Bed & Breakfast Seminar

We wanted to thank everyone for joining us at the Manor on Golden Pond this past weekend for our Seminar on becoming an Innkeeper! The group was very lively and the interaction made it educational and fun for everyone. We had the opportunity to work with specific properties that attendees were considering purchasing and it really brought the seminar to another level! It quickly pointed out to participants which inns were viable and which were not!

Now in keeping with the Manor's standards, they even provided us with a special surprise celebrity. We don't really just want to give away their name, but they happened to be one of the lead stars of the Sopranos...yes, James Gandolfini himself! I think that he really came for the Seminar, but got so wound up with the comforts of the Inn that he decided to relax and be pampered instead. Maybe next time he'll attend!

Some of our comments included:

"Absolutely necessary if even remotely serious - amazingly insightful and enlightening" - K. O'Connor

"If you are thinking about becoming innkeepers, you HAVE to know if it is possible financially, emotionally, etc." - M. Winter

"You get so much more out of a Seminar than you would an "how to be an innkeeper" book" - R. Slavinski

"A good dose of realism" - K.M. O'Connor

The Inn Goes Green

We are seeing it everywhere, and know it’s time to take it to the inn. Going green…is it for you and your inn? The first thing that we think of is asking the guests not to have us change their towels. In reality it goes much further than this. We are talking about organic food, specialty products for the inn, marketing to guests that want to be green, enjoying nature, recycling, light bulbs, and much more. We started our investigation and were surprised by the facts.

The hospitality industry spends around $3.7 billion each year on energy, much of it going to waste, as stated by the American Hotel and Lodging Association (AHLA). According to data from GreenTreks Network, Inc., a distributor of environmental education, compact fluorescent bulbs use 75 percent less energy and last 10 times longer then incandescent bulbs. Not replacing towels and linens each day saves 13.5 gallons of water daily. These facts in themselves are amazing!

We welcome your comments to share with other innkeepers!

Changes From Within

Our new look has arrived! We invite you to take a look at our new website format and see the changes as they begin to occur. You can utilize either http://www.quantumhospitality.com/ or you can always use http://www.oatesbredfeldt.com/ to see the new look and feel for our website!

As many of you know, as of April, 2007 Oates & Bredfeldt, LLC is now owned by Quantum Hospitality Group, Inc. This was part of a five year transition that was finalized as of April of this year. Quantum Hospitality Group is owned and operated by Howard and Rebecca Levitan, and is located in Damariscotta, Maine. As we move forward, many changes will happen, but the quality of the work will always remain consistent. As we expand the role of the Company to provide business consulting services to the broader hospitality Industry, including larger size hotels and restaurants, we will have all consulting and educational programs become a part of Quantum Hospitality Group, Inc. At this time, you will begin to see the transition between utilization of Quantum Hospitality Group and Oates & Bredfeldt names. Oates & Bredfeldt will continue to be utilized, but will be focused and limited to the transfer of Inn properties.

For many years, our Mission Statement has been to provide premier consulting, education, and management services to Innkeepers and future Innkeepers. With that in mind, our product lines have been expanded for both future and current Innkeepers and invite you to visit our website and check them out. We value your comments and would be happy to hear from you.

Regards,
Rebecca & Howard

Is It a Front Desk or Sales Position?

When a call reaches the front desk of an Inn, many times it is just thought of as a telephone call and a potential guest for the Inn. In reality, the front desk is a full powered sales position. This is nothing to shy away from. The sooner that this is acknowledged and embraced, the results will show in the bottom line.

Prior to owning and operating our own Inn on the coast of Maine, my background was mainly sales and marketing. There is a basic formula for sales, and here is the secret recipe:

1. Qualify the caller – This is basically asking open questions such as who, what, why, when, and how. What is bringing you to the area? Who will be traveling in your party? Do you have any special needs? When are you planning to join us? Is this a special occasion? Why are you coming to the area? How did you hear about us? Are you familiar with our Inn/area? You don’t need to ask the questions as they are briefly stated above, but you need to get to know your potential customer before you can start presenting accommodations to them.

