I’m happy to announce that after months of hard work, Webervations now offers seamlessly integrated credit card processing through QuickBooks Merchant Services.

This is one of the biggest new features we’ve launched on Webervations since we acquired the product only a year ago. This new functionality allows innkeepers to automatically charge a deposit for online reservations, and process charges / swipe cards , etc. Customers can now do full lodging-certifed processing through Intuit/QBMS the same as RezOvation GT customers have been able to do. The new functionality will include full swiped-rates, as well as automatic deposit charging. This isn't just a virtual terminal tied into Weber 1.0, but a fully blown-out cc processing product that will take credit cards online in the booking path if you want to, charge them at reservation, take a deposit, and so on.  And to make it even better, it's the same exact pricing and deal as Rezo GT -- nothing up-front, no long-term contract, no early termination fees, and the same great low-rates. We are wiping out the $35/month surcharge that Webervations used to have. This will save innkeepers currently using Webervations credit card processing over $400/year.

This new feature is the latest in what is becoming a long list of upgrades we have made to Webervations in the short time we have owned it including:

• A ton of work on the back-end with server and databse response times and redundancy
• A new custom association building tool
• Linked it to the BedandBreakfast.com online reservation program allowing users to participate in the program and manage all of their rates/inventory through Webervations
• Fixed all kinds of bugs
• Fixed issues with analytics tracking
• Put in all new data security and encryption
• Installed Verisign and HackerSafe
• Launched optional monthly billing
• Are doing a full Level 1 PCI audit on the product

In general, we have really invested in the product all around. We think the new credit card processing is a huge addition to the product and we are really happy to be able to offer it while getting rid of the fee. 

As we have said all along, we have no plans to phase out Webervations, and as demonstrated by the list above, we continue to invest in it greatly to make it even better!

Eric

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

The Interactive Travel Services Association reports that its members are seeing very few cancellations outside of Mexico. "Many are waiving cancellation and change fees for travel to Mexico and helping with any rebookings associated with Mexican travel, as necessitated by the H1N1 flu virus situation.

"Travelers should act on science, and not on rumors or reports blown out of proportion. The World Health Organization and the US Centers for Disease Control and Prevention issue advisories that are up-to-the-minute and authoritative. The public should continue to rely on them as their primary sources of information on which to base travel-related decisions.

"There are no advisories concerning travel to or throughout the US, to Europe, the Caribbean and a host of other destinations. Travelers can take advantage of extraordinary savings and value now for business and leisure trips in many locations outside of Mexico. By exercising caution and some common sense, and guided by the advice of WHO and CDC, travelers can still go ahead with their plans without undue concern throughout much of the world."

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

Innkeepers have heard me preach time and again about basing their marketing spend on their Return on Investment, not on the investment (cost).

Unfortunately, too many innkeepers base their marketing decisions on the cost of a directory/association/local website, etc. that they are considering rather than on their return or expected return from the investment. This is clearly a bad way to make spending decisions for a host of reasons. It is called Return on Investment (ROI) for a reason.  :^)  Let's look at some of them...

• Basing your marketing decisions on cost would lead you to believe that you would be better off spending $25 to join an online directory/association/etc. than spending $250. If all things were created equal, that would be a very logical decision. But if the $25 investment yields you no business, and the $250 investment yields you several thousand dollars in return, clearly the $250 spend was the far more worthwhile spend, and the $25 (in this example) was a complete waste of time.
  
  
• Some innkeepers make the mistake of thinking all directories/associations/local websites deliver the same value/exposure. They sort of think a website is a website is a website, so they should all cost the same and probably all deliver the same return on investment - therefore they feel they should just focus on the least expensive directories to market their property. This is no more accurate than to say that all TV shows, radio shows, newspapers, billboards are the same. Website marketing is a media just like most other forms of advertising (TV, radio, print, etc.). If priced correctly, you are paying for the reach you will get (the number of potential guests/eyeballs you will be exposed to) within that channel/media.
  
  There is a reason a 30-second TV ad during the SuperBowl costs $3 million and a 30-second ad on late night cable costs $1,000. It's reach. The cost of an ad in a medium is directly related to the number of folks the ad will put your product/service in front of. With tens of millions of folks watching the SuperBowl, you pay more than you will pay for the couple hundred folks watching late night TV. The analogy works across all mediums.  A full-page ad in a small-town newspaper should cost you way less than a full-page ad in a national newspaper. The same applies with a local magazine compared to a regiuonal or national one. A billboard on a lightly traveled Farm to Market road should cost way less than the same size billboard during the same time on a major highway that is heavily traveled. You get the picture....
  
  
• With many independent third-party research houses saying that in 2008, over two-thirds of travel was researched or booked online and that in 2009 they expect even more travel to researched and booked online because travelers are looking for the best value/deal, it stands to reason that for most innkeepers the internet should be getting the lion's share of their marketing dollars.
  
  So when we look at ROI within the internet, how do we best determine what works and what doesn't? Many innkeepers still rely on asking the guest where they heard about them. Unfortunately this is very unreliable.  According to feedback from innkeepers attending a presentation I made recently, this method can be off by up to 50%. The problem is that when you ask a guest where they found you, they say, "The Internet".  They do not recall that they started on Google Local, clicked through to your property photo powered by BedandBreakfast.com, and then clicked through from there to your own website (or any other of a hundred possible scearios). So they may say they found you on your own website, BedandBreakfast.com, Google Local, or finally "The Internet". Clearly there has to be a better way!
  
