So, I have been reviewing a couple of surveys we have done recently here at BedandBreakfast.com. One survey in September was directed to inngoers and had over 3,500 participants; another went to innkeepers in June and had almost 1,000 participants.

After looking at the results side-by-side, the thing that struck me as the most odd, was the huge gap/disconnect between inngoers desire/demand to be able to book a room online, and innkeeper's perception of that demand.

Our September survey showed that a full 89% of consumers felt that the ability to actually make a reservation online (not just do research online then call the property) was between important and essential. That's almost everyone...!! To look a little deeper, 50% said it was "very important" or wouldn't book a room at the property without it. That's half of all potential guests saying they want to book their next stay online. If you do not offer them that as an option, you very likely may lose their business.

Now, I recognize that we sell software that allows innkeepers to offer this option/service for their guests. But let me assure you our research only supports virtually everything you read. Regardless of the research house you are reading industry publications from, they all say that consumers want to book online and that next to third-party peer reviews (another subject) and photos, it is at the top of the list of requirements.

So how can it be that only 8% of innkeepers felt that offering online reservatins for their potential guests would help them sell more rooms...? Somewhere, somehow we in the industry are not doing a good enough job of helping innkeepers understand the importance of offering their guests the ability to make a reservation without picking up the phone. I doubt many innkeepers would run a B&B without a toll-free number; online reservations have become as important. It does not matter whose technology innkeepers use -- there are many providers. But innkeepers have to choose one and get on board with online reservations before it is too late. The time seems to be fast approaching.

Now "maybe" if you are running 90% occupancy regardless of what you do with your rates (ie. you raise them and raise them and people just keep coming), you don't need online reservations "yet!"...  And clearly, like all innkeepers, all B&Bs are different, and that's one of the great things that makes B&Bs unique. But I truly feel that we as an industry have to make it easier for folks to come stay with us without picking up the phone (new guests but even repeat guests). Until we do that, we will continue to struggle with increasing our share of the lodging pie.

Thoughts? 

Need R&R?  Go B&B!

Eric

While we have been emphasizing the increasing importance of offering online reservations both on your website as well as through distribution channels such as Expedia, hotels.com, Kayak, Travelocity, etc., this new study from the well-known Ypartnership makes it clear how important online reservations are to running a successful inn. (CEO Peter Yesawich is recently spoke at the PAII conference in Atlanta, and is well known to many innkeepers).

As reported in Hotel Marketing.com:

"While the percentage of leisure travelers who report making reservations online has grown more than thirty-seven percent (37%) since the year 2000, “Consumers’ search behavior has changed in recent years as people have become more familiar with search technology and the number of travel planning/purchasing sites has grown exponentially,” said Peter C. Yesawich, chairman and CEO of Ypartnership.

"According to the just-released National Travel MONITOR(SM), fully sixty-six percent (66%) of leisure travelers now use the Internet to plan some aspect of their travel (versus 35% in 2000), while fifty-six percent (56%) now report making reservations online. The nationally representative survey of 1,590 active travelers was conducted during the months of February and March, 2009, and is co-authored annually by Ypartnership and Yankelovich, Inc.

"Travelers visit search engines such as Google, Yahoo or MSN first (34%) when considering vacation destination alternatives. The Web sites of specific countries or destination boards are visited next (23%), followed by online travel agencies such as Expedia and Travelocity (22%). Only one percent (1%) of travelers commence their search for a vacation destination by visiting a blog.

"Search patterns for selecting an airline or lodging accommodation are understandably different. Consumers who are searching for these travel services first visit the Web sites of online travel agencies (42% and 31%, respectively). Brand-specific sites (41%) follow closely when leisure travelers are selecting an airline, yet significantly less so when they select lodging (21%). Meta search engines that compare fares are visited first by over one-out-of-ten travelers (13%) when selecting an airline."

