Assistance with Case Study Paper

31Journal of Hospitality & Tourism Cases

Amy M. Gregory is affliated with University of Central Florida. Kathryn Norton is affliated with Starwood Vacation Ownership.

case study

By Amy M. Gregory and Kathryn Norton

Introduction Guests’ stays at resorts, whether they are traditional destination

resorts, planned resort communities or timeshare/shared ownership

resorts, are characterized by longer lengths of stay than non-resort

properties. This is primarily due to resort stays occurring during

leisure, rather than business, travel. The leisure focus of resorts origi-

nated during the eighteenth century as an outcropping of Roman

bathhouses. Due to the expense and lack of transportation, travel for

pleasure was only available to the upper echelons of societies. There-

fore luxurious bathhouses situated on the periphery of population

centers became retreats for the wealthier members of society. Having

spent significant time and trouble getting to the destinations, individ-

uals wanted to devote longer time there to make the trip worthwhile.

These extended stays led to more amenities and offerings being

made available in order to entertain the guests during their stays.

With advances in transportation, travel became more accessible and

destination resorts centered on a variety of amenities or geographical

features became increasingly popular among all levels of society, not

just the sovereigns and affluent (Mill, 2011).

With the supply of resort properties growing, it has become pro-

gressively more important for resorts to ensure their guests are satisfied.

It is expected that increased satisfaction creates a feeling of loyalty to a

resort or development company and therefore, increases the likelihood

that guests will refer others to the property. Whereas resorts may ap-

pear to offer activities in order to give guests “something to do” while

they are on vacation, research shows that satisfaction increases when

guests are involved in activities during their leisure travel (Costa et al.

2004; Otto and Ritchie, 1996). Dubbed as the “Experience Economy”,

Pine and Gilmore (1998) emphasize the importance of “experiential-

izing” goods and services because consumers are ever more looking for

rewarding, memorable experiences. Building on this, Weiermair et al.

(2007) go so far as to say that consumers’ search for fun or excitement is

forcing today’s tourism and service providers to incorporate memorable

experiences. These findings may lead practitioners towards strategic

management initiatives to address consumers’ needs.

One such example found in the Wall Street Journal (February 21,

2013, D1) highlights the importance of experiences and activities in

differentiating resorts and attracting and retaining customers. In the

article, Paul James, Global Brand Leader for Starwood Hotels and Re-

sorts, attributes lavish experiences as a way to get people thinking and

talking about a resort. Mr. James comments that even if the more lav-

ish experiences never get booked, it gives the resort an opportunity to

reach out to previous guests with a new message and a reason to trav-

el. Based on a strategic decision to respond to the importance of the

resort experience, Starwood Vacation Ownership Resorts, a division

of Starwood Hotels & Resorts, created a new position responsible for

the guests’ experiences and resort activities. The position is uniquely

entitled “Director of Fun” and is held by Ms. Kate Norton at one of Star-

wood’s vacation ownership properties in Orlando.

As is typical of business management, a vision is established, ob-

jectives are identified and strategies are put in place to achieve those

goals and objectives. The steps involved in creating, implementing

and carrying out this process may be collectively referred to as stra-

tegic management (Murphy, 2008). Depending upon the structure

and philosophy (e.g. traditional, resource-based, or stakeholder) of the

organization, strategies may be created or modified at one or many

levels (e.g. corporate headquarters or field operations) within the

organization (Enz, 2010). Further, several theories (e.g. Matzler’s cus-

tomer-based lifestyle segmentation, Porter’s value chain, Gordon’s life

cycle) may drive the implementation, measurement and modification

of the processes to achieve the overall strategies (Murphy, 2008).

This case study examines the responsibilities of Starwood’s Director

of Fun as laid out in management’s strategic objectives in order to help

students understand the complexities of the position. It presents typi-

cal job duties of various members of Ms. Norton’s team, and describes

a scenario wherein an extremely popular resort activity is interrupted

due to weather. The aim of this case study is to educate students on the

roles and responsibilities of a Resort Activities team, including staffing,

scheduling, and financial implications, and to guide them in developing

alternate programming in order to salvage guest satisfaction and pre-

serve the profitability and integrity of the department.

