Selling Sandals

Hunched over blueprints for the new suites at Sandals’ Antigua resort, company founder Gordon “Butch” Stewart explained why it was essential to rearrange the location of the bathroom sinks. Couples need their private spaces, he said.

“It’s important to make sure rooms completely reflect modern thinking,” Stewart added in his rolling Jamaican accent, as he sifted through schematics spread across a conference table in Sandals’ Coral Gables, Fla., offices. “You can’t depend on an architect.”

For 25 years Stewart, the former air-conditioning salesman, has been tinkering, redesigning and putting his personal stamp on the all-inclusive experience. In the process he created two of the most instantly identified brands in the travel industry — Sandals and Beaches, the family-only resorts launched in 1997 to provide the perfect complement to the couples-only Sandals. By selling romance and lifestyle — more than just a room with a view — he changed the industry.

“The number-one thing that makes us different is Butch Stewart,” said Kevin Froemming, president of Unique Vacations, the sales agent for Sandals and Beaches. “This is a totally entrepreneurial operation. We don’t miss opportunities on account of bureaucratic roadblocks getting in the way.”

Director of wedding strategies Joann Delgin was at first taken back by the casual corporate atmosphere when she joined Sandals last year, after years with the Walt Disney Co.
“I don’t have to get 65 million signatures” to do something, she said. “I just go up and ask Mr. Stewart.”

It is that nimble nature, the ability to quickly act on an idea and leap to the forefront that has made Sandals something of a marketing legend. Sandals — now with 12 Sandals and four Beaches resorts — always seems to have something to promote, something new and different in the pipeline that fits seamlessly into its core goals. From concierge and white-glove service to corporate partnerships with such heavyweights as Microsoft and Coca-Cola, Sandals consistently wins accolades for its ability to build on its image, to create something more than a typical vacation experience.

“The thing that impresses me the most is the consistency of the marketing approach,” said Ray Snisky, president of Funjet Vacations, a longtime Sandals partner. “They appeal to the customer on an emotional level and that ends up benefiting the entire Caribbean.”

All agree it starts with Stewart, but there is also a specific, carefully thought-out design to selling and marketing his entrepreneurial vision. Early on, in 1981, Sandals separated its sales and marketing functions from the company, creating Unique Vacations. Unique is the exclusive sales agent for both Sandals and Beaches, giving it responsibility for almost all the chain’s marketing.

“Our G.M.s have one mission — turning out happy people,” said John Lynch, Unique’s executive vice president of sales worldwide. “We look out for sales.”

“It’s not just keep up, it’s keep in front.”

Lynch has been part of Stewart’s core team for 14 years, after 14 years with the Jamaica Tourist Board. Through the ups and downs, he’s seen the company maintain 80 percent and above occupancy rates, while stubbornly refusing to play among the heavy discounters.

“We saw you could sell from the top,” Lynch said.

Instead they focused on romance and the resort experience, selling weddings and honeymoons instead of cheap weekends.

“There are times in life when people want to splurge,” Lynch said, expressing one of the company’s primary philosophies.

Unique’s marketing and promotions are famous for an extra twist, the added synergistic element. According to Lynch, the best ideas have often emerged from the company’s flexibility — its ability to improvise. When construction started on the first Beaches in Negril in 1997, plans included two buildings for dormitories. But “the lawyers went bananas,” Lynch said.

With liability issues effectively killing the dormitory idea, the executive team found themselves looking at two empty buildings.

“What the heck are we going to do with these?” Lynch recalls asking.

The answer was converting the dorms into Sega game rooms, where the game company could test new products. Now Microsoft runs Xbox game centers in all the Beaches.

Another of the company’s big successes was the 2004 link with the Muppets, which addressed a very specific need, more than a broad marketing strategy. Beaches was struggling in the spring and fall, when kids were in school and parents were reluctant to travel. The idea was to find something to appeal to pre-schoolers, which led to the Muppets, the gold standard for pre-schoolers.

Beaches’ Caribbean Adventure with Sesame Street was “the most exciting thing that happened to me since I got here,” said Tony Cortizas, vice president of advertising, who has been with Sandals for 10 years.

He enthusiastically described how he was able to quickly link with the legendary Sesame Street organization and move forward, thanks to Sandals streamlined operation. The deal called for Sesame Street characters in the resorts and special themed weeks, as well as co-sponsorships, breaking new ground for all-inclusives in the Caribbean.

