Castle ignores economy, feels time is right to grow

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A potential downturn in visitor counts to Hawaii may be on the horizon, but that isn't discouraging Castle Resorts & Hotels President and COO Alan Mattson from spearheading a significant expansion of the company he's led since 2005.

"In a way, we were on the sidelines in recent years, but that's all changed," Mattson said. "We're committed to growing the company, not only in Hawaii but also in Southeast Asia, where we see great potential."

When Mattson mentions recent growth, he's talking about an 88% increase in Castle's accommodations count in the past six months. The chain has added roughly 1,200 rooms at the Maile Sky Court, the Ocean Resort and the Queen Kapiolani, three midsize Waikiki hotels that have joined the hotel group in the past six months. 

Mattson is confident the time is right for growth thanks to the extensive midmarket inventory Castle now offers in Waikiki; the majority of rooms are priced from $140 to $175 per night. That means tapping the still significant market for mid-range travel.

"Most of our growth has been in Waikiki," he said. "The redevelopment of Waikiki has absolutely drawn new interest.

"We see it as a high-demand product in an increasingly upscale destination," Mattson added. "We rule the market when it comes to moderate pricing."

Accommodations acumen

Castle relies heavily on electronic booking systems, which handle about 50% of business. That comes as no surprise: Mattson launched Avis.com during his three-year stint as the car-rental giant's director of global marketing prior to joining Castle as a senior vice president in 1999.

Before that, he served as director of sales for Hilton's Hawaiian operations. His track record provides momentum to Castle's aggressive market stance.

Wholesalers are Castle Resorts & Hotels' primary distribution channel, with packages that rely on travel agent sales. With an eye to creating a higher profile among agents, Castle introduced the Five for $50 incentive program, which earns agents $50 for each five-night booking at any of its 19 Hawaii properties. The incentive applies to bookings made either direct with a property or through Castle's wholesale partners.

In addition, Castle typically offers a 50% discount on its daily rates to travel agents booking a visit to the Islands.

Castle's staff on the U.S. mainland run training seminars that emphasize its user-friendly, agent-dedicated Web site, which aims to inform and ease the booking process, with pictures and extensive collateral information.

Castle's recent growth has been centered on Waikiki -- where it had, until recently, only a small presence -- but the company also runs six properties on Kauai, two on Maui, one on Molokai and four on the island of Hawaii. As with the Waikiki inventory, Castle offers both midrange and upscale properties on the Neighbor Islands. 

Inventory in Waikiki is mostly hotel-style; on the Neighbor Islands the majority are condominium apartments.

Mattson said he considered Castle's diverse portfolio of properties a plus, providing access to a variety of overlapping markets and enabling agents to match client to  property based on location and price breaks.

"We're already seeing aggressive pricing and promotions for the second quarter, and we're offering many fourth-, fifth- and sixth-night-free deals through June 30," Mattson said. "Our first quarter was up, but we're seeing a shorter lead time on bookings than in the past. Things are hard to predict past the first quarter."

Castle views the family travel and romance markets as key to its growth strategy, with its midrange pricing, value-added packages and significant condo inventory lending it an edge in both segments.

There's more growth on tap. Mattson figures he's spent more than half his tenure at Castle evaluating expansion possibilities.

"We're looking at adding one property each month into the immediate future with the greater percentage in Asia, although we expect to see continued growth in Hawaii, as well," he said. "There are lots of opportunities out there for us."

Most Castle inventory is priced at $175 or less per night and from $200 to $325 at the top end. The chain offers in-house romance and family packages as well as packages through numerous wholesalers.

Call (800) 367-5004 or visit www.castleresorts.com or www.castletravelagents.com.

To contact reporter Allan Seiden, send e-mail to [email protected].

 

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