The Director of Fun's Role and Responsibilities At the case study property, the role of the Director of Fun is to

create, implement and staff an effective recreation program and two

poolside retail outlets with the objective of increasing overall guest

In Case Fun Happens, Keep Calm and Try to Stay Dry: Managing Profitable Activities at a Resort in Spite of Mother Nature

32 Volume 4, Number 4

satisfaction / loyalty and driving incremental revenue. There is freedom

within the framework and the Director of Fun is bound only by the limi-

tations of the annual budget. It’s important to note that in this case, the

resort is a shared ownership property with a Home Owners Association

(HOA). The HOA, not the developer or management company, approve

the annual budget of the resort. By the nature of the shared ownership

component, the budgets are zero-based with every component having

to be justified on an annual basis (Abbey, 2008; ARDA, 2012). The most

challenging of tasks assigned to the Director of Fun’s role is meeting the

budgeted revenue goals laid forth in the annual budget.

Within this job description however, there are many more job

responsibilities. At this particular resort, the Director of Fun also assists

the Food and Beverage Director with running the F&B Department. As

a result, the Director of Fun’s job responsibilities also include organizing

weddings and vow renewal ceremonies, as well as assisting the Food

and Beverage Department with catering and banqueted events and the

day to day running of the on-site casual dining restaurant and grocery

store. Based on the breadth of responsibilities and diversity of staff re-

sponsibilities, the Director of Fun must also be cognizant when it comes

to developing “bench strength” within the team. Bench strength refers

to a manager’s relative immediate ability to promote internal movement

and decrease staff turnover. This is challenging in any environment, but

especially so within recreation and F&B departments, both of which are

renowned in most resort settings to have a high rate of turnover.

The Director of Fun has a staff ranging from 16 people to 22 peo-

ple; depending on the time of year. The Leadership team consists of one

Manager and one Supervisor, both of whom report to the Director, and

an Activities Lead and a Retail Lead, both of whom report to the Man-

ager. The line level associates all report to the Manager, but are expected

to follow the chain of command for routine questions or concerns. The

Director of Fun reports to the General Manager of the resort.

Activities Team Members Wage range: $8.75 - $10.00 per hour.

An Activities Associate’s primary role is to provide leadership for

an “Industry Best” Activity Experience Program that creates value for

all owners and guests while offering a balance of engaging, unique,

memorable and compelling activities for all age groups. Any individ-

ual hired should have the ability to lead programs and convey a sense

of fun and enthusiasm to participants. All associates are expected to

engage and involve guests and timeshare/shared ownership owners

in a variety of programs. Based on the dual responsibility of the Direc-

tor of Fun, activities and F&B, associates at this particular resort are

also required to work certain shits in the poolside retail stores which

are operated by the Activities Department.

The Activities Associate’s job can be very demanding and requires

a specific, hard-to-find personality that is able to efficiently balance the

fine line between professionalism and having fun. Their roles and re-

sponsibilities differ on a day to day basis depending on where their shift

is assigned. Many resorts’ Activities teams are responsible for swimming

pools, staffing water features and pool towel distribution, as well as the

implementation of the daily program. Consequently, in this particular

resort, the Activities team is responsible for running the daily Activities

program, pool towel distribution and staffing the poolside retail outlets.

Team members must also be able to efficiently plan their time and be

self motivated to be able to carry out and execute the daily schedule

of events relatively unsupervised. Also, they must have the personality

and confidence to host entertaining and engaging poolside events on a

microphone while still maintaining the brand standards laid forth by the

Resort Developer and Management team. Notwithstanding, these as-

sociates must possess excellent cash handling skills, be able to multitask

effectively and be familiar with up selling and sales techniques to boost

revenue at the poolside retail outlets. With the continual pressure of a

zero-based budget and established revenue goals, these associates are

always mindful of balancing guest satisfaction with profitable opera-

tions. As such, this is a demanding position that is not easily filled, and

understandably has a historically high turnover rate.

Managing the Profitability of Fun Profitability is not something usually associated with Recre-

ation departments. Typically, they are funded from an expectation of

minimal cost coverage and any profit made on the back end is a nice

surprise. However, with this department, because of the unique retail

aspect, meeting and beating the budgeted revenue is a harsh reality.

