines,
popular in resorts where there is concentrated demand for play in the morning
hours; and the 36-hole regulation, which can be an 18-hole continuous and two
returning nines. These last two options require greater capital investment but offer
much more course capacity for the money invested.
Typically, a resort will need a challenging regulation 18- or 36-hole course
with an executive or par 3 course as a supplement.
FIGURE 6.2 Placement of trees on angled lots. Source: Graves, Robert Muir, and
S Geoffrey S. Cornish. Golf Course Design. New York: John Wiley & Sons, Inc., 1998, 147.
N Reprinted by permission of John Wiley & Sons, Inc.
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Golf Hole Styles

Golf holes are the essence of a course. The style of holes can be defined as penal,
strategic, or heroic on the basis of type, placement, and number of hazards. These
styles are illustrated in Figure 6.3.
Penal The majority of holes built early in the twentieth century were in the penal style
and patterned after British courses. Hazards are scattered at random around these
holes in a manner that is unfair, given the inconsistent play of the average golfer.
This makes the hole relatively easy for the better golfer and difficult for beginner
or older players. Long, accurate tee shots are required over hazards to land in a
relatively small landing area. In short, every poorly played shot is severely penal-
ized. As a result, play tends to be slow.
Strategic Most holes today are designed as strategic—that is, the green may be approached
in several ways, each with a different degree of risk and reward. Safer shots will
cost a stroke or two, but errors are not as severely punished as in the penal style.
Golfers must play position to score well. The result is a thinking-person’s course
Penal design
Strategic design
Heroic design
FIGURE 6.3 Examples of golf hole styles. Source: Cornish, Geoffrey, and William Grieve
S Robinson. Golf Course Design: An Introduction. Lawrence, KS: Golf Course
N Superintendents Association of America, n.d., 7.
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FIGURE 6.4 The bite-off hole. Source: Cornish,

Geoffrey, and William Grieve Robinson. Golf Course
Design: An Introduction. Lawrence, KS: Golf Course
Superintendents Association of America, n.d., 5.
that plays faster than a penal design. The bite-off hole (Figure 6.4) is an excellent
example of strategic design.
Heroic The heroic style is a combination of the other two. Golfers must choose between
alternate routes to the pin, with one much more difficult than the other. Failure is
punished more severely than under the strategic model. The reward for taking the
more difficult route is typically a birdie (one below par) or an eagle (two below
par).
The typical course today consists mainly of strategic holes with a sprinkling
S of heroic holes, usually around water hazards.
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DESIGN PRINCIPLES 163
DESIGN PRINCIPLES
All artificial features should have so natural an appearance
that a stranger is unable to distinguish them from nature itself.
—DR. ALASTAIR MACKENZIE
Designer, Augusta National
In order of importance, the factors to consider when designing a golf course are:
1. safety—to golfers and passersby

2. flexibility—different lengths of tees to handle golfers of varying abilities
3. shot value—variety of shots, lengths, and targets
4. fairness—placement and severity of hazards
5. progression—sequence of holes
6. flow—movement of golfers around the course
7. balance—distribution of par
8. maintenance costs
9. construction planning
10. aesthetics
11. tournament qualities 26
An item higher on the list takes precedence over one below it. For example,
the primary issue is safety. The next six items, flexibility through balance, deal with
designing the course for play and making the experience as pleasant as possible.
Maintenance costs, because they are ongoing, are more important than the one-
time cost of construction. Aesthetics, while important, is of less concern than the
factors preceding it on the list. Finally, the one to two weeks of tournament play
annually is of less concern than the other factors noted above.
Safety
Courses should be designed with golfer (and passerby) safety in mind. Many golf-
ers tend to slice the ball, playing it to the right of where they meant it to go. For
this reason, out-of-bounds on the right can be dangerous to people and homes
(Figure 6.5). Several measures, as indicated in Figure 6.6, can be taken to increase
the safety of the experience:
Tees can be staggered so that players on adjoining holes do not slice into
the same area.
Safety buffers, such as bunkers, rough, trees, and other vegetation, can be
installed. A rule of thumb is that over 90 percent of all shots fall within
15 degrees of the line of the desired shot. This can be used as a guide-
S line for the placement of double-fairway holes.
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FIGURE 6.5 Many golfers have a tendency to slice.

Source: Cornish, Geoffrey, and William Grieve
Robinson. Golf Course Design: An Introduction.
Lawrence, KS: Golf Course Superintendents
Association of America, n.d., 8.
The risk associated with blind shots—which occur when the golfer is
unable to see the likely path of the shot—can be decreased by cutting
down the obstruction, raising the tee to allow the golfer sight access to
the route of the shot, or installing a periscope on a pole so the player
can check for people in the path of the shot.
Keeping out-of-bounds areas on the hook or left side of the shot means
that courses play clockwise.
Having the right side of the impact area higher than the left means that
S sliced balls are caught by a mound and kept in play.27
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Trees to separate golf holes
Direction of play
Tree planting for safety and
screening from development
50 foot building setback line
Pond to separate golf holes
Property line
150´ minimum distance

Offset allowed from golf hole
Bunkers to stop balls and landing centerline to property line;
cause golfers to aim right zones this will allow for adequate
safety buffer
15° Holes routed clockwise to allow

Probable zone of play is 15°
approximately 15° on either golfer to slice into property,
side of apparent centerline not out of bounds
Trees to separate golf holes
FIGURE 6.6 Design safety elements. Source: Hurdzan, Michael J. Golf Course
Architecture: Design, Construction, Restoration. Chelsea, MI: Sleeping Bear Press, 1996,
25.
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Design for Play

Flexibility The course should be built for all golfers. Variations in handicap can be accom-
modated by placing multiple tees at different distances from the hole. Tees serve
as the control points for each hole. They are often as large as greens, with several
starting points to handle golfers of varying strength and ability.
Five sets of tees are common—the forward tee of 140 yards for novices; the
intermediate tee at 175 yards for advanced female, junior, and senior players; the
main tee of 210 yards for average males and advanced seniors; the back tee of
240 yards for advanced golfers and female professionals; and the pro tee of 270
yards for tour golf pros. On courses 5,000 feet above sea level, the ball will carry
10 percent farther.28
Tee placement also depends on the amount of play. The more the course is
played, the larger the tees. A common rule of thumb is to build a tee area of 100
to 200 square feet per 1,000 rounds of golf per year.29 Because of practice swings
on both the first and the tenth holes, these tee areas need to be larger. Similarly,
on a par 3 where the tee shot is played with an iron, the playing surface is subject
to more wear and tear and a larger tee area is needed.
Shot Value The value of a shot to the golfer depends on its length, the target size, the difficulty
of the hazards, and the position from which the shot is played. Difficult hazards
on a short hole can counterbalance easier hazards on a longer hole. Designers
can mix and match these criteria to create shots that most golfers can successfully
make. Collectively, the shots taken make up the round of golf. A good layout
means that every club in the bag should be used. Theoretically, the best round is
played by the best all-around player rather than by the best putter or driver.
Fairness A golf hole is said to be unfair ‘‘if there is but one route to the hole, which must
carry a severe hazard, and the required shot is beyond the ability of most golfers.’’30
Various features are situated around the course to add to the strategy of play.
Sand, water, trees, and rough are all used for this purpose. ‘‘The basic principle
of hazards is to allow the golfer a reasonable chance of recovery.’’31 The use of
sand in bunkers is a link to the past practice of locating courses on seaside links—
where, it is said, livestock crouching against the dunes for shelter formed bunkers.
Today, the bunkers provide a visual contrast to the predominance of green while
being useful for stopping errant shots. The most aesthetically pleasing bunkers
feature sand surfaces that slope upward and turf hanging over the edges. Bunkers
of this sort, however, require mowing by hand. Softer slopes and curves provide
good-looking bunkers that can be maintained by riding mower. Bunkers range
from 1,000 to 3,000 square feet when close to the green and up to 4,000 square
feet on a fairway.
Water is a more punishing hazard than sand, as a shot into the water means
a penalty stroke rather than ‘‘just’’ a difficult shot out of the bunker. However,
S apart from its aesthetics, water can speed play, as the golfer takes another shot
N instead of a well-thought-out difficult stroke.
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Quick Getaway 6.4

From Slag to Swings
Golf courses all share certain elements: greens, pable of processing all of the ore from the Butte
roughs, holes. It’s difficult to come up with an mines. Therefore the Old Works were disman-
original course idea all on your own, but it’s tled and closed in the early twentieth century.
much easier to look to the surrounding area for The location was mostly undisturbed until 1983
inspiration. That’s what happened at Old Works when the location of the Old Works became a
in Anaconda, Montana. Superfund cleanup site. In 1989, Anaconda’s
In 1883, an Irish immigrant named Marcus citizens formed a group to promote the con-
Daly bought the land on which the city of An- struction of a world-class golf course in the
aconda and the Old Works copper smelters cleanup area. Ground was broken at the site
were to be built. In September of 1884 the Up- on May 26, 1994.
per Works, capable of treating 500 tons of ore Designed by famed course designer and
daily, began production. Remnants of the Up- professional golfer Jack Nicklaus, Old Works’s
per Works can still be seen today when playing layout incorporates many historic relics from
the front nine at Old Works. In 1886, installing the old copper smelter. The flue and oven re-
more modern equipment increased the Upper mains can be found on the course, and fair-
Works’ capacity to 1,000 tons per day. Never- ways border and wind their way through slag,
theless, more smelting capacity was demanded which is a byproduct of the copper smelting
from the Butte mines, so construction began on process. All of the bunkers on the course in-
the Lower Works in 1887, which were built 1 corporate black slag instead of the usual white
mile east of the Upper Works. Unfortunately the sand, which creates a stunning and unique
Lower Works burned down shortly after they vista.
were finished. The Lower Works were quickly
rebuilt, and by 1889 they were capable of pro- Source: ‘‘History.’’ Oldworks.org. Accessed July 31,
2006. http: / / www.oldworks.org / history.aspx
cessing 3,000 tons of ore daily. The ore supply
kept increasing, and to keep up with it a third
smelter was planned across the valley. Marcus DISCUSSION QUESTION:
Daly never saw these Reduction Works in op- Brainstorm some ideas for a historical (or
eration, because he died in New York in 1900. cleanup-area) golf course that could be built
The more modern Washoe Smelter was ca- in your state.
Trees enclose the course in addition to functioning as a safety factor by pro-

viding a vertical target for errant balls. Placed behind a green, they aid depth
perception. They can also provide shade, act as a windbreak, and add to the visual
appeal of a course.
The rough areas on either side of the fairway are also hazards. The rough
S tends to get deeper the farther one moves from the fairway. This penalizes the
N poor shot well off the fairway. In some situations, wind can be a hazard and must
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be taken into account. To be fair to the golfer, designers avoid building consec-
utive holes into the prevailing wind.
While hazards can add to the interest of play, their number and placement
also affect the speed at which rounds can be played. Most hazards, landing areas,
and putting surfaces should be visible from the tee. Seeing the layout of the hole
invites the golfer to think, thereby emphasizing the strategic nature of the game.
Additionally, the enjoyment of a good shot is enhanced if the golfer can see the
ball land.
Progression Progression refers to the way the holes are sequenced around the course. A sat-
isfying golf experience means the golfer experiences as wide a number of shots
and holes as possible.
Holes should be located in relation to natural features. Tee areas require flat
land; greens can be located at the base of slopes that provide aesthetic backdrops.
Avoiding consecutive holes of the same par is preferred for the sake of variety.
However, this guideline may need to be adjusted to the natural features of the
course. Designers prefer not ending a round with consecutive par 3s or par 5s.
Because of the fatigue factor, most golfers prefer a course that slopes downhill
on the final holes. A water hazard around the clubhouse makes for a dramatic
setting to end the round.
The difficulty of the holes should increase slowly to culminate in challenge
at holes 7, 8, and 9. Difficulty should then drop, then slowly rise again before
topping out at holes 16, 17, and 18 with a par 3, 4, and 5.32 Excitement is added
if players have a chance to catch up on the final few holes by taking additional
chances—taking more difficult routes to the pin to cut strokes off the score.
Flow Flow refers to the movement of golfers around the course. Speed of play is largely
a function of the quality of course maintenance. However, speed can be increased
by reducing the number of hazards and shortening the hole relative to par. The
first holes to be designed are those around the clubhouse—holes 1, 10, and 18.
To avoid slow play off the opening holes, the first and tenth holes should be of
medium difficulty and maximum visibility. A par 4 or par 5 that avoids narrow
fairways, water, and other traps near the green is ideal. Starting a round with a
medium-length par 5 and leaving long par 3s to the middle of a round helps flow.
Widening the fairway minimizes the rough, which, being more difficult to play
from, slows play.
Balance Balance refers to the ‘‘equality or distribution of par, shot value, and golf course
length.’’33 Courses are generally balanced such that the first set of nine holes is
equivalent to the second nine. In courses with returning nines, golfers may start
on the first or the tenth hole. Even on an 18-hole course, many golfers play only
S the first nine. Designers therefore like to ensure that both nine-hole experiences
N are balanced with respect to difficulty and style.
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Costs
Maintenance Long-term maintenance is a balance between cost and quality—how much quality
golfers are willing and able to pay for. Decisions made during design and construc-
tion of the course affect later maintenance costs. Consider, for example, the green.
The modern green is raised above the level of the fairway. This allows air to
circulate across the turf, thus helping ice melt in the spring and the green to drain
faster after rain. Prior to World War II, greens averaged 5,000 square feet. Larger
greens became popular, growing to 12,000 square feet.34 As a result, maintenance
costs escalated while play slowed because of the increased attention paid to put-
ting. Today’s greens are somewhere between these two extremes and allow for
several pole positions to even wear and tear while reducing maintenance costs.
A green serves several purposes. It acts as a target area for incoming balls on
their way to the hole. It should not only receive but also hold a well-struck shot.
It provides a consistent putting surface to test the putting skills of the player. It
must be designed with maintenance costs in mind while being playable as many
days of the year as possible.35
Greens should be located downhill from the tee although, as noted above,
the green itself is deliberately elevated 1 to 3 feet from its immediate surroundings.
A natural backdrop—trees or a creek—provides an excellent setting. Greens typ-
ically vary from 5,000 to 8,000 square feet, large enough for 14 hole locations.
Changing the position of the pole helps ensure even wear on the green. The size
of the green should also reflect the difficulty of the hole; the more difficult holes
require larger greens. Likewise, the longer the approach shot called for, the larger
the green.
Greens tend to slope from back to front at a gradient of at least 2 percent.36
This increases visibility from the tee while helping hold the approach shot to the
green. Difficult greens slow play even more, given that putting is the slowest part
of the game. Overly large greens slow play in that they call for very long putts.
The amount of fairway—the playable area from the tee to the green—also
influences maintenance costs. The landing area on the fairway should be wide
and flat enough to ensure a predictable finish to the shot. Typically, this means
an area between 120 and 150 feet wide. Shorter holes have a narrower fairway. If
the fairway is too narrow, balls can land in the rough and play is slowed. The
lower cost of maintaining the rough has to be balanced against the higher cost of
fairway maintenance and golfer frustration with slow play.
Mounds are another example. Gentle mounds reflect the Scottish roots of the
sport. For the golfer, mounds assist in depth perception. Steep mounds require
hand mowing and result in higher maintenance costs (Figure 6.7).
Construction When the course is being planned, it is up to the designer to present cost–benefit
S Planning analyses of major design features so that owners can weigh the cost of the feature
N (and its longer-term maintenance cost) against benefits to the players.
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Fairway Green Raised Green
FIGURE 6.7 Gentle mounds permit machine mowing. Source: Cornish, Geoffrey, and
William Grieve Robinson. Golf Course Design: An Introduction. Lawrence, KS: Golf Course
Superintendents Association of America, n.d., 13.
Aesthetics
Designers are expected to use principles of art—harmony, proportion, balance,
rhythm, and emphasis—in making their courses enjoyable to play.37 Figure 6.8
illustrates the application of these principles.
Tournament Qualities
For a successful tournament, a course needs ‘‘at least 6800 yards for a men’s
tournament and 6000 yards for a ladies’ event, [to] have relatively small but good
landing areas, [to] provide at least four competitive pin positions on each green,
and [to] have a large practice area.’’38
The needs of the spectators, or gallery, also must be anticipated with respect
to parking, movement, seating, restrooms, first-aid stations, and television camera
locations.
Accessibility
S Since the 1990 Americans with Disabilities Act (ADA) was passed, golf course
N managers are feeling increased pressure to make their courses accessible to people
L with physical disabilities. While federal guidelines exempt private courses, the def-
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S FIGURE 6.8 Integrating art principles with golf course design. Source: Cornish,
N Geoffrey, and William Grieve Robinson. Golf Course Design: An Introduction. Lawrence,
L KS: Golf Course Superintendents Association of America, n.d., 17–19.
MILL (Wiley)
inition of private is limited. If a course ever opens its grounds to the public—for
a tournament, for example—it may be regarded as coming under federal guide-
lines. Because golfers with physical disabilities are estimated to comprise 12 per-
cent of the golfing population, or 10 to 15 million people, it makes economic as
well as altruistic sense to open courses to this segment of the market.39
Course superintendents have two primary concerns. They fear that wheel-
chairs and other vehicles will damage fragile greens. They are also worried about
slow play.
The basic approach is to ensure that at least one tee and one route to the
green on each hole be accessible to golfers with physical disabilities.
Clubhouses
Many golf courses suffer because the clubhouse is too large for the membership
base and so is too expensive to operate for the income generated. A resort setting
may need a relatively small clubhouse of 4,000 square feet that emphasizes the
pro shop and lockers. Clubhouses tend to be built on visible, centrally located
sites. They should be near the first and tenth tees (the ninth and eighteenth
greens), with a practice green and driving range nearby. On a hilly site, it is best
to locate the clubhouse between the highest and lowest points so golfers can avoid
long climbs on continuous courses on the back nine. The separation of vehicles
and pedestrians, the location of maintenance facilities and storage areas, and the
relationship between the course and real estate units must also be considered.40
A major concern occurs when the clubhouse is used by resort guests, home-
owners, and nonresidents. Market segments can be separated spatially by assign-
ment. Additionally, access can be managed by the user group through, for
example, giving residents preference for golf starting times.
One useful approach is to design the clubhouse facilities to grow as demand
grows. Using a modular approach, facilities can be small at first and expand as
the project matures. This conveys the impression of an active clubhouse while
allowing for the phasing-in of capital expenditures at a pace consistent with rev-
enue generation.
Practice facilities can take from 4 to 6 acres. This is twice the size of an average
hole. Typically, they include a driving range, putting greens, target greens for prac-
ticing approaches to the green, and practice bunkers. The driving range should
not be oriented directly east–west, as the sun will get in the eyes of golfers.
Several principles guide clubhouse design:
To ensure that the floor plan and building functions act in concert, the
clubhouse operator should be part of the design process.
The clubhouse should be integrated with and complement its setting.
The design should incorporate elements of the immediate surroundings,
local traditions, and materials to make it unique to the area.
S The clubhouse should have a personality and character that gives it a
N sense of place and tradition that is comfortable and inviting to the mem-
L bers.
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Traditional architecture helps the clubhouse age gracefully without seem-

ing out of touch with fads.41
Pro Shop The pro shop—the area where golf clubs and bags, clothing, balls, and other
accessories are sold—is a large part of the clubhouse in a resort, though likely to
be smaller than in a primary-home community. In the latter case, clubs and bags,
which require considerable display space, are more likely to be sold than in a
resort setting. While pro shops in resorts have higher sales-per-round-played figures
than those in primary-housing communities, the sales are more likely to be balls
and smaller accessories.
Golf Carts Despite the cries of protest from purists, most courses allow, and even promote,
the use of golf carts, which can provide significant revenue while making the game
more accessible to more people. Carts can be powered by electricity or gasoline.
In addition to a secure storage area, provision has to be made for recharging or
fueling the carts. Earlier courses allowed carts on the fairways and had paths only
around high-traffic areas like tees and greens. Recent trends have extended the
paths the entire length of the course. This helps avoid wear and tear and controls
traffic on the course. Fairway damage is also reduced, and golfers can return to
the course sooner after heavy rain.42
It is important that the way the course will be played should be taken into
account when laying out the golf cart path. For example:
As many golfers tend to slice the ball, cart paths should be on the right
side of the fairway. An exception is a dogleg that plays right to left. On
such a hole, the shortest distance to the hole is along the left side, and
most players will shoot in that direction. If the cart path is on the longer,
right-hand side of the fairway, golfers may find it so far away from their
ball that they ignore the path and drive across the course.
As a rule of thumb, the distance from the center of the path to the center
of the fairway should be 90 feet, although this is shorter at tees and
greens.
A wavy path is more aesthetically pleasing than a straight line although, if
the line is too wavy, drivers cut corners.
Paths should cross the hole as little as possible.
Parking areas are needed at tees, greens, and practice areas.
While it is tempting to utilize two-directional paths down the middle of a
double fairway as a way of cutting costs, holes that are too close together
can act as a hazard for golfers playing out from the clubhouse; they will
be forced to face balls hit by golfers playing back to the clubhouse.
Low mounds can be used to camouflage paths.
To comply with the ADA, paths must allow for exits every 75 yards.43
Remodeling
S Changes in equipment have resulted in players being able to hit balls farther and
N more accurately; courses that once were challenging can lose much of their orig-
L inal luster. Attempts to redesign the course, or parts of the course, should be made
MILL (Wiley)
in the context of a master plan. To keep the course in continuous play, most plans
spread the work over two to four years. Here is a typical schedule:
First year—Prepare master plan.

Second year—Remodel first nine holes and automate irrigation system.
Clear area for new practice range and maintenance area.
Third year—Open remodeled nine holes. Remodel second nine holes and
automate irrigation system.
Fourth year—Open second remodeled nine. Construct new maintenance
building, entrance road, and parking lot.44
The remodeling should be done at a time of the year when the number of
players is reduced—fall in the north and summer in the south.
Specific elements might include the establishment of multiple tees, eliminating
blind shots on fairways, developing gentler contours on bunkers to reduce hand
mowing, installing completely automated irrigation systems, offering more variety
in the greens with more pin placements and gentle undulations to make mowing
less likely to scalp the grass, a long-term tree planting program, and the incorpo-
ration of cart paths.
TENNIS
Good shot, bad luck and hell are the five basic words to be
used in a game of tennis, though these, of course, can be
slightly amplified.
—VIRGINIA GRAHAM
Introduction
Tennis facilities are a favorite amenity choice for a resort. From the developer’s
perspective, the requirements for land and the costs of development and mainte-
nance are relatively small, regulatory and permit issues are few or nonexistent,
and tennis and golf share a complementary market.
In real estate settings, tennis courts can speed sales because so many people
enjoy playing the game.
Site Selection
While tennis courts can be located more flexibly than other amenities, they tend
to be conceived as part of the centralized core of facilities serving a large real
S estate project. Resident access is thus protected, while parking and clubhouse
N facilities can be shared with other amenities.
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TENNIS 175
Climate has a dramatic effect on usage. In desert climates, it makes sense to

install lights so guests can play in the cooler evenings. Indoor facilities may be
appropriate in wet or cold climates. Climate can also affect the type of court
surface to be used.
An acre of land can, theoretically, accommodate six single courts, each 60 by
120 feet. In reality, this crowded configuration would make for a very unpleasant
experience. Three courts can be comfortably placed on an acre of land, with
enough space left over for parking, seating, and landscaping. The best sites are
flat, rectangular, and built to avoid direct sun in the players’ eyes. A dark back-
ground behind the players helps them see the ball.
A private outdoor tennis club can handle between 30 and 60 players per court.
This is a useful ratio for determining the number of courts to build in a resort
setting. Capacity can be increased by one-third by adding lights. A reservation
system helps push capacity closer to the upper figure of 60 players per court.45
Planning and Design

Tennis courts tend to be developed in clusters. A variety of cluster options is
available (Figure 6.9). Maximum efficiency in space and building costs comes
when courts are developed in clusters of eight or ten. Built side by side, courts
should be 12 feet apart. Each additional court adds 48 feet of width to the battery
of units—36 feet for the width of a doubles court plus the 12 feet of separation.
Adding courts means that the average space needed per court is reduced. Placing
S
N Tennis courts are an asset to any resort. Courtesy Camelback Resort
L
MILL (Wiley)
LAYOUT IN-BOUNDS OUT-BOUNDS TOTAL

DESCRIPTION (Sq. Ft.) (Sq. Ft.) (Sq. Ft.)
net
12´
STANDARD 2808 4392 7200 3´
SINGLE 41/4´
UNIT 21´ 1
13 /2´
36´ 21´ 60´
18´
78´
120´
2 Courts 5616 8784 14,400

End-to-End
2 Courts 5616 7344 12,960

In Battery
3 Courts 8424 10,296 18,720

In Battery
4 Courts 11,232 13,248 24,480

In Battery
2 Batteries 11,232 14,688 25,920

of 2—
End-to-End
2 Batteries 16,848 20,592 37,440

of 3—
End-to-End
6 Courts 16,848 19,152 36,000

In Battery
S
N FIGURE 6.9 Tennis court configuration options. Source: Phillips, Patrick L. Developing
L with Recreational Amenities: Golf, Tennis, Skiing, Marinas. Washington, D.C.: Urban Land
Institute, 1986, 92. Reproduced with permission of the Urban Land Institute.
MILL (Wiley)
TENNIS 177
courts end to end is not recommended unless they are separated by screens or
fences.
The objective in orienting the course is to avoid players having the sun in
their eyes. In northern resorts, play is concentrated in the nine nonwinter months.
The sun tends to ride high in the sky and play is equally divided between morning
and afternoon. The court should be oriented with the long axis aligned north and
south. In southern areas, play occurs year-round. In the winter months, the late-
afternoon sun can hang low in the sky. The best approach, therefore, may be to
orient the court northwest–southeast at a 15- to 20-degree angle to true north to
prevent players on the north side of the court from looking directly into the sun.
Orientation is less of a factor in other elevations and climates. In a Rocky
Mountain resort setting, for example, play tends to occur in the midmorning to
midafternoon of the summer, when the sun is high in the sky and less likely to
bother players. It is more of a factor when the court is to be used for a major
annual event. In this case, the court should be oriented relative to the position of
the sun during the one- or two-week period of the tournament.46
Surface The original court surface in England was grass. Today, 14 types of surface are
divided into two major categories: porous and nonporous. Nonporous surfaces can
be cushioned or noncushioned, and can be compared on the basis of cost and
play factors. The initial cost, the cost of repairs and maintenance, and time before
resurfacing vary greatly. Fast-drying porous surfaces are relatively expensive, re-
quire daily and yearly care, and need to be resurfaced annually. Clay, on the other
hand, is much less expensive and needs resurfacing only every five years. How-
ever, it takes longer to dry after rain and, therefore, limits play where a great deal
of rain falls.
Porous courts can be fast drying, clay, or grass. They all allow moisture to
drain through their surfaces, and their softness makes them easy on players’ legs.
Grass courts look wonderful but cost a lot to build and maintain; they need daily
maintenance (watering and rolling) and are susceptible to damage. In contrast,
clay courts are less expensive to build and last a long time, but they play slower
than grass and have rather high maintenance requirements.
Nonporous courts last a long time, are easy to maintain, and dry quickly.
Noncushioned courts play fast and are hard on players’ feet, legs, and backs.
Unlike on porous courts, however, players do not slide.
Nonporous cushioned courts offer the maintenance advantages of nonporous
surfaces and the player comfort benefits of porous courts. Synthetic turf surfaces
require more maintenance than other nonporous courts but less than porous sur-
faces; they also offer a long-lasting finish.
Player preference should be a major factor in selecting the court surface.
Easterners tend to prefer clay courts, while westerners lean toward hard courts.
Older players probably prefer softer surfaces to hard. Climate also plays a part. In
hot areas, it is wise to select a surface that stays relatively cool, does not glare
excessively, and does not crack or soften in the heat. In northern areas, the effect
S of frost can be a concern.
N Fast-drying indoor courts require watering daily, perhaps requiring the instal-
L lation of extra ventilation to avoid condensation.
MILL (Wiley)
Lights As noted earlier, lighting can increase the capacity of a court by a third and is
especially important in hot climates, where play may be unbearable during the
day. The quality rather than the quantity of lighting is important. Lights should be
placed along the length of the court and mounted between 15 and 35 feet above
the surface. Lights can be either incandescent, fluorescent, or high-density dis-
charge (HID). Incandescents are relatively inexpensive to install but expensive to
maintain. The lamps have a short life and are inefficient when in use. However,
they give good color and need no warm up. Fluorescent lights are efficient, last a
long time, and give good color. HID lights are also efficient and last a long time,
but they take several minutes to warm up to maximum brightness.
Indoor Indoor facilities today commonly offer racquetball and squash courts together with
Structures exercise and fitness areas. An indoor tennis court might complement such a fa-
cility. While most structures are made of prefabricated steel, air-supported fabric
bubbles are half the cost to build—but they have shorter lives. Tension-supported
fabric structures with open or closed sides are also used to cover courts.
Support Support facilities are necessary (and profitable) as a complement to tennis courts.
Facilities Areas for clinics and instructional programs in addition to practice sessions offer
a full-service program to the guest. At some resorts, circular facilities have ball-
spraying machines serving balls to players in pie-shaped alleys. Videos can be
taken of the players to help them improve their stroke.
One tennis court is much like another. Differences are more likely found in
the quality of the support facilities. Shading, viewing areas, landscaping, drinking
fountains, and other amenities can help a resort stand out from the rest.
A clubhouse overlooking the courts can be an attractive place for players to
relax over a drink or meal and to watch others in action. Locker rooms should
have one shower for every one and one-half to two courts and be equipped with
five to seven lockers per court.47
Management
In resort settings, the developer either retains ownership of tennis facilities after
the project is built or sells or leases them to the operator of the resort. As with golf
courses and marinas, the trend is toward contracting with management companies
that specialize in the recreational activity. A tennis pro is similar to the golf pro
and takes responsibility for all aspects of the operation, including maintenance,
the pro shop, and instruction. Many argue that the pro is inexperienced in retailing
and should be restricted to instruction. At larger resorts, the shop is usually run by
experienced retailers because of the potential profits from lines of clothing.
At a resort that includes residential units, dealing with two market segments—
S residents and resort guests—can be problematic. This situation can be handled as
N it is with golf—by giving residents priority scheduling and setting different fee
L structures for each.
MILL (Wiley)
TENNIS 179
Quick Getaway 6.5

Tennis Troubles
Tennis courts are popular resort additions, but Always wear proper tennis shoes, because
unfortunately they cause some guest dissatis- they properly support your feet, and be-
faction as well. Are the guests upset with the cause they do not damage the court sur-
condition of the court? Not usually. Because face.
tennis is a game that can only be played by a Use the tennis courts for tennis. They are
handful at a time, and because of the nature not for biking or roller hockey.
of the court, guests often find themselves at Close the gate behind you. It keeps the
odds with other guests when on the court. balls inside the confines of the gate so they
Reminders about basic tennis courtesy can won’t roll outside.
help prevent unpleasant exchanges between Pick up after yourself. Leave the court
guests. Some bits of tennis etiquette to remem- cleaner than you found it.
ber: Monitor children on the courts at all times
so that they aren’t disrespectful to other
Show respect and courtesy by keeping players or the court.
your voice down when talking to your part-
ner(s). Source: Coursey, Eric T. ‘‘Tennis Court Etiquette.’’ Bella
Do not walk onto another court during a Online. Accessed July 31, 2006. http: / / www.
game. If you must cross a court, do so after bellaonline.com / articles / art26699.asp
the game is finished, and go around the
court, not through the middle.
Do not retrieve your ball from the other Discussion Question:
court. Wait for the players on the other Most guests will abide by your ‘‘etiquette re-
court to finish the game and kindly ask for minders,’’ but some will not. How would
‘‘a little help’’ to get their attention. you deal with disrespectful guests?
SUMMARY
The design and layout of a golf course depends on the reason for developing the
course. All courses, however, should express certain design principles so as to be
environmentally sensitive while allowing the operator to make a profit. The same
is true for tennis courts at a resort.
ENDNOTES
1. Asabere, Paul K., and Forrest E. Huffman. ‘‘Negative and Positive Impacts of Golf Course Prox-
S imity on Home Prices.’’ Appraisal Journal (October 1999) vol. 6414: 351–355.
N 2. Burgess, Dean H. ‘‘Lending to Golf Course Communities.’’ Journal of Commercial Bank Lending
L (March 1991) vol. 74: 19–30.
MILL (Wiley)
1977, 156.
4. Osmun, Mark Hazard. ‘‘Spanish Bay: Golf Course Developers as Environmental Heroes.’’ Urban
Land (July 1997) vol. 56: 40.
6. Muirhead, Desmond. ‘‘Changing Times: Building Golf Courses in the 90s in Japan Is a Different
Story: The Focus Is on the Bottom Line.’’ Executive Golfer (June 1997): 46–50.
7. American Society of Golf Course Architects. Handbook: Tips for Real Estate Development. Chi-
cago: American Society of Golf Course Architects, n.d.
8. Funk and Wagnalls Standard Encyclopedic Dictionary. Chicago: J.G. Ferguson Publishing Com-
pany, 1965.
12. Hurdzan, Michael J. ‘‘Design and Maintenance: A Crucial Marriage: Part 1 of 2.’’ Golf Course
News (September 1997): 24–25.
14. Highley, ‘‘Tee Time: AS an Amenity or Profit Center, Golf Boosts Bottom Line,’’ Hotel and Motel
Management, 7 September, 1998, 37.
17. Ibid., 71.
18. Nash, Greg H. ‘‘Beautiful, Fun, and Functional: Desert Golf Courses Solve Flood-Control Prob-
lems in the Southwest.’’ Golf Course Management (February 1996) vol. 56: 122–124.
20. Hurdzan, Michael. ‘‘Design and Maintenance: A Crucial Marriage: Part 2 of 2.’’ Golf Course
News (October 1997) vol. 73: 13–14.
21. Hurdzan. ‘‘Design and Maintenance: Part 1,’’ 24–25.
23. Ibid.
26. Hurdzan, Michael J. Golf Course Architecture: Design, Construction, Restoration. Chelsea, MI:
Sleeping Bear Press, 1996, 23–43.
27. Ibid., 25.
28. Ibid., 31.
30. Ibid., 32.
31. Ibid., 58.
32. Hurdzan. Golf Course Architecture, 33.
33. Ibid., 35.
34. Cornish, Geoffrey S., and William Grieve Robinson. Golf Course Design: An Introduction.
Lawrence, KS: Golf Course Superintendents Association of America, n.d., 11.
37. Cornish and Robinson. Golf Course Design, 17.
S 39. Torsiello, John. ‘‘Access Guidelines to Ensure All Courses Are Up to Par.’’ Golfweek (June
N 1996) vol. 28: 21, 29.
L
MILL (Wiley)
TENNIS 181

41. DeReus, Mark. ‘‘Golf Clubhouse Design.’’ Developments (June 1993): 16–19.
43. Graves, Robert Muir, and Geoffrey S. Cornish. Golf Course Design. New York: John Wiley &
Sons, 1998, 147.
44. American Society of Golf Course Architects. Handbook.
46. Ibid., 92.
47. Ibid., 104.
S
N
L
MILL (Wiley)
Chapter 7
GOLF-BASED RESORTS:
LEARNING OBJECTIVES
1. Identify the changing trends in and demographic profiles of the golf market.
2. Identify the critical variables in determining a golf-based resort’s profit poten-
tial.
3. Identify potential solutions to financial problems faced by golf-based resorts.
INTRODUCTION Business Golf

GOLF RESORTS Hole-in-One
GOLFERS Women-Friendly
Participation Timeline
Industry Trends Liability
Golf Instruction and Training Banquets
Aids PRO SHOP
MARKET SEGMENTS Margin Enhancers
Golf Segments and Core Accessories
Golfers
Inventory Control
Overview of Golf Travelers
Credit cards
Selection Criteria
GOLF CART FLEET
Sources of Information
Lease vs. Buy
Golf’s Best Customers: A Profile
Inventory Control
Golfer Loyalty
Electric vs. Gas
Spending
Maintenance
Risk Management
Operations
USE OF TECHNOLOGY
Income Statement
GPS
Revenues
Course Management
Expenses
RENOVATION PLAN
S Staffing
SUMMARY
N TOURNAMENTS AND EVENTS
ENDNOTES
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MILL (Wiley)
GOLFERS 183
INTRODUCTION
It is important to understand changes in the market for golfing in order to maximize
the profit potential at the resort. At the same time managers need to be aware of
ways to minimize their costs.
GOLF RESORTS
‘‘The only thing that matters is cash flow—not the cash flows
they use today, but the old cash flows that laid out the source
and application of funds—where it’s coming from and where
it’s going and how much is left over. No company has ever
gone bankrupt because it had a loss on its P&L.’’
—WILLIAM G. MCGOVERN
CHAIRMAN, MCI COMMUNICATIONS CORP., INC. MAGAZINE
GOLFERS
Participation1
Adult golfers are golfers 18 years or older who have played golf at least once during
the past year. In 2004, the total number of adult golfers dropped from 28.4 million
to 27.3 million. Core golfers play eight or more rounds of golf annually. Over the
past decade there has been a statistically significant increase in the number of
core golfers although their number has remained virtually the same for the past
four years.
Overall, the total number of golfers has been increasing over the past decade.
The ten-year growth rate is relatively stable and shows some positive growth, unlike
the more volatile five-, three-, and one-year rates, which demonstrate the instability
of short-term participation estimates.
The increase in golfers over the past decade is mostly the result of an increase
in occasional golfers (those who play from one to seven rounds a year). By com-
paring the growth rate of the number of core golfers to the growth rate of occa-
sional golfers, we can see that interested non-golfers are still trying to decide if
golf is the sport for them. The industry’s challenge is to take the occasional golfers
and convert them into core golfers.
Industry Trends
S According to the 2005 Golf Industry Outlook Survey,2 95 percent of golf industry
N leaders said that their biggest concern was that the number of golfers in the future
L will decline. The industry leaders were also asked about the top issues most likely
MILL (Wiley)
184 Chapter 7 GOLF-BASED RESORTS: MANAGING THE OPERATION
Quick Getaway 7.1

Golf: Quick and Fun?
What’s worse than a double bogey? A person they expect them to go. We don’t judge them
who can’t complete a round of golf in less than on what score they shoot. We judge them on
four hours, or so says John Gunby of Chandler, how they act and react to others. We just care
Arizona. that they act good and have fun.’’
‘‘The longer it takes to play, the more it Andrew Proctor is a seven-year-old gradu-
hurts golf,’’ says Gunby, the general manager at ate of the Russell Cup competition who now
Shalimar Country Club in Tempe, Arizona. competes regularly in U.S. Kids Golf tourna-
‘‘Playing longer than four hours breeds an in- ments. He finished twenty-second at the U.S.
ability for a golf course to make a profit. Sec- Kids Golf World Championship last year for six-
ond of all, it inconveniences all the rest of the and-under golfers and is the current defending
golfers out there trying to play the normal state champion in his age group.
speed of golf, which should be under four ‘‘Andrew still would rather play in the Rus-
hours.’’ sell Cup because he liked it so much,’’ says his
Gunby, 51, is renowned for how he father, Bernard Proctor. Gunby thinks that
teaches junior golfers. His methods give them that’s the way things should be.
excellent golf skills, but more importantly, he ‘‘We try and stay away from too much
teaches them to have fun. technical advice,’’ Gunby says. ‘‘We want to
One of Gunby’s most well-received pro- teach them to play fast and safe, and also be
grams is the John Russell Cup, a developmental respectful.’’
league he initiated three years ago for ‘‘kids
who do not play in the JGAA (Junior Golf As- Source: Armijo, Mark. ‘‘Instructor teaches fun to young
sociation of Arizona) or in the Southwest Sec- golfers.’’ The Arizona Republic (July 7, 2006). http: / /
tion PGA.’’ www.azcentral.com / community / tempe / articles /
‘‘Basically, we want to get the kids to meet 0707cr-gunby0707Z10.html
new kids and have a good experience,’’ Gunby
says. ‘‘We want to have kids celebrate all their
successes and not worry about what may seem DISCUSSION QUESTION:
to them like failures because it’s not really fail- Do you think that youth competitions strip
ures, just experiences. We want them to be very the ‘‘fun’’ out of golfing for junior golfers?
positive even when things don’t go the way Why or why not?
to impact their business in 2005. Of the respondents, 71 percent named the de-
clining number of rounds, and 68 percent cited player retention.
The results of the survey also indicated that 77 percent of respondents felt
water management was the predominant environmental issue facing the industry,
S which explains why many courses are beginning to utilize water conservation
N technologies. In fact, more than half of respondents have made hefty investments
L
MILL (Wiley)
GOLFERS 185
in their irrigation systems, installed drought-resistant grass, and / or looked into wa-
ter reclamation options.
According to the survey results, most respondents are missing out on profit
opportunities by failing to maximize their tax incentives. In 2005, only about one-
fifth of respondents planned to utilize conservation easements, and only half
planned to take advantage of the depreciation of their tees and greens. It’s easy
to see that there is a clear opportunity to educate the industry leveraging the
existing tax laws.
Golf Instruction and Training Aids3

The benefits of golf lessons are clear: those who take lessons generally correct
their swing errors and increase their accuracy with both irons and drivers. How-
ever, not every golfer can take lessons. The most common barriers to taking golf
lessons are lesson expense and the time involved.
Although club fitting is perceived as a valuable tool, only about half of the
surveyed golfers had been club fitted. Of those fitted, 73 percent said that it was
a valuable experience. Of those who had not been club fitted, 39 percent per-
ceived it as valuable. The same trend can be seen among those who have used
videotaping as part of their training. One-third of golfers have used videotaping
and found it very useful (69 percent said so), while the two-thirds who have not
used videotaping in their training responded less favorably (only 49 percent said
that videotaping was ‘‘very useful’’).
Although club fitting and videotaping were not perceived as valuable by every
golfer, they are both rated more highly than computer instruction. Only one-tenth
of golfers surveyed have used computer programs as a part of their training, and
of those who have done so, only 36 percent said that it was a very valuable
experience. Of those who have not used computer training, a mere 17 percent
rated computer golf programs as being very valuable. On the whole, the attitude
toward computer instruction is rather poor, indicating its lack of usefulness.
Golfers practice for all sorts of reasons, but the top four are to improve on
short irons, to work on drivers, to improve on long irons and to limber up before
playing a round. Not all golfers practice, though. Of the reasons given for not
practicing, the top three included not having enough time, preferring to play rather
than practice, and having a dislike of hitting off of mats.
Many golfers who practice make use of various training aids. The aids per-
ceived as most useful include books, videos, exercise equipments, practice nets,
distance finding devices, and putting devices. Then again, golfers don’t always use
the aids they think are the most useful. The most commonly used aids include all
of the above except for distance finding devices and putting devices. Ironically,
these devices are among the aids that golfers are the least open to trying—that is,
when they appear in the form of lasers, straps, braces, and ground apparatuses.
Golfers’ attitudes towards these training devices are reflected in their purchasing
habits. The most purchased aids are books, videos, exercise equipment, and train-
S ing clubs, while the least purchased are swing tracks, lights, lasers, and ground
N apparatuses.
L
MILL (Wiley)
MARKET SEGMENTS
Golf Segments and Core Golfers
The National Golf Foundation identifies seven segments of golfers: core, seniors,
women, juniors, highly skilled players, private club members, and high spending
golfing households.
As we have already seen, core golfers are defined as those who play at least
eight rounds of golf a year. Among core golfers, the average number of rounds
played annually is 37. More than a third of core golfers usually play with the same
group of golfers, and more than half would like to receive special offers to play
golf at area courses. About one-fourth of core golfers enjoy trying different courses,
even if they are a bit far away, while another fourth of the segment prefers playing
at the same course most of the time. Most core golfers do not shop for the best
deals when selecting a course, and few golfers in this segment would prefer to
play only nine holes. Only about one in ten core golfers would golf more if it were
possible to walk the course.4
These data indicate that a resort would likely attain success by utilizing direct
mail to attract the core golfer segment of the market. On the other hand, it also
shows that core golfers have virtually no inclination to play nine hole courses or
to walk the course.
Overview of Golf Travelers5

Golfers travel. In fact, in 2002 alone, 11 million golfers reported taking an overnight
trip that included golf. These golfers played an average of 5.5 rounds per trip, with
an average score between 90 and 99. Of golf travelers, those with scores between
80 and 99 are responsible for 67 percent of golf travel spending.
The more years a golfer has played, the more likely he or she is to go on golf
trips. The majority of golf travelers have played for 20 or more years, while the
second-largest segment of travelers have played golf for more than a decade. Also,
even though there are more than three times more male golfers than female
golfers, men spend only slightly more money than women when traveling for golf.
Unsurprisingly, the golfers who spend the most on travel come from high-income
households (income greater than $100,000), and it’s golfers from 30 to 64 years of
age who account for the majority of golf travel spending (83 percent).
Golf travelers prefer to visit the Sun Belt states. The top five visited states are
Florida, South Carolina, North Carolina, California, and Arizona. The Sun Belt states
are also at the front of golfers’ minds when they consider their next golf vacation:
of the top six states considered for a future trip, only one (Hawaii) is not already
one of the top five visited states.
Selection Criteria
S Why do frequent golf travelers choose a golfing vacation? They note the oppor-
N tunity to combine golf with family visits and to play at quality courses. Business
L travel, the weather and visiting friends are also important considerations. When
MILL (Wiley)
MARKET SEGMENTS 187
actually planning the trip they are concerned about weather / climate, quality of
golf courses, and overall price. The only item common to both questions in the
top three is the quality of the course. On a scale of one through ten where ‘‘10’’
is very important, the other factors are:6
Characteristic Rating
Weather / climate 8.8
Quality of golf courses in area 8.7
Overall price 8.1
Number of golf courses in area 8.0
Location 7.9
Past experience 7.9
Golf packages available 7.5
Resort / hotel reputation 7.4
Natural surroundings / scenery 7.4
Other amenities (pool, dining, etc.) 6.5
Courses highly rated by golf media 6.5
Family / friend recommendation 6.4
Destination within one day drive of home 6.1
Other area attractions 5.8
Courses close to major airports 5.0
Courses close to Interstate exits 4.9
Family activities 4.8
Shopping in area 4.5
Spa 4.3
Golf schools 3.8
In addition to the number and quality of courses, location, the availability of

golf packages, and the reputation of the resort all score well.
The destination experience as a whole is more important than the sport itself
in the golf travel decision-making process. This indicates that destination marketing
might be more effective if it targeted golfers with experience of other nearby des-
tinations. Additionally, brochures that provide information on activities other than
golf in addition to golf-specific information might influence a traveler’s destination
decision.
Sources of Information7
Golfers use word of mouth, the Internet, and golf magazines as sources of infor-
mation in choosing a golfing destination. Word of mouth and golf-related maga-
zines are equally used across all age groups but their use increases with income.
The increase in use is most dramatic for golf-related magazines in households with
S income of $150,000 and above. Internet use decreases with age but increases with
N income. Books / travel guides are used more frequently by retirees while non-golf
L magazines are used more by older and higher income golfers.
MILL (Wiley)
In the Americas both Canada and Mexico are popular while, overseas, golfers
dream of playing in Scotland and Ireland.
Forty percent of frequent golfers play in the summer while 20 percent travel
in the winter. September is the month when the largest proportion of golfers play.
Golf’s Best Customers: A Profile

‘‘Golf’s Best Customers’’ is defined by the NGF as the 10 million golfers who play
25 or more rounds per year or spend $1,000 or more per year on golf equipment
and / or fees. Although they account for only 40 percent of all golfers they are
responsible for 85 percent of rounds played and 81 percent of spending. This is
their profile:8
Average Age 50.8

Percent Male 94%
Highest Level of Education
High School Grad 7%
Some College 24%
College Grad 45%
Post-Grad Degree 23%
Household Income
Less than $50,000 10%
$50,000–$74,999 24%
$75,000–$99,999 25%
$100,000–$149,999 27%
$150,000 and above 14%
Average rounds per year 60.2
Average years played 22.4
Average score 88.4
Percent private 19%
Golfer Loyalty9
There is one question that you can ask customers that has a strong correlation
with a company’s growth rate: ‘‘How likely is it that you would recommend (com-
pany X) to a friend or colleague?’’ Word of mouth is the ultimate act of loyalty,
and a better determinant of a given company’s success than a computer model.
Customers are asked to rate on a scale of one to ten the likelihood of recom-
mending the company to a friend. Those who answer nine or ten are labeled
‘‘promoters,’’ those who respond with a seven or eight are labeled ‘‘passives,’’ and
all other respondents are called ‘‘detractors.’’ A company’s loyalty index can be
found by subtracting the percentage of detractors from the percentage of pro-
moters.
The National Golf Foundation has successfully applied this loyalty index with
S turf-related companies and golf equipment manufacturers. Next, the Foundation
N applied the index to golf courses, hoping to learn if the number of rounds played
L
MILL (Wiley)
MARKET SEGMENTS 189
is tied to customer loyalty. Three hundred core golfers were surveyed, revealing
that the average loyalty index for public golf courses is 30 percent. The most
important factor when deciding where to play golf is the course condition, fol-
lowed by the quality of the course layout, the value, the quality of customer ser-
vice, and amenities. In other words, the best way to increase a golfer’s likelihood
of recommending a particular golf course is to improve the course’s condition and
to create a more pleasing layout.
Spending10
Total spending increased by 1.2 percent from 2001 to 2002. Excluding greens fees,
approximately 45 percent of golfer spending was on food and beverages, one-third
was on clubs, 10 percent was on balls, and a little over 10 percent was on soft
goods such as bags, gloves, and shoes. Avid golfers, who average 69 rounds per
year, represent a small portion of golfers (only 23 percent), but in 2002 they ac-
counted for 63 percent of total spending. Because avid golfers play more fre-
quently, they spend more money on consumables such as soft goods and golf
balls.
Because skilled golfers generally play many rounds, those who score less than
90 points show spending patterns similar to those of avid golfers. These skilled
golfers account for 39 percent of total spending, even though they form a small
percentage (27 percent) of the golf community. Less skilled players, those who
score 100 points or above per round, account for 39 percent of the golfer popu-
lation but 26 percent of total spending.
Generally, the more experienced a golfer is, the more he or she will spend.
Although experience takes time to gain, beware of confusing golfer age with ex-
perience. Forty-two percent of golfers have played 20 or more years, placing them
in the ‘‘experienced’’ category. These experienced golfers account for the largest
portion of total spending, followed by golfers who have played for between 4 and
19 years.
When examined by gender, golfer spending is roughly proportionate. Men,
who account for 78 percent of all golfers, are responsible for 82 percent of fees
and equipment spending. Even though the spending is roughly proportionate, male
golfers spend slightly more than their female counterparts.
A greater discrepancy is seen when dividing golfers into spending segments
based on household income. Predictably, golfers with incomes of $100,000 or more
spend between two and three times the amount of money per capita than golfers
with lower incomes. The majority of private fees come from golfers with incomes
that exceed $100,000, which is to be expected.
Middle-aged golfers (30 to 44) form the largest segment of the golfing popu-
lation, but they are not the biggest spenders. Late-middle-aged golfers (45 to 64)
spend the most overall, and per capita spending on private fees increases with
age.
The National Golf Foundation’s ‘‘Best Customers’’ are the 8.9 million golfers
S who spend $1,000 or more on golf each year and play 25 or more rounds annually.
N Best Customers most often shop for balls and clubs at off-course specialty stores,
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A well-designed golf course can become a destination vacation for golfers.

Courtesy the Four Seasons
followed by on-course specialty stores. They were least likely to buy balls and
clubs from mass merchants like Wal-Mart, mail-order catalogs, the Internet, and
warehouse clubs like Costco.
There are over 3,100 real estate–related golf facilities and over 1,150 golf resorts
in the United States. There are 353 facilities that are both real estate- and resort-
related. Resort facilities represent 7 percent of all golf facilities in the U.S. The top
S states for golf resorts are:11
N
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OPERATING CHARACTERISTICS 191
California 124 facilities

Florida 118
Michigan 69
Texas 62
Arizona 56
North Carolina 54
Pennsylvania 48
South Carolina 44
Wisconsin 43
New York 41
According to the National Golf Foundation (NGF), resort golf facilities are
‘‘operations located in a setting that usually includes other amenities (such as
tennis, swimming, gym facilities, etc.) and are situated in conjunction with a hotel,
motel, or other type of guest lodging.’’12 Approximately 85 percent of resort golf
facilities are daily fee operations.
Operations13
For the purpose of their annual report, the NGF differentiates between the Frost
Belt and the Sun Belt based on the length of the operating season.14 The Sun Belt,
which accounts for approximately 60 percent of all courses, covers the southern
states in addition to the coastal regions of northern California, Oregon, and Wash-
ington. These courses are likely to be open year-round, while those in the Frost
Belt, comprising about 40 percent of all courses and consisting of northern states
in addition to the mountainous parts of southern states, usually shut down for a
while during the winter.
Nine-hole rounds represent a small percentage of all rounds played. Only 11
percent of the rounds played in Sun Belt resorts and 17 percent in Frost Belt resorts
are rounds of nine holes. Just over 40 percent of rounds played occur on the
weekend in both types of resorts. Resort guests account for 40 percent of rounds
played in Sun Belt resorts and just over a third in Frost Belt resorts. Significant
opportunities exist to appeal to local, non-resident golfers. Half of the resorts in
the Sun Belt and three-quarters of resorts in the Frost Belt offer memberships. There
are an average of 143 golf memberships in the Sun Belt and 187 in the Frost Belt.
The median acreage for Sun Belt resorts is 175 while it is 220 for Frost Belt
resorts. Turf acreage accounts for 80 percent of the total in the Sun Belt and only
55 percent in the Frost Belt. Seventy percent of the turf acreage is irrigated in Sun
Belt resorts compared to 60 percent in Frost Belt resorts (median figures). Club-
house and golf pro shops tend to be similar or slightly larger in terms of square
footage in Sun Belt resorts. In the Sun Belt resorts, the restaurant / lounge square
footage is greater in median resorts compared to Frost Belt resorts but less for top
25 and top 5 percent facilities. Sun Belt resorts also have larger cart storage areas.
Two-thirds of Frost Belt resorts and just over 40 percent of Sun Belt resorts irrigate
S from lakes and streams while a quarter of Frost Belt resorts and a third of Sun Belt
N
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resorts use wells as an irrigation source. Sun Belt resorts are a much heavier user
of effluent water compared to Frost Belt resorts.
Though the size of the golf cart fleet is about the same in both regions, indi-
vidual areas report different usage patterns. About 40 percent of Sun Belt resorts
and 30 percent of Frost Belt resorts require the use of a golf cart. In fact, in the
northern region, over 40 percent of courses never require a golf cart. Over three-
quarters of all rounds played in the Frost Belt utilize golf carts, compared to 90
percent in the Sun Belt. Frost Belt golfers prefer gas carts while Sun Belt golfers
prefer electric carts. The average golf cart fleet size is just over 70. Two-thirds of
Sun Belt and just under half of Frost Belt resorts lease their fleet.
Income Statement
In 1999 (the last year for which data are available), U.S. golf resorts reported an
average operating median (net operating income as a percentage of total reve-
nues) of 28.9 percent for Frost Belt resorts and 25.3 percent for Sun Belt resorts.
Revenues
The median revenues for U.S. golf resorts for 1999 are shown in Table 7.1.
Most revenue comes from annual fees and green fees, two to three times as
much as from the second most important source—golf cart rentals. Merchandise
accounts for 11 percent of sales, while annual dues / passes and food and beverage
each account for 14 to 15 percent of revenue. The only noticeable differences
between Sun Belt and Frost Belt resorts is that, in the former, green and guest fees
account for a greater percentage of total revenues while, in the latter, annual dues
and passes accounts for a larger percentage of revenue.
The top 5 percent of resorts by revenue differs in the distribution of revenues
in a few ways. Golf cart rentals account for a smaller percentage of revenue com-
pared to the median in both Sun Belt and Frost Belt resorts. Green and guest fees
in Frost Belt resorts account for a smaller percentage of revenue while ‘‘other
TABLE 7.1 Revenues by Category / Median

Category Sun Belt Frost Belt
Green fees / guest fees 46% 39%

Golf cart rentals 17% 16%
Annual dues / passes 8% 14%
Food and beverage sales 15% 14%
Total merchandise sales 11% 11%
Golf range 1% 1%
Other revenue 2% 4%
S Source: Operating & Financial Performance Profiles of 18-hole Golf Facilities in the U.S.: 1999 Resort Edition.
N Jupiter, FL: National Golf Foundation, 1999, 5.
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OPERATING CHARACTERISTICS 193
revenue’’ is a significantly higher percentage. The top 5 percent of resorts generate

two and a half to three times as much revenue per round compared to the median.
Expenses
Median non-payroll expenses for resorts for 1999 are shown in Table 7.2. Most
significant in both regions is the cost of merchandise sold, followed by the cost
of food and beverage. No extreme differences exist between the regions’ average
expenses, but Sun Belt resorts generally spend more money on utilities and prop-
erty taxes. Frost Belt resorts have more general and administrative expenses, and
they pay slightly more to lease golf carts.
Payroll is usually the largest expense category. The payroll dedicated to main-
tenance workers can run from one-third to half of total payroll, depending on the
region. Unsurprisingly, Sun Belt facilities tend to allocate a greater percentage of
payroll to maintenance than Frost Belt facilities do.
Staffing
The staffing decisions in each climate region could not be more different. On
average, Sun Belt resorts staff their facilities with 29 part-time staff and 34 full-time
staff. In the Frost Belt, those numbers are 60 part-time staff and 43 full-time staff.
Table 7.3 details the distribution of full- and part-time staff in the two climate
regions.
TABLE 7.2 Expenses by Category / Median

Climate Region
Sun Belt Frost Belt
General / Administrative 11% 14%

Irrigation Water 1% Negligible
Fertilizers / Chemicals 8% 9%
Lease Expense / Golf Carts 7% 10%
Lease Expense / Equipment 5% 5%
Cost of Merchandise Sold 19% 19%
Cost of Food and Beverage 18% 17%
Ad / Marketing / Promotion 6% 5%
Property Tax 8% 6%
Facility Insurance 4% 4%
Utilities 7% 5%
Other Expenses 5% 5%
S Source: Operating & Financial Performance Profiles of 18-hole Golf Facilities in the U.S.: 1999 Resort Edition.
N Jupiter, FL: National Golf Foundation, 1999, 8.
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TABLE 7.3 Staffing by Category / Median

Climate Region
Sun Belt Frost Belt
Part-time Full-time Part-time Full-time
Course Maintenance 4.3 14.4 12.7 9.8

Golf Shop 10.6 8.0 14.4 5.5
Food and Beverage 8.0 6.0 14.1 9.5
Administrative 1.2 2.4 2.9 4.8
Other 4.5 2.7 16.0 13.0
Totals 28.6 33.5 60.1 42.6
Source: Operating & Financial Performance Profiles of 18-hole Golf Facilities in the U.S.: 1999 Resort Edition. Jupiter, FL: National Golf
Foundation, 1999, 12.
TOURNAMENTS AND EVENTS

Business Golf15
Doing business on the golf course has become standard practice for many com-
panies. There are legitimate reasons for doing so. Salespeople, who might ordi-
narily schedule a 30-minute meeting with a decision maker, spend several hours
with that person on the course. Compared to other sporting events golf allows for
more one-on-one contact, conversation, and undivided attention. Finally, it can be
a great equalizer between the sexes.
Businesses approach the use of golf as a business tool on a cost-benefit basis.16
The key is to compare the expected return compared to the cost of a golf outing
with that of other means of doing business. A company may offer a golf incentive
trip to a resort worth $800 (the cost) to any sales employee who produces $200,000
worth of business over a three-month period (a benefit). Alternatively a company
may invite prospective clients to play at a resort—a cost of $250—only if there is
the potential for sales from that client of, for example, $10,000 (the benefit).
There are a variety of options to use golf as part of a business event.17 Four
possibilities are customer-appreciation events, sales / product launches, employee
outings, and fund-raising events. For customer-appreciation events the site selected
should reflect the image of the company putting on the event. This is not a hard
sales event but rather an opportunity to thank the customer. Foursomes should be
selected carefully. Non-sales managers can be matched with customers to give
background on company products and services. Prospective customers can be
teamed with long-time clients.
A golf tournament can be a wonderful way of launching new products or
services. The rollout can occur on the course itself or at a pre- or post-event.
S Benefits can be unveiled at different holes with sales managers at the tee box
N handing out gifts or product samples.
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TOURNAMENTS AND EVENTS 195
Quick Getaway 7.2

Ladies Learning the Business of Golf
If more small-business women knew how much ‘‘If a woman isn’t confident in her golf
business gets transacted on the golf course, game, she won’t use it for marketing. It’s a con-
they’d take up the game in a heartbeat, be- fidence thing,’’ Sweeney said.
lieves Dee Sweeney, president of the Executive Suzanne Woo, author of On Course For
Women’s Golf Association’s Seattle chapter. Business: Women and Golf, agrees. Women
It’s a challenge to get more women ex- don’t have to be great golfers to get respect by
posed to the friendly sport—and to the busi- male co-golfers, she insists, and more women
ness dealings that happen while playing it. need to realize this. ‘‘It’s a powerful way to do
Currently, men take advantage of the game’s business,’’ Woo says. If women aren’t yet com-
business opportunities far more frequently than fortable with their golfing abilities, Woo thinks
women do. that they need to take the time to get confident.
‘‘It’s not in our culture yet,’’ Sweeney says. Although it’s a time commitment, it doesn’t
According to her, many women in business have to be burdensome.
‘‘are totally unaware of how much business is With all the rules, technique and etiquette
done on the golf course.’’ Although men don’t to learn, is it worth it?
necessarily close deals and sign contracts while ‘‘If you’re playing in a golf tournament with
on the course, they do exchange business 143 other people, you have 143 business op-
cards and establish closer personal relation- portunities out there,’’ Woo says.
ships there. Plenty of men scout for potential
business opportunities while on the course, but Source: Miller, Ben. ‘‘Women could profit from more
few women do so. But why don’t they? tee time.’’ Puget Sound Business Journal (July 9,
That has to do with confidence, Sweeney 2004). http: / / www.bizgolf.biz / articlespdf /
says. Women prefer to feel confident in their PugetSoundBizJournal.pdf
games before they tee it up with the guys,
she adds, and without the necessary amount
of practice beforehand, they won’t feel self- DISCUSSION QUESTION:
assured enough to risk embarrassing them- What are some ways to drum up interest in
selves. golfing among businesswomen?
Golf outings can work well for employee outings in an attempt to build inter-
nal relationships and improve morale. The accent should be on fun and informality
with room and time for socializing afterwards. Players can be matched to ensure
foursomes of people who do not work together on a daily basis. In this way em-
ployees gain a broader knowledge of the entire company.
The key to a successful fund-raising event is to get as many sponsors as pos-
S sible so that entry fees can go to the charity chosen. There are a number of
N sponsorship opportunities:
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Hole sponsors—a company can sponsor a specific hole and use that op-
portunity to showcase a product for the whole day. The sponsor pays a
specific amount to cover amenities with the balance going to the charity.
Traditional contests—longest drive, closest-to-the-pin, longest putt, etc.
with prizes given by the sponsor.
Nontraditional contests—longest marshmallow drive, best karaoke four-
some, most creative photo pose, longest drive with a hockey stick, etc.
Gifts / tee prizes—awarded to all players as they pass through specific
holes.
Hole-in-one sponsor (see below)
Beverage-cart sponsor
Banquet / food and beverage sponsor—the sponsor pays for the banquet
and is allowed to give a short presentation and / or leave promotional ma-
terials at each place setting.
Pre- or post-event golf clinic
Raffles and mulligan sales—tickets are sold for various prizes. Mulligan
tickets let golfers buy added tee shots for $10 to $20 when their first effort
goes astray.
Hole-in-One
As noted above, one popular option at a tournament is a hole-in-one contest.18
There are companies that will organize this activity for the resort, supplying prizes
from cars to vacations to $1 million. For the resort the steps are relatively simple.
Management decides on the prize and pays the insurance premium. Any and all
golfers who shoot a hole-in-one get the prize. While many think it virtually impos-
sible to achieve this, organizers point out that, in any given year in the U.S., there
are over 40,000 holes-in-one.
Women-Friendly
Although women make up only 20 percent of all golfers, 40 percent of new players
are women.19 Resorts can make a tournament more woman-friendly by taking
differences into account. Because shots hit by male golfers tend to have higher
trajectories and travel farther than those hit by women golfers, the latter have more
difficulty hitting over ravines and lakes. Varying tee locations allows the option of
playing a hard course or an easier one. Women-friendly courses feature holes in
the 5,600 to 5,700 yard range, holes where players do not have to carry the ball
over a large number of obstacles, where the greens can be reached without getting
into too much trouble, and where the forward tees are closer to the hole while
giving players a better angle at the green.
Other things that are important include:
Locker rooms and rest room facilities on a par with those for men.
S Adequate rest rooms on the course.
N Rental sets, including left-handed ladies’ clubs, appropriate for women.
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The number of women who golf increases

annually. Courtesy PhotoDisc, Inc.
Equal treatment in terms of service and attitude on the part of the staff.
Women working in the pro shop that is stocked with women’s merchan-
dise.
Timeline20
A tournament should be planned several months in advance. The format of the
tournament and the number of players needs to be established and the client’s
objectives determined. The types of contests are defined and a determination
made as to whether or not scorecards are to be used. Food and beverage require-
ments are set and types of prizes and the number of sponsors needed is worked
out. Transportation requirements are made known and special requests for such
things as photographers and merchandise are fielded.
The week of the tournament brings specific tasks. Pairings should be checked
to ensure they are correct and last-minute deletions filled in or adjusted to firm
S the format of the tournament. The revised pairing list would be sent to the group
N golf director at the resort together with any changes in the tournament format.
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Staffing needs are re-confirmed and specific shift times are settled. The entire
tournament staff, including volunteers, needs to be assembled and their specific
duties and responsibilities agreed upon. Particular attention needs to be given to
the appearance of players and VIPs. Financial obligations are completed and the
availability of rental equipment confirmed. Food and beverage arrangements are
set and confirmation is made that merchandise has been delivered. The rules
sheets to be handed out to players are finalized and any special holes are noted.
Transportation for players to and from the event is confirmed.
On the day of the tournament the director should arrive at the course several
hours before play is set to commence to check that the registration area is set up
Quick Getaway 7.3

Tee-Time Troubles
Long rounds of golf hurt golfing, by frustrating the camaraderie that goes along with it,’’ adds
other golfers and by harming the operation’s Fornoff. ‘‘Our desire is to enhance the entire
ability to turn a profit. Many courses try to com- golf experience. Every decision we’re faced
pensate for long rounds by putting more golfers with, whether it be with respect to a group out-
on the course, which is accomplished by de- ing or a daily-fee player, we ask ourselves one
creasing tee-time intervals. Some courses have question: how can we enhance our guest’s ex-
as many as eight tee-times per hour. Seven perience and make his or her time spent at the
Bridges Golf Course in Woodridge, Illinois, is facility more rewarding?’’
bucking the trend by adopting 12-minute tee- The number-one reason why people leave
time intervals, which means only five tee-times the game of golf is because they don’t feel like
per hour. This tee-time schedule does not they have time for 18 holes. ‘‘We would love
change during periods of peak demand. for every golf course to adopt our tee-time plan
Studies show that increasing the tee-time as it would make the game faster which would,
interval from 10 minutes to 12 minutes will re- ironically, probably increase the overall health
duce the typical round time by as much as 15 of operators,’’ Fornoff says. ‘‘Everyone would
to 20 minutes, says General Manager and Di- win: The golfer would have a better experience
rector of Golf Greg Fornoff. A simple tee-time which, in turn, should increase the demand for
interval adjustment of two minutes ensures that this great game.’’
golfers will rarely run into the group ahead of Source: ‘‘Commitment to Fast Golf.’’ Seven Bridges
them, which is frustrating even though it Golf, accessed August 1, 2006. http: / / www.
doesn’t significantly affect the overall round sevenbridges.com / index.php?src⫽gendocs&link⫽
time. Committment%20to%20Fast%20GolfPEM&category
‘‘Seven Bridges recognizes how valuable ⫽Golf
people’s time is to them. A lot of golfers have
told us that the overall experience is dimin- DISCUSSION QUESTION:
ished when their round of golf takes too long. What is another way to compensate for the
S They can’t rationalize taking the additional lack of golfer interest in playing through all
N time to stay and enjoy the nineteenth hole and 18 holes?
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MILL (Wiley)
properly and that tee packs are ready to be handed out. Sometimes tee packs are
placed on golf carts. Name cards should be placed on the golf carts and a check
made to ensure that the proper rental golf equipment is placed on each cart
together with a scorecard and rules and other important information about the
tournament. If box lunches are to be served and / or a beverage cart is to be set
up on the course, their availability needs to be attended to. Signage at specific
holes needs to be in place and awards made ready. Sponsors may need transpor-
tation to their respective holes. Players are greeted and sent off, last minute pairing
problems are dealt with, and, finally, scorecards are collected as players come off
the course.
Liability
There are a number of liability issues involved in any kind of golf tournament.21
The first involves a spectator’s assumption of risk. Do spectators assume the risk
of injury merely by attending a golfing event? Most courts hold that ‘‘assumption
of risk’’ applies. However, the prevailing view is that juries should make that de-
termination even if the injured observer is an experienced golfer who, presumably,
would know the potential for errant balls. A second potential issue relates to the
responsibility of both the sponsoring organization and the golf course to provide
adequate security for spectators. Courts have found in favor of observers where
crowd control was inadequate and marshals were not provided. Courts have found
that, when a name professional golfer is involved, that it is reasonable for observers
to focus attention on the celebrity to the exclusion of the actions of other golfers.
Thus, the need for adequate security.
A third issue relates to the need of golfers to warn spectators of a hazardous
shot. The general feeling is that golfers have a duty to warn people within the
‘‘foreseeable area of danger’’ but not someone who is outside of this zone or who
is aware of the upcoming shot. Finally, there is concern about the relative liabilities
of the various entities involved—the player, the resort, the sponsoring organization,
and the professional golf association. There have been cases where the sponsoring
organization was found to share responsibility for any shortcomings. Because the
organization was set to benefit financially from the tournament they have been
found to have the responsibility, in addition to the resort, to ensure proper safety
measures have been taken.
Banquets22
Banquets can represent an excellent way to bring additional revenue into the
resort. An effective marketing plan is crucial. A pinpoint approach to marketing
identifies a specific market segment that can be easily measured. The easiest tactic
is to go after one or more segments that are already part of the resort’s customer
base. There are several common sources of banquet business. Golf tournaments
and outings represent a logical market segment. An alternative facility, such as an
S outdoor barbecue area, means that the primary banquet room in the resort can
N be used at the same time for ‘‘regular’’ functions. A variety of banquet options are
L appropriate—pre-game breakfasts or lunches, box lunches, post-game dinners or
MILL (Wiley)
cocktail parties have proven successful. The most financially profitable segment
for banquets is the social events segment. This includes weddings, bar mitzvahs,
and anniversaries. Holding a wedding expo is an effective way of getting the word
out. Corporate functions include group meeting and employee recognition cere-
monies. These can be targeted for off-season revenue generation. Sports activity
groups often have kick-off or end-of-the-season events that can generate banquet
business.
PRO SHOP
Margin Enhancers
As noted above, merchandise sales in golf resorts account for 11 percent of total
revenue. There are a number of tactics a pro shop can use to improve their mar-
gins.23 These so-called ‘‘margin enhancements’’ include:
Discounts—usually tied to the volume sold or anticipated.

