Fairway Hotel: Customer Lifetime Value through a Loyalty Programme?

Abstract

In July 2015, Stefanie Pietzsch, guest relations and marketing manager of The Fairway Hotel, Spa & Golf Resort, a Johannesburg-based luxury city resort owned by property developer Guvon Investments, considered introducing a loyalty programme to reward her loyal guests. In recent years, hotels in Johannesburg had experienced the effects of slow economic conditions with an overall drop in room occupancy, which had resulted in increased competition. Pietzsch preferred a loyalty programme to be implemented at hotel rather than group level, but how prepared were both the Guvon Group and The Fairway for such a programme, and would a loyalty programme be an appropriate customer acquisition and retention strategy for the hotel?

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1 Total Hotel Room Revenue: 2008-2019

Figure

Source: PwC South Africa (2015), The African Traveller – Hospitality Outlook 2015–2019: South Africa, Nigeria, Mauritius and Kenya, 5th annual edition, available at: www.pwc.co.za/en_ZA/za/assets/pdf/hospitality-outlook2015.pdf (accessed 18 June 2015).

Exhibit 2 Total Room Revenue for Four-star Hotels: 2008–2019

Figure

Source: PwC South Africa (2015), The African Traveller – Hospitality Outlook 2015-2019: South Africa, Nigeria, Mauritius and Kenya, 5th annual edition, available at: www.pwc.co.za/en_ZA/za/assets/pdf/hospitality-outlook2015.pdf (accessed 18 June 2015).

Exhibit 3a South African Hotel Occupancy Rates

Figure

Exhibit 3b Occupancy Rates for Three-star, Four-star and Five-star Hotels

Figure

Source: PwC South Africa (2015), The African Traveller – Hospitality Outlook 2015-2019: South Africa, Nigeria, Mauritius and Kenya, 5th annual edition, available at: www.pwc.co.za/en_ZA/za/assets/pdf/hospitality-outlook2015.pdf (accessed 18 June 2015).

Exhibit 3c The Fairway Occupation Rates: June 2015

Occupancy Report

01/06/2015–30/06/2015 grouped by date

In-house

Total

Total beds

Rooms

Rms %

Pax

Bed %

1/06/2015

Mo

244

37

31.90

38

15.97

2/06/2015

Tu

244

43

37.07

44

18.03

3/06/2015

Wed

244

40

34.48

41

16.80

4/06/2015

Thu

244

31

26.72

36

14.75

5/06/2015

Fri

244

36

31.03

49

20.08

6/06/2015

Sa

244

54

46.55

80

32.79

7/06/2015

Su

244

39

33.62

42

17.21

8/06/2015

Mo

244

64

55.17

68

27.87

9/06/2015

Tu

244

77

66.38

78

31.97

10/06/2015

Wed

244

77

66.38

79

32.38

11/06/2015

Thu

244

71

61.21

73

29.92

12/06/2015

Fri

244

60

51.72

70

28.69

13/06/2015

Sa

244

56

48.28

75

30.74

14/06/2015

Su

244

28

24.14

37

15.16

15/06/2015

Mo

244

33

28.45

40

16.39

16/06/2015

Tu

244

44

37.93

46

18.85

17/06/2015

Wed

244

73

62.93

74

30.33

18/06/2015

Thu

244

86

74.14

86

35.25

19/06/2015

Fri

244

92

79.31

100

40.98

20/6/2015

Sa

244

42

36.21

58

23.77

21/06/2015

Su

244

27

23.28

30

12.30

22/06/2015

Mo

244

35

30.17

39

15.98

23/06/2015

Tu

244

48

41.38

53

21.72

24/06/2015

Wed

244

43

37.07

45

18.44

25/06/2015

Thu

244

42

36.21

51

20.90

26/06/2015

Fri

244

53

45.69

59

24.18

27/06/2015

Sa

244

48

41.38

63

25.82

28/06/2015

Su

244

18

15.52

16

6.56

29/06/2015

Mo

244

17

14.66

17

6.97

30/06/2015

Tu

244

25

21.55

25

10.25

Total

7 320

1439

41.35

1 612

22.02

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, July 2015.