The expectation is that the retail outlets are profit centers, and there-

fore, they must be appropriately staffed to operate when resort guests

want to shop (Costa et al, 2004; Mill, 2011; Murphy, 2008). As a result,

the headcount of this department is twice any usual Activities team

due to the shifts needed to operate the poolside shops. This has an

impact on the compensation line of the budget.

Labor is by far the biggest expense in the budget and is often

scrutinized. Total expenses can be managed by varying the number of

employees among three categories: full-time, part time and seasonal

(Mill, 2011). Full-time employees are scheduled to work 40 hours per

week, usually in the form of five, eight and a half hour shifts with an

unpaid 30 minute break. With a full time position comes the compa-

ny’s responsibility of paying payroll taxes, benefits, paid time off (PTO)

and Family Medical Leave Act (FMLA) expenses. A part time position

does not carry the additional responsibilities of taxes, benefits, PTO

and FMLA; however a part time employee can only be scheduled 30

hours per week. A “seasonal full time” position, the third category, is

also not as great a cost to the company (Murphy, 2008). This position is

considered to be full-time, but the position is only offered during a few

select months when the resort is operating at full capacity, usually the

summer, when vacationing families with children populate the resort.

33Journal of Hospitality & Tourism Cases

Choosing how many full-time, part-time, and seasonal positions to

maintain on the payroll has a direct impact on the profitability of the

department (Mill, 2011; Murphy, 2008).

On the revenue side, the schedule of activities is a great way of

bringing in revenue by charging for some of the activities offered as

part of the weekly program. However, maintaining a balance between

complimentary and fee-associated activities is not an easy task (Mill,

2011). This is particularly challenging in a shared ownership resort

located in Orlando. Many resort guests, especially shared ownership

purchasers, feel as though they should not have to pay for any events

listed in the Activities Guide due to the fact that they have purchased

with the resort and pay an annual maintenance fee to cover the ex-

penses of managing and maintaining the resort (Mill, 2011). Further,

this case study resort is located just a few miles from all the major

Orlando theme parks. It is competing for the guests’ attention as many

travelers come to Orlando and do not stay a single day at the property

– their entire trip revolves around spending every day at the parks. Re-

sort guests and owners often comment that so much money has been

spent at a theme park that paying for another activity is just too much.

As a result, the program of events offered has to be exciting enough

to persuade a family to stay on property for the day, yet affordable

enough where guests are not feeling uncomfortable spending too

much on their vacation. The Activities Department has to be efficiently

run so that the head count does not impact the budget too detrimen-

tally and force the resort fees to go up, yet diverse enough to offer

events for all demographics at all times of the day so as not to alien-

ate any particular generation or culture. The profitability and success

of the program is crucially dependant on a wide variety of offerings

that appeal to all types of guests. Exhibit A provides an example of a

weekly Activities schedule at the case study resort.

The last and likely most important contributor to profitability is

the weather. Temperatures less than 65 degrees render the pool decks

empty at a Florida-based property. Similarly, a thunderstorm in the

middle of a summer day can reduce the pool deck population from

200 people to less than 20. Florida law states that when there is light-

ning in the area, all outdoor pools must be closed for the safety of the

general public. With Central Florida being the “Lightning Capital of the

World”, the resort cannot take any chances with this law, and therefore

shuts the pool decks down completely at the first sign of lightning and

will not reopen them until the lightning is either 30 miles away or it

has been 30 minutes since the last recorded strike, which ever comes

first. Based on proximity of location and resort design, all retail outlets

and many of the activities at this resort are completely dependent on

pool deck population and foot traffic. The weather has such a direct

correlation to revenue that the Director of Fun at the case study resort

keeps a weather diary where she records the weather (temperatures,

rainfall, thunderstorms, etc., and how long the pool deck closed as a

result of weather). Further, the sales for each day are also catalogued

to provide an archive as to how the weather and revenues correlate.

The Perfect Storm: Weather as a deterrent to fun The day in question is a Wednesday during the third week in April

and, surprisingly, it starts out gloomy and chilly. The weather forecast

shows rain in the morning and into the early afternoon. Upon arriv-

ing at the resort, the Director notices that the pool deck and common

areas including the restaurant are unusually quiet. After checking the

Activities Guide for the day, the Director realizes that there is a pool

party scheduled to start at 11:30am and run until 2:30pm. The disc

jockey (DJ) for the pool party is an outside vendor and his cost is $250

for the pool party. The DJ needs a two hour advance notice of any can-

cellation based on his transportation time to the resort location - over

an hour’s drive away. According to the contract between the DJ and

the resort, if the DJ does not receive two hours’ notice of cancellation

before the event, the full fee will be charged whether he plays or not.

