InnkeepingBlog.com » Economy

Spending $16 at McDonald’s

Jay Karen — Thu, 05 Mar 2009 14:31:00 +0000

I’ll admit it. My family has recently been patronizing the Golden Arches more than we probably should. When you are in my situation (two kids under 4, a kitchen that is operational, but still a construction zone, and a financial ground that has shifted under me), sometimes the path of least resistance is taken. Of course, being the fiscal conservative I am, the concept of cheap food can also be appealing. But it just occurred to me on our last trip that a trip to Mickey-D’s costs me upwards of $16. Wait a second! I thought you could feed a family at McDonald’s for something like eight bucks. How is this happening, and what the heck does this have to do with innkeeping?

Caught red-handed eating McDonald’s at Midway Airport on my way home
from the Heartland Innkeepers Conference. Shhh. Don’t tell my wife.

I’m a consumer and my antenna is now officially up. While my antenna was down, the price of fast food crept up. Peter Yesawich, a noted authority on travel trends and speaker at the upcoming Innkeeping Show, recently observed that affluent travelers (defined by household incomes greater than or equal to $75,000) will be comparison shopping MORE than their less affluent counterparts. Antennas are up. People are paying close attention to how they are spending their hard-earned, and seemingly less valuable, dollars. Isn’t it counterintuitive to think that the more affluent will be comparison shopping MORE than the less affluent? Yesawich also just released an interesting stat yesterday – his Traveler Sentiment Index is showing its first signs of upward momentum since January 2008, meaning travelers are feeling more positive about near-term travel possibilities than a year ago.

Let’s connect the dots to innkeeping. People are paying close attention to the choices in front of them, but they’re still in the market to use their hard-earned vacation days. Your guests are going to engage in more comparison shopping. A reasonable conclusion to draw would be to make sure your inn is found where people are comparison shopping. Are you still committing to the industry’s directories that feed you people, who turn into bookings? Now might not be a good time to ditch directories, if indeed you’re getting more than your money back in bookings. Are you paying attention and doing anything about your placement on TripAdvisor’s “Popularity Index”? Like it or not, TripAdvisor is a place where millions of people are doing some comparison shopping, and your placement on TripAdvisor is probably more within your control than you realize. (A side note here: too many innkeepers have not uploaded any photos of your inns on your TripAdvisor pages.) Can you be found in the top ten Google Local results when someone types in “Your Town Bed and Breakfast”? Lisa Kolb with Acorn Internet Services recently observed that about half of our upcoming conference attendees don’t have their Google Local Business Accounts set up and verified. These are places where your potential guests are comparison shopping. Fishermen like to fish where the fish are. Are you where you can be plucked out of the water?

Last year at a meeting of innkeepers in Albuquerque, New Mexico, Jeff Logan of InsideOut Solutions turned me on to Google 411, which is now on speed dial on my BlackBerry. Try calling 800-GOOG-411 next time you are looking for the phone number of a local business. You will be amazed. The automated system on the other end of the line will spout out some results you may be looking for. The interesting thing is that the results come directly from their Google Local listings. In other words, if you go to Google and type in “Bed and Breakfast Cape May NJ,” you’ll see a Google Local list of inns. If you call 800-GOOG-411, you’ll hear the same list of inns. Yet another tool out there to help me with my comparison shopping! I could go on and on. Are you found on GPS devices? Are you working with your local destination marketing organization (DMO), also known as CVBs, to make sure visitors can find you when searching for lodging in your destination? Check out www.neworleanscvb.com and see how you can book a B&B stay right there from the homepage. Thanks to the leadership of Patrick Ashton (Ashton’s B&B) and the Professional Innkeepers Association of New Orleans (PIANO), comparison shopping for B&Bs in New Orleans is a cinch from the city’s tourism web site.

With regards to our patronage of McDonald’s, I’m surely going to do a little more comparison shopping and critical analysis of our choices. Oh, I’m still likely to go to McDonald’s with the family once in a while at the end of a long day. I just have a feeling I will be looking at the Dollar Menu a little more closely…at sharing fries with my wife instead of getting my own fries…or maybe getting a Happy Meal for myself instead of one of the adult-size combos. The point is – I’m going to look at the entire menu before making a choice. My antenna is up. In the context of innkeeping, can you even be found on the menu? If so, how appealing do you look as a choice?

Insanity

Jay Karen — Thu, 05 Feb 2009 21:23:00 +0000

Someone once said the definition of insanity is doing the same thing over and over and expecting different results. We know the economy turned south many months ago, but many innkeepers in our industry report that 2008 was their best year ever. I also know many innkeepers are down in actual and advanced bookings. Yet I fear that many innkeepers are doing the same thing they did last year and the year before and crossing their fingers for good results. Are you generally doing the same thing you did in 2007 and 2008?

Every business in the hospitality industry to some extent crosses their fingers and hopes the customers keep coming. But crossing fingers is not all that successful businesses do. They try new things. They experiment. They take risks. The reach out to new audiences, who may or may not be receptive. They depart from old ways of doing business.

