Driving Demand for the Quarterdeck: A Case Studyside Villas and Grill can fall asleep to the sounds of the ocean. The Quarterdeck is sit-uated on a mile-long, white-sand beach, two

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Driving Demand for the Quarterdeck: A CaseStudyRobert J. Kwortnik Jr.Cornell University, [email protected]

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Driving Demand for the Quarterdeck: A Case Study

AbstractThe Quarterdeck Beachside Villas and Grill is a small property that faces an all too common set of challenges,most of them stemming from steep seasonality. Located on Nova Scotia's south shore, the Quarterdeck sellsout during the summer months but is nearly empty during the winter. This case study examines theQuarterdeck's marketing approach and outlines strategies for driving off-season demand by focusingspecifically on identifying guests' needs and desires to develop new product bundles and marketingcommunications. Although these ideas emerge from the Quarterdeck's particular circumstances, the strategiesare applicable to many small hospitality companies that face seasonal demand.

KeywordsNova Scotia, tourism demand generators, seasonal resorts

DisciplinesHospitality Administration and Management

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This article or chapter is available at The Scholarly Commons: http://scholarship.sha.cornell.edu/articles/256

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AUGUST 2007 Cornell Hotel and Restaurant Administration Quarterly 323

Driving Demand forthe Quarterdeck

A Case Study

by ROBERT J. KWORTNIK JR. and JAMES VOSBURGH

© 2007 CORNELL UNIVERSITYDOI: 10.1177/0010880407302966

Volume 48, Issue 3 323-341

The Quarterdeck Beachside Villas and Grill is a smallproperty that faces an all too common set of chal-lenges, most of them stemming from steep sea-sonality. Located on Nova Scotia’s south shore, theQuarterdeck sells out during the summer months butis nearly empty during the winter. This case studyexamines the Quarterdeck’s marketing approach andoutlines strategies for driving off-season demand byfocusing specifically on identifying guests’ needs anddesires to develop new product bundles and market-ing communications. Although these ideas emergefrom the Quarterdeck’s particular circumstances, thestrategies are applicable to many small hospitalitycompanies that face seasonal demand.

Keywords: Nova Scotia; tourism demand generators;seasonal resorts

It was a sunny October day following Canada’sThanksgiving, with temperatures along the NovaScotia coast reaching 16° Celsius (60° Fahrenheit).

Doug Fowler, managing partner of the QuarterdeckBeachside Villas and Grill of Summerville Beach,sipped coffee in the nearly empty restaurant overlookingthe Atlantic Ocean and considered the past summer.Doug bought the Quarterdeck in 1990 with two partners,upgraded the property, and ran the resort. The past summer had been a success: strong occupancy meant lodging-revenue projections of $500,000 for the year,and the restaurant had increased sales for the fifthstraight season. Yet the off-season was fast approaching,which meant the restaurant would close, room rateswould be reduced, and occupancy would diminish. Dougconsidered it a shame that the business died in autumnand winter, and he wondered whether something couldbe done to boost nonpeak yields. He knew he was fortu-nate to be able to keep the Quarterdeck open at all sincemost independent resorts in Nova Scotia shut down afterThanksgiving. However, Doug vowed to investigateways to increase revenue during the off-season.

This case study examines a problem common to many hospitality companies that are located in

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324 Cornell Hotel and Restaurant Administration Quarterly AUGUST 2007

CQ CASES DRIVING DEMAND FOR THE QUARTERDECK: A CASE STUDY

geographic regions characterized by steepseasonality: how to develop market demandin shoulder and low-season periods. Diffi-culties associated with identifying targetcustomers—both current and potential—and forecasting demand are endemic tosmall, independent operations that lack theresources, personnel, or training to conductdetailed market analysis. However, thisresearch is critical for a business’s long-termviability, especially if growth plans dependon uncertain sources of revenue. Moreover,the internet has provided research powerthat was once available only to larger firmswith dedicated market-research depart-ments. In the case that follows, we profilethe Quarterdeck and highlight the marketingchallenges this property faces. We next offer an analysis of the Quarterdeck’s marketsituation and present a set of recommenda-tions for enhancing demand in light ofexisting geographic, economic, and otherconstraints. We close by underscoring whathospitality managers can learn—and applyto their operations—from the case of theQuarterdeck.1

The Quarterdeck ExperienceGuests staying at the Quarterdeck Beach-

side Villas and Grill can fall asleep to thesounds of the ocean. The Quarterdeck is sit-uated on a mile-long, white-sand beach, twohours southwest of Halifax, the capital ofNova Scotia. The property offers 16 upscaleunits, including 2 one-bedroom, single-storyunits; 13 two-bedroom, multilevel units withtwo full baths; and 1 three-bedroom cot-tage right on the sand (see Exhibit 1). Allunits face the ocean and have fireplaces,full kitchens, bathrooms with Jacuzzi

tubs, televisions with DVD players, andhigh-speed wireless internet access—a luxu-rious amenity set relative to other resorts inthe area. There is also an on-premises restau-rant specializing in seafood that has beenvoted by guests as the number-one restaurant in Nova Scotia in the Taste of Nova Scotiapoll. The villas were awarded four stars from Canada Select, an industry-led ratingprogram intended to provide consistency of quality standards within categories ofaccommodation.2

Doug believed that the Quarterdeck’smajor selling feature is its beachfront loca-tion. Many of the activities offered rely onthe ocean, such as kayaks, body boards, andsurfboards available for rent. Because of the Quarterdeck’s remote coastal location,guests come for a retreat from the hustle andbustle of their daily lives. A typical day atthe Quarterdeck starts with a walk along thebeach in the cool morning air, followed bytime relaxing in the sun or a day trip by carto one of many picturesque towns that dotthe scenic Lighthouse Route for shoppingand sightseeing (see the map in Exhibit 2).Families with young children enjoy trollingthe beach for sand dollars and searching tidepools for starfish. Parents love that they canlet their children play on the beach, whilethey can sit on their decks and relax withtheir children well within view. In theevening, guests can enjoy the specialty ofthe Grill, planked salmon.

