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From the
January 2004 issue of:

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Wellness and the Bottom Line
by Alan N. Schlaifer
Law Offices of Alan N. Schlaifer, P.C.

Last month, we reviewed key aspects of the American healthcare crisis and their impact on the resort industry. Important points include these:

Skyrocketing healthcare costs at most companies, including those in the resort industry.

The U.S. as the "not-so-super power" of total healthcare costs, with the world-leading 15% of national product, but not the leader in life expectancy or other positive indicators.

Many serious diseases and conditions are pushing up healthcare costs for employers and individuals.

Challenges include the "obesity epidemic," as well as explosions in the levels of diabetes and heart disease that made the cover of Time magazine.

Heart disease and stroke are the leading killers and most expensive diseases. About 950,000 people died from them last year, and total direct and indirect costs were about $351 billion.

Cancer is the number two killer in the U.S. and abroad. Last year, nearly10 million people worldwide developed malignant tumors, and about 6 million died.

"People's unhealthy lifestyles" are a major reason for the chronic diseases that afflict over 125 million Americans, with millions of new cases each year and 1.7 million deaths, according to CDC.

We must do more prevention, early detection, and treatment.

Impact on developers and other firms in the resort industry: the need to face and deal with these challenges for both internal and external reasons, from a business and personal standpoint.

The internal side is to keep your corporate healthcare costs under control, while attracting and retaining employees, reducing absenteeism, and raising productivity.

The external aspect is to generate more business, both through happier and healthier owners and guests, and greater profits. Those who live longer and are healthier will be able to generate revenues for you over a longer period of time. A prime example of this is the recently announced Westin Workout from the Westin division of Starwood, which includes the former Vistana vacation ownership division among its various brands. Thus, healthier guests can leader to healthier bottom lines - for you and your business.

Road - and Timeshare - Warriors

Starwood's survey titled "Road Runners: Working out on the Road," shows the importance of exercise to hotel guests and is the basis for the Westin Workout™. It can also be a starting point for your own survey or other efforts to determine what your owners and guests want.

The findings probably apply to both the business travelers and your leisure guests, with appropriate modifications. For example, while a business traveler may exercise to bond with colleagues, timeshare guests can play tennis or swim with family members to increase bonding with them.

Also, with more trips, including timeshare stays, hybrid leisure-business ones, varied recreational amenities can help everyone unwind. I still remember a trip to the lovely St. George's Club in Bermuda where the time spent with my family at the beach and pool offset some of the legal work and meetings that tied up part of my time; not complaining, mind you, about enchanting Bermuda.

The various points noted, both good and bad, can offer a convenient checklist for you of points to check out on your own fitness facilities. You can also apply many of them, or modify them, for other recreational amenities, in appropriate ways.

Also, you may want to keep these points in mind as to your own or colleagues' business or other traveling. Working and working out combine well together, and being in better shape allows you to perform better. Running - or other sound exercise - will help keep you and your team from getting run down. These points apply whether you are away, or at your company's home base.

These are some of the key points of the survey and our comments:

— 90% of travelers surveyed said exercise relieves stress on the road

— 60% - exercise helps alleviate jet lag

— 78% - workouts are a good way to get over a rough day

— 70% of travelers surveyed said that working out is a good way to bond with colleagues [or family, or simply your partner - take some time for yourselves, and hire a sitter if need be]

— 53% - exercising is good for their image among business colleagues

— 62% check to see whether a hotel has a workout room during the reservation process

— 59% - the quality of hotel fitness facilities is an important factor in their choice of hotel [see comments by Max Bodine in this regard]

— 69% - a "state-of-the-art" fitness facility would favor that hotel in the selection process

"Working out on the road is a priority for many travelers but hotels have typically cut corners in hotel workout rooms, cramming mediocre, aging equipment in a small space with absolutely no frills," said Barry S. Sternlicht, Chairman and CEO of Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT). He works out four days a week and always packs his workout gear when traveling on business. Sternlicht has announced his plans to "retire," but as CEO only, once a new CEO is named.


