It may be the most successful hotel company you probably never heard of. It’s Delaware North Companies Parks & Resorts, the Buffalo, NY-based operator of 20 lodging properties with about 4,000 units mostly in or near national and state parks in the U.S. and Canada. The firm also owns five resorts in Australia and is concessionaire at a number of national parks (Grand Canyon, Sequoia, Yosemite), two New York State parks and the Kennedy Space Center Visitor Complex. Its privately held parent company is best known as a stadium and arena foodservice operator but also has worldwide interests in entertainment, gaming, retail and sports.

While most of the hotel industry suffered through its worst downturn in history in the past few years, Delaware North’s resort division held its own and even grew in rate and RevPAR. In 2009, as the rest of the industry suffered, Delaware North reported a slight dip in occupancy but a three-percent rise in rates. Last year was even better: the company sold about 11,000 more rooms than in 2009, rates and occupancy rose, and RevPAR increased by four percent.

“Other companies may have seen their ADR and RevPAR increase at a higher percentage last year, but that’s because they had significant declines in 2009 and ’08,” says Deb Collins, vice president of sales and marketing. “We never had the declines, so our improvements were above the increases we experienced in the previous years.”

Managing a far-flung group of properties, most with non-traditional owners (the U.S. National Park Service, state park systems, even a county) and all with singular looks, histories and markets, can be a complicated task. Delaware North embraces the uniqueness of its portfolio by focusing on several key elements: exploiting each property’s sense of place, maximizing the guest experience in those places and promoting unique cultures at each hotel.

SPECIAL PLACES
The firm considers it stewards of the distinctive venues it operates. This stewardship of Special Places, as the company calls them, extends to environmental management, preservation of history and artifacts and interpretation and education for guests.

“Stewardship is at the heart of what we do,” says Kevin Kelly, president of Delaware North Companies Parks & Resorts. “If we’re not telling the stories of our places to guests, if we’re not strong curators of our properties and locations, then our message doesn’t resonate to guests. People are looking for relevancy and life experiences, and parks like Yosemite and Yellowstone are where they find it.”

The company applies an 80/20 management approach to its properties: the company provides the vast majority of operational expertise and efficiencies—everything from IT to procurement and more—leaving on-property management to focus on what makes each hotel unique and special to guests.

“The more of the basics—the blocking and tackling—we can provide to the properties the more they can concentrate on what makes them different,” says Kelly. “Our managers don’t need to reinvent the wheel. Instead, they can concentrate on delivering experiences to their guests.”

Not surprisingly, sustainability is a cornerstone of the Delaware North philosophy. GreenPath, the company’s environmental program in place at all parks and resorts, as well as its sister companies, grew from its operations in Yosemite. Green teams at each property work on local solutions, some of which bubble up to the corporate level and across the portfolio.

“Sustainability was ingrained in the people living and working in that area, so what we did was harness the energy of our associates and put it into a repeatable platform that would be meaningful to all our clients and customers,” says Kelly. “But again, it relates to our 80/20 philosophy. We’ve been able to standardize some elements of sustainability, such as recycling in the guestroom, across all our properties, leaving our managers free to focus on that 20 percent that is site-specific.”

Kelly uses composting as an example. Given the amount and type of wildlife in Yosemite, it was impossible to place composting containers outside of kitchen doors, as many restaurants do. The company worked out a solution in which garbage trucks make two passes: the first to pick up regular garbage, followed by another pass to retrieve composting materials. When the trucks arrive at the landfill, they first empty the composting material on a pile and then empty the garbage in another area.

Since many green-oriented groups and companies gravitate toward Delaware North properties for meetings, the firm developed eco-friendly packages that encompass all aspects of a meeting. While some of the offerings are standardized across the chain—energy-efficient technology, sustainable catering menus, recyclable paper products and more—each property provides green touches unique to its location. Often, that entails guided tours or hikes or team-building events with an eco-friendly emphasis.

An additional way to unify the properties is GuestPath, a six-year-old customer relationship management and satisfaction program. The system tracks customer comments, sets property-level standards and rewards associates who meet or beat the standards. As with GreenPath, hotel-level teams drive the local initiatives, particularly the rewards programs.

Sometimes creativity is required to fulfill the Special Places mission. About five years ago, when the National Park Service felt a budget pinch, there were layoffs of some park rangers at Yosemite, where Delaware North has a large presence. The company owns and operates the landmark 294-room Tenaya Lodge and has a large concessions contract that includes the Ahwahnee Lodge, seven other hotels and camping venues and a variety of additional food and beverage and retail outlets.

“Our guests love to interact with rangers, and the layoffs would have meant fewer opportunities for them to do so,” says Collins. “Through a partnership with the park service we paid to have those rangers be guides on our valley floor tours. When additional funding came through, the service was able to rehire these seasoned veterans.”

Marketing such a diverse portfolio presents additional challenges. While all of the properties have Facebook pages, Collins says it’s important to control the messaging, particularly as it relates to special rate offers.

“The risk with a flash sales approach is that you teach customers to wait for the last minute to get good deals,” she says. “We use a viral strategy targeted around the experiences offered at each hotel. This helps us fill some lower-demand periods with like-minded individuals, whether they be rock climbers or hikers or photographers. And while we use our centralized expertise to guide the properties in their strategies, the implementation of social media is decentralized. Consumers can tell when a ‘voice’ is forced as opposed to authentic.”

GROWTH AHEAD
The company hasn’t been shy about acquiring hotels during the downturn. In 2009, it purchased its Australian portfolio and secured a management contract for The Queen Mary; last year, it bought two hotels in West Yellowstone, MT, joining a Holiday Inn the company owns and operates in the town. Kelly says the company plans to add two to four properties—both hotels and cultural attractions—a year, either through acquisitions or management contracts.

“It’s all about place first and the property second,” says Scott Socha, vice president of business development, in explaining Delaware North’s growth strategy. “If the public is focusing on a particular park or attraction, that’s where we want to be. Beyond that, we filter our decisionmaking through several different criteria, including projected balance between group and leisure business, drive distance to major metropolitan areas, airlift to the destinations and more.”

The company is also busy integrating the Australian hotels into the Delaware North culture. Until last September, the properties were operated by a division based in Australia. The team in Buffalo has been working to install the company's management platform and the company’s Special Places culture.

“These properties fit perfectly into our portfolio,” says Kelly. Three of them are within World Heritage Sites. Three are on the Great Barrier Reef, one is in the interior near Ayer’s Rock, and one is within a million-acre national park in western Australia. “The biggest challenge has been understanding the distribution channels. The wholesale market is a big part of their business, while direct bookings are less. The question we face is whether they need to shift to the model we use or we [our U.S. properties] need to shift more toward the wholesale component.”

SUMMER BUMP
Delaware North executives anticipate a good summer season for its U.S. properties, pointing to a several-year-long trend in visitation increases at national parks. Both Yellowstone and Yosemite, for example, had record or near-record years in 2010, says Kelly. Advance bookings are up about two percent, and the company has $1 million more in room revenues on the books than it did this time last year.

“Our properties are all in very special places, those iconic destinations where families want to go to enjoy experiences and create memories. They don’t give up those experiences, even in bad times,” says Kelly. “And people continue to view national parks as a value proposition, more so than destinations like Orlando.”

Even rising gasoline prices shouldn’t put a crimp in business, he believes. “While it’s not intuitive, if you track gas prices against national park visitations you find visits to parks go up as gas prices increase. Again, people see us as a value,” says Kelly. “Of course, on the other hand, we don’t like to see high oil prices because all our costs also go up.”