Business for towns along the south shore of Nova Scotia, from Halifax toYarmouth, is strong during the summer. TheQuarterdeck’s occupancy for high seasonaverages 90 percent (see Exhibit 3). Indeed,the property often turns away would-be

1. This case and analysis are based on the second author’s experiences as a guest and employee at theQuarterdeck, as well as interviews with past guests, employees, and marketing professionals from theCanadian lodging and tourism sectors. The Quarterdeck also provided access to guest records and perti-nent financial information.

2. Canada Select, “What Is Canada Select?” www.canadaselect.com/CanadaSelectInformation/WhatIsCanadaSelect/WhatIsCanadaSelect.cfm (accessed August 25, 2006).



guests during summer because the villas arefull. In contrast, during the late fall, winter,and early spring, occupancy is low. Nearlyall of the tourist-based businesses in thevicinity shut down due to minimal demand,including almost a dozen small lodgingoperations which close in mid-October,after Thanksgiving weekend.

The biggest hotel in the area, with 159rooms, White Point Beach Resort, does stayopen in winter. White Point offers someamenities, such as tennis courts and a swim-ming pool, that the Quarterdeck does notprovide. Doug explained that he originallykept the Quarterdeck open to heat the villasin the winter so that the pipes would notfreeze, although this offered the additionalbenefits of discouraging guests from tryingWhite Point in the off-season and also main-tained staff loyalty when many lodging oper-ations in the area simply lay off staff in the

winter. The Quarterdeck did make somemoney in the off-season, even though Dougdecided to close the three-bedroom cottageand the two one-bedroom units after Thanks-giving. The Grill had to close because thefacility is not winterized, and making it winter-worthy would cost more than $20,000.Keeping the villas open without the restau-rant is possible because they have kitchenfacilities, and Liverpool’s grocery stores areless than ten minutes away.

The main problems faced by the Quar-terdeck and many other seasonal resorts in thearea are twofold: first, how to estimate poten-tial demand, and second, how to generate off-peak demand. Compounding this problem forDoug is an investment decision: located acrossthe street from the Quarterdeck is a parcel thathe is considering for development—perhapsas an RV park or as luxury villas similar tothose on the beach—but only if the demand is


DRIVING DEMAND FOR THE QUARTERDECK: A CASE STUDY CQ CASES

Exhibit 1:The Quarterdeck Beachside Villas and Grill



strong enough to fill whatever would be builtthere.

Complicating Doug’s decision is publicperception. Nova Scotia evokes an image ofsun and sand only in summer (and maybenot even then). In summer, it is, as thelicense plates say, “Canada’s Ocean Play-ground.” Typical temperatures range from anaverage of 70°F during the summer to 16°Fduring the winter. Tourism accounts for rev-enues of over C$1 billion—a sizable sum foran economically depressed province. (Nova

Scotia is considered a “have-not province,”which means it receives federal governmentpayments to ensure provision of services to residents.3) The south shore area of theprovince accounts for one-tenth of theprovince’s tourism revenue, at just over $100 million.4 Queen’s County, home to theQuarterdeck, relies heavily on tourism, espe-cially during the summer. In 2002 tourismgenerated almost $21 million and employednearly six hundred workers, all of this for acounty that had only 11,723 residents.5



Exhibit 2:Map of the Quarterdeck Location

3. CBC News, “Equalization Payments,” May 2, 2005, www.cbc.ca/news/background/cdngovernment/equalization.html (accessed April 30, 2006).

4. Nova Scotia Department of Tourism, “Tourism Insights,” December 2005, www.gov.ns.ca/dtc/pubs/insights/AbsPage.aspx?ID=1261&siteid=1&lang=1 (accessed April 30, 2006).

5. Region of Queens Municipality, “Region Statistics,” http://www.regionofqueens.com/index.asp?id=82(accessed April 30, 2006).



More than half of visitors to Nova Scotia come from other Maritime provinces,namely, Prince Edward Island, NewBrunswick, and Newfoundland and Lab-rador.6 Visitation in the century’s first decadecontinues to increase from within Canada,while travel from the United States has yet toreturn to pre-9/11 levels. Doug and the hoteloperators he knew said they were not seeingU.S. tourists for a variety of reasons, includ-ing the rising value of the Canadian dollarand the fact that the Scotia Prince ferry fromPortland, Maine, to Yarmouth, Nova Scotia,was no longer running. That ferry annuallybrought more than 220,000 passengersand 38,000 vehicles to Nova Scotia untilit ceased operation in 2004. In a typical year,one-third of all Americans visiting NovaScotia had come on this ferry.7 (The ferry ser-vice from Portland resumed in 2006 with a

smaller, high-speed catamaran, cutting thetravel time to 5.5 hours, as compared with anovernight crossing on the old Scotia Prince.)Moreover, catamaran service continued run-ning from Bar Harbor, Maine, to Yarmouth,which helped lessen the impact of losing theScotia Prince. Guests still need to drive to thehotel once they arrive on the ferry. If theyreached Yarmouth or Halifax without a car, astaff member could pick them up at a cost.Once they reached the hotel they were essen-tially stranded, however, and so few gueststook this approach.

Nova Scotia has considerable allure fortravelers who enjoyed outdoor activities—hiking, nature observation, beachcombing—but its culture and history also invited gueststo visit craft shops and museums.8 Not surprisingly, Nova Scotia’s provincialmarketing campaign for tourism omitted



Exhibit 3:Room Nights Sold and Occupancy Rates

2004 2005

Number of Average Number of AverageRoom Occupancy Daily Rate Room Occupancy Daily Rate

Month Nights Sold Rate (%) (C$) Nights Sold Rate (%) (C$)

January 43 11.6 135 47 12.6 135February 33 9.8 130 45 13.4 140March 61 16.4 140 78 21.0 150April 114 31.7 140 74 20.5 150May 164 35.7 160 142 31.6 165June 307 68.2 160 287 63.8 170July 424 85.5 250 427 86.1 260August 480 96.8 260 453 91.3 270September 449 93.5 170 412 86.9 180October 247 60.5 160 215 50.8 160November 38 10.6 150 81 22.5 155December 53 14.3 140 47 12.4 145

6. “2004 Visitation to Nova Scotia,” www/gov.ns.ca/dtc/pubs/insights/AbsPage.aspx?ID=1249&siteid=1&lang=1 (accessed April 30, 2006).

