Q&A with EJ Schanfarber, president and CEO of Divi Resorts

Questions and answer for EJ Schanfarber, President & CEO of Divi Resorts

Questions:
Q: Has the hotel industry bottomed out? Is it on its way up?
A: Currently, our assessment of the global economy is that secondary vacation travel appears to have stabilized. Group and business travel are still being adversely affected by the economic downtown. Our overall volume is at par with last year, but yields and average spends are off pace by 5-20%, depending on location.

Q: Do you believe in price cutting to meet current lower demand for hotels?
A: Our business philosophy is to provide value oriented products and packages to meet the needs and expectations of our target markets. We maintain a competitive position in each respective marketplace based on our comp set, market demands and economic variations.

Q: How do you see travel shaping up in the near future?
A: We are projecting a steady improvement in yields as we get closer to our winter season. Our long-range forecasts indicate a 5-10% improvement in volume and yield in 2010 (versus 2009). We believe we will see an increase in pace in 2010 as business and group travel accelerate to meet market specific demand.

Q: Any travel trends in the hotel business you are seeing?
A: The most noticeable trend is a general shortening of booking patterns. The Internet along with last minute travel deals and discounting have resulted in a significant amount of travel being booked within a 14-day window. The volume of reservations being booked via the Internet continues to increase for leisure, business and group travel.

Q: How are hotel chains such as your selling themselves these days? Any new gimmicks or innovations?
A: Divi Resorts continues to focus on service delivery and customer satisfaction. The leading brands have generally reacted to the down economy by sharpening their service skills in an attempt to outperform their competitors. The increased focus has provided a wonderful opportunity for vacationers to experience exceptional service while taking advantage of value-driven packages.

Q: How has the travel industry fared compared to other industries during this recession?
A: The travel industry has committed significant resources to encourage travel during these tough economic times. Our airline partners have stepped up and provided rate discounts and availability which has resulted in a general stabilization of travel patterns.

Q: What should the travel industry do in the future to help maintain its popularity?
A: Continue to provide wonderful customer experiences.
Q: How are you attracting group and convention travel? Any new incentives?
A: We are expanding our market outreach into SMERF and incentive group market segments. We are adding resources and capital to ensure a timely penetration into these segments and anticipate a significant increase in destination in volume in 2010.

Q: Anything else you might care to add?
A: The economy has forced most resort companies to become better operators. In general, resorts are increasingly efficient, focused on their competitive advantages and working diligently to improve customer loyalty. This is a wonderful time for travelers to take advantage of terrific products and packages and experience exceptional service levels.

Schanfarber is a veteran of 30 years in the hospitality industry and xtensive executive and Caribbean management experience. Prior to joining Divi Resorts in 2007, he directed regional operations for large and boutique Southwestern and Caribbean resorts, including Omni and Homestead properties. Since 1997, he has been a chief executive for hospitality groups throughout the southern United States with responsibility for resort and timeshare operations, commercial complex ventures and property development. He has a degree in Corporate Finance from the University of Kentucky, and certifications from the American Hotel/Motel Association in executive marketing, sales, human resources and hotel administration.