What is the Highest and Best Use of YOUR Property?

July 15th, 2009
The title phrase above about the highest and best use describes a real estate appraising term often applied to the B & B Valuation process as well.  Use is the operative word.  Using Wikipedia’s definition, the concept states that the “value of a property is directly related to the use of that property; the highest and best use is the reasonably probable use that produces the highest property value. This use, the Highest and Best Use, may or may not be the current use of the property.” (my emphasis applied)

This affects a LOT of inns.  Some inn properties may have a higher property value as an alternate use.  A smaller property may have a higher value as a residential property…and many small inns have sold recently as homes.
Some inns are restricted by codes (typically zoning and special use permitting) to provide all of the services they would like to offer…thus restricting revenue and profitability growth.  These inns may have higher property value as another use…perhaps an office building or assisted living facility.

Many inns are currently enjoying the highest and best use of the property. It is reasonably likely that these viable inns have the highest property value as currenlty being used as an inn.  Their value, therefore, can be established by a properly detailed valuation as a going concern as an inn.

Most innkeepers do not want to hear that their “baby” is worth more with an alternate use.  But these economic times are clearing the air about value, and what level of loan to value (LTV) the lenders will support, and a clearer understanding of highest and best use.      Scott

Guest Loyalty and Gratitude is the Return Gift for your Thoughtfulness

July 13th, 2009

In January, I attended the PA Tourism & Lodging Association Inn-Touch meeting at Hickory Bridge Farm in Ortanna, PA.  Great place…I wish we had stayed there.  Marilyn and I usually stay at inns when we travel, but on this trip, we had our 4 year old grandson and cocker spaniel Arthur with us.  So we stayed at a (gasp!) chain motel in nearby Gettysburg.  Marilyn had booked on-line (to include checking the bullet that said we had a dog…no charge…and a kid),and when we checked in, everything was messed up.  They assigned us to a room with no extra bed for Brody.  They did not know we had a dog so they said it would cost extra.  And when we went to the desk to make alternate room arrangements, the snot-nosed teenager behind the desk gave us lip.

The manager finally came out to make nice-nice and correct the matter.  He upgraded us to a larger room with a whirlpool tub in the bedroom (which Brody thought was a pool).  But even with the upgrade, I felt both cheated (I was looking for a nice experience…not lip) and guilty (for an upgrade we got only because we complained).

Pat Materka, owner of Ann Arbor Bed & Breakfast, on the U of MI campus, sent me an article from the June 17 New

Ann Arbor B & B

Ann Arbor B & B

York Times, written by Rob Walker, about “Hyatt’s Random Acts of Generosity“.  Hyatt is instituting a new program called “random acts of generosity” where the hotel randomly picks up the tab for an expense, such as your bar tab or massage.  The effort is based on the concept that giving such gifts will not only be appreciated, but will also build loyalty and gratitude.  And such gratitude will result in continued business.

Hmmmmm… A couple of questions come to mind… How do they select which guest gets the gift?  How do they train their employees to do it “randomly” as a surprise?  And, as Walker mentions, when Hyatt made the public announcement of the program (it was in the New York Times, for gosh sakes), wouldn’t EVERY guest be waiting for their gift?  And if they don’t get one, will they feel cheated (like I did)?  Or will they feel guilty (like I did)  if they asked for the gift?

Don’t get me wrong…I am a BIG believer in Relationship Marketing (see the article Marketing on a Dime).  Building personal connections with guests or potential guests (calling them by name, sending handwritten notes, going the extra step for service, including them in newsletters, making a personal call to say Happy Birthday instead of an email, etc.) is, by far, the way to strengthen repeat business.

But inns don’t need gimmicks to build loyalty or gratitude.  When an innkeeper’s thoughtfulness of providing a birthday candle in the cinnamon bun, or an unexpected bottle of bubbly upon the arrival of the honeymooners, or a handwritten sympathy card to a former guest, or a “Welcome, Dan” instead of “Can I help you?”, loyalty and gratitude already have a foundation of a lasting relationship.  Inns are good at that stuff.

