Carlson chief: Loyalty is key in new era

Tuesday, Feb. 19, 2002 | 10:53 a.m.

Encouraging customer loyalty with superior service -- not offering products at deep discounts -- is what tourism companies must do to win customers in the post-Sept. 11 era, the head of a major travel group said in Las Vegas Monday.

Curtis Nelson, president and chief executive officer of Carlson Hospitality Worldwide, parent corporation of a family of privately held companies that span several tourism sectors, addressed 1,600 Carlson managers in an emotional keynote address that kicked off the company's annual business conference.

Nelson's advice to the heads of more than 1,500 hotel, restaurant and cruise ship operators from 80 countries defied Las Vegas' reaction to the terrorist attacks. When tourism fell dramatically after the events of Sept. 11, most Las Vegas resorts reacted by dropping room rates.

This cut into local companies' revenues, as the discounts attracted bargain-hunters that didn't spend as much in the casinos and restaurants. Resorts have gradually raised rates and only recently have begun approaching pre-Sept. 11 revenue levels.

It's the kind of scenario Nelson warned against in his address.

"The best customers are the ones that are value driven, not the ones that have no loyalty and will go to whoever is offering the lowest price that day," Nelson said. "We strive to develop customer loyalty built on a one-to-one relationship."

Nelson said developing customer loyalty is a tactic that could help every part of the Carlson Hospitality group. Under the Carlson umbrella are the Regent International Hotels, Radisson Hotels and Resorts, Country Inns and Suites by Carlson, Park Plaza and Park Inn. The company also has Carlson Vacation Ownership, a timeshare product, and Carlson Lifestyle Living, a resort and hotel built around condominium and townhouse residences for the elderly.

Carlson's restaurant division features T.G.I. Friday's, Friday's Front Row Sports Grill, Friday's American Bar and the Pick Up Stix Chinese fast-food outlets.

The company also has a cruise division, Radisson Seven Seas Cruises.

Carlson Hospitality Worldwide reported sales of $6.5 billion in 2001 and added 222 locations during the year.

Nelson told his managers that the company is capitalizing on customer loyalty and brand recognition with its Gold Points Rewards program, a point-earning loyalty card similar to the slot-club cards offered by most Las Vegas casino companies.

Under the program, customers can earn and redeem points at its hotels and restaurants worldwide. The company also has partnerships that allow customers to place orders on the Internet and receive and redeem points with FTD.com, The Flower Club, Thrifty Car Rental, Dell.com, Nordstrom.com and Handspring.com.

Nelson acknowledged that 2001 was a challenging year for Carlson -- but possibly not as challenging as it was for him personally. The head of the Minneapolis-based company received a liver transplant in late 2000 and could only videotape a message to employees who gathered in Mexico last year. Monday's Las Vegas address by Nelson was his first public appearance since the transplant surgery.

After speaking for nearly 30 minutes, Nelson was unable to complete his address because of an apparent inability to focus and speak. After he stood silently on the stage for a few minutes, he left the stage at the encouragement of his mother, Marilyn Carlson Nelson, chairwoman and chief executive officer of Carlson Cos. Inc., and other Carlson executives.

The crowd gave Nelson a standing ovation, then adjourned to a scheduled reception where they buzzed about what they had just seen.

"He really showed his love for the company and for the people he works with," said Larry Lamb, national account manager for the McCormick & Co. food service group in Kingwood, Texas. "Everybody knows he's been through a lot in the last year."

Nelson returned to the stage this morning and completed his speech, receiving ovations before he began and after he finished.