B&B Profits

by

Dispelling Myths:

B&B Profits: Short-Term vs Long Term

It’s always interesting to me to observe how different innkeepers approach their profitability — the inn’s bottom line. Some pay attention to the numbers, like Michael Eisner does at Disney, while forgetting the basics of what brings people back time and again (think of this style as short-term profitability). Others approach their B&B business as Walt Disney approached the creation and operation of Disney; focusing on customer service, cleanliness, and safety knowing the bottom line would take care of itself (think of this style as long-term gain). What’s the difference between the bean counter and Walt Disney approach to business? What do innkeepers do that’s the bean counter approach? What do innkeepers do that’s the Walt Disney approach?

I see the bean counter approach being a short-term focus, paying more attention to the day-to-day cash flow and bottom line than to the customer and the service that brings them back.

Examples include:

  • Charging extra for services that are often included in the base price of some properties. Local phone calls that cost anywhere from $.25-$1.00. Coffee packets in the room that cost $3.00.
  • Raising the price of a good while lowering the quality or quantity of the good. For example, raising the price of the guestroom while decreasing the quality of linens/towels and breakfast.
  • Cutting services just to save money, not paying attention to guest comfort or satisfaction. Placing one bar of soap per guestroom even though the sink and the shower are in separate rooms. Dark inns where the innkeeper won’t turn hall and exterior lights on because it will burn electricity and therefore money is another example (and are a major turn off and dangerous too).
  • No seconds at breakfast. When servings are inadequate the lack of seconds is noticeable. But then, if the first serving were adequate then the lack of seconds might not be missed.
  • Providing inadequate supplies because it makes your maintenance easier. I know an inn that offered hard, rough toilet paper and no tissue because the innkeeper it was better for the inn’s septic system and she wouldn’t have to pump it as often.
  • Charging an energy surcharge. Lodging properties need to find ways of reducing consumption rather than hide a room rate increase in an illegal charge like an energy surcharge. Between training staff to turn off lights as they leave guestrooms (unless they are doing turn down service) and conserving electric consumption inns can save more than they’d ever gain from guest charges.

Now, the Walt Disney approach is having a vision (market niche or brand) of quality and then setting your standards to maintain that, regardless of the cost (well, within bounds). Disney built a wildly successful amusement park with that attitude; you can build a wildly successful B&B with that attitude.

Some examples:

  • Placing reading lamps with 3-way bulbs on each side of the bed and at reading chairs and the desk.
  • Installing privacy and security locks, even if the doors are “historic”.
  • Providing free broadband Internet service to guestrooms.
  • Offering a full service snack bar complete with sodas, candy/snacks, cookies, and fruit for guests to enjoy.
  • Cleaning common areas daily and guest rooms as needed and between guests. You may raise an eyebrow at that but I know lots of innkeepers who will clean the common areas only when they get to them and don’t clean guestrooms during a guest’s stay.
  • Doing daily maid service to tidy rooms, even if the inn opts for the green program option of not doing linens and towels daily.
  • Staffing the inn so that guests can find someone when they have a question or need. [The B&Bs that have a skeleton staff don’t garner guest satisfaction the way a fully-staffed inn does. I can tell the difference based on either how high the return-guest percentage is or how good the tips are; both are signs of guest satisfaction.]
  • Offering room amenities including iron, ironing board, TV, VCR/DVD player and cable, sound system alarm clock, sauna, hot or jetted tub, and mini-refrigerator, phone with voice mail, and fireplace.
  • Providing umbrellas for guest use during their stay.

After almost 19 years in the business I have seen hundreds of B&B inns, all with different styles, market niches, and attitudes. The inns that have been most successful have been those that had Walt Disney’s attitude about business; they want to treat their guests to a special experience that will have that guest coming back and referring others to visit. Those innkeepers understand the benefits of long-term gain. Some actions will cost you money, but most are very inexpensive but do require effort. To be successful, avoid being a bean-counter and strive to be a Walt Disney; think beyond short-term profitability and think long-term gain. That is what sets B&B inns apart from hotels — the extra effort and personal touch.