You may not have heard of Rysdahl, Buntz and Associates but their biggest success has been written up in consumer publications as, "worth the drive!" I am talking about Bluefin Bay Resort, one of the most successful resorts in Minnesota and possibly the only successful resort with condominium ownership as its primary form of real estate ownership.
What do I mean by success? See if you agree with my definition. The condominium owners are happy because they are either receiving more cash flow than the original projections they were given several years ago or they have sold their units for a nice profit over their purchase price, usually after less than a month on the market. There is a waiting list of prospective buyers now. Bluefin's condominium owners are typically getting an 11% pre-tax return on their total investment or 23% after-tax cash-on-cash return. Dennis Rysdahl and Rob Buntz are happy because they are making money through management of the condominium rental units and ownership of their adjacent restaurant and bar. They also have delivered on all their promises to lenders who either get paid early or at worst on time, a rarity in the hotel business these days, condominium owners, guests of the resort and employees.
How might other resort, hotel, and motel owners and operators benefit from Dennis and Rob's success? They might see if a few of the things that Dennis and Rob believe to have been essential apply to their situation. Dennis mentioned the following items in a presentation to the Condominium Owners Association in late April as being very important:
Continued capital improvements
Dennis and Rob only require them of condominium owners and themselves if the result is either improved productivity or an enhanced guest experience at a value greater than the cost of the improvement. Dennis says, "New bedspreads are an investment, not an expense." And he is not mentioning tax benefits, this is real investment for real return.
Ongoing maintenance
This important daily function reduces operating costs, increases productivity and enhances the guest's experience. Engineers regularly go through every condominium unit with a five page list of things to check everything from shower head flow to loose doorknobs. Dennis estimates that this costs almost $100 per inspection on each condominium unit of one or more bedrooms, full kitchen and living/dining area. He states that the payback is no down-time, reduced repair costs and guests getting what they pay for every time the unit is occupied.
Guest oriented design and amenities
When Bluefin Bay was built and equipped and through subsequent upgrades there were several design and equipment items which in retrospect have proven to be very worthwhile. Among those he mentioned were a whirlpool tub unit overlooking Lake Superior, fireplace, stereo cassette player, coffee makers, microwaves and at least one VCR in every unit. High quality bedding, especially, sofa beds, and upscale furniture throughout the units are complemented by residential style accessorizing. Details such as quality kitchenware, utensils, china and flatware in all the kitchens are required. Regular Quality Control inspections help assure that all owners in the rental program keep their units up to the standards of a four star hotel. Tofte Management, a Rysdahl, Buntz and Associates affiliate which actually manages the day-to-day operations of Bluefin Bay Resort, operate design consulting and bulb furniture purchasing programs in order to make these processes as simple and inexpensive as possible for the unit owners.
Personnel management
Dennis and Rob sponsor an annual retreat for upper and middle management. They accomplish a variety of things ranging from team building exercises to business planning. They firmly believe that in addition to careful recruiting, orienting and training of line employees, that higher pay rates have been instrumental in reducing labor costs. Yes, higher pay saves money! Two years ago their average hourly pay rate was $4.50. It is now $6.50 and their goal for the beginning of 1992 is $7.00. Therefor, in a resort area with a serious labor shortage, they get both the best possible applicants to choose from when there are occasional position openings and they have very a very low employee turnover rate of less than 20%. Dennis calls it "investing in employees." Their kitchen manager is off to the Culinary Institute of America in New York at Dennis and Rob's expense this summer. The Assistant Manager for front office and Comptroller got a $45,000 property management system to tie into the bar and restaurant's new point of sale system. These systems are all first class, no cigar boxes here! Clearly they are investing in people and productivity.
Targeted and creative marketing
Rob coordinates most of the marketing for Bluefin Bay though Dennis gets a few programs going, too. The marketing effort is focused on the slow periods, which they refer to as the "quiet time" of this seasonal resort thereby turning around a negative which must be overcome into a positive to promote. Seasonal is all in the eyes of the beholder though, because Bluefin Bay achieved nearly a 70% occupancy in 1990 while achieving an Average Daily Rate of over $140 giving them a revenue increase from 1989 of about 18%. It wouldn't be fair to give you their market plan but here are a few things they are doing that make them special. They have always considered their return guests as the most important market and communicate with them several times a year with the "Bluefin Fishwrapper" newsletter which Rob publishes.
They adopted two miles of highway to clean and subsequently got radio coverage for doing it. Oh yes, they are going to get their guests to do the actual work next time! This last time the condominium unit owners did most of the work. Good citizenship, you know!
They participate in various programs including the Endangered Species Program with the DNR for which they received honors, contribute to the U. M. Department of Tourism Chair, Dennis chairs the Lutsen/Tofte Tourism Association Golf Committee, help maintain the Superior Hiking Trail, etc.
Their Kitchen Manager's recipes appear occasionally in the TASTE section of the Star Tribune.
They carefully negotiate trade outs with the print and radio media which appeal to Bluefin Bay's target markets.
In the end I believe the secrets to Dennis and Rob's success are focusing on increasing revenues and reducing costs. Nothing new, but their success at achieving these goals is the result of their strategy: working with their staff to develop results-oriented detailed plans and a constant awareness of the need for change and improvement.
Finally, they strive to send each guest home with a sense that the value received was greater than their final bill through a continuous effort to enhance the accommodations, grounds, services and every con-tact with staff members.