If the only way prospective guests can book a room at your property is by telephoning or emailing you, there is absolutely no question that you are losing reservations every single day.  Adding the RezOvation Booking Engine or Webervations to your website will increase your occupancy immediately, and at no risk, so please contact Sales@RezOvation.com or call (866) 565-1800 for details.   Participating in BedandBreakfast.com Online Reservations is now easier than ever, thanks to seamless links for both RezOvation and Webervations customers, and gets you in front of those 22% of travelers who head to the big online travel agencies mentioned above.

Peter Yesawich, Ph. D, president and CEO of YPartnership, discussed consumer travel habits, preferences and intentions during the third virtual Resort Conference webinar session, “Emerging Lifestyles and Travel Trends: Implications for Resort Marketing,” sponsored by Hospitality Sales & Marketing Association International (HSMAI). The 90-minute session presented research findings revealed in Ypartnership's National Travel Monitor™ and travelhorizons™ surveys, and their implications for future resort marketing practices.

Yesawich noted that their Traveler Sentiment Index is on the upswing, with the biggest factor being the perceived current affordability of travel, cited by 97% of surveyed travelers. Also, despite the economy, “54 percent of active travel households are planning travel in the next six months, up from 50 percent last year.” Travelers are “trading down, not out.” Consumers are seeking out packages to book, staying fewer nights, and comparison shopping online to save money.

“Personalization will become the new service strategy for many resorts,” Yesawich stated. “As consumers become more comfortable with the idea of paying a premium to get what they want, personalization will become key.”

Yesawich also touched upon the issue of time poverty and how many travelers feel that they don’t have enough time for vacations.

“Ease of access is the single greatest challenge for resorts in remote locations,” said Yesawich. “If a consumer is going on a four-day vacation, they don’t want to spend two days traveling, and are more likely to pick a closer vacation spot.” He also noted that, according to their research, “the older and more affluent you are, the less interested you become in traditional resort destinations, and the more likely you are to choose an urban destination.”

So what does that mean for innkeepers? The typical B&B experience is exactly what today’s traveler is looking for: 

• great value
• personalized experience
• one-tank trip

Make sure you are messaging these features on your website and on your BedandBreakfast.com listing, and be sure to log in to your Home Base to add a Tanks for Traveling special.

PhoCusWright is the travel industry research authority on how travelers, suppliers and intermediaries connect. President and CEO Philip Wolf has spoken at the PAII conference and other innkeeping conferences, and we are frequent attendees at PhoCusWright events. Because so many innkeepers are Baby Boomers, we thought this article was especially relevant to innkeepers: Move Over Boomers, Y Has Come of Age: Some excerpts:

• “Bailing Boomers: The report reveals that trailing-edge baby boomers (45-54 years old) actually spent the least of any age group per household on travel. They are also the most likely to reduce their travel spending in 2009, with 27% planning reductions in travel frequency and spending. Stuck in a middle-aged slump, trailing edge boomers with children in college, devalued homes and ravaged investment portfolios have been among the hardest hit by recent economic struggles.

• “Gen Y spenders: On the other side of the spectrum, 18-24 and 25-34 year olds are more likely to increase their travel spending in 2009. In particular, 32% of 25-34 year olds (the group that spent the most on travel in 2008) plan on spending more in 2009. So why is Gen Y spending more? Beyond their cultural branding as being free-spending or experiential, they are less likely to be burdened by high-fixed expenses or to have suffered significant investment loss. They also have plenty of time to save up for retirement, so they are not afraid to reach into their wallets. And fortunately for the industry, travel is high on their to-do list.

• “Travel Marketers Take Note:As the U.S.travel industry suffers through a predicted 11% decline this year, age-specific targeting may help improve marketing effectiveness. Young travelers are scanning online travel agencies and metasearch engines in their quest to see the world. Boomers will appreciate quick, affordable, "off the beaten path" (think quaint, not exotic) getaways that allow them to unplug from their stressful everyday lives. The right age-driven spin might be just the trick to cutting through the din of deals in the marketplace this year.”

For more details on the report, click here.

Our thoughts?  Good news is that B&Bs are typically a perfect fit for Boomers looking for “quick, affordable getaways. Although most innkeepers have done a fantastic job of providing the free wifi access that Gen Y expects, there’s definitely room for improvement in the area of such things as updated décor (as in death to doilies and forget the florals), iPod docking stations, flat-screen TVs, online reservations, website video, and a social marketing presence with reviews/blogs/Facebook/Twitter.  