The Director is always keenly aware of the impact of labor costs

on the budget. It’s almost the end of month so any savings on labor

will be beneficial to the month end results. As usual, the Director of

Finance just sent out a reminder e-mail about all areas scrutinizing

costs in order to make month end budget numbers and capture any

possible savings. There are two full time and one part time associ-

ates scheduled to arrive at 10:30am to work the pool party and the

proceeding activities. There is also one full time associate scheduled to

open the poolside store, also at 10:30am. This is intentional as history

shows that pool party traffic usually boosts the sales at the retail store

by approx $150 above and beyond what it would usually make. There

is no fee for guests to attend the pool party.

It is decision time for the Activities Director. If the party is can-

celled, the Director will look to the staff on duty to assist with a “Rainy

Day” emergency program to replace the pool party. If the plan is to go

ahead with the pool party, the Director must consider whether there will

be enough guests to attend the pool party and warrant the expense.

Pool parties are a big guest favorite and are a direct contributor to the

Departmental Guest Satisfaction scores. The 1,000 unit resort is cur-

rently operating at approx 76% occupancy. The primary decision to be

made is whether to cancel the pool party. However, related to this deci-

sion are the operations and anticipated revenues of the retail outlets. If

the pool party is cancelled on the main pool deck, the Director has to

decide if they should shut down the main retail store leaving the smaller

one operational on a different pool deck. Will the savings from cancel-

ling the DJ and potentially sending two, or three (including the retail

store), full-time employees home while keeping one part time employee

to cover the operation, outweigh the risk of losing revenue by not open-

ing the store and receiving poor Guest Satisfaction scores due to the

cancelling of a scheduled and advertised activity?

34 Volume 4, Number 4

Considerations for Alternate Programming If the Director does decide to cancel the Pool Party, it’s important

that the guest experience is not compromised. An alternate program

should offer the same content as the event it is replacing wherever

possible. In this instance, it is difficult because the pool party involves

lots of games played in the pool, interaction with the DJ for “Name

That Tune” trivia and popular line dances. An alternate program may

not be able to compete directly with the anticipated satisfaction of a

Pool Party activity. However, a well-seasoned staff that is aware of the

resort guest demographic profile, their likes and dislikes, as well as a

history of successful (and unsuccessful events) should be able to de-

velop an “Emergency Activity” that is just as appealing to the Owners

and Guests in order to make them feel as though they are still getting

value for money. In the past, this Director has had good success with

rainy day plans that include showing a movie indoors, offering two for

ones on certain crafts and where possible, creating something that is

not part of the regular program to alleviate any disappointment.

If an alternate program is to be offered, the decision has to be

made before 9:30am in order to save on the DJ costs. The decision also

has to be communicated with Guest Services and the Front Desk Team

and all guests staying on property. In addition, the team members

whose shift will be cancelled need to be communicated with before

they clock into work. If associates clock in, they must be paid for a

minimum of four hours regardless of how long they actually worked or

if they were sent home after clocking in. The clock is ticking. It’s now

8:15am. What will the Director do? What decisions need to be made?

What information is required? What steps must be taken?

Surviving the Storm: The actual result On this particular day, the Director and the Manager consulted

the weather carefully. It looked as though there were no thunder-

storms headed their way, but there was a little rain in the forecast and

the temperatures were still quite cool compared to previous days.

Based on that information and the observed lack of foot traffic earlier

in the morning, they made the decision to cancel the pool party at

approx 8:45am. The DJ was called and informed of their decision in a

timely manner and without penalty. They decided to keep the store

open, but called two of the full-time employees and told them to stay

home as they were not required. They kept one part time employee

who would be responsible for overseeing the rainy day activities.

Further, the Director decided to show a movie at 11:30am and

also offered a “You Pick” painting activity where guests could choose

from any of the painting activities listed on the weekly guide for a 10%

discount. Any scheduled activities for that day, aside from the pool

party, would also go ahead as planned.