What do you think?  Do you have “Gifts” you feel are adding to customer loyalty?  Scott

Proud to be an American

June 14th, 2009

I had the opportunity today to attend the Ocean City (Maryland) Air Show.  It’s Flag Day, June 14, and a day filled with patriotic music, aerobatic stunt planes, and military pride.  With background music resounding across the

A Golden Knight

A Golden Knight

Ocean City Beach, the crowd joined Lee Greenwood’s “I’m proud to be an American” as The U.S. Army’s Golden Knights and the U.S. Navy’s Leap Frogs parachute teams landed safely (thank goodness, I always hold my breath until they are all down) on the sands beside our seats.

They look so young…these boys and girls… that will go in harm’s way so that we can sit on a beach and eat hot dogs and soak in the sun.

The Thunderbirds

The Thunderbirds

Then came the grand finale.  The thunder-like roar of six F-16 Eagles, brilliantly white with blue and red trim, as they surprised us from behind and soared in their familiar diamond formation.  The U.S. Air Force Thunderbirds with their high-speed precision aerobatics, knife-edge fly-bys, and nearly supersonic wonder.  The background music was Neil Diamond’s “Coming to America”… a fitting tribute, as the announcer described every maneuver.  I tried to take a bunch of photos, but got a lot of empty sky…wow…they can move!

On the walk home, as we strolled the boardwalk of Ocean City heading for the car, we passed the Inn on the OceanVicki and Charlie Barrett had center stage seats at their ocean front inn.  Saying Hi to Vicki seated on their front patio, I was reminded of the wonderful industry in which Marilyn and I work.  We meet great folks, at great inns, spinning their hospitality magic to make the traveling public comfortable and welcomed.  We all may not look as youthful as the youngsters dropping out of the sky today, but these innkeepers are just as dedicated to their selfless professions…giving their all to make their guests safe, satisfied and rested.  I’m proud to be an innkeeper too.

I love Flag Day… and Happy 19th Birthday, Chris.  Mom and I love you.    Dad

An Inn is a Family

June 1st, 2009

I am not sure why I am writing this little note in this blog.  I just want to.

We just got word that Dolores’  husband passed away on Sunday.  Dolores was our loyal and long term innkeeper at The Lafayette Inn in Easton, PA., the inn we sold in 2005.  We inherited Dolores when we bought the inn 10 years earlier, and the inheritance was a gift of cherished value.  Bob, her husband, loved Marilyn’s quiche and they would often stop by the inn on Sunday morning after church hoping there was a piece or two left over after breakfast was finished.  There always was…especially for Bob.

Bob passed away on Sunday after a courageious bout with the big C.

Employees are family.  Their families are our family.  They rely on you and you rely on them.  And Dolores is one of the best.  With perfect attendance over decades of arduous schedules, and always willing to pitch in and do a couple of rooms if a housekeeper couldn’t make it in, her picture is in the dictionary under the word loyal.

We will miss you, Bob…and we miss you, Dolores, and the great folks at the Inn.      Scott

A-dapting: (verb): adjusting oneself to changing conditions… 

May 22nd, 2009

When Ellen O’Day saw dozens of kayaks and canoes passing by the Clarion River Lodge, in Cooksburg, PA., she saw the opportunity in a heartbeat.  She set up some clarion-river-pics-0801umbrella tables and chairs on the bank, fired up her grill, iced down some cold ones, and sold 4 cases of beer, a kajillion hot dogs and burgers, and got some local exposure that is hard to buy.

“I see my guests and visitors as my employer” says Ellen. “They tell me what to do…and I listen and I do it”.

The comment reminded me of a favorite quote by Gandhi…”I must see where my people are going so that I may lead them.”

Adapting to the changing marketplace in the B & B industry to meet the new trends and offer what the guest is asking for is easy to say. But recognizing which practices and policies actually hinder this change is usually more elusive. “Most innkeepers are too stubborn to change…afraid to adapt” she insists.   “They cling to current practices and habits.  I discovered my niche is with weddings and events and have made the changes to capitalize on the demands of my customers”.

Ellen’s full service restaurant, open to the public as well as guests at the 32 room lodge, changes its menu every 2 weeks to 2 months.  As seasonal prices of food fluctuate, so does the menu…offering local, seasonal variety and changing menu items that guests seek out to explore.  Even the kids’ menu offers sliders and mac & cheese.