Many B&B and travel associations are encouraging members to educate their employees so that they are doing everything possible to safegaurd the health of guests and themselves, educate their sales and reservations staff so they can respond to any questions from guests about the flu, and institute extra procedures to ensure that door knobs, TV remotes, phone hand sets, etc. are sanitized.
 
Hoteliers may send business-specific questions to DHSPandemic@dhs.gov or contact the Center for Disease Control and Prevention (CDC) Hotline at: 800-CDC-INFO (1-800-232-4636). This line is available in English and Spanish, 24 hours a day, 7 days a week. TTY: 888-232-6348. E-mail questions to inquiry@cdc.gov.

As of April 27, there have been no reported cases of swine influenza found in U.S. hotels. The CDC recommends that U.S. travelers avoid all nonessential travel to Mexico; the World Health Organization advises no restriction of regular travel or closure of borders. 
 
Official resources include the following. Thanks to the California Hotel & Lodging Association for compiling this list.
 
2009 Swine Influenza Event

• Center for Disease Control Twitter feed
• CDC Questions & Answers
• CDC website on the 2009 swine flu outbreak
• One-stop access to U.S. Government swine, avian and pandemic flu information
• AH&LA statement on Swine Influenza - (April 27, 2009)

Lodging Business Planning for Flu Outbreaks (2005)

• AH&LA Flu Preparedness Plan: detailed information on what hotel businesses can do during flu outbreaks
• AH&LA Hotel-Specific FAQs: hotel-specific questions about flu outbreaks
• Preparing for a Flu Pandemic: AH&LA's tips for hotels during an outbreak  

Government Resources for Influenza Outbreaks

• Preparing Workplaces for an Influenza Pandemic: how to maintain business operations during a flu pandemic outbreak
• Proposed Guidance on Stockpiling of Respirators and Facemasks in Occupational Settings: information about equipment needed during a serious flu outbreak
• CDC/HHS Business Pandemic Planning Checklist: use when planning for a pandemic (November 2005)
• State Pandemic Plans - All 50 U.S. states have pandemic plans, online via this central webpage

Crisis Communications Resources
Risk Communications Resources - Pandemicflu.gov communications resources on swine and avian flu

Has your inn been affected by the swine flu? Have you received any cancellations? Please share your thoughts.

With over 7,500 member properties, I am fortunate to get a lot of opportunities to visit with a large variety of innkeepers from around the world.

It seems that more innkeepers are finally trying to get a better understanding of their Return on Investment (ROI) from their various marketing spends - which is great and is ultimately how innkeepers can determine what is a good marketing spend and what is not. One thing that seemed to stick out to me in these discussions is that it appears most innkeepers are looking at the revenue they get from a customer only for the initial/first stay. The vast majority of inns (certainly all worthwhile properties) still get a fair amount of their business from repeat and referral/word-of-mouth. To get a clear understanding of your ROI, you need to know your lifetime value of a guest (LVG).

It's not just about the room revenue the guest represents for their stay, but any and all revenue for as long as they are customers. This includes items such as gift shop sells, dinners, and assorted add-ons (massages, picnic baskets, etc.), as well as additional revenue derived through their repeat business (how many times does the average guest return) and how many people do they tell (word of mouth). Only once you know this do you know the true value of a customer and can determine what you should be willing to spend to acquire that revenue. 

An easy example: Let's assume an innkeeper takes a reservation for their average stay -- two nights at $160/night, representing $320 in revenue -- and that this innkeeper paid 25% for this reservation ($80). If the innkeeper looks at the total revenue the guest represents over their lifetime value, they will get a different picture and a much more realistic understanding of the value of their marketing. If this same innkeeper sold two nights at $160 a night (for $320), but also sold $70 in add-ons, and then realized that 50% of their guests came back, so they added 50% of their average stay ($160), and that word-of-mouth represented 25% of their business so they added another 25% of the average stay (or $80), then you realize that this one reservation easily represented  a minimum of $630!  That's without factoring in that the word-of-mouth customers will also generate repeat and word-of-mouth business as well as anciliary sells.  