Exhibit 4 Selection of Guvon’s Lodges: Glenburn Lodge in Muldersdrift, Kloofzicht Lodge & Spa in Muldersdrift and Umbhaba Lodge in Hazyview

Figure

Source: Guvon Hotels & Spas (n.d.), “Country Lodges”, available at: http://guvonhotels.co.za/country-lodges (accessed 15 July 2015).

Exhibit 5 The Fairway’s Surroundings

Figure

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, July 2015.

Exhibit 6 Hotel Entrance, Foyer, Balata Restaurant and the Verve Bar

Figure

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, July 2015.

Exhibit 7 The Fairway Chapel and Fairway Spa

Figure

Source: Courtesy of Stefanie Pietzsch The Fairway Hotel, Spa & Golf Resort, July 2015.

Exhibit 8 Conference Rooms and One of The Fairway’s Luxury Rooms

Figure

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, July 2015.

Exhibit 9 The Fairway Villas

Figure

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, July 2015.

Exhibit 10 The Fairway’s Rates

Leisure rates (bed & breakfast)

Until 31 August 2015

Suites (2)

Single

R4 000.00

Sharing

R2 200.00

Child

R1 100.00

Luxury rooms (35)

Paraplegic room (1)

Single

R2 000.00

Sharing

R1 200.00

Child

R600.00

Leisure rooms (8)

Single

R1 900.00

Sharing

R1 150.00

Child

R575.00

Premier rooms (16)

Single

R1 800.00

Sharing

R1 100.00

Child

R550.00

Golf villas (7)

Single

R1 600.00

Sharing

R1 000.00

Child

R500.00

Garden villas (7)

Single

R1 400.00

Sharing

R900.00

Child

R450.00

Rates quoted are per person per night, unless stated otherwise.

All rates are inclusive of VAT and include a full English breakfast.

Child rates only applicable when sharing with an adult.

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, July 2015.

Exhibit 11 The Fairway: Guest Segmentation

REVENUE SPLIT

March 2015

Segment %

New business %

Corporate

74%

Y

Banqueting

19%

4%

Leisure

5%

1%

Wedding

2%

April 2015

Segment %

New business %

Corporate

68%

11%

Banqueting

13%

2%

Leisure

3%

2%

Wedding

16%

May 2015

Segment %

New business %

Corporate

68%

13%

Banqueting

13%

4%

Leisure

11%

3%

Wedding

8%

FORECAST

June 2015

Segment %

New business %

Corporate

69%

11%

Banqueting

19%

2%

Leisure

8%

3%

Wedding

4%

July 2015

Segment %

New business %

Corporate

52%

8%

Banqueting

10%

2%

Leisure

4%

Wedding

34%

August 2015

Segment %

New business %

Corporate

36%

6%

Banqueting

35%

3%

Leisure

1%

Wedding

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, June 2015.

Exhibit 12a Guest Satisfaction Index

The Fairway Hotel, Spa & Golf Resort

Guest satisfaction index

Month: May 2015

Total guest questionnaires: 71

Category

Excellent

Good

Average

Poor

Bad

Total

Location

Reception/check in/check out

Did the receptionist give you a warm and friendly welcome upon arrival?

61

10

0

0

0

71

Did the receptionist answer all your questions?

58

12

1

0

0

71

Was the check-in fast and efficient?

60

9

2

0

0

71

On presentation of your bill at check out, was this done efficiently?

60

9

0

0

0

69

Your room

Was it pleasant and comfortable?

64

6

1

0

0

71

Were all your needs met (bath, shower, minibar, TV)?

58

11

2

0

0

71

Was everything in your room in working order?

58

10

3

0

0

71

Was your room clean and dust free?

62

6

0

2

0

70

Balata Restaurant

Were you met on arrival by a friendly staff member?

50

9

1

0

1

61

Was the food presented well?

46

17

2

0

0

65

Was the food hot and tasty?

41

19

4

0

0

64

Was the service good, friendly and efficient?

49

15

0

0

0

64

Roundabout Bar/ Bar Verve

Was the service fast, friendly and efficient?

40

10

0

0

0

50

Whenever the staff interacted with you, did they?