“I love my job,” Cortizas said. “It’s not just keep up, it’s keep in front. If you look at Sandals’ marketing, we make bold statements.”

Beyond the promotional value, the Muppets deal also had an immediate impact on the bottom line in Beaches’ troubled months.

“It justified the price point and attracted consumers that we may not have gotten,” Cortizas said.

The company recently announced a three-year extension of the agreement, including plans to add Bert and Ernie characters and exclusive live Muppet stage shows with Caribbean storylines.

Cortizas speaks with equal excitement about Sandals’ new relationship with Preston Bailey, the wedding planner to the stars who now offers special packages for Sandals (see sidebar). Like the Muppet deal, the Bailey alignment addresses specific goals.

“It’s really the same thing,” Cortizas said. “It impacts a core market that is important to the brand.”

In this case, weddings. Once again, Sandals is able to offer something over and above its competitors.

“We’re going to take Preston and make him a household name,” Cortizas vowed.

“If you sit, look and wait, you’re going to get run over.”

The consistent thread in Sandals’ marketing approach is Stewart’s relentless customer-centric focus, the willingness to spend extra dollars to jazz up the experience for a consumer willing to pay for something more.

“If you follow the accountants, you’d have institutional hotels,” Stewart said. “We’re not afraid to spend money.”

Stewart is famously counter-intuitive, willing to go against the grain if he feels the timing is right. After the Sept. 11 terrorist attacks, instead of retrenching like many in the industry, Stewart raised rates and increased the marketing budget, boosting occupancy rates and helping the entire region return to a degree of normalcy.

When Stewart bought his first hotel on Montego Bay it was a rundown facility at the end of an airport runway, and the Jamaican hotel market was struggling. While most resorts were marketing to the broadest possible audience, Stewart instead targeted a niche — high-end couples. As the chain grew, Stewart focused on buying older hotels and renovating them. Instead of streamlining costs, he added larger rooms, suites, four-poster beds, multiple restaurants and extra services, each time raising the service bar.

“He is following the principle that if you sit back and wait, you’re going to get run over,” Lynch said.

The creation of Beaches was pure Stewart, taking a chance and addressing a specific market in a way that had more to do with the cruise-ship business than traditional resorts. Now it seems to simply make sense, but in 1997 it hadn’t been done.

“No one saw fit to roll the dice,” Stewart said.

Sandals, more than most chains, seems to understand its core audiences. The chain boasts one of the highest repeat customer rates in the region, marketing perks like butler service and scuba trips that get the attention of travelers. While some all-inclusives were reluctant to spend the money, Sandals moved aggressively into the spa business. It now has spas in 12 of its 16 resorts, branded under the Red Lane Spa name, offering full-service facilities and a wide range of exfoliations, oils and natural treatments.

“It was very, very early to be getting into the spa game,” Cortizas said.

Although it is famous for specifically targeting market sectors, the overall Sandals audience continues to grow. There are now more than 170,000 members of the Sandals Signature Guests program, which primarily targets repeat customers. Over the years, Sandals has consistently added price categories, providing more choices for the ever-expanding market. It also separated the Sandals resorts into “classic” and “signature” resorts, recognizing the new strata achieved by some of its properties, such as Royal Bahamian, which offers Rolls Royce service, among other amenities.

“We learned the customer wants choices,” said Froemming, who was COO of Mark Travel Corp. earlier in his career.

Recognizing the broader audience, Sandals has started doing more TV spots, “a natural step in the evolution of the brand,” Cortizas said. Sandals ads typically sell the resorts as a romantic dream.

“If you’re dealing with a mass audience, Cortizas said, “you need them to fall in love with the concept of a Caribbean vacation.”

“We protect the travel agent.”

Travel agents and packagers are at the center of the Sandals marketing strategy, which has always aggressively courted the industry. Even when other suppliers turned away from the channels, Sandals has consistently offered events, training and fam trips, putting actual resources behind the lip service. Four days after Hurricane Ivan tore through the Caribbean last year, Stewart flew key tour operators and agents to Jamaica to see firsthand that the island was still functioning.

“In the last couple of years, they’ve really raised the bar on marketing,” said Melanie Compton, a certified Sandals sales consultant with Ladera Travel in Manhattan Beach, Calif.