The Adaptation principle offers advice to all innkeepers. Is it time to (sincerely) self-reflect on those policies and practices that are not adapting to the demands of the guests?  Do you have cancellation policies that are too stringent? (Are they really even needed?)  Are you afraid to change your dog policy?  Are you too stubborn to change your kids policy?  Are you ignoring Facebook or TripAdvisor because they are too technical? (Your guests aren’t). Do you anger your guests (they won’t show it) when you charge unnecessary late check-out fees if their feet aren’t out the door by 11 am?

Times are tough enough right now without shooting ourselves in the foot.  Take a moment to discover those practices or policies at your inn that are ready for change. Adapting to what our customers want is always a good thing.

Happy Memorial Day, All!    Scott



Bicyclers Adds Room-Nights during Mid-Week

May 6th, 2009

On a quick visit to St. Michaels, Maryland, today, I had the opportunity to visit the Old Brick Inn, a 12 room inn, which, if you count the Kemp House they own across the street, makes a total of 20 rooms.  As I was leaving, Bryn mentioned she had to prepare for 15 rooms checking in soonFifteen rooms on a Wednesday night? I had to know more!

The inn is on the route of a bicycle tour group called Carolina Tailwinds, a company that pulls together several-day bike trips around the Mid-Atlantic area.  Delmarva (a consolidation of Delaware, Maryland, Virginia) is the tourist

Bicyclers are great mid-week business

Bicyclers are great mid-week business

rich Eastern Shore of Maryland…flat as a crepe and easy for biking.  But as you can see from the links below, they are in every state.  When asking for more details of the IMPACT of this bicycle business, Bryn stunned me that each visit is for two nights, about 15 rooms, and they come 5 times a year…three times in the spring and twice in the fall.

Let me do the math for you…5 times a year, 15 rooms, 2 nights each trip…that’s 150 room nights!  Times $165 average ADR…that’s…er…a LOT of money! And they come mid-week!

Dave and Donna Reusing, owners of the Town Hill B & B, in Little Orleans, Maryland, have taken it even further.  They are located at mile marker 140.9 on the C & O Canal and offer a special pickup service to shuttle bikers back and forth from path to inn.  They have achieved status as the best place to stay in the National Geographic Map Guide to Appalachia.  This shuttle service, as well as the excellent care at the inn, have brought significant business to the Inn.

Another site to check out is www.bicycletour.com, a site to check out all the trips in any state.

Google it yourself…find the trips that might work in your area…get on the phone and find out how YOUR INN can be one of the stops on the route.  This can be an opportunity for those, probably larger, inns for strong mid-week business. Happy biking!   Scott

Location, Location, Location…the 3 Ingredients to a Successful Inn

April 30th, 2009

When you ask a realtor what the 3 most important factors are when buying a house, the whimsical, but meaningful, response is “Location, Location, Location”.  The intent, obviously, of repeating the same word 3 times implies that Location is the ONLY factor when buying a home.

But when searching for an inn, or developing or strengthening an inn’s

marketing plan, the repetition has 3 distinct implications:


Location #1: Think of the inn’s macro-location first.  Is the inn located within easy reach (2-3 hours) of major directions-pheasant-field2metropolitan areas?  Having major population meccas from which to attract guests is a major asset of any inn.  A great example includes Pheasant Field B & Bin Carlisle, PA.  Within 3 hours of the inn includes such metro-megacenters as the NYC metro area, Philly, Baltimore, DC,, Pittsburgh, and only a few miles away, the capital of PA, Harrisburg.  That’s gotta be about 16 bazillion potential “one-tankers”  (guests that only want to spend one tank of gas for their mini-vacation).

For aspiring innkeepers, keeping Location #1 in mind when building a profile will ensure an advantage from the get-go.  For a current innkeeper, analyzing Location #1 in your SWOT  (Strengths, Weaknesses, Opportunities, Threats) analysis is an important step to strengthening your marketing plan.