7. “Friends of Scotia Prince,” www.friendsofscotiaprince.com/ (accessed April 30, 2006).8. “2004 South Shore Visitor Exit Survey,” www/gov.ns.ca/dtc/pubs/insights/AbsPage.aspx?lang=1&siteid=

1&id=1291 (accessed April 4, 2006).



mention of the winter months.9 The provinceof Newfoundland and Labrador, on the otherhand, spent more than C$5 million in the late 1990s to become the Maritimes’ winterdestination.10 While Nova Scotia enjoysmany demand drivers during the summermonths, the absence of demand drivers inwinter make it hard to market the province asa winter destination. There are, for instance,no provincial events or other attractionsalong the lines of Quebec City’s successfulwinter carnival.11 In short, hotels and restau-rants in Nova Scotia that want to increasewinter occupancy cannot rely on provincialhelp to make their operations year round.

Marketing the QuarterdeckThe Quarterdeck was founded in the

1930s as a roadside beachfront motel.Typical of the day, the original cottageswere simple one-bedroom units. The Grillwas built later as a roadside diner. Over theyears, upgrades were made to the cabins,

but major changes did not occur untilDoug became involved. He explained thatduring fall 1994, the province of Nova Scotiawas reeling from negative guest satisfactionwhen it came to accommodations. To com-bat this, the province offered money to hotelsthat would build two-bedroom housekeepingunits. The Quarterdeck took advantage ofthis offer and received a grant of $350,000.In 1995, Doug demolished the original cot-tages to put up the current two-story units.

The Quarterdeck has a computerizeddatabase with thirty-four hundred guestrecords. The records include where theguests are from, how they heard about theQuarterdeck, how many times they hadstayed at the hotel, how much they hadspent on each visit, the types of gifts theyhave received from the hotel, and select per-sonal data such as birthday or anniversary. Amajority of guests come from within NovaScotia, mostly from Halifax (see Exhibit 4).Doug considers his guests the elite of Nova



Exhibit 4:Guest Source Markets in Canada (in percentages)

Source Market (Location) 2002 2003 2004 2005

Nova Scotia 46.6 56.8 55.9 56.4Newfoundland and Labrador 0.5 0.2 0.0 0.1Prince Edward Island 0.1 0.1 0.2 0.1New Brunswick 4.1 4.3 6.3 7.0Total Atlantic provinces 51.3 61.4 62.4 63.6

Quebec 6.8 2.7 1.4 2.7Ontario 17.3 17.5 15.6 15.3Manitoba 0.1 0.3 0.0 0.4Saskatchewan 0.2 0.2 0.1 0.0Alberta 1.1 1.6 2.6 3.0British Columbia 0.9 1.0 0.4 1.2Yukon 0.0 0.0 0.1 0.0North West Territories 0.0 0.0 0.0 0.0Total other provinces 26.4 23.3 20.2 22.6

Total Canadian guests 77.7 84.7 82.6 86.2

9. Tourism Insights, “Nova Scotia Tourism, Cultural & Heritage, 2004 Advertising Evaluation Study,” October2005, www.gov.ns.ca/dtc/pubs/insights/AbsPage.aspx?siteid=1&lang=1&id=6 (accessed May 27, 2006).

10. Atlantic Canada Opportunities Agency, “Major Boost for Winter Tourism,” August 1, 1998, www.acoa.ca/e/media/press/press.shtml?932 (accessed April 30, 2006).

11. Quebec Winter Carnival, “About Carnival,” April 2006, www.carnaval.qc.ca/en/histoire.stats.asp (accessedMay 27, 2006).



Scotia: government officials, business own-ers, and wealthy retirees who can afford tovisit several times a year. These summerguests occasionally return when the highseason is over and the area is less busy.Doug believes that his guests are willing topay the Quarterdeck’s relatively high ratesbecause they perceive the value of thisupscale resort hotel as compared to one ofthe plainer motels nearby. These guests typ-ically come for multiple nights, dine at therestaurant at least once, and are consideredthe best customers since they are relativelyprice insensitive.

More than half of the guests who visit theQuarterdeck each year are repeat visitors.This allows for personal relationships togrow between staff and guests, as well asamong guests. The front-office staff has beenrelatively stable over the years, enabling deskagents to recognize guests who have stayedbefore. Some staff kept up correspondenceafter guests returned home. Such recogni-tion has been effective in getting guests to return year after year and reinforced theQuarterdeck’s strategy of personalized mail-ings. (For many years, the Quarterdeck hassent guests personal Christmas cards thatfeature a photograph of an employee dressedas Santa Claus and holding a surfboard—ora beer—on the beach.) The database of infor-mation that the Quarterdeck has developedand the personal relationships that have beencreated among Doug, his staff, and the guestsalso allowed the hotel to target specificguests with new marketing efforts. Forexample, the Quarterdeck has sent mailingsto past guests to inform them about off-season sales promotions.

When Doug first became involved in theQuarterdeck, he focused on creating aware-ness for the renovated property, mainly byadvertising in the Halifax market. This wasdone at a substantial relative cost for the

Quarterdeck—$35,000 per year. The Quarter-deck advertised in the Halifax ChronicleHerald newspaper, took part in televisionco-op commercials with the province, andpartnered in radio promotions with SUN FM(CKUL, now known as Kool FM) inHalifax. The Quarterdeck also bought air-time closer to home on nearby radio andcable TV stations. To measure the successof these promotional efforts, Doug trainedthe staff to ask guests how they heard about thehotel—a practice still in use (see Exhibit 5).Currently, the Quarterdeck has a smallerannual marketing communications budget ofaround $25,000—roughly half of which isspent on guest-retention programs. Advertis-ing in magazines and newspapers consumesaround 15 percent of this budget (see Exhibit6 for a sample advertisement), with most pro-motion efforts focused on three other areas:internet, roadside, and specialty print (travelguides and brochures).

The Quarterdeck’s major internet pres-ence is its web site, which recently wasupdated to have a more professional appear-ance. The web site outlines what there is todo in the area, shows what is offered at theQuarterdeck, and gives information aboutthe restaurant. As there is no booking engineon the web site, the site’s purpose is to pro-mote the hotel and encourage interestedtravelers to call the hotel directly. In thepast, the Quarterdeck paid to have bannerads on a Nova Scotia visitor web site. Noclick-through tallies were kept to assess thesuccess of those banner ads, so Doug aban-doned this effort.12

Almost 14 percent of guests said theychose the Quarterdeck after driving by thehotel or seeing roadside signs for it. Dougbelieves that during the off-season mostguests do not make reservations to stay atthe hotel, but instead simply stop by whenthey are touring the coast.