Anticipation—this refers to a discount if the invoice is paid by a certain
date.
Rebates—a reward for outperforming a set goal. It may be paid as a
check but is usually credited to the store’s account.
Fitting fees—this fee helps offset the labor cost involved with club fitting.
It is a flat fee (from $5 per club to $50 for a set) that is deducted from
the cost of the goods.
Demo / display discounts—the median discount of 40 percent as an incen-
tive to demonstrate or display certain products.
Markdown dollars—although not yet common in golf pro shops, this en-
hancement provides credits to the retailer on end-of-season markdown
merchandise.
Advertising co-op—this refers to a percentage of the business that is set
aside for vendor-specific advertising.
Freight programs—the average golf pro shop incurs 2 to 4 percent of re-
tail sales in freight costs. Incentives range from free freight to a specific
maximum allowance per box.
Free product / promotional accounts—an incentive from sales representa-
tives based on how big a customer the shop is to them.
Accessories
Sales of accessories have become increasingly important to net income as the
profit margin (the markup is at least 60 percent) and turnover of accessory inven-
tory is greater than with other pro shop items.24 The key to increasing sales is in
S the presentation of items. Displaying accessories in showcases that are clean, ac-
N cessible, and full of merchandise has been shown to increase sales. Impulse sales
L are greater when the displays are close to cash registers.
MILL (Wiley)
PRO SHOP 201
Better displays of such things as soft goods items will result in increased sales.
This means such things as:25
Keeping the display area neat. Shirts should be stacked neatly and price
tags tucked out of sight.
Using color effectively. Tie in masculine colors to complement men’s
displays and vice versa for women.
Develop a theme. Props can be used to accent a specific theme through-
out the shop.
Cross-merchandise. A complete ensemble can be sold by showcasing the
entire outfit, with accessories, on a mannequin.
Avoid one-level displays. Using different nesting tables creates a more
interesting and accessible sales display area.
Inventory Control
In addition to methods of increasing revenue, inventory needs to be controlled in
order to cut down on costs. A strategic approach to inventory control involves
‘‘open-to-buy.’’26 This term refers to the amount of retail dollars set aside for the
purchase of merchandise in the future. To properly determine future purchase it
is first necessary to divide the merchandise in the store into groupings of like items.
These ‘‘merchandise groups departments’’ might have separate categories for such
things as putters, wedges, irons, branded balls, etc. A small to medium shop might
have 30 to 40 departments. The purpose of such a system is to forecast the future
buying needs in each department.
Once the departments have been determined sales are projected in each of
these areas. Inventory is then bought to support the projected level of sales.27 If
the shop has been in operation for at least a year, sales figures for the past 12
months can be used as the base to project future sales, taking into account any
changes in golfer volume over the past year. Sales volume is affected by such
things as location, occupancy at the resort, traffic pattern, and competition.
After a figure for total annual sales has been set, the amount for each de-
partment is determined using the percentage of sales in each category. If bags
account for 10 percent of total sales then the departmental share of the total
projected annual sales would be 10 percent. To be most effective an open-to-buy
system will tweak all sales projections every 30 days based on actual sales.
Sales figures would then be projected monthly as it is likely that sales volume
varies throughout the season. To maintain control of the system the two important
pieces used to determine beginning inventory levels are projected sales volume
and the turnover rate desired by the shop.
Credit Cards
The decision on what type of credit cards to accept has both revenue and cost
S implications.28 Accepting credit cards makes the purchase easier for the customer.
N Retailers pay a fee to the credit card company because they accept these cards.
L The cost of the fee is determined by the issuer of the card and varies depending
MILL (Wiley)
on the type of card and the payment of the settlement. There are two parts to the
processing fee—the discount rate (a percentage of the amount of the sale) and a
per-item or transaction fee. Both are negotiable. Check cards can be accepted as
credit cards or as debit cards. When cards are accepted as credit cards the fee is
the same as a regular credit card. If the discount rate is 2 percent the fee on a
$100 sale is $2. However, if the cardholder uses the card as a debit card, a PIN
must be entered and the charge to the retailer is a set, much smaller fee.
GOLF CART FLEET

Lease vs. Buy
As noted above, the average golf cart fleet size at resorts is just over 70. Golf courses
have tended over the past few years to lease rather than buy their golf carts.29 In
1990 only one-third of golf carts were leased. That figure is just under half in Frost
Belt resorts and about two-thirds in Sun Belt resorts. This trend is expected to
continue. Manufacturers actually prefer leases because courses tend to keep carts
longer when they buy. A lease means more business for the manufacturer. Leasing
can be attractive to the course because it reduces maintenance problems. Service
is included in many leases. By the time problems begin to develop it is time to
return the carts and get new ones. While buying makes long-term economic sense
for a course, in the short-term the lease payment is less than the interest payments
if the carts were purchased. Because of this lower payment the course does not
have to sell as many rounds to make the payment. Leasing also frees up cash for
other course projects.
Lease payments can be adjusted to the region of the country in which the
resort is located. Frost Belt resorts can negotiate payments that are higher in the
summer months and less or nothing in the off-season. Similarly, for a newly opened
course reduced payments can be made during the first year with higher premiums
due as the resort gets established. Discussions should also take place about ex-
panding the fleet during the term of the lease. Most cart manufacturers will allow
this without re-doing the entire lease but it is best to clarify this up front.
Buyout terms should also be agreed upon at the beginning of the lease. There
are two standard types of leases—operating leases and conditional sales contracts.
In the latter there is an option to buy the fleet at the end of the lease.
Golf cart leases can be customized to meet the specific needs of the resort.
One option is to customize the lease so that it ends with the end of the resort’s
prime season. It would be difficult for management to have to re-negotiate the
return and renewal of new carts during the height of the resort season. At the end
of the busy season management can best decide whether or not to purchase carts
whose lease has expired or renew a lease on additional carts.
A second possibility is the Fixed Purchase Lease Option (FPLO). Unlike the
S Fair Market Value lease, where the decision to buy and the price of the carts is
N negotiated at the end of the lease, under FPLO the price of purchasing the fleet is
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GOLF CART FLEET 203
Some golfers prefer to walk the course while others choose to use golf carts.
Courtesy Purestock
known up front. Negotiations revolve around the trade-in value of the fleet. If the
trade-in value is greater than the pre-determined purchase option, it makes sense
to buy out the lease and trade the existing carts. If that is not the case, the existing
fleet is returned to the leasing company and a new deal is negotiated for the next
fleet.
The grow-in Payment Program is appropriate for new facilities. Payments are
lower than normal for the first 12 to 24 months of the lease. As the resort improves
its cash flow position, payments towards the end of the lease are greater than
normal.
Under the Staggered Delivery Program the fleet of carts is not delivered en
masse but staggered throughout the season as business builds (if this is a seasonal
operation). One-third of the fleet might be delivered immediately prior to the sea-
son, another third as business begins to pick up, then the final third as business
begins to peak.
A final option is the Complete Package wherein golf cart leases are packaged
S along with other equipment leases for such things as turf maintenance equipment,
N irrigation materials, etc.
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The ideal golf cart lease contract is one that allows for a payment schedule
that matches the cash flow of the resort, that matches a service contract with in-
house maintenance capabilities, and that allows payments to be written off as
operational expenses.31 An operating lease offers lower payments compared to
buying. It offers more flexibility for management because it is shorter than a pur-
chase commitment. Payments are deducted from taxes however there is no de-
preciation of equipment. There is no obligation to buy at the end of the lease. At
the end of the lease new terms can be negotiated and a new lease signed for a
new fleet.
A capital lease, or conditional sales contract, offers depreciation on the cash
investment or on the interest on the loan for the resort management. Ownership
of the fleet is transferred to resort management at the end of the lease when
management purchases the fleet. The term of the lease is usually 75 percent or
more of the estimated life of the carts. Once the carts are paid for the profit on
the rental is greater than if lease payments are being made. On the other hand
financing the purchase requires a down payment. The amount financed works
against the resort’s line of credit. This can limit borrowing for other capital projects.
A hybrid lease combines features of both of the above and lets management
decide whether or not to buy at the end of the lease. Because of the uncertainty
of the outcome there are difficult tax issues relative to write-offs and depreciation
that require the services of a tax specialist. A rule of thumb is that purchasing is
best if the operator intends to keep the fleet for six to eight years. If the plan is to
replace after three to five years, then a lease is preferable.
A lease program will vary depending upon:32
Term of the lease

Initial payment
Payment schedule
Selling price
Residuals
Interest rates
Inventory Control
Inventory turnover is the key to good fleet operation. Even rotation can be
achieved by numbering each cart and, for example, send half the fleet out one
day and the other half the next. Another effective management tactic is to rotate
one-third or one-quarter of the carts out of the lease at a time rather than turning
over the entire fleet at the same time. The average lease in the industry is for three
years on a fleet that, depending on the size of the resort, is 50 to 100. A rule of
thumb for a resort course is 70 to 80 carts. Assuming a three-year lease on a fleet
of 75, this would mean that every year, 25 carts go out and a new set of 25 carts
S come into the resort.
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GOLF CART FLEET 205
Quick Getaway 7.4

Rules of the Road
Golf carts are a fantastic convenience, but their 10. The driver should always keep the cart
misuse can create problems between golfers on the path when parking at a tee deck.
and even cause expensive course damage. Cart 11. When stopping at a tee deck, the driver
usage also determines the length of a round of should never park the cart ahead of the
golf, which is a very important variable in the tee deck that the golfers will be hitting
profitability of a golf operation. Aside from get- from, unless the cart path facilitates it.
ting the cart back to the pro shop in one piece, 12. When on the fairway, the cart should be
what are the responsibilities of a golf cart kept behind or next to golfers who have
driver? yet to hit their ball. The cart should
never be in front of them.
1. Carts should be driven with care. 13. Even if the cart is a silent electronic
2. The driver should never make sharp model, it should never be moved when
turns that may damage grass. another golfer is making a shot.
3. Carts should keep out of bunkers and off 14. Carts should be kept far away from the
of grass mounds. greens and green side bunkers.
4. Carts should be kept well away from tee 15. Drivers should respect all roped-off areas
decks and greens (this means at least 15 and cart path directions.
yards, not 15 feet). 16. When parking, station the cart near the
5. Stay on cart path if possible and conven- tee that will be hit from.
ient.
Source: ‘‘Etiquette: Golf Carts.’’ TheGolfExpert.com, ac-
6. Obey course rules for carts, such as the
cessed August 1, 2006. http: / / www.thegolfexpert.com /
‘‘90 degree rule’’ or ‘‘cart path only.’’ etiquette-carts.asp
7. Don’t drink and drive while on the
course.
DISCUSSION QUESTION:
8. Never have more than two golfers on a
single cart. Would it be worth it for courses to hire a
9. Don’t drive carts while others in your person or two to monitor the course and en-
group are hitting. force golf cart etiquette?
Electric vs. Gas33

While electric carts are increasingly popular in the Sun Belt states there are some
drawbacks. An enclosed storage facility is needed to protect charging systems from
weather. Fifteen amp outlets are required for each charger. Electric carts must be
re-charged after 36 holes while gas carts can run indefinitely. While gas carts are
more expensive initially, they also have a higher re-sale value. The key seems to
S be the energy costs and emission laws in various parts of the country. In parts of
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the country with above-average energy costs, gas carts are popular. In areas such
as California, that have strict emission standards, the choice tends to be electric.
Maintenance34
Golf cart revenue can be a high profit area in a resort. The biggest potential for
failure is lack of routine maintenance. There are three parties that are involved
with golf cart maintenance. First, there is the manufacturer of the golf cart. As with
a car, there is information in the owner’s manual on what needs to be done when
regarding routine maintenance. The golf cart servicing dealer or distributor can
provide services that resort management may not want to or be able to do. Finally,
the course operator has a responsibility to perform, at the very least, pre-operation,
daily inspections, and periodic tasks. These inspections cover such things as in-
specting for fluid leaks, battery terminals and wire connections, brakes and steer-
ing, switches and pedals, tires, gas tank, body damage, and the reverse buzzer.
Maintenance can be approached in several ways. A service contract can be
taken out with a local dealer such that course personnel perform the daily checks
while the dealer provides monthly prescribed services. A second option is for the
resort to hire staff to perform all routine and regular maintenance. A third, unde-
sirable, action is to fix carts after they fail. A pro-active preventative maintenance
program results in carts that operate longer and more efficiently.
Battery wear, tear, and care are important aspects of golf cart fleet operation.35
The major reason batteries fail is sulfation. By some estimates almost 85 percent
of all lead-acid batteries are discarded because of sulfation. Sulfation occurs when
discharge from a battery forms an insulating film of lead sulfate over the plate. It
happens when batteries are either over- or under-charged or when it is allowed to
self-discharge when it is not being used.
If batteries are not fully charged they will freeze at higher temperatures. This
is especially important for golf carts stored outside in cold weather. The changes
can be quite dramatic as noted below:
When Lead-Acid Batteries Freeze
State of Charge Freezing Temperature (⬚F )

100 percent ⫺90
75 ⫺53
50 ⫺16
25 ⫹1
0 ⫹16
Problems in charging batteries can be seen from the need to add water often,
acid buildup on the outside battery surfaces and / or on terminals, and / or if there
are bulges in the battery. It is better to give a battery a slow charge rather than a
S quick charge as a sulfated battery can explode during the latter. Ideally a battery
N would be charged at a rate no more than 10 to 20 percent of its rated capacity.
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GOLF CART FLEET 207
Thus a battery rated at 54-ampere-hours would be charged at a 5.4- to 10.8- ampere

rate.
Proper storage of carts in the off-season is critical to performance of the fleet.
A winterizing program involves:36
General maintenance including cleaning the cart inside and out as well
as performing quarterly maintenance such as lubing the front suspension
and greasing the wheel bearings.
Charging the batteries.
Inflating all four tires to 20 psi.
Turning the key to the off position and setting the forward / reverse switch
to neutral.
Using blocks behind the tires rather than setting the parking brake. Set-
ting the brake stretches the brake cable all winter.
Charging electric cart batteries every six to eight weeks. Some manufac-
turers recommend keeping the carts on charge during storage while oth-
ers say to disconnect the battery.
Draining gas from the fuel lines, sealing the fuel tank, oiling the spark
plug opening, and installing a new spark plug.
Replacing tune-up parts.
Risk Management
A pro-active risk management program takes into account the following:37
How do hills affect safe golf cart operation?

Are there sharp curves to negotiate?
Are there intersections between golf and automobile traffic?
Are there controls to prohibit intoxicated and / or underage drivers from
using golf carts?
Is insurance required of drivers of privately owned golf carts if they are
allowed on the course?
Do maintenance employees wear snug-fitting clothes and are athletic
shoes banned?
Do ground crews have access to adequate water and sun protection to
prevent dehydration?
Do ground crews police areas before they mow, removing potentially
dangerous debris?
Do mowing patterns ensure the safe dispersal of clippings and debris?
Is outdoor electrical equipment properly grounded?
Are there checks for wasps or other insect nests?
Are trees inspected for dead limbs that could fall?
Are herbicides and pesticides applied only during non-playing times?
S In the event of a golf cart accident the liability might be shared by the operator
N and the lessor.38 The operator of the golf cart is liable if it can be shown that he /
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she does not use due care in the operation of the vehicle. On the other hand, the
lessor might be liable if the cart and / or cart paths are not properly maintained.
Resorts can minimize accidents by following a few simple guidelines:39
Make sure the operational decal that come with the cart warning occu-
pants to keep limbs inside the cart and prohibiting operation by children
is still intact.
Conduct routine safety inspections.
Install cart path guardrails.
Install warning signs ahead of potential hazards such as sharp turns and
steep declines.
USE OF TECHNOLOGY
GPS
Increasingly, golf courses are using technology in a variety of ways. Global Posi-
tioning System–based technology (GPS) is being used to speed play, to improve
the golf experience, and even in planning tree removal. The golf industry began
using GPS in the early 1990s.40 GPS technology was initially set up when the De-
partment of Defense sent 24 satellites into space to plot movements on the ground.
From initial uses such as mapping golf course yardage, the tool has expanded to
include course management and irrigation system design and turf care application
systems to control the spraying of water, fertilizer, and pesticides.
GPS is being used to help speed up play while providing a better experience
for golfers.41 Golf carts can be equipped with laptop computer screens to give a
picture of each hole including yardage and the placement of features such as sand
traps. Golfers use the devices to track yardage and survey potential hazards. Play
is faster and they tend to make better shots. Since the position of each cart is
known centrally, bottlenecks can be monitored and messages sent to individual
carts asking them to speed up play. GPS is especially useful at resort courses where
golfers are likely to be unfamiliar with the layout of the course.
GPS can also be used to ensure maximum playing conditions for the golfer
while making sure the environmental integrity of the course is upheld.42 Previously
courses were managed based on averages. Because there are differences in plant
and soil characteristics of each course, the concept of site-specific management
has come into vogue. Site-specific management is closely aligned with sustainable
land management and integrated pest management. Sustainable land management
is based on the idea that the environment should be managed in such a way that
it is handed onto future generations in the same or enhanced condition as exists
today. Integrated pest management takes a comprehensive approach to managing
key pests following sound ecological principles. There is a four-step process to
S specific-site management. Data about the site is first collected either physically or
N remotely. It is then stored and read. Various environmental conditions can be
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USE OF TECHNOLOGY 209
simulated to see how a site will respond to certain conditions before they occur.
Variable-rate application then uses GPS and electronic machine-control systems to
apply fertilizer and pesticides in a way that targets specific areas based on the
individual needs of the site.
GPS can also assist with tree placement and removal.43 The major problems
with trees on golf courses are selecting the wrong species, planting too many, and
planting in the wrong places. This can lead to trees that are weak, poorly devel-
oped, and / or diseased. Poor locations mean that trees compete with turf for sun-
light, water, and nutrients.
The first step in a systematic approach is to prepare a tree inventory. Trees
are identified, then checked for pests and diseases, and a plan is established to
take care of any problems. The nest step is to map the golf course using a com-
bination of Global Positioning System (GPS) and Geographic Information System
(GIS) software. This gives the course superintendent a picture of how trees and
turf are integrated on the golf course. Once the cataloging takes places the software
can predict what is likely to happen in the future. Given that it takes more money
to remove a tree than maintain it, a management program saves money for the
course. Sophisticated (and expensive) sun-mapping technology can even identify
Quick Getaway 7.5

Frozen Fore
What’s more difficult than trying to sink a hole- ble that the ‘‘green’’ isn’t cut until literally days
in-one? Trying to sink one when the entire before the event.
course is made of ice—that’s right, without a Playing golf on a frozen seascape is not the
blade of grass in sight. only task at hand. Participants must cope with
The World Ice Golf Championship, which extreme temperatures, which with the wind-
is played on Greenland’s surreal northwestern chill factor can fall to –50⬚C. Special gear is
ice fields, started in the small town of Uum- absolutely essential, and the balls used must be
mannaq (Greenlandic for ‘‘heart-shaped’’). The brightly colored (remember, the ‘‘green’’ is
championship has been held there during white!). Also, this is the only golf championship
years with perfect ice conditions, starting in in the world that comes with the unlikely dan-
1997. ger of losing a ball to a polar bear.
The Championship course is set in one of Source: ‘‘The next World Ice Golf Championship to be
the world’s most spectacular landscapes, lo- held in Uummannaq, Greenland March 22 to March 27
cated more than 400 miles north of the Arctic 2007.’’ Greenland-guide.gl, accessed August 1, 2006.
Circle. Golfers from across the globe travel to http: / / www.greenland-guide.gl / icegolf /
compete in this extreme tournament for the
DISCUSSION QUESTION:
coveted title of The World Ice Golf Champion-
ship. Slow-moving glaciers and huge icebergs How can you bring the thrill of ice golfing
S frame the course. The course is so unpredicta- to golfers in warmer climes?
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a specific branch that requires removal on a tree to improve sunlight penetration.

It can also show how shadows move on the greens and how many sunlight hours
the greens are getting.
Course Management
Computers are making course management easier. The major use of course man-
agement programs is to manage ground care activities including the scheduling
of daily work orders, the maintenance of equipment, inventory control, budget
analysis, and the tracking of labor costs.44 It has also been used to do such things
as determine the amount of sand needed to replace contaminated sand in bunkers
with USGA-recommended sand. By entering the square footage of the bunkers, the
depth of sand desired, and the cost of sand, the amount of materials needed and
the cost can easily be calculated.
Irrigation is a vital component of golf course management. Computers have
aided tremendously in providing a complete system that is effective and efficient.
A complete irrigation system involves several elements:45
Flow-management software lets the system identify the best and most effi-
cient way to irrigate based on flow rates of the sprinkler heads, the pump
station, and the sizes of the pipes in the ground. The superintendent de-
cides what to water and for how long and the software calculates the
rest.
A weather station gathers data about wind speed and direction, the
amount of rainfall, temperature, relative humidity, and solar radiation to
establish the evapotranspiration (ET) rate. This rate, in turn, determines
how long each station has to run to replace the lost moisture.
Radio control between the central computer and the field controllers
means a station can be turned on from anywhere on the golf course.
Sensors monitor and react to changes such as a main line break. They
can also shut the system down in the event of rain.
Cycle and soak allows the superintendent to set the amount of water to
be applied followed by a soaking-in period to eliminate runoff or pud-
dling.
Graphical user interfaces show pictures on the computer screen together
with any graphical information needed. The superintendent can then eas-
ily monitor the irrigation system.
Remote access means the system can be accessed from a remote control-
ler that can be in the office or at home.
It is now possible for sprinkler systems to run off of a computerized central

control system.46 Changing the run-time for sprinklers can now be done in minutes
instead of hours. On a daily basis the computer calculates the run-times of each
individual station based on the evapotranspiration (ET) rate for the previous 24
S hours. The best and most efficient way to water the course is then determined
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RENOVATION PLAN 211
based on guidelines set up by management. The ideal time to water is during a

‘‘water window’’ during the night. In the long days of summer this can be as short
as eight hours. Computers help courses make maximum use of this window.
Computers need to know whether or not the sprinkler is located on a slope,
on sand, or on clay, whether it is in sun or shade, and if it is a half or full circle.
Each of these variables influences the amount and time of water flow.
Because of the importance of ET it is desirable to have a weather station on
the course that can determine ET for the past 24 hours.
RENOVATION PLAN
Golf courses need constant renovation and remodeling. Many operators fall into
the trap of being able to only plan one year in advance. A master plan would
include a review of the ages of greens, trees, bunkers, and the irrigation and drain-
age system; prioritizing goals and objectives; developing a visual plan for the areas
of improvement; setting up phased renovation; outlining various options; and cost-
ing the alternatives.
The starting point takes into account the expected life cycle of the various
pieces of the course. The various parts of the course have a life span of:47
Item Years Item Years
Greens 15–20 Cart paths: concrete 15–30

Bunker sand 5–7 Practice range tees 5–10
Irrigation systems 10–30 Tees 15–20
Irrigation control system 10–15 Corrugated metal pipes 15–30
PVC pipe (under pressure) 10–30 Bunker drainage pipes 5–10
Pump station 15–30 Mulch 1–3
Cart paths: asphalt 5–10 Grass varies
The best time for conducting various maintenance tasks is during the off-
season as this is least disruptive to play. This can involve such things as sodding
bare areas with turf, renovating bunkers, trimming and planting trees, etc.
SUMMARY
Managers are responding to changes in the demand for golfing resort vacations
by developing facilities and services important to the golfer in an attempt to in-
crease revenue. At the same time savvy operators attempt to reduce costs by using
S technology and considering different ways to finance their fleets of golf carts.
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ENDNOTES
1. Golf Industry Overview 2005. Jupiter, FL: National Golf Foundation, 2005, 5–8.
2. www.foley.com / golf, accessed August 2, 2006.
3. Golf Instruction and Training Aids. Jupiter, FL: National Golf Foundation, 2003.
4. Inside the Ropes. Jupiter, FL: National Golf Foundation, October 6, 2005.
5. The U.S. Golf Travel Market 2003 Edition. Jupiter, FL: National Golf Foundation, 2003.
6. Ibid., 4.
7. Frequent Golf Travelers: Attitudes and Behaviors. Jupiter, FL: National Golf Foundation, 2003.
8. Ibid., 146.
9. ‘‘The One Question You Need to Ask.’’ Golf Industry Report, Volume 5 (Third Quarter 2005), 3.
10. Sizing the Golf Consumer Marketplace: The Spending Report 2003 Edition. Jupiter, FL: National
Golf Foundation, 2003.
11. Marzolf, Tom. ‘‘Resources for Remodeling.’’ Golf Industry Report, Number 6 (First Quarter
2006): 12.
12. Operating & Financial Performance Profile of 18-Hole Golf Facilities in the U.S. 1999 Resort
Edition. Jupiter, FL: National Golf Foundation, 1999, iii.
13. Ibid.
14. Ibid., iv.
15. Johnson, Rosemary. ‘‘Business Golf Is on the Upswing.’’ Ladies Golf Journal (September / Oc-
tober 1999). In Tournaments and Events—Organization and Management. Jupiter, FL: National Golf
Foundation, 2001, 10.
16. Anderson, Judy. ‘‘Consider the Cost-Benefit Ratio of Using Business Golf.’’ Long Island Golfer
Magazine, Volume 10 (Number 1, 1999). In Tournaments and Events—Organization and Manage-
ment. Jupiter, FL: National Golf Foundation, 2001, 14.
17. Trost, Ed. ‘‘Why Golf?’’ Meetings and Conventions (July 1999). In Tournaments and Events—
Organization and Management. Jupiter, FL: National Golf Foundation, 2001, 59–61.
18. ‘‘Golf Marketing Incorporated.’’ In Tournaments and Events—Organization and Management.
Jupiter, FL: National Golf Foundation, 2001, 31–32.
19. White, Crystal Ingram. ‘‘Gender Specific.’’ Meetings and Conventions Golf Supplement (July
1998). In Tournaments and Events—Organization and Management. Jupiter, FL: National Golf Foun-
dation, 2001, 26–28.
20. Binger, Sherry. ‘‘The Week of the Tournament.’’ Meetings and Conventions (July 1999). In
Tournaments and Events—Organization and Management. Jupiter, FL: National Golf Foundation,
2001, 51.
21. Marks, Merton E. ‘‘Tournament Play: Water and Sand Aren’t the Only Hazards.’’ Executive
Golfer (August 2000). In Tournaments and Events—Organization and Management. Jupiter, FL:
National Golf Foundation, 2001, 47.
22. Zaruka, John. ‘‘Add Banquets to Boost Your Bottom Line.’’ Fairway Forum: Newsletter for NGF
Member Facilities, 2000, 3rd Quarter, Volume 5, Number 3.
23. Morton, Ken. ‘‘Capitalizing on Margin Enhancements.’’ The Merchandiser: Newsletter of the
Association of Golf Merchandisers (July / August 1999). In Increasing Your Pro Shop’s Bottom Line,
Third Edition. Jupiter, FL: National Golf Foundation, 2002, 9.
24. Wolford, Peter. ‘‘Accessories: Big Sales for Small Items.’’ Golf Product News (March 1999). In
Increasing Your Pro Shop’s Bottom Line, Third Edition. Jupiter, FL: National Golf Foundation,
2002, 1.
25. Pitman, Alan P. ‘‘Make Your Softgoods Displays Stand Out.’’ Golf Shop Operations (April 2000).
In Increasing Your Pro Shop’s Bottom Line, Third Edition. Jupiter, FL: National Golf Foundation,
S 2002, 34.
N
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RENOVATION PLAN 213
26. Haaz, Mort. ‘‘Buying Right Begins with Merchandise Organization.’’ Material Matters
(January / February 1999). In Increasing Your Pro Shop’s Bottom Line, Third Edition. Jupiter, FL:
27. Haaz, Mort. ‘‘Plan Your Sales Dollars Before You Spend Your Dollars.’’ Material Matters (April
1999). In Increasing Your Pro Shop’s Bottom Line, Third Edition. Jupiter, FL: National Golf Foun-
dation, 2002, 41.
28. Caine, Sam. ‘‘Choosing the Right Credit Card Provider.’’ Golf Business (June 1999). In Increasing
Your Pro Shop’s Bottom Line, Third Edition. Jupiter, FL: National Golf Foundation, 2002, 10.
29. Luczycki, Rebecca. ‘‘More Courses Are Turning Toward Leasing and Away From Buying.’’
Crittenden Golfer (July 1999). In Improving Golf Cart Fleet Operations, Third Edition. Jupiter, FL:
National Golf Foundation, 2001, 16. Johnson, E. Michael. ‘‘Don’t be Lax With Lease Language.’’
Golf Shop Operations (May 1999). In Improving Golf Cart Fleet Operations, Third Edition. Jupiter,
FL: National Golf Foundation, 2001, 21.
30. Murray, Troy A. ‘‘Golf Cart Leasing in the 21st Century: What Should You Expect?’’ In Improving
Golf Cart Fleet Operations, Third Edition. Jupiter, FL: National Golf Foundation, 2001, 25–26.
31. Denigan, Jim. ‘‘Made to Order.’’ Club Management (September / October 1999). In Improving
Golf Cart Fleet Operations, Third Edition. Jupiter, FL: National Golf Foundation, 2001, 42–45.
32. Ibid., 45.
33. Musselwhite, Ronnie. ‘‘Roll On.’’ Golf Business: Publication of the National Golf Course Owners
Association (July 2000). In Improving Golf Cart Fleet Operations, Third Edition. Jupiter, FL: National
Golf Foundation, 2001, 48–53.
34. Grigsby, Dan. ‘‘Driving Force: Daily Maintenance is the Key to Keeping Your Golf Carts Rolling.’’
In Improving Golf Cart Fleet Operations, Third Edition. Jupiter, FL: National Golf Foundation, 2001,
23–24.
35. Siuru, Bill. ‘‘Battery TLC May Not Help Your Score But it Can Improve Your Bottom Line.’’ Golf
Car News Magazine (January / February 1999). In Improving Golf Cart Fleet Operations, Third Edi-
tion. Jupiter, FL: National Golf Foundation, 2001, 14.
36. Bailey, Jim. ‘‘Winterizing Your Fleet.’’ Golf Business: Publication of the National Golf Owners
Association (November 2000). In Improving Golf Cart Fleet Operations, Third Edition. Jupiter, FL:
37. Schuster, Joe. ‘‘It’s All in the Game.’’ In Improving Golf Cart Fleet Operations, Third Edition.
Jupiter, FL: National Golf Foundation, 2001, 36–40.
38. Crist, Gary. ‘‘Liability for Golf Cart Accidents: A Tricky Area.’’ Fairway Forum: Newsletter for
NGF Member Facilities (3rd quarter, 1998). In Improving Golf Cart Fleet Operations, Third Edition.
Jupiter, FL: National Golf Foundation, 2001, 41.
39. Marks, Merton E. ‘‘Golf Carts—Not Always a Smooth Ride.’’ Executive Golfer (February 2001).
In Improving Golf Cart Fleet Operations, Third Edition. Jupiter, FL: National Golf Foundation,
2001, 32.
40. Shepard, Dan. ‘‘Companies Develop GPS-Based Technology.’’ In Computerizing Your Golf Fa-
cility. Jupiter, FL: National Golf Foundation, 2001, 8.
41. Aylward, Larry. ‘‘Far Out.’’ In Computerizing Your Golf Facility, Third Edition. Jupiter, FL: Na-
tional Golf Foundation, 2001, 41–44.
42. Schmidt, Mark. ‘‘Site-Specific Management: Roots of the Future.’’ In Computerizing Your Golf
Facility, Third Edition. Jupiter, FL: National Golf Foundation, 2001, 116–119.
43. Overbeck, Andrew. ‘‘Tree Inventory Software Eases the Pain of Tree Removal.’’ In Computer-
izing Your Golf Facility, Third Edition. Jupiter, FL: National Golf Foundation, 2001, 141–143.
44. Goodman, Stacia. ‘‘The Computer Age.’’ In Computerizing Your Golf Facility, Third Edition.
S Jupiter, FL: National Golf Foundation, 2001, 9–11.
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45. Ziegel, Rick. ‘‘Irrigating the Golf Course: Choosing a Computerized Central Control System.’’
In Computerizing Your Golf Facility, Third Edition. Jupiter, FL: National Golf Foundation, 2001,
55–57.
46. Slack, Andy. ‘‘The Digital Age.’’ In Computerizing Your Golf Facility, Third Edition. Jupiter, FL:
National Golf Foundation, 2001, 32–37.
47. Marzolf, Tom. ‘‘Resources for Remodeling.’’ Golf Industry Report, number 6 (first quarter
2006), 7.
S
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Chapter 8
RESORT OPERATIONS:
THE IMPORTANCE OF
RECREATIONAL AMENITIES
LEARNING OBJECTIVES
1. Outline the stages of the recreational amenities development process.
2. Discuss the elements involved in creating an amenity strategy and the pro-
gram’s impact on the overall development process.
3. Discuss the relationship between developers and managers of an amenity
package in terms of successful planning and implementation.
4. Identify the role of the developer in the various types of community manage-
ment structure.
5. Compare and contrast the opportunities for effectively structuring the man-
agement of a community and its amenities.
INTRODUCTION Nonprofit Tax-Exempt

THE DEVELOPMENT PROCESS Organizations
Stages in the Development Community Associations
Process MANAGEMENT AND OPERATIONS
DEVELOPING AN AMENITY Organizational Structures
STRATEGY Comparison of Basic Options
An Amenity Strategy Membership Structures
COMMUNITY MANAGEMENT General Approaches
STRUCTURES
SUMMARY
Government Bodies
ENDNOTES
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216 Chapter 8 RESORT OPERATIONS: THE IMPORTANCE OF RECREATIONAL AMENITIES
INTRODUCTION
Staying power is the first requirement for success; without it,
projects that might have been successful fail.
—WILLIAM BONE
Chair of the Board, Sunrise Company
The recreational amenities are a significant part of the character of any planned
community. According to the Urban Land Institute, the decision to include or
exclude a specific recreational amenity should be based on six factors:
1. what is being offered in similar local projects

2. the residents / users for whom these amenities are being planned
3. how much money is available for amenities and whether the costs are
justified
4. how the amenity fits in with the total project physically, economically,
and as part of its image
5. what quantity of the amenity should be provided and what the climate
will allow
6. what the marketing benefits will be1
In this chapter, the place of the amenity program within the overall develop-
ment process is identified and principles for developing an amenity strategy are
laid out. Options are explored for effectively structuring the management of the
community and its amenities.

Avoid personal guarantees on land acquisition and develop-
ment loans. The failure to heed this advice has broken more
developers than anything else. If more equity is needed to
avoid the need for a guarantee, then by all means put it in or
find a partner.
—WILLIAM BONE
The process for developing a resort is complex, time-consuming, and involves

many related activities. The developer, who may also be the resort manager, must
assemble a team of people who have expertise in various areas.2 The team, over-
seen by a project manager, brings together people with a background in:
S
N Law—attorneys and legal advisers
L Finance—financial and technical analysts, financiers
MILL (Wiley)
Management—construction and project managers

Marketing—market analysts, marketing and public relations advisers, sales
managers, and real estate agents
Planning and design—site planners, architects, landscape architects, engi-
neers, and environmental scientists
Stages in the Development Process

A resort development goes through three stages: (1) feasibility analysis and plan-
ning, (2) construction, and (3) operations / management.3
Feasibility A project is usually initiated based on potential market demand. A preliminary

Analysis and estimate is made of the likely demand, alternative sites are investigated, one is
Planning chosen for in-depth analysis, and a development team is assembled.
The development concept is then agreed upon. This means considering the
buildable area, development capacity, access, and options for community gover-
nance. This is followed by a detailed feasibility analysis comprising an in-depth
market and regulatory analysis, an examination of the characteristics of the site,
and a determination of the financial feasibility of the project.
S
N Construction is the second phase of resorts development, after a feasibility
L analysis and planning, and before operations / management. Courtesy PhotoDisc, Inc.
MILL (Wiley)
At this point, the concept may have to be refined or, if the financial feasibility
is unfavorable, an alternative site may have to be selected and the process begun
again. Next, product programming is put into place. The type and mix of residen-
tial, timeshare, and hotel products are determined, an association structure and
amenity program agreed on, and the phasing of the development set up.
Preliminary planning and design is followed by approvals from necessary
agencies and citizen groups, and the plan finalized in detail. Financing is then
secured and marketing begun.
Construction Planning, construction, and marketing activities overlap with the plan (and the
corresponding construction) being adjusted to changes in the marketplace. Large
amounts of money and manpower are being spent at this stage of the develop-
ment.
Operations / When the first part of the resort is ready for use, the project moves into the oper-
Management ations stage. The various stages of development may overlap, as it can take years
or even decades for a resort to be completed. A resort may consist of resident
owners, periodic renters, and hotel guests who stay a few days. Specialized man-
Quick Getaway 8.1

The Changing Resort Design Trends
The luxury shopper does not want to be behind keep up with the latest trends by recognizing
the fashion curve, so luxury resorts and spas the movement towards cleaner lines in furnish-
have to keep a weather eye on how design ings, dynamic colorations, and more attention
trends are moving. Resorts have already been to lighting details. In short order, creating
implementing spa facilities and golf courses. spaces within the units that incorporate fitness
Not only that, they’ve been building elaborate and well-being will become a standard amenity
play equipment for clients’ children and exten- in resorts.
sive food / beverage facilities. In the 1990s bathrooms became larger and
Today’s addition to these amenities is more were outfitted with stone, whirlpool tubs, and
emphasis on sports and private fitness facilities. specialty shower heads. Today’s resort owners
Imagine: a resort that focuses on various un- can take it a step further by offering better tow-
usual sports such as fencing, archery, and els and amenities, such as aromatherapy items.
maybe even polo—all sports that luxury vaca-
tioners are likely to enjoy. Luxury buyers are Source: ‘‘Design / architecture: breaking the mold in
how we think about luxury.’’ Developments (Septem-
generally in tune with their well-being and ber 2005).
health, but they want privacy when they pursue
either. The sports and fitness private luxury fa-
cility caters to this need specifically. DISCUSSION QUESTION:
S But what good is a private facility if it is What are the pros and cons of adhering
N not an attractive place? Resort owners can closely to what’s trendy in design?
L
MILL (Wiley)
agement services may be required. At this point, developers may provide for the
transfer of community management to associations of owners or members. Finally,
planning has to consider renovation and repositioning of the resort.
DEVELOPING AN AMENITY STRATEGY

The most common mistake is not having a superior land
plan, including the appropriate recreational and other ameni-
ties. The objective is to maximize the residential lot values by
creating the maximum lot premium potential.
—WILLIAM BONE
An amenity is ‘‘a rather broad concept that can encompass virtually any feature
that is attractive to a given market and thus adds value to land.’’4 The first of two
basic reasons for including amenities in a recreational development is that they
increase the value of the real estate. The up-front cost of adding a golf course to
a development, for example, can be recovered through the sale of premium lots
that front the fairways. Amenities may be developed with the idea that they will
form the basis for a profitable operation. This latter is the motivation behind resort
developments, while the former is more true of primary- and second-home com-
munities.
The second reason for the inclusion of amenities within a development is to
get marketing leverage. A well-designed recreational attraction adds credibility to
the development and the developer and can aid in attracting guests to a property
or customers to a development.5
The downside is that substantial costs are involved in providing what is often
a seasonal attraction. The key is to achieve a balance between the cost of provid-
ing the amenity with the sales generated by its presence. Timing is of the essence.
Plans must also be made to transfer ownership and management of the amenity
to an appropriate group or body after it has achieved its purpose of bringing in
guests or customers.
An Amenity Strategy
An amenity strategy is a ‘‘clear understanding of the role of recreational facilities
within an overall project.’’ While every project is unique, certain principles are
accepted as appropriate for any recreational development.
Provide what the market wants.

S Provide for the changing role of the amenity package over the life cycle
N of the development.
L Balance the cost of the amenities with the revenue they generate.
MILL (Wiley)
Guarantee developer control in the early steps of the project.

Provide for an orderly transfer of control from the developer to residents.6
Importance of For a recreational development to be successful, it is critical that it be developed,

the Customer designed, and managed to meet the needs of the customer. This means, first, that
the package of amenities should be a function of the overall project. As a project
progresses from single-family home to multifamily units to a resort hotel, more and
better amenities become appropriate. Next, preference should be given to natural
over built features. Early golf courses in Scotland, for example, relied on the natural
features of the coastline. Development was less costly, impact on the environment
was minimized, and the course was more difficult for competitors to copy because
it was truly unique to the area. These advantages—lower costs, unique design,
and less intrusion on the environment—will occur wherever natural resources can
be used as the basis for amenities.7
Recognizing the risk of dependence on one season of the year, resorts have
sought to reduce their investment risk by converting amenities to off-season use.
Many golf courses rope off their greens and promote cross-country skiing in winter.
Ski areas market mountain biking down their ski runs during the summer.
A final principle is that facilities should be sufficient to meet the needs of the
number of people expected to be attracted to the development.
Resorts need to respond to the amenities and

S activities wanted by guests and offer attractive
N options. Courtesy The Greenbrier
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Quick Getaway 8.2

Targeting the Lifestyle
It can be hard to follow the latest trends. It can vises John M. Nelson, principal, Looney & As-
be even harder to try to find a mix of styles that sociates. ‘‘Make sure the room has a desk un-
works for the establishment. So how are hotels like anything the guest has seen. Everyone is
and resorts coping with this problem? doing the granite-topped vanity with legs and a
Dallas-based designer Looney & Associates bowl above the surface. We created a dresser.
and Global Hyatt are pushing select-service into It is different and it works for retrofits,’’ Nelson
the next generation with the transformation of comments. A good strategy is to limit elements
AmeriSuites into the new Hyatt Place concept. that close down space. Room dividers that stop
Overly detailed case goods, printed bed- short of the ceiling let in more light, creating
spreads, fussy table lamps, oversized kitchens, the impression of a larger area. Comfort is of
sleeper sofas, and ergonomic chairs are history. the utmost importance: lounge chairs, plasma
Instead, the hottest trends: ‘‘zones’’ that differ- televisions that swivel, sectional sofas, and ot-
entiate areas by usage and customizable enter- tomans are appearing in the best-appointed ho-
tainment technology. Instead of a restaurant, tel rooms.
the concept calls for the ‘‘alone / together’’ feel One thing to avoid? Abrahamson says:
of a coffeehouse that serves beverages and ‘‘Don’t make it hip till it hurts.’’
light fare.
‘‘Don’t target the demographics,’’ says Jim Source: ‘‘Get Noticed; Hong Kong’s Landmark Manda-
rin Oriental, Brussels’ Royal Windsor Grand Place and
Abrahamson, Global Hyatt’s senior vice presi-
Hyatt Place are making headlines with next generation
dent, ‘‘target the lifestyle.’’ Targeting the life- design.’’ Hotels (January 2006).
style involves more emphasis on the bed:
pillowtop mattresses, triple sheeting, and gen-
erous accent pillows make a real impression on DISCUSSION QUESTION:
the customer. Is ‘‘targeting the demographics’’ really differ-
Deliver a larger-than-home experience, ad- ent from ‘‘targeting the lifestyle?’’
Changing Role The developer and the users can be in conflict with respect to the type and amount
of amenities developed. Developers build certain facilities because of their mar-
keting appeal—they will help sell real estate—or because they will be heavily
used, thereby becoming valuable in themselves. A championship golf course may
help sell real estate, but it may be costly to maintain and difficult for retired
residents to play. Meeting the needs of the residents by providing an easier course
might not attract the publicity necessary to sell the project. An operational plan is
needed that identifies ‘‘who will develop, own, and operate the facilities and for
how long; who will use the facilities and on what terms; and precisely what the
S expected relationship will be between real estate and recreational amenities, in
N both the short term and over the long run.’’8
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MILL (Wiley)
Timing Development must be timed such that the cost of constructing the amenities is
balanced by the revenue generated by their presence. The rule of thumb is that
recreational amenities should be developed up front and used to draw guests or
stimulate real estate sales. Because of the heavy cost involved, this strategy in-
creases the developer’s risk and produces an initial low rate of return on the
project.
There are several ways to reduce this risk. If recreational developments already
exist in an area, it may be possible to negotiate cooperative agreements whereby
residents of the newer project can use the facilities of the existing project. In this
way, the recreational facilities at the newer project can be phased in gradually
and their development cost spread over a number of years.
Another strategy is to open amenities for use by nonresidents. Revenue is
generated while prospective buyers are exposed to the project. This requires care-
ful management. Residents may resent having outsiders use ‘‘their’’ facilities, and
it may be difficult to phase out the outside members when the project is more
fully developed.9
Developer It is generally accepted that the developer should continue to control construction,
Control operation, and maintenance of the amenity package as the development is being
built out. If the amenities are not under the control of the developer, they may be
poorly managed and maintained. This, in turn, could adversely affect future real
estate sales. The developer, of course, assumes the operational burden and must
have, or hire, the expertise necessary. The rule of thumb is that the developer
retains control until at least 50 percent of the project is completed. Residents will
probably want a role in the management of the facilities prior to this point. An
advisory committee of residents can provide useful input and pave the way toward
eventual transfer of control.
Orderly If recreational areas are making money, there is no need for the developer to
Transfer transfer their management to a third party. This is true of resort hotels and ski
areas, for example. However, in residential developments, once the recreational
amenity has served its primary purpose of selling real estate, its value to the de-
veloper declines while the carrying costs increase. The amenity is then either given
away or sold to the residents of the project, who are usually represented by a
property owner’s association. The developer has already received a return on the
investment by charging premium prices on certain real estate units based on their
proximity to the amenity.
Developers have little or no leverage at the end of the build-out phase. They
are incurring the costs involved in running the amenity. All the real estate has
been sold. It is, therefore, a good idea for the developers to negotiate at the be-
ginning of the project how and when the recreational amenities will be transferred
S to a resident group.
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COMMUNITY MANAGEMENT STRUCTURES 223
COMMUNITY MANAGEMENT STRUCTURES

The pitfall facing the developer revolves around the crucial
point of obtaining long-range approval to develop future prop-
erties that will meet the resort’s needs years after the initial
development proposal is approved.
—DEAN SCHWANKE ET AL.
Resort Development Handbook
The management structure of an amenity package is vital to its successful imple-

mentation. Properly designed, a community management structure helps develop
a process for:
preserving common areas

developing a long-term strategy for owning, maintaining, and operating
the development’s amenities
fulfilling the obligations taken by the developer in order to get approval
for development
establishing and enforcing community maintenance and design standards
No one structure is appropriate in all cases. A detailed analysis of the factors

unique to each development must be completed before determining what will
work best. Three types of organizational structures can be mixed and matched to
provide maximum flexibility for the developer while maximizing the marketability
of the community: government bodies, nonprofit tax-exempt organizations, and
community associations.10
Government Bodies
Communities can be managed through municipal corporations and community
improvement districts. However, because of the disadvantages discussed below,
they are best used in combination with other options.
Municipalities have the power to tax and have the power of eminent do-
main—the right of the state to take private property for public use. They have
access to public funds in addition to the ability to issue debt. This latter consid-
eration can open funds for development purposes at a lower cost than the more
traditional tax revenue–based options. However, government bodies must follow
both state and federal laws that can increase the costs for property owners. For
example, they cannot restrict public access to parks and roads. This means that
they do not have the flexibility to develop private amenities for the exclusive use
S of the owners, tenants, and guests of a resort.
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From the developer’s viewpoint, he / she has no control. The residents of the
municipality elect the governing body, which makes most operating decisions. The
developer cannot be assured that the body will accept responsibility for mainte-
nance of the amenities that are developed. The developer may or may not have
initial influence or control over the election of the governing body. A municipality
may decide to limit votes to those who are registered to vote. A developer who
does not live in the community would have no vote. Even if he did reside in the
community, he would have one vote only.
Nonprofit Tax-Exempt Organizations

Like the municipality noted above, a tax-exempt organization must allow public
access to the facilities. However, unlike the municipality, it can be managed by a
board of directors rather than by elected members. To get tax-exempt status, the
nonprofit must serve ‘‘the common good and general welfare of a community.’’11
A developer could, in essence, select and control the board indefinitely. A non-
profit organization can get involved in maintenance of public areas, architectural
control, and expense assessment without losing its tax-exempt status. Because it
cannot get involved in the maintenance of private property, however, a tax-exempt
organization does not have the authority to enforce covenants. Covenants are usu-
ally desirable in a master-planned development. As a result, this type of organi-
zation is best used in conjunction with other types.
Community Associations
A community association is a ‘‘mandatory membership association responsible for
performing various functions within a planned real estate development.’’12 The
association, with or without one of the options discussed above, gives most flexi-
bility for a resort community. All property owners are members. However, various
classes of membership can be designed so as to allow the developer to control
the community until it can be transferred to the owners later. Voting rights and
dues assessment are usually based on the benefits received rather than on property
value alone. Unlike the first two types of organization discussed above, an asso-
ciation can own and maintain property not open to the public.
In deciding on the way the association is to be structured, consideration must
be given to the balance between the interests of residents and hotel and other
resort operators; how absentee owners will affect the management of the devel-
opment; what private services, if any, will be offered to owners; what control will
be taken of public areas such as beaches; and what services will be provided to
the community and how they will be paid for. The next major decision involves
whether residential and nonresidential uses should be under the control of one
association or whether they should be dealt with separately.
A community association is set up to do two things. It acts as a business that
maintains and manages private property and as a government entity in delivering
S services while enforcing covenants and rules.13 It can be structured in various
N ways,14 as discussed below.
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COMMUNITY MANAGEMENT STRUCTURES 225
Single A single community association is simple and reduces the administrative burden
Community of dealing with two associations while providing a body to keep community stan-
Associations dards. However, some owners may believe they would have more autonomy if
they had a separately incorporated subassociation. This is especially true if differ-
ent owners have the need for varying levels of service. In addition, a single asso-
ciation leaves residential and nonresidential owners subject to control of one
group by the other.
Single A second alternative is to design an association with a neighborhood structure

Residential together with a covenant to share costs on nonresidential units. Nonresidential
Associations owners are protected from involvement in matters that primarily affect the resi-
dential community. However, residential owners are provided with no protection
with respect to the use and appearance of nonresidential properties. In addition,
the structure can be difficult when residential and nonresidential properties are
intertwined.
Dual Dual associations—one for the residential community and the other for nonresi-
Associations dents—is another possibility. Communitywide standards can be maintained while
with Joint both resident and nonresident owners each have an appropriate level of auton-
Committee omy. Joint committees comprising representatives of each group ensure com-
munication and mediation between both sets of owners. Developers maintain
Quick Getaway 8.3

Selling the Experience
Travelers don’t travel simply to find a new Days are extreme, however: health and well-
place to crash at night. They travel to experi- ness trips generally include nature walks, tai
ence new things, to learn, and to grow. At least chi sessions, and cooking classes.
that’s what Franz Hanning, CEO of Orlando- ‘‘Experiencing what life has to offer will
based Fairfield Resorts, believes to be true. continue to be a driving force for people,’’
Fairfield deviates from the ‘‘usual’’ tactic of Hanning concludes. ‘‘As long as that’s impor-
selling timeshares by focusing instead on sell- tant, we’re going to be here to provide it.’’
ing experiences. Special vacation packages,
called Play Days, center on specific activities Source: Moore, Jamie. ‘‘Fast Company: Fairfield Resorts
spins rapid change into rapid growth.’’ Ventures (Sep-
and themes, such as golf-themed getaways that tember 2005).
include lessons and a round at a gorgeous
course. Another Play Day is The Richard Petty
Driving Experience, where participants can DISCUSSION QUESTION:
cruise around a racetrack in an authentic race Do you think the term ‘‘Play Day’’ accurately
car at speeds up to 125 miles per hour, or they represents the vacation packages listed
S can ride shotgun with a pro driver. Not all Play above? If not, what term would you use?
N
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long-term control over community standards while allowing for the transition of
control of service provision to the owners. Limiting membership and the scope of
the committee’s powers can control any perception that the joint committee is
more administration than is needed.
Dual Having two associations to represent resident and nonresident owners with a cov-
Associations enant obligating nonresident owners to share certain costs offers several advan-
with Covenant tages. Each group of owners is provided a certain level of autonomy while the
number of entities involved in governing the community is minimized. No single
group can establish and enforce communitywide standards. Second, owners are
given little or no input into the use and appearance of the other types of properties.
This may become a problem where the standards for one type of residential unit
differ significantly from the other and are detrimental to the appearance and stan-
dards of the entire development.
MANAGEMENT AND OPERATIONS

A resort operating company is in the fantasy fulfillment
business.
—WILLIAM BONE
The management of recreational amenities has become more sophisticated over

the years. A variety of organizational structures are possible.
Organizational Structures
When resort operators, particularly of ski areas, choose to own and operate amen-
ities themselves, one of four structures is typically selected: equity club, right-to-
use club, convertible club, or association membership.15
Equity Club Developers can transfer ownership of the recreational facilities to a separate non-
profit corporation while retaining the right to operate the facilities until most of
the residential property is sold. This protects the developer by ensuring that the
amenities will not be operated in a way that adversely affects sale of the remaining
real estate units. The developer contributes the recreational amenities in return for
the right to sell equity memberships to real estate owners. Once all the real estate
is sold, the club is owned and controlled by the members and run by a duly
elected board of directors. Club members pay annual dues for the right to use the
facilities. They also benefit from any increase in the value of the amenities. It may
S be possible for property purchasers to inherit the equity membership of owners.
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MANAGEMENT AND OPERATIONS 227
This, obviously, increases the value of the equity membership. If all memberships
are sold, new owners must wait for one to become available before they can
participate in the amenity program.
Right-to-Use In a right-to-use club, the developer retains ownership and control of the facilities.
Club Members buy the right to use the amenities rather than acquire an ownership
interest, as above. An initial payment plus annual dues is common. The developer
decides whether the initial payment is a fee or a deposit. Under a fee program, a
member who resigns from the club may receive all, some, or none of the deposit
back. How much, if any, is returned depends on whether or not the membership
is reissued to a new member. The initial fee is treated as taxable income to the
developer and as a deductible business expense when refunded to a member who
resigns.
Under a deposit program, members receive the full deposit when they resign,
but not until 20 to 30 years after their acceptance into the program. The deposit
might, thus, be characterized as a loan to the recreational amenities that is not
taxable income.
Convertible When a developer feels that a market exists for an equity club but is unsure when
Club Program the club can be turned over to members, a convertible club is a viable option.
The program begins as a right-to-use club, but members are made aware up front
of the intention to turn it into an equity club. The one-time fee or deposit is
refundable. When members pay this fee, they are told the likely timing of the
switch to an equity club together with the purchase price to be paid by members
for the facilities, as well as any likely additional costs to be incurred in the tran-
sition. The fee or deposit may be applied to the equity club membership.
Association The developer may turn over the recreational facilities to a homeowners’ associ-
(Ownership) ation set up to represent the surrounding property units. Association members do
Membership not buy memberships but can pay off the debt through assessments and user fees.
Memberships may be sold to owners who want preferential treatment.
The developer recovers the cost of building the recreational amenities through
means other than the sale of real estate. In this way, the return on investment for
the project may increase because the profit on real estate sales does not have to
take into account the construction costs of the recreational amenities. It is crucial
that an association pay off the debt and maintain the facilities while keeping as-
sessments reasonable.
Comparison of Basic Options

The four options discussed above can be compared on a number of criteria.16 The
choice should be based on the criteria most important to the developer and the
development. The up-front cost is highest for the equity club; however, on con-
version, the membership price on an initial right-to-use club is even higher. The
S cost, however, is reduced by the original initiation fee. There is no up-front cost
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Quick Getaway 8.4

An Architect Speaks
Bill Gartz has spent the past 20 years designing crash; they want to experience the loca-
some of the world’s most recognized resorts tion. Look into nature walks, information,
and hotels, including five-star properties that or other activities.
belong to high-profile companies like Star- Developing a mixed-use mentality. Even if
wood, Intrawest, Hilton, and the Teton Club. your property isn’t exactly what you’d call
It’s fair to say he knows a thing or two about mixed-use friendly, you should think about
the hotel design process, and what makes a ho- incorporating retail, health, or programmed
tel work—it’s not all in the design. ‘‘I remind activities.
developers who want us to design a five-star Inviting everyone to the table. Get some
property that we can design three of those fresh perspectives from new players!
stars,’’ Gartz says. ‘‘The other stars they earn by Going with the flow. You should consider
service.’’ incorporating places for people to gather
What are five ways to stay on the cutting and enhancing pathways; doing these
edge of hotel design? According to Gartz: things creates an energetic atmosphere.
Focusing on wellness is key. Baby boomers Source: Finnel, Shari. ‘‘Planning for Profits.’’ Ventures
are looking to retire, and they may want to (December 2004).
spend extended periods of time at your
property. Plan for assisted living and health
care. DISCUSSION QUESTION:
Creating authentic experiences. People are Which of Gartz’s five points do you feel is
looking for more than just somewhere to the most helpful? Why?
for the association ownership unless annual memberships are sold. Even then, the
annual cost is relatively low.
Gross proceeds from the membership program are greatest with the right-to-
use club, although the income is dependent on the selling of memberships. While
the income is less in an equity club, the guarantee that the money will be realized
is greater. The convertible program produces less gross income, while association
management produces none at all unless annual memberships are sold.
The initial operational cash flow is low with both association management
and an equity club and moderate with the other two options. On the other hand,
the sell-out operational cash flow is greatest in an equity club, slightly less in a
right-to-use club, and lower in the other two options.
Because association members own and operate the recreational facilities, a
greater sense of community exists among them. It remains good in an equity club,
S less so in a right-to-use club because of the loss of owner control and uncertainty
N
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over the amenities, and even less in a convertible club program because owners
have no control over the facilities.
The developer has the greatest flexibility under a convertible club program
and none with association ownership. In the other two cases, the degree of flexi-
bility is dependent on terms of the membership plan. Litigation risk to the devel-
oper is low in both an equity club and association membership, moderate to low
in a right-to-use club, and greatest when a developer sells the amenities in a con-
vertible club program.
The convertible club program is the best option where nonowner access to
club facilities is important. In an equity club, access is limited to available mem-
berships until a cap is reached. In a right-to-use club, access is good until conver-
sion takes place. It varies in association ownership depending on the regulations
set by the members themselves.
Membership Structures
Memberships can be structured differently within each of the structures noted
above. The type of membership structure depends on the development concept
and the type of owner or guest. For example, in a resort consisting of primary
residences, long-term membership options that do not expire until the member
sells are made available to owners. In communities where second-home owners
stay for shorter periods, they are given the option of making changes to the service
package they have.
Tiered A tiered membership structure offers a variety of options to members: the more
Membership services, access, and flexibility given, the greater the price charged. For example,
full golf membership might allow an owner to make a tee reservation up to 30
days in advance, while a less expensive membership category might restrict res-
ervations to five days in advance.
When the number of memberships in each category is limited, owners are
enticed into purchasing the more expensive options. This makes their property
more valuable in the event they wish to sell. This may, in turn, create a greater
demand for higher-priced memberships than would occur under a different mem-
bership structure. If owners buy the membership as an investment, golf member-
ships may sell out but the golf course remain underutilized because owners are
not using their privileges fully. This system works best in residential communities
where the number of memberships available is approximately equal to the number
of units. A rule of thumb, for example, is 350 golf members per 18-hole course.17
Another structure may become necessary when the number of residential units
surpasses the capacity of the amenity.
Unitary Under a unitary membership structure, all members pay a membership price and
Membership receive the same interest in the amenities. Each year, members select the mem-
bership category they wish. In one year, a member may purchase the social cat-
S egory, which allows access to the dining facilities, and then, in the following year,
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select a category—at a greater expense—that allows access to all the amenities.

The member is assured that, if she sells, the next owner will also have an annual
choice of category.
A unitary membership works when the recreational amenities are insufficient
to meet the demands of the residents. Unlike the tiered membership described
above, artificial demand is not created for a particular level of membership. Mem-
bers annually select the program that meets their needs. Imbalances in demand
for specific categories of membership can be handled by adjusting the type and
price of memberships available.
Add-on Convertible or add-on memberships are a combination of the above two catego-
Membership ries. All members purchase a social membership, then are free to buy add-ons
depending on the additional access they want. This type of structure works best
when the developer is unsure about the level of demand for the recreational amen-
ities.
Quick Getaway 8.5

The Emerging Waterpark Hotel
First it was golf resorts. Then spas took over the indoor waterpark boom is its wild popularity in
resort market, garnering more than $11 billion obscure northern towns. Places as little-known
in sales in 2003 alone. So what’s the next big as Minot, North Dakota, Sterling Heights, Mich-
thing? What attraction will be drawing crowds igan, and Amana, Iowa, are developing new
for the next ten years? The indoor waterpark waterparks, which are expected to draw visitors
stands ready to transform the hotel industry. from as far as 200 miles away. Especially
Roughly ten years ago, waterpark theme for these northern towns, it seems, the exten-
hotels entered the resort scene, and have sion of the high season that an indoor water-
quickly grown in popularity. Unlike spa theme park provides far outweighs the initial
hotels, waterpark hotels appeal to a greater seg- investment.
ment of the population. While spa-goers are
Source: Anger, Ron. ‘‘Vision 2020: Emerging Trends for
typically females with a household income
2005 and Beyond.’’ Resort⫹Recreation (Winter 2005).
over $70,000, waterpark visitors are of both
sexes and practically every economic bracket.
The reason for this demographic shift is fairly DISCUSSION QUESTION:
obvious: a family of four can play at a water- Indoor waterparks are especially popular in
park all day for the same price as one person’s areas where outdoor waterparks are unfeasi-
spa visit. ble. What might serve as an indoor water-
Perhaps the most interesting part of the park’s counterpart in warmer climes?
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General Approaches
Developers tend to mix and match organizational and membership structures to
accommodate both their needs and those of the members. An equity club may
be organized that offers full golf membership to equity members as well as social
memberships to others. In settings that have both residents and resort hotels, a
club may be developed for residents but also offer access to hotel guests. Several
advantages accrue to both resident and hotel guests:
Both receive higher-quality services than if two lesser-quality facilities

were built for each.
Club members get access to hotel services, such as concierge and room
service.
Hotel guests add life to the facility in the early stages of real estate devel-
opment.18
However, residents tend to favor exclusivity, while hotel guests desire access
at will. Conflicts can be minimized by a reservation system that protects the rights
of use for each group. As an example, a members-only lounge can be created. In
resorts with several golf courses, a different course each day can be designated
for the exclusive use of members. Members can be given a longer lead time than
guests in signing up for tee times.
SUMMARY
Recreational amenities are a significant part of the character of any planned com-
munity. This chapter identified the place of the amenity program within the overall
development process and laid out the principles for developing an amenity strat-
egy. Finally, the options for effectively structuring the management of the com-
munity and its amenities were explored.
ENDNOTES
2. Dean Schwanke et al. Resort Development Handbook. Washington, D.C.: Urban Land Institute,
1977, 30.
3. Ibid.
5. Ibid., 2.
6. Ibid., 15–21.
S 7. Ibid., 15.
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8. Ibid., 16.
9. Ibid., 17.
11. Ibid., 240.
12. Ibid., 244.
13. Ibid.
14. Ibid., 242.
15. Ibid., 247–250.
16. Ibid., 248–249.
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Chapter 9
THE UNIQUENESS OF
TIMESHARE RESORT
OPERATIONS
LEARNING OBJECTIVES
1. Explain the major differences in the way traditional resorts / hotels and condo-
miniums operate with respect to the role of:
a. Guest / Owner Characteristics
b. Marketing
c. Reservations
d. The Front Office
e. Housekeeping
f. Maintenance and Engineering
g. Accounting and Finance
RESORT MANAGEMENT Direct Mail

INTRODUCTION OPERATIONS
TIMESHARE GUESTS/OWNERS RESERVATIONS AND THE FRONT
Residence DESK
Purchase Motivation Reservations
Hesitation About Buying Reservationists
Dissatisfaction Check-in
Use Patterns Billing
Party Composition Owner Relations
ACTIVITIES HOUSEKEEPING
MARKETING Size and Location of Units
The Timeshare Product Guest Arrival and Departure
Patterns
MARKETING THE TIMESHARE
PRODUCT Staffing Patterns
Referrals Owner Relations
In-House Guests MAINTENANCE AND ENGINEERING
S Role of Owners
Telemarketing
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234 Chapter 9 THE UNIQUENESS OF TIMESHARE RESORT OPERATIONS
Common Areas FINANCING THE TIMESHARE

Major Repairs Accounting
Monthly Assessments SUMMARY
Renovations ENDNOTES
ACCOUNTING AND FINANCE
RESORT MANAGEMENT
In addition to daily operations, a general manager’s major
duties and responsibilities can be divided into four broad
categories: budgeting, on-site rental program responsibilities,
board relations, and owner relations.
—ROBERT A. GENTRY, PEDRO MANDOKI, and JACK RUSH
Resort Condominium and Vacation Ownership Management
INTRODUCTION
Vacation ownership resorts began in the 1970s with motel conversions and time-
share interests in existing but unsold condominium apartments. Today, these re-
sorts are purpose-built, and their layout and design are comparable to any luxury
resort.
The growth of the timeshare industry is, in great part, because of the billions
of dollars the major hospitality companies have poured into timeshare develop-
ment over the past several years. In 1984, Marriott was the first major hotelier to
enter the field while Hyatt, Hilton, Disney, Four Seasons, and Starwood followed
throughout the 1990s. The hotel brands have helped improve the early negative
image the industry had in the 1970s as a result of high-pressure sales tactics and
unscrupulous business practices. The shift away from small-time operators is con-
tinuing. In the past five years the percentage of timeshare sales attributable to
major hotel brands and well-capitalized independent developers has increased
from 40 percent of the total to 60 percent.
Today there are over 4,300 timeshare resorts in the world. Over two-thirds are
located in the United States and Europe. Ten destinations account for almost two-
S thirds of all timeshare vacations taken in the U.S. The top states are:1
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Florida 18 percent
California 10
South Carolina 9
North Carolina 5
Tennessee 5
Colorado 5
Texas 4
Hawaii 3
Virginia 3
Alabama 2
Forty-eight percent of owners live in the U.S. and 31 percent live in Europe.
In Europe 30 percent live in the U.K. and an additional 20 percent live in Germany.
Thus, six out of ten owners live in three countries—the United States, the United
Kingdom, and Germany.2 The major locations in Europe are: Spain, Italy, France,
U.K., and Portugal.3
TIMESHARE GUESTS/OWNERS
The target market for timeshare ownership is the growing masses of middle-aged
baby boomers who want the advantages of owning a resort property without the
headaches. They are boomer families headed by couples who range from age 40
to 59 and with incomes between $50,000 and $100,000. About half the U.S. pop-
ulation either falls within that prime age range today or will reach it in the next
20 years.4
According to the 2003 U.S. Membership Profile of Interval International:
The ‘‘average’’ timeshare owner is 49, living in a three-person household with
an average value of almost $300,000 and with annual household income over
$114,000. Almost half have a college degree, 30 percent own second homes and
45 percent own more than one vacation week.5
Residence6
Most timeshare owners live in the Northeast. Florida attracts buyers from central
and northeastern states, although one in eight buyers lives in Florida itself. The
overwhelming number of timeshare owners in the Northeast live in that region.
Most owners of southeastern units also live in that region, although a significant
percentages live in the Northeast and Central regions. Three-quarters of timeshare
owners in the Central region have their primary residence there as well, while one
in ten lives in the Southeast. Over 40 percent of Mountain timeshare owners live
S in that region too, while 25 percent and over 20 percent respectively live in the
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Central and Pacific regions. While over 70 percent of Pacific owners live in that
region, one in eight resides in the Central region.
Purchase Motivation
Eight out of ten owners state they are satisfied with their purchase. In fact, three-
quarters of all owners recommend timeshares to friends. Why do people purchase
timeshares? Four reasons are given:7
1. Flexibility over when, where, and how they vacation—The exchange op-
portunity has increased in importance over the past two decades and is
the item noted most by buyers.8
2. Economics—Owners report they save money over the long term. This is
the second most noted consumer motivation.9
3. Certainty about the availability and quality of popular resorts.
4. Safety and secure environments for family vacations.
Motivation varies by where the timeshare is located. Owners in Florida weigh

the following factors more heavily than do owners in other regions:
The reputation of a timeshare facility is just as

S important to owners as location and amenities.
N Courtesy The Four Seasons; photo by Peter Vitale
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wanting to own in that resort area

location of the resort in the area
liking the timeshare unit, resort amenities, or resort features
confidence in the timeshare company
being treated well during the sales presentation
leaving property to heirs
chance to profit on rental or resale10
In contrast, owners in the Central and Northeast regions place less emphasis
on the factors Florida owners consider important. Their major motivations involve
the opportunity to take advantage of exchanges and the diversity of locations in
the region. In the Pacific, the desire to return to the same resort each year scores
much higher compared to other regions.
Hesitation About Buying

When timeshare owners are asked about why they hesitated before buying, three
reasons are prevalent. The primary concern is financial and concerns the initial
purchase and the annual maintenance fee. Note that one of the motivations for
purchasing was economic—the feeling that they would save money in the long
run. To purchase, the potential owner must feel that the long-term savings will
outweigh the initial and continuing costs. This factor is of particular importance
to owners of Florida timeshares. Hawaiian owners note the high cost of travel to
the resort as a negative factor.
Second, owners are concerned about using the timeshare enough to justify
the expense of the purchase. This may reflect the increasing demands on people’s
time at home and in the workplace. This factor is of less importance to owners in
the Northeast and Southeast and of highest importance to those in the Central
region.
Third, owners worry that the resort experience will not meet the expectations
created during the sales presentation. In fact, almost 20 percent indicated that
high-pressure sales techniques caused them to hesitate before buying. The repu-
tation of the timeshare industry has improved since the years when abuses
occurred regularly. The poor image may remain in the minds of potential pur-
chasers.11
Dissatisfaction
Most owners are not interested in buying more time at any resort, either inside or
outside of the United States. On the other hand, just under half are either very
interested (22 percent) or somewhat interested in selling one or more of their U.S.
timeshares.12 The most common reasons given are a change in lifestyle or personal
situation and not using the timeshare enough to justify ownership. However, over
half of all owners report they are very satisfied and another 30 percent are some-
S what satisfied with their purchases. The two areas of concern to owners are the
N actions of their homeowners’ association and their annual maintenance fees.
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Quick Getaway 9.1

Outstanding Off-Seasons
Hotels are prone to drops in occupancy levels makeover shut down about 60 percent of the
during the winter months. However, many ho- rooms up through July, the spring and summer
teliers have come up with innovative ways to months brought in good business, according to
take advantage of the free time, while others Scott Gubrud, director of sales and marketing.
have created promotions to boost bookings. Occupancy in September (which is part of the
At The Boulders Resort & Golden Door Spa high season in the Rockies) jumped 30 percent
in Carefree, Arizona, a new e-mail program ca- from the previous year, Gubrud said.
ters to guests’ needs, according to Ted Davis, Keeping the momentum going in the
area director of sales and marketing for Wynd- slower October to November shoulder season
ham Luxury Resorts. The automated e-mail pro- depends a lot on holding plenty of promotions
gram goes out to guests once a reservation is and special events.
confirmed to allow them to reserve resort ac- ‘‘One off-season promotion is $179 a night
tivities in advance. One resort activity, a sweat- with a 50-minute customized massage in-
lodge-like ceremony in a tepee with an cluded,’’ Gubrud said. ‘‘And there’s the ‘Ski
American Indian shaman, has proved popular Free, Stay Free’ deal. These packages are our
among The Boulders’ guests. consistent staple and run heaviest in November
’’One of the reasons for our success is we and January.’’
spend lots of time trying to understand our cus- Source: Alisau, Patricia. ‘‘Promotions help during off-
tomers,’’ Davis said. ‘‘The e-mail program deliv- season.’’ Hotel & Motel Management (February 21,
ers a highly personalized agenda for a vacation. 2005). http: / / www.findarticles.com / p / articles / mi
Our focus is to personalize our service.’’ m3072 / is 3 220 / ai n13452784
Sometimes a major off-season renovation
can be the key to year-round success. Hotels DISCUSSION QUESTION:
like the Vail Cascade Resort & Spa in Vail, Col- What is one danger of scheduling special
orado, count on renovations to keep them at events and activities during the off-season?
the top of their game. Although Vail Cascade’s Discuss ways of addressing this problem.
These concerns are often due to a lack of communication between the association
and the owners.
Use Patterns
Over 40 percent of timeshare owners report that, on average, they exchange their
timeshare, while just under 40 percent report household use of the timeshare. Nine
percent say their timeshare is not used at all, while smaller percentages give theirs
away or rent it out. Florida owners report the highest household use, while those
S in the Northeast indicate the highest percentage of renting out their units. Few
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owners in the Southeast rent out their units. They also, relatively speaking, do not
exchange their interest for time elsewhere. Less than one-third of Central owners
actually use the timeshare they own themselves. In the Mountain region, slightly
less than half, the highest percentage of all regions, exchange the timeshare for
time elsewhere. Owners in the Pacific report the highest overall use and the
second-highest use by the household.13
Quick Getaway 9.2

UST to the Rescue!
Yearly maintenance and cleaning can be a Day Five: Conduct a team inspection. An
nightmare for timeshare villas, especially when acceptable rating should be achieved. Re-
it involves working with outside contractors to place all (FF&E) furniture, fixtures and
get the villa shipshape in less than a week. equipment inventories to proper locations
There are many problems with working with in the villa.
outside contractors: they may not work to your
standards, and keeping track of several work Detailed Tasks
teams can be frustrating. The solution? Creating
After stripping, box and label all villa in-
a Unit Specialist Team (UST).
ventories (e.g. crockery, cutlery, etc.). Store
This in-house team works together to make
in a secure area.
the most of a villa’s maintenance week. Each
Sweep all floors prior to beginning any
member has his or her expertise, and because
cleaning. Sweep any debris onto rugs.
they are all in-house employees, they work di-
Pull all furniture away from walls. Clean
rectly with the management to ensure optimum
baseboards. Sweep carpet edges. Clean fur-
quality.
niture.
What does a typical maintenance week
Spray doors and door jams with degreaser;
look like using the UST system?
wipe clean.
Big Picture Tasks
Spray all windows and window trim with
degreaser; wipe clean. Use a broom in
Day One: Repair all cosmetic wall mars
hard-to-reach spaces. Clean window panes
such as holes and cracks, using 20-minute
with glass cleaner.
joint compound.
Day Two: Prep for painting including cov- Source: ‘‘Resort Management: Maximizing Maintenance
ering all floors and furniture with Visqueen. Weeks: Unit Specialist Teams Take Command.’’ Devel-
Paint all baseboards, closet doors, and opments (August 2005).
walls.
Day Three: Continue painting until com- DISCUSSION QUESTION:
pleted. Do you think a UST system work as well for
Day Four: Make wallpaper repairs and any hotels as it would for timeshare villas? Why
additional touchups needed. or why not?
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Party Composition
Approximately 40 percent of all U.S. timeshare vacation groups include children.
Over half of all parties include two adults, while an additional fourth include four
adults.14 This explains the increased popularity of two- and three-bedroom pur-
chases in many areas. The average length of stay in the timeshare is seven days.
The European owner, in contrast, typically has no children at home.15
ACTIVITIES
Timeshare owners exhibit certain differences compared to hotel guests in regards
to their vacation. Skiing, golf, sightseeing, and beach / waterfront activities are more
important to timeshare owners while entertainment, shopping, and dining are
more important to hotel guests.16
MARKETING
The Timeshare Product
Resorts offer timeshares in a variety of formats. Over 90 percent sell interval inter-
ests in increments of one week of use each year or as points offerings. Under a
points-based system, consumers obtain a number of points that are redeemable
each year for a number of accommodation nights that vary depending upon the
season, day of week, size of unit, and resort location chosen. Biennial offerings
show recent growth, particularly in Hawaii; these give the buyer one week of use
every two years. Fewer than 10 percent of all resorts, primarily in the Mountain
and Southeast regions, sell fractional interests offering several weeks of annual use.
An even smaller market overall exists for undivided interests, whereby shares are
sold on a ratio of multiple members per unit. While only one in 15 resorts nation-
wide offers this option, it is available for sale in one in five timeshare properties
in the Mountain region.
Ownership The standard type of ownership is the deeded week, offered by almost 90 percent
of resorts. Customers feel more secure in their title than with other ownership
options. The right-to-use form of ownership has, however, been increasing. Found
mostly in Hawaii, due to the operation of many Hawaiian resorts on leased land,
this form of ownership offers more flexibility to the customer. Overall, however, it
is available at only one resort in ten.
Use Timeshares can be used in a variety of ways. Most feature a fixed-week system
S that offers the customer the same one-week period each year. This was the industry
N norm until the mid-1980s, when a variety of more flexible options became avail-
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able. Floating times within seasons allow customers to book any time, subject to
availability, within a particular season. This type of plan is most commonly found
in the Mountain and Pacific regions. One in five resorts overall, and more in
Hawaii, allows a floating time year-round without seasonal restrictions. This type
of plan is suitable only in areas that do not experience variability of seasonal
demand. Finally, some resorts offer a points plan whereby the customer gets a
vacation credit, expressed as a number of points, that can be redeemed for a
varying number of nights based on season, day of week, unit size, and resort
location. The number of resorts offering this flexible arrangement has increased
in the past five years to the point where it is available in over 20 percent of facilities
nationwide. The plan allows customers to split their total time into smaller intervals
of less than one week. The so-called split-week option is most prevalent in the
Mountain and Pacific regions. It is particularly useful to those who live in the same
region as the resort and who can travel there often and at minimal cost.
Exchange The vast majority of timeshare resorts are affiliated with companies that expedite
exchanges to other properties. The reason is that exchange is the most important
motivation that customers give for buying timeshares. The major organization of
this sort is Resort Condominiums International (RCI), with which over 80 percent
of properties are affiliated. Forty percent of resorts are affiliated with Interval In-
ternational (II), the second-largest exchange organization. Over one-quarter of all
resorts also run clubs or networks that offer owners the flexibility to vacation in
other locations at different times of the year.
Bonus Time Bonus time refers to nights that are not being used, as when the time was not sold
or was not reserved by a member under a floating-time or points-based system.
Bonus time is rented at a greatly reduced rate, with the net proceeds usually going
to the property owners association.
Public Rentals Units that are unsold or that are made available by owners can be rented by the
public through the resort. Over half of all resorts rent unsold inventory to the
public.17
MARKETING THE TIMESHARE PRODUCT

The way timeshares are marketed depends on the motivation of the potential
investor / guest. There are a number of different reasons for purchasing a timeshare
at a resort:18
Home from home occasions—the desire for a second home. This seg-
ment of the market will typically visit the resort at the same time each
S year. They want to get to know the area. They value detailed information
N on the surrounding area on things to see and do. Relationships with the
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staff at the resort—being recognized and respected—are especially im-

portant as are opportunities to mix and mingle with other owners / guests.
Swapper occasions—the desire for access to resorts worldwide by means
of exchanges. This segment values transparency and equivalency. All
exchange opportunities must be made known in a way that takes into
account the relative value of a time period in different locations.
Activity occasions—where the stay is linked to a specific activity such as
golf or skiing. The most important factor for this segment of the market is
accessibility to the actual activity.
Family holiday occasions—where the resort serves as a venue for a fam-
ily get-together. The resort needs to provide activities for all members of
the family as they move through various stages of the life cycle.
The most popular marketing programs for selling timeshare products are re-
ferrals (used by 87 percent of all resorts), in-house guests (used by 79 percent),
telemarketing (70 percent), and direct mail (49 percent).
Referrals
This is the least expensive marketing tactic. Marketing costs of timeshares range
from 45 percent to 55 percent of net timeshare revenues. Major hospitality brands
attempt to keep critical sales and marketing costs well below the industry average
through a variety of methods. One popular program is to examine the membership
of their various hotel loyalty programs for potential timeshare buyers.
Another good source of referrals is from existing owners. People who have
already purchased timeshare intervals are familiar with the resort. If they can be
motivated to provide names and participate in the marketing process they can use
their own personal experience to help make the sale.
Once the names have been identified prospects are often contacted through
telemarketing and invited for an on-site tour.
In-House Guests
Resort guests may have booked at the resort as ‘‘regular’’ guests. If they enjoy the
facilities they may be interested in purchasing a unit or interval. There are seven
steps in the sales process:19
1. During greeting and prospect registration the prospects are made to feel
comfortable. Names and addresses are verified.
2. Pre-tour activities involves either a group or individual overview of the re-
sort. Typically this involves a multi-media presentation that should em-
phasize the benefits offered by the facilities at the resort and in the
surrounding region. Resorts may sell services but people buy benefits—
what the service means or will do for them. Exchange opportunities
S should also be stressed and the presentation tailored to the needs and
N wants of the specific market segment being targeted.
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3. Because a timeshare purchase can involve a great deal of money it is

regarded as a high anxiety purchase. There is potential additional con-
cern on the part of the prospect because of the often-unscrupulous tac-
tics used by some developers in past years. Even though the actual
practices may have changed, the perception can still be present that
they are still manifest. Thus the need for the next stage—establishing rap-
port. Information gathered during the pre-tour allows the salesperson to
showcase those elements of the resort that would best appeal to the pro-
spective owner.
4. During the tour prospects have the opportunity to see first-hand and in
person the various facilities that are part of the resort. The facilities and
services shown should be no less than what actual owners will experi-
ence if and when they make a purchase.
5. During the tour the salesperson continually develops the relationship with
the prospect. Sales presentations should be individualized based on what
is important to the prospective buyer.
6. At this point the salesperson makes the offer.
7. The final stage—the trial close—is where (ideally) an agreement is
made. Incentives may be offered to reach that agreement. The price may
be reduced; added discounts can be given for a cash sale or the pur-
chase of more intervals. Many states have a cooling-off period of several
days that allows a purchaser to rescind the deal if they later change their
mind.
Telemarketing
As noted above, referrals will be called and invited to participate in a discounted
holiday. Telemarketers also engaged in cold calling—calling people off purchased
lists of prospects who meet the demographic profile of timeshare owners. The
former will produce a greater return of interested individuals than the latter.
Direct Mail
Promotional literature can be sent to people inviting them to visit the property.
Direct mail marketers send mailings that include letters, glossy advertisement, sam-
ples, and foldouts to prospects on their mailing list. Direct mail offers a number
of advantages. This form of advertising has a high degree of control as the manager
decides to whom the message is to be sent. The number of pieces mailed can be
tailored to the size of the budget available. It is highly audience selective in that
the mailing lists are developed from customer lists or from lists obtained from
mailing-list houses, which can provide lists of names broken down into a variety
of specific segments. Direct mail is increasing in popularity because it permits high
target-market selectivity. It is also highly flexible, in that the message can be per-
sonalized to different market segments.
S The ability to assess responses from a mailing by enclosing a coupon or a
N phone number allows easy measurement of the results of a campaign.
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On the other hand direct mailings tend to have a high discard rate, high total
cost, and long lead time. A rule of thumb is that a direct mailing gets a 1 to 3
percent response rate. This means that for every 100 letters sent out, the operator
will receive only an average 2 percent response rate to a mailing. To get 100
customers with a response rate of 2 percent would require a mailing of 5,000
pieces. The response rate can be improved by having a high-quality list and a
mailing that is targeted to the needs of the potential customers being sought.
To be successful a mailing piece should follow the five P’s.20 First, it should
form a picture in the mind of the customer. We think in terms of pictures, not
letters or words. Second, it must offer a promise and show how the promise will
be fulfilled. The promise should be something that is important to the customer.
Next, the message must prove to the reader that what is being promised is true.
‘‘Proof’’ might come in the form of testimonials, success stories, or statistics. Fourth,
the message should push the customer to action—ask for the sale. Finally, there
should be a postscript. In reading a direct mail piece, most people first read the
letterhead, then check to look at the signature and to see if there is a P.S. Interest
can be generated by means of a clever postscript. The effectiveness of a direct
mail campaign is measured by the number of responses generated. As noted ear-
lier, one of the advantages of direct mail is that the results are readily measurable
against the costs involved.
OPERATIONS
The operation of a resort differs in many significant ways from that of a traditional
hotel. This chapter assumes the reader is familiar with basic hotel operations. It
concentrates on what makes condominiums, vacation ownership, and timeshare
properties different from traditional hotels.
Managing a resort is different from managing a commercial hotel in a number
of ways:21
Visitor market—No matter how different resorts are from each other, they
all seek to satisfy guests who have three fundamental needs:
1. desire for a change of pace, getting away from the familiar
2. desire to satisfy recreational interests while being entertained and
stimulated
3. desire to travel to interesting and attractive places22
Resorts certainly attract conventions and group business. However, the sched-
uling of business meetings must be coordinated with recreational activities.
Facilities—Because the average length of stay at a resort is longer than at

S a hotel, the facilities are different. Rooms, in general, are larger. More
N closet space is needed. Large amounts of land are required for recrea-
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OPERATIONS 245
tional facilities. Guests are looking to participate in a variety of activities

as part of their total resort experience.
Location—Guests are attracted to many resorts because of their remote
location. Many guests travel considerable distances to ‘‘get away from it
all’’ or to enjoy an area of natural beauty. This means that these proper-
ties must be self-contained. Support services, such as laundry and mainte-
nance, must be provided. Transportation may need to be provided for
employees. Similarly, shuttle service to and from the airport may have to
be provided for guests.
Recreation—A resort, by definition, is a place where people go for recrea-
tion. Most resorts specialize in one recreational type, such as beach activ-
ities, skiing, or tennis. However, it is economic folly to rely on one
season of the year. One bad snow season, for example, can ruin the en-
tire year. To combat this, resorts have attempted to become year-round
attractions. In the Colorado mountains, for example, ski lifts are used to
bring mountain bikes up the mountain in summer.
Seasonality—Commercial hotels operate year-round. However, some re-
sorts, by virtue of their location, are precluded from doing so. Seasonality
produces particular problems. Each season, a new group of employees
must be hired, trained, and motivated. Inventory management, particu-
larly perishables, becomes a problem as the season comes to an end.
When the resort is closed, security and maintenance are constant head-
aches. A season of 90 to 120 days places tremendous pressure on man-
agement to cover fixed costs for the year, variable costs for the season,
and still make a profit. While traditional hotels have strong occupancy
during the week and seek to complement that by going after the week-
end meeting or leisure getaway market segments, resorts tend to experi-
ence strong seasonal fluctuations in demand. A good property can
achieve occupancy rates of 80 percent and above during much of their
peak months.
Personnel attitude—Resort guests have extremely high expectations of
service. They expect to be pampered. In vacation ownership resorts,
where units are actually bought, the guests are owners who like to be
treated as such. This places great pressure on employees to perform at a
high level.
Managers—While all managers need to know about rooms, food and
beverage, marketing, human resources management, and so on, resort
managers must have additional knowledge in two areas: (1) the natural
resource on which the resort is based, and (2) guest activity program-
ming. A manager of a ski resort has to know something about the moun-
tain. A resort specializing in golf must be managed by someone who
knows the relationship between golf course layout and profitability.
Rates—Traditional hotels tend to offer deep discounts on the weekends
to attract the business noted above. Resorts do the opposite, charging
S maximum rates on the weekend and offering (often significant) discounts
N during off-season and the shoulder months of fall and spring.
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MILL (Wiley)
Amenities—Resort guests expect to participate in a number of activities.