Provide you with correct information about the hotel and services?

54

14

1

0

0

69

Perform their duties promptly and efficiently?

57

11

1

0

0

69

Present themselves in a pleasant and welcoming manner?

50

9

0

0

0

59

Fulfil your request and show commitment to your satisfaction?

56

13

0

0

0

69

Make you want to return to the hotel in future?

56

12

0

0

0

68

Total

980

202

18

2

1

1203

Percentage %

81.46

16.79

1.50

0.17

0.08

100.00

Target

80.00

15.00

5.00

0.00

0.00

100.00

Variance

1.46

-1.79

3.50

-0.17

0.08

100.00

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, June 2015.

Exhibit 12b A Selection of Remarks from Guests on TripAdvisor.co.za

The hotel rooms were on point and up to standard. Our room was warm and we felt at home. Beautiful room and the service was excellent from every staff member; from the reception and the waiters at the Balata Restaurant and Bar Verve. I’ll definitely return, this time for the wedding venue.

Excellent service at the hotel, restaurant and the spa. Non-intrusive, yet readily available service and friendly, helpful staff. Good value for money without compromising the five-star standard. Thank you for a wonderful memory!

Excellent hotel. I chose to stay here due to proximity to my client's offices. It was an excellent discovery – really friendly and warm service, great food, spacious rooms with comfortable beds, and a stunning view over the golf course for meals and drinks.

If you like golf, this is the place for you. Hotel staff is good, restaurant average. Rooms are modern and comfortable, but cold in winter. This hotel is a little out of the way, so you need transport or have the hotel arrange taxis for you.

We went for a spa treatment, which was heaven. We then booked into the hotel. Service was great and people were friendly. It’s a very nice and quiet place and I will visit it any time again. Food was divine and rooms were neat and tidy. I had a pleasant stay.

This hotel is a great surprise in the middle of Randburg. I never knew that the hotel offered such fantastic service, the restaurant food was really, really good. Stunning hotel, perfect gem for a great surprise weekend and relaxation, close to home…

The wedding reception was good overall, except for the lady who did the reservations. Food was good; staff inside the venue were excellent and went beyond their call of duty while the management did little to nothing to help.

It was the best stay ever. It was fabulous and you will most likely see me again very soon. What a friendly place with friendly people!!! Food was great, hospitality was great and the room was extravagant and pleasant.

We stayed overnight after watching a show. The service and staff were great. The only let down was that we were four people, but there were only two towels, cups and glasses. We went for a massage at the spa which was glorious. Housekeeping arranged a babysitter which made my spa treatment possible. Thanks.

I really enjoyed my two night stay at this beautiful hotel. The rooms are spacious, amenities and the room service are amazing. Loved the location and will definitely be using this property for my groups.

The breakfast chefs need to be trained about friendliness and also to execute the orders with perfection, the omelettes were not too great and the bacon was also not prepared properly at all. Everything else is great.

The service in The Fairway was exceptional. I arrived late at night and from the time I crossed the lobby to when I had a key card in my hand was probably 60 seconds. I had forgotten toothpaste, called to enquire if they had any, and in what seemed like 45 seconds from hanging up the phone, she was at my door! The rooms are incredibly spacious (probably largest room I've had in South Africa!) and are very clean. It was well located and I was at all of my meetings around the city in about 15-30 minutes.

Good service. Beautiful rooms and location, but the food can be improved. Nice location and grounds around the hotel. Overall loved the location, rooms and ambiance.

Source: TripAdvisor (n.d.), “The Fairway Hotel, Spa & Golf Resort”, available at: www.tripadvisor.co.za/Hotel_Review-g319720-d1876565-Reviews-or10-the_Fairway_Hotel_Spa_Golf_Resort-Randburg_Greater_Johannesburg_Gauteng.html#REVIEWS (accessed 21 July 2015).

Exhibit 13 Selection of Promotional Material

Figure

Exhibit 13 Selection of Promotional Material (Continued)

Figure

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, June 2015.

Exhibit 14 The Fairway’s Location

Figure

Source: Courtesy of Stefanie Pietzsch, The Fairway Hotel, Spa & Golf Resort, June 2015.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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