12. The click-through rate is the average number of visitors out of one hundred who visit a web site and clickthrough a banner ad to reach the ad sponsor’s page (CTR = # clicks/# ad impressions).



This meant that the four roadside signsfor the Quarterdeck are important, especiallyduring the off-season. These signs cost $100each per year. Originally, the signs wereloaded with information, but Doug changedthem to mention only oceanside dining andaccommodations, the driving time to theproperty (in minutes), and the road exit to getthere (the main highway in southern Nova

Scotia is controlled access). Doug reasonsthat the new Quarterdeck signs were distinctand stood out to the driver due to the signa-ture colored deck chairs that adorn allQuarterdeck merchandise and handouts.These signs are changed seasonally to men-tion any special promotions.

Doug believes that the most important pro-motion for the Quarterdeck is advertising in



Exhibit 5:How Guests Heard about the Quarterdeck (in percentages)

2003 2004 2005

ReferralPrevious guest 42.5 43.1 45.9Friend/relative/coworker 18.8 14.3 18.9Travel agent 0.4 1.0 0.4Check-in 0.1 0.6 1.0Queens municipality 0.0 0.0 0.2Familiarization tour 0.7 0.0 0.0

AdvertisementsDoers and Dreamers 8.9 9.5 4.7“Taste of Nova Scotia” 0.8 0.0 0.0Chronicle Herald 0.0 0.0 0.4Other 0.6 0.6 0.0

Tourist bureausLiverpool 0.2 0.1 0.0Other 0.1 0.0 0.0

Cross-promotionsWhite Point Beach Lodge 1.2 1.4 1.0Lanes Privateer Inn 0.1 0.0 0.0Lord Nelson 0.3 0.0 0.0Haddon Hall 0.0 0.2 0.0Other 0.4 0.5 0.8

Trade showFree Wheeling 0.0 0.1 0.4Other 0.0 0.1 0.0

OtherDrove by 13.5 16.3 13.2Road sign 0.1 0.1 0.4Live or lived in area 2.1 3.2 2.3Ate in restaurant 2.3 3.0 2.5Seen brochure 0.3 0.2 0.6Received gift certificate 1.9 1.7 1.6Here on conference 1.2 1.0 1.2Web site 0.3 0.5 0.3Internet 3.2 2.5 4.4





Exhibit 6:Newspaper Advertisement for the Quarterdeck



the Doers and Dreamers travel guide pub-lished by Destination Nova Scotia. Peoplewanting to visit the province can registeronline to receive the free guide or can get onefrom a travel agent. The guide has generalinformation about the province, as well as specific information about each resort that advertises in it. Doers and Dreamers produced more inquiries about roomavailability—and more bookings—thanany other form of paid marketing commu-nications. Other than Doers and Dreamers,the only significant print communicationfor the Quarterdeck is a new brochure withthe title “Spoil Yourself” that features pho-tographs of the villas and the ocean. Thesebrochures were available across the provincein tourist bureaus and in other hotels withwhich Doug had fostered a relationship. Doughad taken on a role in “Taste of Nova Scotia,”a provincewide marketing program designed to highlight culinary experiences offeredwithin the province.13 Through this organi-zation he had met resort owners across theprovince, and they formed an informal mar-keting alliance, ensuring that they would recommend each other’s hotels.

During the 2005 off-season, Doug tried anew promotion designed to increase room-nights: buy two nights and get the third nightfree. Doug reasoned that the third nightwould cost the Quarterdeck little money, andgetting people to spend more time at theproperty during the winter would increasepositive word of mouth back in Halifax—though he did not keep track of the booking orword-of-mouth benefits of this promotion.Communicating the deal to target customerswas a challenge, however. The Quarterdeckadvertised the promotion only on the road-side signs that were located close to theproperty, but this required potential guests to

pass by and pay attention to the signs—something that was less apt to happen inwinter, given the low traffic along the southshore. Doug also encouraged staff membersto mention the promotion to anyone whocalled to inquire about staying during theoff-season. His staff created a small mailer toinform past guests of the promotion, and thiswas included with a personal note from astaff member that also mentioned some ofthe winter activities available around theQuarterdeck.

Even as he assembled this promotion,Doug was concerned that summer guestswould see deals offered during the winterand then question the value of the full pricethey pay for summer stays. During high season, the resort gives free nights only topeople who are loyal guests who have cometo the Quarterdeck for years and stayed formultiple weeks. These preferred customershave come to expect a few free nights fortheir loyalty. Beyond that, Doug did notwant to spend money promoting this deal toguests who would not travel far enough totake advantage of it. During the summer, thehotel was a destination for travelers fromout of province because Nova Scotia hadfew accidental tourists. People had to planto travel there.

Looking AheadDoug was confident that adequate

demand existed for the Quarterdeck toincrease revenues and even to support a property expansion. He was less sure,though, about how to reach potential guestswith a message about the Quarterdeck’svalue proposition—and what exactly wasthat value proposition during the off-season.Indeed, driving off-season demand would beimportant for funding the property’s future



13. The Doers and Dreamers guide is created by the Nova Scotia Department of Tourism, Culture &Heritage (Halifax, Nova Scotia, Canada). Also, Taste of Nova Scotia, “Who We Are,” January 2006,www.tasteofnovascotia.ns.ca/who_we_are/ (accessed April 28, 2006).



growth. Doug wanted to find a way to takeadvantage of the large number of repeatguests who were loyal to the Quarterdeck.Repeat guests and referrals accounted formore than 65 percent of the guests each year.Such loyalty led him to believe that many ofthese guests would be more than willing tohelp the Quarterdeck become busier in the off-season by recommending it to their friends. Insummer 2006, Doug began recording guests’e-mail addresses to allow for less expensiveand more effective direct contact with peoplewho know the property. Ultimately, though,Doug is aware of the difficulties the Quarterdeck faces due to seasonality and the perception that the south shore of Nova Scotiais far from a vacation retreat during theCanadian winter.

