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 ‘inns’

What’s All this Stuff about Living Social and Groupon?

April 28th, 2011 by Scott Bushnell

A little more info to add to Jan’s post of April 6th.

It used to be the mantra in the B&B industry to NEVER discount your rooms.  You cheapen your image and could set lower price expectations for the traveling public for their next trip to your inn.  Well William Shatner in his TV ads and a multitude of Price Lowering websites and alternatives have already changed those expectations…so get over it.

Here are a few Mid-Atlantic stories that counter the old school discounting taboo:

A Full Service Inn in New Jersey, through Living Social Escapes, sold 225 vouchers offering two options to purchasers…a one night stay (voucher price $230) or two night stay ($380)including dinner, breakfast, champagne, chocolates, 2 martinis at the bar and 2 tickets to a regional attraction.

Another upscale B&B in Maryland sold 86 coupons through Groupon for one night, flowers and chocolates for a voucher price of $155, and a larger inn in Maryland, using Living Social Escapes,  is offering two nights, wine and chocolates for $157 (weekends) and $117 (weekdays) and sold 632 at last count.  They make their money on upselling spa services and gift baskets with each voucher at a 20% discount from usual pricing.

A fourth, very upscale inn in Baltimore sold 550 Groupons at $99 for a room with a value up to $250!

The two largest companies, Living Social and Groupon, offer coupons to their memberships at deep discounts…often 50% or more.  They do mass marketing through their email membership databases usually targeted in a particular region or city.  Retailers and service providers have seen phenomenal traffic from the vouchers sold to these members.

Living Social has an “Escapes” section on their site specifically attractive to their travel membership.  Often, this is the section in which an inn can participate.

Here’s the general process:  A retail or service provider signs a deal with the service for a particular product or service having an identified value.  A discount to the purchaser is provided (50% off is usually the minimum…but negotiable with the company), and the coupon “drop” is targeted for a specific market.  The company sells the voucher, subtracts a commission (often 30%+ depending on the voucher price), and sends a net proceeds check each month to compensate the business.

Sound scary to try it?  Here are a few VERY IMPORTANT considerations when planning such a coupon drop:

  • Understand your variable costs.  Your fixed costs are those bills that you have to pay anyway…whether there is a guest in the house or not…such as the electric, real estate taxes, insurances and cable TV bills.  Variable costs are the extra costs when you have a guest, including:
    –  Food costs (take your annual food costs and divide by the number of room-nights sold…should be about $8 or $9).
    –  Laundry (use about $4 per room)
    –  Room amenities (shampoos, soaps, munchies, etc….perhaps $3?)
    –  Housekeeping labor and the withholding associated with wages (probably in the $10-$12 range)
    –  We won’t count the little bit of extra utilities a guest will use.
    –  Add a buck or two for the office supplies (confirmation letters, postage), wear and tear on the linens, etc.

This Variable Cost adds up to about $25-$30 for the first room-night…about $15 more for a second night’s stay.

  • Take the rack rates for the rooms you wish to dedicate to this effort…say it’s $160.  Divide that by two to figure in the 50% discount to the purchaser.  That leaves $80 price for the voucher in our example.
  • You can expect to pay at least 30% commission to the company.  They will also, most likely, charge you the credit card fee they have to pay (let’s say 2.5%).  That leaves $54 which is sent to you for each voucher sold.

    Then compare the proceeds you will receive with the Variable Costs you will incur…Worth it?

That is why inns are upselling other packages and services with their offer.  It increases the value of the voucher and ultimately the check received at a rate greater than the costs associated with the package.  But you must understand your costs.

On the good side of such an effort:

  • You can dedicate a time frame within which the voucher must be used.  Aim those dates to the holes in your schedules including the slow season and mid-week.  Stay away from the weekends and busy season when you will sell your rooms at your usual rates anyway.  You can put those restrictions on the voucher.
  • You can limit how many you sell so that you don’t have the risk of overselling for the time frame and angering guests.
  • Experience is showing a large number of younger couples taking advantage of the deals.  This is the NEXT generation of inn visitor…a valuable asset to the industry.
  • You will build your database with email addresses for future marketing efforts.
  • You can “hook ’em” with your hospitality so that they become repeat guests.
  • It seems about 20% of the vouchers will never be redeemed.  This is free income to you, but don’t budget it.