This information was relayed to guests in the form of a mass

voicemail sent to all villa telephones. Guest Services were also notified

in case any guests called them directly.

At approximately 10:30am, the sun came out and guests started

to fill up the pool deck. The store opened and guests’ receipts were on

track with a typical day, generating average sales of approximately $55

in the first hour of operation. The temperature rose by a few degrees

and at approx 11:15am, guests were starting to approach the team in

the Activities Center asking where the pool party was going to be set

up and where they should sit.

At this time, the Director consulted with the Manager and remain-

ing staff member and they collectively decided to put on a scaled

down, impromptu pool party as best they could using their own

equipment which consisted of a laptop and a portable speaker. The

Manager stepped up to organize the start of the movie, the “rainy day

activity” as they could not go back on the alternative arrangements

that they had already advertised to guests via the telephone voice

message. The Director and team member took it upon themselves to

bring the music equipment to the pool deck along with some hoola

hoops and other over-sized yard games they had on hand such as

Jenga, Connect Four, and Memory.

The Director apologized to the guests that had been asking about

the DJ and proceeded to lead a series of games and dances for the

participating guests. All the while, the activities associate on duty

acted as DJ using songs from the laptop computer. All told, approxi-

mately 20 guests were present for the pool party which is just less

than half of what can usually be expected. After the impromptu pool

party had finished, the part time activities associate continued with

the crafts as planned. Most guests seemed satisfied with the outcome.

However, a few days later there was a comment on the guest feedback

portal saying that the Activities Team was disappointing and should

make a habit of offering the events that were actually advertised. The

guest stated that they had planned their entire day around making

sure their grandsons could attend the pool party and had been very

disappointed when they heard the message that it was cancelled. The

Director called the guest and offered her sincerest apologies for the

lapse in service and for disappointing the guests’ grandchildren.

The Department financials at month end came in favorably for

labor, but primarily due to open positions rather than a savings on

the cost of labor. Entertainment expense also saw a savings by a slight

margin but not enough to make the month profitable. Revenue, unfor-

tunately, did not meet budget for this particular month.

Discussion Questions • Consider yourself as the Team Member responsible for carrying

out the activity and ensuring guest satisfaction.

• What actions would you take in advance to identify if alternate

programming is necessary?

• What recommendations do you make to your Director and

35Journal of Hospitality & Tourism Cases

within what timeframe do you make these recommendations.

• As the Director of Fun, how do you train your staff to anticipate

program changes?

• What information do you make available to them on a regular

basis?

• What critical information does your staff need to recommend

alternate programming?

• In relation to the guests who expected to participate in the activ-

ity, what is the message that will be communicated to the guests

so that their participation in the alternate activity is equally as

enjoyable as their expectations for the original activity?

• What concessions, if any, should be given to the guests?

• How might this impact the programming costs, staffing/sched-

uling, and overall satisfaction ratings?

• What actions can be taken to eliminate or minimize increased

costs, employee and guest dissatisfaction?

• What methods of communication should be employed to ad-

vise both participating and non-participating guests about the

change?

Supplemental Materials ARDA International Foundation (2010), Timeshare Industry Resource Manual,

Washington, DC: American Resort Development Association, pp. 9-33.

Starwood Vacation Network. (2005, August 05). Sheraton Vistana Resort, Orlando FL: Endless Magic and Non-stop Fun. [Video File]. Retrieved from https://www. youtube.com/watch? v=2fps3B-wS0w.

Lanken, A. (2012). The tourism workforce in 2020: People matter. Hosteur, 21(1). pp. 19-20.

Mill, Robert Christie (2011). Resorts: Management & Operation 3rd Edition. New Jersey: John Wiley & Sons, Inc., pp. 267-293.

Mintzberg, H., Ahlstrand, B., & Lampel, J. (2005). Strategy Safari: A Guided Tour Through the Wilds of Strategic Management. New York: The Free Press.

Murphy, P.E. & Murphy, A.E. (2004). Strategic Management for Tourism Communities: Bridging the Gaps. Clevedon: Channel View Publications.

Norton, K. (2013, August). Evolution of resort recreation. Developments Magazine, pp. 40-44.

Farrell, P. and Lundegren, H. (1991). The Process of Recreation Programming: Theory and Technique, 3rd Edition. State College, PA: Venture Publishing, pp. 88-172.

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