Stick to your knitting.

At all times but especially in these tough economic times it is common for moteliers to be reviewing their business and looking at ways they can increase their profit. This is an integral part of operating your own business be it a motel or any other type of business. The ideas and solutions which you arrive at must however be analysed properly to ensure they are in fact a benefit and not a detriment to your business.
What is your core product? This is the backbone of your business and will be the bread and butter profit for you. Many will say well all motels have the same core product. They all have rooms with a bed and bathroom. It is true that all motels have rooms with a bed and bathroom but all of these rooms are not the same. Some are luxury rooms with expensive fittings and unique bathroom accessories, some are rooms of a modern design with standard fittings and some are older rooms with older style fittings and chattels. These are all motel rooms but each offers a different core product to their customer.
Find your identity from your core product and build on this. What are you good at and what are you not good at? If you have a luxury style complex you will not be good at servicing the needs of the budget conscious client. An older style mid range complex will not be good at servicing the needs of a client looking for luxury. What is it that you are best at? Establish your core product find your identity and build on this.
When you are looking at expanding your business you must look at the ideas in relation to your core product. You cannot be all things to all people! When analyzing a new idea put yourself in your clients shoes; is it something they would want. Would a luxury client want a frozen meal to zap in the microwave or would an anti-pasta platter be more appropriate? What can you add to your product that your current customers would want to pay extra for? It is a far more economical way of making profit by taking more revenue from your current clients than by spending marketing dollars to try and attract new clients.
When you implement a new idea it is like any other aspect of your business you must be able to monitor and measure the effect of it. If you have a new product on offer then you must set a time frame (say monthly) to measure how many customers have taken up this product and how much profit was made from it after all costs were taken out. Ask your clients for feedback. Was the product beneficial, would they use it again, how could it be improved? Then it is vital to act on the information and measurements you have gathered. If you have given a product sufficient time to develop and it is not making profit or being used then you must put it in the tried but didn’t work basket and move to the next idea. Business is a perpetual cycle of evaluation and ideas.
Most importantly be good at what you are, “Stick to your knitting” and grow your business from this to be the best of its own particular kind.

August 30 2010 | Articles for current moteliers and Entering the Motel Industry and Uncategorized | No Comments »

When is a casual employee not a casual.

In the motel industry the question of staff contracts and definitions is often raised with me. It is interesting to hear all the different interpretations and methods of employing staff and paying wages. Legally however as an employer a motelier is bound by statutory law and must abide by the obligations under these laws.

Probably one of the biggest misnomers is that cleaning staff in a motel are casual employees. The term casual employee is loosely used to describe someone under a fixed term contract. This is clearly defined in the act as

 Fixed term employment

• (1) An employee and an employer may agree that the employment of the employee will end—
  • (a) at the close of a specified date or period; or
  • (b) on the occurrence of a specified event; or
  • (c) at the conclusion of a specified project.
  •  

The act goes on to specify that this type of employment contract must not be used to

• to exclude or limit the rights of the employee under this Act:
• (b) to establish the suitability of the employee for permanent employment:
• (c) to exclude or limit the rights of an employee under the Holidays Act 2003

In many cases motels call their staff casuals and pay them as if they are under a fixed term contract in that they pay holiday pay as a percentage of their wages on a weekly basis. Motel cleaners work variable hours but have an expectation when they finish work for each day that at some stage in the near future there will be further work for them. Under the terms of the act treating cleaners as fixed term contract employees is illegal and should the employee have issues at a later date they can claim that they have not received holiday pay and the motelier may be required to pay holiday pay on top of the wages already received.

A motel cleaner is a permanent part time employee with variable hours. They can be employed on a basis where you call them when you need them and tell them when they are not required but they are entitled to all the benefits that any other permanent employee is entitled to. Their employment contract must be in writing stating the terms and conditions of their employment. The holiday pay must be paid when they take their holiday not as a percentage each week. The essence behind holiday pay is that the employee has a break from work as much as that they have holiday pay so it should be paid to them when they are having time off. If they do not have regular rostered days each week then a day they are not working could be considered to be a holiday and paid as such. This must be shown clearly on the pay slip and pay records.