When a guest is on the property for several days or weeks, a well-
designed guest activity program is required to satisfy them. This means
much more than offering a sleigh ride next Tuesday. Implementing a
guest activity program involves specialized knowledge regarding leisure,
recreation, and play. Programs must take into account the demographic,
psychographic, and physical backgrounds of guests. Golf, for example, is
a major reason why resorts have attracted business meetings.
Corporate / employer responsibility—Because many resorts are large and
located in remote areas, they constitute a major, if not the major, piece
of the local economy. As such, management takes on a certain responsi-
bility to the community that goes beyond the responsibility of a hotel in
a metropolitan area. The community may be totally dependent on the re-
sort for its economic future. Management has to take this into account
when making decisions to lay off employees during the off-season.
Employee housing—The remote location of certain properties means that
the resort may have to provide housing for its employees. This raises is-
sues of employee privacy and access to services.
Labor skills—Employees at resorts tend to rotate into different jobs both
during the season and in the off-season. If there is no snow at a ski area,
employees may find themselves working in maintenance. This is espe-
cially true in the off season, when being employed means being flexible
and having multiple skills. Commercial hotel jobs tend to be more spe-
cialized and static throughout the year.
Sources of revenue—Commercial hotels derive most of their revenue from
rooms, food and beverage, and various minor operating departments. At
a resort, retail sales—including souvenirs, arts and crafts, and designer re-
sort wear—are more important, as is revenue from recreational activities.
Some properties derive a great deal of revenue from land sales. Resorts
also get higher per capita food and beverage revenues than do traditional
hotels because of menu pricing, the larger number of meals served on-
site as well as the higher occupancy per room.
Activity control—Accounting statements are more complex in a resort
than in a commercial hotel. Every recreational activity and retail outlet is
a potential profit center, with separate profit and loss statements.
Balance sheet—Land and fixed asset investment is greater in a resort than
in a conventional hotel, which changes the look of the balance sheet.
The large amount of land means the resort has few alternate commercial
uses. The payback period—the number of years needed to repay the
original investment—is longer for resorts because of the large investment
in land and other fixed assets.
Resorts and traditions—Traditions are more important for resorts than for
other types of hotels. Many resorts cater to repeat guests who are at-
S tracted by annual festivals and theme weekends. They come back to en-
N joy the experience year after year.
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RESERVATIONS AND THE FRONT DESK 247
RESERVATIONS AND THE FRONT DESK

Front office procedures at whole and interval ownership resorts have much in
common with those at traditional resorts. Front office personnel take reservations
over the telephone; they accept transient guests; they deal with such things as
computer systems, key control, and keeping accurate guest records. In other ways,
the tasks are very different.
Reservations
While reservations at a traditional resort might come in via a toll-free number or
direct calls from prospective guests, at interval ownership resorts they can, in ad-
dition, come from an exchange company or a vacation club. In a traditional resort,
the number of rooms available for rent is determined by management. In a va-
cation ownership resort, the number of units available is determined by the num-
ber of owners who want to rent or exchange their units.
The person reserving the unit may own a specific unit, own the right to stay
in an unspecified unit, be the guest of an owner, or ‘‘just’’ be a regular tourist
looking to stay at a resort. In each case, the person brings a different level of
knowledge and expectation to the telephone encounter. Staff need to be able to
handle this variety of guest types. Typically, one-third of all incoming calls are
reservations, while the remainder involve questions, confirmations, and owner-
related questions and problems.
Three types of people place reservations at whole or interval ownership re-
sorts: owners, guests of owners, and renters. Owners may or may not have placed
their units in a rental program. The former may be required to reserve their own
units anywhere from 30 days to one year in advance. Advance notice allows man-
agement to determine availability on a seasonal basis. Owners who have not
placed their units in the rental pool may also be required to call ahead to reserve
the unit. Because they have maintenance agreements with the resort, calling ahead
allows them to confirm that the unit has not been scheduled for deep cleaning
and is in shape for them to take occupancy.
The second type of people who place reservations are guests who have been
given permission by the owner to occupy the unit. It is important that the resort
accept bookings from one and only one owner contact person in order to avoid
double bookings. Third, are renters—transient guests who have booked a resort
stay. Rentals may come in through the resort’s reservations office or from an out-
side real estate agency. Few reservations come from retail travel agents (unlike
traditional resorts) because few central reservation systems can link individual
agents to resorts. If few units are available for rent, it may be unprofitable for the
resort to operate a rental program.
Many owners put their units into a rental pool in an attempt to recoup their
investment. Most states prohibit developers from guaranteeing rental income. Nev-
S ertheless, when owners are in a rental pool, they may put pressure on management
N to keep the unit occupied and bringing in revenue all the time.
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Reservationists
Employees who take reservations at vacation ownership resorts have a much more
complicated task than do their counterparts at traditional resorts, which feature
few room types. The task is to simply match the needs of the guest to a relatively
small list of variables. Vacation ownership units vary greatly in terms of size, view,
appliances, and decor. Matching individual guests to all of the units available is
more complex and requires greater product knowledge on the part of the em-
ployees. Repeat renters tend to book a specific unit rather than wait to be assigned
a unit at check-in, which is typical at a traditional resort.
A number of computerized reservation systems specific to vacation ownership
resorts have been developed by software companies. Such programs help track
guest deposits, manage correspondence, and pay revenue to owners. Additional
modules link reservations to the Internet and encourage revenue equalization by
having units with less revenue or room nights booked to appear first on a list of
available units. One example is Resort Data Processing, Inc., that has over 1,000
installations and, since 1981, has been providing support for resort management
systems around the world.
Check-in
Some resorts have separate check-in facilities for owners. Owners do not expect
to be treated like guests—they want to be treated like owners! This places addi-
tional pressure on employees to give exceptionally high standards of service.
Work patterns at interval ownership resorts differ from those at both whole
ownership or traditional resorts. At the former, guests check in and out on turnover
days. Typically, check-out occurs on Saturday or Sunday. Some resorts stagger
these days over Friday, Saturday, and Sunday to balance employee workload.
Check-in and check-out times are similar to those in hotels. Guests check out
typically before noon and check-in in mid-afternoon. On turnover day, all units
have to be cleaned in a matter of hours. Timeshares hire temporary or contract
employees to handle the specific work patterns of timeshare units. This makes for
a difficult management situation due to the constantly changing staff. The balance
between nightly rentals and interval owners is an issue traditional resorts do not
have to deal with.
Billing
Other differences relate to overbooking and payment of the bill. Interval and whole
ownership resorts rarely overbook. There is an expectation that guests show up.
To encourage this, advance deposits and full payment on arrival are common at
whole ownership resorts.
Key control can be a problem at interval resorts. It is expected that guests turn
in keys at departure. Owners may feel that it is legitimate for them not only to
S hang on to their keys but also to make copies of them to hand out to friends.
N Electronic locks, which can be programmed after each guest leaves, alleviate this
L problem.
MILL (Wiley)
RESERVATIONS AND THE FRONT DESK 249
Quick Getaway 9.3

Room Key ATMs?
Picture this scene from the future: a lone busi- The automated check-in technology pri-
ness traveler talking on a cell phone walks into marily appeals to business travelers, whose
a classy hotel. Bypassing the line at the front time is at a premium, according to Evans. Using
desk, she makes a beeline for a small ATM-like the kiosk helps guests go from the hotel to the
machine. With the swipe of a card, she is airport without a hitch, which is a big draw for
checked into the hotel and given her room key convenience-minded business travelers. An-
and number. She even prints off a boarding other benefit is the kiosk’s portability, which
pass for her flight the next morning, eliminating means that the hotel staff can move it to the
the need to get to the airport early. The busi- hotel’s Grand Wayne Center entrance for con-
nesswoman boards an elevator and heads to ventions.
her room, only minutes after entering the front Hotels that cater to leisure travelers are un-
door. likely to be interested in installing kiosks, says
The future is here—such a machine exists Todd Medert. Medert is the general manager of
and is in operation at the 250-room Hilton in the Holiday Inn Hotel and Suites on East Wash-
Fort Wayne, Indiana. The hotel was the first in ington Boulevard, which focuses more on lei-
the Fort Wayne area to install a check-in kiosk, sure travelers. According to Medert, guests who
according to Todd Medert, president of the are in search of a leisurely experience are more
Northeast Indiana Hospitality Association. likely to want the personal touch of a con-
The kiosk, which is similar to an auto- cierge.
mated teller machine at a bank, recognizes the ‘‘I think [using kiosks] kind of makes it im-
hotel guest by scanning a credit card or some personal, but there are those guests who want
other form of identification, Evans explains. to check in and go straight to the room,’’ Med-
Guests can use the machines to check into the ert says.
hotel or print out a boarding pass for the flight
home. In the interests of protecting guest pri- Source: Glenn, Jenni. ‘‘Hilton unveils guest check-in ki-
vacy, the screen never displays a customer’s osk.’’ The Fort Wayne Journal Gazette (July 12, 2006).
room number. Instead, the number appears on http: / / www.fortwayne.com / mld / journalgazette /
the guest’s printed receipt. The kiosk is not in- 15020300.htm
tended as a replacement for front desk staff,
but rather as an assistant.
Such a system allows the front desk people DISCUSSION QUESTION:
to spend more time with guests who prefer the Would you use a check-in kiosk? Would you
personal touch while letting the independent use one for retrieving a boarding pass? Why
travelers serve themselves. or why not?
S
N
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MILL (Wiley)
Owner Relations
Large whole ownership resorts have a separate department dedicated to owner
relations. Interval ownership resorts have difficulty giving such personal attention
because of the large volume of owners. This latter group of owners does not
typically have the same level of feeling toward the unit as do whole owners. Ser-
vice expectations, however, remain high. Exchange guests rank each property they
stay at. These ratings affect the resort’s ranking by the exchange organization,
which, in turn, influences the trade value of the resort to others. Thus, guest sat-
isfaction has a direct impact on the attractiveness of the property to others.23
HOUSEKEEPING
There are major differences in the way traditional resorts and ownership properties
operate relative to housekeeping. The principal differences are in:
size and location of units

guest arrival and departure patterns
staffing patterns
owner relations
Size and Location of Units

Most vacation ownership units have two bedrooms and two full baths and can
sleep up to six people. One-bedroom units typically sleep up to four people, while
studio units sleep no more than two.24
Recent designs include the lockout unit, consisting of two bedrooms and two
bathrooms or three bedrooms and three bathrooms, which is designed such that
the owner can occupy the living room and one or two bedrooms while renting
out the remaining space. Features such as terraces, balconies, wood-burning fire-
places, hot tubs, and whirlpool baths are becoming increasingly common.
Public spaces in a vacation ownership resort can include hospitality areas
consisting of a check-in desk, concierge desk, and cashier, game rooms, restau-
rants, and stores.25 In fee-simple resorts organized as condominiums (where owners
actually own the weeks they buy forever), the public spaces are common areas
owned jointly by all unit owners. It is not uncommon for developers to retain
ownership of some or all of the profit centers in the resort.
The lobby must be able to accommodate large numbers of people and lug-
gage during weekly arrival and departure times. Some provision must be made to
store the luggage of guests who arrive prior to official check-in times.
The outdoor landscape is important to creating an ambience that enhances
S the overall experience of the guest. Extensive use of exotic plants has given way
N to the use of native flora. This movement reflects an increased concern for the
L environment.
MILL (Wiley)
HOUSEKEEPING 251
While the standard hotel room measures 400 square feet and includes a sleep-
ing area and a bathroom, the typical condominium unit has over 1,000 square feet
and includes three bedrooms, two bathrooms, a kitchen, and a living / dining area.
Many also include fireplaces and balconies. Thus, while a standard room can be
cleaned in 30 minutes, it may take up to 90 minutes to clean a condominium unit.
The daily standard for a hotel housekeeper may be 15 to 20 rooms per day; for a
resort condominium housekeeper, the number may be closer to 5 units per day.
The problem is not just the size but also the complexity of the cleaning task.
Units may include tubs with glass enclosures rather than shower curtains, Jacuzzis
enclosed with glass or mirrors, fireplaces and grills, ovens, dishwashers, and re-
frigerators.
Quick Getaway 9.4

The Nuts and Bolts of
Successful Housekeeping
The housekeeping department must success- contain batteries for the remotes. Tools for the
fully juggle the work of many people and room attendant should include rags or special
thousands of items. And it must look easy. cloths, glass squeegee for the showers, and
Listed below are a few of the many impor- scrubbers for the ranges.
tant aspects of good housekeeping: Housekeeping Area—Within the main
Staff—the majority of your staff will work housekeeping area, two types of storage are re-
a fulltime day shift. That said, there are usually quired. The first is linen storage. A resort will
part-time laborer scheduled to work specific usually have one par in the unit (par meaning
days, and casual laborers who are called when one of every towel size and quantity that is sup-
they are needed. posed to be in the unit), one par in the laundry,
Compensation—there are two common and a portion of a par on the shelves as a back-
payment methods for housekeeping staff, up supply. The second type of storage is the
which have many variations. The first is an unit inventory storage. This includes the coffee
hourly rate with the expectation of a specific maker, toaster, silverware, dishes, cooking
number of units cleaned. The second is a piece utensils, pots and pans, decorative pieces, silk
rate with the expectation of a specific number flowers, cutting boards, and knife sets.
of units cleaned. The piece-rate method re-
wards good workers, which makes it ideal for Source: Lynn and McCrory. ‘‘Resort Management: Iden-
tifying the Nuts and Bolts of a Successful Housekeep-
incentives. ing Operation.’’ Developments (August 2005).
Cleaning Supplies—cleaning supplies
should include glass and surface cleaners, dis-
infectant cleaners, grease-dissolving cleaners, DISCUSSION QUESTION:
and carpet-spot cleaners. Having the bottles or Cleaning can be dull and laborious work.
S nozzles color coded assists the room attendant What are some ways of making the job
N if there is a language issue. Carts should also more rewarding for your employees?
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MILL (Wiley)
While hotel rooms are located in an enclosed building, condominium units

in a resort may be spread over several acres. Problems of transporting materials
and supplies over distances in all types of weather are intensified.
Guest Arrival and Departure Patterns

In a traditional hotel, guests come and go during the week. In a vacation ownership
resort, most guests arrive and depart on the same day. This exchange day or
turnover day creates unique problems for housekeeping. All units in the property
have to be cleaned in a matter of hours. It is important to have a system that
choreographs activities to ensure a smooth turnover. This might mean, for exam-
ple, that supplies are made up into goodie bags for easy distribution to individual
condominiums. There has to be a plan for dealing with early arrivals. This might
include giving tours of the property, having a welcome party, or giving beepers to
guests to let them know when units are available for occupancy.
Staffing Patterns
The pattern described above means that many housekeepers are needed—but for
only one day a week. Even when some units are rented on a daily basis, the
number of housekeepers needed is much lower than the number required on
exchange day. This situation can be addressed through staggered cleaning sched-
ules, utilization of part-time employees, or using outside contractors.
Depending on the minimum stay requirement, some guests may stay for a
week while others leave after three or four days. Staggering departures in this way
can spread out the work for the housekeeping staff. Some resorts offer a midweek
cleaning on the third or fourth day of a weeklong stay in conjunction with a ‘‘daily
refresh,’’ which can include emptying the trash, straightening the bed, and deliv-
ering towels. Additional services are made available for a fee.
Part-time employees can be used to supplement a small full-time staff. Using
part-timers offers flexibility of schedule and lower costs through not providing
benefits. Special efforts are necessary to make part-time workers feel part of the
team. Their use also necessitates constant training to bring new employees up to
speed on the standards of the resort.
Mastercorp is an example of an outside contractor that provides housekeeping
service to resorts. The company recruits and hires for and manages all housekeep-
ing and laundry services. The resort has limited control over Mastercorp employ-
ees. This is not a problem if standards are met. Problems, however, may take longer
to resolve to the satisfaction of guest and resort management because of the pres-
ence of the outside contractor. The guest, on seeing a housekeeping employee,
believes that person to be an employee of the resort. The employee has to answer
S to the guest, resort management, and the contractor. Communication is more com-
N plex and problems more difficult to resolve.
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MAINTENANCE AND ENGINEERING 253
Owner Relations
Some owners develop strong feelings toward the person taking care of their unit
and want assurance that that individual will always handle their unit. The advan-
tage of this arrangement is that a specific person becomes familiar with the layout
and requirements of particular units and can be expected to do a better job than
someone who rotates into the unit every other day. Difficulties arise when owners
treat the housekeeper as a personal maid or give them cleaning instructions at
odds with policies of the resort.26
MAINTENANCE AND ENGINEERING

Role of Owners
Because of the interest and involvement of owners, there is more pressure on the
maintenance department of a vacation ownership resort compared to a traditional
property. While hotel guests pay for the expense of repairs indirectly through their
room rate, whole ownership resort owners pay directly for all maintenance and
repairs on their unit and share in the expenses of the common units. The main-
tenance responsibilities of the owners are usually spelled out in the owner’s agree-
ment. This might detail the standards that owners must maintain for repairs, interior
decorating, and furnishing. If the standards are not met, the unit may be taken out
of the rental program. As a rule of thumb, the more permanent residents there
are, the less maintenance is required.
Because units are not standardized, it is difficult to specify the same bedding,
seating arrangements, and decor for each. However, it is possible to enforce quality
standards on all items within the units.
Owners either rent out their unit through resort management, do not rent out
the unit because it is used as a second home, or rent out the unit themselves or
through a third party. The first group tends to contract repair and maintenance
services to the management company of the resort. This certainly makes sense for
owners in terms of convenience and cost. The management company can respond
faster with a staff familiar with the units. At the same time, they can likely offer
services at a cost that is lower than that of outside contractors. The second group
typically do their own work, while the latter group usually have work done by the
same agency that rents the unit. Interval ownership resorts usually hold back two
weeks during the year when the unit is not rented. Major repairs and heavy main-
tenance are done at this time.
Maintenance is usually regarded as a support center that is an expensive ne-
cessity. In ownership condominiums, the maintenance function is often run as a
break-even proposition. It does, however, have the potential to be a profit center.
Operational costs are passed on to owners, while the department collects revenue
S for services rendered to owners. Management may charge an annual fee to do the
N following:
L
MILL (Wiley)
Recycle ice maker.

Adjust refrigerator settings.
Reset breakers.
Unstop garbage disposal.
Plunge toilet.
Adjust sink and tub stoppers.
Replace faucet knobs.
Desuds the dishwasher.
Tighten door hinges.
Inspect the heating and air-conditioning system.
Replace air-conditioning filters.
Replace light bulbs.
Common Areas
As noted earlier, owners pay for work done on their individual units, while ex-
penses for common areas are shared. Common areas include:
land, grounds, private roads, parking areas

foundations, main walls, roofs, lobbies, building entrances and exits
central services such as power, light, gas, water
elevators
laundry and storage rooms
recreational amenities
Common areas may be general (such as those noted above) or limited. Lim-
ited common elements are those to which only a single owner has access. Ex-
amples include a balcony and a lock on a door. While the owner has exclusive
use of each, the former can be seen by others, while the latter is included because
the association may need to access the room in the event of an emergency.
Major Repairs
Repairs can be expensive. The resort needs to specify priorities for determining
the order in which repairs must be completed. The order of general priorities
should be:
1. systems critical to life, health, and the property (asbestos removal)

2. systems critical to the property’s daily operation (furnace, air-
conditioning)
3. systems that would cause damage to other systems if they failed (drains,
leaks, broken windows)
4. systems that would cause major inconvenience to owners (electrical
S system)
N
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MILL (Wiley)
MAINTENANCE AND ENGINEERING 255
5. systems that would cause minor inconvenience to owners (minor furni-

ture scratches)
6. systems requiring replacement for cosmetic reasons (out-of-style wall-
paper)
Monthly Assessments
Monthly assessment fees are negotiated with the board and charged to individual
owners. They are intended to support ongoing upkeep so as to increase the at-
tractiveness of the resort and maintain the value of the property.
A system has to be set up to ensure that all work is properly billed. When a
repair request is received, a work order is generated that is used to schedule labor
and create an invoice, which is sent to the owner as part of her statement. Many
companies have a policy of calling the owner if expenses exceed an agreed-on
limit.
Renovations
Resorts usually undertake renovations for one or more of the following reasons:
higher service expectations on the part of owners

increasing levels of technological comfort
keeping up with competition
greater environmental awareness
Prior to the actual renovation, the scope of the project must be determined.
Long-term objectives must be identified, a projects list generated, costs and ben-
efits numerated, and projects chosen. An outside expert may be brought in to
prepare the design, act as an inspection agent, or act as an independent arbitrator
in the event of a dispute. A decision must be made on how the project will be
funded—from existing funds or via a special assessment. Reserves are funded
through annual fees or as part of the regular monthly assessments. Some states
mandate the collection of reserves. Permission from the owners is usually required
before reserves can be spent. When a special assessment is needed to complete
the work, the cost of the project is divided among and charged to the owners.
Finally, a contractor is selected.
During the planning phase, it is critical that a communications program be
targeted toward owners to explain the costs and benefits of the project. Commu-
nication is key to getting the support of the owners, who will be more interested
in what is being proposed than are guests.
Employees may need to be retrained in new procedures after the renovation.
If, for example, a pool has been resurfaced, maintenance procedures may be
different. Owners will also expect higher standards of quality to go along with the
new facilities. A festive reopening will help generate positive feelings from
S owners.27
N
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MILL (Wiley)
Timeshare owners have a high expectation for the overall look and maintenance
of their investment. Courtesy The Four Seasons; photo by Aaron Gordon
ACCOUNTING AND FINANCE

‘‘Hotel guests are very different from timeshare owners. The
challenges for our timeshare resorts are providing financial
management for our 1,500 owners while tracking their per-
sonal needs and generating revenue for them in our rental
pool.’’
—JIM MORASH
COO, CALABOGIE PEAKS RESORT
FINANCING THE TIMESHARE

Approximately 5 percent of eligible household owners actually own a timeshare.
An overwhelming 70 percent are financed internally with down payments ranging
S anywhere from 10 to 30 percent and the remainder financed with an interest rate
N
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MILL (Wiley)
FINANCING THE TIMESHARE 257
much higher—typically 14 percent—than if financed through a bank.28 Timeshares

generate returns of more than 20 percent. Developers not only make money from
timeshare sales they also generate revenue from interest they receive on five- to
seven-year loans they make to timeshare buyers.
Despite these heady returns, the uniqueness of timeshare operations serves to
slow down their development. Because they tend to rely on tourists for the bulk
of their guests, firms tend to concentrate on proven resort destinations that are
densely developed. This can make it difficult to find a suitable piece of land.
Additionally, the sales cycle can be long and drawn out. A developer can be
involved in a project for ten years before all the units are sold and paid for.
Customers can and do rescind their decision to buy while other buyers default on
developer-provided financing.29
Timeshare developments generate revenue after the development is complete.
By law, timeshare owners have a right to select their own management com-
pany. The firms that provide the management can generate 10 percent profit on
annual owner fees.
Accounting
Ownership properties have different needs compared to traditional hotels. Like
hotels, they require reservations, interfaces, housekeeping and customer relation-
ship management (CRM) systems. However, the essence of condominium and
timeshare management is about revenue sharing rather than merely adding up
posted numbers. Owners expect to receive the correct amount of rental pool in-
come from their units on a monthly basis since they are paid based on a formula
based on the percentage of their possession in the timeshare agreement. Thus
hospitality systems suppliers like NORTHWIND have added Condominium Owner
Management and Timeshare Owner Management modules to their applications.
While hotels keep two types of accounting records—one for guests in the form
of guest accounts or folios, and one for business—condominium resorts need three
sets of records:30
Guest (unit-renter) accounts are similar to those in hotels. Individual fo-

lios are created for each guest who is renting a unit from an owner who
is part of the resort rental program managed by the owner’s association.
Charges are posted during the stay and balances are settled prior to de-
parture.
Owner accounts are unique to resort condominiums. On a monthly basis
the owner’s association prepares a statement for each owner outlining
any assessments that are due, rental income from the unit, and any com-
missions due the owner for participating in the rental pool as well as any
direct expenses charged to the owner.
Owner’s association accounts are used to prepare budgets and financial
S statements for the owner’s association.
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SUMMARY
Managing a resort, condominium or timeshare property is very different from man-
aging a ‘regular’ hotel. Understanding the unique operating characteristics of these
types of properties leads to an awareness of how to become a more effective
manager.
ENDNOTES
1. Miller, Richard K., & Associates, Inc. The 2005 Travel & Leisure Market Research Handbook.
Loganville, GA, 2005, 369.
2. Upchurch, Randall, and Conrad Lashley. Timeshare Resort Operations: A Guide to Management
Practice. Oxford, England: Elsevier Butterworth-Heinemann, 2006, 102.
3. Ibid., 10.
4. Gose, Joe. ‘‘Capitalizing on Timeshares.’’ National Real Estate Investor (March 1, 2003).
6. Ragatz, Richard L., and John C. Crotts. ‘‘U.S. Timeshare Purchasers: Who Are They and Why
Do They Buy?’’ Journal of Hospitality and Tourism Research 24, no. 1 (February 2000): 49–66.
7. Phenomenal Growth in the U.S. Timeshare Industry. Washington, D.C.: American Resort Devel-
opment Association, Spring 1999, 5.
8. Ragatz and Crotts. ‘‘U.S. Timeshare Purchasers,’’ 55.
9. Ibid.
10. The United States Timeshare Industry: Overview and Economic Impact Analysis. Washington,
D.C.: American Resort Development Association, 1997, 43.
11. Ibid., 44–45.
12. Ibid., 53.
13. Ibid., 47.
14. Ibid., 48.
17. Ibid., 23–27.
Practice. Oxford, England: Elsevier Butterworth-Heinemann, 2006, 104–107.
Practice. Oxford, England: Elsevier Butterworth-Heinemann, 2006, 141–143.
20. Abbey, James R. Hospitality Sales and Advertising. East Lansing, MI: Educational Institute of
the American Hotel and Motel Association, 1989, 336–337.
21. McElyea, J. Richard, and Gregory L. Cory. ERA Issue Paper. Resort Investment and Development.
An Overview of an Evolving Market. Economics Research Associates, undated, accessed January
11, 2006. http: / / www.econres.com / documents / ip.html#; Gee, Chuck Y. Resort Development and
Management, 2nd ed. East Lansing, MI: Educational Institute of the American Hotel and Motel
S Association, 1988, 16–22.
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FINANCING THE TIMESHARE 259
22. Gentry, Robert A., Pedro Manoki, and Jack Rush. Resort Condominium and Vacation Ownership
Management. Lansing, MI: Educational Institute of the American Hotel and Motel Association,
1999, 49–64.
23. Simons, Arthur H., and George Leposky. AEI Resource Manual. Washington, D.C.: American
Resort Development Association, 1994, 10.
24. Ibid., 11.
25. Gentry, Manoki, and Rush. Resort Condominium Management, 67–74.
26. Material for ‘‘Maintenance and Engineering’’ was drawn from Gentry, Manoki, and Rush. Resort
Condominium Management, 88–103.
28. Gose, Joe. ‘‘Capitalizing on Timeshares.’’ National Real Estate Investor (March 1, 2003).
29. Gentry, Robert A., Pedro Manoki, and Jack Rush. Resort Condominium and Vacation Ownership
Management. Lansing, MI: Educational Institute of the American Hotel and Motel Association,
1999, 49–64.
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Chapter 10
RESORT OPERATIONS:
THE IMPORTANCE OF
GUEST ACTIVITIES
LEARNING OBJECTIVES
1. Explain the guest activity programming model and its significance to success-
ful resort operation.
2. Explain how knowledge of cultural differences and individual needs can be
used by resort managers to design guest activities.
3. Identify how cluster or activity analysis can help meet the objectives of a
guest activity program.
4. Describe the steps required to effectively plan a guest activity program.
5. Identify the approaches and measuring instruments used in evaluating the ef-
fectiveness of guest activity programs.
INTRODUCTION PROGRAM PLANNING

Benefits of Guest Activity Leadership
Programs Volunteers
Approach Budgeting
Model Scheduling
GUESTS’ NEEDS Facility Availability
Needs Assessment Promoting the Program
DEFINING GOALS AND OBJECTIVES PROGRAM EVALUATION
Goals and Objectives Evaluating Program
CLUSTER AND ACTIVITY ANALYSIS Effectiveness
Activity Analysis Approaches to Evaluation
Cluster Analysis SUMMARY
Format ENDNOTES
PROGRAM AREAS
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INTRODUCTION 261
INTRODUCTION
Good programming does not just happen; it is carefully
planned for, thought about, and learned.
—FARRELL and LUNDEGREN
The Process of Recreation Programming: Theory and Technique
When guests are at a resort or on board ship for several days or weeks, they expect
the facility to cater to their need for something to do. At resorts, this need is met
by guest activity programs. What guests actually do is called recreation. Recreation
is ‘‘an activity that takes place during one’s free time, is enjoyable, freely chosen,
and benefits the individual emotionally, socially, physically, cognitively, and spir-
itually.’’1 Note that this definition contains a number of value-laden words. The
activity should be fun, it is something the guest chooses to do, and the guest should
receive some benefit from it. If these conditions are not adhered to, the guests will
not fully enjoy the activity and their stay will be less enjoyable than it could be.
For a guest to leave the resort or ship truly satisfied with the visit, it is imperative
that the guest activity director take an active role in planning activities to ensure
that they provide the benefits noted above. In this chapter, a model is suggested
that will produce satisfied guests.
Benefits of Guest Activity Programs

The impact of a recreational or guest activity can extend far beyond the immediate
benefits.2 Consider a couple hiking along a trail. They may experience one or
more of the following benefits:
feeling good about getting exercise

enjoyment of the sights and sounds of nature
mental relaxation
learning something about the natural environment
feeling closer to their partner
Many of these initial benefits can extend into the long term for the couple
and even for society. Because they feel good about getting exercise, the couple
may commit to a program of exercise that improves their own well-being while,
in some way, lowering health care costs. Feeling relaxed mentally might lead to
increased performance and higher productivity back on the job. Having learned
something about the natural environment, they may return home with a greater
stewardship ethic that will result in greater care for the planet. Feeling closer to
one’s partner can carry over beyond the vacation to the development of better
problem solving within the relationship and a more stable family.
As noted above, to be satisfying, an activity must include:
S
N Freedom—Guests must be free to select the activities in which they want
L to participate.
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262 Chapter 10 RESORT OPERATIONS: THE IMPORTANCE OF GUEST ACTIVITIES
Hiking is an activity that extends beyond its immediate benefits. 䉷 Royalty-free /

CORBIS
Perceived competence—Guests must be able to match their skill level to

the activity such that they feel they can successfully participate.
Intrinsic motivation—Truly satisfying activities are those that are chosen to
satisfy an inner drive rather than to satisfy or impress others.
Locus of control—Guests need to have some degree of control over the
experience, be it in the selection of teammates or when or where the ac-
tivity will take place.
Positive effect—The result of a satisfying activity is that guests enjoy the
experience after participating in it.3
Approach
What are guest activity or recreation programs? ‘‘Recreation programs are pur-
poseful interventions which are deliberately designed and constructed in order to
produce certain behavioral outcomes.’’4 The program is a means to the end—a
satisfied and fulfilled guest.
Model
Guest activity programming involves five steps:
S
N 1. Assess needs of guests.
L 2. Define objectives for the activities that will meet guest needs.
MILL (Wiley)
GUESTS’ NEEDS 263
3. Perform cluster or activity analysis designed to meet the objectives.

4. Administer the activity.
5. Evaluate the experience with respect to its success in meeting guest
needs.5
Evaluation of the activity might lead to a reassessment of any of the earlier

steps. Development and operation of any program occurs within the context of,
and is influenced by, external factors:
Historical influences—the tradition and philosophy of the resort

Environmental influences—time of the year, weather, etc.
Cultural influences—ethnicity, age, and religion of the guests
Social influences—fads, trends, news
Organizational influences—values and mission of the company6
Finally, guests, staff, equipment, and facilities are brought together to deliver
the guest experience. This model is illustrated in Figure 10.1 and serves as the
basis for discussion in this chapter.
GUESTS’ NEEDS
Needs are viewed as motivators, or factors, that influence the
drives people have in making decisions about involvement in
leisure programs.
—DONALD DEGRAAF, DEBRA J. JORDAN, and KATHY H. DEGRAAF
Programming for Parks, Recreation, and Leisure Services:
A Servant Leadership Approach
Activity programs could be much more meaningful to participants if the activity

director knew what guests expected from the program. People participate in guest
activities for a variety of reasons. They may wish to:
Make friends.
Belong to a group.
Experience competition.
Learn a new skill.
Share a talent.
Gain prestige.
Get in shape.7
It might be argued that people pursue recreation for the same reason they
S pursue any goal—to satisfy needs and wants important to them. In so doing, they
N operate within, and are influenced by, the cultural and social environments in
L which they grew up and now find themselves.
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Historical Environmental
Influences Influences
Assess Guest Needs

Guests Equipment/
Resources
Develop Objectives
Cluster/Activity Analysis
Guest Activity Experience Facilities

Activity
Staff
Evaluation
Organizational Social Cultural

Influences Influences Influences
FIGURE 10.1 Guest activity programming model. Adapted from: DeGraaf, Donald G.,
Debra J. Jordan, and Kathy H. DeGraaf. Programming for Parks, Recreation, and Leisure
Services: A Servant Leadership Approach. State College, PA: Venture Publishing, 1999, 52.
And Farrell, Patricia, and Herberta M. Lundegren. The Process of Recreation Programming:
Theory and Technique, 3rd ed. State College, PA: Venture Publishing, 1991, 25.
The key to understanding guest motivation is to see the activities they engage
in as satisfiers of needs and wants. Guests do not participate in guest activity
programs ‘‘just’’ to relax and have fun. They do so in the hope and belief that
these activities will satisfy, either wholly or partially, needs and wants important
to them. This view of guest motivation is critical. It is the difference between seeing
a resort program as simply a hayride or a painting class and as a means for sat-
isfying what is important to guests.
Needs Assessment
Through the use of needs assessments we can maintain cus-
S tomer loyalty while at the same time work to recruit new
N customers.
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GUESTS’ NEEDS 265

Needs assessment is ‘‘a systematic inquiry about needs, attitudes, behaviors, and
patterns of both participants and non-participants.’’9 Its purpose is to identify what
is important to guests in order to better design and deliver guest activity programs
that leave guests satisfied with the program and, consequently, the resort. Con-
straints should be noted. First, needs are infinite. The resort cannot totally satisfy
the needs of every guest. Second, conflicts between different segments of the mar-
ket are inevitable. Teens want different activities than seniors. On the slopes, there
are differences between skiers and snowboarders. Satisfying each segment of the
market without encroaching on the satisfaction of the others is a major task. Nev-
ertheless, this task must be executed if the staff believes in the marketing or cus-
tomer concept.
Several techniques can be used to conduct a needs assessment:
Existing guests are asked what interests them or what activities they cur-
rently undertake. Information may be collected to create a demographic
and usage profile for use in expanding the market segment, finding new
segments, or forecasting future demand for existing and proposed ser-
vices. The existing services can also be evaluated.
People who do not use the programs and who do not take part in the
activities might also be surveyed as to their reasons. This can provide use-
ful information on how to improve the programs to make them more
guest-friendly.
National figures are available on trends in recreation. Figures can be
obtained from such sources as local, state, and national tourism boards,
and agencies such as the Outdoor Industry Association. Noting which ac-
tivities are growing in popularity can help staff identify likely future de-
mand for specific programs.9
Resort amenities can have primary and secondary uses. As an assist in thinking
about secondary uses for facilities and areas, in addition to implementing the
multiple-use concept, list all of the facilities and areas on the property and note
the possible activities for which they could be used.10 For example, the primary
use of a golf course is to play golf. However, it could also be used for cross-country
running and skiing, a jogging trail, sledding and tobogganing, orienteering, and
bird-watching, to name only a few possibilities. This is, in essence, a product rather
than a marketing approach to needs assessment. While not as useful as the other
methods, it can be a useful complement.
In this marketing model, needs assessment is the first step in providing services
S and programs to meet the stated and implied needs and wants of existing and
N future guests.
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DEFINING GOALS AND OBJECTIVES

If one were to picture a staircase, objectives would be the in-
dividual steps and the goal would be at the top of the stairs.
Goals and Objectives

The goals and objectives of the guest activity programs nest within those set for
the resort itself. Goals are broad, general, final outcomes. The overall goal of the
resort might be to produce profits by satisfying guests. Within this framework, the
guest activity goal might be to:
Provide satisfying experiences for guests.

Aid in skill development.
Increase guests’ health and well-being.
Encourage social interaction among guests.11
Objectives are much more specific and short-term. The resort might set objec-
tives relative to occupancy, rate, and percentage of guests who return. Again,
within this framework, the guest activity director might set specific objectives in
terms of the number of people who participate in activities, targets for guest sat-
isfaction with programs, and so on.
Objectives should be set for the overall guest activity program as well as for
every individual program and activity offered. Program objectives should be set
before implementing an activity. A program has the guest perform or behave in a
certain way, learn something, and / or receive instruction.12 For the guest activity
program to be meaningful (and, therefore, satisfying, to the guest), it is important
that the programmer develop some idea of what the outcome of the program
should be for guests and design activities (the next step in the process) to help
ensure the objectives are met. Refusing to set objectives lessens the chance that
guest needs, identified above, are met.
What is the expected outcome of the program? Should guests be able to ski,
golf, play tennis better? Should they have a greater appreciation for the outdoors?
Will they learn a new skill, make a new friend, or feel more relaxed?
Setting objectives involves certain assumptions: that the programmer is able
to conceptualize what will happen during the activity; that the programmer is
skilled in writing performance objectives; and that the program objectives are con-
sistent with the objectives of participants in the activity.13 The success of the pro-
gram is reflected in the extent to which it realizes its objectives. Objectives,
therefore, must be stated in specific terms and include some measurement to
S indicate whether or not the objective is met. This process is relatively sophisticated
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CLUSTER AND ACTIVITY ANALYSIS 267
Quick Getaway 10.1

The Spa—To the Extreme!
It’s one thing to climb up a telephone pole. It’s cock feather in the palm of your hand, among
another to jump off of it. It’s quite a different other things. Like the exercise in pole-climbing,
thing to want to jump off a telephone pole, it’s about executing a task that feels impossible
even taking the safety harness into considera- but isn’t. The idea behind these activities is to
tion. However, jumping off telephone poles become more aware of yourself, to relax, and
and other fear-confronting ‘‘challenge’’ activi- to be more mindful of they way you act.
ties are the centerpiece of a stay at Miraval— Of course, the ‘‘anti-spa’’ has its share of
the anti-spa. treatments, massages, and exercise classes, but
Located in a valley north of Tucson, just their variety and availability make it easy to
west of the Santa Catalina Mountains, Miraval schedule a day full of activities. Still, the chal-
defines itself by the phrase ‘‘Life in Balance.’’ lenge sessions are what sets Miraval apart.
Miraval epitomizes the concept of the anti-spa, Source: ‘‘Balancing Act: Miraval, a destination spa that
especially because it values exemplary service isn’t plans to take its show on the road.’’ Forbes.com.
far more than it does the latest beauty treat- www.forbes.com / business / fyi / 1212 / 111.html
ment. There’s a definite psychotherapeutic el-
ement running through Miraval. For nearly a DISCUSSION QUESTION:
decade, spa-goers have been raving about pro- What particular demographic do you think
grams such as ‘‘Desert Journey,’’ in which you would be the ideal target market for this
may be called upon to balance an upright pea- kind of spa vacation?
and holds the programmer accountable for the success of the program. The idea
is to identify what the participants should think, feel, or do at the end of the
program.
CLUSTER AND ACTIVITY ANALYSIS

If I had no duties, and no reference to futurity, I would spend
my life in driving briskly in a post-chaise with a pretty
woman.
—SAMUEL JOHNSON
As quoted in James Boswell, Life of Samuel Johnson, 1791
The next step in the process is to identify activities that can help guests meet the
S stated objectives. Two ways of doing this are activity analysis and cluster analysis.
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Activity Analysis
Activity analysis involves determining how each part of an activity can contribute
to meeting goals and objectives. Each activity can be broken down according to
the following criteria:
behavioral domains—cognitive, affective, and psychomotor

skill level, from low to high
interaction patterns, from individual to group
leadership required, from minimum to maximum
equipment required, from none to required
duration, from a set time through a natural end to continuous
facilities required, from none to required
participants, from one to any number
age appropriateness 14
The primary focus of a game of basketball, for example, is psychomotor ac-

tivity at a high level—passing, dribbling, shooting. The secondary domain is cog-
nitive, also at a high level—knowing the rules and various plays as well as some
strategy. The tertiary domain is affective, at an average level—sportsmanship. A
high degree of group interaction comes from the need to bond as a team to
compete against another team. A certain amount of leadership is required. A bas-
ketball and court and hoops are needed. Any number from two to ten can play
(ranging from one-on-one to five-on-five), at any age from five years up. The activity
can last for a set time or until a set number of points are scored. Activity analysis
can identify the activity that will best meet identified needs.
Cluster Analysis
Cluster analysis clusters activities that yield similar benefits. Each activity becomes
a variable, the correlation between participation in two variables is computed, and
the cluster is based on the correlation that results. Typically, the following criteria
are used to determine clusters:
degree of skill required

level of activity
nature of the group needed
amount of risk or danger
special facilities needed15
An example of a cluster model is shown in Figure 10.2. The implication is that

people can be typed based on their choice of activity. The implications for the
resort are obvious. From existing levels of participation, staff can identify which
S complementary activities might be popular. If demand for tenpin bowling were
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Group A Group B Group C Group D
Soccer Rugby Outdoor bowls Ice skating

Tennis Netball Tenpin bowls Roller skating
Golf Athletics Table tennis Horse riding
Swimming Basketball Youth club
Fishing Badminton
Hobbies / Do-it-yourself Fitness exercises
Other activities Cycling
Amateur dramatics /
music
Group E Group F Group G Group H
Rowing Hill walking Picnicking Visiting a cinema

Motorboat cruising Rambling Driving in the Visiting a theater or concert
countryside
Messing about in Walking Gardening Dancing
boats Dining out
Visiting a community or
church center
Playing Bingo
Source: Patricia Farrell and Herberta M. Lundegren, The Process of Recreation Programming: Theory and Technique, 3rd ed. (State College,
Penna.: Venture Publishing, 1991), 88.
FIGURE 10.2 Burton’s eight cluster groups
great, for example, it would suggest that table tennis would also be a popular
activity.
Format
Guest activity staff offer various activities in different formats. Program format is
‘‘the way in which an activity is organized and structured to the customer.’’16
Guests select whichever format(s) they feel will allow them to satisfy important
needs and wants (Figure 10.3). In determining which programs and activities to
offer, it is useful to think of the various formats into which activities can fall.
Instruction Guests may participate in an activity for self-improvement—to learn a new skill or
to develop or refine an existing one. Guests may want to achieve a specific per-
formance goal. This format requires a high level of organization to satisfy the
motivations of the participants. For best results, the guest activity staff should have
specialized leadership skills. The program should be limited to a small number of
S participants who meet over a series of meeting times and dates. The program is
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ACTIVITIES
are organized into various
FORMATS
Instructional Competition Social Activities Trips
Drop-in Activities Special Events Spectator
which guests select to satisfy
NEEDS AND WANTS
FIGURE 10.3 Important to them

Needs, wants,
Physical Safety Belonging Esteem Self-Actualization
activities, and
format
Quick Getaway 10.2

New Waves in Cruises
Themed cruises are making a huge impression November of 2004 with Journey, REO Speed-
on the cruise industry, which has seen steady wagon, and Styx. And in early 2004, Cunard
growth over the past six years. The key is in the joined forces with Oxford University to create
specialized and often star-studded entertain- a lecture program. The strategy is to attract cus-
ment and activities offered on these specially tomers with the promise of international travel,
themed cruises. and then to hook them with fascinating on-
Now a cruise buyer has the option of sail- board activities.
ing the high seas with Las Vegas–style enter-
Source: Wright, Delores. ‘‘New Wave.’’ Ventures (De-
tainment, jam-band concerts, rock climbing,
cember 2004): 9.
and classes that teach everything from wine
tasting to financial management. This trend ca-
ters to today’s travelers who demand culturally DISCUSSION QUESTION:
enriching vacations, not just empty stretches of Some detractors of the theme cruise may
time and a few beaches. suggest that since the same activities are
Beginning in December of 2004, cruisers available on dry land, customers will choose
could enjoy Cirque du Soleil on select Celebrity to participate in the activities onshore rather
cruises. Guests on Carnival’s Triumph rocked than on a cruise ship. How would you re-
and rolled their way across the Caribbean in spond to this problem?
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characterized by heavy programmer control, responsiveness to many ability levels,

and fees for participation.
Competition Some people participate to compete. The interest in competition may be intrinsic
(competing against oneself, being the best one can be) or extrinsic (looking good
in front of others, the adulation of the gallery). Competition is traditionally asso-
ciated with sports, although board games, drama, and music, for example, offer
opportunities for competition. Having an audience is important for the extrinsically
motivated guest. (This opens opportunities for a category discussed below—the
participant spectator.)
Tournaments are not regarded as appropriate at the preschool and early ele-
mentary school level. Little leadership is desired by the participants. Groups are
usually formed by sex and stage in the life cycle. Decade age groupings are pop-
ular with adults.
Guests may also be grouped by skill level. It is important that people compete
with others at a similar skill level and in the proper environment to ensure a fair
contest. Competitions require limited equipment and strong administrator leader-
ship skills. They are labor intensive, especially as a variety of competitions must
be provided.
An alternative to competition among people at similar skill levels is the insti-
tution of some equalizing mechanism. For example, golfers with a greater degree
of skill are often given a handicap to allow golfers of less skill a fairer shot at
winning. In an intergenerational game of softball, the size of the bat and the ball
could be changed for younger players.
Participants should feel safe on both physical and emotional levels when com-
peting. They tend to feel more in control if they are given some say in setting rules
and guidelines to maintain a degree of fairness.17 Combining these concepts re-
quires a balance between the skill level of the guest and the challenge present in
the activity.35 If the challenge exceeds the guest’s skill level, he feels anxious. When
the skill level exceeds the challenge inherent in the activity, he is bored. When
skill level and challenge are matched, people can become totally engaged in the
activity. At this point, the experience becomes satisfying to the guest.
Social Activities Some people take part in activities primarily for social reasons. They do this be-
cause they need people. Social activities need minimal programmer involvement
once the activity is developed. Social programs should be open to all but carry
some guidelines and rules and operate within the philosophy of the resort. Certain
singles-only Club Med activities, for example, would not be appropriate in the
family atmosphere of a Disney resort.
Trips Activities may be organized in the form of a day or overnight trip. This format is
complicated in that it involves the movement of people around or away from the
S resort. Transportation must be arranged, increasing safety problems.
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Social activities should be resort appropriate. Courtesy The Greenbrier
Drop-in Some people prefer self-directed programs. These are the most difficult to define
Activities and manage. People sign up because they desire unstructured, unplanned, unsu-
pervised activities. The young and the old, however, want more structure. The key
concept is that self-directed programs need as much consideration as the others
noted above. The following questions are appropriate:
Is the facility free when people would use it for self-directed activity?
Are the only unscheduled hours at times when no one is available to use
the facility?
What is the cost of opening earlier or closing later?18
Special Events Resorts may organize special events, such as festivals, banquets, shows, and ex-
hibitions, in which guests can participate. Special events tend to draw attention to
the resort and, as such, can serve as excellent publicity that complements other
marketing efforts. Because large special events incur problems of crowd control,
S parking, and sanitation, resorts may wish to partner with one or more additional
N organizations and use volunteer staff to supplement the paid staff.
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Spectators Most of the formats noted above offer opportunities for people who prefer to watch
rather than to actively participate. They may look for playing tips as they ready
themselves for participation, or their days of active participation may be over while
their interest in the activity remains. Thus, every program should be planned with
spectators in mind, bearing in mind that watching may be the only ‘‘participant
option’’ for some. Spectators enhance the experience for active participants, es-
pecially those who are extrinsically motivated. Care needs to be taken from a
liability viewpoint, as the resort assumes legal responsibility for people watching
the event. The question of open versus designated seating needs to be addressed
as a means of producing revenue for prime viewing spots.
This list of formats is now combined with the program areas aimed at specific
life cycle groups to form the guest activity program of the resort. The job of the
recreation programmer is to combine the guests’ life stages, a variety of formats,
and numerous program possibilities in order to design a guest activity program.
The process for planning and evaluating programs is also discussed in this chapter.
PROGRAM AREAS
A recreation programmer cube is outlined in Figure 10.4. The cube suggests a
comprehensive approach to guest activity programming by bringing together three
areas—the life stages of the guests, the formats previously identified, and the va-
riety of program possibilities. A guest activity director matches the life stage of the
guest with the format and the activity desired to develop a guest activity program.
For example, a sidewalk craft fair might be set up to appeal to adults interested
in crafts as spectators.
PROGRAM PLANNING
On average, skiers ski for six hours and sleep for eight, which
leaves them with ten free hours a day, every minute of which
they fully intend to enjoy.
—JIM FELTON
VAIL RESORTS, INC., URBAN LAND
Planning a guest activity program involves five steps:
1. leadership
2. budgeting
3. scheduling
S 4. facility availability
N 5. promoting the program19
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Sports and games

Fitness/wellness
Aquatics
Service/volunteer
Dance
Drama
Music
Activities
Arts and crafts

Environmental activities
Adventure/education
Old age
Extreme sports Adulthood
Travel and tourism Young adulthood
Adolescence
Social recreation School age
Hobbies Play age
Cognition and literacy Early childhood s
tage
Self-improvement/ Infancy eS
education Lif
Instructional
Competition
Social trips
Drop-in
Special events
Spectator
Format Structure
FIGURE 10.4 The programmer’s cube. Adapted from Debra J. Jordan, and Kathy H. DeGraaf. Programming
Farrell, Patricia, and Herberta M. Lundegren. The for Parks, Recreation, and Leisure Services: A Servant
Process of Recreation Programming: Theory and Leadership Approach. State College, PA: Venture
Technique, 3rd ed. State College, PA: Venture Publishing, 1999, 122–123.
Publishing, 1991, 172. And DeGraaf, Donald G.,
Leadership
Often described as the most important factor in determining the success of a
program, selection of the appropriate leadership is certainly crucial. The process
involves three important and sequential steps:
job analysis
job specifications
S recruitment of suitable candidates
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Quick Getaway 10.3

Segmenting Resort Tourists
How can we classify resort-goers in terms of singles who rank safety and security reasons
selection, satisfaction, opinion, and prefer- high on their list of resort priorities.
ences? Here’s one model, proposed by Inbak-
aran, Jackson, and Chhetri: These group profiles offer an opportunity
for resort owners and managers to re-examine
Romantics—young people without families the products they sell and to determine which
who are not interested in the resort or its group the products cater to. Since each group
activities, but in pursuing simple recreation differs from the others in every aspect, it’s nec-
activities. essary to create marketing strategies that will
Immersers—regular visitors to the resort bring customers back in the future.
who rank highly all reasons for choosing
this destination. This group appears to be Source: Inbakaran, Jackson, and Chhetri. ‘‘Segmenta-
focused on what the resort has to offer in tion of Resort Tourists: a Study on Profile Differences
in Selection, Satisfaction, Opinion and Preferences.’’
terms of facilities and utilities.
Paper presented at the New Zealand Tourism and
Tasters—for reason of choice, this cluster Hospitality Research Conference, Victoria, New
group gave the highest rank to the resort Zealand, December 2004.
providing a good place for the family to re-
lax and rejuvenate.
Veterans—with the highest percentage of DISCUSSION QUESTION:
males, this is the oldest group and the least What are the dangers of categorizing resort
educated. The membership includes ma- customers and designing a marketing plan
ture families, mature couples, and mature aimed only at the majority?
First, the tasks involved in the job must be identified. This analysis identifies
the job functions that must be carried out together with the skill level at which
they need to be performed. This results in a job description for the position.
From the job description comes the knowledge, skills, and abilities necessary
to perform the job. This is called a job specification and is the second step in the
process. Finally, with job specification in hand, suitable candidates for the job can
be recruited. It is important to consider both internal and external candidates, as
both have advantages. Administrators are likely to be more familiar with the ability
of an internal candidate compared to someone from the outside. No resumé or
interview can compensate for actually seeing a person in action. In addition, if
the resort promotes from within, employees are likely to be more motivated than
if the company regularly bypasses existing employees to hire from outside. On the
other hand, external candidates can bring fresh ideas and a new approach to
S dealing with problems that an internal candidate may not have.20
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Volunteers
Depending on the size and type of program being developed, volunteers may be
an integral part of the operation. Volunteers are ‘‘people who give service of their
own free will with no obligation to act.’’ The consensus in the literature is that the
success of a program relying on volunteers is based on the staff’s ability to ‘‘keep
volunteers motivated and to challenge them with meaningful assignment.’’ What,
exactly, motivates volunteers? Where people are doing something because they
want to rather than because they have to, motivation tends to be intrinsic rather
than extrinsic; the individual is motivated by reasons internal to herself rather than
by external factors such as money or praise. People tend to be internally motivated
by achievement, affiliation, or power.21
People motivated by achievement get a thrill from meeting standards, from
the accomplishment of objectives. One of these objectives might be full-time em-
ployment. People may volunteer as part of a university internship requirement or
strictly as a way of getting their foot in the door. The social interaction that comes
from personal relationships is what motivates those who seek affiliation. Power
motivation implies that satisfaction comes from encouraging others to perform.
The task of the guest activity director is to correctly identify what motivates each
volunteer and structure responsibilities for each person that will challenge them
while allowing them to meet the needs they consider important.
Recruitment is best done one on one. However, an initial group meeting may
be necessary to explain the program and its benefits to volunteers. People who
are interested can be communicated with individually to determine motivation.
Volunteers should be treated with the same care as paid employees. They need
to be oriented to the operation, trained in their responsibilities, motivated, and
evaluated.
Budgeting
The process of setting a price for a guest activity program involves several steps.
1. Determine costs.
2. Set the proportion of costs to be covered.
3. Consider the appropriateness of differential pricing.
4. Set an initial price.22
Program Cost A guest activity will incur two types of costs: indirect and direct. Indirect costs are
those costs that cannot be directly associated with a particular program yet are
incurred in operating the guest services program as a whole. For example, a di-
rector and staff are involved in running the entire operation; their salaries must be
accounted for. Staff salaries must be paid and offices must be heated whether
programs operate or not. Resorts have to decide how to allocate the indirect costs
of running the guests activity department to the various programs that are offered.
S There are several possibilities:
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Equal share—Each program is assigned an equal share of the indirect

costs involved in running the department.
Percentage of budget—Each program is charged with a percentage of in-
direct expenses equal to its percentage of the overall department budget.
Time budget study—Each program is charged for indirect expenses based
on the amount of time spent on the program by the staff in developing
and implementing it.
Space or measurement study—Each program is charged for indirect costs
based on its actual expenses.23
The objective is to determine the full cost of planning, operating, and evalu-
ating a program. Indirect costs should be allocated equitably in a manner indi-
cating how much of an indirect cost a program actually uses. Direct costs, on the
other hand, are specific expenses related to a single item. For example, a program
on fly-fishing might include the costs of an instructor and promotional brochures.
Direct costs may be fixed or variable. Fixed costs stay constant during a specified
time—for example, the salary of an instructor. The cost may be fixed within a
particular range. For example, if a standard is set of 16 guests per instructor, within
the range of 1 to 16 guests, the instructor’s salary is fixed. However, beyond 16
participants, another instructor must be hired. Thus, costs are fixed within a spe-
cific range.
Variable costs vary proportionately with volume. Suppose each guest who
participates in an activity receives a souvenir of the occasion. The cost of providing
the souvenirs is variable.
Pricing A decision must be made as to which costs are to be covered. Resorts may decide
Objectives that certain activities are free to guests, that programs cover only the variable costs
of the program, that some of the overhead costs are covered, or that all costs, both
direct and indirect, are covered. It is important to note that the indirect costs of
running the guest activity department must be paid whether they are allocated to
the various programs or not. Management may view the department as a necessary
service to the guests in order to attract them to the resort. Seen in this way, the
indirect costs involved in running the department can be viewed as a way of selling
rooms, with programs being expected to cover only direct costs.
Differential Different prices may be set depending on:

Opportunities
Participants—Children generally pay less than adults.
Product—One price is charged for a group lesson and another for a pri-
vate lesson.
Place—People pay more for better seats at a concert.
Time—Prices are lower during periods of low demand (off-season).
Quantity—Season passes offer a discount because guests buy in bulk.
Incentives—Prices are initially set low as an incentive to get guests to try
S a new activity.24
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Quick Getaway 10.4

What’s Your Most Popular Amenity?
—SANDRA DE MAZARIEGOS, member services
‘‘We have our own theater, where director, Villa Antigua & Villas del Pacifico,
members can enjoy the latest movies Guatemala, Mexico
and sporting events, but it’s no match
in popularity for our new 18-hole mini- ‘‘Our owners have become accus-
golf course.’’ tomed to our complimentary valet
—ALAN BAZZANA, resort manager, Mariner parking and the Beach Buddies Kids’
Shores Resort, Miami, Queensland, Australia Club, which is run like a camp. They
can come for the day or pay by the
‘‘The amenities our guests like the hour. We also have a spa.’’
most are the ones that provide oppor- —SHERRY SMITH, general manager, Palm
tunities to socialize, such as the pool, Beach Shores Resort and Vacation Villas, Palm
bar, and sunbathing areas.’’ Beach Shores, Florida, U.S.A.
—ERICK CÉSPEDES, member services
manager, Condovac La Costa, Guanacaste,
‘‘An affordable restaurant with a
Costa Rica
broad choice of meals, Internet access
and entertainment for children at our
‘‘Bicycles. They come back covered in Ugie Bear Club also are important.
mud after guests take them up to the Our Forest Hills Lochside Resort is
mountains. They’re also popular with unique in offering a curling rink.’’
families for leisurely rides and with —MAX CONNELL, operations director,
people who don’t have cars and want MacDonald Hotels & Resorts Bathgate,
to duck down to the shops.’’ West Lothian, Scotland
—LYNLEY CHAVE, manager, The Pines Resort
and The Edgewater Club, Wanaka, Source: ‘‘What amenities do owners and guests de-
mand most?’’ Speak Up, Ventures (December 2004).
New Zealand
‘‘Our pool and beach are in demand DISCUSSION QUESTION:

because people want to relax and re- If you were to choose one of the amenities
fresh themselves. Live entertainment mentioned above to include in a new resort,
also is very popular.’’ which would it be? Why?
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Initial Price Development of a budget requires forecasting both revenue and costs associated
with a specific program. A realistic rule of thumb for forecasting revenue is to
assume that 80 percent of anticipated registrants will enroll in the program. Pricing
can be based on cost, demand, or competition. Cost-based pricing involves pricing
the activity so that some or all of the costs are covered. Demand-based pricing
sets prices according to what the market will bear. There are, for example, certain
psychological aspects to pricing. Many people believe that price and quality are
directly correlated—the higher the price, the better the quality. A program may
be priced at a level that more than covers the costs involved as long as guests are
willing to pay and believe that the value they receive is greater than the price they
are asked to pay.
The costs involved in running a program set the floor for the price to be
charged. The level of demand, what guests are willing to pay, sets the ceiling for
how much is charged. The level of competition determines where, between the
ceiling and the floor, the price is set.
Scheduling
The key issue in scheduling is to offer programs that meet the time needs of resort
guests. Three patterns are involved in scheduling activities. The first consideration
is a seasonal one. Certain activities are season-specific. A full list of programs can
be developed for each season, taking into account the constraints and appropri-
ateness of each time of the year. A winter program, for example, would focus on
activities involving snow—sleigh rides, ski lessons, etc.—while tapping trees for
syrup and leaf tours would work in the spring and fall.
A second aspect to scheduling involves a monthly or weekly focus. The time-
span must relate to the average length of stay. If most people stay for two weeks,
for example, a varied 14-day schedule of activities must be developed so that the
second week is not a repeat of the first.
Finally, resorts plan a daily time schedule. Depending on the pattern of activity
of the guests, activities in several or all of the following time frames might be
scheduled:
morning
early afternoon
afternoon activity at lower level
late afternoon
early evening
late evening
It is important, when scheduling activities, to consider when regular mainte-

nance can be done. The best time for maintenance is when demand for partici-
pation in the program is low. For ski areas, for example, most maintenance takes
S place in the so-called mud season, after the ski season ends.25
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It’s important that the schedule of activities be

accessible to guests. Courtesy of the author
Facility Availability
Facilities need to be convenient and accessible to the guest. They must be attrac-
tive and safe places in which to undertake the activity. The safety factor means
being concerned about risk management.26
Risk management involves a proactive attempt to minimize the undesirable
risks inherent in any guest activity. Risks are ‘‘managed’’ in one of four ways:
Elimination—by, for example, not offering the program

Acceptance—by continuing to offer the program
Transfer—(through insurance) to another entity
Reduction—by, for example, requiring participants to wear safety equip-
ment 27
Resorts have a duty to offer a safe environment to their guests because a legal
relationship exists between the resort and the guest. Staff are expected to offer a
standard of care that is reasonable to expect from a trained professional. For a
ruling of negligence, guests would have to show that an injury was a direct result
S of an action or a lack of action by the employee(s). Finally, there must be injury—
N physical, emotional, or mental—to the guest, or damage to property.
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The process of risk management involves scrutinizing every activity offered for
anything that could possibly go wrong and developing procedures to prevent ac-
cidents from happening. All risks cannot, and should not, be completely elimi-
nated. They should, however, be known, understood, manageable, and enhance
or be an essential part of the activity.29 Skiing is a good example. The risks are
known to skiers and managed by the resort through trail marking and activity
monitoring by the ski patrol.
Promoting the Program

Modern marketing calls for more than developing a good product, pricing it at-
tractively, and making it available to target guests. Management communicates
with customers—both existing and potential—through what is known as the pro-
motional mix. The goal of promotion is behavior modification; marketers want to
initiate or change the behavior of guests such that they participate in the guest
activity offered by the resort. Specifically, promotion seeks to inform, persuade,
and remind.
PROGRAM EVALUATION
Program evaluation is a process whereby, through systemati-
cally judging, assessing, and appraising the workings of a
program, one gains information that indicates whether or not
they are getting results or getting where they want to
go. . .whether or not the program has value.
—PATRICIA FARRELL and HERBERTA M. LUNDEGREN
THE PROCESS OF RECREATION PROGRAMMING: THEORY
AND TECHNIQUE
Evaluating Program Effectiveness

The aims of program evaluation are twofold: to determine whether or not the
program has value, and to determine whether or not the program objectives are
being met. Thus, to evaluate the program, actual results must be measured against
predetermined objectives.
Approaches to Evaluation
Programs can be evaluated in several ways—by the extent to which objectives are
met, by the extent to which standards are met, and by the effect on guests.
Evaluation by The importance of setting objectives was noted earlier. In this evaluation method,
S Objectives the appropriateness of the objectives is determined first—both the broad program
N objectives and the specific behavioral objectives for the guests. If the objectives
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are found appropriate, the program is successful if they are met. This process
involves using various measurement techniques, which are examined later in this
chapter.29
Evaluation by A standard is defined as ‘‘a degree or level of requirement, excellence, or attain-

Standards ment.’’30 To the extent that a standard can be determined for an activity, the extent
to which it is met can also be measured. While this method is easy to administer,
it tends to measure things that can be counted rather than the impact of the activity
on people.
Evaluation by The final method of evaluation is to measure the effectiveness of the program by
Effects on looking at the impact on participants. Because the result of a guest activity program
Participants is related to guest satisfaction, this method seems more appropriate than the others
described above. The nature of the effects of a guest activity on guests—and,
therefore, the things that can be measured—can be:
Quick Getaway 10.5

Benchmarking for Guest Satisfaction
The fundamental goal of destination manage- uous process that compares an organization’s
ment is to assess how well the product, facili- performance against that of the best performers
ties, services, and programs are working in the industry, basing the comparison on the
together to provide a memorable experience needs of consumers and what needs to be
for visitors. Because of this, it’s important to pe- done. Although there are many different ap-
riodically monitor visitor satisfaction. It’s also proaches to benchmarking, they are all built on
important to ensure that resources that are vul- performance comparisons, the identification
nerable to damage caused by excessive tour- of gaps, and change management processes.
ism are protected for future use. Benchmarking For this reason, benchmarking goes beyond
these important aspects of destination manage- traditional competition analysis. Traditional
ment is the best way to assess performance, competition analysis looks only at product or
and the best way to learn what needs to be service comparisons, whereas benchmarking
done. also compares operating and management sys-
Benchmarking began to gain popularity tems.
and currency in the industry in the 1990s and Source: ‘‘Destination Benchmarking: An Indicator-
it continues to grow in popularity. As a quality System’s Potential for Exploring Guest Satisfaction.’’
management and improvement technique, Journal of Travel Research (February 2004).
benchmarking is defined as a standard by
which a thing may be judged or measured. DISCUSSION QUESTION:
Benchmarking can also be explained as the How can benchmarking be applied to mea-
S search for the practices that foster excellence suring the effectiveness of guest activity
N within the industry. Benchmarking is a contin- programs?
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psychomotor (e.g., skill, strength, relief from stress)

psychological (e.g., attitudes, need satisfaction)
sociological (e.g., social behavior)
educational (e.g., learning)
SUMMARY
Guest activity programming requires a planned effort. The guest activity director
seeks to satisfy guest needs with a staff, facilities, equipment, and other resources
against a backdrop of historical, environmental, organizational, social, and cultural
influences.
Guest needs are assessed, objectives developed, and a cluster / activity analysis
conducted. A guest activity director matches the life stage of guests with the format
and activity desired to develop a guest activity program. Formats include instruc-
tion, competition, social activities, trips, drop-in activities, special events, and spec-
tator. Programs range from sports and games to self-improvement and education.
Program planning means putting leadership in place, budgeting, scheduling,
checking on the availability of facilities, and promoting the program. Finally, pro-
grams must be continuously evaluated to ensure they are meeting the objectives
of the resort.
ENDNOTES
1. DeGraaf, Donald G., Debra J. Jordan, and Kathy H. 14. Ibid., 84.
DeGraaf. Programming for Parks, Recreation, and Leisure 15. Ibid., 86.
Services: A Servant Leadership Approach. State College, PA: 16. DeGraaf, Jordan, and DeGraaf. Programming for Parks,
Venture Publishing, 1999, 3. Recreation, and Leisure Services, 122.
2. Ibid., 7. 17. Ibid., 124.
3. Ibid., 3. 18. Farrell and Lundegren. Process of Recreation Program-
4. Ibid., 5. ming, 114.
5. Farrell, Patricia, and Herberta M. Lundegren. The Process 19. Farrell and Lundegren. Process of Recreation Program-
of Recreation Programming: Theory and Technique, 3rd ed. ming, 123.
State College, PA: Venture Publishing, 1991, 25. 20. Ibid., 125.
6. DeGraaf, Jordan, and DeGraaf. Programming for Parks, 21. Ibid., 127.
Recreation, and Leisure Services, 52. 22. Ibid., 133–134.
7. Farrell and Lundegren. Process of Recreation Program- 23. DeGraaf, Jordan, and DeGraaf. Programming for Parks,
ming, 14. Recreation, and Leisure Services. 182–201.
8. DeGraaf, Jordan, and DeGraaf. Programming for Parks, 24. Ibid., 190–192.
Recreation, and Leisure Services, 75. 25. Farrell and Lundegren. Process of Recreation Program-
9. Farrell and Lundegren. Process of Recreation Program- ming, 141–149.
ming, 43. 26. Ibid., 150.
10. Ibid., 19. 27. DeGraaf, Jordan, and DeGraaf. Programming for Parks,
11. DeGraaf, Jordan, and DeGraaf. Programming for Parks, Recreation, and Leisure Services, 134.
Recreation, and Leisure Services, 258. 28. Ibid., 136
S 12. Farrell and Lundegren. Process of Recreation Program- 29. Ibid., 239.
N ming, 152. 30. Ibid., 242.
L 13. Ibid., 7.
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Chapter 11
RESORT OPERATIONS: THE
IMPORTANCE OF RETAIL
LEARNING OBJECTIVES
1. Identify the various motivations for tourist shopping and how they can be
met.
2. Describe the role of shopping and retail in a resort operation.
3. Illustrate the impact on sales productivity of:
a. Layout and design
b. Merchandising
c. Customer segments
INTRODUCTION Vendors
TOURIST SHOPPING GETTING YOUR MESSAGE NOTICED
Reasons for Tourist Shopping Merchandise Placement
Nationality and Shopping OPERATIONS
Types of Souvenirs CUSTOMER SEGMENTS
Shopping Venues How Men Shop
RESORT RETAIL How Women Shop
LAYOUT AND DESIGN Older Shoppers
Time Children
Layout Generation X
Transition Zone PROFIT RATIOS
Basket Placement Sales Analysis
MERCHANDISING Price Zones
Retail Competition SUMMARY
Merchandising Principles ENDNOTES
Impulse Buying
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INTRODUCTION
People love to shop when on vacation. Managers who apply a basic knowledge
of retail layout, design and merchandising techniques can significantly increase
revenue from guests staying at their property.
TOURIST SHOPPING
A good store is by definition one that exposes the greatest
portion of its goods to the greatest number of its shoppers for
the longest period of time.
—PACO UNDERHILL
Why We Buy
People, including resort-goers, love to shop. In fact, the main reason for almost 20
percent of all travel journeys is to shop.1 Shopping is increasingly becoming an
experience. Five things contribute to this. We are seeing that, because of more
leisure time, higher standards of living, and increased sophisticated marketing by
retail outlets, shopping is a leisure activity in and of itself. Further, people tend to
define themselves by what they buy. Additionally, the things we buy often have
symbolic meanings beyond the utilitarian value attributed to the item. An unusual
salt and pepper set may remind us of a special vacation. People shop to fulfill a
variety of needs and wants they may be only unconsciously aware of. Finally,
shopping involves a great deal of subjectivity encompassing how individuals pro-
cess images and the degree of value placed on these wants and needs.2
At this point we should note the difference between buying and shopping.3
Buying involves the actual purchase of something. Shopping can involve much
more—being with other people, exercising, spending leisure time with friends and
relatives, seeking novelty. In short, shopping is much more than ‘‘simply’’ seeking
to buy a particular item.
Tourist shopping consists of tangible items purchased for consumption at the
destination (excluding food and drink) or for export back to their home region.4
Its importance is indicated by the fact that shopping is the number one vacation
activity in the U.S. Approximately 40 percent is generated by international visitors.5
Even in Las Vegas more people favor shopping than gambling. In a number of ski
areas summer arrivals outnumber those in winter. In part this movement is due to
the popularity of shopping where it is viewed as an important part of the visitor
experience, a source of revenue for the resort with the potential to surpass profits
from lift tickets, an opportunity for people to meet, a way of extending visitor stays,
S and a way for one resort to differentiate itself from the competition.6
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286 Chapter 11 RESORT OPERATIONS: THE IMPORTANCE OF RETAIL
Reasons for Tourist Shopping

There are a number of reasons specific to tourists that account for their shopping
habits.7 It can be argued that the major reason people buy souvenirs is to remind
them of the places they have vacationed in. The motivation here is nostalgia. Upon
returning home the purchase can, in effect, prolong the trip as purchases and
postcards help keep the memory alive.
For others, time on vacation may be spent watching local craftspeople. Buying
an authentic piece of work by a local artisan allows tourist to show an appreciation
for local workmanship while allowing them to add to their personal collections at
home. It might be argued that the motivation here is prestige—the prestige of
owning local and authentic crafts, materials, and designs.
This motivation to buy is closely related to the desire for authenticity—people
want something that is ‘‘real.’’ Tourists use a variety of criteria to judge how au-
thentic their purchases are:8
Product uniqueness—how scarce it is or how unique it is to a particular

destination.
Cultural and historical integrity—is it truly representative of a place and /
or time period?
Aesthetics—is it visually appealing?
Workmanship—quality and attention to detail.
Authentic processes and materials made by the artists’ own hands.
Shopping experience—communicating with the actual artisan and / or
seeing the piece being made.
Function and use—how utilitarian is it?
Certification—verification by means of names, dates, and signatures ap-
peals to the need for status. Labels are more important to those from
New Zealand, Australia, and Asia compared to tourists from Europe and
North America.
The more people travel to a specific destination their purchase behavior

changes from buying stereotypical souvenirs to purchasing higher quality, more
authentic items. Tourists on vacation also buy functional items. Rather than car-
rying sunblock to the ski resort they may elect to make the purchase at the resort.
If a party is staying at a condominium for an extended stay they might buy food
at the destination for consumption at the resort. If prices of certain items are less
at the destination than at home they may choose to buy these items while on
vacation for consumption upon their return home. Examples would include car-
tons of cigarettes or clothing items.
Tourists also buy gifts for people at home. In Asian cultures it is especially
important to return home with gifts to special people who were themselves unable
to take the trip. A related segment is those local people who buy items indigenous
to the region to give to friends visiting from abroad. Finally there are those who
S make purchases that benefit people and / or places at the destination. Tourists may
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make the purchase for altruistic reasons when part of the purchase price goes to
helping preserve open land or helping a local group.
Nationality and Shopping

At the risk of generalization it is true that shopping patterns vary by nationality. In
a study of handicraft purchases in the Gambia it was found that Germans prefer
bright colors and abstract designs and buy crafts featuring elephants and other
large wildlife, British tourists buy useful items such as bowls and chess sets and
those with novelty or humor value, while Scandinavians prefer batik, clothing, and
similar functional items such as tea towels.9
Japanese tourists spend almost three times as much money on shopping per
trip compared to European or North American visitors. Japanese shopping behav-
ior is a function of the following:10
Desire for brand name, high-quality items. Brand names and outward ap-
pearance connote prestige, social status, and sophistication which,
through purchase, are transferred to the buyer.
Gift giving is very important. The cultural tradition of senbetsu involves
friends, relatives, and even co-workers giving a gift to the tourist prior to
departure. The gift may be money or an item that can be used on the
trip, such as a camera. These gifts oblige the tourist to reciprocate with
gifts purchased while on vacation. The practice is termed omiyage. The
gifts represent a way of salving a guilty conscience with those who were
unable to go on the trip. They are also a function of the Japanese seeing
themselves as part of a larger community. As such, gifts are brought to
friends, neighbors (who may have taken care of children or the house),
and co-workers who are part of that larger community.
The gifts should be representative of the region visited and be of high
value.
Gift giving is also a way to curry favor. A junior manager returning from
vacation after receiving a gift of money from his / her boss is expected to
bring back a gift of greater value than the money given.
Because of difficulties with other languages, Japanese travelers tend to
travel as part of a tour group. Tour groups tend to have tight schedules.
This leads to preferences for shopping at overseas branches of major Jap-
anese stores. These stores have Japanese-speaking staff that is well ac-
quainted with the high service expectations of Japanese travelers. High
expectations carry over to the elaborate ways in which gifts are
wrapped—presentation is extremely important.
Travelers prefer to use left-over foreign currency at airport duty-free stores.
Liquor is the most popular item purchase by Japanese tourists—
especially expensive brandies, Scotch whiskey, and wines from the best-
known regions of the world.11 They also purchase brand-name cigarettes,
S French perfumes, American cosmetics, and Swiss watches.
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Types of Souvenirs
Souvenirs are either place-bound or event-based.12 Place-bounds souvenirs may be:
Pictorial images—postcards, books, posters, etc.