Now you see that paying $80 to get $630 in revenue makes the cost of acquisition about half of what you originally thought as a percentage ($80/$630 = 12.6%, versus 25%).

So next time your phone rings and you are completely vacant that night and are trying to decide if you want to take the reservation or not so you can sleep in in the morning, make sure you think through the lifetime value of the guest, not just the revenue they represent to you today! Likewise, when choosing where you spend your marketing dollars and what gives you a good ROI, make sure you are looking at the total amount of business you get from a marketing spend by factoring in your LVG.

Need R&R? Go B&B!

Eric

I just read an article on the Travel Weekly website saying that people are traveling but taking shorter trips... 

It's clear that people still need to get away regardless of the economy. Plenty of research shows that folks still want to get away, but due to the economy they are taking shorter trips AND they are staying closer to home.

Staying closer to home helps because not only are they not spending money on air -- they are taking their car -- but they also don't want to spend 20%-40% of their getaway time messing with traveling to/from their destination.

Bed and breakfasts and inns are a perfect solution for these short 3-4 day getaways! There are over 15,000 unique properties scattered throughout the United States. So wether you are looking for Victorian charm in the countryside or modern in the city -- there is something for everyone. In addition, B&Bs are a great value compared to hotels since most properties include a full home-made breakfast, many even include afternoon snacks/wines/cheeses, and most have free parking and free Wifi, no daily resort charges/fees, and the best concierge's in the hospitality industry - the owner!

The article states that many folks are looking to spend less than last year (shorter trips = less money spent). Now is a great time for innkeepers to make sure they are doing what they can to shield their rate integrity and protect their RevPAR by packaging and bundling. You don't have to cut your rates to provide more value! Create some packages with massages. wine, dinner -- anything that you think potential guests would want and that you can buy at a discount and package in with your room and set a price point less than it would be if the consumer bought the items seperately/by themselves.

Innkeeper's can also use this trend to try and turn 1 and 2 night stays into 3 and 4 night stays! Have a "Stay Friday and Saturday nights and get Sunday for free" if you usually cannot sell your Sunday rooms anyway. You could even have a boxed breakfast for them to take with them in the car as they leave in the morning on their way to the office/home. Or buy three nights and get a fourth night free.  By offering a limited time offer that gives them an effective discount without you decreasing your rates, you are in a better position as the economy improves to simply not extend the special promo any longer as you do not have to raise your rates.

Need R&R? Go B&B!

Eric

We’ve gotten a ton of inquiries after the Reuters article about booking a B&B and getting a computer virus. We’ve contacted them, and so have a lot of innkeepers, to express our distaste on them singling out the B&B industry when it really is applicable to many many small businesses.  

Unfortunately, I don't feel the old phrase “there’s no such thing as bad publicity” applies here. But if nothing else, this is yet another wakeup call on credit card security. It seems a lot of innkeepers are feeling blindsided by all the credit card security talk out there. PCI security has been around for a number of years now, but it has never been easy to figure out – whether you are an innkeeper or even a company like BedandBreakfast.com. We started doing daily McAfee scans almost three years ago, back when they were called HackerSafe, but the landscape has changed a lot since then. We are by no means experts on it, but we feel we have a decent understanding. For those who wish to really get the details and make sure they are hearing this directly from the experts, you should read a publication put together in part by the AHLA – this is the most thorough guide we’ve seen yet and truly a great example of how lodging is leading the charge. Hats off to the authors for their painstaking effort on this – it is a very well-written document. 

I’ll try to explain how I understand this, hopefully getting it correct...

Right now, every provider of PMS software or services, from what we can tell, is considered to be a Level 2 "Service Provider", and/or a "Payment Application". You are a Service Provider if you grab or store credit card data in any way, and you are a Payment Application if you transmit that data electronically in any way for the actual authorizing or payment from a credit card. 

