The Innkeeper's Resource

Service and Marketing, Not Just for Innkeepers

What does Apple Computer have in common with your challenges as an innkeeper? Not much, you say? Well, you'd be surprised, and probably pleased with the reasons and the lessons.

As Pete Blackshaw writes in his Advertising Age article, "How Apple Is Blurring the Line Between Marketing and Service," Apple is an iconic company with some of the hottest products in the world, some of the greatest growth prospects in the technology sector, a history of making some of the hugest blunders in business, and, apparently, a less than stellar record in customer service and tech support. Well, they're trying to change, and in the process are demonstrating some of the most basic addages about marketing: SERVICE (not sex, well, that too...) SELLS.

Apple's new stores are pushing a whole new philosophy (for them) which is that if they provide great SERVICE to their customers, especially when they have a tech problem, the customer is HAPPY! The customer TELLS THEIR FRIENDS. To that end, they are hiring very knowlegable people to solve problems and help sell their products (duh). They call them "service concierges." Now, concierge is a word that has its origins in the hospitality industry, so Apple is just taking a page from you!

The bottom line lessons that Apple has perhaps belatedly learned are threefold. First is that "Service is Marketing." We've written about word of mouth marketing (WOM) in this blog before, and we all know that stellar service is one of the great advantages that innkeepers have over their larger counterparts in the lodging industry. But by providing service even BEFORE the guest books a room, you increase the odds that they will, in fact, book with you. And if they experience service above and beyond their expectations, they'll likely return.

Second, "Problems are Opportunities." In the bed & breakfast industry it's long been said that "a complaint is a gift." When you get a complaint, you have a unique opportunity to make it right. With the explosion of social media, you hear your complaints in places like TripAdvisor. Handled well, that complaint becomes a great marketing opportunity which arguably has the potential to make a bigger impression on a prospective guest that all the nice things people say about you and your inn.

Lastly, Apple has recognized that "Employee authority and passion aids selling." Again I say, what a novel concept!!! You love your inn and can sell a room, right? If you need to speak to someone to do that, you might be missing a sale. Does your passion show through on your website, just in case you don't get a chance to talk to someone before they book? Are your staff empowered to solve problems? Do they really understand your inn? If not, loosen the reigns and see what happens. But before you do, try something different.

We'd love to hear from innkeepers who not only allow but encourage all of their employees, from the lowliest to the mightiest, to spend a night at the inn as a guest periodically. How many housekeepers and servers and yard people might appreciate their job even more if they had a chance to experience it as a recipient? Try it, and tell us about it. Maybe Apple can learn a lesson or two from you. Cheers!

Peter

The site you love to hate...or hate to love?

Without a doubt, one of today's biggest lightening rod topics for innkeepers is Trip Advisor and the broader topic of social media.  "I don't like this new way of reviews!  How can this be good for me?  People are 'gaming' the system. I can't control what goes on! Who cares what other people say?"  Sound Familiar?

These comments are usually made by the innkeepers that initially resisted the internet...then resisted online availability...then resisted online bookings.  But times change and so does the technology that we all must embrace to be competitive and visible to today's Contemporary Traveler, the i.guest. 

The information about today's traveler, as generated by various research organizations as well as anecdotally by The B&B Team, shows without a doubt, that our guests today are technologically demanding high quality websites, great photography, and the option to book their lodging stays online!

We can't forget that we are still in the hospitality and people business, but to be successful, we all need to embrace the tools that technology offers our guests...and us too.

It's interesting that within the last 48 hours, two articles about Trip Advisor and social media have surfaced from two very different points of view and sources.  What is even more interesting is that they both clearly recognize the importance of this new transparency in online information.

Our own innkeeping organization, PAII, released a Position Statement, "The largest international association of innkeepers is promoting standards to ensure fair and ethical use of online guest review systems -- one of the fastest growing segments of so-called "social media" on the Internet."