Piece-of-the-rock—rocks, shells, fossils, etc.
Symbolic shorthand—replicas of famous attractions.
Markers—items marked with words and logos such as coffee mugs and
shot glasses.
Local products—food and drink items, clothing, handicrafts.
Event-based souvenirs are tied to a specific event. Typically, they are related
to wars or natural disasters. In Vietnam, for example, the cases of unused U.S. 40
mm grenades have been turned into lamps and sold as souvenirs. After Mount St.
Helens erupted in 1980 merchants were quick to fill small bottles with ash from
Quick Getaway 11.1

Souvenirs to Remember
Souvenirs are colorful, they’re kitschy, and status symbols I can think of.’’
they’re as much a part of American culture as In the twelfth century, when medieval
the apple pie. Souvenirs are big: Americans Christians were making pilgrimages to assorted
spend roughly $1.5 billion a year on them. shrines, they purchased metal badges—
Why? The word itself holds the key: the English complete with images of the shrine’s saint—
word ‘‘souvenir’’ comes directly from the and affixed them to their hats and clothing, just
French word for ‘‘to remember.’’ That’s why like the travelers of today who purchase
travelers buy them, to aid their faulty memories patches. Today’s souvenir collectors are often
and to constantly remind them of the good people who had a pleasant trip to the area as
times they had. ‘‘Travel is still this special, a child, and they continue to purchase mem-
unique period of one’s life,’’ says Robert orabilia to remind them of that time in their
Thompson, a professor of pop culture and me- lives.
dia at Syracuse University, ‘‘and there’s a very
natural human tendency to bring back a trophy Source: Hilgers, Laura. ‘‘Sentimental Journey.’’ Via
Magazine (January 2003). http: / / www.viamagazine.
from someplace you’ve been, to commemorate com / top stories / articles / souvenirs03.asp
the event.’’
Souvenirs also provide the opportunity to
boast about where you’ve been—as anyone DISCUSSION QUESTION:
knows who’s worn a souvenir T-shirt. ‘‘Souve- Would you rather buy a beautiful souvenir
nirs are status symbols,’’ Thompson says of the with no practical value or a less attractive
S phenomenon, ‘‘though they’re the kitschiest souvenir that you know you’ll use? Why?
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the volcano and begin distributing them all over the U.S. T-shirt manufacturers
seem to specialize in the ‘‘I survived the (fill in the disaster) of (fill in the year).’’
There is a three-stage process that tourists go through when it comes to shop-
ping.13 In the first phases, where tourists are new to the destination, visitors typically
purchase inexpensive souvenirs indicative of the region—the type of purchases
made by the mass tourist. As the tourist becomes more familiar with the destination
he / she looks for souvenirs that are more authentic. There is a desire to visit the
places where the souvenirs are made and to meet with the people who make
them. More attention is paid to detail and the tourist is willing to spend more time
and money looking for the perfect remembrance. During the buying process, vis-
itors in this second stage seek to distance themselves from ‘‘tourist buyers.’’ In the
third and final stage tourists are very familiar with the destination. They look to
buy items that are truly local in nature and commonplace in form rather than
novel or exotic. They may buy items that are functional, such as local foods, and
may shop in ways and places similar to the locals.
Shopping Venues14
Tourists shop in a variety of places. Souvenir shops are popular in destinations as
well as in transit locations. They usually stock items that are representative of the
region. Clustered near tourist attractions, they will also often sell items that fit in
with the theme of the region—for example, religious items near churches, syna-
gogues, or cathedrals.
Supermarkets cater to both locals and tourists where the latter are staying in
self-catering accommodation. The importance of clothing stores can be seen from
the fact that clothing is the number one item purchased by tourists in the United
States.15
Malls offer a collection of stores offering a variety of merchandise and prices.
Some, such as the Mall of America, have become tourist attractions in their own
right. Increasingly more malls are adding recreational experiences to their offerings
and bringing the concept of ‘‘entertainment retail’’ into being. We are also seeing
the development of theme malls—based on countries (El Mercado mall in San
Antonio, Texas) or, in the case of Park Meadows just south of Denver, nature and
national parks.
By some estimates over 40 percent of all tourists in the U.S. visit a discount
mall annually. Traditionally located in industrial cities, these outlet centers are
now spreading to smaller cities and towns.
Airport shopping areas offer landside and airside locations. The former is open
to all passengers and visitors and are located before security checkpoints. The
latter are to be found beyond the security area and are only accessible to ticketed
passengers. Airport retailing is increasingly becoming an important revenue and
income center for many airport authorities. The market can be segmented into:16
Business travelers who have a high propensity to buy since they spend so
S much time at airports. Some retailers are even offering frequent buyer
N programs targeted to this segment of the market.
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Leisure travelers who, because they have to check in up to two hours

prior to the flight leaving, have an opportunity to buy souvenirs and
travel-related items.
Meeters and greeters will often purchase welcome or departing gifts.
Airport / airline employees.
Airport recreationists who visit the airport to watch the planes land and
take-off.
Railway stations and harbors typically appeal to short-distance commuters and

those making long journeys between cities. Books, magazines, newspapers, and
snack and drink items sell well.
About 30 percent of all spending on each trip is done in duty-free shops.17
The single best selling item is women’s perfume although wines, spirits, tobacco,
candy, jewelry, and watches are also popular. Some countries are beginning to
allow duty-free purchases upon arrival. This provides the added bonus for the
airlines of saving storage space in the passenger cabin while reducing fuel costs
because of the reduced weight of the plane when in flight.
In the developing world craft villages produced specific types of handicrafts.
These villages have evolved into tourist craft production centers that manufacture
items for tourist consumption. Many also set up areas where tourists are invited to
see the artisans at work. These craft markets have given women opportunities to
expand economically.
In some cases these villages have developed into large tourist shopping vil-
lages offering restaurants and other tourist-related services in addition to retail
stores. These villages become tourist attractions in their own right as they are often
found in parts of the region rich in natural or cultural attractions.
Shopping opportunities are also possible at museums, heritage sites, wineries
and distilleries, and special events and theme parks. For the latter retail revenue
can exceed that of entrance fees.
RESORT RETAIL
Retail sales are a significant part of most resort operations. Merchandise sales
account for about 13 percent of total revenue for resort golf facilities in the United
States,18 while ski clothing and equipment sales make up 6 percent of total sales
at North American ski areas. Rentals account for an additional 4 percent of reve-
nue.19
Retail stores have three distinct aspects:
design (the premises)

S merchandising (what is put on the premises)
N operations (what employees do)20
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Specialty or seasons retail is an opportunity for resorts. Courtesy The Greenbrier
These three items are interdependent. Decisions regarding one affect the other
two. Strengthening one area takes some pressure off the others. If one is weakened,
it shifts more burden onto the remaining two. Consider, for example, a store selling
bottles of sunscreen. It is time-consuming for employees to stock all those bottles
in perfectly straight rows. If the store were to replace the shelves with bins, a clerk
could just roll a trolley of merchandise to the aisle, open the bin, and dump in
the goods. This strategy would have to be considered in light of the overall im-
pression the store wishes to give. Management would have to ensure that custom-
ers did not perceive the bins as indicative of lower quality.
LAYOUT AND DESIGN

Time
The most important factor in determining how much people will buy is the amount
S of time they spend in the store (assuming they are buying and not waiting in line).
N The store should not be set up so that customers can scan the entire layout quickly.
L
MILL (Wiley)
They should be set up in a way that leads customers from one part of the store to
another in what is called a ‘‘voyage of discovery.’’21 Another crucial element is the
interception rate—the percentage of customers who have some contact with an
employee. The more shopper–employee contacts that take place, the greater the
average sale.
On the other hand, the most important factor in determining customer satis-
faction is waiting time. The longer shoppers wait in line, the lower their impression
of overall service.
Layout
Retail space should take the physical characteristics of customers into account
when designing the physical layout of the store. Consider the following:22
Most people have two hands that, at rest, are approximately 3 feet off the
floor.
People focus on what is directly in front of them. This means that dis-
plays should be offset to one side so that they can be more easily seen
from an angle. Endcap refers to the display of merchandise on the end of
store aisles. To fully appreciate the displays, customers need to walk side-
ways! Placing shelves or racks at an angle—chevroning—positions the
shelves at a 45-degree angle rather than a 90-degree angle to the aisle.
The problem is that chevroning shelves takes up about one-fifth more
floor space than the usual configuration. As a result, a store can show
only 80 percent of its merchandise.
Peripheral vision is determined, in part, by environmental factors. Sight
lines should be taken into consideration; merchandise should not be
placed so it cuts them off. The capture rate refers to how much of what is
on display is seen by shoppers. The reliable zone, that placement area in
which shoppers will probably see the merchandise, extends from slightly
above eye level down to about the knee level. Large items are the only
merchandise that should be displayed above or below the reliable zone.
Tipping the bottom shelf up slightly helps visibility.
People would rather look at people than objects. The number-one thing
people look at is other people. The most effective signs in fast-food res-
taurants are those that sit on top of the cash registers—more or less at
the level of the cashier’s face.
People go in predictable paths, speed up, slow down, and stop in re-
sponse to their surroundings. People in North America tend to walk to
the right immediately on entering a store, so this is an area of promi-
nence in which to place products. This right-moving tendency is linked to
the side of the road on which people drive. In Great Britain and Austra-
lia, on the other hand, people tend to walk to the left.
Customer flow is also important. In museums, for example, visitor flow
S should take tourists through souvenir shops. They should be clustered to-
N
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MERCHANDISING 293
gether and near other services such as cafeterias and rest rooms. There
will be more sales—especially of larger items—if shops are located close
to the exit gate. In this way, visitors can make the purchase and immedi-
ately load it into the family car rather than contemplate carrying it
throughout the museum during the visit.23
Transition Zone
When people cross the threshold of a store, they do not come to an immediate
stop. Their momentum carries them into the store through a transition zone. Get-
ting them to pay attention to displays at the entrance requires some thought on
the part of the retailer. A slightly creaky door, a squeaky hinge, or special lighting
on the doorway can clearly mark the division between the store and its outside
environment. Merchandisers are advised to avoid trying to accomplish anything
important there and to take steps to keep the transition zone as small as possible.
Several opportunities are presented in the transition zone. An employee can
greet customers and acknowledge their presence. Shoplifting can be discouraged.
The easiest way to do this is to make sure employees acknowledge the presence
of every shopper with a simple hello.
Basket Placement
Baskets are usually placed immediately inside the store entrance. In many cases,
customers rush through the transition zone, bypassing the baskets. At one store,
employees were trained to offer baskets to any customer holding three or more
items. Most gratefully accepted this gesture and took the basket. As more people
used baskets, the average sale increased. Baskets, in fact, should be scattered
throughout the store where they are most needed by customers. The stack should
be at least 5 feet high to ensure visibility and prevent shoppers from having to
bend to get one. Shoppers hate to bend, especially when their hands are full.24
MERCHANDISING
Retail Competition
Resort retailers have to compete with major retail stores and chains for their guests’
business. Golf pro shops, for example, rank first in only one consumer category—
gloves—where they are the outlet of choice of 21 percent of all golfers. When it
comes to other purchase categories (balls, clubs, bags, apparel, and shoes), their
market share slips to between 9 and 14 percent.25 Resort retailers have to compete
with department stores, which are devoting more and more space to golf-specific
clothing. As retail companies come out with casual lines, they intensify the struggle
S to find shelf space in the pro shop and resort retail store. Liz Claiborne has already
N
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taken the lead from Ralph Lauren—whose Polo line went from department store
to pro shop favorite—by placing its LizSport line at private clubs and resorts
around the country.
Department stores are looking to delve further into weekend casual sports-
wear. Callaway is one of only a handful of companies, including Brooks Brothers,
creating golf lines exclusively for department stores. Years ago, golf discount stores
took a chunk out of the pro’s hard goods business but did not compete in the
apparel area. Now, the department stores and specialty stores are threatening to
cut into that business as well. Many pro shop owners and buyers feel betrayed by
the defection of golf apparel companies and are sometimes less apt to do business
with them. Department stores get greater variety than do resorts because of the
volume they deal with.
Resort shops do have one major edge: cresting. Logoed apparel comprises 90
percent of menswear. On the other hand, there is not much logoing in womens-
wear. As a result, this is where the competition is. The resort retailer must compete
on the basis of service, attention, and experience while emphasizing their potential
to provide consumers with immediate gratification in their stores.
Merchandising Principles
Merchandise can be laid out in one of two ways—large numbers of items can be
brought out for self-service or a small number of items can be showcased. The
more expensive the item, the fewer are put out on the floor. Merchandise can be
Shopping venues become tourist destinations

by offering something extra. The Mall of America
S includes an aquarium for visitors. Courtesy
N Underwater Adventures Aquarium
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MERCHANDISING 295
displayed in ways that will stimulate sales if the following principles are adhered
to.26
The product is the focus—the display should not overwhelm or take

away from the product.
The surrounding environment should take into account the product’s fi-
nal use. This might mean having electric outlets available to let consum-
ers try out the electrical product.
Themes can be created to establish mini-environments within the larger
store. Cowboy-related products can benefit from a Western-themed area.
Creative merchandising stimulates all five senses. Sight can be stimulated
by vibrant colors; touch by allowing shoppers to feel the products; smell
and taste by displays of various food items; and sound by means of back-
ground music.
Selling zones can be arranged whereby similar items are grouped to-
gether to create ambience or to make buying more efficient for the shop-
pers. T-shirts, swimwear, and related clothing items sell better when
grouped together.
Impulse Buying
Leisure shoppers are more inclined to make impulse purchases compared to ‘‘reg-
ular’’ shoppers. A variety of factors promote impulse buying:27
Low prices.
The degree to which consumers ‘‘need’’ the item.
Mass distribution of specific items.
Self-service operations mean faster buying and more freedom.
The amount of advertising.
Large displays in the store.
Items with short product lives.
Small, lightweight, and easy to store items are easy to buy and carry.
Vendors
Carrying all the major lines is impossible, so resort retailers have to be selective
in their choice of vendors and items they carry. The average number of lines
carried in golf resort stores ranges from two (gloves and rainwear) to seven (men’s
shirts). Most carry three to four brand names in clubs.28 In choosing vendors,
resorts should consider the following:
Marketing and pull-through—Has a line been nationally advertised? Does

it have adequate consumer awareness? Is the name recognizable?
S Pricing policy—How willing is the company to work with the resort store
N on pricing, closeouts, dating, and terms?
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Execution—How easy is it to do business with the company? Does the

paperwork match what’s in the box? Does the company ship completely
and on time?
Customer service—Are the customer service people talented, aware, and
able to answer questions? Customer service can make or break a com-
pany.
Sales staff—How talented is the sales staff in advising the buyer how to
invest? Does the representative have an awareness and understanding of
the resort retail business?
Logos—Does the company logo in-house or out? This may seem a minor
point, but when a good portion of your business depends on selling your
name, excellent logo service is critical.
Commitment—What is the company’s commitment to the industry? Does
it understand the needs and problems of the resort retailer? Is it willing to
work with you? Vendors have to understand the personal nature of the
resort business, where smaller orders and more exact deliveries are the
norm.29
GETTING YOUR MESSAGE NOTICED

The key to getting your message across is, first, to attract the attention of the
audience. Once that is accomplished, the message has to be presented in a way
that is clear and logical; it must have a beginning, a middle, and an ending.30
People absorb information a little at a time. If they are told too much too fast, the
result is information overload. If customers are confused, they will miss the mes-
sage altogether.
By walking through the store as a customer, retailers can see what shoppers
will do and what they will look at in different places in the store. Where people
are walking fast, the message has to be short and have immediate impact. Where
people are browsing, on the other hand, more detail can be given. At the cash
register, where they stand still, there is an opportunity for a longer message.
For example, the shoe department offers an opportunity to promote other
products. When the clerk goes off to find a particular shoe, the customer is left
(usually shoeless) with nothing to do. The customer could be given promotional
reading materials. Research has shown that 25 percent of the diners in fast-food
restaurants read table tents, compared to only 2 percent of diners in family restau-
rants.31 The reason is that, in family restaurants, most parties are groups of two,
three, or four. They are too busy talking to read. Many fast-food customers, on the
other hand, are on their own and looking for a distraction.
Signs should interrupt the existing natural sight lines in any given area. Re-
tailers should put themselves in the shoes of the customer and identify where they
S are looking—that is the perfect spot for a sign. The principles of good design are
N as follows:
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GETTING YOUR MESSAGE NOTICED 297
Quick Getaway 11.2

Hot, Hot, Hot: One Tub
Store’s Cool Design
When industry veteran Nils Erickson moved to Easy Checkout: The large center-island
Daytona, Florida, he wasn’t planning on enter- cash / wrap station, designed to look like an
ing the local market. However, he just couldn’t open-air cabana, is the focal point of the
resist the demographics. store. Its wide granite counters were de-
‘‘This area is just busting out with retirees signed with both busy employees and over-
with disposable income, and I really wanted to burdened customers in mind, and the
offer them something great to look at and pur- shelves at its base are a great place to dis-
chase,’’ Erickson says. ‘‘I painted a picture in play impulse items.
my head of a hot tub showroom like nobody Attractive Displays: ‘‘Nobody wants to buy
else had done before.’’ the box on top of the ground,’’ Erickson
What were the key elements to making his says of his hot tubs. Instead of displaying
new showroom a success? the ‘‘boxes’’ lined up like soldiers, Erickson
shows them off in interesting settings.
Mood: The store’s mood draws its inspira- Some tubs are recessed, while others are
tion from the company’s motto, ‘‘Fun Fam- surrounded by luxurious extras like plant-
ily Paradise.’’ Touches like sand-and- ers, steps, and bars. There’s also a tastefully
sky-themed paint blend with calypso back- decorated ‘‘mood room,’’ complete with
ground music to create a tropical mood. electric fireplace, where customers can
‘‘It sets a feel. It’s all about emotion,’’ Er- soak in three different tubs.
ickson says.
Accessibility: The store, which is small with Source: Edry, Sharon. ‘‘Life’s a beach: Florida dealer
a narrow footprint, might make other retail- turns his hot retail showroom into a cool customer ex-
ers cram inventory in sideways. That’s not perience.’’ Pool & Spa News (June 4, 2004).
Erickson’s approach. Too much inventory
cuts down ease of movement, which dis-
courages lingering. ‘‘The longer we can get DISCUSSION QUESTION:
the customer to linger and look, the better Erickson deliberately makes sure his show-
chance we have to hit the home run,’’ he room is fully wheelchair-accessible, which
says. ‘‘Even a wheelchair can get through makes sense given the area demographics.
my store, no problem, including every inch What other things would you do to cater to
of the pool display.’’ a senior-citizen market?
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no extra words
the right sign at the right place
enough signs that customers don’t feel ignored or underinformed
not so many signs that there’s clutter or confusion32
Merchandise Placement
Because North American shoppers search right and most are right-handed, mer-
chandise should be displayed just slightly to the right of where customers stand.
The most popular brand should go dead center, the brand the store is trying to
build just to the right of it.33
Positioning the most popular items halfway down the aisle encourages shop-
pers to pass other items on the way to their purchase. Similarly, a large graphic or
hanging on a rear wall seems to pull shoppers toward it.34
According to Underhill, author of Why We Buy: The Science of Shopping, ‘‘al-
most all unplanned buying is a result of touching, hearing, smelling, or tasting.’’35
Let people know that it is all right for them to touch. Many people, for example,
are reluctant to mess up a neat display of sweaters. When sweaters are displayed
in several shades, it is wise to place the lightest one on the bottom and the darker
ones on top, as these will be touched most.
When selling merchandise that will be used at various times of the day, pro-
vide several settings of illumination so customers can see what the color will look
like when it is likely to be worn.
Here are some practical ideas from stores specializing in golf:
Add a display coordinator with an extensive background in the retail

fashion industry.
To blur the line between soft goods and hard goods, incorporate clubs
and bags with apparel displays and boutiques.
Use antique props to create a pro shop atmosphere.
The most worn piece of carpet on your shop floor reveals where most of
the foot traffic goes. Place slow-moving items in that spot to see if sales
increase because of the location.
Everyone moves to the right. Place most impulse items to the right, inside
the shop entrance.
People buy items placed between 3 and 5 feet off the floor.
Tell a story with merchandise by placing apparel, shoes, and equipment
together in a space.
Trade-ins are a way to discount without really offering a discount. Give
the customer a dollar for their old glove if they buy a new one.
Package a box of balls, a glove, and a hat together.
Rotate stock. Built-in cabinets can be beautiful, but modular fixtures are
more practical.
S Halogen lights are more efficient than standard light bulbs; they last
N longer, emit less heat, and are more cost-efficient. New colored halogen
L lights give a warm look.
MILL (Wiley)
OPERATIONS 299
The presentation of merchandise is as

important as the merchandise itself. Courtesy M.
Keith Dykes, KCAB
Appeal to all the senses. Use videotapes with banks of video monitors.
Play audiotapes of, for example, the sound of a tennis ball popping off a
racket.
Use pellets with scents like leather or tobacco in men’s clothing bou-
tiques.
Use lights to highlight high-ticket merchandise.
Supply coloring books, crayons, and cookies for children so parents can
shop more easily.
Provide special services such as in-shop alterations, spike and grip re-
placement, club demos, shipping, gift wrapping, and gift certificates.36
OPERATIONS
S The importance of employees in increasing sales cannot be overestimated. Resort
N retail staff in golf resorts estimate that a whopping 54 percent of their time is spent
L dealing with customers.37 This completely overwhelms time spent in giving lessons
MILL (Wiley)
(13 percent) and dealing with recordkeeping and product displays (10 percent).
Research indicates that any contact initiated by a store employee increases the
likelihood that a shopper will buy something. Shopper conversion rate—the per-
centage of shoppers who actually buy—increases by half when there is a staff-
initiated contact and jumps by 100 percent when there is staff-initiated contact
and the use of the dressing room.38 The dressing room, in fact, may be the most
important part of any apparel-selling store. Shoppers want to experience merchan-
dise before buying it. When shoppers are in a dressing room, they are captive.
Additionally, they have one thing on their mind: the desire to buy something. Thus,
it is important to make the dressing room as conducive to buying as possible by
ensuring that clothes are displayed in their best possible light.
There should be plenty of large, high-quality mirrors. A little anteroom outside
the dressing rooms can be a good place for shoppers to inspect the merchandise
closely. Fresh flowers are a nice touch.
Customers hate to wait. The single most important factor in determining a
shopper’s opinion of the service he receives is waiting time.39 When people wait
up to about a minute and a half, their sense of how much time has passed is fairly
accurate. Anything over this length distorts their sense of time. If they wait two
minutes, they say it has been three or four. Waiting becomes a full-fledged activity
of its own. Measures can be taken to make waiting time seem less. Any interaction,
human or otherwise, makes a wait seem shorter. For example, the time a shopper
spends waiting after an employee has initiated contact seems to go faster than
time spent waiting before that interaction takes place.40 Simply acknowledging that
the shopper is waiting and offering some explanation for the delay automatically
relieves time anxiety.
The cash register / merchandise wrapping area is where customers are sepa-
rated from their money, which is a source of shopper anxiety. Most retail stores
do not make this zone exciting. Adding sound, light, and color can do much to
ease any anxiety felt in the financial transaction.
CUSTOMER SEGMENTS
How Men Shop
Men shop differently than do women. Here are some of the differences:
Men always move faster through store aisles.

Men spend less time looking. In one study reported by Underhill, 65 per-
cent of male shoppers who tried something on bought it, as opposed to
25 percent of female shoppers. Men’s dressing rooms should be clearly
marked. If male shoppers have to search for dressing rooms, they may
decide it is not worth it.
S Eighty-six percent of women look at price tags when they shop—only 72
N percent of men do. Men are more easily upgraded to a more expensive
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CUSTOMER SEGMENTS 301
item. It is almost as if they are so anxious to get out of the store that they
will agree to anything.
Conventional wisdom says, ‘‘Sell to the woman, close to the man.’’ Men
do not especially like the shopping experience, but they get a definite
thrill from the experience of paying.
Men hate to ask directions (just like when they drive!). They prefer to get
information firsthand from written materials, instructional videos, or com-
puter screens. Women, on the other hand, ask questions of employees.41
As noted earlier, how much customers buy is a direct result of how much
time they spend in the store. When a woman is in a store with a man, she’ll spend
less time than when she is alone, with another woman, or with children.
How Women Shop

Compared to men, more women see shopping as a social activity.42 They like to
shop with friends. When two women shop together, they typically spend more
time and money than women shopping alone. They also feel more comfortable
being waited on by a woman.43
On the golf course, women need to dress conservatively for business while
still maintaining an active look. Manufacturers are creating separates that women
can wear on and off the course and get more value out of each piece. For the
next few seasons, women’s clothes will be characterized by:
Classic design—Prep school, corporate, country club—the look is retro in

feel but modern in design.
Brighter color—Golfwear was dominated by earth tones coming into the
1990s. Some of the best new color pairings are the classics—navy and
white, black and white, brights with neutrals, an overall neutral tone-on-
tone.
High-tech fabrics—Two fabrics dominate: microfiber and Tencel.
Texture—The design is in the details. A subtle pattern may be woven into
the fabric.
Pricing—Price is still a sensitive issue in the golf market.44
What can a retail outlet do to take advantage of these characteristics? Here

are some ideas:
Customers can bring a friend to get a discount.

Have a Women’s Department label.
Go narrow and deep with product selection.
Stock specialty items such as gold earrings, necklaces, golf lapel pins,
and mini golf balls for impulse sales and for holidays.
Design a merchandising program around the store’s spring fashion show.
S Describe the lines to be presented and list each date-of-purchase availa-
N bility.
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MILL (Wiley)
Employ an apparel consultant to cultivate and build the shop’s ladies’ ap-
parel business.
Create exciting, well-organized, and visual displays.
Offer seating areas just outside dressing rooms to allow for more relaxed
try-ons and assessments.
Have a café on the premises that allows customers to shop, then take a
break without leaving sight of the selling floor. (Be sure that everything in
the café is for sale.)45
Women are more demanding of the shopping environment than are men. For
example, women do not like to examine merchandise displayed below waist level.
Lowering previously elevated sets of clubs to waist level makes for easier access.
Sales will increase because women can now see better and reach the merchan-
dise.
If they can stand at the corner of a counter, where they can wrap themselves
around the angle and nestle a bit, women are more likely to buy than if they have
Quick Getaway 11.3

Finding and Keeping
Your Best Customers
Being consumer-centric is the key to becoming 8. Performance metrics must be tied to tar-
a successful retailer, yet it’s often difficult to get customer segments.
pinpoint exactly what the consumer wants. To 9. Measure category managers on volume,
best find and retain the best customers, give profit, and customer equity.
the Ten Commandments of Customer Insight a 10. Learn from each initiative and progres-
try: sively invest in increasing capabilities.
1. Start small—think big.

2. Set up a team tasked with this Source: ‘‘Finding and Keeping Your Best Customer
area. . .and give them money. Through ‘Customer-Centric’ Retailing.’’ Merchant News
3. Begin with understanding your key cus- and Views. http: / / www.visaasia.com / ap / sea /
merchants / whyvisa / includes / uploads / final 16dec.pdf
tomer groups. . .that is, segments.
4. Link the segments to how they buy your
products.
5. Understand segments’ needs and DISCUSSION QUESTION:
wants. . .and your performance gaps. When dealing in the number-crunching
6. Prioritize your actions to close the business world, sometimes it is hard to re-
gaps—cost vs. benefit. member that customers are real, breathing
7. Develop go-to-market strategies linked to human beings. What are some strategies to
S marketing and merchandising tactics. overcome this?
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PROFIT RATIOS 303
to stand just a few feet away along the main stretch of the counter. Nooks and
crannies and cul-de-sacs are good for uninterrupted shopping. The narrower the
quarters, the less time a woman will spend shopping. Almost two-thirds of women
who buy something read at least one product package. Reading takes time; time
requires space.46
Older Shoppers
The graying of America has implications for retailers. Reading is more difficult for
older shoppers. Type must be larger for them to read easily. As the cornea yellows
with age, the difference between blue and green becomes harder to see. Yellow
should be avoided, as everything looks a little yellow. Older people see a lot more
black, white, and red and a lot less of other colors. The typical 50-year-old’s retinas
receive about one-quarter less light than the average 20-year-old’s. Stores must be
more brightly lit than they are now.
Children
If a store is set up to be unwelcoming to children, parents will get the message
and stay away. Consider the needs of the child:
Put merchandise where they can see it and reach it.

Childproof the store the same way as a home.
If the parent’s sustained attention is required, someone must find a way
to divert the attention of a restless child.
Design a good area for children. Sight lines must allow parents to see
their children at all times.47
Generation X
One segment of the golf market that might surprise some is Generation X. These
young people are playing golf because so many of their role models—from Mi-
chael Jordan to Eddie Van Halen—are seen on the links. They are a ‘‘mix of anti-
establishment rebels, country-club legacies, beginners, hackers and sandbaggers—
low handicappers in baggy pants, t-shirts and goatees.’’48 Although their look is
logo-driven, they do not want to appear as if they have just walked off a golf course.
They like the specialty-store environment if it is merchandised in an up-to-date
manner.
PROFIT RATIOS
Sales Analysis
The two measures of sales analysis are productivity and merchandise.49 Productiv-
S ity analysis measures sales relative to the space allocated to the goods. Retailers
N can measure the sales productivity of the entire shop, separate product categories,
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or individual items. Merchandise analysis, on the other hand, measures sales across
departments or product categories without regard to floor space. It might, for ex-
ample, compare product movement in golf shoes versus shirts.
Sales productivity starts with a measurement of the sales area used to sell
goods. This is defined as the ‘‘open floor area that is devoted to the sale of goods,
including all areas that are open to the customer.’’50 The total sales area is then
divided into the sales areas of each department. This yields the measure of sales
per square foot. Comparing these data to those of other stores is useful when
repeated over time. Various comparisons are possible:
this month’s sales to last month’s

this month’s sales to the same month’s last year
sales on a rolling basis
the most recent 12 months’ sales to the 12 months prior to that51
Another useful figure is gross margin dollars per square foot. Gross margin is
the difference between what was paid for the merchandise and its selling price.52
High retail prices result in a higher sales volume per square foot. Lower-priced
items may, however, cost less. Compare, for example, $50 in gross margin on a
$200 retail price for one item and $55 in gross margin on a $100 item. If both items
sell at the same rate and take up roughly the same space, the first item has higher
sales per square foot, while the other yields higher gross margin dollars per square
foot.
Another comparison involves share of space versus share of business. This
measurement determines which items are and are not pulling their weight. The
sales of one department are calculated as a percentage of total store sales and
compared with the department’s square footage as a percentage of the total store
space. If a department has a significantly lower share of sales than share of space,
it may be time to consider a space reallocation.
Price zones
Price zones can also be analyzed. Each product category carried has several ranges
of price points, each one of which is designed to appeal to a particular segment
of a store’s customers:
promotion zone—low-end merchandise at low prices

volume zone—middle price range
prestige zone—high-status, high-end merchandise53
Many golf shops offer only one price zone in each product category. As such,
selection becomes a crucial decision. The goal is to meet the needs of each cus-
tomer who walks into the shop. The key is to match what the customer wants to
S spend with the price zones offered.
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PROFIT RATIOS 305
Quick Getaway 11.4

Dynamic Pricing: A Raw Deal?
Did you know that it’s legal for one company change companies than they would offer to
to charge two different people two different others.
prices for the same product, bought at the Not all pricing strategies are allowable, of
same time on the same day? Based on the re- course; collusion by competitors in order to fix
sults of one study, the majority of shoppers prices is illegal, as is using race or gender to
don’t know that. Yet the practice—called dy- target people for different prices or other dis-
namic pricing—is completely commonplace. criminatory treatment. Nevertheless, dynamic
The reason behind dynamic pricing is de- pricing is a tool that, when used effectively, can
ceptively simple: some people will pay more ensure that a transaction is the most profitable
for a product than others will. At first glance, it can be for both the customer and the vendor.
this pricing practice seems discriminatory and
Source: ‘‘What Consumers—and Retailers—Should
unethical, but upon closer consideration it
Know about Dynamic Pricing.’’ Hotel News Resource.
makes sense. It’s easy for us to understand sen-
ior discounts and student discounts, which are
a part of dynamic pricing. We can also under- DISCUSSION QUESTION:
stand why a phone company might offer Do you think dynamic pricing is under-
certain profitable customers more money to handed or unethical? Why?
SUMMARY
Guests who stay at a resort are a captive audience. Managers who understand why
and how people buy can provide retail options for their guests that can signifi-
cantly increase the revenue generated at the resort.
ENDNOTES
1. Timothy, Dallen J. Shopping Tourism, Retailing and Lei- 8. Ibid., 79–81.
sure. Clevenden, England: Channel View Publications, 9. Ibid., 85.
2005, 11. 10. Ibid., 87–91.
2. Ibid., 11. 11. Ibid., 97.
3. Ibid., 23. 12. Ibid., 100–101.
4. Ibid., 69. 13. Ibid., 105.
5. Ibid., 70. 14. Ibid., 118–145.
6. Ibid., 71. 15. Ibid., 120.
S 7. Ibid., 76–85. 16. Ibid., 129–130.
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17. Ibid., 135. 36. National Golf Foundation. The Retail Side of Golf: Trends
18. National Golf Foundation. Operating and Financial Pro- and Techniques. Jupiter, FL: National Golf Foundation, 53–
files of 18-hole Golf Facilities in the U.S.: Resort Facilities. 68.
Jupiter, FL: National Golf Foundation, 1995, 5. 37. Pike. ‘‘Getting the Message,’’ The Retail Side of Golf:
19. Adapted from National Ski Areas Association. Economic Trends and Techniques. (Jupiter, FL: National Golf Foun-
Analysis of United States Ski Areas. Englewood, CO: National dation), 27ff.
Ski Areas Association, 1999, 34–35. 38. Underhill. Why We Buy, 184.
20. Underhill, Paco. Why We Buy: The Science of Shopping. 39. Ibid., 189.
New York: Simon & Schuster, 1999, 184. 40. Ibid., 190.
21. Timothy, 154. 41. Ibid., 98–111.
22. Underhill, Paco. Why We Buy: 187. 42. Ibid., 115.
23. Timothy, 155. 43. Seligman, Bob. ‘‘More Than an Afterthought.’’ Golf Prod-
24. Underhill. Why We Buy, 37–80. uct News (October 1995): 16ff.
25. ‘‘New Consumer Spending Study Offers Multitude of In- 44. Broderick, Eileen Rafferty. ‘‘Golfwear Goes Classic.’’ Golf
sights.’’ Golf Market Today (May / June 1995): 1ff. World (September 29, 1995), 32–34.
26. Timothy, 158. 45. Underhill. Why We Buy, 116.
27. Ibid., 26–27. 46. Ibid., 118.
28. Pike, Steve. ‘‘Competition Heating Up.’’ Golf Shop Op- 47. Ibid., 143–150.
erations (May 1996): 35ff. 48. Lippincott, Liz. ‘‘Fishing for the New Breed.’’ Golf Pro
29. Broderick, Eileen Rafferty. ‘‘A Very Fine Line: How to (July 1995): 24.
Strike the Balance Between Golfwear, Retail.’’ Golf Shop Op- 49. Russell, Michael L. ‘‘How Sales Analysis Can Help Max-
erations (March 1994). imize Retail Profitability.’’ Golf Market Today (March / April
30. Underhill, Why We Buy, 62. 1993): 10–12.
31. Ibid., 66. 50. Ibid.
32. Ibid., 70. 51. Ibid.
33. Ibid., 79. 52. Seligman. ‘‘More Than an Afterthought,’’ 16ff.
34. Ibid., 84. 53. Ibid.
35. Ibid., 158.
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Chapter 12
SPAS, POOLS, AND
INDOOR WATERPARKS
LEARNING OBJECTIVES
1. Identify the economic benefits of developing a spa within the resort opera-
tion.
2. Determine the equipment needs of the luxury market in terms of layout and
design.
3. Identify the various treatment types and benefits of spa facilities.
4. Discuss how the room set-up guidelines impact guest safety.
5. Identify guidelines for the effective development and operation of swimming
pools and / or waterparks at a property.
INTRODUCTION MARKETING
DEVELOPMENT OF SPAS TRENDS
Benefits SWIMMING POOLS
Developing the Concept Maintenance
Operating the Spa Safety
LAYOUT AND DESIGN WATERPARKS
Purchase Criteria SUMMARY
TREATMENTS ENDNOTES
Exfoliation RENAISSANCE CLUBSPORT:
Full-Body Treatment THE CONCEPT OF THE UPSCALE
HOTEL/HEALTH CLUB
WATER THERAPY
UNIFICATION
The Tub
The Evolution of the
Showers Renaissance ClubSport Concept
Massage The Premise Behind the
CLIENT PREPARATION Renaissance ClubSport Concept
ROOM SETUP: WET ROOMS Economic Benefits of the
ROOM SETUP: DRY ROOMS Renaissance ClubSport Concept
COMBINATIONS
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308 Chapter 12 SPAS, POOLS, AND INDOOR WATERPARKS
INTRODUCTION
People are looking for other ways to take care of themselves
through massage, exercise and education about how to live
healthier lives.
—LAURA CRANDALL
Spa Director, Top Notch, Stowe Resort, Vermont
The market segments attracted to spas are outlined in this chapter, and criteria
are given for the efficient layout of a spa operation. Treatments are noted and
suggestions given for marketing the operation.1
DEVELOPMENT OF SPAS
The original spa was a mineral hot springs place in Belgium in a village called
Spau. ‘‘Taking the waters’’ became popular with the upper classes for reasons of
health. Visits to spas included bathing and drinking the mineral waters in addition
to mandatory social events. While European spas focus on cures and health, Amer-
ican operations concentrate on the promotion of a healthy lifestyle based on a
combination of exercise, weight loss, and pampering.
The following definitions are widely used:
Resort spa—The resort spa is located on the property of a hotel, normally

in a resort where other sports and activities are offered besides the spa
program itself. Spa guests and hotel guests intermingle.
Amenity spa—Similar to the resort spa, the amenity spa is added as an
amenity to a hotel. The distinction is its unimportance as a profit center
compared to the resort spa.
Destination spa—The destination spa is a hotel property targeted to the
spa guest and focusing on specific health and fitness programs. Outside
guests are not part of the program. Additional activities such as golf and
tennis are available.
There are over 12,000 spas in the United States. The vast majority—almost
three-quarters—are day spas. Resort / hotel spas are the second largest category
with almost 1,700 reported in 2004. Day spas are of interest to us only to the extent
that a visit might encourage individuals to seek an extended spa experience at a
resort.
Over 90 percent of resorts have spas while over 50 percent of upscale hotels
have such facilities. There are over 100 major destination spas in the U.S.2 The
S fastest growing sector of the spa industry is medical spas or medi-spas. According
N to the International Medical Spa Association there are over 500 medical spas in
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DEVELOPMENT OF SPAS 309
the United States. An offshoot of comprehensive care facilities, medi-spas focus on

fitness, nutrition, stress management, and other medical topics with an overall
focus on behavior modification. A recent trend has been the development of med-
ical spas with an emphasis on cosmetic dermatology.
Guests stay at a resort to recharge and relax. A spa offers guests the facilities
that allow this to occur. Today, a resort spa can expect to attract 15 to 25 percent
of the in-house resort guests. For resorts that attract a leisure market the spas
utilization can exceed 50 percent of their guests. It should be remembered that
the principal business of a resort is selling rooms. The presence of a spa should
help the resort increase occupancy and / or average room rate. The starting point
is to develop a guest profile of the resort guest market. Guests may be individuals,
those on incentive trips (e.g., the top salespeople who are given the resort trip as
a reward for increased sales), groups, families, or couples. Each segment will be
Quick Getaway 12.1

Goof-Proof Spas
In today’s spa-conscious world, adding a spa ‘‘Hire trained professionals to receive treat-
onto an existing resort can be a great way to ments and offer a report on their experi-
boost sales and increase customer satisfaction. ence.’’
However, new spa owners and veterans alike Cultivate an exclusive image. ‘‘Welcoming
frequently make mistakes that are easy to pre- guests into the spa as a given part of their
vent. retreat at the resort needs to be a more in-
Melinda Minton, a spa consultant and dividualized invitation that is anything but
health and beauty professional, offers her best intimidating.’’
advice on what NOT to do:
Resort spas can be a great addition to the
Go for looks over comfort. ‘‘Many resorts
facility, but adding a spa is not a decision that
have large, opulent, beautifully designed
should be undertaken lightly. If you are going
and appointed spas. I liken them to the Taj
to include a spa in your resort, you will want
Mahal. Have you been in the Taj Mahal? I
to make it the best it can possibly be.
have, and all of that marble gets cold on
one’s feet after awhile!’’ Source: ‘‘Speaking of Spa.’’ Resort & Recreation
Favor the latest treatments over time-tried (November / December 2005): 18.
favorites. ‘‘Entertaining the client is fine,
but sometimes there is a real disconnect; if
the therapist doesn’t understand the thera- DISCUSSION QUESTION:
peutic origins of a treatment the client is One way to increase bookings at a resort spa
bound to also be confused.’’ is to book visitors’ next visits when they first
Forget to check up on how your spa is arrive. What are other ways you can think
S doing, from a customer’s point of view. of?
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looking for slightly different experiences. For a group in meetings all day it would
make sense to extend the hours of operation to accommodate them. A survey of
existing guests asking their preferences can be a useful guide as to what additional
activities might be added to the mix.
Benefits
Having a spa at a resort seems to have economic advantages for the property.
Resort general managers indicate that the spa enhances the following aspects of
their business:
room rate (57 percent)

perceived value for money (70 percent)
occupancy (73 percent)
length of stay (43 percent)
marketing advantage (97 percent)
revenue per occupied room (83 percent)
number of people per occupied room (27 percent)3
The spa market overwhelmingly—70 percent—caters to women although

there is an increasing interest in spas on the part of men.4 In 1987 less than 10
percent of all spa visitors was a man. That percentage is now close to 30 percent.
Over 80 percent of resort guests indicate they would choose a property because
of the presence of a spa.
In a 2005 survey5 more than a third of respondents indicated they spend more
in hotels on spa therapies than they do on fine dining and wines. The main mo-
tivations, in order of importance, are:
stress reduction and relaxation

to look good / appear younger
to feel more sexy and attractive
pursuing a spa lifestyle
The top ten most commonly booked spa services are identified (in ranking
order) as aromatherapy massages, facials, local ‘‘signature’’ therapies, manicures,
pedicures, more ‘‘creative treatments,’’ Ayurvedic massages, reflexology, body
wraps, and hydrotherapy programs.
Spa regulars also indicate what they dislike:
having to appear naked for treatments, or to use a mixed sauna without

bathing suits or being bathed by strangers
receiving hard-sell tactics to spend more on spa or beauty products
treatments derived from chocolate or other dessert ingredients
any evidence of lack of cleanliness or poor hygiene
S being ushered out speedily once their treatment is over
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DEVELOPMENT OF SPAS 311
pretentious spas which seem to prefer clients with perfect bodies

having to make small talk with over-familiar staff
on arrival, finding the hotel spa fully booked with locals
Developing the Concept

In developing the spa concept, the facility should be planned after the program
has been agreed upon. Spas can reflect a geographic or historic sense of place
while others may take a theme—such as Asian—and plan and develop the facil-
ities around this. Themes should be developed around experiences that engage
the senses, induce feelings, and create memories. Themes might focus on wellness,
medical well-being, or luxury. As in all marketing, the key is to develop something
the market wants which the spa can do a better job of providing compared to the
competition.
As noted above, the objective of a resort is to sell rooms. It has been shown
that the presence of a spa at a resort can help sell more rooms and at a higher
room rate. In addition a spa can be useful in:6
generating additional room nights in the off and shoulder seasons

expanding the shoulder season / shortening the off-season
generating additional revenue per occupied room during the peak season
being more competitive with other resorts that have spas
giving group guests another reason to return as leisure guests
encouraging group guests to arrive a day early or to depart a day later
providing an opportunity to market the resort as an ‘‘incentive’’ destina-
tion for corporate award programs
enhancing spouse / companion programs for convention delegates
providing an indoor activity during inclement weather
A feasibility study must be conducted to determine the economic viability of

the spa.
Costs of construction, capital expenditures, start-up costs, furniture, fixtures
and equipment (FF&E), and operating costs once the spa is open have to be
compared to the expected revenues from spa services, membership dues, and
retail sales before construction can proceed. A turnkey, four-star quality spa can
cost between $350 and $500 per square foot, excluding land.7
The impact of the spa on other resort departments can be major—especially
for laundry, housekeeping, and maintenance. It may be that the existing laundry
department is not large enough to handle the increased demands of massages and
facial treatments and body wraps. Housekeeping may well be assigned to do the
night cleaning of the spa. Standards must be developed and training undertaken
to ensure high quality cleanliness.
S The use of water and chemicals places a great strain on maintenance needs.
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Operating the Spa

A spa can itself be a profit center for the resort. A PFK (consulting firm) study of
35 spas in resort properties established some guidelines for spa profitability.8 The
study indicated a high correlation between treatment rooms and total spa reve-
nue—the greater the number of rooms, the more revenue is generated. Because
demand is variable there have to be enough rooms during times of peak demand
to offset operational costs during times of slow demand. Obviously the demand
must be great enough to justify the number of treatment rooms present.
To date there has not been a uniform accounting system for spas. However,
at the time of writing, the International Spa Association (ISPA) is in the process of
developing such a system. Resort spas have been looking at the profitability of
spas by calculating spa revenue as a percentage of total hotel revenue. PKF has
found that hotel spas generating more than $1 million in revenue contribute an
average of 5.3 percent of the total revenue for their properties while spas with less
than $500,000 in revenue only account for less than one-half of 1 percent in total
revenue.9
A better ratio might be the amount of spa revenue per available treatment
room per day (RevPAT). In this study the average is $367 with a range of $241 to
$443. Although this seems high relative to the ‘‘standard’’ Revenue per Available
Room (RevPAR) for hotels, it is important to remember that treatment rooms can
be rented out numerous times a day. In fact, some spas have reduced treatment
times to 50 or 80 minutes rather than 60 to 90 minutes to increase the number of
daily treatments per room. A difference between spa treatment rooms and hotel
rooms is that there is a greater fixed cost associated with treatment rooms in the
form of therapist labor. The survey of RevPAT reports that spas with between six
and ten rooms and the mega-spas with more than 21 rooms perform better than
spas with 11 to 15 rooms. The author speculates that this middle category may
have overbuilt the number of rooms relative to guest demand.
Overall, it does appear that spas operate like mini-hotels. Both:10
have check-in and check-out processes

have a service orientation that is labor intensive with resultant high labor
costs
are in the business of renting rooms for a specified time
need extensive laundry and housekeeping services
have high fixed costs
On the revenue side most spa users prefer á la carte services compared to
being on a spa package. PFK finds the following revenue breakdown for the hotel
spa department:11
44 percent massage
S 22 percent spa treatment
N 11 percent club and membership dues
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10 percent salon treatments

7 percent clothing / merchandise
Club and membership dues account for a much smaller percent of revenue
at a resort (compared to a hotel) property while revenue from spa treatments,
salon services, and clothing and merchandise are more. In this analysis food and
beverage revenue are subsumed under the food and beverage department of the
hotel. Other studies show that a healthy snack bar or full service operation can
produce up to 10 percent of total spa revenue.
Many resorts charge facility or daily membership fees for guests. The fee is
sometimes waived in full or in part. A careful study of this decision must be made
as the revenue is often important to the resort since it can cover fixed operational
overhead. Many spas could do more to increase revenue from retail. It should be
possible for a spa to achieve 15 percent of gross revenue from retail sales.12 There
are a number of ways to train and motivate employees to increase retail sales:13
Train all staff to give a great treatment so guests will want to buy the
products used and create their own ‘‘home spa’’
Give the staff an incentive by offering them a percentage of their retail
sales (this can be a sliding scale, based on volume)
Provide ‘‘prescription pads’’ (retail forms usually provided by the product
companies) so the service provider can check off what products were
used during the treatment
Offer products that are sold only in fine salons and spas and can only be
purchased from a spa and not department stores, the Internet, etc.
By some estimates14 the cost structure of a spa, as a percentage of revenue,

can be:
payroll: 35 to 45 percent
payroll with benefits: 55 to 65 percent
operating expenses: 13 to 20 percent
net operating income (NOI) when spa is responsible for all expenses, ex-
cluding rent: 15 to 25 percent
NOI when the spa is responsible for payroll and products only: 30 to 40
percent
LAYOUT AND DESIGN

Quality, durability and warranties vary greatly and must be
carefully evaluated.
S —ERICA MILLER
N Day Spa Operations
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The basic components of a spa include:15
Reception area and lounge

Separate men’s and women’s locker rooms and facilities
Men’s and women’s steam rooms, sauna
Whirlpool, cool-dip pool
Lounge which can include a juice bar and small café
Dry treatment rooms for massage and facials
Wet treatment rooms for body wraps and scrubs
Hydrotherapy rooms for baths and hydro-massage therapies
Staffed fitness studio with exercise machines
Exercise studio for classes
Retail store
Salon for hair, nails, and makeup
The following equipment in a spa is desirable:
facial equipment—full complement of facial devices and a comfortable fa-

cial bed or chair for each room. The devices include a magnifying lamp,
steamer, full machine with high-frequency brush, and vacuum / spray. Ad-
ditional accessories include paraffin heaters, depilatory wax heaters,
wood lamps for analysis, electric masks, mittens, booties, and blankets.
basic body treatment—massage tables. Tables should be sturdy and, for
wet rooms, waterproof. Accessories include electric bed-warmer pads and
hydroculators for linen herbal wraps.
hydrotherapy—hydrotherapy tub, steam shower or steam cabinet, Scotch
hose, Vichy shower, Swiss shower. The greater the number of air and wa-
ter jets, the better. A power draining system should be included to speed
turnover. A manual massage hose should also be included. Surfaces must
be nonstaining.
A Scotch hose needs a room 8 to 12 feet long and equipped with a quick
drain. Both the Vichy and Swiss showers benefit from water-conserving heads and
quick drains. The cost of constructing a wet room can be as high as $150 per
square foot.
The two main issues in a wet room are towels and hygiene. Two to ten towels
per visitor are necessary, depending on the treatment. Body treatments and hydro-
therapy double or triple towel use. The tub and room must be cleaned, disinfected,
and dried between guests; this takes at least 15 minutes. In addition, wet employee
uniforms must be changed. Tubs without a power drain can take up to 30 minutes
to drain, clean, and drain again. Finally, products must be safe to go down the
drain. Employee responsibilities must be carefully thought out so guests are not
S kept waiting. Attention must be given to retail opportunities.
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It is advisable to have separate check-in and check-out areas, if possible.

Check-in areas can be noisy and rather hectic. A quiet, relaxed atmosphere makes
retailing easier.
Purchase Criteria
Concerns regarding the purchase of spa equipment are similar to those relative to
the purchase of any other specialized equipment. Most equipment is delivered
directly from the manufacturer. There are advantages to working with a full-service
distributor who can either repair the equipment at once or provide replacements
while repairs are being made.
Because equipment is both specialized and expensive, employees must be
trained in its use. Who provides the training, and at what cost, is the subject of
negotiation between spa management and the equipment manufacturer or distrib-
utor. Timely support and service from the distributor is crucial to ensure continuity
of the spa operation.
Quick Getaway 12.2

Breaking the Fifth Wall
When designing a spa, it’s easy to remember to ing on one’s back and looking up at the sky.
decorate and install lighting fixtures on the four The panels are designed in a photorealistic
walls of each room. It’s harder to remember the manner, with elements such as clouds and tree
‘‘fifth wall,’’ the ceiling. Most people don’t give branches to add interest. The sky-like ceiling
much thought to the ceiling in everyday life. triggers both psychological and physiological
However, the ceiling is very much in focus for responses of relief and well-being.
spa clients who spend a good deal of their time ‘‘It’s no surprise that this works,’’ says Bill
lying down in treatment rooms. Witherspoon, founder of The Sky Factory. ‘‘The
Spa design must target the senses. Even if sky is the most universal and powerful experi-
every other element in the room provides a ence of nature available to us.’’
soothing visual, auditory, olfactory, and tactile
experience, a bland or ugly ceiling can ruin the Source: Weisner, Sara, and Deane Erpelding. ‘‘Your
whole effect. Therefore, it’s important to con- Fifth Wall.’’ Resort⫹Recreation (Summer 2004).
sider painting, light fixtures, and other decorat-
ing elements when designing a room’s ceilings.
One option comes from The Sky Factory, DISCUSSION QUESTION:
a frontrunner in introducing nature into interior Besides installing The Sky Factory’s ceiling
environments. The Sky Factory offers wall and panels, what are other ways of incorporating
ceiling installations that mimic the effect of ly- nature and natural light into a spa’s ceilings?
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Retail selling can be a lucrative profit center. Rather than discounting a special
package, for example, the spa can offer a product as a gift. This ‘‘gift with pur-
chase,’’ or GWP, is common in the retail sector. It offers the advantage of getting
the product into the hands of the guest. If the product does what it advertises it
will do, additional retail sales may result.
TREATMENTS
Men used to think spas were only for women, but now they
are looking to take advantage of the pampering and the
stress-free environment. They are learning to take care of
themselves.
—TANYA VASSELL
Spa Director, Elysium Spa at Ciboney Ocho Rios, Jamaica
Spas typically offer three types of treatment: exfoliation, full-body treatment, and
spot treatment.
Exfoliation
Exfoliation involves rubbing, polishing, or scrubbing the skin, or using enzymes
on it, to remove dead skin and dirt. Removing dead cells allows the skin to more
easily accept moisturizers and other skin treatments.
Exfoliation can be accomplished in several ways. A dry brush technique uses
a loofah, brush, washcloth, or sponge to rub the dry skin away. A ten-minute
exfoliation treatment is normally given prior to a body treatment and is not charge-
able unless it is part of a 30-minute session involving a finishing lotion.
A salt glow is a popular destination spa treatment. It consists of rubbing special
salt mixed with an oil or liquid soap on all or part of the body. It is chargeable
when done on the full body and followed by a lotion application. When it is part
of a spot treatment—for example, a spa pedicure—it is usually included in the
price of that treatment.
A body polish uses salt or other abrasives in rubbing the body. It exfoliates
and softens the skin at the same time. Treatments usually take 30 to 45 minutes
for the entire body and five to ten minutes for spot treatments. Enzymes and alpha-
hydroxy acids (AHAs) can also be used to dissolve dead cells.
Treatment times determine appropriate booking times, which are important
for the financial success of the operation. Treatments take 30 minutes when given
alone or five to ten minutes when given as part of an additional treatment. Cleanup
and selling take an additional five to ten minutes for a total booking time of 45
S minutes. More time is needed for additional treatments.
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TREATMENTS 317
Full-Body Treatment
Full-body treatments deal with and are intended to help the entire body. The face
is usually excluded, as numerous procedures are intended for the face alone.
Treatments are intended to condition the skin or for detoxification purposes. The
former seeks to improve skin texture, color, and elasticity, while the latter seeks
to help the body function better. This is achieved through stimulating circulation,
which helps the body rid itself of wastes and toxins.
Full-body treatments include:
Full-body mud mask—Mud is warmed, applied thickly, and the body

wrapped in plastic or foil for 20 to 30 minutes. A full treatment takes 60
minutes. Fifteen minutes should be allowed between clients for cleanup
and retail selling.
Herbal body wrap—Linen or muslin sheets are heated and soaked in a
machine in which herbal pouches or oils have been placed. The body is
then covered with towels or rubber sheets, followed by the linen or mus-
lin sheet. Additional sheets and blankets are laid over and the body al-
lowed to rest for 20 minutes. Wet cloths need to be constantly placed on
the guests’ forehead. Due to the weight of the sheets, technicians can do
no more than four to six wraps a day.
Paraffin body wrap—Paraffin wraps generate heat that helps the body per-
spire, thereby allowing moisture and previously applied nutrients to be
absorbed from the skin surface into the body. The paraffin may be used
alone or in conjunction with mud or seaweed. Large strips of gauze, cut
to fit the body, are dipped in the paraffin and molded to the body. The
more layers (typically three to five) are applied, the greater the heat and
the longer the effect. After wrapping the body in plastic or foil, it rests for
15 to 20 minutes.
Body massage—These range from the basic Swedish massage to sports,
deep tissue, Shiatsu, aromatherapy, and reflexology massages. They are
booked for half an hour or a full hour.
Full-body facial—Similar to a facial (hence, the seemingly self-
contradictory name), this treatment involves cleaning, exfoliation, steam,
massage, mask, and finishing lotion, and is booked for 60 to 90 minutes.
Body tanning / bronzing—Exfoliation is followed by the application of a
tanning emulsion.
Full-body treatments range from 30 minutes for a herbal wrap, body massage,
or body tanning, to one and a half hours for a body facial. Most of the other
treatments take 45 minutes. Wrap or mask waiting times take anywhere from 10
to 30 minutes, depending on the procedure. A body facial can be completely
applied in ten minutes, while a full-body seaweed or mud wrap takes 30 minutes.
S Wrap or mask waiting time is usually 20 to 30 minutes. Adding in 15 minutes for
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cleanup and selling pushes booking times anywhere from 45 minutes for a herbal
wrap to one and three-quarter hours for a body facial.
Spot Treatment Spot treatments work on a specific part of the body. They include spa manicures
and pedicures; hand and foot treatments; scalp treatments; cellulite, antistress, and
bust-firming treatments; back treatments; and facials. Adding exfoliation, oils,
wraps, or massage qualifies the treatment as a spa treatment. Cellulite treatments
involve exfoliation, application of a material that stimulates circulation, and mas-
sage followed by a mud or seaweed mask. Conditioning and moisturizing takes
place after 20 minutes under wraps.
Most procedures take 30 minutes and wrap or mask time is 20 minutes. Adding
15 minutes for cleanup and selling pushes most booking times to 45 minutes.
However, a spa facial can last one and a half hours.
Quick Getaway 12.3

Holistic Design for Spa Industry Health
A spa’s main purpose is to heal and nourish imported treatments that local staff are not
mind, body, and spirit, so it should come as no always trained to administer.
surprise that the adoption of holistic spa prin- Restorative Interior Designs. Designs should
ciples will ensure the long-term success of the reflect the environment and use natural
spa industry. Some key principles of holistic re- materials such as raw silk, linen, and wool.
sort and spa design include: Natural Settings. The spa’s setting should al-
low visitors to experience nature and re-
Regenerative Spa Design. Spas are connect with its power and beauty.
designed in harmony with their natural and Wellness Programs. These programs in-
cultural environments, by using local re- clude information on how to create and
sources, and creating systems that continue maintain a long-term healthy and balanced
to evolve and self-replicate. Water, the core lifestyle.
essence of both ancient and modern spas,
Source: Zimmer, Robert, and Angela Clarke. ‘‘Balanc-
is recognized as the most precious re- ing mind, body and spirit: Why the current spa explo-
source, and ways are developed to ensure sion is still the tip of the iceberg.’’ Hotel News
that it retains its purity and integrity over Resource. http: / / www.hotelnewsresource.com /
the long-term. article20893.html
Local Holistic Treatments. These treatments
should be based on the principle of sacred DISCUSSION QUESTION:
healing of mind, body, and spirit. The use Do you think adopting holistic design princi-
of healing and soothing techniques ples is the most important element in ensur-
sourced from the local area is ideal, as ing the long-term success of the spa
S well as the avoidance of ‘‘gimmicky’’ industry? Why or why not?
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WATER THERAPY 319
WATER THERAPY
Hydrotherapy has become the term for treatments using water for professional
purposes. Water has been used as a treatment for various diseases since the times
of the ancient Greeks. Hippocrates himself used both fresh water and seawater for
bathing and drinking as part of his treatment procedures. In England, Dr. Erasmus
Darwin, father of Charles Darwin, utilized water to treat his own son, among others.
It is commonly believed that clean surface water contains great amounts of
oxygen and nitrogen and little carbon dioxide. As such, it can be used to activate
the body’s own mechanisms. The therapeutic use of water extends to drinking it.
Some people feel that, because of the saline content of water in the body, drinking
small quantities of salt water is beneficial.
Water—either warm or cold—affects blood circulation to specific areas of the
body. Warm or hot water dilates capillaries to improve the distribution of nutrients
and oxygen to organs and tissues. Cool or cold water has the opposite effect of
constricting capillaries, thus reducing swelling.
Warm to hot water:
Has a strong anti-inflammatory and anti-infectious action.

Relaxes the body.
Increases blood flow.
Eliminates toxins by inducing perspiration.
Reduces pain and discomfort.
Induces fatigue through muscle relaxation.
Makes product penetration more effective by increasing circulation.
Cool to cold water, on the other hand:
Is invigorating and stimulating, and adds tone.

Helps reduce swelling through capillary contraction.
Has a short-time tonic effect but a long-time depressing effect.
Increases the body’s resistance to disease.
Can reduce pain.
Stimulates the maintenance of skin elasticity.
Can reduce allergic reaction tendencies.
Can relieve headaches.
Improves the absorption of applied substances by stimulating nerve end-
ings, which results in improved circulation.
Because the human body is relatively dense in water, resistance or friction is

greater than on land. As a result, exercising in water can accomplish more than
the same effort made on land. Here are some forms of water therapy:
S Hydrotherapy refers to the use of water for well-being.

N Balneotherapy uses baths for beauty and therapeutic purposes.
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Thalassotherapy refers to the use of seaweed or seawater for beauty and

therapeutic reasons. Seawater is close to blood plasma in composition.
The mineral salts in seawater help skin cells take in more oxygen and
draw toxins out of the body.
Herbal baths use natural herbs or essences in baths for therapeutic pur-
poses.
Aromatherapy baths utilize oils for the same purpose as herbal baths.
Whirlpool baths use water or air jets to give a bubbling effect. One type
of whirlpool bath is the Jacuzzi, introduced in 1968 by Roy Jacuzzi and
manufactured by the company that bears his name.
Hydrotherapy tubs have between 30 and 150 jets that can be operated at
different pressures for therapeutic underwater massages. They are designed to be
used by one person at a time.
For best hydrotherapy results:
Clients should wait 30 minutes to an hour after eating and 15 to 20

minutes after vigorous exercise and should not have recently consumed
any alcohol.
Clients should use the rest room and have a warm shower prior to the
session. The shower warms and relaxes muscles, which helps reduce ten-
sion.
Treatment is more effective if the client is in the nude.
After treatment, clients should be given water or juice, preferably orange
juice, to replace lost potassium.
During treatment, a cool, not cold, cloth can be applied to the head.
Cool, not cold, water can be offered as well.
Clients should never be left alone during treatment lest they fall asleep or
faint.
The Tub
The tub itself should drain quickly. Temperatures range from 50⬚ to 70⬚F for a cold
bath to 98⬚ to 105⬚F for a hot bath. Anything over 105⬚F causes the blood pressure
to fall dramatically and consequent heart stress. Water and air flow in the tub
increases water temperature.
Treatments usually start at 15 minutes and work up to 30 minutes maximum.
Rest times between sessions should equal the time in the tub. A 30-minute session
in the tub should be followed by 30 minutes of rest before commencing another
tub treatment. Typically, however, a slimming or anticellulite hydrotherapy pro-
gram involves treatment two to three times a week. A typical 30-minute treatment
consists of ten minutes of water jets working from the feet to the back of the neck,
ten minutes of underwater massage or additives, and ten minutes of relaxation
S with gentle bubbling.
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WATER THERAPY 321
Underwater massage is accomplished by way of a hose, which is kept under-

water and through which air is forced. Movements begin at the feet and work
toward the heart.
Three types of tub treatment are typical:
plain water baths, which involve no additives but may include under-
water massage
thalassotherapy baths, which add seaweed, seawater, sea salts, or sea
mud
aromatherapy or herbal baths, which add herbs or oils
Most baths are based on relaxation, stimulation, and invigoration. The follow-
ing oils are recognized for each of these:
relaxing—lavender, chamomile
stimulating—rosemary, thyme, pine
contouring—pine, thyme, juniper
Alternating warm and cold baths is a recognized form of therapy. Warm baths
relax; cold baths stimulate. More time should be spent in warm water than in cold.
A tub treatment in an outdoor setting is an additional luxury to a spa

treatment. Courtesy the Four Seasons Hotel and Resort; photo 䉷 Matthew Plexman
S Photography
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For example, five minutes of warm water followed by one minute of very cold
water is recommended.
Showers
A variety of shower treatments exist:
Warm-ups and rinses—initial shower, shampoo, and rinse for cleansing

purposes.
Cold shower—taken after a warm shower for the purpose of invigorating
the body.
Rinsing—one-minute showers between treatment steps.
Swiss shower—surrounds the guest with 8 to 16 streams of water that can
be concentrated to specific body areas from the upper torso to the
thighs. This mild form of water pressure therapy uses alternating warm
and cold water.
Vichy shower—used in a wet room that is tiled floor to ceiling. Several
showerheads direct water to guests as they lie on a bed or table. Hot and
cold water pulse alternately. This shower is usually used after a salt, mud,
or seaweed treatment in the same room.
Steam room, shower, or cabinet—causes the body to perspire, helping
eliminate toxins, stimulate circulation, and increase respiration. Should
be followed by a cool shower or product application.
Scotch hose or shower—a strong stream of water targeted at specific ar-
eas of the body to increase circulation and break up fat deposits. The
guest stands at a wall, holding onto handles, while a technician shoots
water from a device like a fire hose from a distance of 8 to 10 feet.
Products that are available for sale in the spa can be placed in the shower.
As guests use the products, they can see, smell, and feel for themselves their
benefits.
Massage
Massage offers a number of benefits to guests. It causes an increase in blood
circulation that helps improve nutritional exchanges and eliminate wastes and
toxins. Soreness and discomfort in the muscles is relieved. Massage has a sedative
effect on the nervous system. Stress is reduced as the body relaxes. Skin texture
and softness is improved. Finally, it just feels good!
Effleurage Massage. The classic Swedish effleurage massage consists of a gentle

touch and a soft stroke that is directed toward the heart. Typically, the massage
begins on the front of the guest, then proceeds to the back. Movements go from
the foot to the thigh of one leg, then are repeated on the other foot and leg.
S Attention is then given to the arms, moving from the hand to the upper arm on
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WATER THERAPY 323
one side, then the other. The head is then massaged down to the chest and the
movements repeated on the guest’s back.
Special care should be taken when having masseurs / masseuses perform mas-
sages on guests of the opposite sex. Because of potential liability, the resort may
wish to offer only same-sex massages or have someone of the same sex as the
guest in the room during the massage.
Aromatherapy. Aromatherapy refers to the ‘‘therapeutic use of aromatic essences

from plants in treatment for beauty and well-being.’’ These essences can come
from flowers, stems, leaves, roots, bark, or an entire plant and are extracted by
various means to produce a pure, aromatic essence. It takes, for example, 60,000
petals to produce an ounce of Bulgarian rose oil.
Oils affect the body in two ways: physiologically and psychologically. Physi-
ologically, oils enter the body by infusion (through a room diffuser), by bathing
with compresses, and through massage of the skin. Essential oils easily penetrate
the skin and, as a result, are used as curatives in holistic medicine. They affect
various bodily systems as follows:
Skin—Dissolve dead surface cells, increase cell turnover, stimulate metab-

olism, improve texture.
Glands—Soothe and tone.
Muscles—Relieve fatigue, reduce soreness, improve elasticity.
Blood and lymph—Facilitate smooth flow, increase waste elimination.
The psychological impact of aromatherapy comes from the sense of smell

being controlled by the olfactory system, which has the capacity to produce an
immediate effect on the nervous system. Any stimulation affects the limbic system,
which is the part of the brain that controls emotions and personality. Essences
may also play a part in producing neurochemicals like endorphins and enkepha-
lins, which act as the body’s painkillers and relaxants.
It is normal for oils to be diluted with a carrier oil, usually vegetable based.
Oils are chosen depending on the characteristics of the skin. For example, dry
skin might benefit from sweet almond, olive, or palm kernel oil. Oily skin, on the
other hand, utilizes grapeseed, hazelnut, or sunflower oil. The degree of dilution
depends on the application method. For massage purposes, the ratio is 25 drops
of the essential oil to two ounces of the carrier oil, while a bath uses 10 to 30
drops of the essence on its own or ten drops per tablespoon carrier oil when used
as a combination. Infusions require seven to ten drops per quart of water. Com-
presses need two to three drops per 6 inches of wet gauze or linen squares. Guests
should be advised to stay out of the sun, saunas, and baths for five hours after
treatment. Alcohol should not be consumed but lots of water should be in the
S ensuing 24 hours.
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CLIENT PREPARATION
While some guests may be familiar with spa techniques, it is likely that many will
be unaware of basic spa practices. One area that is particularly sensitive is the
need to undress prior to treatments. The vast majority of spa treatments involve
the technician seeing only that part of the body being immediately worked on.
However, guests may not be aware of this and will probably need reassurance. As
noted earlier, this issue is particularly important when the employee and guest are
of the opposite sex.
First-time visitors to the spa should fill out a form indicating basic demographic
information together with a brief medical history, what products are presently be-
ing used on the body and face, and a section on lifestyle habits. A technical
analysis is appropriate in the following areas:
skin type
skin conditions
nails: type and conditions
massage: areas of stress; types of massage; result
skin texture / color
Finally, a history should be kept for each guest indicating the procedures and
equipment used and body work done.
ROOM SETUP: WET ROOMS

The two basic setups are wet and dry rooms. Wet rooms are built so that they can
get wet without damaging the room. Most are tile all the way to the ceiling and
have floor drains. Floors are sloped to allow fast drainage. Ceilings are also made
of waterproof materials. Rooms are typically 9 by 12 feet (10 by 14 if a Scotch
hose is included) and have both a shower for guest use and a hand-held hose for
easy cleaning of the room. Indirect waterproof lighting and a dimmer switch for
ambience complete the package.
The following treatments are best administered in a wet room:
hydrotherapy tub treatments

Vichy and other shower treatments
Scotch hose treatments
salt glows, mud masks, and seaweed wraps
Rooms should be cleaned, sanitized, and dried between guests. Because sea-
S weed and mud can stain tiles, rooms must be cleaned immediately after use.
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ROOM SETUP: WET ROOMS 325
Proper maintenance is essential to any spa. Courtesy The Greenbrier
Quick Getaway 12.4

Safety: Thinking Like a Guest
The number one cause of insured loss within ter, with heads up and luggage in tow?
the resort industry is not fire, theft, or any other Asking employees to ‘‘think like a guest’’
activity-related incident. It’s from slip and fall and keep an eye out for potential hazards is
incidents. Although these losses are usually not one easy way to minimize insured losses. Turns
costly, they are so numerous that they become out that finding and fixing these fall hazards is
a problem. The good news is that most slip and far simpler than it first appears!
fall incidents are preventable.
The best strategy for inspecting the prop- Source: Boynton, Barney. ‘‘Your Biggest Insurance Loss
Could Be Right Under Your Feet.’’ Resort⫹Recreation
erty for potential slip and fall hazards is to think (November / December 2005).
like a guest. The large towel bar next to the
bathtub, designed to hold three large cotton
towels? A guest may think it’s a grab rail in- DISCUSSION QUESTION:
stead. Remember the small change in elevation Look around the room you’re in right now.
between the foyer and the front desk? Do you What easy-to-fix slip and fall hazards can
think your guests will see it when they first en- you see?
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ROOM SETUP: DRY ROOMS

Dry rooms tend to be 8 by 10 feet and, typically, untiled. As a result, they are
quieter and more relaxing. A sink in the room is useful for preparing treatment
bowls. A shower should be available nearby. Dry rooms are best used for mas-
sages. Wiring the room for music and installing dimmers on the lights permit var-
iation of the ambience.
The overall experience demands sheets and towels that are clean and fresh.
The same is true for bottles of massage oil. Taupes, beiges, and grays are the best
colors for a mixed clientele, and the lighting is best subdued. Employee uniforms
must be clean, dry, and fresh. Several uniform changes may be required daily. A
wall clock helps the employee keep track of time, while soft music adds signifi-
cantly to the experience.
COMBINATIONS
Treatments can be combined with hydrotherapy and massage. Sample combina-
tions include:
massage, facial, manicure, pedicure

hydrotherapy tub treatment, full-body seaweed mask
salt glow tub, Vichy shower, full-body mud treatment
deep cleansing facial, antistress body massage, spa pedicure
aromatherapy body massage, facial, mud body wrap, spa manicure and
pedicure, scalp treatment, hairstyle, makeup
for men: anti-aging facial treatment, muscle-relaxing massage, aromather-
apy scalp treatment, cleansing manicure and pedicure
MARKETING
The spa menu should be thought of just like a restaurant
menu when it comes to marketing.
—ERICA MILLER
Day Spa Techniques
Combining treatments under a specific name can make them more marketable.
For example, the Spa at Camelback Inn in Scottsdale, Arizona, features the Adobe
Clay Purification Treatment inspired by the ancient healing rituals of Native Amer-
S icans and involving a total body exfoliation, a clay application, an aromatherapy
N cleansing and application, and a sauna session. The Golfer’s Massage at the Son-
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TRENDS 327
oran Spa, also in Scottsdale, concentrates on muscle groups in the neck, shoulders,
lower back, and hamstrings, while the Hot Rocks Massage uses heated river stones
to work away stress.
Instead of simply listing the treatments and the prices, descriptive words can
be used to paint a picture and promote the treatment. For example:
Body Massage $55.00

A full hour of relaxing massage, designed to relieve stress and tension ac-
cording to your body’s own condition.
Salt Glow Rub $55.00

Special salts from the Dead Sea are mixed with moisturizing and condi-
tioning lotions to slough off dead cells and hydrate while leaving your
body feeling smooth and sleek. You’ll enjoy the comfortable Vichy shower
rinse along with this treatment.
Additional services that can be marketed are food and activities that focus on
the mind. The Hyatt Regency Gainey Ranch in Scottsdale, Arizona, offers Cuisine
Naturelle, nutritious gourmet food with moderate calories, and the Waterfall juice
bar. The Phoenician Resort in Scottsdale has a Meditation Atrium where guests
learn meditation techniques in one-on-one and small group sessions. Alternatively,
consider the following body treatments at the J.W. Marriott Las Vegas Resort &
Spa:
Lost in Paradise
Mandarin Orange
Wild Lavender
TRENDS
A number of ongoing trends can be seen in the spa industry:16
Spa Design—Over recent years, spas have increased, sometimes dramati-

cally, the quality of their interior design. Hydro-therapeutic showers and
tubs, mosaic and glass tiling are combining with everything from ‘‘spa’’
apparel to ‘‘spa’’ luggage.
Live at the Spa—Emerging ‘‘spa communities’’ will provide baby boomers
with important lifestyle requirements focusing on health and fitness cen-
tered around spa-going that will become compelling marketing features
for real estate ventures.
Luxury Becomes Ultra-Luxury—The luxury end of the market will become
S even more luxurious offering such things as daily private spiritual and
N wellness counseling, ruby / diamond / emerald / sapphire massage oils, four-
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hour massages, three-therapist treatments, underwater spas, private hotel /

spa rooms, and a slate of ultra-chic big-name designer spas.
Spa-Goers Become Spa ‘‘Goal-ers’’—Travelers will hit destination and re-
sort spas to achieve increasingly focused personal goals, such as quitting
smoking, grief recovery, or spiritual awareness. Spas will ramp up their
education programs and workshops.
Spa Rx—Medical spas will continue to thrive as they blend traditional
medical expertise with spa luxury and innovation.
Spa Cuisine Served up for Mass Consumption—Spa-inspired food will
become everyday fare with an increase in spa cookbooks, spa cooking
classes, and spa chefs.
Eco-Spas Thrive—Eco-spas will provide guests with environmentally
friendly destinations offering spa products (all organic ingredients), wash
dishes (vinegar instead of soap), room lighting (solar panels and fluores-
cent bulbs).
SWIMMING POOLS
There are a number of different types of pools that can be part of the resort
amenities:17
Lap pools with lanes for swimmers

