How to Thrive, Not Just Survive, in Difficult Financial Times

An article by Admin 1 Comment

by InnConcierge

The numbers don't lie. Consider the following trends:

• The luxury business has been in freefall all year, with REVPAR declines at 30% (Smith Travel Research).
• According to Lodging Hospitality (July 2009) as of April 2009, the 2009 advance reservations for New York City hotels were down 40% compared to the same time in 2008 – even though rates have dropped.
• Lodging forecast: Summer revenue forecast is best for the lower-priced hotel chains.

So, where does that leave the bed and breakfast niche? Nowhere…unless there is a solid determination that the days of business as normal are over and there is an equally firm commitment to do something about it.

We are clearly at key points of change: in politics and health care, in communication and transportation (bus ridership is up - go figure!), in education and unemployment. The largest college graduating class ever is competing against baby boomers for entry- to mid-level career positions…and so change has also come to our own bed and breakfast industry. While it may have taken time for our unique inns to be recognized in the boutique hotel market niche -- it does not take long to replicate a successful model until it becomes commonly accepted. Now we have Indigo by Intercontinental and W by Starwood and Accent by Choice. Not only do we have the greater economic tsunami to contend with, we have disruptions and competition within our own industry -- all of which require change if we want to thrive, not just survive.

Suddenly, our networking is different, our time management is different, and our growth and revenue prospects are different (but may even be better than we anticipated six months ago!).

What you really need to do is to ask yourself the following questions:

• Is every aspect of my operation running at peak efficiency?
• Are my top line revenue streams ahead of last year?
• Am I capturing my fair share of the market?
• Does everyone on my staff share the same views of success and profitability?

When we recently posed these questions to a few of our clients, their answers were quick and startling. Although their responses were negative, our efforts quickly produced positive results.

For example:
Advance sales for June 2009 for a 42-room inn in New England were weak. We conducted a five-hour session, The Lost Art of Selling, in early April. The result? A 10-point increase in occupancy for June 2009 over June 2008.

Similarly, we did an assessment for four inns under the same management and did the same training session for all four inns. The results? A $10 increase in ADR (average daily rate) year over year for an ROI (return on investment) of about 1,000%.

A sales assessment in California for a downtown inn found the contact information for 3,000 past guests in the inn’s database. We recommended a value-added offer to test during a period of moderate demand. The result? 25 reservations for two nights each @ $175 per night, totaling $8,750 in revenue and a 300+% ROI -- and this was only part of the exercise.

In other words:
Change is not easy and will require that you review the process, people, programs and potentials and make the right choices.

The professionals at InnConcierge, partners David Hiler, Stephen Tallon and Jim Miller, have spent their professional careers in the hospitality and innkeeping trade and now, after seemingly having done it all, have created a new company. Why? Their experience taught them the following:

• The B&B model will continue to draw its fair share of discretionary income from travelers with discriminating tastes and preferences.
• Most B&Bs are independently owned and operated.
• Running a B&B takes as much work and effort as a large brand hotel – yet innkeepers do so without the comparable depth of corporate management services.

Innkeepers are then left with the following options:

• React ‘accordingly’ by cutting costs and hoping to save your way to profitability.
• Do it all on your own.
• Continue to do ‘business as usual’ and hope for a change.

Alternatively, you can do the following:

• Solicit input.
• Listen to what experts on a national level have to say.
• Use experienced consulting services to help you break down your bottom line, grow your business, increase your guest satisfaction, and identify areas for increased profitability.
• Take action, set goals and make smart decisions about your immediate and long term future.

This is your opportunity to grow, prosper and succeed, even in troubled times. Whatever you do – choose! Don’t let the choices be made for you.