2. Present based upon their needs - Once you have learned about your potential customers’ needs, you can them present to them a room to them that meets their needs. Are they coming for a funeral and they would like a quiet room? Are they on their honeymoon and want the best room you have? Are they visiting colleges with their son/daughter and need twin beds? Do they have trouble with stairs and potentially need a first floor room?

3. Pre-Close – After presenting the room to them, do a pre-close: Would you like us to reserve the room for you? If they say yes, proceed forward. If they said no, then proceed to the next step.

4. Handle the Objection – If they say no, you have to identify the objection. You discover that the rate you quoted is too high. You discovered that they can’t climb the stairs. You discovered that they don’t like Jacuzzis. What ever the objection is identify it and move to the next step.

5. Close – We do have another room at different rate (state rate), would that work for you? We have a lovely first floor room with a deck, should we do that room instead? I completely understand the noise from the jets. We have a suite with a soaking tub, would that be best for you? If you receive another objection, return to step four and keep backing up until you can get a close.

It’s been many years since I’ve been out of the corporate world, but the “steps to successful sales” has been implanted into my brain, and I just have never forgotten them. I hope that this helpful in making your Front Desk into a successful Sales Department!

Inn Start-Up, Is It For You?

It seems that we are always asked by people considering innkeeping, why not do a start- up? We always express our concern that it is much easier and more cost effective to purchase an up and running business, but that does not suppress the desire by many people to start an inn from the ground up. We are not saying that it can't happen, but one really has to be sufficiently funded and have the ability to succeed even in the difficult situations. Recently we were hired to consult with a nice couple from Europe who were purchasing an inn which was essentially a start-up business. We thought we would share some of the details with you.

The inn which they were purchasing was essentially a start-up. We say this for many reasons. First, it had a first generation website, which means it was totally useless. Nothing that spending $20,000 for a state- of-the-art website couldn't change. The inn wasn't computerized, and therefore had no mailing list which could be utilized. Next, the dining room had not been in operation for many years and it needed to be updated and opened accordingly, with no history of a successful dining business. No marketing had been done to the inn for MANY years, as the owners were going through a divorce and did the minimum amount of work to keep the inn open. So in reality, this inn was a start-up.

Renovations for the inn were projected to be $1,500,000. This was about 50% of the purchase price of $2,900,000. When substantial renovations are being done to a property, the Americans with Disabilities Act (ADA) gets involved. When renovations on a start-up property occur, they demand that 20% of the renovations be dedicated to the needs of handicapped individuals. This includes access to the inn, rooms that can accommodate handicapped people, public bathrooms built to handicapped standards, and oh yes, if you have more than one floor, the ADA requests an elevator be installed! The most amazing thing about their renovation was that the monies were basically geared to the first floor only of the inn, and only one guest room out of nineteen was being redone. This is something to keep in mind.

During renovation of the first floor, many surprises came into play. Old buildings may look fine on the outside of the walls, but just wait until they are opened! Also remember that this inn was inspected by a structural engineer, but he couldn't see within the walls either! Not one, but two steel beams were needed because the main support beams of the inn were damaged. The front of the inn faces the elements of the ocean and this caused the complete rotting of the front of the inn, which needed to be replaced. Windows were removed to upgrade to new windows. In the process, it was found that past construction was done incorrectly, and supports above the windows were non-existent. I could go on and on, but I think you are getting the picture.
Now, let's talk about contractors and deadlines. This inn happens to be located in a very seasonal part of the world. Most cash flow is earned Memorial Day Weekend through Columbus Day Weekend. Projections were made and the contractor promised release of the building by mid-May. It was clear by the first of May that the deadlines would not be met. So to fix this, the contractor started working a six day work week. Isn't that great! Now the new owner has to pay time and one-half to get the work done! Not quite in the budget! Needless to say, they couldn't open for Memorial Day Weekend. The rooms did get released so that the Inn could open the week after, but some business still was lost. I hope that you noticed that I haven't mentioned the dining room. It is currently estimated to be released by the contractor by June 15th, but I wouldn't place any bets yet!

If you want to do a start-up, please do so. However, we want you to be successful!! Please go in with your eyes wide open, pockets deeply lined with money, and be ready to work with delays!

