Cabo San Viejo Rewarding Loyalaty

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Cabo San Viejo: Rewarding Loyalty | Market Management Case Analysis | |

Caryn Harrington

Cabo San Viejo was founded in 1977 by Dave and Florence Blumenthal. It was an inspiration due to Dave’s success in changing his unhealthy lifestyle and creates a place where smokers, overweight people, and others could go to feel better and learn how to live healthier lives. Their mission’s statement is the following: “Cabo San Viejo seeks to help people unlock their hidden potential, so they become healthy, happy, fully self-actualized individuals.”
In the late 1990’s and early 2000’s, the company opened several smaller, branded CaboDaySpa sites that offered spa services without the overnight facilities. In 2005, Cabo San Viejo operated five properties; one full-service resort in Palm Springs, CA, and four smaller CaboDaySpa’s in Miami, Hilton Head, Aspen, and Nantucket Island. Cabo San Viejo has been featured in many publications as the best in the world.
Cabo San Viejo can accommodate a maximum of 288 guests and expanded to include an air-conditioned, 100,000-square-foot spa complex; 4,200-squar-foot golf performance area; and a 13,000-square-foot Aquatic Center. They have about 3,500 new guests per year: 70-80% of guests are female; 82% of the guest have household income of over $150,000. Cost is the primary reason for why the guests do not return; 67% have heard of the resort by word of mouth. Most common reasons for visiting are rest, relaxation, healthy vacation, spa treatments, and fitness. 96% rate their stay highly, most guests live in western California; average guest takes3-4 vacations per year; 32% of first-time guests return within 5-6 years; and 62% of repeat customers return within another 5-6 years.
The summer is the most challenging time of the year and because 59% of guests have less than $150,000 household…...

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