Archive for January, 2010

Bed & Breakfast Memory Makers

Friday, January 29th, 2010

I don’t often spend much time watching the Food Network, but Marilyn does.  And a show with an interesting topic came on that got us talking.  “What is the best food you ever ate?”

We pondered on that and then started reminiscing about some great meals we had.  One with friends of ours in Santa Barbara two years ago before the PAII convention.  Outdoors on the restaurant’s patio… propane heaters overhead in the branches to take the chill off the evening… great wine from one of the vineyards we had visited that day… laughing… upscale fare with a flavorful Spanish creativity.

And the time we were in downtown Baltimore, at Tio Pepe’s (one of Marilyn’s favorites), an underground bistro with great Sangria, and a pine nut roll dessert.  Did I mention the Sangria?  A birthday favorite for her.

Even a great pizza at John’s in Manhattan, at lunch time before we dashed off to see Mamma Mia (I must admit I was an ABBA fan before it was chic) on Broadway.  Crisp crust, served in an old church complete with stained glass and murals…a New York City landmark and favorite for us.  Took the kids there one time.

Then it struck me that while trying to recall “the best food we ever ate”, it wasn’t really the food we were remembering, but the memory of the whole experience.  The food was made even better by the excitement of the location, the folks we were with, the intriguing atmosphere, the other delicacies we tried, the laughing, the holding hands …not just the food.

Isn’t that what all us innkeepers mean when we want to give our guests the full experience?  And if we can deliver, it creates memories.  We are not just beds, not just nice looking buildings.  The warmth of the welcome, the busy day out in the vineyards or at the historical site, the sincere smile when they sneak a second brownie, the breakfast… aahhh…breakfasts!  We had a guest stand on his chair one time to take a photo of his pumpkin waffle with the toasted almonds and roasted fruit.

Pennsbury Inn approach

Pennsbury Inn

Cheryl Grono, innkeeper at  Pennsbury Inn in Chadds Ford, PA., responded to a recent post about making a small cake with a balloon for a 90 year old guest, surprising him on his return from dinner, who then hugged her because he had never had a balloon before.  He will remember that moment…and so will Cheryl.

We innkeepers are the creators of memories.  And those guest memories will last forever and result in repeat guests.  And repeat guests are the lifeblood of our industry.

Any favorite memories?  I’ll bet it’s the whole experience that creates that memory.          Scott

Posted in Building Relationships as a Marketing Tool, Inn Operations, Inns and Innkeepers, PAII, Uncategorized | 1 Comment »

Tax Time means Exit Strategy Time

Thursday, January 21st, 2010

I hate this time of year when the thought of doing taxes pops into my mind several times a day, especially with all the reminders that bombard me.  H & R Block commercials, 1099’s and statements arriving in the mail, commercials of the scams of companies that can reduce your tax burden with the IRS.  W-2’s showed up yesterday from my payroll service.  AAAACCHHH!

But it is time to also self-reflect on an innkeeper’s plans to exit the Bed & Breakfast scene and understand the TIMING of that exit.  I have been a proponent of the 5 Year Plan to exiting the business, and the first 3 years is to ensure your taxes are clean and clear.  When you are in the due diligence process, the buyer’s representatives and lender will want to see 3 years of taxes…and you will want them looking spiffy!

Marilyn and I were innkeepers and fully understand the emotional pull to reduce income taxes each year.  There is definitely the temptation to expense (instead of capitalize) that new roof or charge up some restaurant visits as inn Travel & Entertainment expenses.  But if you plan on selling your inn within the next 5 years, there are preparations to be taken NOW to ensure the selling price is what your property deserves.

It all boils down to increasing Net Operating Income.  The value of your business activity is based on how much NOI your inn’s performance delivers.  At the “rule-of-thumb” cap rate of 10%, a $10k increase in NOI can result in a $100,000 increase in sale value.  Sacrificing a few short-term tax bucks for the big benefit is well worth the effort!