Wellness: Get Your Share of the Coming Trillion Dollar Industry

Wellness is already big business. As noted, Paul Zane Pilzer, author of The Wellness Revolution, says it is already a $200 billion industry. That's nearly 30 times the size of timeshare, not to minimize timeshare.

Rather, it is to point out how you can, in Pilzer's words, "get your share of the trillion dollar wellness industry" that he foresees in the next decade. Demographic trends, such as the aging of tens of millions of baby boomers, point to a five fold increase in coming years.

Ken Miller, President, Global Marketing Group, New York City, sees many ways for the timeshare and resort industry to benefit from this growth and become part of it.

Here's what he says about the huge potential waiting to be tapped:

Trades: What opportunity do you envision for wellness and timeshare?

Miller: The opportunity in the developing a substantial new business by incorporating or creating a wellness product is at hand. In the early 90s, Global Marketing Group did an extensive study for a major developer/ insurance company regarding developing a resort city of the future.

Trades: Could you provide background on your prior work to explore this market?

Miller: We interviewed leaders in travel, conventional resorts, wellness and health resorts, educational and culture travel, ecoresorts, airlines, travel consultants, travel media professionals, and more. The overriding consensus was, given the aging population, baby boomers and the health and fitness attitude by younger people, that a new wellness resort/vacation concept will have a major impact on the future of the vacation industry. In essence, they clearly stated that the wellness industry will become a major factor in vacation decisions in the future.

Trades: What has happened since then?

Miller: Today, as Paul Pilzer notes, wellness products, resorts and services are at the $200 million dollar level and well on their way to approaching a trillion dollars in annual sales in the foreseeable future.

Trades: How does that apply to the vacation ownership industry?

Miller: One of the key points we discovered was that many people want more than just the conventional vacation. In addition to the swimming pool, tennis courts, golf courses, and other recreational amenities - which are important - they would like to learn something and become healthier. They are so stressed out in their daily lives - and getting more stressed out over time in double-career and single-parent families - that vacations mean more than ever to them. If they can take home benefits to enhance their lives, all the better.

Trades: How do you foresee the concept of possible "wellness resorts" evolving?

Miller: Global Marketing sees an ideal marriage between the timeshare and wellness concepts. Each year, a person can get the needed vacation break and improve his or her health.

We envision a great future in a smart Wellness Timeshare product based on varied factors. These include the results of our study of Wellness Resorts and the attitudes of people regarding vacationing. Our views also reflect growing health and wellness concerns of our populace, anti-aging issues and products, healing, rejuvenation, and more emphasis on physical and mental fitness. Also, nearly everyone desires a better life for themselves and their family. This conclusion is also based on our many years' experience in timeshare marketing and developing.

Trades: What have you done to move forward the concept of Wellness Timeshare Resorts?

Miller: GMG is currently developing and exploring a Wellness Timeshare resort product with and for resorts in the Caribbean, Southwest USA, overseas, and Florida.

We are working with experts to bring this product, in its various formats, to fruition to assure the best solution for millions of people who want to improve their lives. These experts include doctors, health and spa professionals, environmentalists, developers, and travel and vacation professionals.

Trades: What options do you have for those who want to consider well- ness as part of their product mix?

Miller: GMG has three solutions for developers to benefit from this new boom in vacationing. These range from getting a little involved, getting serious to jumping in 100%.

For example, resorts can:

1. Use an existing space to add a Wellness product.

2. Add a standalone building for wellness and fitness.

3. Focus on this concept and build an ideal Wellness Resort offering all the services and amenities required.

In each case, resorts can develop ongoing products and services for their members both at the resort and when the member (and their family) is at home that provide additional income and loyalty, Many companies in the health product and services industry currently do so.

Trades: What are some of
factors and approaches to be considered?

Miller: There are several factors to consider and several approaches to consider.