A few years ago, when some companies lost interest in travel agents, Sandals kept calling.

“Their salespeople are always in touch with us,” Compton said. “They’re constantly holding our hand and asking what we need.”

There are now more than 12,000 registered Sandals specialists, a key link between Sandals and its customers.

“We’re more important to each other today than ever before,” Froemming said.

Instead of cutting commissions, Sandals continues to pay agents for total packages booked by their clients, including all the extras.

“We protect the travel agent,” Stewart said. “We make sure no sale is more profitable than a Sandals sale. They look out for us, and we look out for them.”

Sandals executives recognize that their product requires a little extra attention. The client has to understand what they’re getting for their money, as well as the different categories and services. Cortizas calls Sandals an “aspirational purchase,” the type of trip clients dream of taking some day. Sandals believes travel agents are the best avenue to demonstrate why a trip to Sandals or Beaches may be worth a few extra dollars.

“Our customers want value,” Froemming said. “But at the end of the day they’re coming down for something other than a cheap price.”

Signs abound that the competition is likely to get tougher — the market more complex. Last year Stewart resigned as chairman of Air Jamaica and the Jamaican government re-established control of the troubled airline, which reportedly lost more than $80 million in 2004. Earlier this year the airline laid off workers and cut back on flights.

“I hope they get their act together,” Stewart said. “The reality is that airlines are not the simplest things in the world.”

Last year Sandals averted a potentially debilitating marketing land mine when it lifted a longstanding ban on homosexual couples. As it turned out, since the change in policy few gay couples have visited resorts, executives say, but the chain is no longer in the bull’s-eye of protest groups. Stewart chalks it up as “a lesson learned” and said the change in policy has done nothing to change the chain’s focus.

Meanwhile, the chain continues to expand. In addition to the $49 million expansion of Sandals Antigua Caribbean Village and Spa, which will include 180 suites and the largest pool in the eastern Caribbean, the chain recently unveiled the refurbished Sandals Grande Ocho Rios Beach and Villa Resort, the largest in the chain. Earlier this year it opened Sandals Whitehouse European Village & Spa in Jamaica’s raw South Coast region, the newest addition to its exclusive Signature Collection and the first Sandals resort built from the ground up. Set in a 500-acre nature reserve, Whitehouse includes such typical Sandals touches as personal butlers, seven restaurants, four pools and private champagne breakfasts.

Industry speculation continues to mount about what Stewart will do next. It is widely believed that Sandals will soon expand outside the Caribbean for the first time, most likely to an area like the Maldives, popular with Sandals’ U.K. customers, its largest market outside the United States. Although Sandals has often been approached about planting its flag in other regions, “we’re more open to it right now,” Stewart acknowledged. One deal is in the works, he said, although he refused to comment further.

But Stewart leaves little doubt where his loyalty lies.

“We will always stick with the Caribbean,” said Stewart, who grew up on the beaches of Jamaica. “We understand the Caribbean.”

WEB EXCLUSIVE: Sandals Timeline 1968-Gordon “Butch” Stewart starts his own air conditioning business in Jamaica 1981-Stewart opens a refurbished hotel as the couples-only Sandals Montego Bay 1985-Sandals Montego Bay debuts a swim-up pool bar 1988-Sandals introduces white glove service in restaurants; Sandals Negril opens 1991-Sandals opens Sandals Dunn’s River and Sandals Antigua, making it the largest operator of all-inclusive resorts in the Caribbean 1992-Sandals acquires Upton Golf Course in Ocho Rios and waives green fees for its Jamaican guests 1993-Sandals St. Lucia opens; the term “ultra all-inclusive” is coined. 1994-Sandals debuts concierge service and introduces the “weddingmoons” concept 1996-The Sandals Royal Bahamian opens with the chain’s first full-service spa 1997-Beaches resorts debut, offering the ultra all-inclusive experience to families 1999-Major renovations of Sandals St. Luica and Beaches Turk & Caicos 2000-Beaches Sandy Bay opens, targeting more budget-conscious travelers 2002-Beaches Boscobel Resort & Golf Club opens, including Xbox game centers and golf for children 2004-Beaches becomes the first resort chain to link with the Sesame Street Workshop, offering characters and theme weeks at the resorts 2005-Sandals Whitehouse opens in Jamaica; the latest in the chain’s “Signature Collection.”