Location # 2 is the immediate region around the inn.  What will bring the 16 bazillion people to your area?  It is NOT just to visit you, as much as we innkeepers would like to believe!  Having a variety of area attractions that appeal to longwood-gardens1multiple interests, great restaurants, and soft adventures will offer a one-stop shopping itinerary for any guest looking to get away.  Take the Pennsbury Inn, for example, in Chadds Ford, PA.  Within a few short miles of the inn is something for everyone:  Longwood Gardens and its world-reknown topiary gardens, Winterthur (the DuPont country house) for the antiquers and hortoculturists, Simon Pearce glassworks, the River Museum and its Andrew Wyeth Gallery, the Brandywine Revolutionary War battlefield for history buffs, and, of course, the Wine Trail and great restaurants of the region.

This vast array of attractions appeals to most any interest…with plenty to do for any visitor to the region.  For the aspiring innkeeper, what will bring guests to the area around YOUR future inn?  For the current innkeeper, which of these attractions can I package with, and build relationships with, to capitalize on THEIR popularity?

Location # 3 is an easy one, and the one most innkeepers, aspiring and current, focus.  This is the inn itself, its curb appeal, and the attractiveness of the surrounding neighborhood.  When a guest rounds the corner and sees the inn for the first time, we hope their eyes widen and they mutter the “ooooooh!” that we work so hard to achieve.  Many inns know how to achieve this look.  The example here, Brampton Bed & Breakfast Inn near Chestertown, MD., is brampton-inn-picnic1noteworthy for its curb appeal.

For the aspiring innkeeper, does your candidate inn have curb appeal, or can you give it great curb appeal?  Is it in an attractive and safe-looking neighborhood?  For the current innkeeper, taking a look from the road to ensure a great first impression should be a part of every capital expenditure plan.

Three separate interpretations for the same word…Location.  But each having distinct meaning

to ensure the success of an inn.

Consultant’s Advice: Aspiring innkeepers, ensure the profile of your candidate inn has ALL 3 location criteria metFor current innkeepers, look at all three definitions, assess and take advantage of the strengths of your location, and develop plans to strengthen those weaknesses or take actions for those opportunities that your location offers.

What are the strengths and weaknesses with YOUR location, location, location?

HOT DOG! 10-15 Room-nights PER MONTH!

April 23rd, 2009

I enjoy (stealing, and then) passing on ideas to other innkeepers that might be useful to grow their own businesses.  Not a new idea…allowing pets at your inn…but I never had a real appreciation for how strong this segment of the market can be. 

 

A short visit to Pheasant Field B & B in Carlisle, PA., enlightened me.  Dee Fagan and her husband Chuck own a great 8 guest room inn that also boards pets of all kinds…including horses.  But the dog market is the one that kept my attention when Dee, answering about a 1000 questions I had for her, indicated that she estimates between 10-15 room-nights PER MONTH are guests looking for inns that accept dogs.  HOT DOG!  I never realized it was so significant!

 

Bubba doing room checks

Bubba doing room checks

Among all the inns in the association around the Carlisle area, only two accept pets.  So when ANY of those inns have a request for a room with dog privileges, referrals start pouring in to Pheasant Field.  10-15 room-nights PER MONTH!  It bears repeating…I can’t get over the magnitude of the business!  That would raise an 8 room inn with 40% average occupancy up to over 46% occupancy.  At $153 ADR (the 2006 PAII Survey statistic), that’s almost $28,000 per year, not counting any fee for the doggies’ visits.  At almost 20% NOI/Sales (another PAII stat), that kind of Cash Flow improvement can add up to $56 thousand buckaroos to the value of your inn when you go to sell someday.  HOT DOG!  The numbers just keep on growing!

Dogwood (get it?!) next to the pet walking area at Pheasant Field

Is that a dogwood (get it?!) next to the pet walking area at Pheasant Field

 

I feel so foolish that when we had The Lafayette Inn in Easton, PA., we were reluctant to take pets.  When I asked Dee about any damage or problems over the years, she said once a dog scratched a door when the owner failed to put the dog in the crate upon departure as required.  And once a barking dog, (whose owner claims Fido never barks), embarrassed its owners when they came home and Dee invited them to listen at the door.  Again, had the dog been in its crate, there would have been no problems. 