Given the style and objective of the developer, one can go towards the medical end and offer true medical services administrated by doctors and health professionals. On the other extreme a developer can simply create an enhanced Spa. And there are alternative products in between.

The developer must have comfort level as to what works best for the kind of membership they want to serve and the kind of company they want to build.

We are exploring products that range from intensive medical services (in essence an attractive and comfortable medical clinic) treating people with diseases that require constant care to the high end Spa approach that serves healthy people who simply want to look and feel great.

Trades: What are other benefits, Ken, for a developer considering the creation of a Wellness product?

Miller: The Timeshare Wellness concept can be sold to corporations an employee benefit or incentive. That is, the company provides a week at a wellness timeshare resort. The employer can give the entire week, or split it. With a lockoff unit, the company could get double usage. What-ever the choice, this opens a major new opportunity for timeshare resorts that offer this product.

Trades: What recent developments in Wellness centers relate to timeshare?

Miller: Global Marketing Group is working with a company named Biomage based in Miami. Under the direction of Jeffrey B. Sussmane, M.D., their Chairman and CEO, they operate Wellness centers, one each in Miami and Fort Lauderdale, plus two more coming on-stream in 2004. Their concept is a "highly individualized" service for clients to achieve their optimal state of well-being and life enhancement. This means services that make their clients feel better and have an improved state of fitness and well being.

We're taking what their clinics are now doing and developing a full-scale Biomage Center at individual resorts.

Trades: How will these centers at timeshare and other resorts compare to the current Biomage facilities?

Miller: We will adapt the facility to fit the needs of the individual resort and its owners and guests. This amenity will expand the services of the resort for its guests and will enhance the benefits and value to the consumer of traveling to that resort.

Trades: If a developer is interested, how will this work?

Miller: Jeffrey and I will visit the resort. He will focus on the medical and healthcare issues, and I will deal with the marketing facets, such as demographics, profile of the current and pros-pective clientele, as well as the physical aspects of the resort.

Trades: Can you give me a hypothetical example?

Miller: It could be a 100-unit timeshare in the Caribbean, on the beach with tennis courts and a small golf course attached or nearby. Most of the clientele is between 45 and 65. Based on our analysis and random interviews, we conclude that the majority would benefit from the services of wellness center at the resort. Use of that center leads to a more positive attitude and enjoying the resort more, plus potentially more referrals and purchases of additional weeks. People who feel better and are healthier are also likely to live longer and remain owners for a longer period of time.

Trades: Any other benefits?

Miller: A wellness center is an amenity that keeps paying for itself. It can lead to easier closes and fewer cancellations, especially for those who have had the opportunity to sample the center, as through a massage, while visiting the resort. It requires much less space and a far smaller outlay than expensive amenities such as a golf course. With an aging population, a well conceived, designed and maintained wellness center is not going to be a frivolous option. Rather, it will be an important feature that your clients will increasingly expect.

Trades: How can readers learn more about this, Ken, or determine whether this concept might apply their resort?

Miller: For an evaluation to ascertain if your resort would benefit by incorporating a Wellness product and expanding your market base, you can call me at
212 247 6060, or email me at">


Keeping Your Amenities Fit

- And Fitting the Needs of Your Clientele

Comments of Resort Industry Executive and Consultant:

Max Bodine, Branson, Missouri

Max was a top executive at Fairfield and Peppertree, and has had many years of experience with them and assisting other members of the resort industry. These are his views, first on fitness and exercise amenities, and then on health insurance and related issues.

Trades: Do all timeshare resorts need quality fitness and exercise facilities? Why or why not?

Bodine: My judgment is that resorts in all locations will soon realize the need for quality fitness equipment and recreational amenities for their guests or risk being considered "second-rate" in consumers' opinions. Of course, a full-blown spa would be great, but even small operators will find a need to have some type of all-weather exercise opportunity for guests if they expect return demand.

Trades: Should resorts economize on fitness equipment?