  
• Well... there is! All innkeepers should be using tracking software for their website. If you are not using tracking software, how do you know how many potential guests visit your website from the various places you market your property online? How do you know how long they stay or which page they leave from? How do you know which site(s) send you the most potential guests? What your conversion rate is? In short - how do you understand your ROI without understanding what is working and what is not, and who is driving you how much business??? The answer is, you don't.
  
  At the highest level, one of the most simple benefits of using tracking software is it allows you to see how much traffic a directory/association/chamber website/etc. sends you. This allows you to see that not all sites send you the same amount of traffic. They are all different, and you have no idea what is working "for you" unless you look at your web stats. Although I highly recommend innkeepers ask other innkeepers what works for them and what doesn't, just remember that is one data point in the decision-making tree. What works for another innkeeper may not work for you for a variety of reasons (the property type, location, price, etc.). 
  
  Traffic is a good leading indicator of value you receive from the various sites you advertise on. But realize that not all traffic is created the same. You can have three different sites that all send you the same amount of traffic, and all three will deliver different amounts of revenue because they will convert to reservations at different levels. Why? Because different sites send you more or less qualified levels of potential guests. A simple example is traffic that comes to you from a directory with a poor layout/design that does not provide the potential guests with much information will be less qualified (and therefore convert to a reservation at a lower level) than traffic coming to you from a site that provides lots of detailed property information in an easy-to-read format. This is because the potential guest already saw much of what they needed to know before they clicked through to your site, and therefore, they are further along in the selection process. They already know that you allow pets (or don't) and that you allow kids (or don't) and that you have a nice breakfast that can be served in the room, etc. So once they click through to your website, they are more likely to book a room (ie. they have a higher conversion rate). 
  
  
• Finally, in addition to traffic and conversion, innkeepers need to realize that not all reservations represent the same amount of revenue. Different sites send different amounts of traffic that convert to reservations at different levels and that also represent different amounts of revenue per reservation. One site may sell your more expensive rooms more, and another site your lower-end rooms more. A great example of this would be to compare traffic a Select Registry member gets from the SR website versus the traffic they get from their local chamber/CVB. I'd be willing to bet that the traffic from the SR website is a customer more interested in your higher-end rooms/suites with all the bells and whistles versus the traffic from your CVB would trend more toward the average consumer, and therefore represent less revenue to you per reservation.
  
  Any more advanced booking engine should be able to allow you to track the revenue all the way through from the website they came to you from, through to the booking, and the amount of revenue it represents to your pocketbook.

Ulitmately, revenue is what we need to determine to see what website is worth the marketing spend or not. We are not looking at "Traffic on Invesment" (TOI?) or "Conversion on Investment" (COI?), we are looking at how much money we get back as a return on capital compared to what we spent to get it - Return on Investment!

To be continued...

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

I had the opportunity a couple of weeks ago to participate in the "State of the Industry" panel at the annual Innkeeping conference held in Atlanta. Here are my thoughts from the panel:

If a rising tide floats all boats, a falling tide exposes all the rocks. Last year, there were so many consumers to go around that B&Bs could get by being lazy in some areas – having a bad website, not taking online bookings, fighting reviews tooth-and-nail. Now I am primarily hearing from two kinds of properties out there – those that are doing absolutely fine, and those that are having a hard time. Every time I get a call or email, I take a look at their website, their booking engines, and their reviews, and it is a constant theme. The properties struggling seem to typically have bad websites, either no online bookings or request only (or their booking engine/availability calendar isn’t customized at all), only a few reviews on BedandBreakfast.com, etc.  Every year we see countless properties want to stick their heads in a hole and pretend that online reservations and reviews do not matter. "Maybe" it didn’t last year – but it does now, and these properties are feeling the pinch. Guests are choosier now than ever before  – and if you don’t have what they want online, they will very easily click on to the next property.

Some additional points:

• Innkeepers who don’t fully understand and leverage online marketing are making their competitor's life easy by having such a haphazard online presence. Innkeepers need to seek proffesional help for their web presence. There are lots of companies out there in our industry that can help you build a great website, get a great booking engine, take professional photos, etc.
• Market aggressively but intelligently, using ROI, not cost, as your measurement tool.
• The four-legged stool of inn marketing – exposure, great website, online reservations, and reviews – you need to use all four or you’ll end up on the floor.

The panel also discussed how nice it would be to have a industry-wide marketing/PR program. I agree and think it would be excellent, but I think many folks are under-estimating the true costs involved to try and pull off such a national program without a "real" budget. I think a much easier step would be for more innkeepers to leverage the tools already available from multiple vendors at very little cost to make it easier than ever for folks that have never tried a B&B, to give us a try. For us as an industry to convert more folks to become "inn-goers", we need to provide them with the tools they want to use give us a try. These are online reservations, leveraging ratings and reviews, frequent stay programs, etc. The tools are available today, and will make us more appealing to millions of folks that otherwise will never try a B&B. We just have to use them.

I welcome your comments/questions.  There is so much to discuss!

Sincerely,
Eric

So I have been wanting to get on the bandwagon for some time now with the whole "blog thing". I had no idea it would take me 6 months to finally get around to it. Wow! I decided the best way to get it started was to simply get it started ... so here we go!

I look forward to using my blog to share thoughts and open discussions/dialogs with industry participants on various issues within the B&B industry. I see it as an opportunity to share thoughts with inngoers and innkeepers alike. An opportunity to answer questions about our various company products and services, as well as overall industry trends that we see from the supply-side and from the demand-side. I see it as an opportunity to have a dialog with innkeepers out in the open that is visible for all to see.

There is no lack of things to discuss/talk about. Be sure to add your two cents.

Sincerely,

Eric