As we look forward to the rest of 2009, here are some thoughts for you to consider…all in the name of seeking different results by doing things differently.

1. Love them or hate them, embrace the online review phenomenon. Properties with reviews get double the traffic that properties with no or few reviews get. Don’t ignore negative reviews. Too often I hear innkeepers say, “I will not dignify that review with a response.” On the other hand, I’ve heard many innkeepers say they earned business from guests who were impressed with their response to negative reviews. Dignify them with a dignified response! Many innkeepers choose to ignore or be indifferent towards the online review realities. At the same time, those who embrace it (despite all the unfairness I know exists) are earning business away from their competitors. Plain and simple.
2. Don’t follow suit with the hotels and stop the amenities. While I hear that guests today are more interested in a good price than what amenities you offer, I still believe that the amenities they enjoy on site will keep them loyal to you and our industry. What new amenities could you introduce to supplant ones that guests might not value?
3. Are you engaging at all in niche marketing or other new marketing opportunities? Do you offer babymoon packages to expectant mothers, and have you checked out a babymoon directory? Are you GLBT-friendly, and have you listed on any GLBT directories, or optimized your sight or purchased Google Adwords to attract the GLBT crowd? Do you even purchase Google Adwords at all? Experts in the industry cite very good ROI when you wisely choose your key words. Have you explored the advertising opportunities on Facebook? An innkeeper friend of mine is telling me he gets more referrals from those ads than one of the major B&B directories. Have you tried your hand at being a pet-friendly inn? If you have concerns about moving in that direction, just talk to one of your peers on the PAII forum about how surprisingly good that business has been for them. Pet-owners will go out of their way to find pet-friendly properties, and will pay a premium. You could always try it for 6-months and go back if it doesn’t work for you. Take some calculated risks with marketing!
4. Have you checked out your competition lately? Have you asked a friend to look at your web site compared to others in your market and give you the brutal truth about how those sites might be better than yours? Along that point, when was the last time your web site had a facelift or an overhaul? Quality, well-designed sites are winning business they lost before their sites were updated. Many innkeepers who tell us business is good cite updated web sites as a major reason. I highly suggest you use someone in our industry to work on your site. Don’t use your nephew, friend down the street or anyone else who doesn’t intimately know the B&B business, effective B&B sites, search engine optimization in our industry, etc. Your money will ultimately be wasted, with few exceptions.
5. Seek out those $25,000 ideas, rather than sit back on your heels and hope this year is a good one. Where can an innkeeper get an idea that might make a major difference in her business? By stepping forward, rather than backwards, and getting on innkeeper forums and going to conferences, rather than staying home. The only place to get those $25,000 ideas, meaning ideas that will bring you new business or increase the repeat visits of happy guests, will be at thought-provoking events where you will be among thought-provoking peers. Sound like a shameless plug for the style="font-family:trebuchet ms;">Innkeeping Showstyle="font-family:trebuchet ms;">? You bet it is; but I contend you should go to any innkeeper conference in our industry. I’ve seen attendance down as much as 30% at state and regional innkeeper meetings this winter. Now is not the time to retreat and hope the $25,000 ideas arrive at your doorstep.

What are you doing differently that is producing results? What are you doing differently that you hope will produce results? Here is the place to share! You never know which idea will really make a $25,000 impact on your business.

Jay

$15 Jelly Beans

Jay Karen — Fri, 23 Jan 2009 16:18:00 +0000

I recently spoke at the Mid Atlantic Innkeepers conference at The Homestead in Hot Springs, Virginia. It was great seeing innkeepers and vendors at this event.

I felt compelled to share the photo I took below. Upon entering my room, my eyes were drawn to the little jar of jelly beans. “How cute,” I thought. After seeing the price tag of “$15″ for the little jar of jelly beans, I didn’t think it was very cute.

Now is a GREAT time for innkeepers to remind potential guests about all the wonderful amenities you provide at no extra charge. While hotels are cutting back their amenities or charging for them (sometime an arm and a leg), we should capitalize on what’s happening and tell our story.

Also, I wanted to share with you a message that Scott Bushnell sent to his friends and clients in the innkeeping world about what innkeepers should be doing in this difficult environment. I have pasted it below.

Onward and upward, my innkeeping friends!

Jay______________________________________________________Email from Scott Bushnell:A couple of weeks ago I sent out a note suggesting your attendance at the Mid-Atlantic Innkeepers Conference and Trade Show in Virginia. I would like to pass on the BIGGEST LEARNING I picked up at the conference. The conference was packed with workshops and ideas on how to deal with the business of innkeeping, especially in this time of economic challenges.

Jay Karen, president of PAII, held a Town Hall Meeting and discussed the latest trends in the travel industry. But it was the results of the latest PAII business activity survey, summarizing the industry’s performance from September through November that really caught my attention.

