Oct. 20 (Bloomberg) -- Spa resorts such as Vermont’s Stowe Mountain Lodge and the Broadmoor in Colorado are using wall climbing, carpentry classes and yoga to lure corporate clients accustomed to little more than free breakfast as a hotel perk.
Stowe Mountain has boosted its corporate group bookings with such programs as the “Naked Table Project,” in which participants learn to build furniture from scratch. At the Miraval Arizona Resort & Spa in Tucson, guests can use meeting breaks to walk a tightrope or jump from a 25-foot (8-meter) pole, an activity known as the “Quantum Leap.”
Luxury hotels, hurt more than their cheaper competitors by last year’s U.S. recession, are working to reverse a drop in demand from business travelers. Spa resorts, upscale properties with a focus on health treatments and other recreational activities, are among those that have had the toughest time booking corporations, which became thriftier during the slump.
“These have been challenging times, but during these last two years, our programs have helped to attract corporate groups,” said Morgan Fukumoto, a spokeswoman for Stowe Mountain in Stowe, Vermont. “They look for more team-building activities and to get a great value for their money.”
Hotel occupancies in the top 25 U.S. markets climbed to 65 percent this year through August from 61 percent a year earlier, according to Smith Travel Research Inc. of Hendersonville, Tennessee. Luxury properties, which include spa resorts, showed the biggest increases, with occupancies rising to 67 percent from 62 percent.
Chains including Marriott International Inc., Blackstone Group LP’s Hilton Worldwide and Hyatt Hotels Corp. have offered complimentary breakfast and Internet access to attract corporate customers. At Miraval -- majority owned by Revolution LLC, the investment company run by AOL Inc. co-founder Steve Case -- guests can test their skills on an obstacle course.
That spurred the front office of the National Basketball Association’s Portland Trailblazers to hold its annual teambuilding conference at the 118-room resort two years in a row. The group, when not in meetings to discuss the upcoming season, built camaraderie by balancing on an oversized teeter-totter and scaling a 15-foot wall.
“The whole team tried to get over this wall,” said Traci Reandeau, the Trailblazers’ vice president of human resources. “You have to use everybody’s strengths, so it’s not like you could just step on head coach Nate McMillan, who’s pretty tall, to get over it.”
Obstacle courses and carpentry classes may not be enough to help corporate travel return to its 2007 peak as the economic slump continues to stifle spending. Revenue per available room at U.S. luxury hotels plunged 24 percent last year, the most of any industry segment, according to Smith Travel.
“A lot of the hotels are cognizant of the idea to not lower rates but instead offer value,” said Christine Lai, executive strategy director for Santa Barbara, California-based Elite Meetings International Inc., which connects hotels with conference planners. “There was definitely the AIG effect.”
Companies have sought to avoid appearances of excess following the 2008 bailout of American International Group Inc., she said. AIG was criticized by lawmakers for rewarding agents with a $440,000 trip to a California resort less than a week after the insurer got its first government bailout. The company canceled about 160 resort events costing a total of $80 million after congressional hearings in October 2008.
“There is still restraint in corporate spending, although it’s nowhere near where it was six months ago,” said Patrick Scholes, an analyst at FBR Capital Markets in New York. “The problem is corporate meetings are often planned far in advance, so even if the hesitation is lessening, it may still take a year or two until some of these will actually take place.”
For Reandeau of the Trailblazers, the visits to Miraval weren’t only for entertainment. The resort’s activities, which included contests such as chili and barbeque cook-offs, helped with team-building, she said.
“These retreats ensure that there’s a connection there -- that we’re all on the same page,” Reandeau said. “It’s not just fun but, we think, necessary.”
Miraval last year added to its regular corporate offerings a four-day executive program, during which participants receive lessons from Tony Schwartz, a management expert, on boosting energy levels within their companies. The resort charges $3,000 plus tax per person for the program, said Michael Tompkins, general manager of the Arizona resort.
The resort has hosted executives from companies including Bank of America Corp., Google Inc., Sony Corp. and Toyota Motor Corp., Tompkins said. Half of the available executive courses have been booked for the remainder of the year, and about 10 percent have been reserved for 2011, he said.
The Sanderling Resort & Spa, in North Carolina’s Outer Banks, will begin offering butchering workshops to its corporate and leisure guests next month, said Laura Millett, a spokeswoman for the hotel. Guests will “meet their meat” as a German master butcher takes them through the process of selecting and cutting meat from steer, hogs, lambs and other animals at a nearby organic farm, the hotel said today in a statement.
At W Hotels, Starwood Hotels & Resorts Worldwide Inc.’s high-end boutique brand, business clients can learn how to cook, knit or be a disc jockey, according to the chain’s website. At Stowe Mountain, where groups can get maple-infused hand and foot massages during business meetings, corporate programs have been successful enough to help spur the 139-room hotel to open an additional 179 rooms in December, Fukumoto said.
Rise in Reservations
Corporate reservations for the year are up 34 percent from 2009, she said. About 30 percent of Stowe Mountain’s bookings are from business groups, with the rest from leisure travelers. The resort is trying to shift the ratio to 50-50, Fukumoto said.
Joie de Vivre Hospitality, a San Francisco-based boutique hotelier with 35 properties, started its “Joy of Meetings” initiative in January 2009, with bubble-blowing sessions to relieve stress and yoga classes “to stimulate endorphins and energy,” according to the company’s website. Guests can also fly kites and make s’mores, the campout dessert made from graham crackers, chocolate and marshmallows.
The program has helped Joie de Vivre boost business this year, Carole Manning-Kim, corporate director of national sales and marketing, said in an e-mail.
At the Broadmoor in Colorado Springs, Colorado, which promises corporate clients a full refund if they aren’t satisfied, groups can participate in fly-fishing and whitewater-rafting excursions. Bookings for 2011 show a 15 percent increase in business-group demand from this year, said John Washko, vice president of sales and marketing.
About 65 percent of visitors at the closely held Broadmoor are corporate clients, he said.
“After what we’ve just come through, we’ve seen the C-level customer looking more and more for something outside of the set standard golf-and-spa event,” Washko said.
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