Authors’ AnalysisThe Quarterdeck faces challenges that are

common to independent hotels in steeplyseasonal vacation destinations. Reachingprospective guests and identifying targetmarkets are difficult—as is turning a seasonalresort into a year-round destination. Doughas a good understanding of his current cus-tomers, though his experience may also belimiting his view of the potential market andhow best to drive demand throughout theyear. Given the Quarterdeck’s success duringthe summer, it is reasonable to assume thatthere is not a major problem with the productor the way it is priced during peak season.Doug needs to focus his efforts in four mainareas: (1) clarifying target market segmentsfor the Quarterdeck, (2) determining demandfor the resort throughout the year, (3) creatingproduct and price bundles to attract off-season travelers, and (4) selecting the mostefficient and effective promotion tools forcommunicating with past and prospectiveguests.

Market AnalysisDoug’s (and his staff’s) knowledge of

his customers provides a solid place to

start market analysis for the Quarterdeck.From this foundation, Doug can estimatemarket demand using secondary data,as well as create a more detailed profile of the Quarterdeck’s market using pri-mary research. Key, though, is that the Quarterdeck’s management must movebeyond its experience and consider moresystematic methods for better identifyingand understanding customers.

Identifying target customers. Small hotelslike the Quarterdeck have the opportunity to get to know guests through normal,daily interaction. That process, however,can be hit and miss. While the staff knowsa great deal about certain guests, theQuarterdeck has had no formal effort tocreate customer profiles beyond the fact thatthey are all relatively affluent, let alone tocapture information about guests for moresystematic analysis. Doug feels that demo-graphic segmentation is less relevant for his guests due to the wide variation in thedemographic segments that the Quarterdeckattracts. Young families often share the resortwith wealthy retirees, and couples on roman-tic retreats may follow multigenerationalfamily reunions. One apparent commonalityto Quarterdeck guests is the desire to escapehectic lives and relax with no distractions butthe marvelous Atlantic Ocean. This meansthat Doug could segment his customersbased on psychographics (lifestyle) or behav-ioral factors.

To investigate why guests select theQuarterdeck, Doug should remind his staffto ask them (a question that is rarely posed).Even so, such a straightforward approachmay not encourage guests to reveal whatprompted their visit. Doug must train staffmembers to recognize unstated needs andtap into the underlying factors that shapeguests’ preferences, especially by notingmotivations that may be expressed in infor-mal conversation or behavior (Kwortnik2003). For example, a guest who says she iscoming for a peaceful break may be basing





her attachment to the Quarterdeck on nostal-gia. By recognizing and recording this typeof information in the guest database, theQuarterdeck can form an experiential guestprofile. This profile can be enhanced withinformation about guests’ lifestyle andbehavioral characteristics (e.g., whether theyparticipate in water sports, enjoy fishing andcooking their catch, or visit for an annualfamily gathering). With richer informationabout customers, Doug will gain a more clearunderstanding of the desired “Quarterdeckexperience” beyond the arbitrarily chosen“spoil yourself” theme.

Market DemandSecondary data sources. Doug needs to

estimate demand for the Quarterdeck, sothat he can decide how to operate in the off-season and determine whether to expand theproperty. Secondary research using existingdata sources often can provide some insight.A number of web sites give demand infor-mation for the south shore, and the govern-ment of Nova Scotia provides hoteliers inthe province with the Tourism Insightsreport, which contains statistics on occu-pancy rates and room-nights sold for theregion.14 However, the demand questionflows directly from the need for a clarifiedpicture of who the target customer is orshould be. We know that the Quarterdeckattracts people of different ages and fromdifferent geographic regions. Most guestsare Canadian, two out of three come fromthe Maritime Provinces, and more than halfare from Nova Scotia (see Exhibit 4). Mosthigh-season guests are relatively affluentand are able to afford the Quarterdeck’sprices. Based on just this information, wecan use the Canadian census to explore the

market that fits the Quarterdeck customer’sgeographic and socioeconomic profile. Thecensus shows that the province of NovaScotia is home to 17,110 people who reportincomes greater than $75,000 (the topbracket in the census income category), andthe majority of these people reside in theHalifax area.15 Not everyone in this marketwould be a potential guest, of course, butgiven the small size of the Quarterdeck(thirteen rooms and 1,963 total availableroom-nights from November to March; six-teen rooms and 3,424 available room-nightsfrom April to October), we believe that ade-quate demand exists.

Internal data sources. Census and othersecondary data reveal a market with suffi-cient size, though this information tells uslittle about the extent of guests’ interest instaying at a Quarterdeck facility that islocated across the highway rather than onthe beach, or their interest in cold-weathervisits. Doug does have several internal datasources that provide some insight for thesequestions. For example, the source-marketdata (Exhibit 4) show that a majority ofguests drive fewer than four hours to get tothe property. That said, 15 percent of guestscome all the way from Ontario—a mini-mum twenty-hour drive. Examining thesedata by month reveals that off-season guestsare mostly from nearby. Analysis of occu-pancy data and year-to-year changes arealso potentially revealing. For example, off-peak occupancy increased 30 percent from2004 to 2005 (Exhibit 3). In the future, theQuarterdeck should track turnaways (peoplewho arrive without reservations and cannotbe accommodated) and unfulfilled inquiries(reservation requests by phone or e-mail thatare declined), as well as general inquiries



14. Government of Nova Scotia, “Tourism Insights,” January 1, 2006, www.gov.ns.ca/dtc/pubs/insights/AbsPage.aspx?siteid=1&lang=1&id=1 (accessed July 26, 2006).

15. Statistics Canada, “Earnings of Canadians,” August 13, 2004, www12.statcan.ca/english/census01/products/highlight/Earnings/Page.cfm?Lang=E&Geo=CMA&Code=0& View=1b&Table=4a&StartRec=1&Sort=2&B1=Both&B2=Total (accessed May 28, 2006).



(people who are interested enough to requestinformation). Each of these factors indicatespotential demand for the Quarterdeck.

Primary data collection. While secondaryand internal data sources can indicate market demand, primary research is oftenneeded to answer specific questions.Because the Quarterdeck has a current,accurate database, Doug can query pastguests through a survey, as well as pollcurrent guests during their stay. Initially,the Quarterdeck will have to conduct thesurvey by regular mail, as the databasedoes not contain e-mail addresses forguests who stayed at the hotel before 2006.For the future, we recommend using e-mailto invite guests to fill out web-based sur-veys, which are less costly and more effi-cient than mail surveys. While we believethat guests would willingly participate inresearch and share personal informationand opinions due to ties to the staff andhotel, we strongly suggest that Doug con-duct permission-based market research by asking guests for their permission tocontact them in the future.