Many motel operators have employees who do not have an employment contract and who are paid holiday pay as a percentage of their weekly wage. As a business operator you can chose to operate in which ever manner you wish but you must be aware that this style of employment relations may leave you open to possible problems at a later stage should your employee become disgruntled and take the issue further. If you are unsure of the Employment regulations and what your obligations are as an employer you should seek legal advice to make sure you are in fact doing things correctly.

April 14 2010 | Articles for current moteliers and Changes in Motel Trends and Entering the Motel Industry | 3 Comments »

One aspect of avoiding a downward motel spiral.

Ever wonder why some motels seem to survive over many decades and others falter after a seemingly small period of time. One of the causes for this can often be a lack of maintenance which creates a slippery downward spiral.
One scenario will show a motel which has operators who do the bare essentials when it comes to maintenance and take out all the excess money as profit on the motel. They do not spend any money on replacements until items are irreparable. They then sell the complex at a reasonable price because the profit looks good and the next operators use the same ethics when operating the motel. After three or four of these types of operators the motel has deteriorated badly. The tariff cannot be increased as the guests will not pay more for a sub standard unit, the number of return clientele decreases due to people being dissatisfied with facilities which do not work or look old and uncared for and the cost of all the deferred maintenance is too much for the operator. This results in the business profit reducing and the value of the business decreasing. At some stage one of these operators will need to spend a large sum of money on maintenance or sell for a lower price than they purchased at.
The alternative scenario shows a motel which has operators who continually upgrade their facilities. They replace items on a regular basis and before they become sub standard, they continually look for additions or improvements which will enhance the guests stay and they build the business year after year. By having a complex which is perceived by the customers as being cared for and providing good facilities they have a strong customer base and therefore are able to increase tariffs periodically. This ultimately results in a higher profit and a more valuable business when it comes to the selling stage. A change of hands in this scenario sees the new operators continuing with these ethics and the value of the business continuing to grow.
The underlying point is that a motel operator needs to look at a bigger picture than just how much profit is in the bank today. The impact of this profit on the future is just as important. By spending money on your motel when it is needed you will retain the quality of your business and make a larger profit at the selling stage. There is an old adage which holds true even today. Sometimes you have to spend money to make money.

February 15 2010 | Articles for current moteliers and Entering the Motel Industry and Uncategorized | No Comments »

Opportunities for Motels!!

Seeing this recent release in regard to Tourism New Zealands latest campaign made me think about how important it is for motels to take advantage of opportunities. One motel operator will look at this and say wow I hope some of these people stay with me. Another operator will look at it and say Wow there will soon be a lot of people surfing the net looking for Ski related holidays in New Zealand. I need to add a package or a reference to Skiing in New Zealand to my web site so they find me. 

Which one are you and how are you going to make the most of every opportunity you see?

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Source = e-Travel Blackboard: J.L

February 09 2010 | Articles for current moteliers and Entering the Motel Industry | No Comments »

Migration law changes effective 30th November open opportunities.

The following story in today’s NZ Herald comments on the migration law changes and how this may affect business sales in NZ.

As an accredited business broker I deal with many foreign people looking to make New Zealand their home. Motels have been a favoured option for many of these migrants due to the fact they are able to get a business and a home all at the same time.

This law change due to come in to effect on November 30th could make the process easier and more permanent form the onset, with the chance of permanent residency straight away rather than going though the process of a long term business visa. 

This larger target market must be good news for those looking to sell their motel business.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10609740

November 17 2009 | Articles for current moteliers and Changes in Motel Trends and Entering the Motel Industry and Uncategorized | 2 Comments »

Log of Wood Motel Golf Challenge. More of a challenge for some than others!!!