Here are a few ideas to improve your NOI:

  • Remove personal expenses from inn expenses, such as supplies and food
  • Report all revenues, including cash sales
  • Only pay yourself what you need…but have something in there.  If there is no payroll included in the expense report, a lender will insert some, perhaps too much, and reduce NOI.
  • Consider whether you are overstaffed and can reduce unnecessary payroll labor and associated withholding expenses.
  • Keep depreciation, income taxes, rent you pay yourself and other legitimate expenses in your expense schedule to avoid a buyer’s lender from inserting too-high estimates.
  • Capitalize major renovations and equipment purchases rather than expense them.  Your accountant can help you with appropriate practices.
  • Of course, do NOT let your marketing practices falter.  Keep increasing Occupancy and ADR!

I hate this time of year too.  But thinking ahead and keeping your financial records in order will grease the skids when it is time to exit the business.    Scott

Comments?  Do you have other NOI increasing ideas?

Posted in Financial Health of an Inn, Inn Operations, Viability of an Inn | No Comments »

Great Hospitality Means Creating Memories

Wednesday, January 20th, 2010

One of the most thought-provoking sessions at the  Mid-Atlantic Innkeepers Trade Show and Conference last week was the general session featuring Terrie Glass, a story-teller from Leadership Solutions of Richmond, VA.  I’ve been to a number of sessions where the speaker usually addresses the big picture or offers platitudes of advice without really giving any hands-on, practical behaviors that are actionable or useful.

Not this one! After asking, and listing on a flip chart, what a “Good” lodging experience is (e.g. fair price, clean room, nice breakfast, etc.)  and then what a “Great” lodging experience is (e.g. personal interaction with innkeeper, a sincere welcom, attention to details, etc.) ,  she then asked everyone to think of the most “memorable” stay they’ve had at an inn.  And then she listed on a flip chart the “Why’s”…Why was this so memorable for you?    The answers to the memorable question varied quite a bit from the Good and Great list.

In fact, you can stay at an Inn that did NOT have all the details in order, but still have a most memorable experience that earns repeat stays.  Making Hospitality “Memorable”  boiled down to three concepts:

  1. Making the Personal Connection:  Attending to the emotional comfort of the arriving guest, which also builds trust.  Remembering the upcoming anniversary or the kids birthdays, or when guests arrive with a level of anxiety (after a long drive, meeting strangers, not sure whether the inn they’ve chosen will be comfortable, etc.).  Offering immediate and sincerely helpful comfort, with the personal connection, gives the guest a feeling of value and welcome.
  2. Delivering Positive Emotions:  Terrie spoke of a cruise she took with her elderly mom and the clan.  For over 2 hours around the dinner table, the family (grand kids included) interacted, joked, and told stories.  Terrie’s memory, however, is the look of total pleasure on her mom’s face as she watched her family share time together.  For Terrie’s mom, the positive emotion was the love for her family.  For our guests, it is the compliment we offer, or when the guest mentions their son making the swim team, our reply of  “Wow…I would really be proud if that were my son” evokes positive emotions from them.
  3. Taking Care of What is Relevant (to the Guest…not you!):  What is relevant to the guest may be very different than what is relevant to you.  For example, if a guest is (privately) worried about being able to get a hold of the babysitter at home during the night, she doesn’t want to hear that the house phone is for local calls only or that the last guest rang up costly long distance charges.  She would rather you perceived her real concern and offer relevant options to ease her anxiety.  What you worry about does not matter since it is not relevant to the guest.

We are pretty good at the hospitality thing in our industry.  But remembering the 3 important concepts of making EACH visit memorable will pay off in repeat business.

Do any of you have examples of how you made a guest’s stay memorable for them? Scott

Posted in Building Relationships as a Marketing Tool, Inn Operations, Inns and Innkeepers, Uncategorized | 2 Comments »

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