Sports pool of consistent depth for exercise and games
Reflecting pool to complement picturesque landscaping
Traditional diving pool with a deep end for safe diving
Splash pool for wading and family fun
Fitness centers are the number one most important amenity when traveling
for business.18 Resorts that appeal to business travelers can turn their pools into a
profit center by offering fitness classes—low-impact aquatics—to their guests.
While a soak in the pool might make guests feel better, a low-impact workout can
invigorate guests, relieving them of the fatigue of travel, increase the blood flow,
and increase endorphins. In-pool exercise equipment can be purchased for $1,200
per unit. Aquatic exercise is performed in a vertical manner in either shallow or
deep water. Because water buffers the body from gravity a person seems weightless
when totally submerged. Exercising in the water provides a cushion not available
outside the pool. The negative impact on the body is reduced. At the same time
toning is improved. To get muscles into shape the body has to work against some-
thing. Because the water limits the impact of gravity on the body the muscle tones
S without feeling the strain that might occur on dry land.
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SWIMMING POOLS 329
The pool setting should be inviting to guests. Courtesy Camelback Resort
Maintenance
According to some experts, an attractive pool is one of the most visible and cost-
effective resort amenities. Keeping the pool attractive requires constant mainte-
nance.19
Know your chemistry—The single most important factor in extending the

life of the pool and reducing repairs is keeping the water chemistry in
balance. An automated water chemistry control system measures chlorine
and pH levels every three seconds and automatically dispenses the right
amount of chemicals into the pool. These systems cost between $3,000
and $5,000 but pay for themselves after two years due to savings on
chemicals and manpower.
Renovations—Exposed-aggregate pool finishes, such as Diamond Bright
and Krystal Krete, cost 15 percent more than regular finishes but last
longer and are easier to maintain. Decks can be spruced up with emul-
sions or concrete pavers in different shapes, textures, and colors. Adding
lighting for evening ambience completes the effect.
Starting over—There comes a time when it is cheaper to tear out the
pool and start over rather than to repair it. If your pool is over 30 years
old, this be may the better strategy. During pool replacement is a good
S time to integrate changes in construction such as larger multipurpose
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decks, dramatic architectural elements such as waterfalls, shallow wet

decks for kids, and access for seniors and people in wheelchairs.
Safety
Because of liability concerns the presence of pools represents a difficult challenge
for management. Management has to be particularly concerned with:20
Responsible adult supervision—many resorts post signs indicating that

guests swim at their own risk and have no lifeguard. This is no substitute
for having responsible adult supervision in the pool, spa, or hot tub
areas.
Drains, suction fittings, and jets—grates and covers help prevent body or
hair entrapment. Covers must meet specific safety standards. Safety doors
should be installed in all pool cleaner wall suction lines.
Diving—all diving boards, platforms, or slides must be consistently in-
spected to ensure compliance with industry standards.
Electrical hazards—all equipment should be inspected by a licensed
electrician to ensure everything is properly grounded, bonded, and pro-
tected.
Ladders, steps, and handrails—there should be adequate safe-entry and
safe-exit methods at both ends of a pool and two sides of a hot tub or
spa.
Drowning prevention—routinely inspect all gates; have staff trained in
CPR.
Water clarity—ensure that circulation and filtration systems are working
properly to provide clear water.
Water chemistry—pools need regular sanitizing and chemical balancing.
Heaters—heaters must be properly bonded and ventilated with features
to prevent overheating.
WATERPARKS21
A recent trend has been the development of the waterpark resort. Most are outdoor
waterparks located in the Sun Belt states. Originally owners have built hotels ad-
jacent to their parks. But now, there is a growing trend of building hotels with
indoor waterparks—a movement that is predominant in the Wisconsin Dells. The
Dells is a region of natural beauty that has become known as a summer family
resort destination. It owes much of its success to its location near three major
metropolitan areas—Chicago, Milwaukee, and Minneapolis.
In the mid-1990s, five major resort families changed Wisconsin Dells from a
S summer resort to a year-round resort destination by building mega-resort hotels
N with indoor waterparks. Hotels with indoor waterparks have been shown to pro-
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WATERPARKS 331
duce higher occupancies and room rates compared to hotels with ordinary swim-
ming pools. This is especially true of the shoulder months when occupancy drops
from that of the peak summer weeks. The major reasons for resort success are:22
Seasonal resorts gain year-round appeal

Elimination of weather-related vacation risks
Wide appeal of water-based recreation
Increasing demand for short drive-to getaway vacation
Themes with varying levels of appeal
Location proximate to customer base and within established family
vacation market
An indoor waterpark resort can be defined as ‘‘a lodging establishment con-

taining an aquatic facility with a minimum of 10,000 square feet of indoor water-
park space and inclusive of such amenities as slide, tubes, and a variety of indoor
water features.’’23 A waterpark with less than 10,000 square feet of indoor waterpark
space is considered to be a hotel with water features.
At the end of 2004 there were 63 indoor waterpark resorts in the United States.
Forty-four percent are located in Wisconsin while an additional 22 percent are in
Minnesota. In Canada, there are over 100 hotels with indoor waterparks that are
open and operating with most located in the western provinces. Mexico boasts at
least 11 properties that have a combination of hotel rooms, indoor waterparks,
and outdoor waterparks while there are an additional 13 in the rest of the world
that have a combination of hotel rooms, indoor waterparks, and outdoor water-
parks.
The size of the indoor waterpark will be dictated by the results of a market
and feasibility study. An industry rule of thumb indicates that a 100- to 150-room
hotel may be able to generate enough additional income to support the investment
of a 15,000- to 20,000-square-foot indoor waterpark. Hotels ranging in size from 150
to 250 rooms may be able to support a 30,000- to 40,000-square-foot waterpark.
Hotels with waterparks over 50,000 square feet have a ratio of 273 square feet of
waterpark per guestroom. This ratio decelerates as waterparks get smaller. The
ratios are as follows:24
Size of Waterpark Number of Square Feet

In Square Feet Per Guest Room
50,000 ⫹ 273
40,000–49,000 183
30,000–39,000 130
20,000–29,000 98
10,000–19,000 100
S These figures do not include such things as arcades, gift shops, mechanical
N rooms, and offices. The type of attraction developed is a function of the demo-
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Quick Getaway 12.5

Waterplay Structures: What to Look For
Private clubs that install waterplay structures matter how it grows—operate from a
(which can include slides, sprinklers, showers, single water line and fit any pool?
and other elements) find increased use of the Interactive Play. Does the system promote
overall facilities. This is because members interactivity, teamwork, discovery, and
spend more time there as a family than as in- imagination?
dividuals, which of course leads to increased Accessibility. Does the system comply with
revenue for the club. the American Disabilities Act (ADA)?
Installing waterplay structures can be a Safety. Is the system an environment where
great idea to bring in new revenue. So, what families will feel safe and comfortable as
should you look for when selecting a waterplay well as exhilarated? Can the resort support
structure manufacturer? daily inspections to insure equipment
safety?
Expandability. Can the system be installed
Source: ‘‘Waterplay Wows Guests.’’ Resort⫹Recreation
in different phases to accommodate your
(Summer 2004).
budget?
Flexibility. Can the interactive components
be interchanged to update the structure or DISCUSSION QUESTION:
replace faulty parts? How can you design a waterplay structure so
Installation. Will the entire structure—no that it appeals to different child age groups?
graphics of the market sought, including the age of children as well as the size of
the available space.
Indoor waterparks with 10,000 to 30,000 square feet might feature such things
as multiple slides, a tree house with slides, spray guns, tipping buckets, Jacuzzi, a
number of pools, and a lazy river. With a capacity of 250 to 740 people, the
waterpark would require a minimum of three lifeguards. For a small waterpark,
up to 15,000 square feet, the Kiddie Pool is the major element. Typically ranging
from 3 to 18 inches in depth, the pool covers an area of 2,000 square feet. A play
element offers such things as spraying components, tilting buckets, and slides rang-
ing from 2 to 6 feet in height. A second element consists of an activity pool to
accommodate guests ranging in age from eight to adult. This conventional swim-
ming pool is approximately 25 feet wide by 50 feet long with depths of 3 to 5 feet.
The size of this pool depends on the number and type of activities. It might, for
example, have several movable water basketball hoops and a volleyball net. The
third element is a whirlpool. A favorite gathering area for adults, they should be
located away from the Kiddie Pool and the activity area as possible. This allows
S for a relatively quiet conversation area. A game room and snack bar offers the
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WATERPARKS 333
opportunity to generate additional income and should be located in a highly vis-

ible area.
The objective is to create an activity-filled environment that families can enjoy
over a four to six hour period of time.
Once a waterpark increases beyond 15,000 square feet the appeal moves to
families with children up to about 14 years of age. In addition to the elements
mentioned above, a larger waterpark has waterslides with splashdown pools and
for the larger amenities in this category, a leisure river might be added. Waterslides
are very important elements.
Waterparks above 40,000 square feet can be developed to include action riv-
ers, wave pools, and waterslides. At this point it is probably necessary to include
the public to make the investment financially viable. The number of outside users
should be limited as hotel guests are likely paying a premium of anywhere from
$20 to $150 for the room because of the presence of the waterpark and are likely
to be upset if they perceive there are too many non-guests at the facility.
For indoor waterparks of between 10,000 and 30,000 square feet of indoor
waterpark space the waterpark is considered a hotel amenity. When the size goes
beyond 30,000 square feet the waterpark is a true destination resort that families
visit primarily because of the waterpark. In addition to the elements noted above,
such a facility might include a wave pool, water coaster, surfing opportunities, and
additional outdoor waterpark features. With a capacity anywhere from 750 to 5,000
people, this facility requires a minimum of ten lifeguards.
Construction costs for an indoor waterpark will be a minimum of $300 per
square foot. The budget for a 300-room upscale resort with a 40,000-square-foot
indoor waterpark is typically:25
The operation of an indoor waterpark will result in additional costs in certain
areas—primarily lifeguard and other staff wages, utility costs, and repairs and main-
tenance. A typical waterpark is open from 9:00 a.m. until 10:00 p.m. and must be
TABLE 12.1 Waterpark Construction Costs

Category Per Room Amount % of Total
Land $14,400 $4,320,000 7.9

Design 3,500 1,050,000 1.9
Development 10,800 3,240,000 6.0
Construction 119,000 35,700,000 65.6
FF&E 14,600 4,380,000 8.0
Construction management 1,600 480,000 0.9
Pre-opening 4,800 1,440,000 2.6
Working capital 2,000 600,000 1.1
Financing 8,300 2,490,000 4.6
Contingency 2,500 750,000 1.4
Total Project $166,700 $54,450,000 100.0
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staffed accordingly. It tends to be kept at a constant 85⬚F year-round. While the

overall utility costs mirror those of a full-service hotel (4 to 6 percent of revenue),
the dollar amount increases.
Because most kiddie play elements spray a great deal of water in high levels
of humidity evaporation results. This, in turn, causes the spread of chloramines
and other compounds, which can result in excessive corrosion and deterioration
of HVAC systems and other equipment. They can also act as a health hazard
because of poor air quality.
Thus, the best water purification system should include not only a chlorine
or bromine system, but also an ozone system to reduce the chloramines formation
and improve air quality. Waterborne pathogens need to be eliminated from the
water, circulation system, HVAC system, and the air.
SUMMARY
People go to spas because they are stressed or because they want a small indul-
gence. A full-service spa contains a full complement of facial devices and a com-
fortable facial bed or chair for each room, massage table for full-body treatment,
and a range of hydrotherapy treatment options. Treatments themselves consist of
exfoliation, full-body treatments, and spot treatments conducted in wet and dry
rooms following strict guidelines to ensure a safe and enjoyable experience for
guests. Pools and, increasingly, waterparks offer amenities that attract guests and
can produce additional revenue for the resort.
ENDNOTES
1. This chapter draws heavily from two books by Erica Miller: Miller, Erica. Day Spa Techniques.
Albany, NY: Milady Publishing, 1996. Miller, Erica. Day Spa Operations. Albany, NY: Milady Pub-
lishing, 1996. Readers interested in finding out more about this subject are referred to these
excellent publications.
2. Miller, Richard K., & Associates. The 2005 Travel & Leisure Market Research Handbook. Logan-
ville, GA, 2005, 434–435.
3. Singer, Judy. ‘‘Studies Show Resort Spas Find Their Stride.’’ Hotel and Motel Management (June
14, 1999): 10.
4. Scholz, Kimberly. ‘‘More Men to Be Found at Spas.’’ Travel Weekly (April 5, 1999): 16. Licata,
Paula. ‘‘Men are Discovering the Salon & Spa.’’ The New York Times (October 5, 2003), accessed
February 20, 2006. http: / / www.paulalicata.com / men-n-spas.htm
5. Ibid.
6. Monteson, Patricia A., and Judith L. Singer. ‘‘Planning and Operating a Resort-Based Spa.’’
Journal of Leisure Property (December 2002).
7. Ibid.
S 8. Foster, Andrea, and Adam Wohlberg. ‘‘Hotel Spas as Independent Profit Centers.’’ March 7,
N 2006, accessed March 8, 2006. www.hotelnewsresources.com / news print.php?sid⫽21255
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RENAISSANCE CLUBSPORT: THE CONCEPT OF THE UPSCALE HOTEL / HEALTH CLUB UNIFICATION 335
9. Foster, Andrea, and Robert Mandelbaum. ‘‘Hotel Spas: The New Recreational Vehicle for Hotel
Profits.’’ Lodging Magazine (October 2005).
10. Foster, Andrea, and Adam Wohlberg. ‘‘Hotel Spas as Independent Profit Centers.’’ March 7,
2006, accessed March 8, 2006. www.hotelnewsresources.com / news print.php?sid⫽21255
11. Foster, Andrea, and Robert Mandelbaum. ‘‘Hotel Spas: The New Recreational Vehicle for Hotel
Profits.’’ Lodging Magazine (October 2005): 17.
12. Monteson, Patricia A., and Judith L. Singer. ‘‘Planning and Operating a Resort-Based Spa.’’
Journal of Leisure Property (December 2002).
13. Ibid.
14. Ibid.
15. Ibid., 2.
16. ‘‘Spa Finder Offers Sneak Preview of Spa Trends to Watch in 2005.’’ PR Newswire, December
13, 2004. http: / / hotel-online.com / News / PR2005 2nd / Apr05 SpaTrend.html
17. Pool and Spa Living Buyer’s Guide 2005. March 2005, 34.
18. Velinsky, Milton, and Steve Belmonte. ‘‘Pooling Your Assets.’’ Lodging Magazine (April 2006):
66–68.
19. Ibid.
20. ‘‘Important Safety Information’’ leaflet, The Association of Pool & Spa Professionals, undated.
21. Accessed January 18, 2006. http: / / www.hotel-online.com / News / PR2002 1st / Jan02 Water-
Parks.html
U C: \ Documents and Settings \ rmill \ Local Settings \ Temporary Internet Files \ OLKAD \ Hotel Wa-
terpark Resort Industry Report—2003 14 New Hotel Waterpark Resorts Open—October 2003
(3).htm
22. Sangree, David J. ‘‘Indoor Waterparks and Hotels—Year End 2005 Overview,’’ 3. Accessed
March 23, 2006. http: / / www.hotel-online.com / News / PR2006 1st / Feb06 SangreeWaterpark-
Report.html
23. Ibid., 1.
24. Hotel Waterpark Resort Research & Consulting: Jeff Coy and Bill Haralson, 1. Accessed January
18, 2006.
http: / / www.hotel-online.com / News / PR2003 2nd / May03 HotelWaterParkStudy.html
25. Accessed January 18, 2006. http: / / www.hotel-online.com / News / PR2002 1st / Jan02 Water-
Parks.html
U C: \ Documents and Settings \ rmill \ Local Settings \ Temporary Internet Files \ OLKAD \ Hotel Wa-
terpark Resort Industry Report—2003 14 New Hotel Waterpark Resorts Open—October 2003
(3).htm
RENAISSANCE CLUBSPORT:
THE CONCEPT OF THE UPSCALE HOTEL/
HEALTH CLUB UNIFICATION
By: Kevin Patel
Assistant Vice President, HVS International San Francisco
S Business travelers in recent times have expressed a greater desire to maintain their
N health during business trips by exercising and eating healthier on the road. The
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development of new fitness initiatives by various hotel companies in the past dec-
ade have focused on the fitness facility as an amenity to the hotel guest. While
these companies focused on improving their fitness facilities, Leisure Sports Inter-
national (L SI), an operator of high-end sports clubs under the ClubSport brand
since 1978, pioneered the concept of the ‘‘hotel and fitness resort.’’ This ground-
breaking concept combines the features of an upscale, boutique hotel with a
luxurious, Ⳳ70,000-square-foot fitness complex. The facility generates revenues
from hotel guests as well as health club members from the local community. The
premise of the Renaissance ClubSport concept is that operating expense and con-
struction cost efficiencies, as well as prospective marketing synergies, result from
the combined hotel and health club operations. This article will provide an intro-
duction to the history, premise, and economic benefits of the Renaissance
ClubSport concept.
The Evolution of the Renaissance ClubSport Concept

The concept has its roots in Pleasanton, California, the headquarters of L SI. Steven
Gilmour founded L SI in 1978 with the intention of developing the ‘‘fitness resort’’
concept. This concept, under the ClubSport brand name, entailed the creation of
a luxurious fitness complex that now includes the following:
five to six group exercise studios;

three swimming pools;
five to seven racquetball and squash courts;
an NCAA-regulation gymnasium;
expansive cardiovascular, circuit-training, and free-weight areas;
a full-service spa and salon;
a pro shop; and
a child-care facility.
This facility would target a high-income residential population and workers in

corporations in the local community who were looking for a resort-like experience
in a suburban or urban area. L SI’s first facility, the ClubSport Pleasanton, opened
in 1981. During this time, L SI also noticed a shortage of hotel supply in the Pleas-
anton area. Mr. Gilmour’s idea: if a hotel were attached to the existing club, a
number of objectives could be achieved, such as a larger amenity package for
hotel guests. Furthermore, the club’s numerous corporate clients would be able
to access the hotel’s room accommodations and meeting space. The idea resulted
in the development of a $25 million, 300-room Hilton hotel next to the Pleasanton
ClubSport in 1985. This development, a partnership between L SI and Travelers
Insurance Company, became the root of L SI’s mixed-use, hotel / health club con-
cept.
While L SI developed five stand-alone ClubSport health clubs around Califor-
nia, Oregon, and Nevada in the 1980s and 1990s, L SI was refining the premise and
S potential economic benefits of the hotel / health club concept. In addition, L SI was
N also looking for a strong hotel brand as a partner to create and grow a brand for
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this new concept. Marriott International, which purchased the Renaissance brand
in the late 1990s, was looking to grow Renaissance as an upscale, boutique hotel
brand in numerous markets. The attributes of the Renaissance brand seemed like
a good fit with the ClubSport brand, and in the late 1990s, the Renaissance
ClubSport brand was created under a franchise / co-branding agreement with Mar-
riott International.
The concept turned into reality when the first Renaissance ClubSport devel-
opment, in Walnut Creek, California, opened to the public in October 2002. This
facility has been a resounding success. The health club has reached its capacity
of 4,500 members with initiation fees averaging between $400 and $450, and
monthly dues of approximately $150. Additionally, the hotel has achieved annual
occupancy levels in the low-to-mid-70s percent range with average rates in the low-
$140 range, easily outperforming its competitors in the market. The success of the
Walnut Creek facility has spurred significant interest in the concept, and new de-
velopments are planned in Aliso Viejo, California (Orange County); Chandler, Ar-
izona (Phoenix); and Rockville, Maryland (Washington, D.C.). Other areas that are
currently being considered for development are Milwaukee, Wisconsin; Weehaw-
ken, New Jersey; Oak Brook, Illinois; and Portland, Oregon.
Moreover, Marriott International launched a strong initiative to develop the
Renaissance ClubSport concept by acquiring the ClubSport brand name and in-
tellectual property rights from L SI in September 2005. L SI will receive payments
based on future developments. The company will also provide various design,
operating, and marketing services for the health club component of each new
development. Marriott International plans to develop and open 15 Renaissance
ClubSport facilities in the next five to seven years.
The Premise Behind the Renaissance ClubSport Concept

The premise of the Renaissance ClubSport concept is that operating expense and
construction cost efficiencies, as well as prospective marketing synergies, result
from the combined hotel and health club operations. In addition, the stable cash
flow of the health club would complement the more seasonal and cyclical cash
flow of the hotel.
The Renaissance hotel and ClubSport health club, when jointly developed and
operated, feature common lobbies and food and beverage facilities, integrated
management, and extensive indoor and outdoor recreational and fitness facilities
for the use of club members and hotel guests. Hotel guests do not incur an extra
charge for use of the health club facilities; the costs are reflected in the regular
hotel room tariff. On the other hand, club members receive discounts for hotel
accommodations as well as the use of the hotel’s meeting facilities.
The marketing synergies are based on the premise that hotel guests perceive
higher value due to the hotel’s integration with a first-class athletic club, as well
as the inverse: higher perceived value in the club membership due to the club’s
attachment to a first-class hotel. For example, hotel guests would increase the
S utilization of the club and spend more on a greater variety of ancillary facilities
N (than those typically available in a stand-alone Renaissance hotel). Members of
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the club would increase the utilization of the property’s food and beverage facil-
ities and meeting rooms, as well as become a marketing tool to sell the hotel to
the members’ friends, family, or colleagues.
The stated efficiencies allow for the creation of a resort-like, full-service hotel
with a number of amenities and facilities that would not be feasible in a compa-
rable freestanding hotel.
Some key advantages and efficiencies related to the concept are summarized
as follows:
Construction costs and ongoing energy and maintenance expenses are

economized as a result of the shared physical plant and building systems
(e.g., HVAC, laundry, etc.);
Integrated management would result in economized staffing levels, as var-
ious positions in general management, human resources, accounting,
sales and catering, and engineering are expected to be shared, eliminat-
ing some ongoing operating expenses;
The health club provides a more stable and predictable cash flow, which
complements the hotel’s more seasonal and cyclical cash flow;
In the property’s initial years of operation, the health club generates cash
flow from the pre-sale of club memberships and the collection of
monthly dues from this membership base. The initial cash flow from the
club helps cover expenses for the entire facility while the hotel builds up
its operation and cash flow;
From the standpoint of corporate hotel visitation, the provision of an at-
tached first-class athletic club is consistent with today’s trends toward
corporate wellness programs, and would provide added appeal for the
property as a corporate conference destination;
The integrated first-class hotel would increase the athletic club’s prestige
and provide both the hotel and the club with a more resort-like image;
Club memberships and hotel rooms can be jointly marketed to nearby
corporate employers, reducing marketing expenses;
With two major sources of restaurant, lounge, and banquet demand (ho-
tel guests and club members), the shared food and beverage operation
would experience higher sales volume and greater efficiency;
The facility’s parking facilities can be utilized more efficiently since local
residents use the health club during the morning and afternoon, while
hotel guests, especially commercial transient guests, use the parking facili-
ties overnight.
The concept is designed to provide a suburban hotel product as an alternative

option in business markets and areas with high household income levels and
populations with health-conscious individuals. Most Renaissance ClubSport devel-
opments are currently planned in suburban locations that are similar to Walnut
S Creek, California, although the concept can be easily adapted to urban locations.
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Economic Benefits of the

Renaissance ClubSport Concept
The economic benefits of the Renaissance ClubSport concept can be quantified
in the following ways:
1. Construction cost savings from developing the hotel and health club in
one facility;
2. Combination of revenues from the hotel and health club;
3. Potential increases in ancillary revenues from hotel guests and club
members;
4. Ongoing energy and maintenance cost savings from the shared physical
plant; and
5. Cost savings from the integration of property management and econo-
mized staffing.
The methodology for the illustration of the concept’s economic benefits can
be best described by analyzing the construction costs and income streams for two
stand-alone business entities (the hotel and health club); the savings associated
with the construction and operation of the integrated development; and the impact
on the integrated development’s construction cost, cash flow, and economic value
added to the joint facility.
This methodology has been employed due to the unique nature of the Ren-
aissance ClubSport concept and the lack of actual operating statements for an
integrated facility. In addition, this methodology will also provide an indication of
the value of each stand-alone operation as well as the added economic value of
the integrated operation. The following hypothetical example will provide a basis
for the economic benefits of the Renaissance ClubSport concept.
The following table provides an indication of the hard construction cost sav-
ings from the development of the integrated facility.
TABLE 12.1 Hard Construction Cost Savings (as of January 2006)

Square Footage Cost per Square Foot Total Cost
Stand-Alone Hotel 125,000 $170.00 $21,250,000

Stand-Alone ClubSport 75,000 230.00 17,250,000
Total of the Stand-Alone Facilities 200,000 192.50 38,500,000

Less: Savings from Common Lobbies / Food and 15,000 192.50 2,887,500
Beverage / Back-of-the-House
Hard Construction Cost of Integrated 185,000 $192.50 $35,612,500

Hotel and Health Club
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As shown in the preceding table, the integration of the facility resulted in a

cost savings of approximately $3 million. The total square footage of the integrated
development typically contains an atrium joining the hotel and health club struc-
tures that measures approximately 8,000 square feet, and contains a common
lobby, food and beverage facilities, and separate reception areas for the hotel and
the health club. Back-of-the-house areas such as the administrative offices and
laundry facilities are also shared between the hotel and health club. The integra-
tion of the two facilities eliminates approximately 15,000 square feet of usable
space necessary to operate the integrated development. In addition to savings on
hard construction costs, the economies of scale of developing this integrated fa-
cility also result in savings on indirect costs, yard costs, and pre-opening costs. The
estimated savings of the integrated facility is approximately 7 percent of the cost
to develop the two stand-alone facilities. The following table provides an outline
of these savings.
In addition to cost savings during the development and construction of the
integrated development, the subsequent operation of the integrated facility also
provides opportunities to utilize various operational and marketing synergies in
order to lower operational expenses. An estimate of the integrated development’s
net income potential must include a quantification of savings resulting from
shared-space and integrated-staff efficiencies. Due to the shared building space
and common building systems of the integrated building, some savings can be
foreseen in the energy department. In addition, joint operating savings would result
from integrated staffing in the general management, human resources, accounting,
sales and catering, front-desk, housekeeping, and engineering departments. The
following chart provides an indication of the positive impact of the integrated
development’s operational synergies on the facility’s stabilized net income levels,
as well as the economic value added from the integration of the hotel and health
club into one entity.
As shown in the preceding table, the integration of the hotel and health club
results in an additional $1 million in net income for the integrated facility, as
opposed to the combined net income stream from two stand-alone facilities. In
addition, the stable cash flow of the health club complements the more seasonal
and cyclical cash flow of the hotel. Therefore, the integration of the two facilities
also results in a more feasible development with the potential for a significantly
TABLE 12.2 Development Cost Savings (as of January 2006)

Units Cost per Unit Total Cost
Stand-Alone Hotel 175 $225,000 $39,375,000

Stand-Alone ClubSport 75,000 $400.00 30,000,000
Total of the Stand-Alone facilities 69,375,000
Less: Savings from Integrated Development 4,856,250
Total Development Cost for Integrated Development 64,518,750
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(SAY) 64,500,000
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TABLE 12.3 Stabilized Net Income and Valuation Analysis (Revenues and Expenses in [‘]000s) (as
of January 2006)
75,000 Square Less: Savings
175 Room Foot Stand- Total Stand- from Integrated Integrated
Stand-Alone Alone Health Alone Development Development
Hotel % Club % Facilities % Operation Operation
Occupancy 75% 75%

Average Rate $175.00 $175.00
Memberships 4,400 4,400
Initiation Fees $350.00 $350.00
Monthly Dues $175.00 $150.00
Revenues
Rooms $8,300 65.4% $0 —% $8,300 32.2% — $8,300
Food and Beverage 3,800 29.9 300 2.3 4,100 15.9 — 4,100
Health Club — 12,400 94.7 12,400 48.1 — 12,400
Other 600 4.7 400 3.1 1,000 3.9 — 1,000
Total Revenue 12,700 100.0 13,100 100.0 25,800 100.0 — 25,800
Departmental Expenses
Rooms 2,158 26.0 0 — 2,158 26.0 ($83) 2,075
Food and Beverage 2,964 78.0 270 90.0 3,234 78.9 (159) 3,075
Health Club 0 — 4,464 36.0 4,464 36.0 (124) 4,340
Other 270 45.0 0 — 270 27.0 — 270
Total Departmental 5,392 42.5 4,734 36.1 10.126 39.2 — 9.760

Expenses
Departmental Profit 7,308 57.5 8,366 63.9 15,674 60.8 — 16,040
Undistributed Operating
Expenses
Admin / General 1,016 8.0 1,585 12.1 2,601 10.1 (331) 2,270
Marketing 686 5.4 812 6.2 1,498 5.8 (105) 1,393
Maintenance 470 3.7 419 3.2 889 3.4 (89) 800
Utilities 330 2.6 563 4.3 894 3.5 (94) 800
Management Fee 508 4.0 524 4.0 1.032 4.0 — 1,032
Total Undistributed 3,010 23.7 3,904 29.8 6,914 26.8 — 6,295

Operating Expenses
Income Before Fixed 4,298 33.8 4,462 34.1 8,760 34.0 — 9,745
Changes
Fixed Expenses
Property Taxes 350 2.8 400 3.1 750 2.9 — 750
Insurance 250 2.0 160 1.2 410 1.6 — 410
Reserve for 508 4.0 524 4.0 1,032 4.0 — 1,032
Replacement
Total Fixed Expenses 1,108 8.7 1,084 8.3 2,192 8.5 — 2,192
NET INCOME $3,190 25.1% $3,378 25.8% $6,568 25.5% — $7,553
Stabilized Capitalization 10.0% 10.0% 10.0% 10.0%

S
Rate
N
L Stabilized Valuation $31,901 $33,782 $65,683 $75,528
MILL (Wiley)
TABLE 12.4 Feasibility Analysis of Integrated Development (as of

January 2006)
Stand-Alone Stand-Alone Integrated Hotel /
Hotel Health Club Health Club
Stabilized Valuation $31,901,000 $33,782,000 $75,528,000

Construction Cost 39,375,000 30,000,000 64,518,750
Feasibility Gap ($7,474,000) $3,782,000 $11,009,250
higher return on investment. The following table provides an indication of the

feasibility gap or development profit for the two stand-alone facilities and the
integrated development.
The preceding table indicates that a stand-alone hotel would not be feasible.
In addition, the development of a stand-alone health club would provide a mod-
erate return on investment upon stabilization of operations. On the other hand,
the development and operation of the integrated facility result in a development
profit of approximately 15 percent of the total development cost. This hypothetical
example illustrates the economic value that is added to the integrated develop-
ment due to the savings from constructing and operating the facility under one
roof.
Courtesy of: Real Estate Finance Journal
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Chapter 13
SPECIALTY RESORTS
LEARNING OBJECTIVES
1. Identify the changing trends in and demographic profiles of the market for
specialty resorts.
2. Compare and contrast traditional lodges and ecolodges.
INTRODUCTION ADVENTURE
NATURE-BASED ENVIRONMENTAL Market Profile
ACTIVITIES ADVENTURE TRAVEL IN AMERICA
Trails Wilderness Tours
ECOTOURISM Hard Adventurers
ECOLODGES Soft Adventurers
Traditional Lodges vs. Activities
Ecolodges
SUMMARY
Ecotourism Design
ENDNOTES
Operations
Trends
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344 Chapter 13 SPECIALTY RESORTS
INTRODUCTION
One way to describe tourism is to see it as mass tourism or alternative tourism.
Mass tourism—the subject of most of the previous chapters—involves large num-
bers looking to imitate their home culture in corporate-type settings involving little
or no interaction with the local culture and / or environment. Alternative tourism,
on the other hand involves activities that are consonant with the local physical
and / or social environment and often involving contact between host and guest.1
Alternative tourism can be divided into cultural, event, and natural tourism.
The latter can further be subdivided into nature-based and adventure tourism.
Because natural tourism is physical-recreation-based this chapter will focus on the
important elements of nature-based and adventure tourism.
NATURE-BASED
ENVIRONMENTAL ACTIVITIES
Typically, the goal of environmental activities is to learn about the interdepen-
dence of living organisms or to learn how to behave in the environment. Programs
can include camping, environmental education, nature-oriented activities, outdoor
living skills, conservation skills, and bird watching.
Rapid growth in this area has meant that programs are increasingly taking on
more complex issues, covering economic as well as technological aspects and
their impact. Emphasis on biological characteristics and the environment as a
resource base has increased.
As noted in the Outdoor Recreation Participation Study for 2004, ‘‘The lure of
nature as a place to recreate is attracting more of all Americans:. . .Increasingly,
Americans are re-discovering that reality as experienced in places less trampled
provides a better antidote to noise, confusion, impersonal computers and ma-
chines and the sameness of conventional lives and places to live.’’2
Trails
Trails are an effective way of transporting people and their machines around rec-
reational areas while enhancing the natural experience. Parks Canada classifies
trails as follows:
Class 1: Primitive Trails—marked but unimproved except for clearing and

some work on dangerous areas.
Class 2: Minor Trails—signed and improved to accommodate foot or
horse traffic, or both.
S Class 3: Major Trails—as for class 2 but, in addition, reaches many of the
N main visitor attractions and serves as a terminus for minor and primitive
L trails.
MILL (Wiley)
NATURE-BASED ENVIRONMENTAL ACTIVITIES 345
Class 4: Walks—including boardwalks and bituminous trails that connect

developed areas or serve as short scenic walks.
Class 5: Special-Purpose Trails—including bicycle, cross-country ski, and
accessible trails for people with disabilities.3
Design standards have been developed for each of these trail types.
Three elements are important in the development of a trail:
1. function of the trail

2. relation of the trail to others in the area
3. relation of the trail to other facilities4
Figure 13.1 shows a tree diagram to assist in determining the appropriate trail
function. Note that the primary function of the trail can be single-purpose or mul-
tipurpose. A single-purpose trail might be used for interpretation, hiking, motorized,
or horseback riding. Examples of multipurpose uses are hiking and biking, hiking
and horseback, fitness / jogging, and hiking and skiing. Secondary uses include
Trail Function
Primary Secondary
Access Connection Circulation
Controlled Open Foot Foot &

Access Access Only Bicycle
Multi-Purpose Single-Purpose
Hike Hike Fitness- Hike Interpretive Hiking Motorized Horse-

’n ’n Jogging ’n back
Bike Horse- Ski
back
Historical Nature Long Loop ORV ATV 4 Mini- Snow-
Distance Wheel Bike mobiles
Self- Guided
Guided
Audio Signed Brochure

S FIGURE 13.1 Trail function tree diagram. Source: Hultsman, John, Richard L. Cottrell,
N and Wendy Z. Hultsman. Planning Parks for People, 2nd ed. State College, PA: Venture
L Publishing, 1998, 49.
MILL (Wiley)
access, connection, and circulation. The important point is that the primary func-
tion of the trail should be identified and every subsequent design decision should
be tied to that function. A trail designed to serve too many or conflicting purposes
will disappoint users.
Once the function is determined, the relation of this trail to others must be
determined. Some trails conflict with each other, while others complement their
neighbors. Hiking and interpretation do not mix, as do not horseback and off-
highway vehicles. On the other hand, dirt bike and four-wheel trails can be com-
plementary. The final consideration is the relationship of the trail to other facilities.
Again, compatibility is the issue. Motorized trails should be separated from such
quiet venues as campsites.
Several important design considerations pertain to trails:
A circular loop is preferable to a linear design. A loop eliminates back-

tracking and seeing the same views twice. A linear trail means traffic
moves two ways on the trail. The result is more congestion.
Use a single entry / exit point. Administration and control is easier, and
visitors have less chance of being disoriented by exiting the trail and not
knowing where they are.
The trail entrance is particularly important. The entrance should be de-
signed to funnel people into the trail in an inviting manner. The trail
should be rather wide initially and gradually get narrower. This allows
participants to get used to the trail.
Trails that begin by going uphill represent an unfriendly barrier to many
people. Trails that go downhill at first are much more user-friendly. Pref-
erably, the trail should be designed so that, after the entrance, the first
half of the trail has a gradual upward incline (when participants are
more energized) and the latter half slopes downward (when people are
more tired).
The natural tendency for people is to move to the right. This tendency
can be reinforced through proper design. A barrier to the left discourages
movement that way, while a gentle curve to the right reinforces that natu-
ral movement (most people are more comfortable moving to the right).
The need for variety is particularly important if the primary function of
the trail is as a foot trail. Because people move rather slowly over such
trails, a great deal of visual variety is necessary to guard against boredom.
The use of curves and different kinds of scenery can enhance the experi-
ence.
Consider orientation to sun, wind, etc.5
The site can be defined in terms of its positives and negatives. A picnic area
is inappropriate where there are no trees for shelter; stable soil bases are necessary
for the construction of buildings; roads should not be constructed where snow
loads are heaviest.
S Additionally, use areas should be examined relative to their compatibility with
N each other. For example, nature walks, canoeing, and areas for contemplation
L demand a certain level of peace and quiet. Tennis courts, basketball courts, and
MILL (Wiley)
ECOLODGES 347
other physically active sports areas create noise as part of the enjoyment of the
activity. The quiet activities and the loud activities should each be clustered to-
gether and buffered from the other. Similar activities usually require similar main-
tenance—another reason for the clustering.
Another consideration is the grouping of areas into zones by type of user. Day-
use activities may be zoned together, away from overnight-use activities. Hultsman
et al., in their book Planning Parks for People, suggest the development of ‘‘neutral
zones,’’ where primary attractions such as shorelines, scenic vistas, and overlooks
are designed such that all visitors have equal access to them.6 Thus, for example,
individual-use areas such as picnic and camp units would be kept a minimum of
75 feet away from such attractions.
ECOTOURISM
An enthusiastic form of nature-based tourism is ecotourism. The Ecotourism So-
ciety, in its Definition and Ecotourism Statistical Fact Sheet, defines ecotourism as
‘‘purposeful travel to natural areas to understand the cultural and natural history
of the environment, taking care not to alter the integrity of the ecosystem, while
producing economic opportunities that make the conservation of natural resources
financially beneficial to local citizens.’’7
Ecotourism areas should be respected as the abode of local residents

with their own traditions and customs.
Ecotourism use should minimize negative effects on the local and natural
environment as well as on local inhabitants.
Ecotourism should contribute to the management of protected areas and
improve the links between local communities and managers of protected
areas.
Ecotourism should procure economic as well as other social benefits for
local inhabitants and maximize their participation in deciding what type
of tourism and how much tourism should develop.
Ecotourism should promote genuine interaction between hosts and guests
as well as a real interest in the sustainable development and protection
of natural areas.
Ecotourism should supplement and complement traditional activities of
the area without marginalizing them or attempting to replace them.
ECOLODGES
S
N From the very beginning, I believed that ecotourism develop-
L ment was a pure art form, where the designer arranged all
MILL (Wiley)
the indigenous cultural and natural assets into a guest

experience.
—STANLEY SELENGUT
The Ecolodge Sourcebook
A specialized form of resort lodge is the ecolodge. An ecolodge or nature-based

lodge is defined as a ‘‘nature-dependent tourist lodge that meets the philosophy
and principles of ecotourism.’’8
Traditional Lodges vs. Ecolodges

The following table illustrates some of the differences between traditional lodges
and ecolodges:
Ecolodges tend to be found in places such as Belize, Costa Rica, Ecuador,
Peru, Brazil, Australia, Kenya, and South Africa. Ideally, they are designed using
natural sustainable materials that are collected on the site. The objective is for
ecolodges to generate their own energy from renewable sources and manage their
own waste. Ecolodges blend in with the natural surroundings and build on and
accentuate the local culture.
Ecotourism Design
Here are some ecotourism design practices:9
Use local construction techniques, materials, and cultural images.

Provide building forms and images in harmony with the natural environ-
ment.
TABLE 13.1 Differences Between Lodges and Ecolodges

Traditional Ecolodge
Luxury Comfortable basic needs

Generic style Unique character style
Relaxation focus Activity / educational focus
Facility-based activities Nature / recreation-based activities
Enclave development Development integrated with local environment
Group / consortium ownership common Individual ownership common
Profit maximization based on high guest Profit maximization based on strategic design,
capacity, services, and prices location, low capacity, services, and prices
High investment Moderate / low investment
Key attractions are facility and Key attractions are surroundings and facility
surroundings Good / hearty meals and service, cultural
Gourmet meals, service, and presentation influence
Marketed within chain Marketed independently
S
Guides and nature interpreters minor Guides and interpreters focus of operation
N
feature or nonexistent
L
MILL (Wiley)
ECOLODGES 349
Use canopies to cover high-use trails between structures to minimize

erosion.
Avoid energy-intensive products and hazardous materials.
Use low-tech design solutions.
Prominently post an environmental code of conduct for visitors and staff.
Select interior furnishings and equipment to represent local resources.
Design trail systems to respect travel patterns and wildlife habitats.
Minimize trail crossing points at rivers and streams.
Space buildings to allow for wildlife travel patterns and forest growth.
Discreetly label plant / tree types around the immediate lodging facilities
to acquaint visitors with species they may encounter.
Limit and control site lighting to avoid disruption of wildlife diurnal
cycles.
Quick Getaway 13.1

Silk Sheets in the Savannah
Travel used to be divided into two sections: all- sorts are cropping up in increasingly remote ar-
out luxury and roughing it. Luxury meant trav- eas, according to author Martin Nicholas Kunz,
eling first-class, dining on choice dishes at whose latest book on luxurious lodgings covers
world-class restaurants, and relaxing in deca- Africa and the Middle East.
dence; roughing it meant backpacking out to ‘‘The new nomads will help drive a market
some of the world’s most remote and beautiful for many more exciting hotels to visit in the
locations, but living on hot dogs cooked over deserts, jungles, mountains, forests and even
a campfire. Now travelers can enjoy fine wines underwater,’’ Kunz says. Atlanta-based travel
and see the wildlife too, because luxury and agent Betty Jo Currie explains that once news
nature are no longer mutually exclusive. of these remote gems reaches civilization, it’s
Cutting-edge hoteliers are beginning to practically impossible to get reservations. The
combine the timeless luxuries of solitude and exclusivity of the resort ‘‘drives the price sky-
nature with the more modern ones of butlers high. It’s supply and demand.’’
and silk sheets. In the jungles of India’s Ran-
thambore Tiger Reserve, the Oberoi Group has Source: Power, Carla. ‘‘Rustic Luxury.’’ Newsweek Inter-
national (July 25, 2005). http: / / www.msnbc.msn.com /
erected magical air-conditioned tents complete id / 8597678 / site / newsweek /
with marble bathrooms, while the Gulf hospi-
tality group Jumeirah has the Bab Al Shams
Desert Resort in Dubai, a study in comfort and DISCUSSION QUESTION:
Arab opulence. What might be some moral issues connected
S Rich travelers’ quest for isolation and deca- with traveling in five-star luxury to areas
N dent comfort means that these camp-style re- plagued by poverty?
L
MILL (Wiley)
Operations
In one survey of 28 ecolodges in nine countries, management indicated the key
to success was being located in an area of outstanding natural beauty. Cultural
attractions, while important, took second stage to nature. Most ecolodges feature
a lodge and cottage facilities. A restaurant and bar are located in the lodge. In
many cases, a patio is featured as a key attraction.
Cottages are private and designed so as to encourage air flow in order to
reduce the need for electricity and cooling. Ecolodges are the equivalent of a one-
or two-star urban hotel. Typically, they are small, with a capacity of around 24
guests. This provides for a 15-person group with a guide and a few places left over
for independent travelers.
Meals, often included in the package price, are home-style and reflective of
the local culture. The atmosphere is friendly and relaxed. Educational opportuni-
ties are often stressed, although, as one New Zealand operator noted, ‘‘We still
make more money out of beer sales than we do out of guided walks.’’10
Trends
Operators tend to specialize in order to remain distinctive. Some ecolodge oper-
ators are improving their educational activities; others are emphasizing guest ac-
tivities that relate to the natural environment. While ownership has traditionally
been independent and small scale, corporate ownership is becoming more com-
mon. The P&O line is getting involved in Australia and Hilton in Kenya.
ADVENTURE
An adventure can be thought of as consisting of some combination of the follow-
ing:11
freedom to choose
rewards that are internal to the individual
ingredient of uncertainty
personal challenge
controlled risk
excitement
Market Profile
S Who are Adventure Travelers? A 2004 study published in the Journal of Travel
N Research found that adventure travelers can be classified into six groups:12
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MILL (Wiley)
ADVENTURE 351
Quick Getaway 13.2

Sea Suites
The first Poseidon Undersea Resort will take the bungalow cantilevered off the wall at 1,000
phrase ‘‘a vacation to the sea’’ to a new level. square feet and accessible only by subma-
This resort, located under 30 to 60 feet of water, rine (depends on final site selection)
will feature suites with clear acrylic walls for
underwater viewing. Unlike existing underwa- Main Unit #2
ter habitats, the interior of the resort will be at
one atmosphere of pressure (the same as on- the Grand Poseidon Suite of 1,600 square
shore). feet
Poseidon was conceived and developed the themed Nautilus Suite of 800 square
by L. Bruce Jones, the president of U.S. Sub- feet
marines, Inc., and will be engineered by the library / conference room of 800 square feet
tremendously experienced staff at U.S. Subma-
rines. The underwater resort will be linked to Shore Facilities
land through two tunnels, one for guest access
and one for service access. The five-star luxury reception area
resort property will consist of: technical service area
Main Unit #1 swimming pool
bar / café
an underwater restaurant and bar lounge tennis courts
of approximately 3,000 square feet dive shop / water sports center
kitchen luxury spa and hydrotherapy center
foyer and reception area
Source: ‘‘Welcome to Poseidon Undersea Resorts.’’
Luxury Suites and Service Areas Poseidonresorts.com, accessed August 2, 2006. http: / /
www.poseidonresorts.com / overview.html
20 luxury suites of 550 square feet each
with private coral gardens and underwater
lights, fish feeders, and safety pod DISCUSSION QUESTION:
a service area for storage and equipment Sleeping in a depressurized pod underwater
a diver–lock out chamber and submarine may make some guests feel unsafe. What
dry transfer lock steps would you take (design steps and hu-
Poseidon’s Lair, a two bedroom undersea man resource steps) to make them feel safe?
S
N
L
MILL (Wiley)
General Enthusiasts. These are usually men with some college education
and no children under the age of 12. The general enthusiast is the most
likely to take adventure trips, preferring hard adventure like sea kayaking
or mountain climbing to soft adventure like camping. He is also likely to
want to arrange his own trip, and to travel to non-American destinations
like the South Pacific.
Budget Youngsters. These travelers are generally young (19 to 34) and
single, with a fairly low income. They prefer to organize their own trips,
though they also like to have partially inclusive trips to get professional
expertise. The budget youngster prefers to travel with friends to areas
around America, perhaps because travel in-country is cheap.
Soft Moderates. This is a small group composed mostly of middle-aged
women who had been highly educated but nevertheless have a low in-
come, because there is only one wage earner in the house. The soft mod-
erate is unlikely to have children under the age of 12. She prefers soft
adventure, like hiking and nature trips in American destinations. The soft
moderate would rather not arrange her own trips, and she desires famil-
iarity, not risk-taking.
Upper High Naturalists. Members of this group are mostly middle-aged,
married, and earn high wages. They usually have a dual-income house-
hold, but no children under 12. They prefer both soft and rugged adven-
tures, like hiking or backpacking, and they like to travel with family
members and friends. The upper high naturalist seeks novelty trips and
exotic destinations like Africa, where she generally spends more than a
week and more than $1,000.
Family Vacationers. These travelers, married males, are usually not very
excited about their vacations. Family vacationers have generally com-
pleted some college and have two incomes in the household to support
their children, at least one of which is under age 12. Favorite travel desti-
nations for the family vacationer include America and South America.
This group likes to have some help in planning their vacations.
Active Soloists. This group is composed mostly of well-educated middle-
income-earners without children under 12. The active soloist distinctly
prefers high-risk high-adventure activities like hang gliding, and they pre-
fer to travel alone or in an organized group. Of all the groups, this group
seems to rely on tourist infrastructure the most when making travel ar-
rangements.
ADVENTURE TRAVEL IN AMERICA

‘‘Trails need to be reconstructed. Please avoid building trails
S that go uphill.’’
N —Actual comment on a comment card at a Forest Service trailhead
L
MILL (Wiley)
According to the Travel Industry Association of America (TIA) one-half of U.S.

adults, 98 million people, took an adventure vacation during the last five years of
the twentieth century. Adventure travel can consist of either hard or soft activities.
Hard adventure includes such things as:13
Backpacking across rugged terrain Whitewater rafting or kayaking

Hot air ballooning Rock climbing or mountain
climbing
Off-road biking or mountain Hang gliding, parasailing, or
biking windsurfing
Parachuting or sky diving Skateboarding or snowboarding
Roller hockey, bungee jumping Spelunking or cave exploring
Snorkeling or scuba diving Survival games (e.g. paintball)
Soft adventure encompasses such things as:14
Camping Biking ‘‘Gentle’’ hiking Bird watching

Animal watching Sailing Horseback riding Snow skiing
Water skiing Canoeing Visit to a cattle / dude Photo safari
ranch
Wilderness Tours
Of the 98 million people who take adventure vacation trips, 67 million, two-thirds,
take soft adventure trips exclusively, 6 million take only hard adventure trips while
the remaining 25 million, one-quarter, take both soft and hard adventure vacations.
One-quarter of those who have not taken an adventure trip in recent years indicate
that they are very or somewhat likely to do so in the next five years.15
The most popular soft adventure activities are camping, hiking on gradually
changing terrain, and biking while, for hard adventure trips, the most popular
choices are whitewater rafting / kayaking, snorkeling / scuba diving, and mountain
biking.16 While men and women are equally likely to participate in adventure
travel, men are more likely than women to participate in hard adventure. Partici-
pation is also related to age. Two-thirds of 18 to 34 year olds), half of the 35 to 54
year old age group and a quarter of those 55 or over have taken a recent adventure
vacation. While the South, because of the large population base, generates the
largest number of adventure travelers, the greatest proportion of residents who
take such trips are to be found in the Western states.17 Over two-thirds of adventure
travelers enjoy it periodically while one in ten describe themselves as a fanatic.
Another 10 percent did not enjoy the experience.
Hard Adventurers
S The average hard adventure traveler is 35 years old with some college education
N who is employed full-time. They are more likely to be men, single, belong to
L
MILL (Wiley)
A new environment is a big attraction for those who take wilderness tours.
Courtesy Corbis Digital Stock
Generation X, and work in a professional or managerial job. Seventy percent of

soft adventurers have attended some college while two-thirds are married.18
Both soft and hard adventure travelers take an average of three adventure
trips every five years. The former are likely to participate in several different types
of activities while the latter are likely to engage in only one activity. Compared to
hard adventurers, soft adventurers are more likely to take a spouse, child, or grand-
child and less likely to take a friend with them on a trip. Hard adventure travelers
tend to spend more on trips than soft adventurers.
S
Soft Adventurers
N As noted above, the most popular soft adventure activities are camping, hiking on
L gradually changing terrain, and biking. Other popular pursuits are bird and animal
MILL (Wiley)
Quick Getaway 13.3

Aged Aventurers
Soft adventure tours’ popularity has risen star- in South America and five in Asia.
tlingly in the last decade. However, although 50-plus gives all of its tours a grade, ranging
the tours are labeled as ‘‘soft,’’ that doesn’t from easy to demanding, which allows the trav-
mean easy. The ‘‘soft’’ in the name means that eler to choose a tour geared toward her capa-
the effort and risk levels are toned down. bilities. Most trips last from 8 to 20 days, and
Soft-adventure tours are a sub-category of the groups always number fewer than 16 peo-
the adventure tour market that typically in- ple. Pricing ranges from a little under $100 a
volves a combination of physical effort, basic day to as much as $200 a day (both prices are
accommodations, and some occasional risk. per person). Unsurprisingly, the price depends
These tours are usually aimed at younger trav- on what’s included. Base tours include meals,
elers, and occasionally at 40- or 50-plus adven- accommodations, local transportation (if any is
turers who are in exceptional physical required), and all admission fees. Pricier tours,
condition. Even so, soft adventure tours often such as those to the Galapagos, include cruise
include extensive hiking, walking, and bicy- ship fares and air trips. Of course, tour prices
cling, frequently with considerable uphill and do not include airfare from the adventurer’s
downhill components. So far, the physical ca- home to the tour area.
pabilities necessary for participating in soft ad-
venture travel have kept most senior citizens Source: Perkins, Ed. ‘‘Special tour options allow sen-
iors adventurous travel.’’ San Francisco Chronicle (Sep-
out of the game. That is, until now.
tember 21, 2003). http: / / www.sfgate.com / cgi-bin /
50-plus Expeditions caters solely to travel- article.cgi?f⫽ / c / a / 2003 / 09 / 21 / TR220290.DTL
ers age 50 or older, as its name suggests. The
company specializes in taking its clients to re-
mote areas (the 50-plus website currently lists DISCUSSION QUESTION:
20 destinations). Not one of these locations is Do you think there’s a comparable market
in the United States, and very few are in North for soft adventure tours aimed at children
America. Compare that with eight destinations under 18? Why or why not?
watching, horseback riding, canoeing, and water skiing. Boomers are more likely
to go hiking while mature adults are more likely to go bird and animal watching
or on a photo safari. This latter segment is less likely to go biking, canoeing,
horseback riding, snow skiing, and sailing. Generation Xers are most likely to go
water skiing. Compared to men, women are more likely to go horseback riding or
sailing.19 Boomers are most likely to bring along spouse and children on a trip
while Generation Xers typically travel with friends or parents / grandparents.
The popularity of various activities is linked to regional geography. The North-
east is popular for biking, sailing, and photo safaris, the South for horseback riding,
S and the West for skiing. Westerners are most likely to list adventure as the primary
N motivator for a trip. Participation in high cost activities such as sailing and skiing
L is proportional to household income.
MILL (Wiley)
Activities20
Camping One in four of those who camp also participate in hard adventure activities. The
most popular of these are rafting, snorkeling / scuba, and off-road biking. Campers
tend to be married with children at home and have attended some college. Camp-
ers have the lowest percentage that have attended college and are also the lowest
income group. About one-half also hikes while a third each also bike and canoe.21
Hiking About 30 percent of all hikers participate in hard adventure activities also. The
favorites are rafting, snorkeling / scuba, and backpacking. This group is the most
likely segment to be married. Three-quarters of them also take camping trips while
40 percent each participate in biking and bird watching.22
Biking About 40 percent of those who take a biking vacation also participate in hard
adventure activities. The favored activities are off-road biking or mountain biking,
snorkeling or scuba diving, and whitewater rafting or hike kayaking. This segment
of the market is young and relatively prosperous. Approximately one-half are Gen-
eration Xers while the same percentage are professionals or managers while one
S
N
L Camping is a popular family activity. 䉷 IT Stock
MILL (Wiley)
third, second only to snow skiers, are single. Over 80 percent of bikers also camp,
70 percent also hike, while almost 40 percent also canoe.
Watching Birds One-quarter of those who watch birds or animals also take hard adventure vaca-
and Animals tions. The top activities are whitewater rafting or kayaking, snorkeling or scuba
diving, and backpacking across rugged terrain. This segment of the market has the
highest proportion of all soft adventure vacationers aged 55 or older as well as the
highest percentage with postgraduate college education. They also participate in
soft adventure travel. Three-quarters of them also camp; 70 percent hike while
almost 40 percent also bike.
Horseback Thirty-three percent of those who horseback ride also take hard adventure vaca-
Riding tions. Preferred activities are rafting, snorkeling / scuba, and off-road biking. This
segment has the highest percentage of women—57 percent. This is a young group
that tends to have children at home. Equestrians also camp, hike, and bike.
Quick Getaway 13.4

Women in the Wild
What’s fueling the growth in the $100 billion-a- ment. One man in the group changes that
year adventure travel economy? Estrogen, per- dynamic, which is why we’re also seeing an
haps? Women are the new adventure travelers, increase in women outfitters.’’
driving women-only outfitter numbers up from Shannon Stowell, president of the Adven-
a handful back in the mid-1990s to more than ture Travel Trade Association, agrees. Stowell
75 today. says that according to a survey of tour opera-
Another surprise: it’s not just 25-year-old tors, adventure clients are increasingly women,
buff mountain babes signing up for outdoor ad- with significant increases in single women and
ventures with U.S. outfitters. The typical woman women older than 40.
adventure traveler profile: ‘‘This doesn’t mean the niche is getting
older, or that men are no longer a major part
Age 47 of it,’’ Stowell says. ‘‘It means that the niche is
Wears a size 12 getting broader.’’
Prefers to leave hubby and the kids at Source: Hobart, Sue. ‘‘Women now ride adventure
home to travel in small groups of 10 to 12 travel wave.’’ The Oregonian (October 24, 2004).
like-minded women http: / / www.oregonlive.com / travel / oregonian /
index.ssf? / travel / oregonian / 041024women 2.html
‘‘Women today want to push their limits,’’
said Marybeth Bond, guidebook author, long- DISCUSSION QUESTION:
time adventure traveler, and adventure editor How can a specialty resort be designed in
S for Travelgirl magazine. ‘‘And they want to do order to take advantage of this demographic
N it in a sharing, nurturing, all-woman environ- shift?
L
MILL (Wiley)
Canoeing Those who canoe also participate in rafting, backpacking, and off-road biking.
Almost 40 percent of those who canoe also participate in other hard adventure
vacations. They tend to be young and have attended, though not necessarily grad-
uated from, college. Mostly, the segment consists of households with only one
wage earner. Canoeists also camp, hike, and bike.
Water Skiing Water skiers have a high participation rate in other hard adventure activities. They
tend also to snorkel / scuba, raft, and off-road bike. They are young and affluent.
Fifty-six percent are male. They also camp, hike, and bike.
Snow Skiing Snow skiers have the highest participation rate in other hard adventure activities.
Forty-five percent undertake other activities, notably rafting, off-road biking, and
snorkeling / scuba. They are young and affluent. Fifty-four percent are male while
over half have completed college, the best educated group of hard adventure
vacationers. As with the previous segment, they also camp, hike, and bike.
Adventure The popularity of rock climbing is due, in part, to a recent boom in indoor climb-
Education ing walls. Although resorts are concerned about risk management, research indi-
cates that climbing on a traverse wall produces fewer injuries than playing on the
playground.23
Adventure education, which encompasses backcountry travel, ropes courses,
initiative activities, team building, and rock climbing, is concerned with two types
of relationship: interpersonal and intrapersonal.24 The former refers to how people
get along in a group. Issues that are explored include communication, coopera-
tion, trust, conflict resolution, problem solving, and leadership. Intrapersonal re-
lationships deal with how an individual gets along with himself. The basic idea is
that change can take place when individuals and groups are exposed to challenge,
high adventure, and new growth experiences. Climbing activities help young peo-
ple develop interpersonal skills (cooperation and communication), personal
strengths (self-esteem and self-confidence), cognitive skills (decision making
and problem solving), and physical abilities (fitness and motor skill develop-
ment).
Adventure education programs aimed at children and teens can be offered in
one or more of the following ways:
cooperative games and sports

self-challenging activities
resident camps25
When a sports unit is offered, the emphasis is on the team aspect of the
activity. Students learn the skills involved in the game or sport, but team building
S is the primary objective.
N
L
MILL (Wiley)
During self-challenging activities, participants learn to compete against them-

selves rather than others. Examples include scaling an indoor climbing wall and
outdoor rock climbing. For participants in grades four through six, an indoor wall
has blocks of different sizes and types that are bolted to a wall at heights ranging
from a few inches to 5 feet. The children climb the wall using a variety of hand-
and footholds, never getting higher than the height of a balance beam. From this
traverse wall, participants graduate to a vertical climbing wall that reaches to 20
feet. At the top, they can sign their names to demonstrate their mastery.
Another option is a five-day adventure camp. Camps tend to have central
themes such as ‘‘Knights, Castles, and Dragons’’ and ‘‘Pirates, Rafts, and Treasures.’’
In the former, participants get involved in building a real castle with drawbridge,
walls, cardboard armor, shields, water balloon catapults, medieval feasts, and tour-
naments. In the latter, participants build a homemade raft out of 100 milk jugs and
PVC pipe and float out of camp on the last day.26
Extreme Sports Participation in extreme sports has increased dramatically in recent years. Snow-
boarding, mountain biking, skateboarding, and scuba diving are examples of ac-
tivities that have shown growth in recent years.27
Travel and Travel and tourism can range from trips, tours, and travelogues to adventure tour-
Tourism ism and field trips. The range of adventure tourism possibilities is illustrated in
Figure 13.2. Opportunities vary from soft to high adventure and involve low to high
risk. Market segments can be targeted depending on the degree of risk the guest
wants to undertake. Soft adventure activities involve the perception of risk and
excitement without actual danger. Theme park rides or floats down the Grand
Canyon on huge rafts fit this category. They are suitable for people with physical
restrictions or who are just beginning to explore adventure possibilities.
Adventure activities offer more risk than soft adventure and include treks in
the Himalayas and two- to six-person raft trips in the western United States. High-
risk activities involve real risks, so participants may have to master specialized
skills before being allowed to participate. Differences have been found between
whitewater rafters who have prior experience and those who do not.28 The former
are more relaxed while concentrating on the secondary benefits of the experi-
ence—being with friends; enjoying the natural environment. The latter tend to
concentrate on the action involved in the adventure experience. There are obvious
marketing implications in terms of the message promoted to rafters. The adventure
would be the primary message to those with no prior experience while the enjoy-
ment of sharing the experience with others in an attractive environment would be
the message for those who had rafted before.
Developers of orbital tourism see space travel as a possibility by 2025.29 Visitors
would arrive at their Hilton (currently being designed) having traveled through
space at 30 times the speed of jetliners. Arthur Frommer, the travel book publisher,
already has issued The Moon: A Guide for First-Time Visitors.30 Civilians currently
S pay $15,000 for a weeklong program at Moscow’s Star City Gagarin Cosmonaut
N
L
MILL (Wiley)
High South Pole ski touring

Shark baiting
Sea kayaking
Raft trip
Himalayas trip
RISK
Mexico volcano climb
Grand Canyon float trip

Mule trip to Grand Canyon bottom
Low
Soft Adventure Adventure High Adventure
ADVENTURE LEVEL
FIGURE 13.2 Tour packages and levels of risk. Source: Christiansen, Dale R. ‘‘Adventure
Tourism.’’ In Miles, John C., and Simon Priest (eds.). Adventure Education. State College,
PA: Venture Publishing, 1990, 436.
Training Center to experience weightlessness during a parabolic flight, a spin in a

giant centrifuge, and a scuba dive in a neutral buoyancy tank to simulate space-
walking.
Other forecasted opportunities include deep-sea safaris to 12,000 feet below
the surface. At the moment, guests at the two-room Jules’ Undersea Lodge in Key
Largo, Florida, must dive 21 feet to enter. A Honolulu architectural firm is designing
an 80-room underwater hotel and observatory, to be built at an as-yet undisclosed
location.
Cybersafaris will satisfy those who hear the call of the wild but do not want
to undergo the hassles involved in actually traveling to the location. As remote
areas become tourist sites, rare animals become extinct, and isolated cultures are
assimilated, demand may emerge for nostalgia tours to world capitals and former
wildlife zones to re-create the days of gondolas, Galapagos turtles, rain forests,
or reef life. History enthusiasts might time-travel through virtual trips to Cali-
fornia’s hippie days, Paris’ Café Society of the 1930s, or the Roaring Twenties in
S Manhattan.
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Are underwater resorts the wave of the future? Courtesy Jules’ Undersea Lodge
Sports and Sports and games encompass field and team sports, individual and dual sports,
Games recreational games, and fitness activities. While the tendency is to concentrate on
competition, many people are increasingly emphasizing developing a lifetime
sports orientation—that is, learning activities that they can participate in through-
out their lives.
The National Sporting Goods Association (NSGA) surveys people currently
taking part in various sports, asking how many anticipate increasing their partici-
pation. Sports showing high positive change in terms of future participation in-
clude:31
exercise walking
fishing
exercising with equipment
bicycling
S camping
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Fitness / Interest in fitness and wellness continues to increase. Guest interests include fit-
Wellness ness activities, nutrition education, aerobic activities, and even weight lifting. Ac-
Activities cording to the American Council on Exercise (ACE), we will see growth in the
following:32
Individualized exercise programs coached by a human or electronic per-

sonal trainer. Internet-based personal training sites will allow individuals
to work directly with a personal trainer to design programs, track prog-
ress, and learn online.
A sharp increase in mindful exercises like tai chi and yoga. Yoga is popu-
lar, in part, because of its acceptance by such public figures as Madonna,
Courtney Love, and Ricky Martin. Some brand-name clothing companies
have come out with a trendy line of yoga outfits.
An increase in exercise programs geared to older adults (the graying
baby boomers). A prime example is yoga, which appeals to the need to
do something about stiffening joints.
Goal-oriented exercise training.
Smart fitness machines designed to accept a computer disk or palm-size
scanner containing a personalized exercise program.
Adventure workouts that enhance body and spirit, such as rock climbing,
hiking, and mountain biking.
More people seeking fitness for health reasons instead of solely for ap-
pearance.
Sport-specific personal training for such activities as golf and tennis. For
example, people are doing the Salute to the Setting Sun yoga position to
improve their golf game.
Lifestyle exercises, incorporating fitness into everyday life.
Many observers of leisure trends believe that exercise will become a way
of life for increasing numbers of Americans and that this trend will become
even more pronounced with each succeeding generation. Sports programs that
build skills in soccer, softball, and basketball are aimed at kids who start playing
at an earlier age. As children grow older, they need more diversified options, such
as mountain biking and whitewater rafting, that are part of a high-adventure pro-
gram.
Options exist to contract out a fitness program. Jazzercise is a successful ex-
ample of this in the public sector. This dance-exercise program offers over 2,000
classes weekly at 430 parks and recreation facilities across the United States. The
operator pays either a percentage of the gross or an hourly rate for use of the
facilities during a specific time.33
A special category of fitness and wellness involves rehabilitation programs for
people with disabilities. While most rehabilitation programs focus on assisting par-
S ticipants in regaining physical strength and range of motion, sports programs seek
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to rehabilitate a person both physically and emotionally. When people with phys-
ical disabilities learn to ski, for example, it increases their self-confidence while
gaining the respect of others.
A forerunner in the field of sports programs for the handicapped is the Na-
tional Sports Center for the Disabled at Winter Park, Colorado. Begun in 1970, it
is the largest and best-known skiing program for people with disabilities. Summer
activities have been added over the years and include rafting on the Colorado
river, hiking, backpacking, overnight camping, nature walks, chairlift rides, dance
movement, adaptive swimming, rock climbing (for the visually impaired), and
tennis. Teaching methods are adapted from the American Teaching System (ATS).
The four fundamental skills taught are:34
Balancing movements, required to keep the body in equilibrium when

acted upon by external forces.
Quick Getaway 13.5

Green Gold
Vail Mountain Resort in Vail, Colorado, knows powered by wind energy, and there are plans
that what is best for the environment is best for in the works for adding turbines to form a gen-
it. After all, the resort’s success depends heavily uine wind farm. There’s also a solar-powered
on its pristine mountain locale. The manage- trash compactor and a compost program. On
ment also knows that it’s saving money—BIG the cultural side of things, the resort offers
money—through Vail’s Natural Step eco- skiing-with-a-naturalist tours and hands out
friendly program. The resort saves $50,000 a wildflower seeds as a part of its educational
year through recycling, $15,000 through com- programs.
pact fluorescent bulbs, and the water bill has ‘‘These stops make our area a better place
gone down too, thanks to the 1.73 million gal- for everyone,’’ says Bill Jensen, the COO for
lons of potable water saved by low-flow bath- Vail Mountain. Visitors agree with him: the re-
room fixtures. sort has been rated the number one ski desti-
So what exactly is Vail doing that’s reaping nation in North America for the thirteenth time
such huge benefits? since SKI Magazine began the poll in 1988.
Environmentally, Vail provides coupons
Source: Kenninger, Judy. ‘‘Gold in Green.’’ RCI Ven-
for $20 of on-mountain food to car-poolers,
tures (November / December 2004).
which has reduced vehicle numbers by 37 per-
cent, leading to an increase in air quality. Up
on the slopes, photovoltaic panels are used to DISCUSSION QUESTION:
power self-composting remote rest rooms. As What type of specialty resort do you think
for conservation, Vail is a leader in wind- would benefit most from ‘‘going green?’’
powered energy: one high-speed chair lift is Why?
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Rotary movements, of the body as a whole or parts of it. It is desirable to

use the lower body for rotary movements.
Edge-control movements, that affect the way the edges of the skis come
into contact with the snow surface.
Pressure-control movements, used to control the pressure the skis exert
on the snow as they move.
Maneuvers that are taught seek to provide building blocks for one or
more of these skills.
It is possible to teach individuals with a variety of disabilities. The three track

method is used for teaching people who have one good leg and two arms. The
adaptive equipment required consists of one ski and two outriggers. With the ad-
dition of a prosthesis, the method can also be used with a double amputee.
The four track method uses four separate ski sources to maneuver down the
slope. Two outriggers complement the two skis. This method is used for skiers with
such things as an aneurism, cerebral palsy, spina bifida, muscular dystrophy,
or multiple sclerosis. Reins or a bungee cord can be added to help control
speed.
Monoboards or snowboards can be substituted for those individuals who can-
not risk independent leg action such as those with severe hip problems or with
full leg braces. For those with severe disabilities sit skiing gives the experience of
speed and motion. Students sit in a sled-type device controlled by the upper body
and short handheld pole. An able-bodied skier skis behind the sled holding an
attached rope. The sit ski is gradually being replaced with bi skis. The shell of the
sit ski is replaced by a sled that consists of a ‘‘bucket’’ that rests on two skis. The
equipment for the future for most paraplegics is the mono ski which allows stu-
dents to ski in a three track fashion. It is similar to the bi ski expect for the fact
that it has one rather than two skis under the bucket.
SUMMARY
As the market for nature-based and adventure tourism continues to grow, there
will be a market niche for specialty resorts catering to these tourists.
ENDNOTES
1. Fluker, Martin R., and Lindsay W. Turner. ‘‘Needs, Motivations, and Expectations of a
Commercial Whitewater Rafting Experience.’’ Journal of Travel Research, vol. 38 (May 2000):
S 380.
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2. Outdoor Recreation Participation Study, Seventh Edition. Boulder, CO: Leisure Trends Group,
2005.
3. Data from the Parks Canada website, obtained June 1999. http: / / parkscanada.pch.gc.ca /
library / trails / english / trailce.html
4. : Hultsman, John, Richard L. Cottrell, and Wendy Z. Hultsman. Planning Parks for People, 2nd
ed. State College, PA: Venture Publishing, 1998, 49–52.
5. Ibid., 52–55.
6. Ibid., 24.
7. Source: National Ecotourism Strategy. Mexican Secretariat of Tourism in cooperation with the
World Conservation Union, 1994.
8. Hawkins, Donald E., Megan Epler Wood, and Sam Bittman (eds.). The Ecolodge Sourcebook
for Planners and Developers. North Bennington, VT: Ecotourism Society, 1995, x–xii.
9. Lindberg, Kreg, and Donald E. Hawkins (eds.). Ecotourism: A Guide for Planners and Managers.
North Bennington, VT: Ecotourism Society, 1993, 124–129.
10. Ibid.
11. Fluker, Martin R., and Lindsay W. Turner. ‘‘Needs, Motivations, and Expectations of a Com-
mercial Whitewater Rafting Experience.’’ Journal of Travel Research, vol. 38 (May 2000): 380.
12. Sung, Heidi H. ‘‘Classification of Adventure Travelers; Behavior, Decision Making and Target
Markets.’’ Journal of Travel Research (May 2004), V. 42, No. 4: 343–357.
13. Adventure Travel: Special Report. Washington, D.C.: Travel Industry Association of America,
1998, 1.
14. Ibid.
15. Ibid., 4.
16. Ibid., 8–9.
17. Ibid., 11.
18. Ibid., 31, 34.
19. Ibid., 41.
20. Ibid., 55–72.
21. Ibid., 58–59.
22. Ibid., 59–60.
23. Hyder, Martha A. ‘‘Have Your Students Climbing the Walls: The Growth of Indoor Climbing.’’
Journal of Physical Education, Recreation, and Dance 70, no. 9 (November 1999): 3233.
24. Priest, Simon. ‘‘The Semantics of Adventure Education.’’ In Miles, John C., and Simon Priest
(eds.). Adventure Education. State College, PA: Venture Publishing, 1990, 114.
25. Ibid., 376–378.
26. ‘‘Life on the Edge: Is Everyday Life Too Dull?’’ Time 154, no. 10 (September 6, 1999):
28–29.
27. Fluker, Martin R., and Lindsay W. Turner. ‘‘Needs, Motivations, and Expectations of a
Commercial Whitewater Rafting Experience.’’ Journal of Travel Research, vol. 38 (May 2000):
380–389.
28. Dash, Judi. ‘‘The New Millennium May Offer Travel Surprises Sooner Than You Think as
Adventure Outfitters Embark on Future Treks.’’ Denver Post (January 2, 2000): T1.
29. Frommer’s The Moon: A Guide for First-Time Visitors. Wemer Kum / Ustenmacher (trans.). New
York: IDG Books Worldwide, 1998.
30. Sung, Heidi H. ‘‘Classification of Adventure Travelers; Behavior, Decision Making and Target
Markets.’’ Journal of Travel Research (May 2004), V. 42, No. 4: 343–357.
S 31. Journal of Physical Education, Recreation & Dance, vol. 70, no. 3, 1998.
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32. Martin, Claire. ‘‘Toughen up exercise styles being reduced to boot camp.’’ The Denver Post
(January 2, 2000): F 04. Krucoff, Carol. ‘‘Fitness trends for the next millennium.’’ The Washington
Post (January 4, 2000): Z 15.
33. Unold, Ginny. ‘‘Inside Looking Out.’’ Parks and Recreation (August 1999): 52–55.
34. Bold Tracks: Teaching Adaptive Skiing, Third Edition. Boulder, CO: Johnson Books, 1994, 168.
S
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Chapter 14
CRUISE SHIPS:
FLOATING RESORTS
LEARNING OBJECTIVES
1. Identify the changing trends in and demographic profiles of the cruise ship
market.
2. Identify the critical variables in determining a cruise ship’s profit potential.
3. Identify potential solutions to financial rations relevant to cruise ships.
4. Identify the most important financial ratios relevant to cruise ships.
INTRODUCTION MANAGING FACILITIES

Travel by Ship Yield Management
The Cruise Experience Accommodation
Major Players Environment
Ship Classifications HEALTH, SAFETY, AND SECURITY
MARKETING THE CRUISE PRODUCT Centers for Disease Control
The Distribution System Sanitation Program Inspection
The Cruise Product Safety
STAFFING THE CRUISE SHIP MANAGING THE OPERATION
Responsibilities CRUISE DESTINATIONS
MANAGING THE HOTEL Introduction
DEPARTMENT Definition
Managing Service Port of Call
Role of Tipping Itinerary
MANAGING FOOD AND BEVERAGE SUMMARY
Introduction ENDNOTES
Supplies and Services
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368 Chapter 14 CRUISE SHIPS: FLOATING RESORTS
INTRODUCTION
‘‘My experience of ships is that on them one makes an inter-
esting discovery about the world. One finds one can do
without it completely.’’
—MALCOLM BRADBURY
Travel by Ship1
Cruise ships represent a specialized type of resort—for cruise ships are nothing
more than floating resorts!
The steamship era had its beginnings in the 1840s. Sir Samuel Cunard pio-
neered the first transatlantic scheduled liner trips at that time. Just as the auto-
mobile led to the demise of the train, the introduction of intercontinental
commercial airline service precipitated the rapid decline in the use of ships as a
scheduled passenger transportation mode. In 1957, transatlantic ship traffic
reached a new post–World War II high as some 1,000,000 passengers were trans-
ported on ocean liners. Although travel by ship remained strong for several years
thereafter, the aircraft had by 1958 eclipsed it in terms of volume of transatlantic
passengers.
Transatlantic scheduled passenger ship traffic declined rapidly. Passenger de-
partures from New York fell from approximately 500,000 in 1960 to 50,000 in 1975.
So great has been the decline in scheduled liner passenger transport volumes that
it has almost completely disappeared in this modern-day era.
Cruising has taken the place of scheduled liner services. Ships originally built
for ocean crossings do not make the best cruise ships. Ocean liners were large
and heavy—built to withstand the rigors of the Atlantic Ocean. As a result the fuel
costs were great. As cruising took off, the lines built ships specifically for cruising.
These ships were smaller—800 to 850 passengers and 20,000 tons—lighter, with
smaller cabins, larger deck space and public areas, and a smaller ratio of staff to
passengers. Fuel costs were also reduced by spending time in more ports, a move
that satisfied passengers.
The Cruise Experience2