 

It takes some special preparations and processes to make it work.  Here are a few ideas the Pheasant Field takes to ensure a problem-free pet visit:

  • Requiring a pet to be in its crate while the owners are away precludes problems.
  • Having a properly equipped and identified place to visit when nature calls is important…and requires occasional policing by the innkeeper to ensure all land-mines are picked up.
  • Fees for pet visits are acceptable to guests.  Dee charges only $10.  That certainly will not discourage the thrifty guest from booking.
  • Private entrances to guest rooms is a real plus.  Not having to drag a dog through the inn to get outside is a convenience to ALL guests…even the ones there without dogs.
  • Requiring proper vaccinations is OK, if desired, and some inns limit the size of the dog…but too many restrictions may discourage bookings.
  • Providing a scooper, baggies, a spare leash, trash can, availability to water, and doggie treats make pup and owner feel welcome.

And once the process is set up…Market it, Market it, Market it.  On your website, in your keywords and Adwords, in your newsletters, in your rack card, in your personal notes and emails to your database…let the world know.

 

Perhaps it is time for other inns to rethink their no-pet policy.  I certainly wish I had when we had our inn…HOT DOG!…10-15 room-nights PER MONTH!  I can’t get over it.     Scott

 

Please reply and let us all know of other ideas you have to make a doggie visit a real boost to YOUR economy…And how are you marketing it?  

The Complete Guest Experience…the path to Success

April 6th, 2009

We just returned from the PAII Convention in Atlanta.  On the way home, while visiting our son at Virginia Tech, Marilyn and I had the opportunity to spend the night at The Inn at Riverbend, a Select Registry inn in Pearisburg, VA.  Linda and Lynn Hayes built the 7 room inn from the ground up and opened in 2003.  A restful and magnificent stay.

The reason the stay was restful and magnificent, however, especially after an arduous week in Atlanta working as a volunteer PAII staffer, is demonstrated in the photo here.interior-room-riverbend

I took the photo intending to show the sunrise over the New River taken from the McKenzie Room, a corner guest room on the entry level of the Inn.  Although an incredible view of the mountains and river, the interesting point of view for an innkeeper is the INSIDE of the room.  Although difficult to see in this tiny photo, let me describe (from right to left) the creature comforts all captured in this one photo: Read the rest of this entry »

Invest in Personal Development during Recession Times

March 24th, 2009

2009 PAII Innkeeper’s Convention-Atlanta

I have heard a number of innkeepers these past two months that insist they cannot afford to go to the upcoming PAII Convention in Atlanta.  This is usually an inn’s slower time of the year anyway, so it is difficult to ascertain whether a dip in occupancy is due to the seasonality of the inn, or as a repercussion of the traveling public’s plans due to the current economic woes.

At the Mid-Atlantic Innkeeper’s Conference at The Homestead, in Warm Springs, VA., Jay Karen, president and CEO of the Professional Association of Innkeepers, presented some survey data of 218 inns from the fall of 2008.  About half (50.2%) reported business was stronger, or as strong as, the same period the previous year.  The remaining 49.8% reported business down from last year.  But that is not the interesting part…the reasons the inns gave as the reasons for the strong business are very interesting:

  • New or revamped website
  • New (professional) photography on their website
  • Strong packaging agreements with local attractions
  • Strong investment in the internet directories that send guests to their inns.

The innkeepers who had decreased business blamed:

  • Bad weather in their area
  • The economic conditions of this recession
  • Increasing gas prices
  • Decreased number of visitors to their region

Notice how the inns with increased business cite actions they have taken as the reasons for continued or stronger growth.  Notice how the inns with decreased business blame uncontrollable factors (I call this the Woe is Me syndrome).  Now is the time to take action to keep your business strong during the recession.  Failure to take these steps, and continued plummet of occupancy and resulting revenues will only hasten the decline of the inn on its Life Cycle (March 18 posting).

And there is NO BETTER place to pick up new ideas (at the Great Idea Fair), meet up with a website vendor (or 2!…at the Trade Show), go to the “How to” Workshops, network with others who are DOING the actions, and be energized with the General Sessions, than at the 2009 PAII convention.atlanta-paii-logo

It’s an Investment, not a cost.

Marilyn and I will be there…for those who cannot make it, take a look at the PAII Schedule of Workshops, select a couple that are of particular interest to you, and Marilyn and I will try to pick up the handouts.  There will also be a video/audio recording of ALL the sessions available through the after the convention.

We will be reporting our learnings at the convention, so stay tuned for additional feedback!

See you there!  Scott

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