A few watch-outs from those who have used these programs:

  • The demographics of the visitors may not be your what you are used to.  They can be “cheapskates” (as one innkeeper put it), asking for other discounts and taking advantage of the free goodies you have around the inn.
  • “Sit by the phone” when the coupon drops…you will be swamped all at once.  One inn had a list of 60 callback names and numbers to get back to because the calls came in like a tsunami.
  • You will get calls from people trying to buy the deal after the vouchers sell out.  They saw it online and feel they have the right to book it directly with you.
  • The voucher holders tend to book early (as soon as they buy it) or late (just before they expire).  Be prepared with rooms for the procrastinators.

For those start-up inns or inns with very slow months of the year…I think it’s a valuable tool for cash flow.  Any other inns out there doing it?  Would love to hear your comments.    Scott

The B&B Team is Growing!

January 4th, 2010 by Peter Scherman

Peter Scherman and Rick Wolf of The B&B Team® are pleased to announce the affiliation of Scott & Marilyn Bushnell of Bushnell & Bushnell Innkeeping Services as new Affiliates of The B&B Team®. Bushnell & Bushnell Services is based in Berlin, MD, complementing our offices in Kennebunk, Maine and Scottsville, Virginia.

The B&B Team®, founded in 1993, caters to the Innkeeping Industry with consulting and brokerage services nationwide. With the affiliation of Bushnell & Bushnell Services, Inc., the company continues to evolve its business model and add resources to better serve our clients. Founding partner and CEO Peter Scherman said, “Experience in and commitment to the Innkeeping industry are essential to success. High ethical standards are core to our company’s mission. Scott and Marilyn meet the expectations we have of our associates and our clients have of us.” Partner and COO Rick Wolf said that “bringing Scott and Marilyn onboard early in 2010 speaks volumes to how strongly we believe in the business and how much confidence we have in the Bushnell’s to join us and better serve our friends and colleagues in the Innkeeping industry.”

The Mid-Atlantic Innkeepers Conference and Trade Show at The Homestead in Hot Springs, Virginia in January will be the regional kick-off of this new collaboration, followed shortly by the national launch at the Innkeeping Show hosted by the Professional Association of Innkeepers International (PAII) and Select Registry®, in Austin, TX in March, 2010.

Peter and Peggy and Rick and Janet welcome Scott and Marilyn to The B&B Team® and look forward to advancing the Innkeeping industry and our clients’ interests in 2010 and beyond.

Moonlight in Vermont and New Innkeepers at The Brass Lantern Inn

December 17th, 2009 by Janet Wolf

One of the best songs ever written about Vermont is by John Blackburn.  Mr. Blackburn spent only two years in Vermont, teaching Drama at Bennington College.  He lived the rest of his years in Southern California, as far away as one can get from Vermont, in more ways than just weather!   But he must have loved the place while he was there, just read a sample of these immortal lyrics in which each verse is haiku.

    Ev’nig summer breeze

    Warbling of a meadowlark

    Moonlight in Vermont


 Icy fingers-wave

Ski trails on a mountainside

 Snowlight in Vermont

Written in 1943, the poetic words of this romantic ballad are timeless and describe so well the romantic vision most people have of Vermont.  Native Vermonters and visitors alike to this wonderful state know this and keep it close to their hearts.  

One Vermont location and Inn that met his criteria is The Brass Lantern in Stowe.  The B&B Team is pleased to have been involved with the transfer of the inn on December 16th as Consultants to the Buyers.  Please join us in congratulating and welcoming Mary Anne and George Lewis, new Innkeepers of The Brass Lantern Inn.  The Lewis’s are recent graduates of our Aspiring Innkeeper’s Seminar.  With their knowledge and our commitment to an ongoing relationship with our clients, we feel assured of their future success as Vermont Innkeepers. 

