How to Use Data to Build a Profitable Resort

06|22|2018 • BY Luz Candelas, Director of Architectural Projects

Summary:

Data is key to deriving profitability from capital expenditures
Best practices based on successful past projects drive ALG design specifications
Senior ALG executives additionally provide project input to ensure resorts with future of positive guest feedback

When I became ALG’s Director of Architectural Projects in August 2016, it was to provide our owners with a more data-driven approach to resort construction.

How we operate our existing resorts and how we develop new properties must keep pace with both technology and ALG’s exponential growth.

Today, ALG has 52 existing resorts across Mexico and the Caribbean, six brands in total, and 20 more resorts in the pipeline. My role is to translate eight years of experience as AMResorts’ Project Manager, working directly with resort owners, into cohesive brand standards. We want to assure resort guests that certain aspects of their stay will always be consistent.

“The focus is on constantly delivering high quality dining, entertainment and bathroom amenities and still provide a new and unique experience at every resort.”

Unlike publicly traded brands that have bibles of design guides, ALG’s specification booklets remove the risk of operational error.

The level of detail includes how many hooks to include in both couple’s treatment rooms and solo treatment rooms.

Such precision saves owners the cost of remedying mistakes.

But we intentionally created a consolidated set of specifications in order to allow for greater leeway in designing a singular resort.

Architecture of a Profitable Blueprint

In addition to refining brand standards, I’m also leveraging data amassed during almost a decade of working with AMResorts owners on resort design.

That data includes details from past AMResorts’ new build construction of single resorts, adaptive reuse and capital expenditure (CapEx) initiatives.

Together with our CEO Alex Zozaya and our Executive Vice President and Chief Strategy Officer Javier Coll, we provide customized annotations on master plans, Property Improvement Plans (PIP), and implementation of brand operations.

The collective input is intended to drive long-term returns for our owners and generate consistently positive feedback from guests long after the resort has opened.

We first kick off the process working in tandem with the property owner and architects to create a master plan, prescribing the square meter requirements for every venue allocated to the resort.

After opening more than 50 properties across the region, the internal metrics that we use to determine the size of public spaces as a function of room count is a near-exacting science.

The same is true for even more exhaustive aspects of the property like the number of parking spaces necessary and even the number of toilets that equip public rest room facilities.

Similarly, we’ve developed back-of-house data that ensures streamlined operational procedures, accounting for minute detail like kitchen set-ups.

Later in the process, we bring engineering in to verify that all essential equipment is properly situated.

Pull Quote 2

The Right Room Categories

We additionally work with our sales team on room schematics. Metrics from sales are used to shape room inventory and specifically, the number of various suite and room categories.

Too many or too few of any one room category will impact revenue and ultimately, result in corrective measures that will require further investment.

A comprehensive data assessment of the brand, the local market and regional data provided by our sales force have been a reliable method of achieving the right mix of rooms for generating high returns.

Establishing pool size is one area where we employ both internally and externally collected data.

I’ve assembled a set of analytics based on site visits that I’ve made to resorts that are in our properties’ competitive sets, noting pool sizes as they relate to room counts.

For both owners and architects, this data eliminates what is often a speculative process that can have financial consequences for the owner, should the pool itself prove too small to accommodate guest numbers.

The data initiatives that I’ve launched at ALG also extend to Property Investment Programs (PIP).

Acquiring an existing asset and financing its conversion to an AMResorts flag is a commitment that will span years.

“The decision to convert a hotel to an AMResorts brand should be weighed using timely and accurate data.”

Investment costs should be broken down by line item to include:

Specific outlays for rooms
Common areas
Back of house
New construction (when the existing property lacks ALG-mandated venues like theaters)

The matrix that I’ve implemented to evaluate these costs gives our owners greater certainty and has already proven valuable in decisions to forget ahead with a negotiation –or not.