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Panel Detail:

Tuesday, April 28, 2009
11:00 AM - 12:15 PM

CEO Conversation: Steve Cloobeck on the Value of Providing Excellent Service in Difficult Economic Times

Speaker:

Stephen Cloobeck, Chairman and CEO, Diamond Resorts International

What's the secret to success? According to Steve Cloobeck of Diamond Resorts International, it's "never say no." And when you say yes, "say it with a smile."

Cloobeck came out of retirement two years ago and purchased Sunterra, a public company specializing in hotel timeshares. But the company was in terrible shape. "They were a hospitality brand in thought, but nobody was taking care of it day to day," said Cloobeck.

More importantly, however, the Sunterra management team was missing the point. "Timeshare is not about real estate — it's about taking care of your guests." Sunterra received 60-70 complaints a day — complaints so loud that Cloobeck said they qualified as hate mail. But no one from Sunterra ever responded. The guests were completely ignored. The entire operation was crying out to be re-engineered to focus on customer service.

Cloobeck decided immediately that the company needed to be rebranded. Instead of hiring "a fancy ad agency," they did it themselves. The first strategy was to send customer surveys to their guests in the United States, Canada and Europe and ask them why they were so unhappy. Next Cloobeck and his team took to the blogs. They went to chat rooms to talk directly to the customers. "Nobody had talked to the customers for years and years and years," said Cloobeck.

Based on the results of this customer research, Sunterra was transformed into Diamond Resorts International (now a private company). The new brand has three main tenets: simplicity, choice and comfort. But most importantly, Cloobeck maintains that "we never say no."

According to Cloobeck, no request is too small. If a guest prefers the floral soap that was used during their last visit, a hotel staffer will go find it. If a guest is celebrating a birthday or an anniversary during their stay, they'll find flowers in their room on arrival.

Diamond has 23,000 beds in 21 countries, with more than 400,000 timeshare members. Cloobeck himself has sampled 25 pillows to find the most comfortable one to distribute throughout the properties. He also travels to all of the properties and drops in unannounced to test the quality of service for himself.

When asked about how he is coping with the tough economy, Cloobeck acknowledged that Diamond had been forced to make some adjustments. In October 2008 approximately 500 personnel were let go, most from corporate offices. Cloobeck was also forced to raise maintenance fees by 27 precent.

But Cloobeck believes that for a healthy company, "this is the time to expand," so Diamond is looking to acquire additional properties. The company is currently working to open a location in Greece, and European guests have also requested a location in the Middle East. Diamond Dubai may not be far behind.

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