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How hotels drive revenue through memberships for locals

Column: industry Tag: hotels Published: 2017-04-10 11:45 Source: Author:

A significant number of hotels have adopted fee-based membership programs to drive revenue, increase on-property spending and gain local exposure from nearby residents eager to use a property’s spas, fitness centers and other facilities.

For these (usually upscale to luxury) hotels and resorts, membership programs appeal to locals by creating a country club-type atmosphere. Hotels benefit through exposure and increased ancillary revenue, sources said, but it’s important to balance the needs of overnight guests with those of members.

“Our membership program is a lifestyle solution for those who would like to enjoy all of the amenities of our seaside resort,” said Pam Cook, director of membership sales at Fort Lauderdale Marriott Harbor Beach Resort & Spa. “Our property is their backyard, their staycation and their private setting to enjoy with friends and family.”

The people who join, Cook said, “want to feel part of something exclusive—a place they can enjoy and show off to their friends and family. They are willing to pay for top-notch amenities and excellent customer service.”

ROI in awareness
Memberships can get pricey, but are not always about revenue generation. In many cases, operators see clubs or membership programs as serving the important role of developing local awareness and increasing spending on restaurants, retail and other facilities.

At The Naples Beach Hotel & Golf Club in Naples, Florida, a major renovation of its championship golf course heightened the focus on membership, GM Jason Parsons said.

Before the renovation, the property “had maybe 200 members who paid $500 a year for discounts on greens fees and so forth,” Parsons said. “We didn’t know what to expect after the course redo, but we researched other local clubs and started off with $8,000 for a single, $11,000 for a couple, with a goal of selling 100 memberships. We sold that in under two weeks.”

Interest in one amenity often benefits others, Parsons said. “I was in our upscale restaurant recently and saw three different tables occupied by members,” he said. “On any given day, 20-30 members come to the Sunset Beach Bar and Grill for lunch.” Meetings and social business also are up at the hotel, he said, in part because of membership exposure.

Golf can be a big draw for members, and spa and fitness packages also drum up good membership business from locals.

Helen Storer, director of spa & boutique at Los Angeles’ Hotel Bel-Air, said the property’s spa membership program was conceived in part “to expose the hotel and its spa to local residents.” She added that “the hotel is in a private neighborhood, and many locals were not aware that our spa was open to the public.”

Members receive a discount and house account charging privileges around the hotel, Storer said.

Spa memberships, in turn, have increased exposure for the hotel’s Wolfgang Puck at Hotel Bel-Air restaurant, she said.

Fitness facilities are a draw, too. David Bernand, GM of the Four Seasons Hotel Washington, D.C., said the property has a 12,000-square- foot fitness club and spa and offers a lifetime membership “to create repeat business to our restaurants and guestrooms.”

“The membership at our facility is important to our local guests because we offer a world-class, albeit small, fitness club and spa,” he said, “and that is ideal for locals who are interested in staying fit while not having to wait for equipment or deal with a crowded gym. They also demand exacting service and frequent our restaurants; and book our guestrooms for leisure and business.”

At the Hyatt Regency Coconut Point Resort and Spa in Bonita Springs, Florida, “spa membership dues can be revenue generators, depending on what is included in the membership,” said Jennifer Licciardi, director of the Stillwater Spa and Salon. “Members’ revenue accounts for about 3% of our overall spa revenue.”

Cristina Cascio, spa director at the Hyatt Regency Indian Wells Resort & Spa in Indian Wells, California, said the hotel’s spa membership program is more about driving loyalty.

“While our Agua Serena Spa Wellness Membership brings in incremental revenue, it more so improves our reach into the community, creating a stronger connection—and overall brand support and loyalty,” she said. “We enjoy seeing our members frequently, even daily, if they choose.”

The Hyatt Regency Tamaya in Santa Ana Pueblo, New Mexico, sees similar benefits from its spa membership program, said Spa Director Stephanie Martinez.

“The primary goal of our elite spa membership program is not direct revenue generation, but rather it was implemented to drive exposure of our spa throughout the local market,” she said. “Leveraging our membership program to introduce locals to the variety of services offered at our facilities, as well as the resort’s robust amenities, helps to grow local business and garner strong word-of-mouth exposure among this important audience.”

Costs and benefits
Memberships tend to be pricey, so fees from even a limited number of members can add up.

For instance, the Awili Spa & Salon at Andaz Maui at Wailea Resort has a spa membership that costs $7,500 a year for the first adult and $5,000 a year for each additional adult. It includes access to spa and fitness center facilities; daily fitness classes; valet parking; discounts on services and retail purchases; one spa service and one salon service per year; and one personal training session per year.

The plush Hotel Bel-Air offers memberships at $3,000 for a single and $5,700 for a couple annually. It includes pool use Sunday through Thursday; daytime valet parking; three massages (per member) or other treatment per year; use of spa facilities and gym during spa hours of operations; discounts on treatments, food and rooms; use of the fitness center from early morning until late evening; access to the pool including seasonal “pop-up refreshments;” access to the spa; and invitations and preferred reservations for events.

Membership perks range from as modest as tennis court access to full access to a resort’s facilities—with fees commensurate with benefits. Aside from access to facilities, members typically receive discounts on hotel F&B, retail and more.

At the Marriott in Fort Lauderdale, “members receive a 20% discount resort-wide,” Cook said. “This includes food and beverage at all restaurants, the spa, shopping and events held at the resort. With members-only specials offered weekly, it is another way to bring them back to the resort to dine or for spa treatments.”

At the Four Seasons in Washington, members get complimentary all-day valet parking; laundry services for fitness wear; shoeshines and newspapers; discounts on spa services, rooms and F&B; a monthly yoga class; monthly nutrition seminars; quarterly seminars with the resident life coach; 24-hour concierge services; and a once-annual hotel in-kind donation to a charity of their choice. New members also receive a complimentary personal training session and fitness assessment; 50-minute spa treatment; and a workout outfit.

At the Naples resort, a 10-15-20 discount plan is in effect with members of the various clubs (golf, tennis and spa) enjoying 10% off F&B, 15% off retail and 20% off accommodations.

Operations
Memberships often are handled by spa or fitness staff. At the Fort Lauderdale Marriott, a director of membership sales and a member services coordinator manage the club office, taking care of sales to new members and service for current members.
Licciardi manages membership operations with her team at the Stillwater Spa and Salon. “Our spa point-of-sale system has a membership component, which allows easy billing and tracking member preferences and service history,” she said.

At the Hyatt Tamaya, the program is implemented and managed day-to-day by the spa staff, as well as VIP Concierge Jacqueline Hockey, who has been with Hyatt Regency Tamaya Resort and Spa for more than a decade. “She knows all of our members, greets them by name and creates a personalized VIP experience for those membership guests,” Martinez said.

Priority for overnight guests
Operators say memberships are held to levels that do not interfere with the enjoyment of guests staying overnight.

“We don’t want to get goofy or greedy,” Parsons said. “We think we have found the magic number. A guest who’s paying $500 or $600 for a room does not want to wait to play golf, and they don’t have to. In fact, since we raised our membership fees, non-guest play is down.”

The resort limits its spa membership to 50. “We don’t really want to interfere with guest enjoyment of the facility,” he said.

Similarly, he said, club members do not have access to the resort’s pools, which helps avoid issues with overcrowding. “We have discussed building a member pool area,” Parsons said, “but that’s just an idea for now.”

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