Best Methods for Finding the Ideal Inn

Written by: Howard J. Levitan, Oates & Bredfeldt, LLC

This is one of the most asked questions at every one of Oates & Bredfeldt’s Innkeeping Seminars. How can I find my ideal Inn? The answer is very easy, but counterintuitive. We say simply to “Stop looking at Inns for sale!” Here is why:

Location, location, location is still the golden rule. Searching for an Inn is not like buying a home (it is a business first!). We often hear, “Well, I have moved all over the United States during my business career, I can live anywhere.” Better yet, we often hear prospective innkeepers say “I will know my ideal Inn when I find it.” In order to take control of the process, every prospective Innkeeper needs to first decide clearly what they are looking for in an Inn, and, most importantly, where that Inn is located. Location will dictate the one clear factor in the Inn’s business model, the occupancy rate. While the occupancy rate at Inns will vary depending on the rate charged, or the amenities, or the size and furnishing of the rooms, or especially the hospitality provided, the key factor is location.

If the Inn is in a destination location (each state has only a few true historical destination locations), the occupancy rate will be significantly higher on average than if it is located in the countryside. Thus, occupancy rates at Inns located in destination areas like Stowe, Manchester, and Woodstock, Vermont, or North Conway, NH, or Bar Harbor, Camden, and Kennebunkport, ME can be almost twice the occupancy rates of their counterparts in non-destination areas of the same states. This is a historical factor. People have been vacationing at these locations since travel was made easy by the Industrial Age. They have a recognition factor, and Inns in these types of locations do not need to sell coming there, only how their Inn is differentiated from the other Inns. The Internet and particularly the Search Engines have heightened this effect. People may enter “Boothbay Harbor bed and breakfast” into Google, but few are going to enter “Newcastle bed and breakfast” (where our Inn was located) even though it is only a few miles away. Thus, Inns in non-destination locations need to be at the very top of their electronic marketing game just to hold their own against the destinations. Location is a critical factor, but what about price? The other side of the equation is that with higher occupancy rates, and, potentially, more net cash flow, the Inns in destination locations tend to be very expensive. You need to decide what factors are your ideals!

Creating Your Model Inn. This is the key to success. Take control of the process by clearly defining what you want in an Inn; your ideal “model.” What does it look like (style of architecture), is it full service or bed and breakfast, what kind of food service will you serve, how many rooms (dictates the need for and number of staff), is it a mature business or a start-up, and, most of all, where is the location? The model needs to be as detailed as possible; it is not something that you can just dash off in a few minutes. For couples, one of the most interesting exercises is to do this separately and then compare models. Often, there are clear differences that need to be ironed out before commencing to search. Start the process with a very exhaustive list of exactly what you want in an Inn. You may never find your “ideal” Inn, but at least you now have an objective list of what you are looking for. Put it down in a spreadsheet, so that you can compare all of these factors against each of the Inns that you look at.

Inns for Sale? Looking at Inns for sale all over any region, like New England or the Southeast, or any broad location can be an exercise in frustration. Again, it is not like buying a house. The more you see does not necessarily expand your knowledge of Inns, only of Inns that may be overpriced or have problems. The simple answer is that most very good Inns sell without the general buying public ever being aware that they are for sale. This is a confidential process. Most Innkeepers understand that being for sale may be a “four letter” word. It has an impact on the staff and clearly on the guests coming to visit. If the average life of an innkeeper is about 8 to 10 years, this means that about 10-12 percent of all Inns are for sale at any one time. Not all of these are publicly on the “market” with a broker.

Another very important factor in Inns for Sale is how the offering price may be set. What is the justification for the high asking prices we now routinely see in Inns? Does the Innkeeper decide the price based on anecdotal evidence of what other Inns in the area have sold for, or is it based on some kind of simple rule of thumb like a gross revenue multiplier? Can the Inn support normal commercial financing or does it require more equity in order to cash flow? Does the Inn’s business model have potential for growth, or is it stagnant or are revenues/occupancy falling? All of these are important questions in the process of setting the right price. Searching for an Inn which is ready to be sold, but not yet on the open market, may be the real answer to finding your ideal Inn.