By surveying past guests and inquiringabout their willingness to visit during theoff-season or to stay at a prospective newQuarterdeck facility (and at what pricepoints), Doug can obtain a more precisedemand estimate. He could also ask aboutguests’ interests in special activities, in partto establish a customer-relationship manage-ment (CRM) system to support existing relationships the staff have with guests.Presently, the Quarterdeck collects some dataabout guests (e.g., anniversary or birth dates,referral information, and general contactinformation), although specific preferences(e.g., activity, dining, or desired room ameni-ties) are not systematically captured forrelationship marketing efforts. The guestdatabase could be adapted to manage this type

of information. Although past guests receivechocolates, a bottle of wine, and a personalnote welcoming them back (which mostguests appreciate), the Quarterdeck couldinstead tailor these gifts to align with guestpreferences. The more immediate benefit ofturning the database into a tool for CRMwould come from tracking guests’ activitiesand interests to help with the design of preference-based vacation packages.

Product and Price BundlesStimulating demand during the off-

season requires an understanding of whatmotivates guests to visit the Quarterdeckin the off-season. Doug and his staff mustalso be creative in developing demandgenerators without government or touristbureau assistance. Other seasonal resortsin the Maritimes might provide inspira-tion. For example, Fairmont’s AlgonquinHotel in St. Andrews by the Sea, NewBrunswick, proposes the following attrac-tions for winter guests:

Snowshoe romps, cozy fireplace chats, in-room movies for the occasional blusterywinter night. We have everything you needfor a winter retreat. Local nature trails arecleared for walking, snowshoeing, or skiing,and local dining and shopping is available.16

The Quarterdeck’s winter guests couldenjoy similar activities, but not all suchactivities have been developed or commu-nicated to guests. At the moment, theQuarterdeck offers a romantic getawayand a kayaking adventure. Both packagesinclude two nights’ accommodations in avilla, a meal in the restaurant, and a lunch.(The kayaking package also includes aguide.) The Quarterdeck might promote fallfoliage on the south shore’s LighthouseRoute, just as the Cabot Trail, at the other



16. The Fairmont Algonquin, April 30, 2006; www.fairmont.com/algonquin/.



end of Nova Scotia, is promoted. Dougcould design a driving tour for guests thatincludes a personalized itinerary, en-route dining reservations, and lodging aspart of a special fall-foliage package.Similarly, the Quarterdeck is close to for-mer rail lines that have been turned intonature trails, which can be used for cross-country skiing and snowshoeing. Dougcould create a winter sports package thatincludes use of winter sports gear, and hecould promote the Quarterdeck’s presencenext to the trails for those who seek suchtrails.

Doug might create a family retreat pack-age that focuses on spending “quality time”away from computers, phones, and sched-ules. Other packages might revolve aroundhobbies (e.g., antiquing, winter fishing, pho-tography). In particular, Doug is friendlywith a famous watercolor artist who livesnearby, as well as a local landscape gardenerwho offers clay-statue classes during thewinter. Doug could enlist these artists tooffer classes that he could include in pack-ages for guests. Finally, Doug might createa package based on nothing at all, such as a“winter solace package” that highlights theserenity and beauty of the ocean—perhapsbundled with spa-like elements (such asmassage treatments, aromatherapy candles,and soothing music).

Closing the restaurant constrains Doug’sability to develop off-season vacation pack-ages. Although guests can drive to a nearbytown to purchase groceries, asking them tocook in their villas is inconsistent with theQuarterdeck’s image as a luxury experience.We believe that this weakness can be turnedinto an opportunity. Doug could hire out-of-work restaurant staff members to facilitatean alternative food-and-beverage experi-ence. For example, guests could provide ashopping list and food-service workerscould stock the guests’ villa for them beforethey arrive. A variation on this idea would be to create a menu of dishes (e.g., ready-to-eat meals) that could be delivered hot or

finished in the villas’ kitchens. Another ideathat emerged from guest interviews andfeedback is to have a Quarterdeck chef cookmeals for guests in their villa. Becauseoccupancies are typically low, especially inthe winter, it would be possible to offer “pri-vate chef” packages for guests who want agetaway experience (including a getawayfrom cooking).

The development of integrated productbundles offers several benefits in addition tothe potential to improve off-season demand.Integrated-product bundles coordinate prod-ucts or services that enhance the customer’sexperience (Carroll, Kwortnik, and Rose2006; Stremersch and Tellis 2002). Thesepackages represent value-added bundles thatshould obviate price discounting.

Currently, the Quarterdeck only offersconcessionary price packages during theoff-season (those being a reduced-rate pack-age and the “stay two nights, get the thirdnight free” promotion). While these pack-ages protect price integrity better than dosteep price discounts, they neverthelessfocus attention on prices, instead of thelodging experience itself. Ultimately, inter-est in the vacation packages—as well asideas for new package concepts—should bebased on guests’ desires and tested throughresearch. This might be done simply withsurveys that describe package concepts andinquire about the level of guests’ interest, orwith more sophisticated methods, such asdiscrete-choice analysis, which can revealdesired features and feature combinations inproduct bundles (for an excellent discussionof discrete-choice analysis and customer-choice modeling, see Verma and Plaschka2003; Verma, Plaschka, and Louviere2002).

Marketing Communications forthe Quarterdeck

Print media. In the 1990s, Doug spent$35,000 on newspaper and magazine adver-tising as the main vehicle to generate aware-ness for the Quarterdeck, an expenditure he





believes was worthwhile. Currently, hespends less than $4,000 on such advertis-ing, and a number of these ads are specif-ically for the restaurant (one is placed in amotorcycle magazine to attract bikers dur-ing the summer). Perhaps it is not a sur-prise that the Quarterdeck’s data indicatethat this print advertising effort brings fewpeople to the hotel. Less than 1 percent of allguests cite these advertisements as the wayin which they heard about the Quarterdeck.We could not determine whether this tinyresponse is due to ineffectiveness of printadvertising for this purpose, inadequateinvestment in print media, or unpersuasiveadvertising messages. While small displayadvertisements can be effective, the currentbudget allows for few advertisements.Advertising in the Halifax Chronicle Herald,the largest daily newspaper serving theQuarterdeck’s primary market area,17 forinstance, costs $250 for a 3 1/3 by 4 1/4 inchadvertisement (roughly 1/16 of a page). Atcurrent budget levels, the Quarterdeckwould only be able to run sixteen smalladvertisements in this newspaper—a level ofrepetition that is unlikely to draw aware-ness among target customers (Tellis 2004).We expect that the Quarterdeck would needto increase spending on print advertising tosupport the launch of off-season vacationpackages, though any such effort should be tracked to determine incremental salesbenefits.