Bodine: They should try to get good value, but that does not mean sacrificing quality. As to equipment that is in poor condition or of cheap quality, the people that use such equipment would instantly spot a shoddy product. Thus, those who supply something that is inferior or maintained badly actually do themselves a disservice. Fewer but better quality, well maintained equipment would be a better "silent salesman" that the message sent by several (or many) pieces of broken down or dysfunctional junk.

Bodine: I notice on recent cruises on which I have traveled that the exercise area on the ships is well maintained, well equipped and well appointed. That suggests a level of professionalism about the entire operation. The same would be true in a resort environment where both indoor and outdoor opportunities exist.

Trades: What is the downside of poor maintenance or appearance of fitness or other leisure facilities at a resort?

Bodine: An otherwise well-appointed resort takes on the appearance of cosmetics when various departments (exercise rooms, housekeeping areas, maintenance shops, etc.) look rundown or patched together. One example is a nice resort that has a very badly maintained boat dock, and I've heard people talk more about the poor dock facility than about the great dinning room in the lodge. Like a beautiful lady with a black eye, any amenity that is ignored or shoddy leaves a negative impression more lasting that the favorable overall impression.

Trades: And the upside?

Bodine: Added revenues from proper design, construction and maintenance of all recreational amenities can vastly exceed the modest costs of building and properly maintaining your facilities. A developer may want to focus on lower maintenance facilities, thus limited those such as saunas and whirlpools, that are harder to maintain.

Whether in making sales, or keeping owner loyalty after you have sold all of your weeks, you have far more to gain by investing than to lose by taking care of your resort, and inspiring all of your owners to do likewise. If you let it run down, they'll be inclined to follow suit - or maybe even file suit!


Health Insurance Views

Health insurance is reportedly the number one benefit desired by employees. With costs rising sharply, more employers are asking employees to pay, or to bear a bigger share, while cutting coverage or increasing co-payments (the per visit or per use fee.)

This is a vital area for employees; health insurance costs were a key factor triggering in strikes in major California supermarket chains. In asking employees to pay part of health insurance costs, the companies say this is in response to competition from Wal-Mart - which pays none of its employees' health insurance costs.

With Wal-Mart the number one retailer in the world and now having more impact on supermarkets, this situation could spread if Wal-Mart enters others fields, such as timeshare.

These are Max's views on this important topic.

Trades: Max, what is health insurance availability in the timeshare industry?

Bodine: Two trends are converging. First, I believe that the industry is continuing to move toward bigger developers and consolidation. Second, healthcare coverage is becoming increasingly important, and many resort developers have provided health insurance on a group basis.

Trades: What is the situation with smaller developers?

Bodine: They have to take a census of their staff, which can be more difficult for some of them. In general, it can be more difficult for many smaller developers to secure and provide appropriate health insurance for this and other reasons.

Trades: To what extent is turnover an issue?

Bodine: Because sales employees tend to come and go, and have high turnover, it is very difficult to manage a healthcare program. Some of the larger hospitality companies have less turnover. More stable groups for various size developers are accountants, bookkeepers, and office staff. High turnover can lead to problems with insurance carriers.

Trades: What actions are needed?

Bodine: The employer has to subsidize health insurance. Doing so can be a great recruiting tool. Sales personnel may favor Developer A with group insurance and slightly lower compensation over Developer B, where the reverse is true.

Trades: What can be done to keep down increases in healthcare costs?

Bodine: Developers and other companies have to encourage greater preventive care and wellness efforts. Unlike traditional HR, no one is there in many cases to help smaller developer. A smaller project can get really good property managers, but that does not mean those people are trained in skills about how to develop health and wellness programs for employees.

Trades: What level of employee access to fitness or other facilities do developers provide?

Bodine: It varies. Some developers do provide access to their health club as a modest cost perk to employees at modest cost.
They may also promote it in the local community for those who buy a week.


A New Look at Fitness: 70/70 Vision

Interview with Mike Kuntz, CEO

Prospect Generation Systems, Inc.