The Tell-tale Signs. The Inn is for sale, but only the Innkeepers may know it. There are always clues. Perhaps it is the chipped paint on the stair treads, or the landscaping that just is not as manicured as it should be. The website has not been updated for a while. The Innkeepers are a bit tired, or you only see them occasionally; the staff is running the Inn. They have been keepers of the Inn for 8 or 9 years, and perhaps they are ready to move on. If the Inn meets your ideal model, or is close to it, why isn’t this situation the perfect solution to your Inn search? Approach them before the Inn goes on the market, and you may be able to get a much more reasonable price. The worst thing that can happen is that you are told that the Inn is not for sale. But even then, you may be able to get a first bite when they are ready to sell.

Create a Search Plan. Take your model, and visit your location. You should have a back-up location which you are keeping an eye on, but not actively searching. Visit your location as often as possible, in different seasons, staying at Inns which are high on your list as meeting your model. Network with the Innkeepers, tell them that you are searching and what is your model. Even if they are not really for sale, they can help you with knowledge of who might be thinking about selling. This is the best way to get first hand facts of what is going on in that location. The Innkeepers may not tell you financial information about their Inns (occupancy rate or average daily rate), but most are quite free with giving you everything they may know about other Inns in town. This networking is really the key to success.

Confidentiality. Remember one thing. If an Inn is not actively on the market, whether it is for sale or not, telling other Innkeepers or people in the community that you are trying to buy a particular Inn is the fastest way to lose a deal. You need to get knowledge, but not by breaching the confidentiality of the Innkeepers. Word spreads quickly in small communities and this can impact the business of the Inn that you may be trying to buy. There will be plenty of time to accomplish the due diligence that you need between the time an offer is accepted and the dates set in the purchase and sales agreement. You need to respect this!

Final Thoughts. This is all about taking control of the process. We have taught hundreds of prospective Innkeepers these lessons, and they work. Create a model, create a search plan, and then find your Ideal Inn.

Words of Innkeeping Wisdom

We are always looking for Innkeeping advice from Innkeepers to feature in our newsletter for Future Innkeepers. Do you have a piece of advice you wish you had known BEFORE you were an Innkeeper? Please share it with us.

We have received some great advice since the inception of our Future Innkeeper Newsletter:

“Plan from day one to have some personal time. The days speed by and before you know it it's been weeks of long days and you haven't even taken a walk. If an activity was important to you before you bought the Inn, keep it a priority after purchase, be it exercise, church or just sitting down and reading. Everyone tells you that you'll be busy, but until you experience it you really have no idea how busy you will be." Sarah & Erik Lindblom, Captain Jefferds Inn, Kennebunkport, Maine

"Many years ago, not long after we opened our own Bed & Breakfast, we learned not to call a guest about having left an item when they departed their stay. It didn't take us long to realize that occasionally we would have a couple stay with us who were married, but not to each other. Today when an item is left behind, we hold it in a lost and found "safe place" awaiting their call to let us know they would like the item returned and where to send it." Bonnie & Joe Masslofsky, The Parsonage Inn, St. Michaels, Maryland

“…now that we're here we have strategically set out to change as many light bulbs to the energy efficient coil style as possible. Oh, stop cringing, we still use the pretty ones where it counts, but when they are destined to be left on 24/7 and covered by a shade, we found that our average suite has 15-17 bulbs, and that each bulb is supposed to save around $50, not to mention they last much longer and have virtually ended our having to drop everything when a bulb goes out to go and change it…” Pam Matthews, Montgomery Inn Bed & Breakfast, Versailles, Kentucky

"Find a place that you love so much that every time you come towards the Inn or when you enter the Inn you say to yourself what a GREAT place this is and how grateful you are to be where you are!" Frank & Julie Hanes, Inn at Manchester, Manchester, Vermont

And one of our personal favorites..."Own a couple of good plungers, know where they are located, and try to avoid carrying one through a public space without masking it in something (a garbage bag works, and it catches drips from hitting the floor post-plunge)." Nancy & Bill White, Sudbury Inn, Bethel, Maine

Do you have some Innkeeping advice that a Future Innkeeper should not proceed without? Please comment on this post or email your advice to kim@oatesbredfeldt.com. We look forward to hearing from you!