SOURCE:http://www.hotel-online.com/Neo/Trends/Payne/Articles/BluefinBay.html
What do I mean by success? See if you agree with my definition. The condominium owners are happy because they are either receiving more cash flow than the original projections they were given several years ago or they have sold their units for a nice profit over their purchase price, usually after less than a month on the market. There is a waiting list of prospective buyers now. Bluefin's condominium owners are typically getting an 11% pre-tax return on their total investment or 23% after-tax cash-on-cash return. Dennis Rysdahl and Rob Buntz are happy because they are making money through management of the condominium rental units and ownership of their adjacent restaurant and bar. They also have delivered on all their promises to lenders who either get paid early or at worst on time, a rarity in the hotel business these days, condominium owners, guests of the resort and employees.
How might other resort, hotel, and motel owners and operators benefit from Dennis and Rob's success? They might see if a few of the things that Dennis and Rob believe to have been essential apply to their situation. Dennis mentioned the following items in a presentation to the Condominium Owners Association in late April as being very important:
Continued capital improvements
Dennis and Rob only require them of condominium owners and themselves if the result is either improved productivity or an enhanced guest experience at a value greater than the cost of the improvement. Dennis says, "New bedspreads are an investment, not an expense." And he is not mentioning tax benefits, this is real investment for real return.
Ongoing maintenance
This important daily function reduces operating costs, increases productivity and enhances the guest's experience. Engineers regularly go through every condominium unit with a five page list of things to check everything from shower head flow to loose doorknobs. Dennis estimates that this costs almost $100 per inspection on each condominium unit of one or more bedrooms, full kitchen and living/dining area. He states that the payback is no down-time, reduced repair costs and guests getting what they pay for every time the unit is occupied.
Guest oriented design and amenities
When Bluefin Bay was built and equipped and through subsequent upgrades there were several design and equipment items which in retrospect have proven to be very worthwhile. Among those he mentioned were a whirlpool tub unit overlooking Lake Superior, fireplace, stereo cassette player, coffee makers, microwaves and at least one VCR in every unit. High quality bedding, especially, sofa beds, and upscale furniture throughout the units are complemented by residential style accessorizing. Details such as quality kitchenware, utensils, china and flatware in all the kitchens are required. Regular Quality Control inspections help assure that all owners in the rental program keep their units up to the standards of a four star hotel. Tofte Management, a Rysdahl, Buntz and Associates affiliate which actually manages the day-to-day operations of Bluefin Bay Resort, operate design consulting and bulb furniture purchasing programs in order to make these processes as simple and inexpensive as possible for the unit owners.
Personnel management
Dennis and Rob sponsor an annual retreat for upper and middle management. They accomplish a variety of things ranging from team building exercises to business planning. They firmly believe that in addition to careful recruiting, orienting and training of line employees, that higher pay rates have been instrumental in reducing labor costs. Yes, higher pay saves money! Two years ago their average hourly pay rate was $4.50. It is now $6.50 and their goal for the beginning of 1992 is $7.00. Therefor, in a resort area with a serious labor shortage, they get both the best possible applicants to choose from when there are occasional position openings and they have very a very low employee turnover rate of less than 20%. Dennis calls it "investing in employees." Their kitchen manager is off to the Culinary Institute of America in New York at Dennis and Rob's expense this summer. The Assistant Manager for front office and Comptroller got a $45,000 property management system to tie into the bar and restaurant's new point of sale system. These systems are all first class, no cigar boxes here! Clearly they are investing in people and productivity.
Targeted and creative marketing
Rob coordinates most of the marketing for Bluefin Bay though Dennis gets a few programs going, too. The marketing effort is focused on the slow periods, which they refer to as the "quiet time" of this seasonal resort thereby turning around a negative which must be overcome into a positive to promote. Seasonal is all in the eyes of the beholder though, because Bluefin Bay achieved nearly a 70% occupancy in 1990 while achieving an Average Daily Rate of over $140 giving them a revenue increase from 1989 of about 18%. It wouldn't be fair to give you their market plan but here are a few things they are doing that make them special. They have always considered their return guests as the most important market and communicate with them several times a year with the "Bluefin Fishwrapper" newsletter which Rob publishes.
They adopted two miles of highway to clean and subsequently got radio coverage for doing it. Oh yes, they are going to get their guests to do the actual work next time! This last time the condominium unit owners did most of the work. Good citizenship, you know!
They participate in various programs including the Endangered Species Program with the DNR for which they received honors, contribute to the U. M. Department of Tourism Chair, Dennis chairs the Lutsen/Tofte Tourism Association Golf Committee, help maintain the Superior Hiking Trail, etc.
Their Kitchen Manager's recipes appear occasionally in the TASTE section of the Star Tribune.
They carefully negotiate trade outs with the print and radio media which appeal to Bluefin Bay's target markets.
In the end I believe the secrets to Dennis and Rob's success are focusing on increasing revenues and reducing costs. Nothing new, but their success at achieving these goals is the result of their strategy: working with their staff to develop results-oriented detailed plans and a constant awareness of the need for change and improvement.
Finally, they strive to send each guest home with a sense that the value received was greater than their final bill through a continuous effort to enhance the accommodations, grounds, services and every con-tact with staff members.
SOURCE:http://www.hotel-online.com/Neo/Trends/Payne/Articles/BluefinBay.html
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