Many tourists who choose to cruise perceive cruising as safe, social, service-
oriented, and customer friendly. Although it’s mobile, the ship provides a consis-
tent ‘‘home away from home’’ easily accessible to the tourist even at the remotest
of ports. Life aboard the ship consists of comforting routine broken up by carefully
planned activities both aboard the ship and on land. Cruise ships are popular
because they combine familiarity with the excitement of travel; the ship is simply
a crime-free mobile resort that offers its passengers a variety of destinations in the
space of a few days.
S Despite its popularity, the idea of cruising also generates negative opinions.
N For some travelers, cruising is perceived as expensive, claustrophobic, elitist,
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INTRODUCTION 369
seasickness-inducing, and reserved for older couples only. The best way to counter
these common misperceptions is to advertise cruising as cost-effective and high in
value, and to highlight that the cruise experience can be exclusive and inclusive—
many cruises now cater to specialty groups such as families with small children,
single travelers, and active travelers. Although a cruise vacation appeals greatly to
older groups, it’s worth noting that nowadays the average age of first-time cruisers
is well below 40.
Major Players3
Cruising is a changing industry. Although most analysts predict a profitable future,
the industry has seen a lot of upheaval over the last decade. A chain of acquisitions
and mergers makes the industry appear unstable and the market subject to con-
stant disruption.
It’s tempting to look at the industry and predict more upheaval in the near
future. However, that would be an incorrect assumption, because it ignores some
relevant issues that have come to the fore. Firstly, the major companies in the field
(Royal Caribbean Cruise Line, Carnival Corporation, Star Cruises / NCL) possess
among themselves considerable purchasing power. Secondly, the construction of
Quick Getaway 14.1

Close to Home
In this economy, vacations are becoming more For timeshare resorts, this means that they
and more expensive. Cruise lovers don’t want should be checking the yearly cruise itinerar-
to sacrifice their trips, but they don’t want to ies. If the timeshare’s city shows up on the list,
waste money on expensive plane tickets to far- its employees should prepare themselves for a
away ports, either. great deal of attention, because the profile of
Enter homeland cruising. Cruise lines, ever those who cruise closely approximates the pro-
aware of their customers’ wishes, are bringing file of those with timeshares.
the ships closer to the tourists. Now coastal cit-
Source: McArthur, Stacey. ‘‘Homeland Cruising.’’ RCI
ies are playing host to more cruises than ever,
Ventures (March / April 2003).
some of which stay in the area, and others
which set sail for faraway shores. New Orleans
hosts ships bound for the Caribbean, while in DISCUSSION QUESTION:
Texas, ships drop anchor and sail for weeklong Homeland cruising may encourage those
trips between Galveston and Houston. Seattle who live in coastal cities to try cruising, but
has four large ships that sail for Alaska, and Los those inland will still have to fly to the coast
Angeles hosts ships that sail for voyages along to cruise. How can cruise companies com-
the Mexican Riviera and cruise liners that take pensate for this and encourage mid-
S longer trips to Hawaii. continent customers to try cruising?
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new liners creates a ripple effect in the industry, making older ships available for
new cruise lines or smaller companies. Thirdly, cruise companies have learned to
keep a weather eye on the market and to prepare for unforeseen events. Variables
such as public opinion of globalization, worldwide health threats such as avian
flu, and the threat of terrorism can influence customers’ decisions.
Cruise brands like Costa Cruises, Orient Lines, Princess Cruises, Celebrity
Cruises, Norwegian Cruise Lines, and Saga Cruises take great care when it comes
to their reputations. For customers, a brand name implies a certain standard of
cruise, so it’s understandable that the different companies guard their reputations
with a great deal of care. The brand is more than a name; often symbols are
included which imply professionalism or safety, such as P&O Cruises’ nautical flag.
Interestingly, the ship itself lends itself very well to the process of branding.
The customers engage with the liner on a very personal level. This engagement is
a process that begins with the first glossy brochure and does not end until dis-
embarkation. The customer associates the impressive size of the vessel, the comfort
of life onboard, and the palette of new experiences with the brand.
Branding is essential for garnering new business, encouraging repeat custom-
ers, creating brand recognition, defining the company’s approach to operations
and marketing, and most importantly, establishing customer loyalty. The major
cruise corporations are at an advantage in this regard, because with their larger
budgets and increased spending power, they can afford to launch massive, pow-
erful advertising campaigns that target the correct market.
Ship Classifications4
The most important factor in determining a cruise’s amenities is the size of the
ship. Larger ships often have multiple swimming pools, spas, casinos, and a variety
of dining options. They often have space for features such as waterslides, rock
walls, and theaters, and because of their size, they can support a wide variety of
activities. Smaller ships forego many amenities but focus instead on guest comfort
and the destination, which creates a different sort of cruise ambience. Those who
classify cruise ships use criteria such as the number of passengers; the quality of
food, drink, and accommodations; and a measurement of the overall cruising
experience. Many cruise companies choose to operate cruises of different sizes so
as to maximize the possible customer pool. The different cruises are designed with
different itineraries that complement the ship size and the interests of the passen-
gers.
One scheme of classification that has been adopted by several industry ob-
servers divides cruises into five categories: Luxury, Premium, Resort / Contempo-
rary, Niche / Specialty, and Value / Traditional.
Luxury ships are generally small liners with few passengers who enjoy five-
star-level accommodations. Public areas are generally finely appointed, and the
passengers’ suites are palatial. Service may include a private butler, and food is
absolutely top-notch. These cruises fall into the highest price range.
S Premium brands have above-average service, food, and amenities. Like the
N luxury lines, there are many cabins with balconies, and there is a large amount of
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INTRODUCTION 371
Quick Getaway 14.2

Biggest and Smallest
The Queen Mary II—a floating city The ship is nicknamed a ‘‘floating country
house.’’
The liner’s cabins are few, so they have
The ship cost $1.19 billion to build, and it
names instead of numbers.
is the biggest and most luxurious passenger
The Princess can accommodate 49 guests.
ship ever built.
The tariffs are all-inclusive; tipping is dis-
The liner accommodates 1,250 crew mem-
couraged.
bers and 2,600 passengers.
The guest / crew ratio is nearly 1⬊1.
The power it generates would be enough
The luxury liner was a vehicle ferry in its
to provide electricity for a city of about
former life.
300,000 people.
The ship has a 1,000-seat theater, 2,000 Source: Schmidt, Christophe. ‘‘As tall as a 23-story
bathrooms, 3,000 telephones, a spa, a ball- building, world’s biggest liner sets sail.’’ The Sun-Herald
(September 28, 2003). ‘‘Why Choose Hebridean Prin-
room, five swimming pools, a planetarium,
cess.’’ Hebridian International Cruises, accessed July
4,500 steps, and hundreds of works of art. 28, 2006. http: / / www.hebridean.co.uk / whychoose /
Maiden voyage prices ranged from $5,300 whychoose princess.html
for a view-less interior cabin to $70,000 for
a 209-square-meter duplex. DISCUSSION QUESTION:
Which boat do you believe would provide a
The Hebridean Princess—the smallest lux- more luxurious experience, judging simply
ury liner from the information above?
space per passenger. The premium ship offers a diversity of attractions, with the
aim of providing entertainment for a wide variety of passengers.
Contemporary ships are the modern ‘‘floating resorts’’ complete with swim-
ming pools, golf ranges, and climbing walls. Contemporary cruise ships range from
mid-sized vessels to the biggest megaliners. On-board style is generally casual, but
opportunities exist for guests to dress in more formal attire.
Niche or specialty cruises rely on specialization to attract their clientele. The
cruise itself usually emphasizes one or more aspects of the cruising experience,
such as cultural interaction, soft adventure, or language enrichment. The compa-
nies who run niche cruises usually target the more experienced traveler.
Budget or value cruising involves mid-sized, older cruise ships with fewer fa-
cilities than the newest megaships. There is usually a lower staff-to-customer ratio
on budget cruises, and dining options generally include self-service. This form of
S vacation is attractive to first-time cruisers and those who are still relatively new to
N cruising.
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Quick Getaway 14.3

Not an Ordinary Cruise
What is a cruise? Most of the time, it’s a lot of environment, thanks to the experienced natu-
people relaxing in luxury aboard a fashionably ralists onboard. For some, the pinnacle of the
appointed liner. But not always. For example, eco-cruise is its transit of the Panama Canal.
eco-cruises like the Costa Rica and Panama The ship itself is a pleasant surprise. Even
Canal itinerary aboard the Pacific Explorer far though it eschews some of the ‘‘luxury’’ aspects
outstrip the ordinary. of its larger brethren, the ship’s cabins are sur-
On this cruise, there’s no ‘‘fashion parade’’ prisingly comfortable. The accommodations
in the dining room; in fact, passengers are far are almost identical to those found on larger
more likely to dine in T-shirts and bare feet. ships, with one notable exception: no televi-
Those who get too much of structure and rules sions. There is, however, one big-screen satel-
in their everyday life appreciate the laid-back lite TV in the Tucan Lounge, but it’s universally
atmosphere of the eco-cruise. ignored by the passengers.
The Pacific Explorer is a 100-passenger,
shallow-draft vessel purposely designed for slip- Source: Petrie, Glenn. ‘‘Eco-cruising in Central Amer-
ping into remote pockets of water that are out ica: Cruise West’s natural voyages of exploration in
Costa Rica and through the Panama Canal.’’ Cruise
of reach of the average traveler. Activities of-
Travel (September–October, 2002). http: / /
fered with the cruise include hiking, kayaking, findarticles.com / p / articles / mi m0FCP / is 2 24 / ai
bird watching, snorkeling, water skiing, and 91397615
great lectures. Passengers can hike through old-
growth rain forest, explore jungle rivers, search
out exotic birds and wildlife, and snorkel along DISCUSSION QUESTION:
some of the most pristine reefs in the Americas. What areas do you think would be good
In addition, they can learn about the natural eco-tour destinations?
MARKETING THE CRUISE PRODUCT

The Distribution System5
A market system can be described as having two sides: supply and demand. The
cruise market, however, can be divided three ways: focused on the product, on
customer identity, and on satisfying a need. Cruises that are product-focused have
the advantage when it comes to developing economies of scale, but they may fail
at accounting for incremental changes in the market. Need-satisfaction-focused
companies are phenomenal at understanding their customers, but they may find
strategic decision-making problematic. Passenger-identity cruises are excellent at
targeting certain groups of customers. Most companies incorporate elements from
S all three of these strategies, utilizing their strengths and fortifying their weaknesses.
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World events such as the 2001 terrorist attacks on the East Coast, the Gulf War that
followed, and the economic conditions of the United States and other major coun-
tries of the world are vital in shaping the tourist economy. After factoring in con-
tinued international unease in the face of terrorist attacks and cruise companies’
decision to create safe itineraries, it becomes clear that the industry is acting to
compensate for negative influences on the market.
Cruise Cruise operators or brands dominate the market. They either lease or own cruise
Operators ships, for which they create itineraries and products. One way to think of cruise
operators is to imagine them as wholesalers, with travel agents as their retailers,
or brokers.
All cruise companies work hard to ensure that the brand is perceived favor-
ably. Customer surveys, market research, and the studies of anthropologists help
companies understand how to improve the brand’s perception.
The products developed by cruise operators are a combination of services
and facilities, some of which generate revenue and some of which are included
at no additional cost to the customer. Cruises therefore have a variety of fixed
costs, such as fuel, port administration, and customs. To increase profits, the cruise
operators seek to reduce these costs without adversely affecting quality. Larger
companies can negotiate for such items as fuel and consumables much more
easily than smaller companies. Through negotiations, costs can be effectively re-
duced, often by quite a bit.
Traditionally, cruise companies have relied on travel agents to help them book
cruises. Despite the ever-increasing popularity of the Internet and the ease of online
booking, cruise operators continue to rely on printed brochures to sell their cruises.
The ratio of brochures to sales is roughly 10 to 30 brochures per sale. The bro-
chures are carefully designed to encourage advance booking, through such strat-
egies as making off-season prices look dramatically lower than their on-season
counterparts, and promising discounts for booking early.
Because the brochures are produced well ahead of the actual cruise, there
exists the additional challenge of setting prices based on rates that fluctuate fre-
quently. Because of common changes, such as rates of exchange and port fees,
it’s not at all uncommon for cruise operators to produce new brochures periodi-
cally to replace the older, less-accurate ones.
Right now the Internet is used mostly as a complement to the printed bro-
chures. Online, potential customers can read the ratings of previous customers,
check on health concerns in destination ports, and even book the cruise (elimi-
nating an agent’s fees).
Market Six segments are easily identifiable within the recent cruiser market: Restless Baby
Segments6 Boomers, Enthusiastic Baby Boomers, Luxury Seekers, Consummate Shoppers, Ex-
plorers, and Ship Buffs.
Restless Baby Boomers are generally the newest to cruising. They represent 33
percent of total cruisers. They’ve enjoyed their cruise experiences in the past, and
S they’d like to cruise again, but they might find the cost prohibitive. They are also
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Quick Getaway 14.4

Home, Home on the Boat
Fact or fiction: retirees are opting to live out radio, and television, and her bathroom is
the rest of their lives on cruise ships rather than smaller than the average shore-side closet.
retirement homes, because the cruise ships Those who are close to their families or com-
cost less and the staff treats them better. munities would not likely do well on a cruise
Fact, at least for one retiree. At first this ship, where long-term relationships are difficult
account seems fictional, especially since it has to form and maintain.
been circulating on the Internet for at least five The cramped quarters aside, Muller is
years. However, one octogenarian from Florida happy with her seafaring life. ‘‘I’ve got full-time
is living the cruise ship dream: Bea Muller has maid service, great dining rooms, doctors,
been living full-time aboard Cunard’s Queen medical center [where she volunteers], a spa,
Elizabeth 2 since January 5, 2000. Eleven beauty salon, computer center, entertainment,
months earlier, Muller’s husband had passed cultural activities, and, best of all, dancing and
away while the couple was on a world cruise. bridge.’’
Instead of heading for a retirement home, Mrs. Bea Muller is not the first retirement-plan
Muller decided to sell everything and book her- cruiser: Clair MacBeth lived aboard a Cunard
self onto the ship. cruise ship for 14 years.
In 2001 Muller was reportedly paying as
she went, booking one cruise after another, in- Source: Mikkelson, Barbara and David. ‘‘My Retirement
stead of submitting a monthly or yearly fee. Plan.’’ Snopes.com, March 15, 2005. http: / /
Thanks to her frequent-traveler discounts, her www.snopes.com / travel / trap / retire.asp
overall costs were only about $5,000 a month.
For those thinking of following in her foot-
steps, some things should be kept in mind: DISCUSSION QUESTION:
cruise prices have increased in the past few Would you retire to a cruise ship? Why or
years, and the accommodations are likely go- why not? Do you think cruise ships should
ing to be small and windowless. Muller lives in start promoting themselves as ‘‘floating
a 10-by-10-foot cabin that barely fits a bed, retirement houses’’?
open to different vacation options. Marketing aimed at this segment should em-
phasize the affordability and superiority of cruising.
Enthusiastic Baby Boomers already know how exciting and affordable cruising
is. They represent 20 percent of the market; they choose to cruise in order to
escape their hectic and extremely busy lives. Successful marketing aimed at this
segment will emphasize how cruising helps you ‘‘get away from it all.’’
Luxury Seekers represent 14 percent of cruisers. These travelers can afford
pricey accommodations, and they are willing to spend money to ensure that they
S have an extremely lavish experience onboard. Marketing messages aimed at this
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segment need to address their need for luxury and extravagance, emphasizing that
they are sophisticated travelers with highly developed tastes.
Consummate Shoppers are not cheapskates; they are simply looking for the
best value. This segment consists of very committed cruisers, who have tried other
vacations but returned to cruising nonetheless. This segment, which represents 16
percent of cruisers, looks for a marketing message that highlights a cruise’s value
and its special promotions.
Explorers are well-traveled, well-educated people with a genuine intellectual
interest and curiosity about new destinations. Explorers represent 11 percent of
those who cruise, and respond to marketing messages that emphasize novel, in-
teresting ports.
The last segment consists of Ship Buffs, who represent 6 percent of all cruisers.
This segment represents the most senior cruise vacationers. Ship Buffs cruise fre-
quently because they have enjoyed cruising in the past, and they consider cruising
comfortable, fun, and interesting. Only minimal marketing efforts need to be di-
rected at this group, as they already want to cruise. It doesn’t hurt to remind them
that the ship experience is one that they know and already enjoy.
Travel Agents The only purpose of the travel agent is selling tourism products, for a commission.
Because of the uncertain nature of their work, most agents belong to professional
organizations that guarantee to support them in the case of serious financial hard-
ship. Two examples of these associations are the American Society of Travel Agents
(ASTA) and the Association of British Travel Agents (ABTA). Travel agents’ services
generally include booking tickets and packages, and they can frequently arrange
travel insurance, car rentals, and accommodations.
Unfortunately for agents, the booking scene is rapidly changing. With increas-
ing competition from sites on the Internet, travel agents are finding the marketplace
far more volatile than it has been in the past. Many airlines have cut down com-
mission fees, and everywhere in the travel industry providers are attempting to sell
directly to their customers, which cuts out the agent altogether. Agents who try to
fight the changes invariably fail; the best option for travel agents in the rapidly
changing market is to stay ‘‘on top of the game’’ and become extremely efficient
at what they do. Customers can make their own purchases online, but it takes
them time to figure out the system and to coordinate their hotel, travel, and en-
tertainment options. A practiced travel agent can do the same in a fraction of the
time, which appeals to customers.
Some agents decide to specialize in order to deal with the changes in the
travel market. Travel agents who specialize in arranging cruises often form strong
alliances with cruise companies, who frequently support ‘‘their agents’’ through
training, sales events, and customized marketing materials.
Alliances7 Cruise operators may decide to form alliances with other vacation service provid-
ers in order to create a more attractive package, or to create additional reasons
for customer loyalty. One such alliance is the Luxury alliance, which includes
S Orient-Express Trains and Cruises, Silverseas Cruises, Relais and Châteaux, and
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Leading Hotels of the World (Luxury Alliance, 2005). Carnival Cruises, Cunard Line,
Costa Cruises, Holland America, Seabourne, Princess Cruises, and Windstar form
the ‘‘World’s Leading Cruise Lines’’ alliance, which provides incentives for cus-
tomer loyalty within these brands.
The Cruise Product8

Cruises have three different economic features: inelasticity (a cruise product is
‘‘perishable’’ because it can’t be stored if it’s not sold), heterogeneity (the product
consists of a variety of components that make the cruise experience different for
each customer), and complementarity (the cruise is not one single experience but
a host of elements that combine to form the cruise experience).
A cruise is a defined product that may include travel to the port of embar-
kation, an itinerary including activities that spans a defined period of time, some
inclusive facilities and services (such as leisure areas and onboard entertainment),
accommodations to a specified standard, and other services for which there is a
charge. Some operators offer a special deal where cruisers can finish their ex-
perience off with a tour of the area at the last port of call—or alternately, a stay
at a local resort.
Accommodation Accommodations aboard a ship are generally referred to as ‘‘cabins,’’ but many
cruise companies have different terms for their guests’ rooms. Some still refer to
the lodgings as cabins, but with additional terms, such as ‘‘stateroom cabin’’ or
‘‘minisuite cabin.’’ Other companies forego the term ‘‘cabin’’ altogether, using
more landlocked terms like ‘‘suite’’ and ‘‘penthouse’’ to describe the range of
accommodations. Penthouse suites tend to be the most luxurious, largest, and
most expensive options aboard a cruise ship.
Even though cabins can vary in size from 120 square feet to over 900 square
feet, the average cabin is around 200 to 250 square feet. Even the smallest cabin
is designed efficiently, though—it’s not uncommon for a cabin of 150 square feet
to have four berths. The upper berths can usually be folded away to provide more
headroom during the day, or to accommodate two people instead of the usual
four. It may also be possible to reconfigure the lower two bunks to create a full-
or queen-sized bed. Larger cabins generally include a lounge area, and nearly all
cabins nowadays are ensuite; that is, they have a shower, toilet, and room or a
shower, bath, and toilet.
Cruise ship cabins are essentially more compact versions of their hotel-room
counterparts. Because space is at a premium aboard a ship, storage areas within
the cabin are meticulously designed so as to give the impression of a very efficient,
‘‘shipshape’’ space, and the vessel is built to maximize the revenue-generating area.
Because designers can’t afford to be picky about where they place cabins, some
cabins will inevitably be preferable to others for reasons of noise or view.
To help customers decide which cabin will be right for them during their
cruise, cruise companies’ websites usually provide overhead blueprints of the var-
S ious types of cabins that are drawn to reflect three dimensions. Photos, 360-degree
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scanning views (on websites only), and blueprints help give potential cruisers a
better idea of where they will be staying.
Customers usually use deck plans to identify their cabin’s location. When
viewed in conjunction with cross-section plans, deck plans can pinpoint the exact
location of a particular cabin. The plans are usually color-coded by cabin type
(and therefore, by cabin cost). Generally, cabins on the lower decks that are nearer
to the inside of the ship cost less, but that is not always the case. By using a deck
plan, it’s possible to identify the following properties of a cabin:
Whether it’s an inside or outside cabin (that is, whether it’s buried within
the ship or along the hull).
Whether the cabin has a porthole, window, or balcony.
If the cabin has additional beds (berths), connected staterooms, or
handicapped-friendly facilities.
Where the cabin is located—is it near elevators or other facilities?
Nowadays it seems that cruise customers expect more from their cabin ac-
commodations than was previously the case. Fortunately, today’s cruises tend to
be larger, more complicated ventures that can provide a wider variety of cabin
layouts and amenities to satisfy the expectations of every customer.
Customers can use deck plans to pick exactly the cabin they wish to have.
However, one issue that needs to be addressed is the mistaken impression that
travel agents often give their customers regarding upgrading cabins. The errant
philosophy is that the best way to upgrade is to buy a cheap cabin, and then
complain once onboard in order to receive a free upgrade. This is not so: cruise
companies strive for 100 percent occupancy and frequently cannot accommodate
passengers who wish to be moved once on board.
Cabin decor usually reflects the standards associated with the cruise brand.
Artwork is chosen to coordinate with soft furnishings and carpeting in order to
create a certain ambience, and colors are chosen to complement the cabin light-
ing. Especially in inside cabins, lights and mirrors are strategically placed so as to
give the illusion of greater brightness and space.
Cabin stewards monitor the general condition of the cabins, and they perform
routine service and cleaning duties such as arranging complementary bathroom
supplies in an attractive display and ensuring that the minibar is kept stocked.
Housekeeping supervisors or managers check in on the rooms to ensure that the
proper standards are maintained. Many larger cruise ships have something called
a bell box, where a group of room service stewards and chefs deal with requests
for food and drink to passenger lodgings as required. Additionally, some cruise
ships provide passengers in larger suites with personal butlers, who can assist them
with parties and can perform other services requested by the passenger.
Dining The perception of a cruise as a place to enjoy fine dining and good company is
just as true today as it was in the heyday of traditional cruising. A guest’s meals
S are typically included in the cruise price, but meals at onboard specialty restau-
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rants usually carry a supplementary charge. Cruise ships often try to diversify and
create unique culinary experiences for their guests by creating themed restaurants,
such as Asian-themed eateries that serve Japanese food.
Cruises can be highly caloric affairs, but chefs do take care to try to meet
specific dietary needs when they design menus. Traditionally, breakfasts and
lunches were conducted as open-seated affairs, with two separate sittings for din-
ner. Recently though, large cruises have begun offering two large 500-plus-seat
restaurants located on either side of a gallery with a double-ended hotplate or
servery. This arrangement is ideal for serving large numbers of guests in a short
amount of time. Additionally, dinner service sittings are linked to performance
schedules, which ensures that passengers are not upset by having to attend one
sitting or another to see the performance they want. Dinner tends to be more of
an organizational hassle than the two earlier meals, since guests often order room
service and the breakfast is generally a buffet. Additionally, the ship frequently
spends time in port during the daytime, which means fewer passengers will be
taking lunch aboard.
The Buffet. The buffet is a 24-hour, efficient option on the cruise ship. It’s often
located on the upper deck, and it’s frequently designed to run from one side of
the ship to the other, with a mirrored layout on either side of the ship. This is
especially efficient between mealtimes, as one buffet can be kept open while the
other is cleaned or replenished.
The buffet is kept supplied by a small team of chefs under the supervision of
a sous chef. Galley assistants and supervisors help customers, serve drinks, and
clear tables after they are vacated. The buffet is designed with equipment incor-
porated which keeps each food item at the desired temperature while it waits for
the guests. Some items, such as bread, appear every day, while others change to
provide variety. While the ship is in port, the food served generally incorporates a
bit of local flavor to enhance the experience of being in a new place.
Serving food via buffet service is an extremely efficient and passenger-friendly
option. The layout options inherent in buffet design simplify the dining room and
allow customers to take their food to tables along the windows, and it gives them
a great deal of choice and flexibility. Very few staff are required to operate and
maintain a buffet service, and it creates extremely little waste, as food options can
be adjusted based on prevailing consumption patterns. Tables are efficiently
cleared by staff, who use carts to transport the used dishes from the buffet galley
to the main galley for washing.
Main Restaurants. On a cruise ship, passengers may eat as much or as little as

they want, and nowhere is this reflected more clearly than in the main dining
restaurant or restaurants. Food is brought out to the diner as often as it is requested.
This appeals to diners who prefer to eat large quantities, but who may be con-
cerned about the impression that carrying a loaded buffet tray might give to other
S guests. In the restaurant, the heavy eaters believe, their consumption is obscured
N by the routine of service.
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Frequent cruisers may receive an invitation to dine with the captain. Courtesy
Digital Vision
Food in the main restaurant is created to differentiate and distinguish the

brand. The menu is often configured to appeal to customers who are used to
eating out in the United States, Europe, or the United Kingdom. This extends to
the courses offered, the foods in the courses, and the language used to describe
each course.
The main restaurant is as much an experience as it is a dining establishment.
Decor tends towards the more formal experience, with sparkling crystal and cutlery
complemented by carefully chosen colors in the linens, walls, and carpeting.
The lighting is subdued, and an array of uniformed serving staff, headed by the
maı̂tre d’ (an abbreviation of the French term maı̂tre d’hôtel, meaning the restau-
S rant manager). Aside from the maı̂tre d’, the main restaurant is staffed by head
N waiters, waiters, commis waiters or assistant waiters, and professional wine waiters
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known as sommeliers. Music, sometimes live, helps to heighten the theatricality of

the dinner event.
Styles of service vary with the brand, from full silver service to a combination
of plated and buffet service. Each style correlates to the skill of the staff and the
ratio of staff to guests—in full silver service, the ratio must be much lower than in
other types of service. Whatever the service level, the staff must be able to relate
interpersonally with passengers at the appropriate level. Table sizes may vary from
two to eight seats, with the larger sizes more common in multiple-sitting dining
arrangements. Some cruise brands are beginning to implement free dining situa-
tions in which customers are able to prebook tables for a certain time. Guests can
also choose whether to dine privately or to join a group.
Formal dining is featured on many cruises, although many newer brands place
an emphasis on informality. The formal dining experience allows customers to
dress to impress every few days, which helps alleviate the boredom of longer
stretches between ports and adds to the cruise experience.
Other Options. Although all-you-can-eat dining is an integral part of the cruise

experience, many brands are catering to the passengers’ desire for more variety
by creating an assortment of restaurants where they can dine for a small supple-
mentary charge (which increases cruise revenue). On the Star Princess passengers
can choose from several different restaurants, including an upscale Italian eatery
and a Tex-Mex grill. Aboard the Ocean Village, guests can choose to dine at the
Bistro, a restaurant that serves food produced to the specifications of one of the
U.K.’s leading chefs. Other cruises offer alfresco dining, where patrons can enjoy
their meals under the stars.
For younger children, hot dog stands, pizzerias, and burger counters offer a
change from the formal dining that may not suit their tastes. Ice cream carts by
the pool, afternoon teas (in some cases, high tea), and room service round out
passengers’ additional dining options.
Bars As a rule, most of the onboard bars tend to get busy after 10:00 in the evening,
although they are relatively popular beginning after dinner. However, there are
many opportunities for guests to purchase drinks in different places.
On sailing day, drinks are readily available on the upper decks as the ship
leaves port. Live music enhances the atmosphere, and waiters working from key
bars on the upper decks serve cocktails to celebrate the departure of the cruise.
Before dinnertime, a wine preordering point is made available to guests so
they can ensure that they get the wine they prefer with their dinner. During the
dinner service, drinks are available from the galley’s bar. Lists for liqueur, wine,
cognac, and fine whiskeys are made available to guests, and liqueur trolleys and
merchandising displays aid the sales initiative. Additionally, sommeliers and wine
waiters are at hand to help the passengers.
In every entertainment venue, table service is available. Special promotions
S and cocktails of the day help highlight all possible drink options.
N The bars onboard may each have a different theme to draw different customer
L groups. Sports bars and traditional lounge bars are at the forefront of this trend.
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Champagne and caviar appeals to a certain cruising set who value exclusivity
and luxury. Piano bars that serve such ‘‘upper-crust’’ indulgences combine relaxed
intimacy with amiable atmosphere.
Nightclubs usually have table service and a distinct cocktail menu, depending
on the clientele aboard the cruise. Cocktails are generally popular on liners, and
the majority of bars use pre-blended mixes that have to be combined with spirits,
ice, and / or garnishes before being served.
During the daytime drinks can be purchased from several places including
indoor bars and poolside bars. Drinks are also made available from certain mobile
points in the buffet line and in the restaurant during mealtimes.
In lounges where customers congregate for relaxation, bar service is usually
available although tea and coffee are more likely to be requested. The ship gen-
erally has a variety of themed lounges (library, card room, observation lounge)
which can be used for small group meetings, wine tastings, and competitions.
The bars are also ideal places to hold art auctions, fashion shows, dance
classes, and other activities. The staff at the bar work through a rotation system
within the ship that ensures an equitable work schedule for all involved.
Entertainment The entertainment staff report to the cruise director, who reports in turn to the
passenger services or hotel services director. Entertainment generally does not
produce additional revenue for the cruise, but small sales can be made indirectly.
Theaters, which are usually the largest gathering point aboard the cruise liner,
are used for a variety of purposes. Comedy shows, musical presentations, cabaret,
and magic shows are routinely held in the theater, but the area can also be used
for emergency drills and as a meeting point for shore excursions. The perform-
ances and shows operate on a rotating schedule, with two or three presentations
each night. This arrangement ensures that each program appears exciting, new,
and fresh.
Daytime activities are also handled by the entertainment staff. Events for the
day are usually published and circulated in the onboard newspaper. The enter-
tainment team responsible for activities frequently includes special members such
as dance instructors, lecturers for cyber cafes, and port lecturers. Working with
other staff onboard, the entertainment staff can arrange arts and crafts demonstra-
tions, fashion shows, wine tastings, and other culinary demonstrations.
Various musicians are hired to support theatrical productions, sailing days,
show bars and bar areas, piano bars, and deck parties. For movies, cinema support,
stage support and lighting, special effects, and sound work, a technical team is
necessary. The musicians may also require the help of the tech team in a pinch.
For more active entertainment, cruise ships usually hire a leisure staff. They
arrange for onboard golf and various water-based activities, such as scuba diving,
windsurfing, and water skiing. Some vessels rent bicycles for their passengers to
take ashore with them. Within the fitness suites various classes are offered, often
including Pilates and yoga. A team separate from the main leisure staff generally
arranges age-appropriate activities for children.
S Shore Shore excursions are sold to passengers both before and during the cruise. Alone,
N Excursions they generate revenue, but the shore excursion’s true purpose is to add value to
L the cruise experience. Due to time constraints, tours or excursions ashore are
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Many cruise lines offer a variety of nighttime entertainment. Courtesy Digital

Vision
efficiently designed so the passenger can do and see as much as possible. De-
pending on the port of call, a wide variety of transportation options may be avail-
able, such as launches, bicycles, coaches, helicopters, and horse-drawn buggies.
For passengers, booking excursions through the cruise provider means a greater
amount of comfort and security, because if something goes wrong, it is the cruise’s
responsibility to see it fixed, not the passenger’s.
Shore excursions frequently make use of third-party shore trip operators in
addition to an established network of contacts. Some cruise companies also own
tour companies, which makes the excursion-arrangement process even easier for
them. Like military operations, passenger shore excursions require crowd control,
planning, efficient communication, and precise timing.
Beauty and This is another revenue-generating area. There are cruise brands that contract con-
Therapy cessionaires to provide the service (the operator comes to a business agreement
with the line to work onboard), while other brands have their own staff. Many
well-known hair and beauty brands operate aboard cruise ships and some brands
S (Lotus Spa is one such) are created by the cruise company itself to reflect the
N style of the line. ‘‘Well-being’’ and ‘‘spa’’ are words that are heard more frequently
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aboard cruise ships as the industry becomes more aware of modern lifestyle
choices.
Services offered aboard can include body wraps, thalassotherapy, foot mas-
sage, chakra stone therapy, pedicures and manicures, oxygenating facials, hair
styling, and health and nutrition lectures.
Shopping Because guests are aboard a ship does not mean that they do not wish to shop.
Indeed, shopping on a cruise line can be more rewarding than shopping on land,
since stores in international waters don’t usually pay duty. Items of luxury and
necessity can be found in a variety of onboard stores run by concessionaires, the
staff purser administration, or by someone of like rank. The shops generally include
fashion stores for both sexes, a gift shop, a general store, and a jeweler.
Onboard shops are usually situated in one central area, much like a shopping
mall. The tendency to build large atriums on the bigger cruise liners suits this
arrangement, and it creates the opportunity for shops to set up additional market-
ing stalls at a distance from their main location, which creates a bustling, market-
like ‘‘feel.’’ Some companies that operate shops under concession include Harding
Brothers Duty Free, Miami Cruiseline Holdings, Flagship Retail Services Incorpo-
rated, and Nuance Global Ships.
Photography Photographers aboard the ship are kept busy constantly, as there is hardly a mo-
ment aboard that isn’t magical enough to capture. Photos are taken during im-
portant moments such as embarkation, departure, and arrivals at various ports of
call. The presence of the photographers ensure that passengers can purchase pro-
fessionally taken pictures, some of which are available in special presentation
packs. The most technologically advanced cruise lines have adopted an all-digital
system that enables customers to look at photographs on special screens as they
move through the corridors. Guests can hardly resist looking at (or arranging to
purchase) the constantly updated images, and the digital technology enables pho-
tographers to include scenes from the port of call into more mundane back-
grounds, creating a unique keepsake. Sometimes, photographers are employed
directly by the cruise brand, but often they are contracted through concessionary
companies such as Image Photo Services, Inc., Ocean Images, Ltd., the Cruise Ship
Picture Company, and Digital Seas Internet Cafes.
Casinos The glamour and glitz of Las Vegas casinos makes its way onto many cruise ships,
where passengers head to the onboard casino for a bit of action and excitement.
Gambling is frequently perceived as an activity for winners, and the cruise that
has a casino is therefore more alluring to people who want to see themselves in
that light.
Cashless ships are becoming more popular within the cruise industry, with
special cards for passengers to use that credit purchases to their account. Onboard
casinos also use this mode of transaction to sell tokens or chips.
Casinos are usually allowed to open upon sailing, although depending on the
S port of call, they may need to shut down once within a certain distance of the
N shore. Passengers over the age of 18 are allowed to gamble in the casinos, which
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usually have a dress code. Minimum and maximum bets are generally posted
clearly at the gaming tables, which typically offer such games as craps, blackjack,
roulette, three-card poker, Caribbean stud poker, video poker, and baccarat.
Celebrations Passengers sometimes cruise to commemorate a special event, and on some ves-
sels, they can even get married. Marriages aboard cruise ships are not uncommon,
but they can be complicated due to national laws (which may or may not affect
the ship, depending on its flag and registration). Nevertheless, where the law al-
lows, the cruise liner’s captain can perform marriages. In response to this possi-
bility, many brands have developed special, inclusive wedding packages. These
packages can include photographs, champagne, flowers, the reception, the cere-
mony, souvenir items, and the wedding cake.
Passengers who are already married can purchase similar packages to renew
their vows. Other celebrations can be catered to as part of a package, such as
honeymoons, birthdays, and anniversaries.
STAFFING THE CRUISE SHIP9

For cruise operators, crewing is a complex issue. When first forming a crew, par-
ticular attention is necessary for the support mechanisms that exist to assist the
staff development, the management of hotel services crew, and the sourcing of
unskilled, semiskilled, and skilled labor for the department of hotel services.
Cruise ships are almost exclusively heterogeneous, with a crew composed of
people of various ages, nationalities, backgrounds, and prior learning. This poses
the additional challenge of coordinating a diverse, multicultural crew and dealing
with its unique difficulties while maintaining a smoothly functioning ship.
Responsibilities
Today, large cruise ships with an array of amenities need virtually an army to
remain in operation. These floating ‘‘resorts’’ traditionally employed both officers
and ratings (non-officers). Ratings are the crewmembers who operate within a
hierarchical system, and who are responsible for performing tasks that relate to
the ship’s safe passage and commercial activity. In days past, seafaring vessels
absolutely had to have a 24-hour watch schedule, but with the advent of auto-
mation that timetable has shifted slightly. Nevertheless, the ship’s operational crew
still maintains traditional four-hour-long watches under ‘‘officers of the watch,’’
with a typical deck officer serving for two watches in a 24-hour period.
On cruise ships, the same hierarchical structure remains, but unlike on cargo
ships or tankers, the majority of the crew are employed in customer services.
Onboard today’s cruise ships, employees are typically grouped into officers, crew,
S and staff. Officers hold official authority and are divided among four departments:
N deck, radio, engineering, and hotel services. The crew, the largest group in num-
L ber, is likewise divided among the aforementioned departments. The last group,
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STAFFING THE CRUISE SHIP 385
the staff, is composed of employees such as shop managers, hairdressers, lecturers,

casino staff, entertainers, and beauticians. They may be hired directly by the line
or brought onboard by a concessionaire.
The ‘‘ship’s company’’ that results is an extremely diverse group, over which
the ship’s master has absolute authority. The master, acting as a stand-in for the
owner, makes decisions that relate to the safety of the ship, including the people
and things aboard it. The captain’s job differs slightly from that of the ship’s master,
although frequently the post of captain and the post of master are occupied by
the same person.
Aboard a cruise ship there may be more than one officer with the rank of
captain, such as the staff captain who oversees all things relating to the crew, staff,
and customers.
Deck Department. This department oversees the navigation and care of the liner.
On an everyday basis, the chief officer or first mate is responsible for running the
deck. Unsurprisingly, larger vessels require more crew members in this department,
who are called second, third, and fourth officers (the actual number is dependent
on the ship’s size). The position of safety officer is filled by one of the senior
officers in the deck department, and the officer’s complement is often composed
of junior officers-in-training, known as cadets.
There are many different types of employees who fill out the deck crew. The
chief petty officer (deck) and the petty officers (deck) supervise the deck crew
under the supervision and direction of deck officers; the deck carpenter attends
departure and berthing; the quartermaster (also known as the coxswain, with sen-
ior rating) is responsible for steering. On deck are also junior seamen, seamen
grade two, and seamen grade one (the last two share steering and lookout duties
with the deck officers); the Bosun (boatswain), who serves as foreman for the
deck hands; and day workers who handle general tasks. Those crew employed in
the department who are not officers are rated as ordinary seamen (OS), who are
classified as unskilled, or as able-bodied seamen (AB), who are deemed skilled.
Other, specific posts exist within the deck department, such as security.
Deck officers wear plain gold stripes, the number and configuration of which
identify their rank. Captains and masters wear four stripes, chief officers wear three,
first officers have two-and-a-half stripes, second officers wear two stripes, third
officers wear one-and-a-half, and fourth officers have one stripe. Cadets usually
wear half a stripe, or one stripe.
The deck officers can be immediately identified as such because they wear a
diamond. Security wears brown stripes and a capital letter ‘‘S.’’ The majority of
cruise ships also employ an environmental officer, who can be recognized by his
or her green and gold stripes. The environmental officer is answerable directly to
the ship’s captain.
The Engine Department. The chief engineer, who is responsible to the master,
oversees the engine room. The chief engineer is in charge of maintaining the ship’s
S steering, propulsion, and power for systems such as heating, ventilation, lighting,
N air-conditioning, and refrigeration. Other responsibilities include maintenance,
L fuel, and repairs. Depending on the system of propulsion and the size of the ship,
MILL (Wiley)
additional crew may be needed, such as engineering officers, cadets, and electrical
engineers.
Crew positions within the engine department include the chief petty officer
(motorman) and petty officer (motorman), who (under the direction of engineer
officers) supervise the engine room. Other posts include junior motorman, motor-
man grade two, and motorman grade one, and the occasional specific post such
as electrician.
The chief engineers wear four stripes in alternating gold and purple. Chief
electricians wear three stripes, first engineers two-and-a-half stripes, and second
engineers two stripes. As for symbols, the engine department has two: a propeller
for technical and engineering, and an electric current logo for electrical officers.
Radio Officers. The radio office supports all the ship’s communication, includ-
ing telex, radio, telegraph, Internet, telephone, and satellite communications.
Within the office, there is usually a chief radio officer, who may have additional
radio officers working for him, depending on the ship’s requirements. The officers
and their assistants (who are ratings who assist the officers) are affiliated with
engineering, but as they work closely with the navigators, the radio room is usually
nearer to the bridge than the engine room.
The chief radio officer (or chief communication officer) wears three gold and
green stripes, while the officers under him follow the same pattern as deck and
engineering officers. The symbol worn by those in the radio department is a radio
signal emblem.
This post is something of a holdover from the past, and is now fast vanishing.
Modern electronics mean that the technical job is more likely to be handled by
an electrical officer instead of a radio officer.
Medical Department. The principal medical officer (PMO) is supported by a

team whose size depends on the size of the onboard community. The PMO’s staff
includes medical officers (doctors) and frequently a few nurses, who are usually
recognized as officers. Some ships also employ orderlies, who are pulled from the
ratings. The largest cruise liners may keep physical therapists, dentists, and a med-
ical dispenser aboard. Some vessels even have morgues.
The medical officer can be identified by three gold and red stripes and the
department’s symbol, the caduceus (staff of Hermes). Besides being a necessity,
the medical staff can also generate revenue through the provision of specialty
services. For this reason, cruise companies place the medical team under the
management of the department of hotel services.
Entertainment Department. This department is led by the cruise director, who

is usually an experienced professional from the entertainment industry. Any en-
tertainment of guests and staff is managed through the entertainment department,
which means that it employs a wide variety of staff. Stage technicians, sound and
lighting crew, social hosts, dancers, comedians, actors, musicians, port lecturers,
S singers, guest lecturers, and children’s staff are just some examples of the enter-
N tainment employees of a typical vessel.
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MANAGING THE HOTEL DEPARTMENT 387
The cruise director is often assisted by the deputy cruise director, and is usu-
ally regarded as having authority equivalent to three stripes. The entertainment
department is linked by association with the department of hotel services.
Hotel Department. Although the number of people in this department is gov-

erned mostly by the size of the operation, the hotel department usually dominates
the others in terms of staff. This department is managed by a person with the title
of hotel manager, passenger services director (PSD), director of hotel services, or
executive purser. The term ‘‘purser’’ traditionally refers to an employee in charge
of finances, hence the root ‘‘purse.’’ Nevertheless, the term is used in different
ways on different cruise lines.
The senior officer responsible for hotel services wears four gold and white
stripes. The food and beverage manager, the executive chef, and the deputy purser
each wear three. The assistant food and beverage manager, accommodation man-
ager (housekeeper), senior assistant purser, and bar manager all wear two-and-a-
half stripes. The second purser wears two stripes, and all in the hotel department
wear the cloverleaf, which is its symbol.
Depending on the cruise brand and the particular passenger experience de-
sired, the hotel services department may resemble a contemporary on-shore hotel
or something more traditional and nautical.
MANAGING THE HOTEL DEPARTMENT10

The senior role of managing the hotel goes to the executive purser on lines where
tradition is deemed an essential selling point, and to the passenger services director
or the hotel director when adhering to tradition is unnecessary. Hotel services are
generally line managed by two or three senior managers, who may go by the title
of deputy purser. These managers usually focus on passenger services (including
accommodations), food and drink, and finance. Each deputy, in addition to these
tasks, leads a specific team. Some of these teams:
Food and drink, including chefs, bartenders, sommeliers, maı̂tres d’hôtel,

head waiters, stewards, and many more.
Passenger services, including accommodation administration, public area
supervisors, cabin stewards, butlers, laundry masters, etc.
Administration and personnel, including purser front offices, receptionists,
assistant administration manager, shore excursion manager, and more.
Additional areas, including florists, shops, print shops, art auctions, ad-
ministration stores, beauty centers, etc.
S Often duties are reassigned to junior staff members when it is strategically

N necessary.
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Quick Getaway 14.5

Working the Cruise
Cruise ships are like small floating cities, and between contracts.
like cities, there are thousands of jobs that need
to be done to keep the whole thing operating Positive factors of working on a cruise
smoothly. These thousands of jobs are filled by ship:
thousands of applicants, but most do not stay
on. In fact, cruise lines have very high em- Working on a cruise ship gives you the op-
ployee turnover levels, mostly because new portunity to travel the world and to meet
employees don’t understand what they are many interesting people.
signing up for! Although living and working on You usually work with a team of people
a liner seems romantic and exciting, in reality who are eager to help you learn to do your
it’s a lot of work. Fortunately, most cruise com- job well.
panies promote from within, so if you are look- Although you are working every day, there
ing for a career in cruising, starting at the are some opportunities to go ashore and
bottom is probably a good plan. So what are see the sights.
the pros and cons of a job aboard a cruise Free room and board, and you don’t have
ship? to pay any utility bills!
Negative factors of working on a cruise In addition, since you are working so
ship: much, you don’t have much opportunity to
spend your paycheck, so many employees
Do you get sea sick? Are you claustropho- are able to save money while working on a
bic or feel badly in small, confined spaces? ship.
If you answered yes to either of these ques- Cruise lines try to have a comfortable work
tions, then a cruise line job is probably not environment for their employees. Happy
for you. employees are effective employees!
You can forget the 40-hour week at sea. Source: Garrison, Linda. ‘‘Pros and Cons of Working
Most cruise ship employees are required to Onboard.’’ About.com—Cruises, accessed July 28,
sign a contract for four to six months, and 2006. http: / / cruises.about.com / cs / cruisejobs / a /
are expected to work seven days a week. cruisejobs.htm
All days off come at the end of the con-
tract. DISCUSSION QUESTION:
Employees are usually paid in U.S. dollars Would you consider taking a job on a cruise
while working, but do not receive any pay ship? Why or why not?
S
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MANAGING THE HOTEL DEPARTMENT 389
Providing food, drink, and accommodation is a very demanding task from a

human resource (HR) perspective, especially because the perceived quality of a
cruise depends so heavily on the performance of its waiters, sommeliers, stewards,
and other crew. On today’s megaliners, staffing can be an enormous challenge, as
the necessary crew can number more than 1,000 people. The patterns of contracts
and the obligations agreed to therein must be taken into consideration when hiring
new crew members, and any influx of untrained employees will dampen the ser-
vice level onboard as experienced employees devote some of their time to training
the newcomers.
In the galley, organization of members generally follows the more traditional
‘‘hotelerie’’-style lineup of chefs. The executive chef, who oversees the entire op-
eration, is supported by a small team of sous chefs who control the hot plate (also
known as the ‘‘hot press’’) where the service occurs in the galley. Depending on
the ship and its restaurants, the sous chefs may be required at satellite restaurants
as well. The different areas of the galley are controlled by their respective chefs
de partie, such as the butcher, sauce chef, grill chef, larder chef, fish chef, and
pastry chef, each with their own assistants. Additional members of the team may
include breakfast chefs and bell box chefs, the latter of which work to produce
room-service food from pantry galleys close to the cabins. Last but not least, the
chefs in charge of the messes (the term for the eating areas of officers and crew)
provide food for the cruise employees, a complex task in and of itself.
Restaurants on larger cruise ships make use of a supervising maı̂tre d’hôtel,
who oversees a team of restaurant managers. Within each restaurant, there’s a host
to coordinate seating and make guests feel welcome and head waiters to oversee
the waiters, who work with an assistant or ‘‘busboy’’ to serve between 16 and 18
covers. Large restaurants in particular often employ a head sommelier along with
a team of assistant sommeliers to serve alcoholic beverages. On the largest cruisers
there are frequently a variety of fast food outlets along with a buffet service area,
which is operated by a team of assistant buffet stewards overseen by head waiters
or assistant head waiters.
Bars onboard are handled by a bar manager who coordinates a multibar
operation, which can include the following: show bars, cocktail bars, dispense
bars, deck / pool bars, lounge bars, champagne and caviar bars, and crew bars.
Each bar is managed by bar supervisors who coordinate the bar stewards and their
assistants.
The food and beverage managers work with assistant pursers / managers in
order to coordinate operations. Stores managers deal with supply and demand,
receiving, storing, and issuing consumable goods to the various outlets around the
ship.
Managing Service
Reputation is one of the most important factors when it comes to a cruise’s new
and repeat business. It’s important to bear in mind that no matter what standards
S a brand may set, it’s the customer who ultimately sets the standard for what service
N is appropriate.
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Understandably, many cruise companies are eager to address customers’ con-

cerns and to improve service. However, there is often a massive gap between the
changes made in the boardroom and the service offered on a personal level.
Hazards such as unhappy employees, production problems, and unexpected itin-
erary changes can ruin the customer’s perceived service quality and reduce the
chances that that person will return.
Five elements must be consistently maintained without fail in order to provide
the best customer experience:
Officers, managers, crew, and staff must all be sufficiently trained

Employees should be instinctively customer-oriented in their thinking
Crew at every level should be empowered to solve customers’ problems
Employees should be aware of company standards
Employees should be capable of exceeding said standards
This can prove a daunting challenge, as employees nine months into their
contracts must be as dedicated and fresh as if they just arrived.
Customer service at sea presents serious challenges for a number of reasons.
First, on a luxury cruise, the ratio of staff to passengers is nearly one to one,
meaning that a greater percentage of staff will come into contact with the passen-
gers and therefore must be customer-focused. The passengers are often from a
variety of nations and backgrounds, which means that their expectations may vary
wildly. Also, contemporary customers can be demanding, as the rights of the cus-
tomer are highlighted and defended greatly in our culture, especially when it
comes to the benefits of complaining.
On the other hand, customer service at sea has many advantages. As a ship
is a confined environment, there is next to no risk of employees unexpectedly
quitting and disappearing. Bad performance is more difficult to hide from super-
visors, and because the passengers and crew are in close contact over a protracted
period of time, there are many more opportunities for crew members to turn the
passenger’s experience into something truly magical.
There remains one element that is especially worthy of consideration. On-
board a cruise ship, there are occupations that require much more labor than
others. Food service and food production are seen as examples of such high-labor
areas, especially when compared to their counterparts ashore. Part of the high
labor needed aboard the ship is a result of the desire for greater food diversity
and service quality, but cruise staff numbers are frequently affected by safety reg-
ulations as well.
The job of operations management in a cruise setting is to optimize passenger-
crew interactions. When a job does not require the personal touch, or when it’s
more efficient to set up a ‘‘self-service’’ option, operations management steps in.
One example is online booking and reservations, which can prevent long lines
and customer aggravation. However, the perception of care and contact should
not be diminished, and by designing specific interaction instances (such as a
S captain’s cocktail party or a welcome meeting), the crew’s perceived attention
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MANAGING FOOD AND BEVERAGE 391
level increases in the passenger’s mind without actually affecting operational de-
mands.
Levels of interaction between customer and crew can vary in a cruise ship.
The encounters can often be rather personal, such as the waiter-passenger inter-
action or the friendly contact between passengers and officers at a nightclub. Most
passengers view these personal encounters as very important to the quality of their
experience. However, it’s necessary to bear in mind that crew and officers need
time away from passengers in order to ‘‘recharge their batteries’’ and to remain
focused on customer needs during their shifts.
Role of Tipping
Tipping is an ancient practice, and any service personnel who are regularly in
contact with passengers are likely to be given tips of varying amounts. However,
it’s also an awkward practice that can lead to misunderstandings and embarrass-
ment. Therefore, cruise companies tend to regulate the practice, because no one
wants to feel awkward while on vacation—but employees don’t want to feel un-
appreciated, either.
Some cruise lines choose to enact a ‘‘no-tipping’’ policy, while others provide
a helpful brochure which suggests tipping in a very formulaic and orderly system.
Other lines automatically levy a daily service charge ($10 is not unusual) which
is then split among crew members according to a hierarchical system of division
(known as the ‘‘tronc’’). Another method to regulate tipping is to automatically
levy a 15 percent charge on every bar bill. The tip in this case isn’t mandatory;
rather, guests are told that they may act to remove the charge if they feel that it
truly isn’t warranted.
MANAGING FOOD AND BEVERAGE11

Few food and beverage operations are as demanding or as complex as those
aboard cruise ships. Still, when compared to its cost-cutting, deskilling, centralizing
counterpart ashore, the cruise ship restaurant veritably shines as a beacon of dis-
tinction.
Introduction
The first transatlantic liners were designed to be perfectly self-contained vessels.
Because they were away from ports for so long, they were essentially cargo carriers
in addition to passenger carriers. Oftentimes ships would drop anchor in a foreign
port, load up on indigenous goods, and then sail back to the home port in order
to distribute the goods among the fleet’s various ships. The storage areas in these
S ships were designed accordingly; for example, a ship that frequented Argentina
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for its fine steaks would have cavernous freezers and refrigerators located on the
lower decks, near loading areas.
Supplies and Services

Today’s cruise ships are different from their forebears. Unlike the heavy transatlan-
tic cruisers of the past, today’s ships are not designed to sail in difficult waters, so
instead as much space as possible is devoted to revenue-generating space, such
as passenger cabins and restaurants. Because the ship is designed to bring in profits
for the company, storage space is planned accordingly. For example, if the ship
is to be used primarily for ten-day cruises, there will be just enough storage for ten
days’ worth of supplies.
Unsurprisingly, managing the food and beverage supplies for an entire cruise
ship can be a highly specialized and difficult job. The acquisition process usually
starts at the head office with a consultation involving key professionals, both from
aboard the ship and onshore. Planning relies on analyzing prior consumption pat-
terns, planning menus for different types of passengers, forecasting needed quan-
tities, and identifying expected changes to routine. Contracts are then offered
based on the ability to supply, price, and quality. Because supplying large cruise
ships is a lucrative business, it’s attractive to suppliers; however, many suppliers
can’t meet the requirements for the contract tender.
Onboard, the head storekeeper or stores manager, often aided by an assistant
and an administrator, is in charge of managing supplies. Larger ships often have
a cellar master who is responsible for beverages. The head storekeeper, cellar
master, and their assistants report to the food and beverage manager (or the equiv-
alent), and they work in close contact with the bar manager and head chef. The
routine process of acquiring and storing goods usually begins upon arrival at the
port of departure. Oftentimes this is the home port, but it can also be a port that
has been chosen for the embarkation and disembarkation of passengers for many
cruises.
Before being loaded, goods are kept in a container on the dock that has been
sealed by the supplier. It’s also be checked out by the customs officer before the
arrival of the ship. Once the ship ties up and has been cleared by the port or
customs officials, supplies may be loaded. Forklifts and pallets are usually used to
load the goods onto the ship, although conveyor belts are sometimes employed
onboard. Loading usually occurs at doors located at the level of the quay, which
are frequently called ‘‘gun port doors,’’ which is the historical nautical term.
Stevedores supervise the dockside laborers who deliver supplies to the ship, and
onboard, general assistants are used to make sure that everything is stored in the
proper manner. Stores managers are responsible for checking item quality and
accuracy, for goods may be rejected if they do not meet the pre-set specifications.
Most cruise companies nowadays make use of a computerized stock manage-
ment system, which helps with the accurate control of goods. Using this computer-
based system, bartenders and chefs can make requisitions without using up
S valuable manpower or wasting time, and supplies on hand can be checked against
N the computer log to ensure that no discrepancies occur.
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MANAGING FACILITIES 393
Stores managers must take care that goods are stored and moved safely and
accurately. The large volume of supplies may make some workers feel compelled
to load quickly, but the store manager must ensure that workers load with care.
Workers should be considerate of their health and lift things safely, and items
should be handled in an appropriately safe and hygienic fashion. Goods should
also be loaded properly and restrained so that they do not get damaged or cause
accidents in the case of any sudden movement on the part of the ship, or in case
of storage area inadequacy. Perishable goods must be rotated so that waste is
minimized and to ensure that only the highest quality produce is supplied.
Prestige goods, such as caviar and vintage wine, must be treated with special
care and stored more securely than other goods. Items such as fresh produce may
be ripened in storage—for example, the supplier may be given specifications that
request near-ripe fruit instead of fully ripe fruit. Once requisitioned, items from
storage go to the next stage for preparation (galley, bar, bell box, etc.).
MANAGING FACILITIES12
One of the main challenges of operating a cruise ship can be dealing with space,
or rather the lack of it. Passengers bring aboard large quantities of luggage, and
moving and storing it all can pose daunting. Also difficult is helping passengers to
readjust their expectations; although most passengers acknowledge the difficulty
of dealing with space aboard a ship, they often arrive with unrealistic expectations
about the size, look, and feel of their cabin. Because cruise ships lack alternative
accommodations, it can be a challenge indeed to provide passengers with new
accommodations.
Yield Management
Yield management is defined by offering the proper type of inventory (in the case
of cruises, cabins / staterooms) at the correct price to maximize revenue. Yield
management is utilized by a number of industries to effectively manage the time
and selling strategy. The perishability of the product (a cruise cabin unsold on a
particular cruise can never be resold) drives the yield management policy. Gen-
erally, yield management is utilized when the organization in question has a fixed
capacity (like the cabins on a cruise ship), and when failure or success depends
on exactly how that capacity is used. Organizations like this generally have high
fixed costs; however, these are covered after a certain sales level is reached. Sales
in addition to this break-even point barely affect costs, but they have a large impact
on revenue.
Revenue and Costs. Because cruise companies are naturally investment-heavy

in terms of equipment, labor, and provisions, it is difficult to adjust the capacity
S of a ship once it is in service. Therefore, it is in the company’s best interest to sell
N inventory as rapidly as possible, because then they can:
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Understand the demand at an early stage and therefore decide on the op-
timum yield-maximizing strategy
Obtain early access to passenger’s money
Make relevant decisions to decrease demand-related time uncertainty
Since early sales clearly benefit the company, it is a wise strategy to encourage
early booking. Some initiatives used by cruise companies include free upgrades
for early bookers, time-constrained discounts, loyalty club membership (with ac-
cess to early notice of advance booking benefits), and other incentives such as
free transportation to port.
In order to make the vital decisions regarding yield management, the cruise
company must be aware of:
Historical booking patterns and demands

Which markets should be specifically targeted for different vacations
Knowledge of competitors’ pricing
Consumer buying behavior and market segments
It’s becoming increasingly possible for cruises to be overbooked. Cruises over-

book because there are always some customers who cancel at the last minute or
do not show up at departure, and overbooking ensures that the ship is at capacity.
However, if the ship remains overbooked at departure, the cruise line will find
itself with some unhappy customers. The overbooking policy is designed to deal
with this situation, and it details specific actions to be taken in case of overbook-
ing, such as offering the unhappy customers compensation.
Another element that should be considered when calculating possible yield
management is the multiplier effect. This effect suggests that revenue can be made
after the booking is already made, and therefore the yield management system
needs to concern itself with attracting sales once onboard. Of course, this model
depends heavily on what ‘‘package’’ is being offered. In recent years, the trend
has been to maximize occupancy through reduced prices while increasing yield
by combining volume sales of cruise-type vacations and increasing onboard rev-
enue.
Sales figures are representative of the number of lower berths that have been
sold. To increase occupancy and therefore revenue, many operators offer four-
berth cabins to family groups or single travelers who aren’t averse to sharing. In
combination with the policy of overbooking, this practice can generate occupancy
rates that are actually greater than 100 percent.
Accommodation
Because capacity may exceed 100 percent, accommodation management must be
extremely efficient, thorough, and above all, flexible. Inflexibility leads to the in-
ability to deal with accidents or onboard problems, which can cause passenger
S disillusionment and harm to the brand’s image. Most of the time, issues are dealt
N with by reception or the purser’s desk, but the ship’s manager / officer must be
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MANAGING FACILITIES 395
able to make accommodation decisions in a pinch. To do this, the officer must

be aware of the options, and he or she must know how to choose the best option
for both the customer and the company.
When the purser’s desk or reception settles a problem, communication is the
most important issue. The department must have accurate information regarding
cabins and passengers. This information, which is supplied by the sales office
ashore, is absolutely essential because it provides information about the passengers
that may help management more fully assess the issue. Additionally, it provides
data about surplus inventory that can be used in the case that a cabin change is
unavoidable.
Communication is also essential to the purser’s office in that the department
must not only be aware of the appropriate policy but it must be empowered to
act on it. Lastly, the manager must be able to communicate effectively with all
parties in order to seek advice or access information when necessary. For this
reason, a channel of continuous communication should be maintained between
the accommodation manager and the purser’s office. It’s critical that the infor-
mation database remain updated so that accurate passenger accounts or folios
can be generated, management can administer the accommodation department,
and passengers’ information can be quickly accessed for the convenience of port
authorities.
As for the accommodations themselves, the passenger is likely to scrutinize
them more heavily than any other area of the ship, simply because more time is
spent in the cabin than anywhere else. Therefore, clean and comfortable cabins
are essential to the cruise’s success in the eyes of its customers.
Although personnel who work in the accommodations department appear to
have similar jobs to hotel staff onshore, the work is really quite different, as the
ship’s employees have a higher profile and far more contact with the customer.
Therefore, it is imperative that the cabin steward leave a favorable impression on
the guest.
There is some overlap between the housekeeping department and other de-
partments on the ship. Even though housekeeping is in charge of general cleaning
duties such as cleansing and servicing rooms, providing laundry services and uni-
forms, and maintaining decorating standards, other departments typically handle
the more intensive cleaning and servicing tasks. For example, the housekeeping
staff doesn’t clean the galley—that duty is managed internally.
Servicing cabins requires a certain sort of employee because it is both phys-
ically demanding and detail-oriented. Cabin stewards serve a different number of
cabins depending on the type of ship, the type of cabin, and the type of passenger.
For example, on the Queen Mary 2, the most experienced stewards typically service
the high-end cabins, while less-experienced stewards handle the rest. On some
ships, stewards are required to provide room service duties, while on others they
do not have to. Generally, a steward handles 12 cabins, but that number can vary
as larger cabins take more time to service than their smaller counterparts.
One of the most important factors in the functioning of an efficient house-
S keeping department is the teamwork of its members. Although servicing cabins
N can be an independent activity, some tasks are better done with a partner. Addi-
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tionally, housekeeping staff members can assist each other when one of them is
tackling a particularly challenging cleaning task, and teams are usually better able
to handle large jobs like cleansing common areas.
A word on the laundry: it is very important for the proper functioning of the
cruise ship that its laundry department performs flawlessly. The laundry is under
the direction of the laundry master, who is supported by a team.
Environment
Traditionally, the hospitality industry has not been terribly environmentally
friendly, and cruise ships can be included in this statement. The industry as a
whole uses immense volumes of energy, water, consumer goods, and rare luxury
items while seemingly ignoring the environmental consequences of its consumer-
driven product.
Cruises in particular must take care that they are operating in a more ecolog-
ically friendly manner, simply because they operate in the ocean. Waste manage-
ment especially must be carefully planned. Cruise companies should bear in mind
that, to an extent, they can help control both the ‘‘upstream’’ and ‘‘downstream’’
waste; that is, they can contribute by demanding that their suppliers operate in an
environmentally conscious manner, and the cruise company can educate its cus-
tomers about their ecological impact.
HEALTH, SAFETY, AND SECURITY13

Cruise brands are careful to cultivate the image that a cruise is the utopian vacation
experience: no worries, no stress, and no danger. However, like most travel, cruis-
ing has its share of peril. Onboard diseases, such as the norovirus, tend to garner
a lot of media attention, but they are in no way the only threats. Security is also
a significant concern, especially because cruises have recently begun marketing
themselves as a very secure vacation option.
Naturally, health, safety, and security are extremely complicated subjects, and
this issue is complicated further by the fact that many ship security procedures are
understandably confidential. However, some procedures are almost universal. Al-
though this section covers the basics of onboard security, additional research is
recommended to fully comprehend the issue.
Centers for Disease Control

In the 1970s, the U.S. Health Service’s Centers for Disease Control and Protection
(CDC) introduced the vessel sanitation program (VSP) as a reaction to several
severe disease outbreaks aboard cruise ships. The VSP, which focuses mostly on
S gastrointestinal disease, has experienced a great deal of success. Over time, as the
N cruise industry’s relationship with the CDC has matured, the role of the latter has
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HEALTH, SAFETY, AND SECURITY 397
evolved in the direction of assisting and training. However, the agency remains a
powerful force in regulation and control.
The CDC is primarily known for its 100-point vessel sanitation inspections.
Vessels that score 86 or more points are considered sanitary, while those who do
not score highly enough are declared unsatisfactory and are given 30 to 45 days
in which to improve before re-inspection. Although the ships with lower scores
have lower levels of sanitation, the low score does not necessarily mean that the
ship’s passengers are at immediate risk of contracting gastrointestinal illness (GI).
However, the CDC states that since the inception of the VSP, there have been
fewer disease outbreaks aboard cruise ships—even though the number of passen-
gers carried has significantly increased.
The VSP functions by undertaking specifically targeted surveys in order to
identify possible GI-related problems. If 2 percent or more of crew and / or passen-
gers aboard the ship report GI-type symptoms, the attention of the VSP is triggered.
However, an investigation may also be initiated if an unusual GI pattern emerges,
even if less than 2 percent of the people aboard report symptoms. The first and
perhaps most essential part of the process consists of keeping accurate records of
anyone who has reported GI symptoms or has requested medication to treat di-
arrhea. If any of the data shows cause for concern, the VSP would kick into action,
analyzing the risk of an outbreak, reviewing onboard practices, identifying infec-
tious agents (if possible), developing a control and prevention program, and eval-
uating the response once implemented. In essence, the VSP acts to identify and
deal with disease-related problems and to insure that they do not reoccur.
When a new vessel is in the planning or construction stages, the CDC can
assist the designers so that the finished vessel is optimally suited for meeting public
health standards. Such things as the correct location of hand-washing facilities, the
proper design of food storage and preparation areas, and the installation of effi-
cient food-storage temperature control mechanisms are all elements that the CDC
prefers to assist with. At the CDC’s facilities in Florida, training classes are offered
for cruise staff that detail the existing standards and the how and why of enforcing
them. The training program covers the following: water sanitation, food safety,
employee practices and hygiene, general cleanliness, safe repair practices, con-
tamination prevention, and vector control (a vector is any rodent, insect, or ar-
thropod that is capable of hosting or transmitting disease-causing elements to
humans).
Sanitation Program Inspection

Vessels that have a foreign itinerary, carry more than 13 people, and call into the
United States must undergo a twice-yearly environmental health inspection as per
the orders of the CDC. The VSP operations manual (which was revised in 2005 to
account for changes in technology, hygiene, and disease-causing agents) includes
the details of the required inspection. Aside from aiding the CDC with its inspection
S procedures, the VSP manual also help to educate ship operators and crew. The
N following are some points, summarized from the manual:
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Water: drinking water is referred to as potable water. Pumping water

aboard the ship from the shore is a process known as bunkering (the
same term can be applied to pumping fuel aboard). Drinking water must
meet the standard of the World Health Organization. To ensure this, wa-
ter should be sampled every 30 days or less to check for microbes. The
ship should retain records of the microbial reports for 12 months after
testing. Water should not be produced on the ship (through distillation,
reverse osmosis, or other methods) while the ship is at anchor, in a har-
bor, or in polluted waters.
Swimming pools: flow-through seawater swimming pools may only oper-
ate once the ship is under way and at least 12 kilometers from land. The
pool must be drained prior to arriving at the port and must stay empty
while in port; however, in some cases it may be permissible for the pool
to remain filled, as long as the filling system can be disconnected and
the pool remains properly filtered and halogenated. The water must pass
safety tests before guests can be allowed to swim, and recirculating pools
must be filtered as per the instructions of the filtration manufacturer. The
quality of the water must be monitored, and it must always exceed the
minimum expectations. The water in whirlpools must be filtered, with fil-
ters inspected frequently and changed twice yearly. Whirlpool water must
be changed daily, and all pools must have safety signs and depth mark-
ings prominently displayed. The temperature in the whirlpool must not
exceed 40⬚C, and the pool area should be adequately supplied with
safety equipment. Babies, young children, children wearing diapers, and
children who are not toilet-trained may not enter any of the pools.
Food safety: the person responsible for food safety and food production
on board must be sufficiently knowledgeable about the prevention of
food-borne diseases, Hazard Analysis Critical Control Point (HACCP) prin-
ciples, and the food safety guidelines of the VSP. Observing the individ-
ual’s practices while onboard, as well as his or her ability to answer
questions satisfactorily, may be considered sufficient evidence of profi-
ciency. Also considered acceptable: appropriate certification from the
United States or overseas.
Managers must ensure that their staff adopts hygienic and safe practices as
outlined in the manual. Generally, food must be unadulterated, safe, and sourced
adequately. Foods that may be hazardous must be received at an appropriate
temperature (7⬚C or less). Edible supplies must be stored in clean, dry locations,
at least 15 cm above the level of the deck. Food must not be stored in places such
as toilets, dressing rooms, locker rooms, garbage rooms, open stairwells, and me-
chanical rooms. Even food on display must be protected from contamination.
Safety
S After the terrorist attacks of September 11, 2001, terrorism has become an increas-
N ing concern for travelers, especially travelers from the wealthier parts of the world.
L Border security and vigilance has increased around the world in the past few years,
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HEALTH, SAFETY, AND SECURITY 399
With so many people on a cruise ship, sanitation practices are imperative.

