Diamond Resorts International is a vacation ownership and hospitality leader, with vacation destinations throughout the US, Canada, Mexico, the Caribbean, South America, Central America, Europe, Asia, Australasia and Africa.
Increasingly, the brand has focused on creating memorable experience beyond offering a place to stay. These VIP events, tours, and celebrity meet-ups are becoming a major driver of growth for Diamond, which is trying to change the perceptions of the timeshare business.
We spoke with Mike Flaskey (right), CEO of Diamond Resorts, about the brand’s marketing strategy in the face of Airbnb and other competitors.
What is Diamond Resorts, and what do you offer?
Diamond Resorts International is a global hospitality company that sells the vacations of a lifetime to our members. In essence, we are a subscription model where people decide how much vacation time they want to use, and then they purchase that from us. Diamond has over 430 resorts in 37 countries around the world, and is one of the largest vacation ownership companies in the world. Currently, we have just over 500,000 families that own their vacations with us.
We are known across Europe and North America, and we earn our revenue from three distinct channels. One is our hospitality business: we own and manage 109 of the resorts that are in our portfolio. The second way that we earn our money is through our vacation ownership business, which is where we market and sell vacation ownership and we develop, purchase or acquire companies that already had product. Then the third is that we finance about 80% of the families or people that buy their vacation products from Diamond Resorts.
— Diamond Resorts (@diamondresorts) October 10, 2017
What is ‘THE Club’ and what are the perks of being a member?
THE Club is what I consider to be the “X Factor” for our entire company. In essence, it is a points product that allows you the ultimate flexibility in travel, accommodation and timing. What our points product does that is different than our competitors is that we have a very heavy focus on what I’ll call the “experiential model.” Not only do we have this experiential model within our club, but we also have it in our marketing and our sales of our VOI (Vacation Ownership Interests) division through our Event of a Lifetime platform.
If you look at the Airbnbs of the world and others that participate in the sharing economy, you’re starting to hear them talk about that. But we’ve been focusing on these experiential models and not just using our vacation ownership products in the form of condominiums, giving our users the ability to turn their points into tickets to high-profile sporting events like the Masters or a Formula One race. They have the ability to go on cruises, take experiential vacations, even do things like stay in ski-in-ski-out 12-bedroom homes in Vail or Beaver Creek if they want to combine their points.
The ability to monetize our club points and turn them into cash gives us the flexibility to be able to offer the ultimate menu to our club members. We can offer them the opportunity to do the unthinkable. No one else in the vacation ownership space has gotten to that point.
— Diamond Resorts (@diamondresorts) October 17, 2017
How are you marketing these experiences?
We have a whole team of R&D people that are continuously innovating and coming up with new concepts, but when it comes to communicating these, we have a direct marketing model. On an annual basis, we bring roughly 300,000 families through our sales centers or through our Event of a Lifetime platform that wants to come and try one of these cool, unique experiences that money can’t buy. It may be a country music concert with Cole Swindell or Lee Brice at one of our resorts in an intimate setting with 150 people. It could be going to a New York Yankees spring training game and going down on the field and sitting in a suite with Reggie Jackson. It could be a culinary evening with a celebrity chef, and all kinds of things in between.
So we try to demonstrate through a discounted mini-vacation offer where they can come in and stay at one of our resorts for four days and three nights far below market value, and in exchange they’ll give us 90 to 120 minutes of their time to learn about our club and what we have to offer. And then we tie that into one of our Event of a Lifetime programs that may be going on regionally, to deliver that combination of seeing, touching and feeling the experiences that really gets the message out to prospective owners.
: @leilanionmaui pic.twitter.com/AO5NgEErXr
— Diamond Resorts (@diamondresorts) October 16, 2017
What goes into designing these experiences?
When we started the Event of a Lifetime platform, our very first brand ambassador was a PGA touring professional named Brian Gay, and we tested it here in Orlando around Bay Hill at the Arnold Palmer Invitational. We invited 15 couples to come in on a Wednesday evening and have dinner with Brian Gay and had a no-media, 30-minute Q&A and really get to ask the questions that the golf world was really wanting to ask that you may never get a candid answer on. The next day, after they had a chance to meet Brian, we took them out to Bay Hill and they watched Brian play in his first competitive round on Thursday, and then on Friday they would come in and learn about the Diamond Resorts club and what it would be like to become a member.
What we saw was our close-rates triple after putting people through these sorts of once-in-a-lifetime experiences. So it started with golf—we covered all three of the major PGA golf tours—and then from there went into baseball. We have Reggie Jackson and Gaylord Perry, two Hall of Fame baseball players, and three days a week we’re bringing prospective members through the ballpark and they’re going with Gaylord or Reggie down on the field for batting practice and then sitting in the suite and watching a game with them.
Then we started moving from sports into other things, and we tested music—music was a real winner for us. We’ve got four country music stars: Colt Ford, Jana Kramer, Cole Swindell and Lee Brice perform as a part of our Diamond Concert series. We do about 55 private concerts at our resorts for our members and potential members on an annual basis. Then we moved into the culinary world. People absolutely love wellness and food, so our work with celebrity chefs has been very successful.
In 2017, we will do over 3,000 of these unique Events of a Lifetime throughout the globe. And it really does provide our prospective owners and our existing members a true event of a lifetime—money can’t buy it. When they have the opportunity to go out and experience it, it has a significant improvement in our close rates, from people upgrading to those choosing to become an owner. And today, over 30 percent of our annual revenues come through the Event of a Lifetime experiential platform.
How are customer expectations changing in the hospitality and travel destination industry, and how does this affect Diamond’s approach?
People are less concerned today about the physical bricks-and-mortar of the accommodations. What they really want is to understand the comprehensive experience of ownership. So it’s a natural part of our five-year plan to integrate more of these experiences into the lifetime ownership of all of our customer.
In addition to that, people are taking shorter vacations than they used to. People don’t take the full week vacation that they used to, they may take three- or four-day and three-night getaways and they want the flexibility that allows them to have a shorter stay and ultimately be able to get what they want to get.
As the younger generations start to look at products like this, we know we’re going to have to mirror a lot of the things that they’re already used to—Airbnb, other elements of the sharing economy—so we’re continuously learning, innovating and evolving.
And I’m really I’m proud to tell you that for an industry that has been fairly set in its ways, I think you’ll find that our product offering and our marketing is pretty cutting edge.
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