Powells Point, North Carolina


1-800-849-5999; 252-491-8369

Mike Kuntz, subject of a September 1998 profile in Resort Trades, is a former pilot who has helped developers throughout the U.S. hit new high ground in sales since he began working in the resort industry. Here is our interview with him.

Trades: What does Prospect Generation Systems do?

Kuntz: We manufacture displays, called RegiStands™, which are lead generation products. Our resort clients use these in their box programs in stores, shopping malls, restaurants, customer trade shows, or anywhere there are a lot of people. They can be used for mini-vacations or other prize promotions.

Trades: Are they used in any other way?

Kuntz: They are also used at resorts themselves to take
customer comments.

Trades: How do they work in the lead generation process?

Kuntz: They're establishing a working relationship with anyone who fills out the slip with their name, address, phone number, and increasingly, their email address as well.

Trades: Why are box programs important to resorts in these days of Do Not Call and other proposed restrictions?

Kuntz: With DNC and other limits, you need to have a way to establish contact with a prospect that shows that you have their permission to follow up with them. Box programs are even important, especially because telephone contact works better with prior contact. You can use follow-up calls or emails to touch base again periodically, as long as you don't push too hard and overdo it. You can also change the offer from time to time. In an age of "Permission Marketing," having a lead slip filled out by the customer is more important than ever.

Trades: How effective are box programs?

Kuntz: I got into this business after 22 years in timeshare marketing. We wanted to produce something that was more attractive and durable than the cardboard boxes then being used. Our initial boxes were fiberglass, and we still have some of them, but we have upgraded to more durable and attractive ABS plastic. We have everything from small table model up to freestanding floor models.

Trades: Speaking of free standing, I understand that you are very active in taking care of your health. What are some of the actions you have taken?

Kuntz: My favorite fitness activity is bicycling. I've tried running, but this produces much less stress.

Trades: How long have you been a cyclist?

Kuntz: For almost 20 years, starting in Virginia Beach on the Boardwalk. I do it every day that it's not raining or too windy, but a minimum of five days a week. I average 12 miles a day.

Trades: Have you entered any races or competitions?

Kuntz: No, but I'm thinking about it. I do special trips on my birthdays, with the length of the ride matching the number of the birthday. Last year, I did 69 miles for my 69th, and this year on October 4, I did 70 on my 70th.

Trades: How do you pace yourself?

Kuntz: Steady, averaging 10.2 miles per hour, taking breaks as needed. This year, I stopped at my house in Kitty Hawk, and have gone to Carollla, which is a round trip of 60 miles. I rode in and around Kitty Hawk. My elapsed time, including riding and stops, was about 9 hours.

Trades: What benefits do you get either in a physical, personal or business sense from riding?

Kuntz: It's a great time for thinking. I enjoy seeing the sites, which change on a daily basis. I ride through beautiful golf courses near our farm, plus places with deer, geese, and other beautiful scenes. I get a lot of toots from passing friends, and it gives me a nice opportunity to wave at them.

Trades: What business benefits do you get from this activity?

Kuntz: The thinking time helps me be more creative in my business. I feel disappointed if I don't ride. It's not for muscle building, but rather for cardiovascular health. It's much better than running in that regard, because it strengthens my knees, instead of putting stress on them. My legs are like rocks. Cycling acts as a great stimulator. Riding gives me a chance to think about my family, my business, and gives me more great ideas and keeps my mind active. In fact, it's easier much of the time to hop on my bike to ride to my office than to drive. For me, riding a bike is a key component of fitness.

Trades: Do you encourage employees to stay fit?

Kuntz: There is already much activity in our business, with our staff walking around constantly. We are near the beach, so some of our employees go to the ocean on the weekend.

Trades: Anything else?

Kuntz: My wife, Gaye, is 67, takes care of the financial end of our business and is very active. She walks and has a treadmill in her shop on a regular basis. She walks to and from our office. She also walks around the farm and gets on the treadmill if there's a television program she wants to watch. She also does a lot of gardening, as our 18-acre farm requires a lot of care.

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