Almost simultaneous to this release was an online article from BudgetTravel on msnbc.com about the Top 10 Travel Innovations from the past 10 years...and Trip Advisor was rated as the 3rd most important innovation!  Why, because, it "takes the guesswork out of deciding where to stay" and "empowers travelers to make smart choices".

What's it all mean to us?  Technology continues to advance and we all need to embrace it, but in so doing , do it with a sense of fair play.  In the end, we all benefit!  Your thoughts?

Rick

Pet Travel Niche Remains Strong

In The B&B Team's seminars for aspiring innkeepers we devote a section to niche marketing. One of those niches is pet travel. Everyone knows that pets are a big deal in America and that a large number of people like to travel with their furry companions. Years ago my parents had a very difficult time finding places to stay with their dachshund, but I dare say that it is easier today.

Some bed & breakfasts and inns have recognized the pet travel trend and have turned a small niche into a lucrative part of their business. Some, like the B&B at Ponder Cove near Asheville, NC, have made it the focus of their business! In a short article on 2008 Pet Travel Statistics reported by BringYourPet.com and presented in Hospitality Trends, there are some remarkable statistics. 75% of those taking the survey said they frequently take their pets with them when they go away. A significant number, 43.8%, stay at pet-friendly lodgings three or more times a year! While 38.5% say it is difficult to find pet-friendly lodging, a full 63% would lengthen their stay if they could travel with their pets.

What I found interesting when visiting BringYourPet.com was the significant number of hotels that provide pet-friendly lodging, and a quick glimpse showed that La Quinta has clearly made a statement that, if you are traveling with your dog or cat, look for their sign. La Quinta isn't a luxury chain, and many who want to travel with fido want luxury for their pet as well as themselves. Maybe the boutique lodging industry needs some kind of "pet-friendly" certification which could be used to identify all inns that will take cats and/or dogs and which adhere to a certain standard, kind of like a AAA for pets! Any ideas? Pass them on right here.

Peter

Transparency of Inn Reviews, Help or Hindrance?

I just read a GREAT article by Gregg Swann of Bloodhound Realty entitled "Why Do We Link In a Web 2.0 World?" While the blog post is geared toward real estate professionals, the observations and wisdom are worthy of anyone in commerce to consider, especially innkeepers. It's all about transparency.

At the PAII conference we heard about "Transparency Tyranny," and lots of innkeepers continued to fret about online reviews and how bad they are. Gregg Swann points out how the issue of transparency is really about honesty. People want to buy a product or a service, and they just don't know whom to trust. The old fashioned marketing as monologue was where you told me how great your product was, and I was supposed to believe you. But, too often, you told me what you wanted me to hear, and when I thought was buying a rabbit, in actuality I got an empty hat.

With Web 2.0 and Travel 2.0, marketing is a dialogue between the provider and the consumer and between consumers. To the extent that a prospective guest at your bed & breakfast can read what others say about you, they gain a measure of confidence, especially if those comments and reviews reinforce what you have said about your inn. That shows honesty.

"Transparency and verisimilitude both mean the same thing in this context: This is real. People are so used to marketing trickery that they expect it everywhere. The challenge for anyone seeking to change minds in the Web 2.0 world is to take away that expectation. Transparency doesn't mean I am obliged to disclose to you the color of my underwear. Transparency means that if there is any possibility that you could entertain the smallest doubt that I am effecting some kind of sleight of hand to trick you into doing something you otherwise would not do, I have to give you the means of eradicating that doubt to your own satisfaction." (Gregg Swann) The means to eradicating that doubt in travel is reviews. To the extent that you promote them, encourage them, and make them accessible, travelers will trust your honesty, that you have nothing to hide.

Gregg concludes his post with words that are very apropos to innkeepers and which echo what we have been saying for a long time. "...Web 2.0 consumers are already pretty sophisticated [the i.guest] - and everything they do on the nets teaches them how to be more sophisticated. If you are not willing to be completely transparent in your online marketing presence, consumers will gravitate, one by one, to people who are willing to back up everything they say."