Courtesy Digital Vision
which has actually helped the cruise industry, which is able to capitalize on flex-
ible itinerary planning (a necessity as the risk level in different regions of the world
fluctuates). There are a few downsides to the increase in security: more bureauc-
racy, longer lines for passengers and crew to wait in, less privacy, increased costs,
and a higher level of complexity when planning. Fortunately, cruise passengers
have been very understanding and accommodating as security procedures change,
as they see the hassles as a necessary evil.
Shipping security standards in the last decade have truly raised the bar for the
safe operation of all vessels. In December 2002, representatives from 108 govern-
ments—along with observers from the International Maritime Organization
(IMO)—gathered at a conference with the intent of strengthening maritime secu-
rity. The goal was specifically to prevent and suppress terrorist attacks against
shipping, and by the end of the conference, a set of measures was agreed upon
by all. The code resulting from this decision was added as an amendment to the
Safety of Life at Sea (SOLAS) agreement, and is known as the International Ship
and Port Facility Security (ISPS). ISPS defines specific security requirements for
S port authorities, governments, and shipping companies in a mandatory section.
N The second, non-mandatory section provides a series of guidelines designed to
L help the aforementioned parties meet the standards of the first section.
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Originally, the target date for full ISPS compliance was July 1, 2004. Not all
contracting states met the deadline, but the majority did. For a ship that visits a
non-ISPS-complying port, the implications can be serious upon reaching an ISPS-
participatory port—from a security point of view, the ship may be viewed as con-
taminated. For the ship, this could result in additional security measures or (in the
worst case) refusal of entry.
It is up to the contracting government to set the risk level appropriate for a
particular port facility or for an arriving ship. The levels are designed to be easily
understood by all parties—a low-probability hazard is a low risk, and a high-
probability hazard is a high risk.
Both the port and the ship are responsible for controlling and monitoring
access, ensuring that security communications are readily available, and monitor-
ing the activity of both cargo and people. The ship’s master is kept apprised of
security concerns by the Ship’s Security Officer (SSO); this fact highlights that the
ship’s master is ultimately the one responsible for the security of the vessel. How-
ever, the SSO tackles more mundane security concerns with the aid of a team of
security professionals, who are often sourced from the police or the armed forces.
For additional security, ships are required to establish a special security alert com-
munication system that once activated from the bridge (or another location on-
board) sends out an alert—without any alarm sounding on board the ship. Ships
are also required to carry an International Ship Security Certificate at all times.
In an interesting twist, not all ports have decided to sign onto ISPS. For ex-
ample, Porto Cervo on the island of Sardinia has refused, becoming the first Italian
port to do so. This decision has effectively removed the port from being a cruise
destination. Some have suggested that Porto Cervo refused ISPS in order to retain
its exclusivity.
Interestingly, security equipment such as X-ray machines and scanners are not
as effective at preventing security issues as is creating a ‘‘security philosophy and
mindset’’ among the staff, crew, and officers. This observation suggests that human
observation and deduction are extremely useful tools, and that relying too much
on automated sensors can be dangerous.
MANAGING THE OPERATION14

Managing an operation as complex and self-contained as a cruise ship can be a
daunting task. One key to successful management is understanding the attitudes
and behaviors of the crew—that is, knowing the employees. The following infor-
mation is taken from the results of a research project undertaken in order to plan
for work placements or graduate internships aboard cruise ships (because of the
nature of the project, most of the time was spent on interviewing junior and assis-
tant pursers or managers).
S Originally, the case subjects were attracted to working aboard a cruise ship
N for a variety of reasons. The glamour associated with working in a luxury environ-
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ment, the ability to travel all over the world, the desirable income, and the lifestyle
associated with working on a cruise ship were the primary factors. Interestingly,
few subjects stated simplistic reasons for wanting to work onboard; in fact, the
answers were all surprisingly complex and individualized.
Over time, the subjects’ reasons for staying aboard changed from the reasons
that first attracted them. The social aspect is the number one reason why crew
members choose to continue living the cruise lifestyle: the community on board
becomes very important to them. Working at sea creates a strong social context
that, for whatever reason, becomes increasingly important to cruise employees.
On the research project’s ship, the crew turned out to be far more diverse
than initially expected. Fifty-four different nationalities were represented, the male-
female ratio was 2⬊1, and the average age of the crew was in the early 30s. Despite
its diverse nature, the crew’s interactions were very harmonious, with disputes and
personal grievances very rarely posing an issue. The subjects of the project em-
phasized the agreeable nature of the onboard community, citing it as proof that
diversity is not an obstacle to peaceful coexistence.
The community apparently operated at a number of levels. At the professional
level, individuals took on their role and worked with passengers, supervisors, sub-
ordinates, and managers. Subjects typically enhanced their professional skills
through training sessions, supervisor feedback, observations of colleagues, and
practice. Throughout the research study, there was a sense that the professional
environment had been changed by the advent of electronic communications such
as e-mail and the Internet, since these new methods of communication made the
ship less isolated (and more prone to external observation) than it had been in
years past.
The subjects of the study viewed their ship as more than a vessel on which
they were employed; for them, the ship was more like a village or town. Employees
expressed a sense of ownership and pride in their ship, saying things like ‘‘it’s the
best ship to be on, or at least better than any other.’’
The crew’s lives onboard were divided into two main segments: on duty and
off duty. Some personnel had special privileges, in that there was some time al-
lowed for socialization while in uniform. Put another way, they were still consid-
ered on duty, but in a more laid-back mode. Generally, staff, crew, and officers
were not allowed in passenger areas of the ship while out of uniform, but in some
cases simply wearing a name badge was considered acceptable. Working hours
were rather long, which is consistent with the operation and its need to provide
continuous service.
The manner in which managers managed directly affected the functioning of
the professional community. On a somewhat subjective level, the ‘‘mood’’ on the
ship was a product of the crew’s professional communication style, which was
patterned after the practices of their lead managers. Although managers set stan-
dards about how to communicate and how to treat members of their teams, they
appeared to conform to their own norms. Also, there was evidence of two-way
learning; while junior crew members learned from their superiors and peers, their
S superiors were learning from them. It was suggested that individuals onboard were
N very sensitive to cultural differences, and as a coping mechanism, most chose to
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subsume deeply entrenched cultural beliefs in favor of maintaining a harmonious

work environment.
Patterns of off-duty social behavior showed specific structure. Generally social
alliances and networks were formed along national, hierarchical, or cultural sim-
ilarities. The previously mentioned tensions, infrequent as they were, were often
the result of someone crossing what seemed to be territorial boundaries. Also of
note was the fact that early contacts, formed when an individual first joined the
ship, were very important for helping the new crewmember settle in and orient
him- or herself.
Among the subjects, there was a sense that the ship’s community was very
self-aware. This self-awareness was the key to maintaining harmony, because al-
though the hierarchy onboard was understood, it was not very strict—on American
cruises, the nautical is generally subsumed in favor of the vocational. Naturally,
rules and regulations were necessary for establishing societal parameters, but the
ship operated effectively because the rules had been internalized. The crew had
a collective desire to ensure that each individual’s personal and professional needs
were being met, because they all understood that they were being paid to do a
job that, if not performed successfully, would disappear. Therefore, it was in every
employee’s best interests to help maintain a harmonious environment. Those who
didn’t comply or who caused a disturbance were very quickly identified and re-
patriated. The ship seemed to be an excellent model of a self-regulating popula-
tion.
Since there were twice as many males as females aboard, there were some
expected issues which are nevertheless worth noting. Any new female employee
quickly found herself the subject of a great deal of male attention, which was
described as alternately exasperating, annoying, flattering, or irritating. Female sub-
jects enumerated a number of techniques they used to ward off unwanted atten-
tion, and they said that after a while, the advances became much less of an issue.
It was not unusual for couples to work aboard, either married or in very close
partnerships. The cruise line was described as being good about meeting the needs
of the couples and arranging cabins. Overall, social conditions were described
favorably—although crew are not allowed in passenger areas when they are not
working, they find the crew areas very pleasant and they enjoy spending time with
their friends.
Subjects also spoke of the speed with which they re-accustomed themselves
to shipboard life after a period of leave. Because of the nature of employment and
contractual patterns, employees inevitably met people they had worked with be-
fore, and friendships were easy to re-establish. The social environment on board
the vessel was often described in a manner similar to that of a college campus,
where individuals work and live in an environment with high communication and
interaction levels. It’s harder for individuals to become isolated, and in such a
small community, problems are impossible to ignore. The success of the profes-
sional community was seen as a direct result of the success of the social com-
munity.
S Although the social communities aboard different ships share some qualities,
N there was a firm belief among subjects that each ship is unique. This is essentially
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CRUISE DESTINATIONS 403
true, since the social atmosphere in each individual ship relies on the people who
populate it on any given cruise.
CRUISE DESTINATIONS
Introduction15
For cruises from the U.S., the most important cruise destinations are Alaska, the
Caribbean, and the Mexican Riviera. Seventy percent of U.S. cruisers visit these
locations, and the majority of cruises to the Mexican Riviera and the Caribbean
leave from Florida.
Cruising’s popularity in the Caribbean is based on several factors: warm water
temperature, the ability to visit a number of varied ports, smooth sailing conditions,
and Miami International Airport’s ability to provide customer access.
The popularity of cruising in the Caribbean has grown since the 1978 U.S.
deregulation of airlines, which allows cruise operators to offer joint cruise-airfare
packages.
Cruises to the Mediterranean are dominated by Germany and the United King-
dom. The industry is operated in a very different way in each country, however.
In Germany tour operators dominate the booking market, while in the U.K. tour
operators are challenged by selling such a sophisticated travel product through
retail travel agents.
Despite cruising’s popularity in regions such as the Caribbean and the Medi-
terranean, smaller cruises to less typical vacation spots (the Great Lakes, the Eng-
lish Channel) have gained in popularity. These smaller cruises often serve the
double purpose of luxury and transportation, acting as ferries between two points.
Definition16
At first glance, ‘‘cruise destination’’ seems like a fairly easy term to describe. In
reality it’s a fairly complex idea, especially in the cruise industry.
As the cruise industry has grown, so has its ships. Today’s ships are more like
floating luxury resorts than a means of transportation, so it’s safe to say that the
cruise ship itself can be interpreted as the destination. For many travelers, the lure
of foreign travel is the main draw of a cruise vacation, so for them the cruise ship
is not the ultimate destination. Rather, it plays an important role in connecting the
generating region (the place the tourist is from) and the tour destination regions.
In fact, over the course of the cruise the ship functions as a center for interpreta-
tion—a safe, secure haven from which to plan, sample, and engage in new ex-
periences.
Some passengers prefer the familiarity of the ship, and will choose to stay
S aboard during a port day. These cruisers choose to experience the new destination
N as filtered through the experience onboard the ship. Even though they don’t go
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ashore, they learn about the destination from others, and this information travels
back with them when they return to the generating region.
Those who prefer staying on the ship to visiting new destinations may be
interested in those companies that are experimenting with selling cruises to no-
where.
Port of Call
Ports of call, or destinations, offer a mix of elements that attract and entertain
customers. Because cruise companies rely so heavily on customer satisfaction, at
the end of the cruise passengers are encouraged to fill out a survey that rates their
experience.
This feedback indicates that passengers prefer a port to be culturally stimu-
lating, non-threatening, interesting, accessible, friendly, and user-friendly. In reality,
few ports fulfill all of these wishes, so cruise ships simply seek the best-fit ports.
Compromise, and the difference between expectation and reality, can often lead
to positive reflection.
The ports themselves obtain significant income from the presence of the
cruise, and popular destinations are known for selling themselves very aggressively
in the hopes of attracting more cruise tourism.
Destination Evaluation. Many methods can be used to measure the value of a
port. For an experienced cruise brand, building on experience and basing deci-
sions on the so-called ‘‘reliability factor’’ of a port can reap huge rewards. This
reliability factor refers to the cruise company’s past experiences with the port in
question—the more a cruise visits a particular port, the more knowledge is gained
about that port. Relationships are formed between the cruise employees and port
officials, agents, tourist organizations, contractors, and of course the local popu-
lation.
Often, a broad group of stakeholders are invited to help compose the cruise’s
itinerary. The itinerary-composing team generally includes sales teams, captains,
and passengers. World events and passenger survey results help to advise the team.
Itinerary planning is frequently approached in an eclectic fashion, for many rea-
sons. Clients’ wants and needs change frequently, and cruises try to accommodate
passengers with special requests, such as those clients with a fear of flying. New
ports are added to the itinerary so the cruise is not seen as boring and staid; new
programs, land-based activities, and cruise-and-stay options are added; and
passenger-expectation related details are incorporated to the new itinerary. The
length of the cruise and the level of luxury may be adjusted as per passenger
request.
Tendering—ferrying passengers from ship to shore through use of the ship’s
tenders—is just one of the practical matters that may cause problems with an
itinerary. Tendering can be unpopular among passengers for a variety of reasons.
For some, it means that they spend more time in a boat and less time on shore,
and for others, the experience of riding in a smaller vessel is alarming. However,
S tendering is popular among other passengers for similar reasons. These customers
N enjoy moving from the massive cruise ship to a more human-scale vessel, which
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can create excitement about the destination. Traveling by tender also offers a
different perspective of the port (outbound) and the cruise ship (inbound).
Care should be taken when planning which ports to visit and how to visit
them. Some ports have a reputation for their dealings with cruise ships. Reportedly,
some ports raise their port costs with no prior notice, while others levy costly
landing taxes that may include a charge for the use of tugs, which are more
compulsory than necessary.
Destination analysis is most frequently used by cruise companies for strategic
purposes, in order to further long-term corporate goals through creating a distinct,
sustainable competitive advantage through itinerary planning. Approaching desti-
nation analysis from this angle is slightly more scientific, as it involves analyzing
research data and identifying the destination’s appropriateness for the target mar-
ket. Destination analysis is as useful for planning in the medium term as it is for
the long term, as it can inform tactical decisions based on emerging risks or height-
ened threats.
Analysis originates in different areas, coming from tourist agencies, cruise op-
erators, tour operators, and others. When considering the source of a destination’s
analysis, it can be said that it originated either internally or externally. Internal
analyses highlights the strengths, weaknesses, and ‘‘core competencies’’ (the dis-
tinctive qualities that a company prides itself on). An internal analysis also inves-
tigates financial aspects and both tangible and intangible resources, such as skills,
brand names, buildings, and / or stock. External analyses focus more on the view
from outside the area in question, but they are still important to the overall eval-
uation, as they can perceive threats and opportunities that an internal analysis
might miss.
Overall, an analysis of a destination can consider sociological variables as
well as business issues. Analyses which primarily focus on the sociology of the
destination can provide valuable and insightful information, but they can also be
somewhat esoteric. A business evaluation, on the other hand, focuses more clearly
on profitable opportunities and defined threats to commerce in a pragmatic
manner.
Itinerary17
Cruise providers aim to create itineraries that maintain the cruise experience and
ensure its continued quality, even while ashore. Although many cruise brands
attempt to break the mold when they design their itineraries, most cruises conform
to the following criteria:
They leave from a port of embarkation and they return to a port of dis-
embarkation, which may or may not be the same port.
They last for 7, 10, or 14 days. This corresponds to customer expectations
and availability.
Some cruises are cyclical (they repeat the itinerary for a defined period
S of time) or bi-cyclical (they alternate between two co-located programs
N over a set period).
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The ship is generally designed to hold only enough supplies for the dura-
tion of one cruise pattern.
The itinerary may be designed to allow for a port arrival time in the
morning and a departure in the mid- to late afternoon.
Cruises may plan to stop at ports where they can receive fuel (known as
‘‘bunkers’’), supplies, and stores; offload waste from trash compactors
and rubbish collection; and access technical support services.
Cruises generally minimize the number of days at sea and maximize days
spent in port.
Port costs are carefully examined to insure a favorable cost-benefit ratio.
Ports of arrival and departure are chosen with special consideration for
their infrastructure as regards onward travel, terminal facilities, and
security.
Additionally, some cruise companies choose to define their lines by offering

distinct itineraries which may include:
Exotic, seldom-visited ports; ports with more complex procedures; and

ports frequented by fewer people.
Schedules that may include short break or ‘‘taster’’ cruises, cruises with-
out specific destinations, sector cruises (may be constructed from a
world cruise), unique cruising (with different itineraries for each cruise),
or world cruising (including circumnavigation of the globe).
Ports that can provide locations and connections for tours and cruise
vacations.
Some itinerary-planning issues are more critical than others. For example, bor-
der and passport control, documentation, and immigration can cause huge head-
aches for the cruise operator if they are not carefully considered beforehand. Also
important to the itinerary-planning process is the issue of disease. Some countries
may have a greater prevalence of water- or insect-borne disease. Immunization
can help as a preventative agent, but customers should be informed of the poten-
tial health risks even if they are immunized. Cruise companies generally advise
their customers to visit a doctor before leaving on the cruise, and to ask the med-
ical professional any additional questions they may have regarding potential health
threats. As for ports where the water may be unsafe to drink, passengers should
be advised to buy bottled water and avoid foods which may have been washed.
Some ports are inaccessible to cruise ships because they are too shallow.
These ports are declared ‘‘boat ports’’ because the passengers will have to travel
in the ship’s smaller boats, or tenders, in order to reach the shore. The cruise ship
itself will anchor safely offshore. Without exception, visiting boat ports reduces the
amount of time that passengers are able to spend onshore, and they pose the
additional requirement of setting up a control point where cruise personnel can
coordinate the arrival and return process.
S As stated earlier, returning to a specific port time after time is beneficial in
N that the cruise company creates contacts in the area that can help smooth the
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whole docking experience. Generally, cruise ships use a port agent (an onshore
agent who acts on behalf of the cruise) to facilitate bureaucratic and logistical
transactions.
Familiarity with the port is also good for the cruise’s customer service. Crew
who know the area can recommend sights to see and tour operators. Often, the
town center is far from the actual port, so the cruise may need to arrange for
transport for passengers so they can more readily reach local points of interest.
Regulations Often, a destination nation’s tourism policies can mean that the cruise and its
passengers will have to deal with a great deal of regulation upon arrival. Cruise
companies specialize in the recreational transfer of people, goods, and capital,
and because of this, they may experience issues pertaining to visa and passport
controls, financial exchange, customs, and the passage of passengers as they arrive
to and depart from a particular destination.
A ship approaches a foreign port. Before any passengers may disembark, the
ship must be cleared for arrival by the port authorities. The process will likely
involve the ship presenting a declaration about the passengers, goods, and crew
on board along with information concerning the itinerary of the cruise. Any goods
and passengers permanently transferring from ship to shore or vice versa will be
noted as a part of the routine. Depending on the country, port officials may inspect
the vessel for sanitation and hygiene. In recent years, ports have increasingly begun
requesting declarations confirming that no health risks are aboard and that the
vessel poses no security risk.
Due to heightened security in the face of terrorist activity and health threats
such as SARS, cruise ships and the travelers they carry are subject to increased
security measures. Cruise ships in U.S. ports must submit to the following measures:
Screening of all passenger baggage including carry-ons

More thorough inspections of passenger lists and passenger identities
Restricted access to sensitive terminal or vessel areas
Strict measures designed to prevent illegal activity and unauthorized entry
Notice must be given to the U.S. Coast Guard 96 hours before entering
U.S. ports, and crew and passenger identification information must be
submitted to the proper federal authorities
Coast Guard establishes security zones around cruise ships
Different challenges await in Europe. In 1985, an agreement known as the

‘‘Schengen Treaty’’ was introduced. The Schengen Treaty facilitates the passage of
citizens between the 15 member states (Austria, Belgium, Denmark, Finland,
France, Germany, Iceland, Italy, Greece, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden). This affects cruises because while some of their passen-
gers may not need to pass through border controls, passengers from non–Schengen
Treaty member nations will have to do so.
S Health regulations (discussed earlier in the chapter) may result in a visit from
N officials who will inspect the ship for safe and hygienic practices. Unsurprisingly,
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the galley is often the focus of such investigations, as an unsafe galley can be a
far greater health risk than an unclean ballroom.
Logistics Logistical planning focuses on a number of different areas. Supplies and services
must be procured, schedules must be planned, and efficiency must be maxi-
mized—even when dealing with large numbers of people.
When planning schedules, fuel consumption must be kept in mind. Cruise
ships are usually capable of speeds up to 25 knots. At 25 knots, the ship consumes
more fuel, but it can travel a greater distance.
Itineraries are planned so that:
Fuel is consumed at an economically optimal rate

Arrival times and departure times conform to the schedule
Destinations are mixed appropriately to fulfill customer needs
Regulations are adequately met
For a seven-day itinerary, cruises generally include four to five ports of call.
On a longer 14-day itinerary, eight to ten ports are the norm. As the industry grows
larger, there is an increasing need to incorporate new embarkation ports in order
to access new markets.
Shore Cruise companies offer their customers shore excursions for many reasons. Without
Excursions18 a doubt, these activities provide the company with a source of revenue, but they
also add to the vacation experience as a whole. Offering passengers a pre-planned
tour only reinforces the ‘‘no-hassles’’ vacation image that cruises want to sell. Tours
are fairly easy to organize, they are relatively safe, and they offer guests the op-
portunity to engage in a novel activity or to interact with a different culture. Guests
who would otherwise feel uneasy about venturing ashore feel safer with a tour
guide as their chaperone / mentor.
Because shore excursions are entirely optional, sales and marketing are es-
sential to establishing a successful shore excursion program. While some excur-
sions are sold to passengers once they are onboard, many are sold before the
cruise even arrives at the port of embarkation. The cruise brochure is an ideal
place to promote guided tours; even if the customer does not purchase one with
the cruise ticket, he or she becomes aware of the possibility.
Even though selling shore excursions is in the best interests of the company,
care has to be taken that the sales technique is not overbearing. A high-pressure
sales pitch is unlikely to have any success in the social, community-oriented cruise
environment, but a subtle sales approach may do the trick.
Elements. Shore excursions should be designed with the port’s attractive ele-
ments in mind. What about the destination draws passengers’ interest? The most
successful tours are likely to capitalize on not only the interests of the passenger,
S but on the interests of different groups of passengers (elderly, young, single, etc.).
N Arranging different tours for different interest groups will likely meet with greater
L enthusiasm than will a single one-size-fits-all tour.
MILL (Wiley)
The shore excursion must fulfill certain requirements: it must enhance the
cruise brand, fit the ship’s itinerary, and meet the expectations of the ship and its
passengers. At the same time, the tour operator on shore must assure passengers’
safety, health, and security.
Again, the benefits of returning to the same port affect shore excursions. Good
relationships with tour operators on shore will benefit the cruise in the long run,
as will paying attention to which tours are the most popular with passengers.
Promotion. As stated above, the cruise brochure is the first place where the
company markets shore excursions to its customers. In the itinerary, emphasis is
placed on interesting things to do and see once on shore at the ports of call. These
components are frequently highlighted in the available tours. Some brochures cau-
tion travelers that tours are the best way to experience a new location with minimal
risk, and follow that warning up with instructions for booking tours before joining
the ship. This message almost invariably advises the customer to book as soon as
possible in order to avoid the disappointment of not reserving a slot.
When cruise tickets are sent to the passenger, another shore excursion bro-
chure is included. This brochure is the primary vehicle for promoting sales right
before departure and during the cruise. It must be carefully worded, in order to
form a bond of trust and intellectual camaraderie with its reader.
Almost every cruise company today maintains a website, which is used pri-
marily for marketing and distribution purposes. Customers can use the site to make
bookings, find out more, make comparisons, communicate with the company, and
(in some cases) communicate with passengers. The website, when used properly,
can be a powerful tool for promoting shore excursions.
The itinerary of the ship and the tour on shore can affect sales, as many tours
need to know how many people to expect ahead of time. On board the cruise,
there are many vehicles for selling tours: advertisements in the ship’s newsletter,
on the ship’s television program (if one exists), direct sales, promotions held near
the tour office, and connections made by the port lecturers can all be a part of
the marketing plan. However, nothing beats a strong performance at the first port
of call, as additional sales may be generated through word-of-mouth.
Most passengers realize that the most efficient, safest way to see the sights at
the port of call is through the cruise’s tours. Tours offered through the cruise line
imply a guaranteed experience—for example, if the tour is delayed or cancelled,
the passenger knows that he or she can expect some form of compensation, some-
thing that would probably not happen in a non-cruise tour. Because the ship often
arrives in port at 8:00 a.m. and departs by 5:00 p.m., there exists the possibility of
selling both whole- and half-day tours. These may appeal to passengers who would
like the convenience of a cruise-affiliated tour, but who would also like to explore
on their own.
The following are drivers for tour sales:
Security aspect
S Best choice promotion
N Scarcity value
L Natural choice option
MILL (Wiley)
Tour Design. Without a cohesive plan, a tour is likely to fail. The following sec-
tion details the different areas of planning that need to occur for a successful tour.
Tours are designed to have both a minimum and maximum number. Upon
leaving port, the shore excursion office would have an exact tally of the numbers
sold and the remaining quantity. The shore excursion team would then be briefed
on the tour content, the tours that are likely to become oversubscribed, any special
features, the best alternatives to overbooked tours, and tours that might best suit
particular groups of passengers (such as those with walking difficulties). Passengers
often like to talk to a member of the shore excursion team to get a better idea of
the types of tours offered, and it helps if the shore excursion team has experience
with a wide variety of tours.
Port lecturers play a huge part in the shore excursion process. They work with
the shore excursion office by helping passengers understand the content of differ-
ent tours, and they often participate as guides while ashore. The lecturers help
with the feedback process as well, telling the shore excursion manager about their
experience and that of the passengers.
Roughly a day before arriving, the shore excursion manager will be in contact
with the tour operators in order to inform them of final numbers. Before the cruise
ship even sails, the tour operators have an idea of how many people to expect.
When the shore excursion manager gets in touch with the tour manager, the latter
will inform the former if any last-minute sales can be made.
If a tour attracts little attention, it’s up to the shore excursion manager to
decide whether the cost-benefit ratio favors canceling the tour. If a tour does not
meet minimum sales early on, last minute sales might cancel the loss.
Sales of tours generate a receipt and a ticket for the customer. Tickets that
include the name of the passenger are preferable, because they offer additional
security in the event that they are lost. Advice about dietary requirements and
recommended wear (walking shoes, long-sleeved clothing, clothing appropriate
for the region’s religion) should be communicated at the time of the ticket’s sale.
Customarily, after a ship has arrived at port, followed due process, and
docked, the shore excursion personnel are among the first to disembark. They
must contact tour operators, ensure that everything is operating on schedule, and
help to coordinate the disembarkation of passengers—a tricky operation. Passen-
gers must leave the ship in an organized fashion, and those who bought tours must
find their way to the right place at the right time.
Passengers are usually instructed to meet at an area near the disembarkation
point, where they receive color-coded adhesive badges. The ship’s staff remains
in radio communication, which allows them to assist disembarkation and coor-
dinate the tours. Most cruise companies encourage their employees to attend tours
and act as escorts. This ensures that a representative of the company accompanies
the tour—the crewmember can act on behalf of the company, and upon returning,
can report as to the quality of the tour. Escorts are usually fully briefed before
going ashore and are given a specific checklist. Tours are marked by clear, visual
codes based on the colors of the badges that the passengers are wearing.
S A shore excursions officer registers the return of the passengers to the vessel
N and meets the returning tours. The tour operator speaks with the shore excursions
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officer and they agree on the number of passengers who took tours, so that the
cruise company can pay the operator.
In addition to organizing tours in ports of call, the shore excursion office
functions as a tour agency. Passengers frequently ask the staff about the destina-
tion, including distances, customs, and other basic information. Most shore excur-
sion offices keep files relating to the various ports of call, and can use these files
to help passengers answer their questions. Nevertheless, members of the staff fre-
quently use their own knowledge and experience to help the customers.
As a travel agency, the shore excursion office generates revenue through book-
ing hotels, onward travel arrangements, train tickets, flight tickets, and often
through arranging ferries or taxis. Some cruise companies decide to operate a
separate travel agency ashore in order to deal with passengers who request these
services.
Tour Guides. A good tour guide is essential to the success of any tour. The
guide’s job is to entertain, inform, and organize the activity, depending on the
passengers’ needs.
The ideal guide is highly knowledgeable about his or her field and excels at
communication. Fluency in various languages, a well-developed but tactfully ap-
plied sense of humor, and the ability to empathize with a wide range of people
are assets in this line of work. Guides may also have basic first-aid skills, and they
should be able to assert themselves when necessary.
There are many tourist organizations that offer accreditation schemes for tour
guides, which ensure that they are adequately qualified for the job. Frequently,
tour guides seem over-qualified, with higher-level degrees pertaining to their field.
Maturity can be a beneficial asset, because greater life experience has a way of
lending itself to the job. Additionally, all guides must be in solid physical condition,
since the work demands it.
Tour operators, coach companies, attractions, and other tourist venues fre-
quently employ guides. Some are self-employed, others work through agencies.
Guides are frequently used within notable buildings or sites, on walking tours, on
coach tours, on trails, as sports guides, or as interpreters. In certain ports, one or
two particular tours become very popular and the guide may need to work with
the tour manager to ensure that every passenger gets the best experience possible.
Guides frequently form strong working relationships with the tour operator or
with the people at a site they frequently tour. The guide may need to identify any
escort for the tour, who is normally employed by the cruise company.
SUMMARY
Although cruising sells itself as a flawless, carefree vacation, in reality it takes a
great deal of work and orchestration to create that image. From the equipment to
S the crew to the international nature of this form of travel, organization is an im-
N perative element. As the industry grows and ships become ever larger, the chal-
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lenges—and the rewards—of working in the cruise industry will surely only
increase.
ENDNOTES
1. Mill, Robert Christie, and Morrison, Alastair M. The Tour- 9. Ibid., 91–93.
ism System. Dubuque, IA: Kendall / Hunt, 2006, 397–399. 10. Ibid., 94–107.
2. Gibson, Philip. Cruise Operations Management. Oxford, 11. Ibid., 114–115.
England: Elsevier Inc., 2006, 2–3. 12. Ibid., 128–133.
3. Ibid., 12–14. 13. Ibid., 138–146.
4. Ibid., 30–31. 14. Ibid., 164–166.
5. Ibid., 17–18. 15. Mill, Robert Christie, and Morrison, Alastair M. The Tour-
6. Mill, Robert Christie, and Morrison, Alastair M. The Tour- ism System. Dubuque, IA: Kendall / Hunt, 2006, 400–403.
ism System. Dubuque, IA: Kendall / Hunt, 2006, 399–400. 16. Gibson, Philip. Cruise Operations Management. Oxford,
Gibson, Philip. Cruise Operations Management. Oxford, Eng- England: Elsevier Inc., 2006, 70–73.
land: Elsevier Inc., 2006, 17. 17. Ibid., 78–81.
7. Gibson, Philip. Cruise Operations Management. Oxford, 18. Ibid., 81–87.
England: Elsevier Inc., 2006, 19–20.
8. Ibid., 20–26.
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Chapter 15
CASINOS
LEARNING OBJECTIVES
1. Identify the changing trends in and demographic profiles of the casino mar-
ket.
2. Identify the critical variables in determining a casino’s profit potential.
3. Identify potential solutions to financial problems faced by casinos.
4. Identify the most important financial ratios relevant to casinos.
INTRODUCTION Number of Dealers Needed

THE GAMING MARKET CONTROL
U.S. GAMING MARKET History
United States Front Money and Safekeeping
State by State Deposits
Major Companies Reporting in Non-Gaming Areas
Native American (Tribal) CASINO CAGE, CREDIT, AND
Gaming COLLECTIONS
FROM CASINOS TO RESORTS Casino Cage
First Phase: Casino Serving a Casino Credit
Local Market Types of Casino Credit
Second Phase: Increased Procedures
Competition from Other Classes of Customers
Locations
Credit Decision
Third Phase: Entertainment
SLOT MANAGEMENT
Convergence
Slots
Objectives
Themed Slots
MARKET
Bonus Games
Casino Gamblers: A Profile
Cashless Casino
CASINO MANAGEMENT
Participation Games
ORGANIZATIONAL STRUCTURE
Types of Slots
President or General Manager
Model Mix
Vice Presidents
S Mechanical Configuration
STAFFING
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414 Chapter 15 CASINOS
Floor Configuration Game Speed

Philosophies Procedures
Slot Layout and Guest Establishing Guidelines
Behaviors Rating Systems
Successful Slot Servicescape TABLE GAME HOLD AS A
TABLE GAME OPERATIONS MANAGEMENT TOOL
Revenue and Profit per Square Uses
Foot High Table Occupancy
CASINO ACCOUNTING CASINO MARKETING
Table Drop and Count Match Plays and
Slot Drop and Count Nonnegotiables
Internal Audit Gambler’s Spree
Casino Audit Dead Chips and Chip Warrants
Statistical Reports General Slot Marketing
PLAYER RATING SYSTEMS Consumer Choice Factors
Quantifying the Disadvantage Rebates on Losses
Importance Player Action Criteria
Actual vs. Theoretical Win Premium Player Segment
Average Bet and Time Played Discounting Rationale
Estimating the Casino Discounting Dangers
Advantage SUMMARY
ENDNOTES
INTRODUCTION
‘‘If you aim to leave Las Vegas with a small fortune, go there
with a large one.’’
—ANON. AMERICAN SAYING
The gaming industry is an increasingly significant part of the resort business. This
chapter profiles the market for gamin and identifies how to plan, staff, manage
and control a casino for maximum profitability.
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U.S. GAMING MARKET 415
THE GAMING MARKET

By 2003 the U.S. gaming market of $72.9 billion was distributed in this way1
$28.6 billion Commercial casinos

$19.9 Lotteries
$16.8 Indian casinos
$3.78 Pari-mutuel wagering
$2.7 Charitable games and bingo
$851 million Card rooms
$128 million Legal bookmaking
U.S. GAMING MARKET

United States2
In 2002, gross gaming revenue in the United States peaked at over $68.7 billion,
which was a 226 percent increase from only a decade prior. Nevada continued to
dominate the gaming market in 2003, not only in terms of overall volume but in
revenue growth. In that year, Nevada generated over $9.6 billion in gross gaming
revenue, which was more than Mississippi, New Jersey, and Indiana combined.
Casino gambling continues to grow in popularity among the American public,
which correlates with the industry’s expansion and the growing presence of gam-
bling as a theme of network television shows. The World Series of Poker, The
Celebrity Poker Tour, Las Vegas, The Apprentice, Casino, and The World Series of
Black Jack are just some of the shows that have enhanced gambling’s mainstream
popularity.
On the whole, the global gaming environment is in the midst of a rapid growth
period. In the U.S. in 2002, the gaming industry experienced more than 297 million
visits to casinos.
According to the 2002 U.S. Census Bureau’s Census Data & Gaming Partici-
pation Study, the total U.S. population is 290.8 million. Out of that population, the
adult population (21 or older) is 197.2 million, and from that population, only 51.2
million are casino gamblers. This makes the casino gaming participation rate about
26 percent. Trip frequency averages at about 5.8 trips per year, since casinos logged
297.2 million casino trips in 2002. The largest feeder markets are New York City
(21.4 million trips), Los Angeles (18.7 million trips), Chicago (13.4 million trips),
Las Vegas (13.1 million trips), and Philadelphia (13.1 million trips).
State by State3
Different states allow different types of gaming. Of all the states, only Utah and
S Hawaii ban gaming entirely—every other state allows some form of gambling. The
N three most pertinent forms of gambling are:
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Land-based gaming. Allowed by Louisiana, Michigan, Nevada, and New

Jersey.
Riverboat-based gambling. Allowed by Illinois, Indiana, Iowa, Louisiana,
Mississippi, and Missouri.
Native American gambling. Allowed in most states, excepting Alabama,
Arkansas, Delaware, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, Ohio, Pennsylvania, Rhode
Island, South Carolina, Tennessee, Vermont, Virginia, Washington, D.C.,
and West Virginia.
The gross gambling revenue of the Las Vegas Strip has risen from $1,505 mil-
lion in 1986 to $4,806 million in 2003. Over the same time period, Atlantic City’s
gross gambling revenue has gone up from $2,273 million to $4,480 million.
Quick Getaway 15.1

The Biggest U.S. Casino
Las Vegas is the unofficial gaming capital of the New England’s Foxwoods Resort and Ca-
world. It’s estimated that more than 25 million sino was opened in 1992 by the Mashantucket
people visit Las Vegas every year. The desert Pequot tribe at a cost of $60 million. After its
gaming oasis is also one of the fastest-growing initial success, another $300 million was in-
cities in the U.S. vested into the resort to make Foxwoods the
The ‘‘main street’’ of the Las Vegas gaming largest casino worldwide. The resort operates
empire is the Las Vegas Strip. Once it was noth- 6,400 slot machines and employs more than
ing more than a highway through the Mojave 2,000 dealers. Its gaming rooms alone cover
Desert that connected Las Vegas to Los Ange- 315,000 square feet, making the Foxwoods Re-
les. Today the Las Vegas Strip is an oasis of the sort about three times as big as an average ca-
most extravagant gaming palaces ever known sino on the Las Vegas Strip. More than 40,000
to mankind, like the Egyptian-themed Luxor, guests visit Foxwoods every day. The annual
the medieval-themed Excalibur, and the Trop- revenues of Foxwoods are estimated to exceed
icana, to name a few. On the Las Vegas Strip, $1 billion, making the resort truly the biggest
the casino-resorts compete with each other to and most profitable casino in the U.S.
see who can build the biggest and most extrav- Source: ‘‘Bigger is Better?—The biggest casino in the
agantly themed casino. US is. . .’’ Optimalgambling.com, accessed August 4,
So, if bigger is better in Las Vegas, the big- 2006. http: / / www.optimalgambling.com / articles /
gest casino in the U.S. must be on the Strip, biggest-casino.htm
right? Wrong. Surprisingly, the biggest and most
profitable casino in the U.S. isn’t located in Las DISCUSSION QUESTION:
Vegas at all. Are you surprised that the largest and most
The biggest casino in the U.S. is Foxwoods profitable casino in the U.S. is not in Las
S Resort, in Ledyard, Connecticut! Vegas? Why or why not?
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FROM CASINOS TO RESORTS 417
Major Companies4
The top four large cap gaming operators of 2004, as measured by revenue (trailing
12 months), are Caesars Entertainment ($4,560 million), Harrah’s Entertainment
($4,370 million), Mandalay Resort ($2,600 million), and MGM Mirage ($4,020 mil-
lion). Mandalay Bay has since been acquired by MGM Mirage.
Native American (Tribal) Gaming5

When the U.S. Congress passed the Indian Gaming Regulatory Act of 1988, Native
American gaming facilities began to proliferate in earnest. Currently, tribes operate
203 Class 3 (casino) and 72 Class 2 (bingo) gaming operations in 29 different
states. Eighty-four percent of the roughly 225 federally recognized lower-48-state
tribes had Class 3 operations in 2000, according to the National Indian Gambling
Association. Economic development strategies have aimed to stimulate depressed
regions, cities, and communities by utilizing the rise of gambling activity as a
tourism policy.
States that want to maximize the fiscal benefits of gaming should attract a
good number of customers from outside the casino’s home state. If casino gam-
bling is prohibited in surrounding states, then the casino’s home state will be able
to optimize the competitive advantage. Also, states with no casinos will likely find
that their residents may have contributed significantly to tribal and state coffers in
neighboring states.
Today, roughly 330 casinos are run by more than 200 tribes across 28 U.S.
states. In the five fiscal years from 1998 to 2002, the Native American gaming sector
underwent an impressive 71 percent increase in gross gaming revenue, growing
from $8,500 million to $14,500 million. Gross gaming revenue from operational
Native American casinos in 2002 was roughly $14.5 billion. Approximately 40 Na-
tive American casino properties generate over $100 million annually in gross gam-
ing revenue, while about 90 casinos generate less than $3 million each year.
Southeastern Connecticut is the home of the largest Native American casino mar-
ket.
FROM CASINOS TO RESORTS6

Even though casinos and gambling have a very long history, only recently have
they become a part of entertainment convergence. Entertainment convergence is
the phenomenon of integrating multiple entertainment elements in order to create
a destination with broader appeal.
To this end, there are two general objectives: extending the length of stay for
on-site guests, and broadening the appeal in order to increase the potential market.
The paradigm shift that is fundamental for this change to occur is the move from
S focusing on competition within an entertainment product line (such as gaming or
N shopping) to competition for customer’s leisure time.
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First Phase: Casino Serving a Local Market

Las Vegas, more than many other gambling areas, needed to become a destination
simply because it had virtually no local market to rely on. In its first growth stage,
Las Vegas attracted local customers simply because of the legalized gambling, but
that was not enough to promote additional growth.
Second Phase: Increased Competition

from Other Locations
After the legalization of tribal gambling and gambling in other states, Las Vegas
lost its virtual monopoly on the gambling industry, and it was forced to make
changes in order to keep growing. Las Vegas entered its second major growth
phase by tapping into the mass market by offering 99 cent buffets and inexpensive
lodging. This made traveling to Las Vegas to gamble a more feasible option for
many casino-goers.
Third Phase: Entertainment Convergence

The current growth phase of Las Vegas has been spurred on by entertainment
convergence. The development of full-service themed resorts, integrated with retail,
restaurants, and entertainment, has led to some interesting trends.
This third phase of development created in Las Vegas a full-fledged national
resort destination, which created a tremendous buffer to offset the competition it
now receives from other gambling centers.
Attributes. The attributes of Las Vegas, or any gambling center in the third phase
of development, are as follows:
The area experiences a greater increase in the total visitor revenue per
capita.
Elements of entertainment and hospitality transition from marketing costs
to centers of profit.
The average length of stay for guests extends.
The area experiences a slight decrease in per-capita gaming revenue.
Objectives
In moving from a casino to a resort casino, consider whether the objective is to
attract new visitors or to extend the length of stay of existing visitors.
Objectives of Transforming a casino into a national resort destination seems like an obvious
Resort Casino step, but the ultimate objective for evolving to a regional destination is in order
S Development7 to increase the operation’s profits and revenues. There are numerous ways of
N accomplishing this:
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FROM CASINOS TO RESORTS 419
Casino resorts must consider the market, competition, and other entertainments
in order to be competitive. Courtesy Digital Vision
Increase revenue by attracting a new type of guest demographic

Increase revenue by extending guest stay
Increase revenue by attracting guests from a wider market area
Increase revenue through direct revenue through new elements
Arrest market-share erosion from competitive casino-resorts
S Figure 15.1 is a high-level diagram detailing the land use relationships between
N typical resort-casino entertainment elements:
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Casino Restaurants (Casino)
M Accommodations
A Conference Hotel Resort Hotel RV Park
R Alternative Activities
Alternative Activities Retail/Entertainment
(Primary Usage) (Resort Support)
K
Live Music Venue Family Attractions
E Spa
Nightclubs Outdoor Adventure
T Meeting Facilities
Resort Residential
Golf
FIGURE 15.1 Land-use relationship model of prototypical casino resort development.

Source: Dvorchak, Mark E. Casino to Resort: Understanding the Entertainment Hierarchy.
Los Angeles, CA: Economics Research Associates, July 2002, 4.
As the casino element is the core, it is at the top of the diagram.

Accommodations are considered a separate group from the rest, because they
are typically supportive of the casino. Casino accommodations are rarely targeted
at guests who won’t use the casino.
Entertainment activities represent a wide variety of elements that offer guests
many entertaining options. Activities, on the other hand, fall neatly into two sub-
categories. The first subcategory includes elements that do not require the casino
or the accommodations in order to function. The second group consists of land
uses that usually support the demand for accommodations. As an example, con-
sider the meeting facilities used to drive up a hotel’s overnight stays.
Resort residential products can be offered in many different forms, such as
vacation homes, retirement homes, fractional ownership, vacation rental units, and
timeshare. Resort residential development is clearly distinct from the others, since
it is driven not by attraction economics, but rather by real estate economics. How-
ever, there exists significant synergy between the casino resort and the resort res-
idential element.
The synergy functions because the casino (along with its entertainment amen-
ities) directly drives the desirability of the resort residential location. In turn, the
S resort residential creates an on-site market for all of the resort’s activities. Depend-
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MARKET 421
ing on the particulars of the resort residential product, the resort’s accommodations
can be used in order to support real estate sales. Residential units can also be
added to the accommodations inventory, and as a result, they can increase the
daily rental inventory.
A given state’s tourism policy is a reflection of the desire to induce other states’
residents to cross into the first state and buy its goods and services. Encouraging
cross-border economic activity allows states to build their tax base, which helps
them garner a fiscal advantage as compared to neighboring states. One possible
reaction to this fiscal outflow is for the non-gaming state to legalize casinos. Ev-
erything else being equal, casino-goers are more likely to visit the nearest gaming
operation. States that do not allow casinos leave themselves financially vulnerable
to neighboring states that have embraced the emerging gaming tourism policy.
Role of Specific An entertainment retail center is the element that has the greatest potential impact
Elements8 on casino resort development. In a typical situation, the casino resort operator
does not operate the stores or restaurants, instead becoming a landlord for the
‘‘best of class’’ tenants. Therefore, the casino operator’s impact will come in the
form of rents, which usually run about 6 to 10 percent of gross sales revenues.
Also, potential revenue from a residential resort development can have an
impressive impact. Even though casino revenue impacts are usually small, a resort
hotel can have a moderate overall revenue impact.
The additional entertainment elements mostly have smaller direct revenue
impacts, but they can be absolutely essential to indirect revenue impacts. These
entertainment elements can provide diversity and critical mass, which is needed
to extend drawing power to bigger market areas and to create a competitive ad-
vantage for the property.
MARKET9
Although tribal gaming is present in more states, corporate casino gambling has
been traditionally seen as a more appropriate way to foster economic development
via increased employment and the revenue from taxes. This is mainly because
Indian casinos are not bound to the state—they are sovereign entities. Therefore,
the state cannot tax them.
In 1931, Nevada became the first state to legalize casino gambling, and it
currently has the largest gambling market in the country. During 2001, the 210
casinos in Nevada were able to generate more than $9.5 billion in revenue. Of
course, the largest concentration of casinos in Nevada is in Las Vegas, with its
downtown casinos (14) and the casinos on the Strip (47 casinos), which amass
roughly $5.3 billion dollars while attracting approximately 35 million visitors each
year, who fill more than 100,000 hotel rooms. Hotels on the strip and downtown
S have electronic gambling devices (EGDs) numbering more than 75,000 along with
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3,300 table games, which take up 3.3 million square feet of floor space. Some of
the other major Nevada markets include Reno ($1 billion in revenue), Laughlin
($500 million in revenue), and Lake Tahoe ($330 million in revenue).
The second state to legalize gaming was New Jersey. In 1976, gambling was
legalized there, but only in Atlantic City. Nowadays, 13 casinos in Atlantic City
generate roughly $4.3 billion annually, and they received 32 million visits. This
makes Atlantic City the second-largest gambling market in the entirety of the
United States. Atlantic City’s market is described as a day-trip destination, while
Las Vegas is generally considered a vacation destination. Atlantic City’s casinos
Quick Getaway 15.2

Who Goes to Casinos?
When surveying the slot machine room at a ca- over age 25. Furthermore, employment for ca-
sino, it’s easy to simplify and categorize—it sino customers breaks down as follows: 44 per-
seems that many players are people who are cent have white-collar jobs, 25 percent hold
too poor to gamble, people who are spending blue-collar jobs, 17 percent are retired, and 13
money they don’t have in the hopes of achiev- percent place themselves in ‘‘other.’’ Compare
ing an impossible dream. Don’t casinos prey on that with 41 percent white-collar, 27 percent
the poor, after all? Not necessarily. blue-collar, 17 percent retired, and 15 percent
In a casino you can certainly find custom- other in the overall population. Additionally,
ers who could be making a much better use of the median age of casino-goers is about that of
their money. You’ll find these people, espe- all U.S. adults who are over age 21.
cially if you go looking for them. But what if Most of these differences are not earth-
instead you went to a casino and stopped every shattering. Essentially, one could make the
tenth person coming through the turnstiles, claim that casino-goers reflect the general U.S.
sampling customers at different times of day population. If you walk into a casino looking
and on different days of the week? What kind for people who don’t really have the means to
of profile would emerge then? be gambling, you’ll find them there, but set in
The above example is an oversimplifica- a group that reflects the population of the U.S.
tion, but for years Harrah’s has commissioned at large.
surveys by independent polling groups. These
Source: Grochowski, John. ‘‘Casino Customers: Who
surveys have always shown that the typical ca-
Are They?’’ The Detroit News (October 14, 2004).
sino customer is slightly older, slightly better-
educated, and slightly wealthier than the
average American adult. DISCUSSION QUESTION:
Conducted for Harrah’s by the NFO World Do you think poor people who gamble with
Group, one survey finds that a slightly higher their disposable income are judged more
percent of casino-goers have had at least some harshly than rich people who do the same?
college compared with the general population Why or why not?
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MARKET 423
have 12,000 hotel rooms and 37,000 EGDs, along with 1,200 table games and at
least 1.3 million square feet of casino floor space.
In the 1990s, there was a remarkable increase in the number of states that
decided to legalize casino gambling. Riverboat casinos began in Illinois and Iowa
in 1991 and they quickly spread across the Midwest. Indiana, Mississippi, and Mis-
souri all allow riverboat casino gambling as well. Michigan and Louisiana both
chose to legalize land-based casino gambling within the last decade.
The greatest perceived benefits from legalizing casino gambling are increased
employment, greater tax revenue to local and state budgets, and growth in local
retail. During the 1990–1991 recession, increased pressure on state budgets caused
a fear of losing revenue to the casinos of neighboring states. This, combined with
the public’s increasingly positive attitude toward gambling, increased the accep-
tance and appeal of casinos.
Besides Nevada and New Jersey, only two states have legalized land-based
casinos: Louisiana and Michigan. Lousiana’s 15 riverboat casinos and one land-
based casino generated $1.9 billion during 2001 while attracting nearly 38 million
visits. The major Louisianan markets include New Orleans, Baton Rouge, Shreve-
port, and Lake Charles. Michigan hosts three land-based casinos, all of which are
in the Detroit area, with the first opening in 1999. These casinos brought in a total
of $1 billion in 2001.
Casino Gamblers: A Profile10

Who are casino gamblers? A recent survey conducted by Harrah’s in 2002 (entitled
‘‘Profile of the American Casino Gambler’’) reveals some interesting statistics.
Over 51 million Americans participate in casino gambling. This figure is equal
to about 26 percent of the 21-and-over population. Gamblers’ median age is 46,
compared to the U.S. population’s median of 45. Nonetheless, gambling is most
popular in the 51 to 60 age group. Casino gamblers have a male / female ratio of
45 / 55, compared to 48 / 52 for the general U.S. population. Of the gamblers, 46
percent graduated or attended college, compared to only 43 percent of the pop-
ulation at large. The states that generate the most casino trips are California, Illi-
nois, Nevada, New York, and Michigan.
One of casino gambling’s most controversial issues is the perception that ca-
sino revenue comes mostly from low-income gamblers, which places an unfair
financial burden on the poor. Examining this perception, it becomes clear that
there are really two separate issues at state: (1) as a percent of their income, do
lower-income gamblers bear a greater financial burden from casino gaming than
do their upper-income peers? And (2) from which income bracket do casinos
generate the majority of their income?
As regards the second issue, casino gamblers have a median household in-
come of $50,000, compared to $41,000 for the general U.S. population. Therefore,
the income level of gamblers is on average higher than the rest of the populations.
Regarding the first issue, the important factor is the percentage of income spent.
S So, if two gamblers having annual incomes of $20,000 and $100,000 respectively
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each spend $1,000 on gambling each year, then the first gambler bears a larger
financial burden, since she spent 5 percent of her income while the second lost
only 1 percent of hers.
Regarding the financial burden of gambling, the evidence is mixed. An early
study that used a national survey found that high-income gamblers spend a greater
percentage of their incomes on gambling than lower-income gamblers do—
making higher-income gamblers the ones who bear the financial burden of casino
gambling. However, a study of Las Vegas gamblers pointed to the opposite. Lower-
income gamblers living in the city spent more of their income on gambling than
the wealthier Las Vegas–dwelling gamblers. Yet for visitors to Las Vegas, the bur-
den on lower-income gamblers was lessened.
In order to determine which of the income groups contributes most to casinos’
revenue, it’s only necessary to look at the income level of each player. Because
the median income of casino gamblers is higher than the median income of the
U.S. population, it’s possible to assume that casinos generate most of their income
from wealthier gamblers than they do from lower-income gamblers. Nevertheless,
it might be true that lower-income gamblers bear the greater financial burden of
casino gambling. Even though the evidence is clear that the average casino patron
does not hail from the lower income bracket, the financial burden of gambling at
casinos likely differs from location to location and should be analyzed on a more
individual basis.
The Games People Play. The following illustrates which games casino visitors
play:11
Slots / Video Poker (74 percent overall)

one cent to two cents (1 percent)
5 cents to 10 cents (16 percent)
25 cents to 50 cents (46 percent)
$1 to $2 (10 percent)
$5 and up (1 percent)
Table Games (14 percent overall)
Blackjack (9 percent)
Roulette (2 percent)
Craps (2 percent)
Other (4 percent)
Don’t know (8 percent)
Looking at these game preferences, it should be no surprise that casinos

choose to allocate roughly 80 percent of their floor space to slot machines and
other EGDs. Denominations on slot machines may range from five cents to $1,000
per play, with the option to insert multiple coins each play. Slot machines that
work with denominations of $100 or greater are usually only found in Las Vegas
and Atlantic City. Approximately half of all slot players prefer 25-cent and 50-cent
S machines. Some machines also offer progressive jackpots, which means that the
N jackpot increases with each play until someone hits the winning combination of
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MARKET 425
symbols. In the majority of cases, many machines are hooked together for the
progressive jackpot, such as in the MegaBucks system. This progressive jackpot
system is the most popular, regularly posting jackpots that average from $5 million
to $10 million.
State laws stipulate that the minimum machine payout must average about 85
percent. Nevertheless, casino slot machines often pay back at 95 or even 98 per-
cent, for competitive reasons. A payback rate of 95 percent means that the house
advantage is 5 percent. Of course, this doesn’t mean that every player will have
95 percent of his money returned, but over the long term the machine returns 95
percent of the money wagered back to players, as winnings.
Nowadays, slot machine payouts are regulated by a computerized random
number generator. Essentially, every combination of possible reel outcomes on
the slot machine has certain numbers that are associated with it. After the player
makes a wager, the slot machine generates a combination of random numbers.
Then the reels spin, landing on a particular combination that has been preassigned
to the combination of random numbers. Obviously, higher-paying symbols have
fewer numbers mapped to them as do lower-paying symbols (if this weren’t the
case, the odds of winning any prize would be equal). If the certain combination
of random numbers corresponds to that of any prize, the machine then pays out.
The symbols on each reel are completely irrelevant—they are only for show. The
outcome is determined at the moment the bet is played, not after the symbol
wheels stop spinning. Also, the idea of a ‘‘hot machine’’ or a ‘‘cold machine’’ is
pure myth, because slot machines have no memory. Each spin on the machine is
totally independent of past outcomes, so the odds of winning the jackpot is the
same no matter if the jackpot was won on the previous play or ten years ago.
EGDs provide a different gambling experience than that of table games. While
the electronic slot machines are mostly non-interactive, table games require a
certain amount of skill and knowledge regarding the game. Players actively partic-
ipate, whether by rolling the dice in craps or holding cards in poker or blackjack.
Generally, the minimum bet at a table is $5, but $3 tables are sometimes present.
On table games, the house advantage averages about 3 percent, but craps and
blackjack have a house advantage of only 1 percent. Blackjack is by far the most
popular table game, followed by roulette and craps. Baccarat traditionally found
more favor with high-income gamblers, but it is now being adopted by low-income
gamblers as well. New table games are continually being adopted and created by
casinos around the country. Newer games available at most casinos include Let It
Ride, Caribbean Stud Poker, Double Down Stud, Boston 5, Three Card Poker, and
Pai Gow Poker. Out of these games, several allow players to make side wagers of
$1 in order to win progressive jackpots given for top hands such as a royal flush
or a straight flush.
Promotional Strategies.12 In order to keep existing patrons gambling longer,

and to attract new players, many casinos offer complimentary services and goods
(known as ‘‘comps’’). Comps can include things such as caps, T-shirts, and buffets
S for the low-end players, up to dinners, transportation, and hotel rooms for the
N higher-end players. There also exists a type of gambler called the ‘‘whale’’ by the
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casino industry. A whale generally wagers $50,000 or more per hand and can easily
wager $10 million in only a weekend. Big wins by whales can even influence a
casino’s quarterly financial statement. Atlantic City and Las Vegas casinos do what-
ever they can to attract whales, which number only a few hundred in the world.
Whales never pay for any part of their trip: they stay in a penthouse hotel room
for free (which could rent for more than $10,000 a night) and they will be provided
with just about anything they request, completely free of charge. Casinos spend
an average of 21 percent of their adjusted gross revenue on comps (compare that
to 18 percent on payroll), which only highlights the importance of comps in gen-
erating casino revenue.
Casino comps are computed like so: The average bet of the player is multi-
plied by the hours that player plays, the number of pulls or hands dealt in an
hour, and the casino advantage for that particular game. The resulting figure rep-
resents the player’s theoretical loss. For example, if a player spends two hours on
a $3-per-play slot machine with a house advantage of 5 percent, and that player
pulls the handle 120 times per hour, the comp would come out to be $36. Some
casinos base actual comps on about 30 to 50 percent of the computed comp.
Since slot odds are less in favor of the player, a slot player will probably get
slightly more comp per dollar than his or her counterpart at a table game. There
are techniques a player can use in order to increase comps received. If playing
video poker or a slot machine, the player should make sure to get a club card.
The club card looks like a credit card, and it’s issued by the casino for use in that
casino only. When the player chooses to play a machine, she simply inserts the
card and it accumulates points based on how long the patron plays and how
much is wagered. It’s possible to still receive comps with no club card, but this
would mean playing for a long time and / or wagering larger denominations (likely
$5 and more) in order to get the attention of the slot host or slot manager. De-
pending on the level of their play, patrons may not receive any comps while at a
casino, but they might receive coupons for gifts, free meals, and more in the mail
several days after leaving the casino. These coupons of course are only good at
the casino, which requires a return visit. In other instances, a slot host may visit a
player while still playing on the casino floor.
A patron playing at a table game can increase the odds of receiving more
comps by betting more whenever the pit boss (the table game manager) comes
by to observe the game. The pit boss floats around the floor, moving from table
to table and casually (but accurately) counting up how much each player wagers.
Additionally, a player can request that the pit boss records the amount of his buy-
in (trading cash for chips) and also tell the pit boss when he changes tables. It’s
best to play at a table with as many players as possible, and then bet more when
the pit boss arrives to watch. At a table with many players, the number of hands
dealt per hour is less than average, meaning that a player’s loss is also less each
hour.
Impact of Heavy Spenders.13 A large number of heavy-spending tourists have

S no interest in gambling, but in the other tourism products available at the desti-
N nation. It seems that the region’s tourism assets are very important for enhancing
L casino visitation; therefore, promoting the casino as a part of the tourist attractions
MILL (Wiley)
MARKET 427
in the area may be beneficial for both the casino and related businesses located
in the surrounding community.
As stated earlier, there exists a small population of casino gamblers known as
whales or high rollers. Theses gamblers account for the bulk of casino wins.
Roughly 13 percent of casino player club members generate about 84 percent of
total tracked revenue that is associated with loyalty club members. About 2 percent
of this larger group is actually responsible for generating roughly 52 percent of the
total tracked casino revenue.
Conclusions. One promising way of segmenting the gaming travel market is to

segment patrons based on expenditure. Heavy spenders have significantly higher
expenditure levels than their counterparts when it comes to non-gaming expen-
ditures. Also, contrary to what other volume segmentation indicates, substantial
differences were found between segments in terms of household income and age
distribution.
Heavy spenders are relatively more affluent and younger than their counter-
parts. They are often first-time visitors to the casino where they were intercepted,
and they engage in several recreational pursuits beyond gambling. They do not
travel on charter bus trips, but they do travel with others, and they stay longer in
the region. The vast majority of heavy spenders stay at hotels or motels, and the
primary purpose of the trip was not gambling, but visiting friends and relatives,
business, recreation, or some type of sporting activity.
Heavy spenders are not usually attracted to the area because of the casinos,
unlike non-heavy-spenders. Nevertheless, they were more likely to stop at and
patronize several different casinos. About a quarter of heavy spenders investigate
the community before their trip. More than three-fourths of heavy spenders typi-
cally reside outside of the gaming state, roughly one-third were from a neighboring
state, and the rest were from other states. Most medium and light spenders are
from within the gaming state.
Heavy spenders are a viable market segment. They are accessible, actionable,
substantial, and measurable. Heavy spenders can be measured because they rep-
resent a significant number of casino tourists. Heavy spenders are actionable
because they differ from the other two segments in their trip behavior and socio-
economic characteristics. The heavy spender group is also far more accessible
than their counterparts, because heavy spenders are more likely to seek informa-
tion about the community before departing on the trip. They also patronize
community-related tourist attractions while on the trip. Disseminating informational
literature regarding the community may attract heavy spenders’ attention. Addi-
tionally, repeat visits may be encouraged by way of direct mail advertisements
sent to anyone registered at facilities such as hotels, sports arenas, shopping ven-
ues, museums, and halls of fame.
It’s widely recognized that tourists are attracted to urban destinations by the
variety and combination of attractions, services, and other events that they offer,
and casino visitors are no exception to the rule. The challenge for tourism oper-
S ators is not only to highlight the services offered, but to package them for the
N convenience of the visitor. Packaging entails linking with other sources and ser-
L vices in an effort to offer the desired experience to targeted groups. The gaming
MILL (Wiley)
community in particular can put together trip packages that include stops at sev-
eral casinos (since heavy spenders appear to prefer casino variety). Rather than
creating competition, tourism providers create harmony that benefits the gaming
market as a whole and highlights secondary casinos that are often overlooked. Put
briefly, a combination of activities will likely bring heavy spenders into the com-
munity, and including casinos in the inventory will ensure they have the oppor-
tunity to benefit that industry.
CASINO MANAGEMENT
One of the keys to a casino’s success is the effectiveness of the management team.
The organization and experience of the team has a direct impact on the casino
operation’s profitability, so it’s only fitting to examine management and how it is
organized in a casino.
ORGANIZATIONAL STRUCTURE
President or General Manager14
This person is responsible for the casino’s operations overall, which includes any
related properties or hotels. Strategic and day-to-day responsibilities are inherent
to the position, and all personnel report ultimately to the president. The person in
this position reports to the owners’ representatives.
Vice Presidents
The Vice President of Finance is responsible for all the financial activities of the
organization. The VP of Finance’s direct reports usually include cage, credit, ac-
counting, collections, information system (IS), and purchasing. The Vice President
of Casino Operations handles the casino’s overall operation, including table games,
slots, and other gaming operations (such as keno, race and sports, and poker).
Gaming compliance and gaming are two critical responsibility areas for this indi-
vidual. The Vice President of Human Resources oversees compensation, benefits,
employment, labor relations, training, and workers’ compensation functions. The
VP of Human Resources must also ensure compliance with any applicable local,
state, and federal requirements that pertain to these areas. The Vice President of
Security is responsible for security, surveillance, investigations, risk management,
S and safety. This includes handling insurance issues and the loss complaints of
N guests.
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ORGANIZATIONAL STRUCTURE 429
Games or Casino Manager. The responsibilities of the Games or Casino Man-

ager include table games operation, personnel, and supervising the shift managers.
Shift managers operate game tables, and manage the associated personnel
during a given shift. Supervising the pit managers and every other table games
employee during the shift is also in the job description.
Pit manager: This person is accountable for overseeing the table games’
operation in a particular pit. The pit manager also supervises floorpersons
and dealers within his or her pit. Additionally, the person in this position
is responsible for games protection and customer relations.
Floorperson: A floorperson is responsible for supervising the operation of
a specific group of games within a certain pit. This person also supervises
the dealers at the assigned tables, rates player actions, and ensures com-
pliance with the house rules.
Dealers: Dealers are responsible for the operation of one particular table
game. Dealers are required to comply with house rules for conducting
the game in play.
Pit clerk: This individual completes pit transactions including fills,
markers, and credits either manually or by using the casino computer sys-
tem. This person may report to either casino or cage supervisory person-
nel.
Slot manager: This individual is in charge of the operation of the slot de-
partment, from selection of machines and determination of the floor con-
figuration to machine operation and maintenance. The slot manager also
supervises the head slot mechanic and the shift managers.
Shift manager: The slots shift manager oversees the slot department,
which includes overseeing all personnel during a given shift. Other re-
sponsibilities include verification of large jackpot payouts and customer
relations.
Head slot mechanic: This employee is responsible for the repair and
maintenance of all the slot machines. The head slot mechanic also main-
tains records that pertain to the slot machines, including par sheets, loca-
tion, and any changes made to the machine. Additionally, this individual
trains and supervises all the slot mechanics.
The director of casino marketing: This individual is responsible for all of
the aspects concerning the casino’s marketing, which includes the devel-
opment and maintenance of a database of customers. Another task the
director of casino marketing carries out is designing and implementing
programs that seek to attract repeat and new customer visits. This person
also oversees the operation of the slot club, branch offices, casino hosts,
special events, and tournaments.
Hosts: Hosts are put in charge of identifying and attracting new casino
S visitors, in addition to serving the needs of those who are already
N customers.
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STAFFING15
The adequacy of customer service and the overall profitability of a casino opera-
tion are directly affected by proper staffing. Management requires the ability to
forecast the anticipated number of customers and staff accordingly.
Understaffing and overstaffing can both damage the casino’s bottom line. Ov-
erstaffing unnecessarily increases the casino’s labor costs, while understaffing can
lose revenue as unsatisfied customers leave to find a casino that can meet their
service needs.
Number of Dealers Needed

What is the process of calculating the number of people needed to staff a casino
on a given day? The following must be taken into consideration before arriving at
a final figure.
Number of First, the casino manager must determine the number of stations that must be
Stations manned for each day of the week in question. A station is a position that must be
staffed for an entire shift. In craps, there exist three stations: the two base dealers
and the stickman. In blackjack, there is only one station per game.
Number of Next, the casino manager must consider how many dealers will be necessary to
Dealers keep the stations open yet still allow for scheduled breaks. This method of cal-
culation must be applied to every day of the week in order to arrive at the correct
numbers.
Each Game and As mentioned above, every game type must be accounted for, and every day of
Every Day the week must be analyzed separately (because demand is going to be different
for each day). Since dealers don’t normally work seven days a week, there will
need to be enough dealers on the casino’s payroll to account for those dealers
who are on their days off or on vacation. To determine how many additional
dealers will be necessary, one must simply figure out how many days employees
work per week and the average vacation time per employee each year.
Floorpersons The casino manager must also determine the number of floorpersons necessary.
Floorperson numbers are calculated in roughly the same way as dealer numbers
are, though the different shift lengths and break times for each position must be
accounted for.
CONTROL16
History
S In 1985, the Secretary of the Treasury determined that the definition of a financial
N institution would need to be expanded in order to include casinos. There were
L many ramifications that stemmed from the announcement, but the most important
MILL (Wiley)
CONTROL 431
is that a casino must report any transactions that involve greater than $10,000 in
cash that occur during any 24-hour period. However, each jurisdiction (if it de-
sired) was allowed to develop its own method for the implementation of these
controls and reporting procedures.
Nevada’s regulators had the support of the Nevadan gaming industry to de-
velop their own regulatory system. Later, casinos in other jurisdictions have com-
menced operations that comply with the currency reporting requirements of the
federal government.
Front Money and Safekeeping Deposits17

There exist unique methods for handling player deposits for front money or safe-
keeping. Two options in particular stand out:
Physical segregation of the cash deposited; placing the cash in a

designated location and returning the same cash to the patron
Recording the number of bills of each denomination in a given cash de-
posit. The deposit, when returned to the player, is returned in the same
denomination and number of bills that were in the original deposit.
24-Hour Each casino may choose when its 24-hour period begins and ends. This allowance
Window is extremely beneficial for reducing the effect on individual players. As an exam-
ple, if a casino’s 24-hour window begins at midnight, one night of gaming on the
patron’s part could actually overlap two days. That is, if the player bought-in or
lost $10,000 before midnight, and then did the same after midnight, no reporting
is necessary.
Customer It’s difficult for an employee of the casino to approach a player who has just lost
Identification a bet that took him over the $10,000 and ask for a driver’s license. The player may
be in no mood to cooperate with the employee. However, if the casino already
has the necessary information on file, the customer needn’t be bothered.
There is no need to inform the customer that the report is being prepared,
but it is necessary to approach players that the casino does not know and ask for
identification.
Reporting in Non-Gaming Areas18

There rarely exists a similar focus on reporting currency transactions that do not
pertain to gaming areas of the establishment, such as banquets, retail, catering,
the hotel, or restaurants. The point of the federal regulations regarding large cash
transactions exists solely to identify transactions that may have resulted from illegal
activities.
Therefore, the aggregations requirements pertain to a 12-month period instead
S of a 24-hour period. This means that any lump sum payment of $10,000 or more,
N or related payments over a year that sum to more than $10,000, must be reported
L by the institution.
MILL (Wiley)
CASINO CAGE, CREDIT,

AND COLLECTIONS19
Casino Cage
The area known as the casino cage functions as the financial center of the oper-
ation. It maintains an accountability of the chips, tokens, and cash that are used
in order to fund the casino’s operations.
The cage has many elements; one such is its customer windows. These are
usually established based on an imprest basis (that is, they are funded at a pre-
determined, constant dollar amount) and they are operated by cage cashiers. Win-
dows can range from $25,000 to $100,000 or more.
The cage also has a fill bank, which maintains a large inventory of tokens and
chips. It’s also frequently responsible for accounting for the coin room and slot
cashier bank inventories.
Located within the main bank, the marker bank is responsible for maintaining
inventories of the issued markers that are transferred in from the gaming tables,
safekeeping deposits, front money, and other items such as airfare disbursements
and returned checks. The cage itself operates on a 24-hour basis, and an inventory
is performed during every shift. All transactions are recorded on a shift summary.
Casino Credit
Casino credit is used primarily as a marketing tool. Casinos don’t charge any in-
terest for the use of their funds, but credit is usually only given to players who the
casino believes will take full advantage of the line by gambling with the new funds.
If the player does not make use of the credit, it will be taken away. Gambling in
this instance serves the purpose of charging interest.
Credit, therefore, is granted only to increase play. Those customers who gam-
ble on credit are usually upscale clientele who insist on amenities like upscale
accommodations and gourmet restaurants. Therefore the physical facilities be-
come crucial for the casino that plans to market to such upscale customers.
Types of Casino Credit

Check-cashing privileges are one form of casino credit. This permits the client to
cash either business or personal checks at the casino cage. The primary risk is
from a customer attempting to cash a check for which there are insufficient funds.
Recently casinos have been receiving increasing amounts of forged and coun-
terfeit checks, which has led to many casinos adopting check-approval programs
such as Telecheck.
An exception to the typical check-cashing situation is seen when a casino
agrees to hold the check for a number of days before depositing it. This courtesy
S usually is not extended to any but premium customers, and depending on policy,
N the check may be held anywhere from 30 to 45 days.
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CASINO CAGE, CREDIT AND COLLECTIONS 433
The total amount a given casino is willing to extend to a customer is known

as the credit line. The term ‘‘front line’’ corresponds to players who bring cash to
the cage to deposit. For the purposes of gaming, this is known as front money.
Otherwise, if the player only desires that the cage hold the funds for security and
convenience reasons, the procedure is known as safekeeping.
Procedures
A player who wishes to establish credit with the casino must first fill out an ap-
plication.
Classes of Customers
Roughly 75 percent of those who apply for casino credit have casino credit some-
where else. Fortunately, there exists an agency whose specialty is providing credit
information on casino credit holders. However, one-quarter of those applying for
casino credit have no such record on hold. For them, bank information serves as
the primary source.
Central Credit is also available to report whether an applicant is considered
‘‘4 in 14.’’ Any person who has applied for casino credit at four or more establish-
ments during a two-week time span is labeled ‘‘4 in 14.’’ According to casino
research, 80 percent of these applicants will write a bad check sometime in the
next six months.
Credit Decision
Those applying for consumer credit are required to prove that they deserve the
loan. Applicants who are denied casino credit usually have something in their
report that shows that they are undeserving of a loan. If nothing appears in the
applicant’s record to suggest that he or she should not receive a loan, then it’s
reasonable to expect that that applicant will be granted casino credit.
Ability / Willingness to Pay. An applicant’s willingness and ability to pay are

usually determined based on the appearance of the applicant’s bank account and
a report from Central Credit. Other factors that influence this attribute are:
The length of time the applicant has been in business

The applicant’s position within his or her company
The applicant’s age
S Interestingly, although the applicant’s business information informs the credit

N decision, very few casinos actually verify the applicant’s statements.
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Propensity to Play. Casinos are also concerned with whether the applicant will
play. Because the client is expected to gamble, the casino will refuse to grant
credit that is not warranted by the gambling behaviors of the player. There are
two main sources of intelligence on the player’s gambling propensities: the history
of play, as recorded by the casino prior to the application, and Central Credit.
A casino credit applicant is likely to have records in the computer, verifying
whether he or she has been a frequent player. This information is used to gauge
an applicant’s expected level of play.
If the credit applicant has a record with Central Credit, then the gaming report
will list the last and highest action at every gambling establishment where the
applicant has credit. Of course, neither the last action nor the highest action gives
any indication of gambling frequency, but it’s all the casino has to go on if no in-
house record exists. In fact, high action better indicates the applicant’s borrowing
tendencies.
Setting Limits. When the application is prepared, the applicant is asked how
much credit he or she wishes to obtain. There are three options for the credit
executive once the application has been reviewed: the application can be ap-
proved, the amount can be reduced, or it can be denied altogether. Setting ap-
propriate credit limits protects not only the casino but also the applicant.
SLOT MANAGEMENT20
Slots
In the past, table games were king of the casino. Nowadays, slots are the domi-
nating force. Roughly 50 percent of the total casino win comes from slot machines,
and in Nevada, slots are responsible for generating more than 67 percent of the
total casino win.
Themed Slots
Today’s electronic slots have long since replaced the mechanical slots of the past.
Over the past 30 years, one of the most fundamental changes was the proliferation
of themed slot machines.
Bonus Games
With the advent of computerized, electronic machines came the ‘‘game within a
game,’’ one of today’s most innovative slot features. If the player hits on a specific
combination of symbols, he or she is invited to play the ‘‘game within a game.’’
S Although the form of this ‘‘inner game’’ changes with each machine, the concept
N of giving the player an opportunity to physically interact with the game by touching
L the video monitor remains the same.
MILL (Wiley)
SLOT MANAGEMENT 435
Slot machines typically generate the most revenue for casinos. Courtesy
PhotoDisc / Getty Images
Cashless Casino
Slot operations are moving toward creating a ‘‘cashless casino.’’ Cashless slots are
configurable to return bar-coded tickets or coins. The slot player who receives a
ticket has the option of cashing it at the change booth or taking it to another
machine. Some gaming technology allows the player to deposit money with the
casino, then use a magnetically imprinted card to access the money from slot
machines.
Participation Games
Back in the early 1990s, a typical slot machine had a ‘‘shelf life’’ of roughly eight
to ten years. Now the typical machine lasts only two to three years, with video
reels that experience shelf lives only six to nine months long in some markets.
This decrease in shelf life is a result of decrease in demand.
Traditionally, casinos buy most of their machines directly from the slot man-
S ufacturer. A typical video or reel-spinning slot can cost from $7,000 to $10,000.
N Game conversion kits run from $250 to $2,000 and can be used to transform an
L existing machine into a brand-new title (machine type).
MILL (Wiley)
Casinos can use the lease / purchase system to acquire new slots. In this sys-
tem, the amount of the lease / purchase payment is used toward the ultimate pur-
chase of the machine. A daily-fee option on licensed titles allows the operator to
pay the manufacturer a daily fee (perhaps $25 per game per day) in addition to
the up-front charge for the machine.
Under a participation agreement arrangement, the casino pays nothing up
front for the slots. The manufacturer and the casino then share in the revenue the
machine generates, based on a predetermined percentage division. Frequently 80
percent will go to the casino and 20 percent to the manufacturer. A good number
of participation games are offered to casinos as participation games only. For the
casino, this arrangement makes certain machines easier to acquire on more fa-
vorable terms.
Types of Slots
The three main slot categories are multipliers, line games, and buy-a-pays.
In line games, the player can ‘‘activate’’ additional lines by inserting more
coins. In a multiplier game, only the center horizontal line pays. With the insertion
of more coins, the player multiplies the payout per coin. Buy-a-play games also
only pay on the center line, but the player can choose to ‘‘buy’’ additional jackpot
symbols.
Model Mix
The casinos that cater to Las Vegas locals offer mostly video poker machines,
though the Strip casinos (which cater to tourists) predominantly offer reel-type
slots. Local customers appear to be more astute gamblers, who are aware that
video poker machines are likely to have a lower casino average. Additionally, in
video poker the player must use thought and make decisions, unlike in slots, where
the only decisions are which machine to play and how much money to insert.
Mechanical Configuration
The elements that make up mechanical configuration include payoff schedule /
reel strip combination, coin denomination, casino advantage, and hit frequency.
It is up to the slot manager to decide how many machines of each denomination
should be offered and where these denominations should be placed. When plan-
ning a new casino, management should first determine the customer base in order
to determine the initial slot mix. Typically, analyzing competitors’ mechanical con-
figuration is helpful in reaching the targeted customer base. If a certain competitor
is clearly successful at reaching the targeted base, management may consider
S replicating the competitor’s mix, at least initially. After the casino opens, the slot
N data should be analyzed and used to better adjust the machine mix.
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SLOT MANAGEMENT 437
Casino Advantage. Slot machines usually average 0.5 percent up to 25 percent

casino advantage. A number of casinos choose to advertise their low-advantage
machines, believing that the decrease in the house’s advantage will be more than
adequately set off by the increase in volume of play.
In several gaming jurisdictions, minimum levels of payback have been estab-
lished. In Atlantic City, required payback is at least 83 percent. In Nevada, payback
is required to meet or exceed 75 percent.
Hit Frequency. Hit frequency refers to the percentage of trials during which the
machine pays something back to the player. Theoretically, high hit frequency stim-
ulates play. Usually, hit frequencies range from single digits to a high 30 percent.
Floor Configuration
After the needed number of slot machines has been determined by the slot man-
ager, the machine placement on the casino floor must be decided. This is known
as floor configuration, which provides both specific and general placement infor-
mation.
General placement indicates where the coin booths and slot banks (groupings
of slot machines) should be placed. When considering general placement, the slot
cabinets themselves must be seen as empty boxes. These can be used in order to
create traffic patterns or to impede them. The most important consideration is to
place the slots so that the maximum number will be viewed by slot players. En-
ticements such as the bingo parlor or the showroom can be used to create traffic.
These enticements (also known as anchors) will influence slot placement. For
example, slot machines should be arranged at the entrance and the exit of anchors
in such a way that customers will be exposed to the maximum number of ma-
chines upon passing through the doorway.
Aisle Width. Slot aisles are usually between five-and-a-half and seven feet wide.
Too-narrow aisles can cramp customers, leading to a negative impact on profit.
However, too-wide aisles provide less room for machines, which is undesirable.
For 40 years, operators did not pay much attention to slot players’ desire to
sit. Nowadays, the availability of seating at the slots is crucial to the operation’s
success. In Atlantic City, regulations state that all aisles must be seven feet wide
and that all seating must be fixed. This arises from the concern that mobile seats
could topple and impair customers from exiting safely in the event of a fire.
In Nevada, however, using fixed or movable seating is left to the managers’
discretion. Fixed seating also carries with it some liabilities—improperly affixed
seats have toppled and injured customers. Graveyard shift workers remove the
seats to clean around the machine base, and sometimes they are improperly re-
affixed.
S Other benefits of movable seating include requiring less aisle width, giving the
N manager more flexibility, and allowing the customer to stand if desired.
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Philosophies21
Several philosophies inform the placement of different slot models, depending on
coin denomination and the specific models:
Loose slots should be placed on busy walkways, giving an air of activity.

Loose machines should be placed both at the beginning and end of traf-
fic patterns.
The most popular machines need to be near the entrance, where they
can attract customers unsure of entering the casino.
High hit frequency machines placed around the casino’s pit area creates
an atmosphere of slot activity.
‘‘Garbage machines’’ (machines popular with players that do not provide
a high return to the casino) are usually placed in less attractive areas,
such as near rest rooms.
Machines should be located near compatible enticements. . .for example,
poker machines should be located by the poker tables, keno next to
keno, etc.
Test machines and high earners should be placed in high-traffic areas.
Gimmick machines (where the top prize is a trip around the world or a
new car) should be placed in high traffic areas or near entrances.
Machines where a play costs a dollar or more should be placed around
the pit area, while nickel machines should be placed around the
perimeter.
The machines located in accessible, visible areas near the pit consistently
outperform their counterparts in other areas.
Hypothetical The following diagram showcases a theoretical casino floor layout, designed to
Layout maximize the number of ideal slot machine locations. The diagonal aisles are
designed in the hopes of accommodating foot traffic moving to and from the
anchors (located at the corners of the floor). Possible anchors might be restau-
rants, hotel towers, or garages.
Slot Layout and Guest Behaviors22

Servicescape satisfaction ratings are influenced by overall cleanliness, interior de-
cor, and seating comfort. The ability to navigate the casino floor, particularly the
slot floor, is also an issue that receives a lot of interest.
Satisfaction with the slot experience overall is correlated positively with such
important consumer behavior statistics as willingness to recommend and return.
Satisfaction with the casino floor’s navigational aspects is part of the overall proc-
S ess that leads to vital consumer behavior intentions.
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TABLE GAME OPERATIONS 439
1. Slot areas
2. Major Aisles
1 1 3. Table Games
1 2 2
1
1 1
2 2
1 1
FIGURE 15.2 Hypothetical layout. Source: Kilby, Jim, Jim Fox, and Anthony F. Lucas.
Casino Operations Management, 2nd edition. Hoboken, NJ: John Wiley & Sons, Inc.,
2005, 132.
Successful Slot Servicescape

Ambient variables are those that stimulate the five senses. In a casino setting, the
ambience may be judged according to cigarette smoke levels, overall lighting lev-
els, sounds of excitement (clanking sound of coins or dinging of slot bells), and
air temperature. A successful slot servicescape adjusts these to the optimum levels
for customer enjoyment.
TABLE GAME OPERATIONS

Revenue and Profit per Square Foot
In real estate, the concept of highest and best use is described as ‘‘that reasonable
and probable use that will support the highest present value.’’ In a casino, however,
highest and best use of floor space describes that which generates the maximum
profit. Profit, rather than revenue, should be the maximized value.
Table 15.1 charts reasonable expected profit margins from various casino ar-
S eas:23
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TABLE 15.1
Department Margin Percentage
Slots 60–70
Table games 15–20
Keno 25–30
Race and sports 15–25
Poker 20–30
Revenue The casino manager needs to utilize the space available to the best advantage,
and Profit balancing the amount of square footage needed for different games in order to
achieve the highest profit per square foot.
The daily revenue per square foot per game and the daily profit per square
foot per game should be kept track of and analyzed in order to better arrange the
casino floor for maximum profit. Table 15.2 is a sample revenue / profit per square
foot chart that could be used for better floor planning:24
New games are introduced constantly, often on a monthly basis. Many of these
carry a license fee, and they all require floor space. The ‘‘old’’ use of the given
floor space represents displaced revenue, and management should be sure to
quantify the difference between total revenue generated by the new configuration
and the revenue generated by the previous configuration. Put differently, a new
game should be judged not by its total revenue but by the incremental gain or
loss generated.
Maximizing One must estimate profit from activities such as casino gaming, dining, retail shop-
Profit per ping, and entertainment activities in order to properly value a particular occupancy
Available Room segment. In this case, direct contributions are tracked by automatically recorded
purchases, such as carded slot play. Indirect contributions, on the other hand,
refer to purchasing activities that lie outside the scope of the automated tracking
system’s abilities.
A great deal of untracked spending appears to occur in hotel segments in-
cluding Group Business, Free Independent Travelers, and Wholesale. Estimating
TABLE 15.2 Revenue / Profit Per Square Foot

Revenue per Profit per Unit /
Game Unit / Day / Sq. Ft. Day / Sq. Ft.
Craps 19.67 2.95–3.93

Twenty-One 12.50 1.88–2.5
Roulette 17.13 2.73–3.43
S
Slots 12.30 7.38–8.61
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CASINO ACCOUNTING 441
these purchases helps the casino to better rank and understand the value of hotel
segments, which can be assigned an occupancy priority once they have been
assessed.
Once the system is understood, it’s easy to see that a dollar of slot win is
actually worth more than a dollar of table win, since the profit margin of the slot
department is probably significantly greater than that belonging to the table games
department.
CASINO ACCOUNTING25
Table Drop and Count
Depending on the preferences of management and the requirements established
by the gaming jurisdictions, drop boxes can be removed from the table games
either after each shift or once a day. Casinos, unlike most businesses today, do
not record transactions at the point of sale. The proceeds of the shift of the day
are unknown until the count is performed. As a result, the drop and count proc-
esses must maintain their integrity.
The key that accesses the boxes’ contents is controlled separately from the
key that removes the boxes from the table. After removal, the count team reports
as an organization to the finance department so that the revenues being counted
are independent of the employees.
Currency counting machines are used in most casinos today to count and
recount currency, because they easily determine the number of bills from each
denomination and the total for each individual table. These counting machines
can be integrated with the main computer system so that they report the count
results directly to the master game report, eliminating the need for any manual
input.
During the count, all activities are monitored by surveillance cameras, posi-
tioned to record every corner of the room. Most count-room surveillance systems
also include audio capabilities.
Slot Drop and Count

The drop from the slots is different from table games drop because the amount
removed from the slot machines is known. Slot machines each contain a me-
chanical and / or computerized meter that records the amount that should be pres-
ent within the machine. Two drop and count processes occur for slot machines:
coins and tokens (hard drop) and the bills (currency acceptor drop).
Currency Acceptor Drop and Count. As with the hard drop, currency acceptor
drop removal is performed by the drop team, accompanied by security officers.
S The rise of currency acceptors has meant that the hard drop has fallen, as people
N use bills more frequently. Bills have in fact become the preferred play method for
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most customers, which has resulted in labor savings for the casinos, since the hard
drop is more difficult to drop than the currency acceptors.
Key Control. Key controls play an essential part of the drop and count process.
No one individual or department ever has access to full drop containers in storage.
Internal Audit
The Nevada Gaming Control Board has established Minimum Internal Control Stan-
dards (MICS) for use in internal audit functions. The MICS declare that all internal
audits must be independent of the department subject to audit. Additionally, in-
ternal audit must report to the management officials or owner representatives who
are separated from the management of the casino.
The MICS state that the internal audit must review the following areas:
Table games, with audits carried out semiannually.

