The Innkeeping Blog

With Maybelle Beasley, executive director of the Bed and Breakfast Association of Mississippi, just before I judged the Innkeeper Cook-Off.

I just love coming to Mississippi and Louisiana to visit with the innkeepers in these two states.  Fortunately for my travel schedule, they host a combined annual conference, and this week it was in Natchez, Mississippi.  Thank you to Peter Sharp (President of BBAM and innkeeper at the Fairview Inn in Jackson, MS) for having me as the opening speaker and for allowing me to judge the Innkeeper Cook-Off.  What a blast!  It wasn’t easy tasting 10 dishes.

I was thrilled to present some of the most important and interesting findings of our newly released 2009-2010 Industry Study of Innkeeping Operations and Finance.  We’ll have a press release soon with some highlights, and innkeepers who contributed data to the study should already have their free copies by way of email.

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That’s not a typo. It’s just a long acronym. It stands for “what have you done for me lately?” I suppose we’re not always best at tooting our own horn, but we have some fantastic things going on I want to share with everyone – a few things we’ve already announced and others that will be news to members. As I travel to state association meetings throughout the country, I’m often asked by non-members (including many former members) about what PAII is like today and what we are doing. Similarly, when we talk to busy members about renewing their membership, we find many have been too busy to really pay attention to what’s happening. You pay dues to PAII – so you should know what’s happening. Here’s a short list of what’s happening now. There’s a lot more in the on-deck circle, so stay tuned for more!

Prescription Drug Program
Soon PAII members will be receiving in the mail a letter and two cards that give you access to discount prices on prescription drugs at nearly all major pharmacies. We know being self-employed doesn’t always afford you the best health coverage, including many times weak or no pharmacy coverage. With this card, you and your family can enjoy attractive savings. If you don’t want to wait for the direct mail piece, simply go to http://www.sunrxdiscount.com/paii to print your own card now. At this web site you can go ahead and check the prices you’ll pay for your prescriptions – both over-the-counter and mail order. This is not an insurance program, but rather a nationwide discount program. If you have good prescription coverage, this program might not benefit you – but do yourself a favor and check it out! I’ve been using the card myself, and have enjoyed the savings.

IQ Circulation

Beginning this January, Innkeeping Quarterly magazine will be circulated to all innkeepers throughout the United States, not just PAII members. To date we’ve been sending this leading trade publication to members every quarter, as well as a different group of 3,000 non-member innkeepers. The advertisers want the greater reach, and we believe the entire industry should be reading the timely content in this publication. We’re looking for a few good writers! If you have significant writing experience and want to contribute to the industry’s only trade magazine, please email Ingrid Thorson at ingrid@paii.org

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I am writing this from the Travel Industry Association’s “Marketing Outlook Forum,” in Charlotte, North Carolina. By time you read this, the event will have adjourned over a week ago. Convened here are some of the top brass and opinion leaders in the United States travel industry. What’s the message here? Things are changing, and changing fast…so you better be ready! I have a duty, which I take very seriously, to absorb as much of the information on performance and trends as one man can absorb, and filter for innkeepers what I believe are the most relevant facts and opinions that will impact our industry.Here is some of what I heard at the Marketing Outlook Forum, which I believe to be pretty relevant to innkeepers.

