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Saturday, November 01, 2008

High Peaks Resort's Recession Marketing Strategy


As everyone talks about how the recession may change their business, one industry that will likely feel the effects severely is travel. More specifically, leisure travel as people put off that next vacation, or choose to stick close to home rather than heading to more exotic destinations. You might think there's not much any one property or destination could do to change that, but High Peaks Resort in Lake Placid has a brilliant idea that is doing just that. 

They tied their room rates to the Dow Jones. So when the Dow goes down, their rates for rooms do as well. On a recent day, the Dow closed around 8300, which meant their room rates were $83 - a significant discount from the usual $250 they charge. The menu items at their restaurant also change prices based on this sliding scale. The effect is not only a great promotion that is generating big word of mouth for a single resort that most people would never have otherwise heard of, it's also generating millions of dollars in free publicity and media. While companies like Exxon Mobil continue to post record profits, and many other businesses continue to try and make a few extra bucks off their customers, High Peak Resort's example is a powerful reminder that sometimes the best marketing is to find a way to show your customers that you share their pain ... and give them a real reason to choose you.


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I think this is a brilliant idea, but how significantly will it affect consumer purchasing decisions?

People are most likely not planning or traveling on vacations given the current state of the economy and predicted continued recession. Consumer discretionary spending is most likely going to take a huuuuge hit this holiday season (in my opinion larger than what most companies/analysts are expecting). Thus I really don't think that people are looking to spend money regardless of the novelty or "deal" they may be getting.

Though the idea is ingenious and worth a lot in the context of generating awareness, free advertising, and brand equity, I don't see this campaign having a marked effect on the resort's bottom line in the short run (which I think you are suggesting).

In the context of a potential customer, I would definitely stay here if I were on business or had to be in the area, but I would not be looking to spend extra money by planning a superfluous vacation to Lake Placid. I think this idea would go further if the resort combined this campaign with a direct marketing effort to financial professionals.

I too believe it is indeed a very innovative approach - and thank you so much for sharing - but I do not agree with Matt that this initiative will not impact their business. Having looked at their site, they also offer to host conferences, meetings, weddings. If I were organizing a conference or company meeting in that area, the price of a room, a meal etc. is sure to have an impact on my preferences.

Michael Leander, Copenhagen - Denmark

Don't let that "regular rate" fool you. Max rates are only posted for "special events". At this time of year, you would likely do better than the Dow rate by simply asking.

It is free PR though.

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