Some very famous natives, at least to the many fans of the Vermont Country Store, are the Orton family.  They are in their 8th generation of ownership!  In the beginning, Vrest and Ellen Orton had a family goal, “sell products that don’t come back to people that do”, and “we take great care to treat you right so that you come back often.”  These values still exist in the running of the store.  You see it everywhere, from their dedication to their product line as ‘Purveyors of the Practical and Hard-to-Find’ to the warm and cozy feel of their two stores and the unique format of their catalog that hasn’t changed much in 60 years.  This home grown friendly and practical approach to business is what makes this state’s hospitality so genuine.

Norman Simpson once wrote in one of his Country Inns & Back Roads volumes, that he was always looking for the “lost Vermont”.  His vision was of “Gardens, trees, peace, history, laconic natives, covered bridges, mountains, lakes, antiquing, auctions…a sort of warm feeling of coming home.”

 Lost Vermont”…?…sorry Norman but we don’t believe it has ever been lost.  If you visit Vermont this winter I am certain you will be welcomed with the warmth of an ‘icy-fingered wave’, a road map to the ‘ski trails on a mountainside’ and a beautiful evening view from your guest room window of ‘Moonlight in Vermont.’  The Lewis’s and the Brass Lantern Inn will be happy to be your hospitable guides and hosts.  Oh yes, and while there, do drop in and see the folks at The Vermont Country Store too!


Janet Wolf

Eastport…Downeast Maine’s Must See Destination!

September 18th, 2009 by Janet Wolf

One of the joys of being part of The B&B Team is the opportunity we have to work with great Innkeepers at great Inns in great locations.  Many of the locations are in well known ‘destination locations’ and some are in less known ‘undiscovered’ locales. 

Eastport, Maine is a small town on an island accessible by a causeway and is touted as the eastern most US city, where the sun rises first.  Just northeast of Bar Harbor off US Route 1, definitely worth the journey.

So…what’s new in Eastport and what makes it the newest must see destination?  To start with there is The Pickled Herring, Eastport’s newest upscale dining venue.  But don’t let the word upscale turn you away.  More like innovative…clam martini!… that got my attention.  Here are a few excerpts from Trip Advisor reviews that tell it all.

“A most wonderful surprise in a beautiful but under visited Maine seacoast town.  If in the area of Eastport, it is definitely worth the detour.”

“A great meal in an interesting little town, I would recommend a trip to Eastport anyway, but the addition of The Pickled Herring means you can now get an excellent meal while you are there.”

“Eastport has come of age with the recent opening of The Pickled Herring Restaurant.  Everything is fresh, prepared to order and the wood fired grill imparts a wonderful flavor.”

These reviews not only praise a wonderful new restaurant but they also give the reader a glimpse into a most interesting town.  To go back a few years , a 2005 article from Fodor’s Travel News describes Eastport as “still undiscovered by the sunburnt crowds that jam Mt. Desert Island and Bar Harbor every summer, Eastport’s surroundings are as scenic as the more popular downeast destinations.”   Eastport may still be undiscovered in 2009 but for those that work and have businesses there they know there is plenty of ‘downeast Eastport’ to share with the lucky visitors that ‘discover’ their part of the world.  The wealth that the town and surrounding area offers is unique.  Another quote from the Fodor’s article describes the town as having a “wonderfully eccentric vibe”.  With many of the 2,000 locals being artists, writers, filmmakers and now innovative restaurateurs, the creative atmosphere could be catching.

Another way to see Eastport is from the viewpoint of someone that has been vacationing there for almost half a century!

“Let me start by saying I have been going to this island city since the 1960’s. Not a lot has changed in all those years (not a bad thing) we have made a lot of friends here and always look forward to our next trip back.  The sunrise over Campobello is amazing, gotta get up early though.  So much to see:  the Old Sow whirlpool, the tremendous tides, life in the slow lane for sure.”

So whether you stay at a turn of the century campground (as these folks did) or a lovingly renovated, elegant Bed and Breakfast like The Chadbourne House, Eastport’s unparalleled scenery, home grown traditional festivals and events and creative locals welcome you to ‘discover’ them.  Come with an explorer’s heart and you won’t be disappointed!

Janet Wolf