So from looking at the Spring 2009 issue of PAII’s Innkeeping Quarterly: 2009 Technology Guide for Innkeepers, companies like: Availability Online, NetBookings, and TCS would fall under only the PCI Level 2 Service Provider standards since none of them provide any integrated credit card payment gateway (according to the guide). Most everyone else - RezOvation, Webervations, Booking Center, Resnexus, SuperINN, RezStream, etc. - would fall under both the Payment Card Industry Data Security Standard (PCI DSS) AND the Payment Application Data Security Standard (PA-DSS) since they also transmit the credit card data.

The good news is that PA-DSS is crystal clear. You must have a 3rd party external audit to be compliant. As of last October, no company without a PA-DSS certification was supposed to take on any new customers that use credit cards in any way. As of July 2010, no customer, period, can use an application like these without having passed a third-party audit. Currently RezOvation GT is the only product that we are aware of that has successfully passed a full level one PA-DSS audit - although I’m sure other companies are in the process since it is an absolutely firm requirement. Companies that pass will be listed on the PCI website, which is updated roughly every month. If a company is not shown there, then they are not certified or were just recently certified. By July of 2010, all processors will be prohibited from working with merchants unless they show up on the list. 

The PCI DSS for "Service Providers" also has to be met – but this one is a little fuzzier. Since basically all vendors selling software products & services in the B&B industry are categorized as a Level 2 Service Provider (fewer than 300,000 transactions/yr), it means that basically everyone can do a self-assessment and claim they are PCI certified. A Level 1 provider (greater than 300,000 transaction/yr) must have an external audit. You can imagine how reliable a self-assessment is - and it can be private so you would never know what it says - just that the company says they passed it. So unfortunately there really is no way to know if a company is compliant or not unless they go through an external audit. The scans from companies like McAfee are not enough. And it may not even matter – because banks are already starting to ONLY allow credit card information to be collected/saved/transmitted by companies that go through a Level 1 external audit. So pretty much everyone is going to have to do what is necessary of the big sites - a full external security audit. We were actually already informed by People's Bank that they are going to start enforcing this - now. 

What does this mean? Well for starters - there are no level 1 PCI compliant products in the market that we know of - not us, not SuperINN, Resnexus, Availability Online, no one. The only product we know to have undergone an external audit is RezOvation GT - and that just recently passed. This is good news for innkeepers though – as it is going to provide an enormous incentive for everyone to be externally audited – allowing innkeepers to rest more easily. We have already begun the process of going through an external audit for the other pieces of our business, and we’ve already started making changes to Webervations to comply. We’ve generally kept RezOvation and BedandBreakfast.com up to par with Level 1 standards, but will be making any and all necessary changes that the auditors find as well. We expect that other companies will start going through this too at some point as they really have no choice. For the industry as a whole – this will be great news. Hopefully the next article we see in Reuters will talk about how the B&B industry and providers like RezOvation and Webervations led the charge to put industrial-grade security practices in place for small merchants!

My advice to innkeepers...  Unfortunately we are aware of some widely used products in our industry that say they are compliant but are not. For instance - one company posts its own self-audit online - and the audit shows they failed in a number of areas. So anyone using this system knows they are using a non-PCI-DSS/non-PA-DSS compliant product, that hasn't passed a self-audit. Another stores full credit card and CVV data, which is  expressly against the PCI compliance rules. Another doesn't encrypt anything at all and stores all the info including CVV right on your desktop in an Access 2.0 database from the 1990s. A lot of companies think the quarterly HackerSafe seal is enough to be compliant. That is not correct. If you are innkeeper using a system that you know stores things like CVV or that failed a PCI audit - then you could be held liable in the event of a security breach. The unfortunate part is that PCI insurance is null and void if you are using non-compliant software.

I would highly recommend that when you are looking for a software platform or booking engine/availability calendar, find a provider that has passed an external PCI/PA-DSS audit so you don't wake up one day and hear that the bank is no longer going to allow you to process credit cards, or worse - that you are liable for a security breach because you used software that was not compliant.

We'll try to keep you guys up-to-speed on things relating to this as they develop. 

Respectfully,
Eric