The slot department, also audited semiannually.
Keno, audited annually.
Card games, also annually.
Bingo, annually.
Entertainment, annually.
Race and sports book, annually.
Cage and credit, annually.
Cage accountability.
Electronic data processing (EDP) functions, annually.
Pari-mutuel wagering, annually.
Reconciliation of gross revenue, annually.
Casino Audit
Casino audit must report to the finance department, verifying the integrity of com-
pliance and control procedures. A daily review of documentation prepared by the
areas listed above is documented through completing a checklist.
Statistical Reports
Key performance statistics are prepared and presented on a daily basis. Many
different jurisdictions also require that the prior year’s information be compared
with the current year’s statistical information. This is done to determine significant
fluctuations. In Nevada, any fluctuations totaling plus or minus 3 percent from the
base level (the statistical win to statistical drop percentage for the previous busi-
S ness year) must be investigated. The results of this investigation are documented
N and retained.
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PLAYER RATING SYSTEMS 443
PLAYER RATING SYSTEMS26

Quantifying the Disadvantage
Quantifying a particular player’s disadvantage is one of the greatest challenges that
faces casino management today. The profitability of any one character can be
determined by how the game is played, the player’s skill level, the bets played,
the total amount wagered, and the speed with which the game is played.
The following games are the most common in U.S. casinos:
Craps
Roulette
Blackjack
Pai Gow
Bacarrat
Pai Gow Poker
Caribbean Stud
Mini Baccarat
Importance
Marketing casinos often depends heavily on complimentaries. If a casino is to use
the system to its full advantage, it must develop a strategy by which comps are
awarded at certain levels that will encourage the player to continue playing while
still allowing for an acceptable casino profit.
In order to maximize profit yet still deliver comps to the players, management
must be able to determine a player’s theoretical value to the casino. Expenses are
easy to identify, but quantifying revenues is a more difficult task. This is compli-
cated in part because the casino frequently calculates two separate revenue (win)
figures: actual win and theoretical win. Actual win is easier to quantify than the-
oretical win, yet the latter is the better representation of a given player’s ultimate
value.
Today, player rating systems are used for awarding comps and identifying
certain customers for the casino’s marketing department to target with direct mail-
ing or other strategies.
Actual vs. Theoretical Win

The formula for theoretical win is as follows:
Average bet ⫻ hours played ⫻ decisions per hour ⫻ house advantage
Hours played and estimated average bet are documented by the casino su-
S pervisory personnel observing the play on a player rating card. The other two
N factors are part of a formula housed within the computer software.
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This process is usually applied consistently to all entries. If the house’s advan-
tage in roulette is 5.26 percent, then this percentage will be used for all roulette
players. Assuming the player rating system is working on 60 decisions per hour
with the previously mentioned house advantage, and the casino supervisor esti-
mates the average bet at $150 for play lasting 2 hours and 15 minutes, then the
system would come up with a theoretical win of $1,065.15.
Average Bet and Time Played

To generate a more accurate theoretical win, an accurate estimate of time played
and the player’s bets are essential. Strangely, few casinos actually provide training
or written guidelines to help the casino personnel gauge these two elements.
The most popular player rating software in use today asks for the following
inputs:
Player’s average bet

Game played
Player’s skill level
Speed of the game
When the casino supervisor rates the player, he or she indicates what game
is in play, the player’s type (Hard, Average, or Soft), the game’s speed (Slow,
Medium, or Fast), the total time played, and the estimated average bet. The game
speed should also indicate how many spins per hour in roulette, hands per hour
in card games, or decisions per hour in dice games.
Estimating the Casino Advantage

An individual players’ skill level can only be determined through an accurate
statistical analysis.
Blackjack. In blackjack, casino marketing rarely focuses on players who do not

bet at least $50 per hand. A customer who plays alone at a table will be dealt
roughly four times as many hands per hour as the same customer who plays at a
full table.
Craps. Craps is more difficult than any other game when it comes to determining
a player’s percent disadvantage and average bet. An average craps player is more
difficult to handicap because his bets must be placed along with the amount that
will be bet on proposition wagers.
Roulette. On a zero (or double-zero) roulette wheel, the player disadvantage on

every bet (except one) is 5.26 percent. The bet with a larger disadvantage (7.89
percent) is the bet with a six-to-one payoff (betting zero, double zero, one, two,
S or three).
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The craps table. Courtesy PhotoDisc, Inc.
Baccarat. As a general rule, the casino employee should choose the most con-
servative skill level if doubt exists. For rating purposes, a conservative skill level
will provide the lowest house advantage.
Game Speed
No industry standards exist concerning game speed, so management should per-
form some in-house research in order to determine the proper slow, medium, and
fast criteria to be used by a floorperson making this determination.
Procedures
To create and maintain an effective, accurate player rating system, the following
should be utilized:27
In-house research should be performed to determine game speed factors.

Current factors should be compared against recommended game house
S advantages and necessary adjustments should be made.
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Quick Getaway 15.3

Discovering Card Counters
Card counting, the method of using mathemat- As noted above, card counting is not
ical formulae to determine the advantageous cheating. Backing players off of a game based
move in a card game, is not illegal. However, only on one person’s suspicion of card count-
since a good card counter can make around a ing may lose the casino a good deal of money
2 percent profit over time in a game of black- in the long run, so the decision to prevent a
jack, it may be to the casino’s advantage to player from participating should not be taken
prevent these people from participating in high- lightly. Just because a player can count does
stakes games. But how can a casino employee not mean that that player is going to beat the
quickly and easily determine if a player is house. Many card counters do not use the Ba-
counting cards? sic Strategy variations, or they use them badly.
There are three indicators that help a floor
supervisor distinguish the counter from the av- Source: ‘‘Bigger is Better?—The biggest casino in the
US is. . .’’ Optimalgambling.com, accessed August 4
erage player:
2006. http: / / www.optimalgambling.com / articles /
biggest-casino.htm
1. The counter must use a betting spread.
2. The counter must deviate from Basic Strat-
egy (the way a typical player would play DISCUSSION QUESTION:
the game), especially when the count is in Card counting is not legally considered
the high plus range. cheating. Do you consider it cheating? Why
3. The counter will only take insurance when or why not?
the deck is rich, with a high plus count.
Ratings cards should be changed so that number of players (one to two,

three to four, etc.) replaces slow, medium, and fast as an estimate of
game speed.
Written guidelines should be established for determining the average
player type, bet, and game speed.
Casino floorpersons should be formally trained in these guidelines.
Periodic refresher courses should be scheduled and implemented.
The accuracy of player ratings should be periodically audited.
The accuracy of the casino employees’ ratings should be communicated
back to them through feedback. High levels of rating accuracy could be
rewarded by incentives and recognition.
Because few floorpersons ever see the results of their ratings, few take ratings
S as seriously as they might if the importance of the ratings were communicated to
N them.
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Establishing Guidelines
Complimentary policies should be put in place with two particular objectives kept
in mind: maximizing customer satisfaction and ensuring that the casino’s profit
margin is acceptable. Customer satisfaction may not be maximized by policies that
base comps solely on theoretical win, although such a system would create an
acceptable profit margin for the casino.
Rating Systems
Slot Systems. Tracking individual play, summarizing the gaming activity at the
player level, and storing demographic player data can all be achieved by a slot
player rating system. Most casinos choose to use two separate systems. The first is
primarily responsible for gathering data from the machines on the floor, and in-
terfacing with the second system. This second system is made up of an accounting
module and a marketing module, which is separate. The first module stores an
individual machine’s performance data, allowing for analysis and aggregate levels.
The second module presents data which management can view and sort. This data
pertains to demographics, visitation, gaming history, and individual player perform-
ance.
How is it possible for a casino to obtain all this information? Through players
who enroll in the casino’s slot club or the player tracking program. How does
management ensure that players use their tracking cards? A reward system, in
which the player’s gaming volume determines the magnitude of the award, is the
most common incentive. At many casinos, points are accumulated as a function
of the money wagered (coin-in). However, at least one major casino company
computes its rewards as a result of coin-out. Incentives may be based on theoret-
ical win, but most casinos base their incentives on a function of some particular
gaming volume.
Points awarded to players can be converted to shopping dollars. At some
casinos, points are not used, but rather a cash-back refund is employed. This
refund is also a predetermined function of either a gaming value measure or a
gaming activity. A number of casinos now offer a system under which the simul-
taneous accumulation of points may be redeemed at retail outlets and as a cash-
back award.
Naturally, casinos with a coin-in reward system will encourage their players
to choose low-house-advantage games. The benefits of rewards programs are easily
communicated, which improves the customers’ understanding of the process and
its benefits. Simpler is better, which is why a reward system based on theoretical
win may seem abstract.
Credit Card Issues. Because it is sometimes a challenge to encourage players

to use their cards, most casinos suffer from low card usage. It’s not unheard of for
S a Las Vegas casino to experience a usage rate of only 30 to 35 percent of total
N play.
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Technology may be used to increase the amount of tracked play. Biometric

facial recognition technology employs a small camera inside each machine, which
records the player’s image. Once this has been done, no card need be used to
identify a player. Nevertheless, an original record must be submitted in the form
of a photograph at some point. This image may be captured during the slot club
enrollment procedure or at hotel registration. Unsurprisingly, use of this technology
raises issues about privacy concerns and the intrusiveness of being filmed.
A good compromise for a casino involves telling infrequent visitors about
the random bonus awards, and saving the cash-back, point-accumulation,
nonmonetary-privilege spiel for frequent visitors.
TABLE GAME HOLD AS A

MANAGEMENT TOOL28
Uses
In the past, there were only two primary uses for table game hold: to identify theft,
and to identify good or bad casino management. Even today, casino management
uses hold when making decisions on employee honesty and productivity. Simply,
table game hold represents the percentage of chips bought at the table by the
customer that the house wins back. Written mathematically, this formula appears
as:
Win
⫽ Hold
Drop
High Table Occupancy

Casino profit is equal to wins less expenses. Decreasing expenses is one way to
increase profit. Since the table games department’s payroll encompasses 25 to 50
percent of the game’s win, comprising the largest line item on the profit and loss
statement of the casino, it only makes sense to begin cutting here.
The casino’s two main types of expenses are: payroll expenses, which are
indirectly correlated to the number of customers, but directly related to the num-
ber of open games; and expenses that directly relate to customers (gaming taxes,
complimentary beverages, etc.).
Will having fewer open games with the same number of players lead to max-
imum profit? To address this query, some assumptions must be made:
One dealer works each table for 50 minutes before taking 30 minutes off.
There is one floorperson for every five games (0.2 floorpersons per
S game), who receive one 50-minute and two 30-minute breaks each shift.
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TABLE GAME HOLD AS A MANAGEMENT TOOL 449
Each dealer is paid $60 for an eight-hour shift.

Each floorperson is paid $175 per shift.
Taxes and benefits make up another 40 percent of labor costs.
The number of games open causes the payroll costs to vary, and the number
of actual players affects costs such as complimentary beverages.
Using the previous assumptions, the following formulae demonstrate the cost
of staffing each table for eight hours:
Dealer
80 ⫻ 60 ⫻ 1.40 ⫽ 134.40
50
Floorperson
480 ⫻ 0.20 ⫻ 175 ⫻ 1.40 ⫽ 63.57
370
Total per table ⫽ 197.97
Table 15.3 below compares two theoretical scenarios: in one, there is one
player per table at 25 tables; in the other, five players at five tables. First we must
assume an average bet and house advantage. An average bet of $100 per hand
and a 1 percent house advantage will do. However, the house advantage does not
affect the conclusions that these scenarios support.
In this comparison, margin increases as the occupancy increases. However,
profit decreases. It’s safe to say that the following illustrates the correlation be-
tween profit, occupancy, margin, and hold:
TABLE 15.3 Costs of Table Staffing

Scenario 1 Scenario 2
Tables open 25 5
Players per table 1 5
House advantage 1 percent 1 percent
Bet per hand per player $100 $100
Hands per hour 209 70
Win per hour per table $209 $350
Win per table per shift $1,672 $2,880
Gross win (all tables) $41,800 $14,400
Labor cost per table $197.97 $197.97
Total labor cost of all tables $4,949.25 $989.85
Contribution $36,850.75 $13,410.15
Margin (percentage) 88 93
Source: Adapted from Kilby, Jim, Jim Fox, and Anthony F. Lucas. Casino Operations Management, 2nd edition.
S Hoboken, NJ, 2005, 252.
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Occupancy Hold Margin Profit
When management attempts to increase occupancy by putting the same

number of players at fewer games, the return on labor is increased successfully,
but the maximization of profit is not achieved. That is, efforts to increase game
occupancy reduce profit.
Management frequently determines for declining the hold percentage. Increas-
ing occupancy from 3 to 3.8 players will in and of itself decrease the hold per-
centage. The increase in occupancy will usher in an increase in the margin of the
table games department, but it will come at the expense of the profit.
For labor costs to be covered, a casino must have high table occupancy with
players betting a certain amount. In order to break even, a table must be near
maximum capacity if the players are making smaller average bets. As the average
bet increases, having fewer players per game will help to increase profit.
So how can a casino go about decreasing occupancy? More games can be
opened, but this may not work because the casino is unable to control where a
player decides to play. A second method (applicable to blackjack) is to decrease
the number of spots in the layout. Over the past few years, many casinos have
increased the number of seats at tables from six to seven. A different strategy would
be to decrease these seats, or the spots at a table, on the higher minimum bet
games.
Why would a casino choose to increase the player spots located at a given
table? There are two reasons: emphasis has traditionally been placed on increasing
the return on every labor dollar spent, and the relationship between emptier tables
and higher profits has not been fully considered before. When every game is open
and filled, the only way to increase profit is to increase the minimum bet—but
it’s rare that every game is open and filled.
CASINO MARKETING
In recent years, casino marketing has become increasingly emphasized. Marketing
costs have continually risen as competition between casinos has risen. Innovative
and new ways of differentiating oneself from the competitors are difficult to come
by, although spending on marketing has significantly increased. Marketing is now
more than ever crucial to a given casino’s success.
Match Plays and Nonnegotiables

Match play coupons and nonnegotiable chips (like promotional chips) are increas-
ingly being used as a marketing strategy, both in Nevada and around the world.
At first, coupons were only issued in denominations of $1 or $2 and then only to
S the customers who didn’t mind cashing their paychecks at the casino. Back then,
N the match play coupons were known as game starters.
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CASINO MARKETING 451
Nowadays, match play coupons and nonnegotiable chips are given away in
much larger increments—at times, hundreds of dollars. What used to be only a
nominal amount now can total several thousand dollars each day. Therefore, man-
agement must closely review these programs and the large costs they incur to
ensure that the program is achieving its overall objective in the most cost-effective
way possible.
Basically, a match play requires a cash ‘‘match,’’ while a nonnegotiable can
be played on its own. Often the match play does not require an equal cash
‘‘match’’. . .a $1 match play may require a $2 bet to go along with it, with winners
taking away $3.
Match plays or nonnegotiables can also be styled in a manner so that the
player only forfeits the item when he or she loses, or when the bet is won by
exchanging the match play for a live chip of equivalent value. Coupons placed in
the table’s drop box by the dealer after a bet has won are referred to as ‘‘with
exchange,’’ and those forfeited after a bet is lost are referred to as being ‘‘without
exchange.’’
Casinos often offer several different types of nonnegotiables and / or match
plays at the same time. Only the imagination of the casino’s management can limit
the restrictions placed on these coupons.
The cost of a nonnegotiable or match play is actually a function of the house
advantage, as the cost of the match plays to the casino is less when the game has
a greater house advantage.
The casino’s marketing director must possess the ability to identify and main-
tain profitable programs, and to eliminate those that do not turn a satisfactory
profit. Although a casino may be profitable, it should not be assumed that all of
its marketing programs are successful. Constant scrutiny ensures that each program
is reaching its goals. Systems should be put into place to track programs’ perform-
ance values, helping the marketing director to evaluate each program individually
and as compared to other programs.
Match play coupons are one of the most common ways of marketing to an
individual customer. Because the assumption exists that these serve as effective
game starters, and because they are somewhat costly to the casino, it would be
helpful to find evidence that supports a positive relationship between table games
drop and coupon redemptions. At the very least, it would justify the continuation
of this somewhat leap-of-faith marketing strategy.
Gambler’s Spree
At today’s casinos, one justification for implementing a particular program or pol-
icy is that a competitor is offering the same thing. If a well-known casino is offering
a certain program, it is more likely to be adopted by a competing casino—
regardless of its actual merits. One example of this phenomenon is the proliferation
of $5 table game programs that are known as ‘‘gambler’s spree.’’
These programs are designed by independent casino representatives in order
S to attract gamblers to the casinos that they work for. The programs are styled in
N many, many different ways, but the gist is:
L
MILL (Wiley)
1. The representative works with the casino-hotel to offer gamblers a dis-

counted room rate, some food and beverage credit (or a discount), and
some type of match play or nonnegotiable must be given to a player if a
certain bet and / or time requirement is met.
2. These items are assembled by the representative, who adds some airfare
and transfers to and from the casino. Then the rep sells the package to
players at a price that usually nets the representative a profit of roughly
$60 to $100 per player.
Before management agrees to allow a gambler’s spree like the above example,
four questions should be carefully considered:
1. What would be the profit / loss if only the minimum requirements are
met?
2. What is the minimum action required for the program to break even?
3. Can the casino reasonably expect players to gamble in excess of that re-
quired to break even, which would assure the casino a profit?
4. Do any reasons exist to justify the program, even if management does
not believe there will be sufficient action for it to break even?
Dead Chips and Chip Warrants

A chip warrant is a voucher, generated and controlled by the casino. The player
presents it at the table, receiving an equal amount of nonnegotiable chips known
as dead chips.
A player may purchase a chip warrant for $100,000 at the casino cage. The
casino agrees to rebate the player somewhere around 1 to 3 percent of the pur-
chase, after the dead chips are lost. The dead chips can be wagered just like live
chips, and winning bets are paid in live chips. Once all the dead chips have been
wagered out, the live chips that the player possesses represent actual cash, which
then can be exchanged for at the casino cage.
A version of this program, called the dead chip program, appeared in Las
Vegas. In this version, a player representative promises to deliver players (usually
from Asia, where dead chips are popular) who will each bring $100,000 in cash
to the casino. These players agree to make $1,000-per-hand wagers in baccarat, as
long as the casino picks up their room, food, and beverage expenses, along with
airfare.
The player representative also expects a commission from the casino in return
for delivering the players. The player who presents $100,000 in cash receives
$103,000 in dead chips. After that is gone, the player can purchase $102,000 in
dead chips for $100,000. For the third purchase, and all purchases following, the
player gets $101,000 in dead chips for every $100,000 spent.
Determining the merits of such a program means calculating how much the
program will cost and how long it will take to ‘‘wash’’ (exchange dead chips for
S live chips) the chips. Wash time is important because if too much play time is
N required, the casino can’t expect much of a profit.
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MILL (Wiley)
Dead Chip Commission. The dead chip bonus can be awarded after the end
of play, rather than at the beginning. The player will pay all of the face value of
the dead chips, and after they are lost, he or she will receive a cash refund equal
to the dead chip bonus.
General Slot Marketing

The majority of slot marketing is driven by databases. However, casinos also offer
promotions in the hopes of bringing in new customers and hopefully adding them
to the slot club. An important issue for marketers is whether belonging to a slot
club builds loyalty, or just acts as an elaborate discount device. Is the most com-
mon form of slot club appropriate for every casino?
Learning about customer behaviors through their slot club card is already
understood, but casinos need to learn more about the actual club card holders.
Are they simply bargain-hunters attracted to the deal, but not the casino? Many
customers belong to several casinos’ slot clubs. Reverse buying in this market can
cause profit erosion, so care must be taken to ensure that the incremental effects
of all offers are constantly scrutinized.
Drawing-based promotions rarely pay for themselves, and direct mail programs
aren’t much better (though it depends on the market). Since direct mail experi-
ences mixed results, casino managers would be well-advised to keep a sharp eye
on any such program and its success rate.
Cash Mail. Cash mail (direct mail) promotions consist of cash incentives in tiered
offerings. The value of these offerings is usually determined as a function of the
player’s average daily theoretical (ADT), which is obtained from slot databases.
Since this requires previous experience with the casino, cash mail is usually geared
at generating repeat visits. Using cash mail too much can lead to customers per-
ceiving it as an entitlement rather than a promotion. Some casinos have compen-
sated by requiring players to wager the promotional bonus at least once. This
requirement prevents ‘‘walkouts,’’ players who redeem offers and do not game on
the same day. In the short term, this new strategy may damage customer relations
as they realize cash mail is not an entitlement.
Restaurants and Slots. The notion that restaurant operations can successfully
generate slot play is popular especially among markets characterized by repeat
clientele (Las Vegas, riverboat markets). This has been proved incorrect—the suc-
cess of this strategy varies between properties. Any casino that decides to use this
strategy should closely monitor its success, by comparing cash covers (restaurant
head counts) to coin-ins. Covers that result from comps will likely skew the data.
Food Loss Leaders. Many casinos lose millions annually through operating food
outlets. If a restaurant is casino-operated, it’s more likely to incur substantial losses.
S The aforementioned theory is the justification for these losses. Given this situation,
N knowing how casino volume is affected by restaurant cover would be extremely
L
MILL (Wiley)
helpful. Does casino volume offset food losses? If food is discounted just enough,
will that simply attract bargain-hunters with no interest in gaming?
Contracting outside restaurant companies to operate food service is one op-
tion. This eliminates the loss factor, but it reduces the casino’s control over food
quality and hours of operation, since many private contractors are unwilling to
run a 24-hour operation. Working with an outside restaurant company also com-
plicates the issue of food comps. For these reasons, a hybrid approach may be
the best solution.
Drawing-Based Promotions. These promotions are very popular in repeater

markets. There exist infinite variations on the drawing theme, so only the basic
form will be discussed here. Customers acquire tickets though winning top award
jackpots on specific slot machines. The two-part, numbered ticket is torn and half
is thrown into a drawing drum, with the remaining half going to the customer.
Cash prizes for these drawings can reach up to $1 million. Despite the huge cash
prizes, drawings’ effects on property cash flows are unknown. Only one study has
addressed the issue, and it did not support a positive cash contribution to the
casino.
Acquire, Retain, Recover. Slot marketing can be divided into three categories:
customer acquisition, customer retention, and customer recovery. Mass mailings,
database analysis, general advertising, and drawing-based promotions are all
aimed at acquiring new customers. Direct mail campaigns, bonus promotions,
event promotions (such as a slot tournament), and slot club membership drives
are all strategies designed to retain customers. Recovering lost customers may
involve increasing the value of incentives, or conducting customer interviews to
establish the cause for lost business.
Consumer Choice Factors

What are the properties of a casino that cause consumers to choose it over an-
other? This is especially important to repeat-clientele markets with a competitive
atmosphere. The answer to this question varies by market, but some answers are
nearly universal.
General convenience of location is a major draw; in fact, across three different
repeater markets (Las Vegas, Chicago-based riverboats, and Mississippi locals) it
was the only common answer.
Rebates on Losses
Premium players are often offered a rebate on their losses by casinos who want
to retain their patronage. This strategy can be wildly successful, but a casino that
doesn’t thoroughly understand how it works may be courting disaster.
Only when the theoretical casino win equals the losses of the player does a
S 10 percent rebate actually cost the casino 10 percent. Until this equilibrium is
N attained, the costs are actually greater. The casino will lose revenue if the player
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MILL (Wiley)
Quick Getaway 15.4

Vegas vs. Video Games
‘‘Tom Clancy’s Rainbow Six Vegas,’’ which has showcase ‘‘Sin City’’ in an unfavorable light:
players fighting against terrorists on the Vegas the 1970s’ James Bond flick Diamonds Are For-
Strip, has Las Vegas marketers worried about ever included a perilous Fremont Street car
the image it portrays. chase, and in 1997, moviegoers watched a
‘‘It could be harmful economically, and it plane crash into the Hard Rock Hotel in Con
may be something that’s not entitled to free Air. Currently, CBS’s popular series CSI: Crime
speech [protection],’’ Las Vegas Mayor Oscar Scene Investigation dishes out a new Las Vegas
Goodman says of the game’s gruesomely real- murder every week, and the Stratosphere tower
istic scenes, which he had not viewed person- exploded in Domino, a Keira Knightley film
ally. which was released in the fall of 2005.
According to Goodman, the game is Liping Cai, director of the tourism and hos-
‘‘based on a false premise,’’ because federal pitality research center at Purdue University,
and state leaders have repeatedly assured him says that tourism will probably not be affected
that Las Vegas is ‘‘the safest place imaginable’’ by the virtual violence portrayed in the Tom
five years after the terror attacks on the East Clancy video game.
Coast on September 11, 2001. ‘‘However, if that video game becomes so
’’I will ask. . .whether or not we can stop popular that a whole generation is educated on
it,’’ Goodman says of the video game’s planned that image, it will affect people’s perception of
release.. the safety of Las Vegas,’’ Cai says.
Las Vegas Sheriff Bill Young questions the
wisdom of showcasing terrorists in this city’s Source: Jones, Chris. ‘‘Terror On The Strip: Video game
bustling tourist corridor, saying ‘‘it’s unfortu- depicting attacks in LV makes some officials wince.’’
Las Vegas Review-Journal (July 8, 2006). http: / /
nate that we’re the backdrop for a lot of stuff www.reviewjournal.com / lvrj home / 2006 / Jul-08-Sat-
because of our profile. I’m not a big believer 2006 / news / 8367726.html
on pushing violence on young people any-
more, particularly the more-realistic stuff that’s
coming out today.’’ DISCUSSION QUESTION:
Las Vegas’s high-profile status has long Should the media be held accountable for
drawn attention from the media. The city is of- portraying certain places as dangerous
ten used as a backdrop for dangerous action through unfavorable depictions in movies
scenes, such as those in Frank Sinatra’s 1960 and video games? Should those who live in
film Ocean’s Eleven, which was based on rob- the area have a say in whether the game or
bing casinos. There are many other movies that movie is released?
S
N
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MILL (Wiley)
plays small total hands, which is a serious concern since the casino cannot predict
what will happen in the short term. Therefore, a long-term program designed to
ensure profitability is advised.
Player Action Criteria

Premium table game players are ‘‘courted’’ by casinos, who will give out huge
amounts of comps just to attract them. Some casinos contract independent rep-
resentatives to find and attract these players.
Schedules should be developed, using player action criteria, to ensure that
the player is given adequate comps while maximizing casino profit. Identifying the
true cost of the complimentaries to the casino is very important, as is tracking to
associate the cost of the comps to the individual players with which they relate.
A schedule of this sort can be established which determines the average bet
based on all games played, instead of by a per-game basis. However, a per-game
schedule is recommended, as a roulette player (for example) can lose roughly
three times more per hour than a blackjack player.
Premium Player Segment

Marketing to premium players is threefold. One part of the equation is the amen-
ities offered by the property. The second part involves the hosts, who serve as
communicators between the high roller and management. The third part is defined
by the deals that are offered to the premium player. If any one of these elements
is missing, the casino will find it more difficult to attract the high rollers it wants.
The premium-player segment is thought to produce a disproportionate amount
of casino profit, with good reason. These players make up only 5 percent of Las
Vegas gamblers, yet they produce 40 percent of the gross gaming win. It has been
suggested that premium players are necessary for producing the cash flow that is
required for a mega-resort.
The gross gaming win does not consider the costs of player acquisition, how-
ever. Expanded play incentives can be very expensive for the casino, if they are
not managed properly.
Definition. There are many different definitions of a ‘‘premium player,’’ but a

three-tier framework can be used to describe this demographic. Tier-1 players have
a maximum credit line of $20,000. Tier-2 players’ credit lines range from $100,000
to $500,000, and tier-3 players have credit from $1 to $5 million. Although this
basic framework works relatively well, it contains some gaps, and there is no
classification for those with credit exceeding $5 million.
Acquisition Costs. Individually, premium players appear to justify their acqui-

sition costs. Before discounts, players usually received free lodging and food, with
the occasional airfare reimbursement. Back in those days, acquisition costs were
S fairly modest.
N Now that competition has increased between casinos, premium players can
L negotiate much greater play incentives. As mentioned earlier, discounts on losses
MILL (Wiley)
are a large cost to the casinos. Spiraling play incentives, especially discounts, have
led to recent cuts in marketing efforts aimed at premium players.
At least 12 Las Vegas casinos actively offer a priori discounts to premium
players. Nearly all of these offer discounts on losses to some degree. Casinos that
rely more on premium players offer greater discounts on losses.
The costs associated with attracting high rollers have a deleterious effect on
premium-play profits. Costs have become so high that some casino owners are
questioning the profitability of this segment. If this segment is not as profitable as
was once believed, what can be done to remedy the situation?
True Cost. The true costs associated with discounting can be enormous. The face
value of any a priori discount is likely to be understated in its effect on the game’s
earning potential. In some cases (in baccarat especially), an a priori discount can
turn the house’s advantage into the player’s advantage.
Hidden Cost. A guaranteed 20 percent refund of losses in a game of baccarat is

capable of totally dissolving the casino’s usual advantage, and actually creating a
player advantage. Additionally, most astute players are aware that when it comes
to the number of hands played, less is more.
The truth is that if a player is allowed to negotiate a priori loss discounts, the
casino simply cannot allow that player to determine the number of hands played.
Quick-Loss Rebates. Nearly all Las Vegas casinos that pursue the premium-
player segment offer quick-loss rebates. These are structured to award a player the
greater of 15 percent of a player’s actual loss or 45 percent of theoretical win, in
order to cover airfare and room, food, and beverage costs. This is usually offered
in addition to any other loss rebates. This rebate may exist because management
believes that short-term losses will be kept by the casino.
However, this strategy only encourages players to play few hands with large
wagers. The addition of this policy to rebate-on-loss marketing gives players an
even greater incentive to curtail their play. As such, this rebate can be far more
costly than it is beneficial.
Costs of Competing. Casino managers give premium players free rooms and
expensive food, which obviously have costs associated with them. The rule of
thumb at most casinos states that comps of as much as 35 to 50 percent of a
player’s theoretical loss may be awarded. However, these guidelines were not
altered after a player was given a rebate on losses. This failure only decreases the
premium-player segment’s profitability for the casino.
The profit of bringing in high rollers should more than compensate for the
costs associated with providing incentives such as classy limousines, lavish hotel
rooms, and gourmet restaurants. The costs for these amenities can be insanely
high; for example, the MGM spent $180 million in 1999 on its new high-roller villa.
These incentives are not the end of the story. High rollers are also frequently
S given free chips, ‘‘walk-in’’ money, and airfare allowance. . .despite the fact that
N the casino’s jet flew them to and from the casino. Yet casinos do not set any
L minimum-play criteria for these players, endangering their profit potential.
MILL (Wiley)
Quick Getaway 15.5

Gaming from Abroad
Online gambling is at an all-time high. What’s legal. With a Chinese population of 1.3 billion
in store for gaming sites in the next five years? people, Macau is sitting on a tremendous op-
Perhaps the traditional games will take on a portunity.
more Eastern flavor. What does this mean for online gambling?
Right now the world goes to Las Vegas to Eric with MacauTexasHoldem.com says, ‘‘With
gamble, the biggest poker tournaments are the growing popularity in world poker tourna-
held in Europe and the U.S., and the biggest ments you can expect that Macau will have
online gambling sites have mainly American tournaments for traditional Vegas games and
gambling themes. After Las Vegas’s legalization many culture specific games that are new to
of gambling on March 19, 1931, the city ex- most Americans. This is a very exciting time for
ploded into a gambling mecca, a title that it Macau and its growing popularity as a premier
has unofficially held for almost 75 years. How- travel destination for casino gambling, resort
ever, a great shift in the world of gambling and meetings ensures it will be a dominant
looks like it’s ready to take place: Las Vegas’s force. . .’’
current top contender is a small city that Online gamblers may see a major shift in
wouldn’t have been a blip on its radar only five online gambling trends soon. Popular online
years ago—Macau. gambling games like poker may start to give
Macau is a small territory on the southern way to traditional Chinese gambling games. Or
coast of China that has grown from roughly 9 perhaps Vegas-style games like poker will sim-
million arrivals in the year 2000 to 19 million ply take on a more Eastern flavor.
in 2005. Over half of these arrivals come from
mainland China. Macau’s amazing growth has Source: ‘‘Macau vs. Las Vegas.’’ PRWEB, May 16, 2006.
been primarily driven by gambling and tour- http: / / www.prwebdirect.com / releases / 2006 / 5 /
ism. In 2004, Macau made a splash by over- prweb386127.htm
taking Las Vegas in its individual casinos’
gambling revenue (roughly US$5 billion per ca-
sino). The key to understanding Macau’s suc- DISCUSSION QUESTION:
cess is realizing that Macau is the only city in Do you think that American gamblers will be
the Greater China Region where casinos are drawn to traditional Chinese games?
Discounting Rationale
If discounting is as expensive and damaging as all this indicates, then why is it
such a popular practice? Why are their harmful effects not detected?
To begin with, the process of discounting and rebating is fairly young, having
first appeared in the 1990s. They probably began with high rollers losing huge
S amounts of money and being unable to pay the full amount. Initially, a casino
N executive may have tried a payment plan. After that failed, a discount was offered,
L on the theory that collecting something is better than collecting nothing at all.
MILL (Wiley)
Eventually, this discount turned into an incentive, to be used in bidding wars.

Players benefited.
Although casinos may recognize the damaging effects of their discounts, they
are loath to part from them, because they still want the high-roller visits. Some
casino executives may see the segment as simply inherently profitable. Combined
with poor game mathematics, these discounts can have a catastrophic effect on
profit.
The thrill of ‘‘stealing’’ a whale, or big high roller, from another casino may
blind executives to the unprofitable position they have put the casino in, through
offering unreasonable discounts. Conceding the game advantage, even to a whale,
is not a wise strategy.
Discounting Dangers
Before casino executives decide to go ahead with a new discount, they should
carefully examine the mathematics involved. In the case of loss rebates, players
must be asked to play a minimum number of hands to ensure that the casino does
not lose money. Discounting policies should also prevent players from pooling
their actual losses from different games, because the house advantage varies from
game to game. In skill-based games such as twenty-one, a player’s abilities and
not historical performance should be used to determine discounts. Although dis-
counting in and of itself is not inherently dangerous, when misapplied by people
who do not understand the math, it can be truly disastrous. Additionally, with the
way premium players are being handled in the industry right now, constructing a
new casino that is designed to pull most of its profits from premium players is a
questionable move.
SUMMARY
As gaming continues to grow there will be an increased need for managers to
learn and apply specialized knowledge of the market, the regulatory framework
within which casinos operate and the techniques of management and control
unique to this type of operation.
ENDNOTES
1. Miller, Richard K., and Associates, Inc. The 2005 Travel & Leisure Market Research Handbook.
Loganville, GA, 2005, 379.
2. Ernst & Young. 2004 United States Gaming Bulletin.
3. Ibid., 1–2; 17.
4. Ibid., 12.
S 5. Ibid., 31. Dense, Jeff, and Clyde W. Barrow. ‘‘Estimating Casino Expenditures by Out-of-State
N Patrons: Native American Gaming in Connecticut.’’ Journal of Travel Research, volume 41 (May
L 2003): 410–415.
MILL (Wiley)
6. Dvorchak, Mark E. From Casino to Resort: Understanding the Entertainment Hierarchy. Los An-
geles, CA: Economics Research Associates, July 2002.
7. Ibid., 9.
8. Ibid., 10.
9. Garrett, Thomas A. Casino Gambling In America and its Economic Impacts. St. Louis, MO: Federal
Reserve Bank, 2003.
10. Ibid., 6.
11. Ibid., 6–7.
12. Ibid., 7–9.
13. Moufakkir, Omar, A.J. Singh, Afke Moufakkir-van der Woud, and Donald F. Holecek. ‘‘Impact
of Light, Medium and Heavy Spenders on Casino Destinations: Segmenting Gaming Visitors Based
on Amount of Non-Gaming Expenditures.’’ UNLV Gaming Research & Review Journal, Volume 8,
Number 1 (2002): 59–71.
14. Kilby, Jim, Jim Fox, and Anthony F. Lucas. Casino Operations Management, 2nd edition. Ho-
boken, NJ, 2005, 43.
15. Ibid., 53–59.
16. Ibid., 61.
17. Ibid., 71.
18. Ibid., 81.
19. Ibid., 83.
20. Ibid., 107.
21. Ibid., 130–133.
22. Ibid., 133.
23. Ibid., 179.
24. Ibid., 182.
25. Ibid., 193.
26. Ibid., 219.
27. Ibid., 232.
28. Ibid., 241.
S
N
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MILL (Wiley)
INDEX
A demand model for, 44–46

Add-on membership, 230 demographics, 74
Activity analysis, 268 base village resorts, 93–94
Activity programs, see Guest activity emergency care, 46
programs food service, 44
Adventure travel, 351–365 maintenance, 46
adventure education, 359–360 parking, 43
activities, 357–365 trends in, 93–94
hard adventure, 354–356 Beaches, 99–104
market profile, 351–352 Blue-Flag Certification, 128–131
miravel anti-spa, 367 environmental management, 129–
and older customers, 356 131
soft adventure, 19, 356–357 waste disposal, 129–131
and tourism, 360–361 water quality, 128–129
wilderness tours, 354 capacity, 101
and women, 358 density of, 100–101
Air Travel, 6 material, 100
All Inclusive Packages, 17 slope of, 100
Amenity(ies), 4, 9, see also surrounding area, 102
Recreational amenities zoning, 101
golf courses, 146 Beach-based resorts, 97–104
most popular, 278 basics for, 103
spa, 308 catering to kids, 132
swimming pools, 328 criteria for certification, 128–134
tennis facilities, 174 guest profile, 125–128
Anchoring, 135–136 beaches and islands, 125
Aromatherapy, 323 scuba travel, 125–126
Association (ownership) membership, romance-related, 126–128
228
and local community, 134
Atlantic City, 5, 422
managing the resource, 128–134
environmental management, 129–
B 131
Back beach, 101 committee, 129
Barry, Dave, 98 pets, 131
Balance Sheet, 83–84 sanitary facilities, 130–131
And timesharing, 245 waste disposal, 129–130
Base Areas, 43–46, 93–94 safety and services, 131–134
S access roads, 43–44 access, 134
N accommodation, 44–46 activity zones, 133–134
L
MILL (Wiley)
462 INDEX
Beach-based resorts (continued ) currency acceptor drop and

emergency plan, 134 count, 441–442
first aid, 131–133 key control, 442
lifeguards and equipment, 131 statistical reports, 442
maps, 134 table drop and count, 441
palapas, 133 currency counting machines,
weddings, 127 441–442
Beach development, 99–104 baccarat, 425, 443, 445
back beach, 101 blackjack, 425, 430, 443, 444
beach, 100–101 cage, credit, and collections, 432–
beach capacity, 101 434
costal sites, 103–104 casino cage, 432
desirable sites, 102–104 casino credit, 432
evolution of, 104 types of, 432–433
Benchmarking, 282 classes of customers, 433
Biking, 358 credit decision, 433–434
Bird and animal watching, 358 and ability / willingness to pay,
Blue Flag Certification, 128–131, 139– 433–434
144 propensity to play, 343
Boating, 135–137 setting limits, 434
and environmental code of conduct, procedures, 433
143–144 card counting, 446
Bone, William, 216, 226 comps, 426
Bradbury, Malcolm, 368 control, 430–431
Breakwaters, 113 front money and safekeeping
Budgeting for activity programs, 276– deposits, 431
277, 279 24-hour window, 431
Built-in marina, 114–115 customer identification, 431
Bulkheads, 113 options for, 431
Business travel, 9, see also conference history, 430–431
business reporting in non-gaming areas, 431
and golf, 194–196 and cruises, 383
health and fitness, 334–335 dealers, 430
meeting / recreation balance, 244 demographics of casino customers,
and most important amenity, 328 422–428
heavy spenders, 426–428
and income range, 422–423
C premium player segment, 456–457
Camping, 357 promotional strategies, 425–426
Canoeing, 359 and types of games played, 424–
Carlson, Bror R., 82 425
Casinos, 414–459 whales, 425–426
accounting, 441–442 development as resorts, 417–421
casino audit, 442 land-use relationship model, 420
internal audit, 442 objectives, 418
Minimum Internal Control of development, 418–419
S Standards (MICS), 442 revenue, 419–421
N slot drop and count, 441–442 phases of becoming, 417–418
L
MILL (Wiley)
INDEX 463
competition from other discounting rationale, 458–459

locations, 418 general slot marketing, 453–454
entertainment convergence, 418 acquire, retain, recover, 454
serving local market, 418 cash mail, 453
roles of specific elements, 421 drawing-based promotions, 454
entertainment, 420 food loss leaders, 453–454
gambling, 19 restaurants and slots, 453
average bets, 426 gambler’s spree, 451–452
types of games, 424 match plays and nonnegotiables,
legalization of, 416, 421–423 450
online, 458 and media images, 455
player rating systems, 443–448 player action criteria, 456
profile of gamblers, 422–428 premium player segment, 456–457
gaming market, 415–417 acquisition costs, 456–457
distribution of, 415 costs of competing, 457
major companies, 417 definition, 456
Native American (tribal), 417, 421 hidden cost, 457
state by state, 415–416 quick-loss rebates, 457
United States, 415 true cost, 457
heavy spenders, 426–428 rebates on losses, 454, 456
land-based gambling, 416 Native American (tribal) gambling,
largest in US, 416 416–417
Las Vegas and Nevada, 415–416, organizational structure, 428–429
421–422, 442, 455, 458 player rating systems, 443–448
legal issues: actual versus theoretical win, 443
casino legalization, 416, 421–423, average bet and time played, 444
458 establishing guidelines, 447
and machine output, 425 estimating the casino advantage,
Macau, 458 444–445
Machine output, 425 baccarat, 445
computerized, 425 blackjack, 444
laws for, 425 craps, 444
management, 428–429 roulette, 444
president or general manager, game speed, 445
428–429 importance, 443
games or casino manager, 429–430 procedures, 445–446
other managers, 429 rating systems, 447–448
and table game holds, 448–450 credit card issues, 447–448
vice presidents, 428–429 slot systems, 447
market, 421–428 quantifying the disadvantage, 443
marketing, 450–459 and technology, 448
and accommodations, 420 and popular culture, 415, 455
consumer choice factors, 454 riverboat-based gambling, 416, 423
dead chips and chip warrants, slot management, 434–434
452–453 bonus games, 434
dead chip commission, 453 cashless casino, 435
S and entertainment, 420 comps, 426
N dangers of discounting, 459 floor configuration, 437
L
MILL (Wiley)
464 INDEX
Casinos (continued ) Costal sites, 103–104

aisle width, 437 Costal stretch, 101–102
general placement, 437 access roads, 101–102
mechanical configuration, 436–437 facilities, 101
casino advantage, 437 Cottle, John, 43
hit frequency, 437 Crandall, Laura, 308
layout of slots and guest Credit cards, 101–102
behaviors, 438 And casinos, 447–448
model mix, 436 Crosby, Ted, 111
participation games, 435–436 Cross-Country Skiing, 47–50
philosophies, 438 design criteria, 49–50
hypothetical layout, 438–439 and golf courses, 151
servicescape, 438–439 maintenance, 50
themed slots, 434 signs, 49
types of slots, 436 site selection, 48
table game operations, 439–441 trail types, 50
maximizing profit per available Cruise ships, 368–412
room, 440–441 biggest and smallest, 371
revenue and profit, 440 case study, 400–403
table game holds, 448–450 cruise experience, 368–369
high table occupancy, 448–450 appeal of, 268
management tool, 448–450 negative opinions of, 368–369
and staffing costs, 449 cruise product, 376–384
uses, 448 accommodation, 376–377
types of games, 424 cabin décor, 377
most popular games, 443 cabin sizes, 376
staffing, 430 cabin stewards, 377
costs of, 449 deck plans, 377
floorpersons, 430 choosing, 376–377
and rating, 446 management of, 394–396
number of dealers needed, 430 terms for, 376
each game and every day, 430 bars, 380–381
number of stations, 430 management of, 389
Center for Disease Control, 396–397 beauty and therapy, 382–383
Children, see family-based resorts casinos, 383–384
Clubhouses, 172–173, 178 celebrations, 384
Cluster analysis, 268–269 dining, 377–380
Combination option, 12 buffet, 378
Community associations, 225–226 and children, 380
Condominium hotels, 13–14 formal versus informal, 380
mountain-based, 93–94 main restaurants, 378–380
options for owners, 13 and décor, 379
water-based, 108 styles of service, 380
Conference business, 6, 10 other options, 380
conference / convention centers, 6, and performance schedules, 378
91–93 staffing for, 389
S Convertible club program, 227 with the captain, 379
N Corporate resort, 7 entertainment, 381
L
MILL (Wiley)
INDEX 465
musicians, 381 tour sales, 409

staffing, 381, 386 tour design, 410
theatres, 381 tour guides, 411
photography, 383 major players, 369–370
shopping, 383 importance of brand, 369–370
shore excursions, 381–382 management, 387–396
destinations, 403–411 accommodation, 394–396
definition of, 403–404 housekeeping, 385–396
itinerary, 405–411 importance of, 395
port of call, 404–407 and occupancy, 394–395
destination analysis / evaluation, staffing, 395–396
404–405 customer service, 389–391
and stakeholders, 404 advantages, 381
tendering, 404 difficulty of, 389
eco-cruises, 372 most important elements, 390
health, safety, and security, 396–400, and manager of operations,
407–408 390–391
Centers for Disease Control, 396– self-service options, 390
397 facilities, 393–396
regulations, 407–408 environment, 396
SARS, 407 yield management, 393–394
screening, 407 revenue and costs, 393–394
safety, 398–400 food and beverage 391–393
equipment, 400 hotel department, 387, 389–391
International Ship and Port purser, 394–395
Facility Agreement (ISPS), store, 393
399–400 supplies and services, 392–393
security standards, 399–400 and bookings, 394
ship’s security officer (SSO), 400 computerized stock
and terrorism, 398–399 management, 393–394
Vessel Sanitation Program, 396–398 head storekeeper, 391
food safety, 398 storage, 392
and inspection, 397–398 yield management, 394
swimming pools, 398 teams for, 389
water, 398 tipping, 391
Hebridean Princess, 371 the operation, 400–403
homeland cruising, 369 case study of staffing, 400–401
itinerary, 405–411 marketing the cruise product, 372–
criteria for, 405–406 384
issues in planning, 406–407 customer identity, 372
logistics, 408 customer need, 372
and regulations, 407–408 impact of negative influences, 373
health, 407–408 distribution system, 372–376
in Europe, 407 alliances, 375–376
in US, 407 cruise operators, 373
shore excursions, 408–411 market segments, 373–375
S elements of, 408–409 enthusiastic baby boomers, 374
N promotion, 409 explorers, 375
L
MILL (Wiley)
466 INDEX
Cruise ships (continued ) Desirable sites:

consummate shoppers, 375 and mountain-based resorts, 26–33
luxury seekers, 374–375 and beach resorts, 102–104
restless baby boomers, 373–374 Destination clubs, 14
ship buffs, 375 Destination spa, 308
maximizing occupancy, 394 Destinations, making them popular, 3
online booking, 373 Developments, types of, 16
packaging, 394 Direct mailing, 243–244
product focused, 372 5 p’s of success, 244
promotion, 409 advantages of, 243
travel agents, 373, 375 disadvantages of, 244
associations for, 375 Disney, 6, 7, 11, 234
changes in booking scene, 375 Dredging, 112
retirement on, 374
ship classifications, 370–371 E
and amenities, 370 Ecotourism, 19, 97, 347–351
budget or value, 370–371 and cruises, 372
luxury, 370 design practices, 328–350
and customer service, 390 and luxury elements, 350
niche or specialty, 371 wilderness tours, 354
premium, 370–371 Ecolodges, 347–351
resort / contemporary, 370–371 operations, 351
shore excursions, 408–411 trends, 351
staffing, 384–387 versus traditional lodges, 348
case study, 400–401 Ecosystem of costal zones, 129
community of crew, 401–402 Effleurage massage, 322
deck department, 385 Environmental concerns:
engine department, 385–386 beaches, 128–131
groupings, 384–385 blue-flag certification, 128–131
hotel department, 387 cruise ships, 396
entertainment department, 386–387 waste control, 396
medical department, 386 golf courses, 147
radio officers, 386 environmentally-friendly courses,
responsibilities, 384–385 158
themed, 270, 370–371 and GPS, 208–209
travel by ship, 368 natural features, 220
history of, 368 and timeshare renovations, 255
trends in, 368 water management, 184
Queen Mary II, 371, 395 marinas, 107–109
working on, 388 carrying capacity, 109
facilities, 118
D guidelines, 105
Degraff, Donald and Kathy, 263 impact of environmentalism, 107
Demographics: offshore marinas, 113
of skiers, 64–67 resource conservation, 107
of snowboarders, 64–67 water levels, 105
S of golfers, 188–190, 196 mountain-based resorts, 31–32, 52–54
N
L
MILL (Wiley)
INDEX 467
environmental mission statements, Fraser, Charles E., 8

53 Full-body facial, 317
and global warming, 63, 65 Full-body mud mask, 317
water-based resorts, 135–139 Full-body treatment, 317
anchoring, 135–136
back beaches, 101 G
boat operation, 136 Gambling, see Casinos
boat sewage and garbage disposal, Gaming market, 415–417, see also
136–137 Casinos
coral, 99, 129, 135–136 Gee, Chuck, 4
erosion, 99, 100 Gentry, Robert A., 234
pollution, 99, 128–129, 136–137 Golf, 9
snorkeling, diving, and snuba, distance standards for par, 155, 157
137–138 and fun, 184
turtles, 134 hole styles, 161–162
water quality, 103, 128–129 heroic, 162
waterparks, 334 penal, 161
Environmental tourism, see Ecotourism; strategic, 162
Trails bite-off holes, 162
Equity club, 227 ice golf, 209
Erosion, 99, 100, 103–104, 105 instruction and training aids, 185
Exfoliation, 316 club fitting, 185
Extreme sports, 360 other training aids, 185
practice, 185
F videotaping, 185
Family-based travel: resorts, 183
beach based, 132 tees, 166
mountain based, 94 and tee times, 198
and timeshares, 242 and traveling, 186–187
Farrel, Patrica, 261, 281 selection of location, 187
Farwell, Ted, 79 Golf-based resorts, 146–174, 183–211
Ferris wheel, 6 climate, 154
Financial statements, 82–83 costs:
First aid, 131, 133 construction planning, 169
Fitness facilities, 18, 218, 314 and greens, 169
and adventure travel, 362–365 land, 152
pools, 328 and layout, 159
Renaissance ClubSport concept, 336– maintenance 154–155, 169
342 design principles, 163–174
Fixed week option, 2 accessibility, 170, 172
Floating resorts, see Cruise ships aesthetics, 170–171
Floating week option, 12 balance, 168
Four season resorts, 6, 9 carts, 173
mountain based, 73, 91 clubhouses, 172–173
and indoor waterparks, 330–331 construction planning, 169
off-season promotions, 238 costs, 169
S timeshares, 240 factors to consider, 163
N
L
MILL (Wiley)
468 INDEX
Golf-based resorts (continued ) double fairway continuous, 159

fairness, 166–168 double fairway with returning
flexibility, 166 nines, 159
flow, 168 diagrams of, 156
for play, 166–168 other, 159–160
layouts, 173 regulation, 155–157
maintenance, 169 single fairway continuous, 157
natural hazards, 166–168 single fairway continuous with
progression, 168 returning nines, 157
remodeling, 173–174 golf hole styles, 161–162
schedule of, 174 heroic, 162
safety, 163–165 penal, 161
diagrams, 164–165 strategic, 162
shot value, 166 bite-off holes, 162
tournament qualities, 170 golf shops, 173, 200–202
Frost Belt resorts, 191–194, 204 accessories, 200–201
general guidelines, 147–148 credit cards, 201–202
golf cart fleet, 202–208 displays, 201
electric versus gas, 205–206 inventory control, 201
and four-season resorts, 220 layout, 298–299
inventory control, 204 margin enhancements, 200
lease versus buy, 202–204 pro shops, 293
maintenance, 206–207 retail revenue, 290
and operations, 192 sales figures, 201
responsibilities of drivers, 205 trends in women’s clothing, 301
risk management, 207–208 golfers, 183–185
types of leases, 202–204 best customers, 188
golf courses: core, 186
and average golfers, 146 information sources of, 187–188
early, 220 and loyalty, 188–189
environmentally friendly, 158 participation, 183
irrigation system, 153–154 growth rate of, 183
land cost, 152 preferences, 168
maintenance, 154–155, 169 spending, 189–190
negative environmental impact, grass, 150
147 industry trends, 183–185
positive environmental impact, 147 future of, 183–184
purpose of, 146 tax incentives, 185
and real estate, 146 in Japan, 148
and residential communities, 148 market segments, 186–190
tree placement, 160 and core golfers, 186
types, 155–162 golf’s best customers, 188
Old Works, 167 golf travelers, 186
water supply, 152–154 golfer loyalty, 188–189
Xeriscape, 153 selection criteria, 186–187
golf course types, 155–162 sources of information, 187–188
S comparing layouts, 159–160 spending, 189–190
N core golf courses, 157 operation characteristics, 190–193
L
MILL (Wiley)
INDEX 469
expenses, 193 tree placement and removal,

operations, 191–192 209
season length, 191–192 GPS, 208–210
statistics of, 191–192 Guest activity programming, 261–283
revenues, 192–193 approach, 262
and golf carts, 206 benefits of, 261–262
and golf shops, 200–202, 290 cluster and activities analysis, 267–
staffing, 193–194 269
ownership types, 148 activities analysis, 268
daily fee, 148 cluster analysis, 268–269
membership-owner equity club, external factors, 263
148 format, 269–273
non-equity private club, 148 competition, 271
planning and development, 148–155 drop-in activities, 272
clearing required, 151–152 instruction, 271
landscape architect, 149 social activities, 271
natural hazards, 150 special events, 272
and fairness, 166–168 spectators, 273
shape of property, 149 trips, 271
size of property, 149 goals and objectives, 266–267
soil characteristics, 151 and guest needs, 263–265, 270
topography, 149–150 assessment of, 264–265
vegetation, 151 techniques for, 265
reasons for activity participation,
renovation plan, 211
263–264
Sun Belt resorts, 191–194, 202
model, 264
top states for, 190–191
program areas, 273
tournaments and events, 194–199
program evaluation, 281–283
banquets, 199–200
approaches to, 281–283
benefits of, 194
and effect on participants, 282–283
business golf, 194–196
evaluating program effectiveness,
hole-in-one, 196
281
liability, 199
and objectives, 281–282
golfers, 199 and standards, 282
security, 199 program planning, 272–281
spectators, 199 allocation of funding, 276–277
sponsorship options, 196 facility availability, 280–281
timeline, 197–199 budgeting, 276
women and, 197 leadership, 274–275
use of technology, 208–211 pricing, 277, 279
and course management, 210–211 differential pricing, 277
computers, 210–211 initial price, 279
computerized irrigation system, pricing objectives, 277
210–211 program cost, 276
GPS, 208–210 promoting the program, 281
environment, 208–209 scheduling, 279
S speeding play, 208 steps in, 273
N tree inventory, 209–210 volunteers, 276
L
MILL (Wiley)
470 INDEX
Guest activity programming (continued ) M

recreation, 261 Marinas, 104–122
risk management, 280–281 Blue Flag certification, 139–144
satisfaction, 261–262 environmental management, 139–
steps in, 262–263 141
Graham, Virginia, 174 management, 140
Grahame, Kenneth, 134 objectives, 140
Gravity sports, 89 sanitary facilities, 141
Greeks, 2 waste disposal, 140
regulations for individual boat
owners, 143–144
H safety and services, 141–142
Handicap Access, 121–122 emergency plan, 141–142
beach, 134 maps, 142
and marinas, 121–122 posted safety precautions, 142
sports programs for the disabled, water quality, 143
363–365 boat capacity, 106, 109
Hard adventure, 354–356 boats and boaters, 135
Herbal body wrap, 317–318 boat operation, 136
Hiking, 357 boat sewage and garbage disposal,
Horseback riding, 359 136–137
Hydrotherapy, see Water therapy regulations for owners, 143–144
controlling losses, 11
destination resort marinas, 134–135
I development process of, 104–11
Ice skating, 51 criteria for, 109–11
Indoor waterparks, see Waterpark(s) environmental guidelines, 105
International Ship and Port Facility onshore / offshore, 106
Agreement (ISPS), 399–400 water levels, 106
steps in, 104
general design principles, 111–122
J geography-engineering, 112–113
Japanese shopping behavior, 287 bulkheads, 113
Johnson, Samuel, 267 breakwaters, 113
Jordan, Debra J. cost, 112–113
locks, 112
piles, 113
L layout, 115–122
Lake / river resorts, 9 boat storage, 120–121
Landlocked marina, 114–115 circulation pattern, 118
Las Vegas and Nevada, 415–416, 421– handicap access, 121–122
422, 442, 455, 458 mooring layout, 115–118
Leisure travel, availability, 9 parking, 118
Lifeguards, 131 piers, 115–117
Location, 8–9 profile of, 115–118
Locks, 112 social interests, 118–119
S Lowe, Rob, 12 support facilities, 119–121
N Lundegren, Herberta M., 261, 281 types of marinas, 113–115
L
MILL (Wiley)
INDEX 471
built in, 114–115 snowmaking, 27

landlocked, 114–115 terrain, 29–30
offshore, 113–114 balance sheet, 83–84
recessed, 113–114 current ratio, 84
integration with local area, 120 debt ratio, 84
legal and policy context, 106–109 networking capital, 84
goals affecting, 107 base areas, 43–46, see also base
permits, 107–108 areas
approval checklist, 107 bears, 47
and dredging, 112 capacity of, 30, 34–39, 79–80
managing the operation, 135–144 nightskiing, 39
anchoring, 135–136 persons at one time, (PAOT), 39
boats, 136–137 potential, 34–35
environmental impacts, 135–144 skiers at one time, (SAOT), 38
marine wildlife viewing, 139 of ski lifts, 40
recreational fishing, 139 of terrain, 35
seafood consumption, 138–139 community of, 38
snorkeling, diving, and snuba, conference centers, 91–93
137–138 critical ratios, 87–89
souvenir purchasing, 138–139 critical variables, 79–81
Mackenzie, Dr. Alastair, 103 capital investment, 80
Management: length of season, 80
of cruise ships, 387–396 revenue per skier visit, 81
Mandock, Pedro, 234 ski area capacity, 79–80
Marine wildlife viewing, 139 design guidelines, 33–34
Massage(s), 238, 317, 322–323 of ski runs, 39–40
Effleurage, 322–323 desirable sites, 26–33
Mastercorp, 252 site feasibility, 27–33
McGovern, William, 183 access to markets, 31
Merchandising, 293–299 attracting customers, 31
displays, 294–295 attractiveness, 27, 29–30
getting message noticed, 296–298 criterion for, 28–29
impulse buying, 295 environmental limitations, 31–32
merchandise analysis, 304 major constraint of, 30
retail competition, 293–294 terrain, 29–30
principles, 294–295 development process of, 22–26
placement, 298–299 concept and objectives, 23
vendors, 295–296 economic balance, 23
Miller, Erica, 313 physical balance, 22–23
Mixed-use developments, 15–17 planning process, 23–26
pros and cons, 16 economic feasibility, 79–81
Morash, Jim, 256 economics of, 60–64
Mountain-based resorts, 22–55, 58–95, capital improvements, 62
see also ski areas distribution by size, 60–61
attractiveness, 27–30 lift numbers, 61
length of season, 30 number of ski areas, 60
S major constraint of, 30 top states / regions, 62
N of ski lifts, 41–42 vertical transport feet / hour, 61
L
MILL (Wiley)
472 INDEX
Mountain-based resorts (continued ) O

environmental concerns, 31–32, 52– Ocean resort, 9
54 Onshore marinas, 106
expenses, 86 Offshore Marinas, 106, 113–114
financial statements, 82–83
four-season, 91
P
income statements, 84–86
indicators of quality, 22 Paraffin body wrap, 317
maturation cycle, 54 Patel, Kevin, 335
multi-age visitors, 79 Permits:
permits, 26–27 marinas, 107–108, 112
problems, 94–95 mountain-based, 26–27
expansion, 94–95 Piles, 113
housing, 94 Points-based membership option, 12
real estate, 30, 62, 93 Pools, see Swimming pools
retail development of, 30 Pollution, 99, 106, 128, 136–137, 141
revenue, 85
safety, 37, 40, 79 R
season passes, 69, 85 Railroad, 5–6
ski lift network, 40–42 Recessed marina, 113–114
capacity of, 40–41 Recreational amenities, 216–232
types of, 42 community management structures,
upgrades to, 62 223–226
and ski runs, 39–40
community associations, 225–226
snowboarders, 75–77, see also
considerations for, 225
Snowboarding
membership, 225
snowtubing, 77–78
structure options, 225–226
summer season, 73, 88–95
dual associations with
summer activities, 88–89
covenant, 226
waterparks, 90–91
dual associations with joint
sustainable development, 51–54
committee, 225–226
terrain features, 62–64
single community
trends, 9, 59
associations, 225
trip characteristics, 72–75
single residential associations,
visits by ticket type, 86
winter sports activities, 46–51 225
cross-country skiing, 47–50 developers:
ice skating, 51 community management, 224
snowmobiling, 50 control, 222–223
snowtubing, 77–78 organization structures, 227–229
tobogganing, 51 role of, 221
other, 79 factors in, 223
Muirhead, Desmond, 149 government bodies, 224
Multiuse resort community, 17 power, 224
public access, 224
N taxes, 224
Native American (tribal) gaming, 417, nonprofit tax-exempt organizations,
S 421 224
N Nature-based activities, see Trails covenants, 224
L
MILL (Wiley)
INDEX 473
public access, 224 and membership, 229–230, 225–

definition of, 219 226
developing an amenity strategy, 219– and timesharing, 246
223 trends in, 218
changing role, 221 waterparks, 231
balancing real estate and Recreational fishing, 139
amenities, 221 Renaissance Clubsport, 335–342
downside of, 219 advantages of, 338
importance of the customer, 220 economic benefits, 339–342
natural features, 220 evolution of concept, 336–337
reasons for, 219 premise, 337–338
timing, 222 Residential Lodging, 9–18
cost-revenue balance, 222 condominium hotels, 13–14
non-resident amenity use, 222 destination clubs, 14
development process, 216–219 mixed-use developments, 15–17
stages in, 217–219 multi-use communities, 17
construction, 218 second-home developments, 15–17
feasibility analysis and planning, and timeshares, 11–12, 15
217 traditional, 9–11
operations / management, 218– trends in, 15
219 Resort(s):
team for, 216 activity programming for, 261–283,
factors in, 216 see Guest activity
programming
management and operations, 226–
amenities, 4, 9, see also Amenities
231
and Recreational amenities
general approaches, 230–231
and beach, see Beach-based resorts,
accommodating both residential
97–104
and resort guests, 230–231
balance sheet, 83–84
exclusivity, 231
and businesses, see Business travel
membership structures, 229–230
and casinos, 414–459, see also
add-on membership, 230
Casinos
tiered membership, 229–230
check in, 248
unitary membership, 230 automated, 249
organizational structures, 227–228 communities, 6
association (ownership) design trends, 218, 228
membership, 228 destination(s), 8–9
and community sense, 229 and cruises, 403–411
and control, 229 economic trends, 6
comparison of options, 228–229 fantasy, 7
convertible club program, 227 floating, 368–412, see also Cruise
and costs, 228–229 ships
equity club, 227 and golf, 146–174, 183–211, see also
right-to-use club, 227 Golf-based resorts
primary and secondary uses, 265 handicap access, 121–122
public access, 224–225 beach, 134
S residential areas, 219, 222–223, 230– golf courses, 170–172
N 231 sports programs, 363–365
L
MILL (Wiley)
474 INDEX
Resort(s) (continued ) men, 300–301

history of, 2–8 older shoppers, 303
hotels, 9–11 women, 301–303
chains, 11 dynamic pricing, 304
chains and timesharing, 234 layout and design, 291–293
standard rooms, 251 basket placement, 293
housekeeping, 251–252 example of, 297
at spas, 311 layout, 292–293
indoor water parks, 330–334 time, 291–292
and marinas, 104, 122, see also transition zone, 293
Marinas operations, 299–300
mountain-based, 22–55, 58–95 and shopper conversion rate, 300
non-destination, 9 staffing, 299–300
parking, 7 waiting time, 300
beaches, 101 profit ratios, 303–304
handicap access, 121 sales analysis, 303
marinas, 118 price zones, 304
mountain-based resorts, 43, 79–80 and spas, 313
pets, 138 Right-to-use club, 227
popularity, 3 Risk management, 280–281
preferred configurations of, 15 Romance-related travel, 126–128
retail, 290–305 honeymoons, 126–128
golf, weddings, 126–127
seasonality, 6 Romans, 2
and timesharing, 245 baths, 2
selling the experience, 226 Ross, Donald, 155
social tourism, 7–8 Rush, Jack, 234
sole purpose of, 2
spa, 308–309 S
specialty, 344–365 Scheduling activity programs, 279
and tennis, 174–179, see also Tennis- Schwanke, Dean, 223
based resorts Scotch hose or shower, 322
timesharing, 11–13, 15, 234–257 Scuba travel, 125–126
Resort industry, 4–8 top dive areas, 125–126
Atlantic City, 5–6 Sea, 99
Civil War, 4–5 air temperature, 99
European, 2–4, 8 attractions, 99
future, attractiveness of, 99
introduction to, 2–8 currents / waves, 99
North American, 4–8 ecology, 99
railroads, 5–6 water clarity, 99
trends in, 18–19 water temperature, 99
Retail, 290–305, see also Merchandising wind and sun, 99
and cruises, 383 Seafood, 138–139
customer segments, 300–303 Seashore, 99–100
best, 302 depth of, 100
S children, 303 Second-home developments, 15–17
N Generation X, 303 And amenities, 219
L
MILL (Wiley)
INDEX 475
Selengut, Stanley, 348 customer motivations and dislikes,

Shopping, see Tourist shopping 310
Shore excursions, 381–382, 408–411 development, 308–313
elements, 408–409 of the concept, 311
promotion, 409 definitions, 308
tour design, 410–411 benefits, 310–311
tour guides, 411 dry rooms, 314, 326
Showers, 322 early spas, 2–3, 308
Site design: European, 308
of ski areas, 33–34 layout and design, 313–316
Ski areas, see also Mountain-based equipment, 314
resorts holistic designs, 318
characteristics of buyers, 23 purchase criteria, 315, 316
development of, 23–24 marketing, 326–327
environmental considerations, 32–33 operations, 312–313
merchandise revenue, 290 accounting, 312
number of, 60 retail sales, 313
types of, 23 revenue, 312–313
Skiers at one time (SAOT), 38 safety, 325
Skiing: specialized ceilings, 315
and adventure travel, 359 tips for owners, 309
demographics of, 33–36, 64–69 treatments, 316–318
history of, 58–59 aromatherapy, 323
length of season, 30 combinations of, 326
night skiing, 30, 39, 72 exfoliation, 316
and risk management, 281 full-body treatment, 317
Telemark, 67 massage, 322–323
water, 359 spot treatment, 318
Ski lift network, 40–42 water therapy, 319–323, see also
Ski runs, 39–40 Water therapy
Snowboarding, 75–77 trends, 327–328
attitudes, 76–77 wet rooms, 314, 324
demographics, 64–72 Specialty resorts, 344–365
future of, 76 Sports and games, 361–362
participation in, 76 Staffing, 274–275
programs and facilities, 77 and casinos, 430
Snowtubing, 77–78 external candidates, 275
Snowmaking system, 27–29 internal candidates, 275
pros and cons, 32, 36, 39, 63 job analysis, 274–275
Snowmobiling, 50 job specification, 274–275
Social tourism, 7 and program planning, 274–276
Soft adventure, 19, 356–357 retail operations, 299–300
Souvenirs, 138–139, 288–289 Steam room, 322
authenticity of, 287 Stowell, Shannon, 358
Spa development and operations, 308– Summer resorts, 6
328 mountain-based, 88–95
S and cruises, 383–383 Sustainable development:
N client preparation, 324 of mountain-based resorts, 51–54
L
MILL (Wiley)
476 INDEX
Swimming pools, 328–330 guest arrival and departure

and fitness, 328 patterns, 252
maintenance, 329–330 size and location of units, 250
safety, 330 owner relations, 253
types of, 328 staffing patterns, 252
Swiss resorts industry, 3–4 Mastercorp, 252
Swiss shower, 322 Part-time employees, 252
and hotel chains, 234
image of, 11
T and keys, 248–249
Tanning / bronzing, 317 maintenance and engineering, 253–
Tiered membership, 229–230 255
Telemark skiing, 67 common areas, 254
Tennis-based resorts, 174–179 major repairs, 254–255
management, 178 priority order, 254–255
ownership and, 178 monthly assessment, 255
planning and design, 175–178 roles of owners, 253–254
configurations, 175–176 and expenses, 252
clubhouses, 178 management fees for, 254
indoor structures, 178 renovations, 255
lights, 178 reasons for, 255
surfaces, 177 marketing the product, 241–244
nonporous courts, 177 direct mailing, 243
and player preference, 177 5 p’s of success, 244
porous courts, 177 advantages of, 243
and real estate, 174 disadvantages of, 244
and residential areas, 178 in-house guests, 242–243
site selection, 174–175 steps for the sales process, 242–
and climate, 175 243
tennis etiquette, 179 and purchase motivations, 241–242
Theme parks, 6 referrals, 242
Thompson, Robert, 288 telemarketing, 243
Timesharing, 11–4, 15, 234–257, see operations, 244–246
also Timeshare owners activity control, 246
bonus types, 241 amenities, 246
changes in, 12 balance sheet, 246
costs, 11 corporate / employer responsibility,
marketing, 242 246
definition of, 11 differences from traditional hotels,
exchange, 241 244–246
financing, 15, 256–257 employee housing, 246
accounting, 257 facilities, 244–245
records, 257 labor skills, 246
revenue sharing, 257 location, 245
sales cycles, 257 managers, 245
statistics of, 256–257 personnel attitude, 245
S history of, 11, 234 rates, 245
N housekeeping, 250, 253 recreation, 245
L
MILL (Wiley)
INDEX 477
resorts and traditions, 246 Florida owners, 236–237

seasonality, 245 reservations, 247
sources of revenue, 246 residence, 235–236
visitor market, 244 and second-home ownership, 241–
mixed use developments, 15 242
mountain resorts, 44 and maintenance, 283
off seasons, 238 use patterns, 238–239
other terms for, 11 Tipping:
plan types, 240–241 and cruises, 391
public rentals, 241 Tobogganing, 51
reservations and the front desk, 247– Tourist shopping, 285–290
248, 250 airports, 289–290
billing, 248 authenticity, 287
check-in, 248 craft villages, 290
owner relations, 250 duty-free shopping, 289
reservationists, 248 malls, 289
complications, 248 nationality and shopping, 287
computerized systems, 248 Japanese shopping behavior, 287
reservations, 247 reasons for, 285–287
guests of owner, 247 shopping venues, 289–290
owners, 247 stages of, 289
rental pools, 247 types of souvenirs, 288–289
renters, 247 Tourists, segmenting, 275
size and location of units, 250 Traditional lodging, 9–11
cleaning, 251 Trail(s), 344–347
outdoor landscape, 250 classification of, 344–345
public spaces, 250 cross-country skiing, 151
typical unit, 251 design considerations, 346–347
unit design, 250 development elements, 345
top states for, 234–235 function, 345
use, 240 Transportation:
Timeshare owners, 235–240 problems, 3–4
accounts, 257 improvement, 6
and revenue, 257 Travel agents, 373, 375
check-in for, 248 associations for, 375
demographics of, 235 changes in booking scene, 375
dissatisfaction, 237–238 Tubs, 320–321
and expenses, 253 oils, 321
hesitation about buying, 237 treatment types, 321
amount of use, 237
expectations, 237
financial concerns, 237 U
management fees for, 254 Underhill, Paco, 285
part compositions, 240 Underwater resort, 352
preferences, 11–12 Unitary membership, 230
purchase motivation, 236–237, 241, US Forest Service, 25–26, 34–35, 38, 40,
S 242 44, 46, 52
N factors in, 236 goals of, 25
L
MILL (Wiley)
478 INDEX
V construction costs, 333

Vacation ownership, 11 indoor, 330–334
Vessel Sanitation Program, 396–398 size of, 331
Vichy shower, 322 success of, 330–341
Waterplay structures, 332
Water therapy, 319–322
W
best results, 320
Waste disposal:
cool water, 319
and beach resorts, 129–131
forms of, 319–320
and boats, 136–137
showers, 322
recycling, 130
tubs, 320–322
Water-based resorts, see also Marinas;
warm water, 319
Beach development
Wilderness tours, 354
activities, 97–98
Winter resorts, 6
attraction of, 100
Water skiing, 359
Waterpark(s), 90–91, 231, 330–334 X
and children, 332–334 Xeriscape, 153
S
N
L

Resorts Management Operation

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Resorts Management Operation

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MILL (Wiley)

MANAGEMENT AND OPERATION

Robert Christie Mill, Ph.D.

MANAGEMENT AND OPERATION

Robert Christie Mill, Ph.D.

This book is printed on acid-free paper. 嘷

Published by John Wiley & Sons, Inc., Hoboken, New Jersey

Anniversary Logo Design: Richard Pacifico.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in

Library of Congress Cataloging-in-Publication Data:

Mill, Robert Christie.

Printed in the United States of America

Chapter 5 PRO SHOP 200

Chapter 10 ROOM SETUP: DRY ROOMS 326

Chapter 15 CASINO CAGE, CREDIT, AND

Recreational attractions that draw guests to the facility

WHAT’S NEW IN THIS EDITION

The administration at the University of Denver’s Daniels College of Business

Shane C. Blum, Texas Tech University

2 Chaper 1 RESORTS: AN INTRODUCTION

HISTORY OF RESORTS1 The sole purpose of a resort, in the

A Roman bath in Bath, England. Courtesy Peter Adams / Digital Vision

4 Chaper 1 RESORTS: AN INTRODUCTION

S The Greenbrier in White Sulphur Springs, West Virginia, is a traditional resort.

6 Chaper 1 RESORTS: AN INTRODUCTION

Quick Getaway 1.1

Source: Litman, Todd. ‘‘First Resort: Resort Community

8 Chaper 1 RESORTS: AN INTRODUCTION

cations for white-collar workers. A common alternative in Western Europe is the

1. The history of transportation has, to a large extent, determined where,

Resorts can be characterized in terms of:

proximity to primary market

Proximity to Primary Market

Nondestination resorts tend to be within a two- to three-hour drive of the

Setting and Primary Amenities

Residential and Lodging Properties

10 Chaper 1 RESORTS: AN INTRODUCTION

S Fine dining is just one attraction of many

12 Chaper 1 RESORTS: AN INTRODUCTION

interested in purchasing a timeshare prefer a branded product, while 21 percent

setting the dollar-per-point ratio and sending the corresponding message

‘‘The baby boom generation is at an age when building a

Ownership structure where rooms are sold to individuals as an invest-

14 Chaper 1 RESORTS: AN INTRODUCTION

Quick Getaway 1.2

two-bedroom suite (55 percent)

A major reason for mixed-use developments is the high cost of amenities.

Second-Home A second-home development consists of a project that consists primarily of second

16 Chaper 1 RESORTS: AN INTRODUCTION

Quick Getaway 1.3

second-home developments are. They consist of a variety of types of properties—

1. Resort condominiums are usually high-rises located on oceanfronts.

Compared to primary homes, second homes place more emphasis on outdoor

Quick Getaway 1.4

18 Chaper 1 RESORTS: AN INTRODUCTION

Health Spas and Fitness Facilities

Quick Getaway 1.5

20 Chaper 1 RESORTS: AN INTRODUCTION

INTRODUCTION Access Roads

22 Chapter 2 MOUNTAIN-BASED RESORTS: THE IMPACT OF DEVELOPMENT ON OPERATIONS

1. daily lift ticket price

THE DEVELOPMENT PROCESS

THE DEVELOPMENT PROCESS 23

Type I resorts—These international destinations feature excellent moun-