Public relations. Article and featureplacements facilitated by public relationsoffer the Quarterdeck an opportunity for low-cost media exposure. Stories about howa small-town resort is trying to become awinter destination through novel vacationpackages could be well received by themedia. Doug might also develop general

interest stories about the history of theQuarterdeck. To be successful, public rela-tions requires a concerted and consistenteffort to cultivate media contacts and togenerate stories that are truly newsworthy (atleast in the news editors’ view). Though public relations can be low-cost because itdoes not involve buying air time or print-media space, it still involves time and effort.The process includes crafting timely, interest-ing press releases, following up with mediacontacts to fan their curiosity, and enablingthese contacts to experience the Quarterdeckfirsthand.

Direct marketing. Another approach topromoting the Quarterdeck involves directmarketing. This would be most effectiveafter primary research was complete andDoug had a more precise profile of targetcustomers and their characteristics. Basedon target profiles, the Quarterdeck couldcontract with a direct-marketing firm to purchase or rent lists and create the mailer.However, given that 14 to 19 percent ofthe Quarterdeck’s recent customers werereferred by friends or relatives, a moreeffective and efficient approach to direct-mail prospecting would involve past guestsas marketers for the hotel. This is especiallytrue since commercial lists, though they arewell constructed, usually yield tiny responselevels. Instead, the Quarterdeck could buildits own mail list of likely prospects by ask-ing guests for referral names and contactinformation. To reciprocate, Doug shouldoffer something of value for the referral,such as a gift memento or bottle of wine. Inaddition, if the referred guest eventually vis-ited the Quarterdeck, Doug might offersomething of even greater value to the guestwho made the referral, such as a com-plementary dinner or priority high-season



17. Daily circulation of around 114,000, with circulation of the Sunday Herald of around 68,000; www.thechronicleherald.ca/services/aboutus.html.



booking when the guest returns. Key tothis approach, though, is that any mail solici-tation would reflect the Quarterdeck’sintended image. That is, the communication tothe prospect should mirror the Quarterdeck’spersonalized service style and charm. Thepiece might, for instance, include a handwrit-ten invitation from Doug. This would main-tain the personal touch the Quarterdeckvalues and the level of customizationQuarterdeck guests expect.

Internet marketing. Based on our analysis,we believe the internet offers considerableopportunities for the Quarterdeck to expandits promotional reach and enhance its brandmessage. In 2005, less than 5 percent ofguests said the internet was how they heardabout the Quarterdeck—and less than 1 per-cent identified the Quarterdeck’s web site as a main source for information. Ourresearch revealed several problems with the Quarterdeck’s web strategy. First, websearches using keywords such as “NovaScotia beach resorts” or similar terms fail toturn up the Quarterdeck’s web site on the firstthree pages of search results. That is true eventhough its nearby competitor, the White PointLodge, consistently appears on the firstpage—and as the first listing on somesearches. On the other hand, a search usingthe keywords “Nova Scotia beachside villas”does return the Quarterdeck as the topsearch result. This finding indicates thatthe Quarterdeck web site is not optimizedfor search engines. At a minimum, the siteshould be redesigned to contain more of thekeywords that web searchers are most likelyto use, such as “resort,” rather than “villas.”Doug might consider bidding on keywords tobetter ensure that the Quarterdeck shows upon searches—and higher in the search results.

Before he spends money on keywords,however, Doug needs to address his web site.Once web users do find the Quarterdeck’ssite, its “virtual experience” needs work (seeExhibit 7). Noted one advertising executivewho reviewed the site as part of this analysis,

“The site fails to convey the kind of experi-ences guests of the Quarterdeck can expectthere.” There are few images of guestsengaged in the many delightful activitiesavailable at the Quarterdeck—bodyboardingand kayaking in the surf, strolling along thebeach at sunset, winter cross-country skiing,enjoying a romantic dinner in the Grill, cele-brating a family gathering with a beach pic-nic, or sipping hot chocolate by a warm firein the villa. Self-relevant imagery is criticalfor triggering emotions and helping people tovicariously experience (or reexperience) theirvacation. That said, however, any imagesshould be aligned with guests’ needs andwants for the Quarterdeck experience.Without research-based insights into whatmotivates guests to come to the hotel—yearafter year—Doug is left guessing aboutappropriate imagery to feature on the website. For example, if his research were toreveal that guests viewed the Quarterdeck astheir own private beach retreat for familyvacations (a theme evident in our exploratoryresearch), the web site’s images should high-light family activities and togetherness.

A related idea is to promote the emotionalattachment that repeat guests report feelingfor the Quarterdeck and its staff by creatinga “Quarterdeck Family” section on the website where guests can post their vacationphotographs and stories. The web has madepossible virtual tourism communities, inwhich active and armchair tourists exchangeinformation and travel tips, find like-mindedtravelers, and engage in vicarious vacation-ing by reading travel narratives (Wang,Yu, and Fesenmaier 2002). Indeed, a fewQuarterdeck guests have posted their opin-ions about their experience on the travel web site TripAdvisor.com. For example, oneguest wrote,

This location is perfect for a romantic get-away. It’s perfect for someone who wants to get away from it all. You can walk on the beach . . . watch a sunrise or a spec-tacular sunset or explore some of the coastal





villages for unique vistas, friendly people,and shopping for local crafts. It’s a naturelover’s paradise. A hikers’ and kayakers’mecca, with Kejimkujik National Park andthe Seaside Adjunct Park just a short driveaway. There you can kayak, walk the shore

trails, and you can even watch the sealsbasking on the rocks . . . not far away. Youcan surf at White Point Beach or you can justchill on your deck with a good book and alime daiquiri . . . listening to the waves rollingin. . . . As you can see I love this place.18



Exhibit 7:Quarterdeck Web Site Home Page (www.quarterdeck.ns.ca)

18. TripAdvisor.com, “Quarterdeck Beachside Villas and Grill”; Tripadvisor.com, Nova Scotia: “QuarterdeckBeachside Villas & Grill, A Wonderful Place to Stay,” June 14, 2005; A TripAdvisor Member, Riverview, N.B.;www.tripadvisor.com/ShowUserReviews-g154967-d569290-r3554656-Quarterdeck_Beachside_Villas_and_Grill-Nova_Scotia.html (accessed September 22, 2006).