“Consumers trust each other more than they trust you (marketers).” Geoff Ramsey, CEO of eMarketer
This was mentioned in the context of reviews that consumers are increasingly posting online after their stay at hotels, resorts, B&Bs, etc. In fact, research shown at the TIA meeting indicates that consumers trust anonymous peer reviews more than professional travel journalists! If you doubt the popularity and acceptance of this form of consumer-generated content (CGC), click here. If you know how popular this television show is, then you’ll understand. My message to innkeepers? Embrace this, embrace this, embrace this. If your listing on BedandBreakfast.com, TripAdvisor, Google, etc., does not have any user reviews, or an unfortunate few, then it is more likely that potential customers will pass on making a reservation with you. In fact, BedandBreakfast.com is reporting that properties with online user reviews are getting double the traffic that comparable properties that don’t have reviews are. As you can see, I’m not the first, nor the only, advocate of embracing online reviews. Do your very best to encourage your guests to leave reviews on any and all sites that are garnering attention and used by the traveling public. We will be discussing this at great length at the 2008 PAII Conference & Trade Show. When registration opens, I highly encourage you to come take part in the conversation.
“Consumers feel the most important travel web site features are: 90%—able to check fares…81%— easy-to-use booking feature…71%—photos of rooms.” Peter Yesawich, CEO of Ypartnership
Whether we like it or not, the Internet has created a level playing field for all types of lodging, so consumers are expecting all types of lodging to have these features. Here’s how I think their findings and messages apply to innkeeping. If you have the ability—whether through your own web tools or by using third-party reservation systems—to list the exact price of your rooms, rather than price ranges, you should. A visitor to your web site should be able to pick a night, pick a room (if your room prices vary) and see the exact pricing. Also, to meet the needs of consumers who want “easy-to-use booking features” (the second most important feature), I advise innkeepers, who don’t already have it, to consider adding real-time reservations to your website. I am concerned for the properties that require guests to get in touch with you personally as part of the booking process. I know many innkeepers like to weed out their prospective customers through conversations over phone or email, as well as set expectations for their visit. I am not suggesting you should replace phone and email with real-time reservations, just make sure it’s part of the mix. I venture to guess that innkeepers who still use email forms exclusively and have to get back to prospective customers are losing business—possibly losing more business than it’s worth to screen out the occasional bad apple. If a potential customer is doing her travel research and reservations at 11 pm at night, and she wants to close the loop on the romantic vacation she’s trying to book, those sites which allow her to make the reservation and receive an instantaneous confirmation will win the day. And for the inns whose “bread and butter” are minimum-night stays, require your technology provider to include this element in the booking process. Research by Babson College reveals that visitors to travel sites will abandon their online search efforts if they have to wait more than four seconds for information to load. If someone has to wait a few hours (or longer) for a response from an innkeeper about their reservation request, they very well might move on to real-time reservations in the time they’re waiting to hear back. The sooner you can capture and confirm a reservation, the less likely you are to lose the customer to another inn (or even a hotel) while they wait to hear back from you. Regarding photos of rooms, here’s where innkeepers are leading the way. Since each room is likely to offer a unique experience, it’s essential to have high resolution, up-to-date photos of your rooms. If you don’t have photos of rooms, then visitors to your site may think you have something to hide. Show off your property! You’ve worked hard on it, and it’s what makes your inn special.

“Average Daily Rate (ADR) for the hotel industry is $103.63 in 2007.” Duane Vinson, Vice President at Smith Travel Research
In 2006, ADR for the lodging industry was $97. Smith Travel’s findings are showing rates are up. The recent PAII study of B&B and country inns showed ADR for our industry was $166 in 2006. That was $93 ahead of hotels. I’m wondering how 2007 has been for our industry. Smith Travel also reported that a night’s stay in Oahu, Hawaii, is averaging $168 – second only to New York, New York ($241). That means our AVERAGE member is on par with lodging in the 2nd most expensive market in the entire country. As the hotel industry works to stay ahead of the curve, which sometimes includes stealing from the innkeeper playbook (i.e. investing in luxurious linens, increasing the quality of “free” breakfasts), what are innkeepers doing to maintain the gap? Why is that important to me? I’m not suggesting the B&B market should maintain high prices for the sake of having high prices (that would actually be unlawful). But, the $69 gap in ADR in 2006, to me, demonstrates that travelers view the B&B experience as premium. If the gap closes, that means the consumer perception of value of the typical hotel and the typical B&B are getting to be similar. Innkeepers have been offering unique lodging and hospitality experiences for years. Ask yourselves—what am I doing to maintain the premium experience (from booking to staying to checking out to reviewing) that warrants a premium price? If innkeepers want to maintain premium status in hospitality and lodging, we have to continue offering an experience you just can’t get in the hotel market.

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Years ago, I watched a colleague give a presentation about why it was important for an association’s membership to have a financial benchmarking study. He said, “Think of it like major league baseball. If your win-loss record is 75-67, you wouldn’t know of that’s good or bad, unless you knew how the other teams in your division were doing.” That made good sense. If you look at your inn’s financial performance in isolation, you can make your own judgment about the results. You can determine if you spent more or less on various items than intended, if you earned what you had hoped, etc. But by looking at the numbers in a context of hundreds of other inns, you can glean a good bit more about your own operations.

By doing a comparative analysis using PAII’s recently released “Industry Study on Operations and Finance, 2007-2008,” you can see if your revenue and expenses are above or below inns of similar size. For example, you can look at your net income compared to like inns. If you happen to notice that your marketing spending is the one line item that is a good bit lower than average, and your net income is commensurately lower, you could draw a correlation. Might your financial results improve if you invest a little more in marketing? The study won’t tell you for sure, but you will be a more knowledgeable innkeeper, who can in-turn make well-informed decisions about the management of your business. No one should operate an inn – or any other business for that matter – without good information. The study is chock-full of data about guest amenities, average daily rate, revenue per available room, food and beverage, human resources and much more.

On a macro level, this kind of study impacts your business in a positive way. Insurance companies and lending institutions base their decisions on risk factors associated with a business. If an industry or business does not have good data, these service providers tend to think of that industry or business as risky. The result is usually higher interest rates or premiums. With good, solid information, an entire industry can be seen as a solid investment or risk. PAII has the ability to present the innkeeping industry in a very positive light with the good information in the Industry Study. Think of the macro effect next time you are asked to participate in these kinds of research projects, because they come around to help you in the end in ways you might not have realized.

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