The Broadmoor hotel is trying a new tactic to combat the sinking economy and lure gun-shy meeting planners: It lives up to its five-star reputation or your money back.
"This is a very simple proposition: We perform or you don't pay," said John Washko, vice president for sales and marketing at The Broadmoor. "What we're doing is we're making a bold statement in an effort to help our customers to move forward with a level of confidence that The Broadmoor is a responsible investment."
Money-back guarantees are common in many businesses, but unheard of when it comes to high-priced resorts, said Corrie Dosh, destinations editor for the trade magazine Successful Meetings.
"I think it definitely goes further than what we've seen other companies do," she said.
"This is the first time we've seen a property come out with a blanket statement: money back."
Event bookings account for 70 percent of The Broadmoor's business -- and they're down 20 percent this year, Washko said. And it's not just the lousy economy. Meeting planners have been stung by the negative publicity around pricey corporate retreats for companies such as AIG and banks that received government bailouts. Planners are avoiding posh resorts to keep their meetings out of the spotlight and away from congressional criticism.
"We have taken significant cancellations in 2009 like we've never seen before," Washko said. "The hotel industry has become a target and it's almost a witch hunt from our legislature. They're setting an environment where holding a meeting is a questionable activity, where we see it as a necessary activity."
There are a couple of caveats for the guarantee: It's based on evaluations by participants -- you can't just say you didn't like the drapes and ask for a refund. And it's only for large meetings, involving 50 or more rooms for at least two nights.
It's similar to Hyundai's successful promotion in which buyers can return their new car with no penalty if they lose their job. That campaign worked because it turned around the conventional car ad, said Debbie Frickey, executive vice president of engagement for Vladimir Jones, The Broadmoor's ad agency.
"(Hyundai) stopped talking about themselves and they focused their campaign squarely on their customers' concerns," she said. "That's where the similarity is."
Still, tinkering with a brand as well-established as The Broadmoor's carries some risk. A Hyundai is a fine car, but The Broadmoor would rather be the Rolls-Royce of hotels. In this environment, though, it's a risk worth taking, Washko said.
"We felt we needed to be bold to step out and grab some attention and really speak very strongly to what our value proposition is," he said.
Successful Meetings' Dosh agreed that companies and groups are looking for value, even in five-star properties. "I think the audience for the luxury market is pretty sensitive right now," she said. "I think it will definitely get attention and hopefully it will get some business for them because the luxury market is really hurting."