Of the 218 innkeepers reporting their fall business levels, 30.3% reported stronger business than the same period the prior year and 19.3% reported about the same level. Half of the inns reported business as not as good as last year. But the REAL LEARNING came with the reasons why they feel their business was either up or down:

Those inns reporting IMPROVED business credit the growth to:
- Website revamping
- New photos on their websites
- Packages they have compiled with local attractions and businesses
- Directories they have included in their marketing plans

Those inns reporting DECREASED business blame the downturn to:
- The weather
- The economy
- Gas prices
- Decreased visitors to their regions

What do you notice about these two lists? The first list attibutes improvement due to ACTIONS TAKEN by the innkeepers. The second list blames UNCONTROLLABLE conditions.

If you are sitting in the inn with your arms folded thinking you will just wait out the conditions over which you have no control, you will be losing market share to those inns taking action. If, however, you take an objective view of your marketing plan (including your website) and make pro-active revisions to realize REAL benefit, and if you RECONSIDER and CHALLENGE the long-held premises upon which you built your business model, you, too, can realize growth even in these tougher times. For example, do you make children really feel welcome? Pets? Do you have an industry website hosting service doing your Search Engine Optimization? Do you have videos on your site to show the full beauty of your inn? Is your newsletter aimed at NEW (potential) guests as well as your past guest list? Are your rooms priced properly based on the value you offer? Is your database s egregated into segments (business travelers, reunion guests, college travelers, etc.) so that your newsletter can be tailored to different marketing targets? These are just a few of the ideas shared at the conference.

Now is the time for action. This was the biggest learning to me. The rest of the workshops and the trade show were great at giving the ideas and how-to’s of ACTION.

I just wanted to pass on these insights to you. I welcome your comments and questions. From your humble (and friendly!) inspector.

ScottBushnell & Bushnell Services

The Economy

Jay Karen — Mon, 02 Jun 2008 15:27:00 +0000

Someone shared with me that he had seen a sign in a storefront that said, “I hear there’s a recession going on. I choose not to participate,” or something like that. That is the ultimate in being “bullish” on the condition of the economy, but I like it. I’m not one to be a Pollyanna about things, but I do appreciate the optimism. I think many people will see themselves as victims of the economy and won’t do anything but take whatever changes may come their way. That is a recipe for struggle. When I think about the statistics and market research that I see coming out of the travel industry, I tend to be optimistic about innkeeping.

Emotional Needs
People just aren’t willing to give up their vacations. American workers receive the fewest vacation days per year among the world’s “industrialized” nations. The scarcity of vacation time means, by God, we’re going to take our vacations! That, I believe is true, even when the economy turns a bit sour. Workers have earned the right to relax, travel and tour, and there is nothing to suggest people are not going to take their vacations. Actually, some recent research by one of the travel industry’s leading forecasters, Peter Yesawich with Ypartnership, suggests people are planning to take more trips in the near future. Their research indicates that 16% plan to take fewer trips, but 27% plan to take more trips. In addition, according to YPartnership in research released in May, “six out of ten Americans who are currently planning a trip with their car, truck or SUV this summer will not change their travel plans even with the additional increases in the price of gas.”

Changes in Behavior
Just because people aren’t willing to give up their vacations, doesn’t mean they aren’t going to change some things during a financially tenuous time. I think the bed and breakfast industry is positioned well to welcome the four out of ten who intend to change their travel plans due to the rise in gas prices. Many indicate they will now drive shorter distances and stay for shorter periods of time. Our industry is in the sweet spot for those looking to change their plans a bit. As you know, B&Bs are perfect for the drive-in market, and our bread-and-butter are the two-to-four night stays. If travelers are going to opt out of the week-long, cross-country vacations to the giant theme parks and five-star resorts, I think they’ll opt in for the experiences innkeepers are offering.

Also, the Travel Industry Association (TIA) has reported on trends in travel preferences, most of which fall right in the lap of innkeepers. TIA calls these “markets of future opportunities.” Among the experiences travelers are increasingly seeking, and which overlap the B&B market, are:

Babymoons
Culinary Travel
Destination Weddings
Gen Xers and Millennieals
Girlfriend Getaways/Mancations
GLBT Travel
Medical/Life-Enhancement Travel
Procreation Vacations
Voluntourism

Market Saturation
Anecdotally, I hear there may be fewer inns in the marketplace today than a few years ago. We don’t have any national research to substantiate this, but it’s what I hear when I travel to state and local B&B association meetings. I imagine the likely culprit was the tremendous rise in real estate values during 2002 to 2006, and many innkeepers getting out of the game while sales prices were great. Assuming demand for stays at B&Bs and inns is no different, but supply might be down a notch, one would surmise that existing inns will fair pretty well. It’s simple supply and demand.

This is what I’m seeing from a 30,000-foot perspective. What is your take on the economy and what’s happening where the rubber hits the road? I welcome your stories and comments.