Inn Consultants and Brokers Since 1993

Rick Wolf and Peter Scherman (that’s Rick on the left and Peter on the right) are both experienced speakers who have presented on a range of innkeeping related topics at the state, regional, and national level. They gather and analyze research for the Innkeeping industry and welcome the opportunity to share it with others. Contact Us

The B&B Team

Posts Tagged ‘bed and breakfast niche market website’

Is Living Social or Groupon Confusing Your Performance Indicators?

July 27th, 2011 by Scott Bushnell

Countless inns are participating in the Living Social and Groupon craze (not sure if I should use the word “fad” there, which implies a short-term shelf life) and, as seen in previous postings from Janet and me, there are a number of “rules of thumb” that can make participation worthwhile.

One thing that is happening, however, is the monstrous effects it has on Occupancy and Average Daily Rate (ADR) calculations…typical discussion mileposts among innkeepers concerning the strength of their businesses.  The voucher bookings send occupancy soaring but the revenue margin on each voucher is miniscule compared to the “normal” operating rates.  Consider this example from this 10 room inn in Pennsylvania:

2010 revenues were about $156,000 and occupancy was 31.7%.  They sold 1156 rooms in 2010 giving them an annual ADR of $135.  Like many inns, they are seasonally slow in January-May and participated in a coupon drop with a net income per coupon (after discount to purchaser and the company) of $47.25.  They sold 413 coupons for a windfall check of almost $20,000…nice bucks in the slow season.

Using their 2010 performance, with these additional 413 room-nights sold, their occupancy for the year LEAPED from 31.7% to 43%!  But because their revenue for the additional 413 rooms was so low, their ADR fell from $135 to $112.

With these indicators was the coupon drop worth it?

Don’t know yet.  The hotels have been using RevPar as their measuring indicator forever.  RevPar is the Revenue per Available Room and is calculated by dividing the total room revenue by the number of rooms in the facility times 365 (days per year).  This combines the Occupancy level and the ADR into one number and makes comparisons so much simpler.

In our guinea pig inn above, the RevPar for 2010 prior to the coupon drop impact was $42.76.  With the addition of 413 room nights at $47.25 each, RevPar increased to $48.10.  This makes an easy correlation when comparing performance indicators from year to year or from inn to inn.

So was the coupon drop worth it?

Some of you just now said, Yes!   (I heard you!) but I am not sure you are right.  RevPar does NOT take into account your expenses and the ultimate impact on Net Operating Income…the REAL driver of the strength of your business.  If the inn’s expenses for the coupon drop are above $47.25 (the revenue received for each one) …their NOI dropped unfavorably.  And, as you have seen in previous postings, an inn’s variable costs (for housekeeping labor, those little soaps, laundry, breakfast, etc.) can easily be $30 or more.

RevPar needs to become the measurement of choice in the B&B industry to replace Occupancy and ADR.  It’ll take a generation or two to evolve, but with the current discounting crazes that will, most likely, become routine marketing tools (thus throwing the traditional indicators into a roller-coaster tizzy), RevPar is the only one that makes sense when comparing performance from year to year or from inn to inn.      Scott

The B&B Team Launches New Website

September 10th, 2010 by Peter Scherman

The B&B Team is delighted to launch our new website today. After over a year of planning, the finished product is now available to make it easier to find an inn for sale, get tips on making your inn more profitable, learn about us and our services, and explore the marvelous profession of Innkeeping.

As industry professionals, we had a number of excellent companies to choose from for our design and execution. Believe me when I say it was not an easy decision. However, seeing the result, we are very pleased to have chosen Insideout Solutions to create a site for us using the WordPress platform. We felt that this would allow us the most flexibility as well as ability to add and change our content to keep it fresh for you, our visitors. Thanks to all at Insideout who worked hard to make this site be what we wanted and, most especially, what we hope you will enjoy using. Please let us know what you think and report any problems you come across.

At The B&B Team we are often talking to innkeepers about the importance of a quality website. It’s easy to say, “You need to refresh it, get a new one,” but it is a complicated process that requires patience and communication on all sides. As a team effort, the results should (and usually do) speak for themselves.

Now that we are finally launched with the blog integrated into the site, we’ll all be back to regular postings after a hiatus while the site was completed. Welcome, enjoy, and we look forward to hearing from you!

What Niche Market Does Your Bed & Breakfast Target?

April 9th, 2010 by Scott Bushnell

To stand out from all the rest, ANY product needs its unique selling feature that will lure the shopper to its website, and ultimately make the purchase. Bed & Breakfast Inns are no different. Your search engine optimization efforts will get your site high on the results page of the search, and then the attractiveness, navigation, and functionality of the site will keep the surfer from hitting the back button.

Group hang But what makes your inn stand out above the rest? Professional photography is certainly a strong asset, as is the ease of providing the info the surfer is looking for…in an attractive and eye-appealing manner. But what will grab them..and then keep them searching for more info? Whatever it is that makes you special…that which makes you different from all the other inns…should be up front and central.

But that's not how we found this particular B & B. I can't even say we stumbled on it. Actually we flew  (kinda) into it! Marilyn and I, along with cousins Sue and Floyd, had some time after the PAII convention in Austin. We hooked up our harnesses, helmets, and gloves, took a couple of minutes of training, and went Zip-Lining through the tree tops of Cypress Valley Canopy Tours. I've never hung in a harness on aBedroom   wire over a gorge before, but we had a blast…especially for old people not used to this soft adventure stuff!

And then there it was. Suspended in the tree-tops at the end of the 4th zip, was one of the most unique bed and breakfasts I've ever seen. Not advertised…hidden in the back pages of their website…was Lofthaven. One room, with private (although hardly ensuite!) bath. Marilyn and I were immediately distracted from our zip lining adventures. You can only access the tree house from the zip line from this side. Once you check in, there is a nearby parking space and walkway past the bathroom, with its solar powered hot water heater (everything about this adventure is eco-friendly) for the shower. The room itself was very spacious…with queen bed, canopy which could double as mosquito netting although the room is fully enclosed with screened windows. There is a walkway around the room with a "porch", with a bench, looking out over the peaceful gorge 60 feet below. No need for a sound machine to lull you to sleep here! The babble of the brook below in the gorge, birds everywhere, and, absolutely no sounds of people, or cars, or neighbors…that is the sound machine!

The bathroom was complete with shower supplied by the roof top solar water heater, built in sink, Bathroom  commode and all the fine amenities of any B&B. It is a short walk across a rope bridge from the room…but no need to wear a robe! There's nobody out here!

When we finished zipping, the kind folks at the nature center gave us a golf cart ride out to the B&B. I tried to get a feel for occupancy performance. But I only got anecdotal info from the fellow behind the counter. Mostly filled on the weekends during the good weather season (March-November) and some bookings during the week. I estimate annual occupancy at about 25%. At $300 weekdays and $325 weekends, that puts annual revenue at about $30,000…not bad for an unadvertised little surprise in the woods! And what guest memories that can bring them back time after time and brag about it with their friends. You can't buy PR like that.   BUT NOBODY KNOWS ABOUT IT!

Imagine what it could be if people knew they were here! If they were in the B&B directories, had B&B keywords in the right places on their website, marketed to past guests and included guest photos in their newsletters and blogs. If they would make this unique lodging adventure a dominant feature on their website, with pages of photos, TripAdvisor testimonials, Facebook links with friends and Twitter exposure, just think of the potential!

People should NOT have to stumble into this kind of adventure by happenstance. A lesson for all of us innkeepers…we need to take our message to them.    Scott