Twelve Ways to Rethink The Greenbrier brand
WHITE SULPHUR SPRINGS – The West Virginia resort The Greenbrier is apparently losing $15 million a year for its parent company CSX. The railroad (NYSE: CSX) is considering everything, according to the January 2, 2008 Wall Street Journal. Goldman Sachs is apparently coming up with options.
What to do? Well, I am not sure the folks at Goldman are the best ones to tell CSX CEO Michael Ward. He could find out what to do, as well as find some options, with two telephone calls; one to Bill Marriott and another to Stephen Bollenbach. You’ll learn the options faster, and time is NOT your friend. But you won’t sell it for a good price at this time; why not set up a joint venture with a hotel company that can run it?
Meanwhile, I’ve got some suggestions about The Greenbrier brand.
- There is good news. We hear an average luxury occupancy rate is a piddling 60 percent in luxury hotels these days. If The Greenbrier has 721 rooms, that means about 157,000 room nights in a year. So dividing that by $15 million, it means that if each room had $95 more income, you could break even. In a luxury hotel, that’s TOTALLY do-able.
- Don’t blame the meltdown. First, recognize that these losses in 2008 were not all made by the Wall Street Meltdown. The loss was for ALL of 2008. How come we didn’t know about this sooner? The Greenbrier needs to be able to function in all economic climates. Somehow, it made it through the 1970s. To justify $275 a night, you need to give folks some meals.
- Ratchet down the luxury. Most great resorts, through much of the 20th century, were not super luxury resorts, with all manner of strange spas and extravagant communities surrounding them. They were, instead, well-run family resorts with impeccable service. They were not nouveaux riches, but instead were affordable to upper middle class families who wish for a three-meals-a-day vacation on the old American Plan. While they were pricer than your average hotel, they were always sensible, as you could predict your costs for a vacation, much like Club Med.
- Hook up with a chain. Certainly not one of Marriott’s brands, like Ritz-Carlton (NYSE:MAR). It needs to be a chain like Intercontinental (NYSE: IHG), that allows very different types of properties to be a part of the system.
- Stop worrying about Mobil. Define your own Greenbrier service. Invent your own rules. There is only one Greenbrier.
- Exploit the quiet. The falconry probably has to go, unless it pays its own way. That is fine. Because in a place as gorgeous as White Sulphur Springs, people are content to just sit and relax on the porch.
- Listen to your old-time customers. Many customers that have left because it was unaffordable. Come up with affordable packages for them that that keep the lights on. Think of The Greenbrier like an airline. While Singapore Airlines has the world’s greatest first class, it also sells discount seats. The discount seats might even lose money, but they help pay for the airline’s fuel and overhead. Your gravy then comes from your top 5 percent of customers, who want and need all the frills.
- Lay off the conventions. Conventions have RUINED many a great old hotel. Why? Because by concentrating on conventions, you RUIN the experience for the rest of us chumps who are paying full rate. You sell masses of rooms, at a discount, to people who do not eat in the restaurants, and do not mingle with the other guests. Right now, because you are desperate, you might have to book a few conventions. But realize that every drunken creep at a sales convention with a laminated hanging name tag makes the regulars realize its not a place for them. Convention hotels belong in Orlando and New York. But resorts as unique as The Greenbrier? Realize that your dependence on conventions caused a crisis; when the corporate bookings dropped you lost a major chunk of business. Meanwhile, your regular independent traveler has been scared off by the expense account folks.
- Keep the CSX connection. There needs to be some connection to the railroad, even if it is sold. Perhaps CSX makes it a joint venture, and takes a share of a new resort company? Whatever happens, the connection with the railroad makes The Greenbrier special. Plus, the real benefit of the hotel is in its influence. It allows CSX to have a powerful connection to the powerful. While CSX can’t bribe politicians with rooms, it can certainly make sure that important guests are taken care of properly.
- Lay off the kooky spa crap. In this climate, who is going to pay nearly $3,000 per person for a mother/daughter spa trip? Green tea wraps just won’t do it. This spa thing at resorts has gone nuts with New Age claptrap. The place that invented it, The Greenbrier, needs to bring it back to its roots, namely the medicinal need for warm, sulfur-infused water.
- Pay attention to service, not sycophancy. We are all tired of the crazy telephone answering routines, and the over-trained staffs. Make sure that a reduced staff is doing sensible things. We need sensible.
- A sense of great style. The whole Dorothy Draper design for the hotel was a sensation, but it was cheap, and all about paint, fabric and style. It wasn’t about expense. To sell the Greenbrier brand, you need leadership that understands what this means.
Anyone else have any thoughts?
A further point. Social members pay $7,000.00 a year with nothing included except use of the facilities; all food, members parties, spa, etc. are billed at full price, additionally. Many others associated with the resort don’t pay. Are you understanding the fleecing, it’s every where within the organization. The old girl can only give so much for free before there are consequences…..Enter “Goldman.”
Great point. Very well taken. Can you find a few more third party vendors that do that well for CSX?
FYI, the falconry program at The Greenbrier is run by a third party vendor. in 2007, 20,000 guests had direct contact with the program and its birds. The “rent” paid goes straight to The Greenbrier’s bottom line. No expenses, no benefits, just a 100 square foot booking space. On a yield per square foot basis, the program benefits the hotel. And, the guests love it.
You didn’t address the union situation there. That has to be addressed.