Enabling guests to become part of aQuarterdeck virtual community shouldenhance loyalty because guests will feel thatthey are part of a “family” or “club” (Oliver1999). Beyond that, pictures and vacationdiaries can serve as memory cues that mayencourage guests to return, or influence newguests to try the resort. Narratives based onguests’ actual experience can echo and sup-port the Quarterdeck’s marketing communi-cation. Finally, this imagery may influenceprospective guests who look to the first-hand experiences of others as a source ofinformation to inform their own preferences.Ultimately, a guest-driven section of theQuarterdeck web site can make the site theguests’ own—reflecting the way that theyfeel about the Quarterdeck itself.

Implications for HospitalityManagement

The challenges and opportunities revealedin the case of the Quarterdeck are no doubtfamiliar to managers of seasonal hospitalityoperations. The marketing strategies identi-fied in the case and our analysis should be applicable to small resort hotels in manylocations. Doug and his Quarterdeck staffhave done many things well through theyears, not the least of which is to deliver ahighly rated resort experience that engendersdevotion and loyalty from repeat guests. Oneimportant lesson from this case certainlyshould be that the foundation of most anysuccessful hospitality enterprise is highlysatisfied customers who become committedto the organization and its people (Mattila2001; Price and Arnould 1999). Still, hospi-tality firms cannot rely on the loyalty andbenevolence of guests, especially when mar-keting objectives involve growing traffic andrevenues both in the off-season and year-round. The Quarterdeck must build on itsexisting customer relationships to encour-age loyal customers to patronize the resort

more often—and encourage potential gueststo do the same.

The Quarterdeck’s marketing-informationsystem is unusual for a small company.Particularly notable is its guest database,which Doug has enriched over time withincreasingly detailed customer data (notably,e-mail addresses, guests’ home locations,and how guests heard about the hotel). Usingjust this information, Doug can deriveinsights about the Quarterdeck’s target mar-ket and the effectiveness of his marketingcommunications strategies. In turn, theseinsights provide direction for future market-ing efforts. For example, we conclude thatthe Quarterdeck should focus marketingresources on strategies that encourage gueststo become word-of-mouth marketers for thehotel. Rewards for referrals are one tactic insupport of this strategy, but so is an enhancedweb site that integrates guests’ vacationimages and stories, as well as efforts todevelop off-season vacation packages andinclude personal touches based on theirvacation preferences.

Adding value for guests by delivering amore personalized experience can reduce the need to offer deals to drive demand.However, this strategy requires a systematicapproach for identifying guests’ needs,wants, and desires. The Quarterdeck is in aposition to create considerable value for itsguests. Its database can serve as a repositoryfor information about guests, and constancyof staff and guests means that knowledgealready exists about why guests come to theQuarterdeck and what they value most aboutthe experience. Yet the challenge for theQuarterdeck, as with all hospitality compa-nies, is how to turn this tacit knowledge intoinformation that can be captured, codified,and analyzed for input to marketing deci-sions and operating policies. This requiresnot only a system for observing and analyz-ing guests’ behavior to better understand





their preferences and the meanings theyattach to their hospitality experiences, butalso active primary research to enrich thisunderstanding—for example, to find outwhat elements of a family retreat or roman-tic getaway at the Quarterdeck make theexperience special. We believe that hospi-tality managers who can tap into guests’desires at that level are positioned to createexperiential-product bundles—as well asmarketing messages—that can mitigate thetypical effects of seasonality on demand andinstead drive demand and enhance guest sat-isfaction year-round.

References

Carroll, Bill, Robert J. Kwortnik, and Norm Rose. 2006.Packaging in hospitality: Conceptual foundations and practical implications. Working Paper, CornellUniversity Center for Hospitality Research, Ithaca, NY.

Kwortnik, Robert J. 2003. Clarifying fuzzy hospitalitymanagement problems with depth interviews and

qualitative analysis. Cornell Hotel and RestaurantAdministration Quarterly 44 (2): 117-29.

Mattila, Anna S. 2001. Emotional bonding and restaurant loyalty. Cornell Hotel and Restaurant AdministrationQuarterly 42 (6): 73-79.

Oliver, Richard L. 1999. Whence customer loyalty.Journal of Marketing 63:33-44.

Price, Linda L., and Eric J. Arnould. 1999. Commercialfriendships: Service provider-client relationships incontext. Journal of Marketing 64 (4): 38-56.

Stremersch, Stefan, and Gerard J. Tellis. 2002. Strategicbundling of products and prices: A new synthesis formarketing. Journal of Marketing 66:55-72.

Tellis, Gerard J. 2004. Effective advertising: Understandingwhen, how, and why advertising works. Thousand Oaks,CA: Sage.

Verma, Rohit, and Gerhard Plaschka. 2003. The art andscience of customer-choice modeling: Reflections,advances, and managerial implications. Cornell Hoteland Restaurant Administration Quarterly 44 (5):156-65.

Verma, Rohit, Gerhard Plaschka, and Jordan J. Louviere.2002. Understanding customer choices: A key to suc-cessful management of hospitality services. CornellHotel and Restaurant Administration Quarterly 43 (6):15-24.

Wang, Youcheng, Quaehee Yu, and Daniel R. Fesenmaier.2002. Defining the virtual tourism community: Implica-tions for tourism marketing. Tourism Management23:407-17.



Robert J. Kwortnik Jr., Ph.D., is an assistant professor of marketing at the Cornell University School ofHotel Administration ([email protected]). James Vosburgh is a graduate of that institution.



Documents

Driving Demand for the Quarterdeck: A Case Studyside Villas and Grill can fall asleep to the sounds of the ocean. The Quarterdeck is sit-uated on a mile-long, white-sand beach, two