At The B&B Team we buy into this concept for ourselves as well as our clients. One of our mantras is that you hire us to tell you what you need to know, not what you want to hear. We think that's the honest thing to do. And we have absolutely no qualms about giving you every opportunity to interview past clients. In fact, we think you should. Your reputation for honesty and transparency is something that no one should take away. And if you feel that people are seeing the color of your underwear, then maybe you have to examine what you're wearing!

Peter

A Summer 2008 Viewpoint

“The twin effect of the economic downturn and the increase cost in gas prices just has people more economically-minded than we have seen since 2001, “ says Rod Caborn, executive vice president, at Ypartnership, a leading consumer research firm.

Another piece of great news...except that this quote is coming from HotelMarketing.com and is directed at the hotel chains and particularly the Super 8's and Days Inn type of properties.  Higher end properties seem to be exempt from these concerns.

Others offer a more upbeat assessment of the US market. "It's not quite as terrible as Wall Street makes it out," says Jan Frietag, vice president global development for Tennessee-based Smith Travel Research. He suggests the gloom cast by Wall Street's credit woes has led to a "disconnect between Wall Street and the Main Street operators."

Most certainly, we in the B&B and Country Inn business would fall into the latter category...the higher end.

There is some concern out there that we may again see a round of lodging discounts as we saw post 9/11 in an attempt to fill rooms.  Needless to say, that type of random discounting didn't work and there is no reason to believe that it either is necessary or will work now.

From a series of our own phone calls, emails, and other personal contacts, we're hearing some pretty positive things about the summer.  Rates are in many cases up...advance bookings are coming in...and the consensus is that Americans will still be taking vacations, tho' fewer will go to Europe because of the weak Dollar/Euro exchange.  So where will Americans go and stay?  Here at home!  For 2008, we have a traveling American public and projections for more Europeans and Canadians coming to the US for their vacations.  Could make for a good mix!

It's still not too late to evaluate your rates during the shoulders and/or even to see if there is any upward mobility for measured peak season rate increases.  The point is that once again, there is still time to take a look at your strategies to drive business to your inn.  Look again at your site for relevant content, good pictures, creative packaging, and to be sure you are offering (your promise!) a uniquely wonderful experience to your guests.

The business this year may come with some aggravations, but creative innkeepers will be the ones to garner the lion's share of the business in 2008. Don't sit on the sidelines and just let things happen...be one of the movers and shakers and make things happen!

As always, we love to hear how you are seeing the market and what you are doing to be one of the movers and shakers!

Rick

The Challenge of Declining Leisure Travel

Alright, so the news about leisure travel for 2008 isn't great. In fact, it's a bit alarming. But all is not lost!

According to the 2008 National Travel Monitor, as reported in Ypartnership's recent article "Would If I Could," there are several reasons why 16% of leisure travelers plan to take fewer trips this year. There are those that you'd expect, like "Current economic conditions make it difficult for me to travel" or the "Price of gasoline is too high." While people's Time Poverty continues to be an issue, economic issues seem to prevail this year more than in 2007. So, what's an innkeeper to do?

Let's look at it this way: the travel "pie" is made from a pot of blueberries. If you look around you, there are a certain number of inns who are sitting at the travel table, and each wants a piece of pie. Naturally, each wants the biggest piece! But, not only are there a finite number of pieces to go around, but the pie itself is slimmer this year. So, how do make sure you get your share? Or better yet, how can you get the biggest piece of a smaller pie?

