How does a CEO rejuvenate a respected brand that became stale?
With Memorial Day kicking off the prime tourist season, I wanted to find out how the top dog at Callaway Gardens is dealing with a family treasure that had fallen on tough times.
No one is a harsher critic of what the 13,000-acre gardens and resort had become than Edward Callaway, the grandson of the founder who’s now in charge.
“From the 1990s to the mid-2000s, we were stuck. We didn’t do much. There was not a lot of innovation and it got real sleepy,” Callaway, 56, told me last week.
Sleep had costly repercussions, as a once top-of-the-mind tourist spot, 80 miles south of Atlanta in Pine Mountain, had become an after-thought for many vacationers.
A common refrain from consumers, Callaway said: “I love Callaway Gardens. I went there 15 years ago.”
The result: Revenue and expenses for the nonprofit gardens and the for-profit resort (golf, tennis, inland beach, bike and nature trails, lodging and conference center) went in the wrong directions.
Revenue fell from $47 million in 2007 to $35 million in 2009 on a combined basis for the nonprofit and for-profit operations, which is how Callaway views the financial picture. Operating cash flow during that time fell from $2 million to a negative $1 million, he said.
There was a mild rebound last year, and Callaway hopes his strategy will continue to pay off. Still, he said, it will take until next year — at the earliest — before the numbers reach what they were in 2007.
Here’s what he’s been doing to try to turn things around:
– Added a new lodge and spa in 2007 through a joint venture with Noble Investments, which provided the capital — something that was in short supply when Callaway took the helm in 2004. The other hotel on the grounds was built in 1956. Up-to-date facilities at the resort drive traffic to the gardens.
– Added a half-dozen new attractions, including “TreeTop Adventure,” which is designed to lure some younger visitors. The daring can “climb, leap, swing and whizz” their way through a dizzying course of zip-lines, swinging bridges, nets and logs.
“We needed a little hook to get them to come back,” he said. He thinks the $200,000 investment could light up the $160 million campus.
– Increased the marketing budget by 33 percent to $4 million a year.
“This is a marketing person’s dream,” he said. “The public knows your product and likes it and wants to use it, but they’re not. … Our message now is to come back to try the new things.”
– Added a residential component by teaming up with Cousins Properties. The real estate crash put a damper on the project. But Callaway still thinks they will be able to slowly add to the 180 homes that already have been sold.
– Cut costs, including employees. At the same time, he said, he is changing the culture to encourage employees to go the extra mile to provide good customer service.
“The real trick is to improve the customer experience while cutting costs,” Callaway said. “It’s all about the people — the employees. These guys will save you or kill you.”
He’s counting on the former.
- Henry Unger, The Biz Beat
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