Some would argue that it's not fair for one inn to do really well while others around them are struggling. I've even heard that there are innkeepers who feel that referrals should be shared in an equitable way! Needless to say, this doesn't wash with those bed & breakfasts that get the lion's share of referrals. After all, these are the innkeepers who are delivering an exceptional experience day after day, week after week, season after season. They are also the ones who have figured out how to reach their guests who are increasingly weary, worried, and wondering how to spend their hard earned dollars. When things are tight, people do like to splurge once in a while, and travel close to home, to a B&B for instance, is a great way to go.

So, dust off your thinking cap and put on your spectacles! Look at your inn's "experience offering." What separates you from other bed & breakfasts in your area or region? How is your marketing? Does that website need some tweaking? New pictures? SEO? Are you engaging your future guests? Do you understand your guests and how to market to them? If your revenues are declining, or you're worried that they might because of the prospect of fewer travelers, now is the time to increase your marketing budget. You absolutely cannot cut back or you will ensure a self-fulfilling prophecy. Have you been doing some creative things to attract leisure travelers in a declining market? Is your piece of the pie bigger than everyone else's? Tell us about your successes (but you don't have to share the recipe)!

Peter

Innkeepers and Taxes. Are Yours Done Yet?

Every year on April 16 many of breathe a sign of relief that our tax returns are finally filed and (gulp) we've stroked a check to Uncle Sam for what has hopefully been a profitable year. Procrastinators file extensions but still have to pay up. Many innkeepers, especially those with smaller properties, are often pleased that they don't, in fact, have to write a check to the government, because, on paper, they didn't make any (or not enough) money. It's the magic of cost recovery, which is what we call depreciation these days.

Depreciation is a wonderful thing for real estate investors and people who own business equipment. It saves money in the short term. And, if a bed & breakfast has been successful and had a profitable year, the depreciation helps soften the blow at tax time. But there's a danger in obsessing too much about paying (or avoiding) taxes.

Many innkeepers run their business as if avoiding taxes was their reason for existing. You run your food through the business, your car payments, your vacations, your club memberships, and maybe you don't bother to allocate the portion of utilities and property taxes that are not exclusively for business use. And your bottom line looks terrible. Yay! No taxes this year! But guess what? There's a price to be paid when it's time to sell.

Buyers of bed & breakfast businesses, if they are looking for a business and not a hobby and tax shelter (which B&Bs are great for) are scrutinizing financials very closely. Banks are looking even more closely. It isn't going to sell the inn to tell someone that you really do make money if only your personal expenses weren't all run through the business and showing as deductions on your tax return. If you're selling an inn business, and there's value in the business, you must show as healthy a bottom line, net operating income, as possible. This is what creates value, and it's what a buyer can take to a bank.

So, if you plan to sell your bed & breakfast inn in the next 3-5 years, now is the time to clean up your books, take only your allowable deductions, and show as much profit as you actually can. Depreciation will still soften the hit, but look at it this way: If you have to pay taxes, it's only because you actually made money. Yay! (That's a real cheer this time!).

Peter

2008 Inns and Bed & Breakfasts For Sale Study

For the fourth year Inngenium, LLC, Lodging Management Consultants has completed a fascinating study of the marketplace of inns and bed & breakfasts for sale nationally. The only study of its kind, it looks at the availability of properties for sale that are actually current or former inns (excluding those marketed as "potential" B&Bs). The study's author, Hilary Jones, looks at each state individually, then aggregates by region and nationally. The result is "a snapshot of the inn and B&B real estate market."

To put this year's report into context, the residential real estate boom of the first five years of the millennium are over; the real estate and mortgage markets are in turmoil; prices in many areas of the country have plunged, and inventories are at all time highs. Therefore, it is very illustrative to note that the B&B market has tracked that trend similarly.

Nationally, inventory of inns for sale is up 26.3% over 2007. Average asking prices have also tracked residential trends with prices generally showing a decline, the exception being at the very high end. In the 5-10 room category, prices have declined 7.3% to $1.1M in the past year, while prices are down 8.7% to $1.7M in the 12-15 room category. There were also some individual records set in this study, with the lowest price nationally being in Texas ($160,000) for a bank-owned B&B, the most expensive bed & breakfast (no restaurant) at $8.5M in Florida, and the highest price inn of any kind recorded (a full service property in Pennsylvania) for $10.5M. The price range with the highest percentage of inns for sale was $750K - $1M, with 22.4% of the properties falling into that category.

Of particular note, twice as many inns as last year (43.6%) have been on the market more than a year, and 24.2% have found their way into the study for the past two years. This confirms what professionals in the industry have long said that marketing periods of 2-3 years for an inn are not unusual.

The B&B Team, Inc. was please to be the sole corporate sponsor of the 2008 Inns and Bed & Breakfasts For Sale Study. For a copy of the report, please contact us.

Recession Proof Vacations

Are we entering a recession?  Are we in one? Are we going to avoid one?...I don't know but seemingly neither do the talking heads and economic pundits.  Nevertheless, the topic of Recession Proof Vacations hit the news this morning.

Not sure how many innkeepers had the time to watch the Today Show this morning, but there was a very interesting piece about travel with host Matt Lauer and travel editor Peter Greenberg under the heading of Recession Proof Vacations.

The nuts and bolts of the piece revolved around several topics, some relevant to our industry, and others more relevant to the larger hotel chains...but for us the key points are, the US is a bargain for overseas travelers due to the strength of the Euro, Yen, Canadian Loonie, etc.

Next key point is that people should investigate the shoulder seasons as good times to travel as rates are often lower than during the peak season.  So far so good!  Next came the question about staying at the smaller B&B "hotels"and Greenberg's response was for vacationers to look at the midweek, check in on Sunday and check out Friday morning, as the ideal time to stay at B&B's because as he put it, the B&B's make their money on the weekends.

Nothing new here as we've always been concerned about increasing the off/shoulder season business and the midweek business, but when you have high profile people and shows , like the Today Show giving advice to travelers on how to get the most bang for their buck by traveling during the shoulder/off season and staying during the midweek, it creates a potential WIN-WIN situation for all!

OK, now what to do?  Review your marketing strategies and your website to see if you truly are making your property attractive to the foreign traveler but probably more importantly, have you created a legitimate reason and call to action for today's contemporary traveler, the i.guest, to book a stay with you...when you really want ( and need)  to see them, during the shoulder season Sundays through Thursdays?

If after your review, the reasons to exercise your call to action/make the reservation aren't there...create them and now.Take a few minutes and turn this newsworthy topic into a money making opportunity!  We'd love to hear from you with some success stories!

Rick

Online Travel Satisfaction Declines

An interesting article from HOTELMARKETING.com talks about a decline in consumer satisfaction with the online travel industry. This comes at the same time that overall consumer satisfaction with online commerce is rising. Is this a problem for our innkeepers?

To the extent that the report from the University of Michigan and ForeSee Results focuses on the portals like Expedia, Travelocity, Orbitz, and Priceline, it doesn't matter, as most small inns don't use these travel sites. However, if you do use them, realize that the public perception, while not bad generally, has declined for two years running.

It seems to me that this report reinforces the mantra that unique inns excel at one thing above all others: personal service and doing a good job of assuring guest satisfaction. If you're monitoring the travel review sites like TripAdvisor for comments about your bed & breakfast, you'll know if your guests are feeling truly satisfied with their travel experience. If not, you need to pay attention. As Larry Freed, president and CEO of ForeSee Results, said, "...survival in this economy depends on customer satisfaction, because switching costs are low and an alternative is just a mouse click away." Does that sound like "online booking?" It does to me!

Of importance, Mr. Freed also says, "Standing still is not an option. As the smaller players change the game, satisfaction with the big players will decline if they just tread water." While he's talking about online travel aggregators, it sure sounds like good advice for innkeepers, too. The travel industry is up for grabs. Who will be around and flourishing five or ten years from now?

Peter