Only the second time on a golf course in my life the Log of Wood motel golf tournament was certainly a day to remember. John Griffin Realty were sponsors for the event and so John and I attended the day. Neither of us are golf players although John did play for a few years in his younger days. Long long ago.  I on the other hand have only been on a golf course once in my life when I followed my father in law and husband around for a game and was absolutely bored stiff. This did nothing to encourage me to participate further in the game.

Anyway on the tournament day we dully turned up and it was decided that John and Murray Woofe from PIC insurance would drive the drinks cart around and replenish the poor thirsty moteliers on their rounds.  So what was to happen to me?  I’ll just walk around I said, but, oh no, John in his wisdom decided that it would be better for me to take a cart around. I knew Anne from Boundary Court in Hamilton was also walking the course so thought I could catch her up and enjoy her company. 

After a quick lesson in how to drive my cart I said well where can I drive. Anywhere you want but just keep of the greens John said as he and Murray disappeared in their cart. Ok off I crept down the gravel path until it suddenly ended about 10 metres away, I looked out at the golf course, green trees, green gardens and green lawns. How on earth do I keep off the green I thought it’s all green to me. Oh well I’ll just follow the tyre marks of other carts and stick by the trees no-one will be playing in the trees.

As I crawled around the course on this cart I started to get a bit more confidence and was even going faster than the walkers by this stage.  I had trouble finding Anne and was just whizzing along at  my great speed when I decided to go around the bottom of this hill which was quite long grass and a bit of a gully so I thought oh yes that will be okay. However!!!! Just as I was halfway across  I turned and glanced to the left and noticed a golfer poised above a ball. Another couple of golfers standing around him and all of them watching me intently. When the golfer who luckily I recognized as Robert from Rosetown waved me on I began to think maybe I was in the wrong place. Getting to the end of the gully and travelling up the hill I was greeted by John Griffin who quickly said I think you better follow us now. This confirmed I had gone somewhere I wasn’t supposed to.

Following John and Murray and wondering why they stopped now and then and just seemed to sit still for no reason. We arrived at a hole and I realized Anne was there. AANNE I called out. Everyone turned and looked at me much to my surprise and almost seemed to glare. No Kathie you have to be quiet when they are playing John whispered in my ear. Oh gosh another muck up. Still I’ve only upset about 8 moteliers so far. Good relationship building from this sponsorship so far!!!!

I snuck over to Anne and suggested she came on the cart with me.  Great all sorted and back to the cart to be greeted by ” Your phone has just rung it should be on silent you know”

Well as you can guess so far the day has not endeared me any closer to the game of golf. You can’t drive where you want, you can’t make noise and you can’t have your phone on doesn’t sound like fun to me.

In all fairness though things weren’t quite so bad after that it certainly helped to have a navigator. I would be driving along gazing across the expanse of the golf course when I would hear a gasp from Anne at my side and looking down to where I was driving I would see a large mud hole which I would have to evade very quickly with Anne hanging on tightly. I’m not sure if her day was getting better or worse she seemed a bit quiet so it was hard to tell.

As the day went on I became a much more confident driver with Anne and I attempting bigger and steeper hills on our drinks delivery rounds. Of course even the cart race between us and the John Griffin Murray Woofe cart was won by the ladies. Doesn’t take long to learn to drive those carts. Hope the green keeper wasn’t too busy afterwards fixing the skid marks.

The end of the day was fantastic with a get together in the club rooms, food, drinks and the prize presentations. As sponsors we got to do the prize presentation and I of course got to kiss the recipients. Now this ending to my day was very enjoyable and almost enough to make me consider playing golf. I was however told that the kissing at the end was not standard and this has made me hesitate to rush out and book golf lessons.

October 20 2009 | Articles for current moteliers and Entering the Motel Industry and Uncategorized | 1 Comment »

Which agent do you choose when buying a motel?

It is important you make the right choices along the way when you are looking to make a major investment such as when purchasing a motel.  One of the important choices is that of which broker to use. Often people think all agents are the same and so they just respond to a number of advertisements with lots of different agents. The idea of sameness is far from reality as various agents and companies can be quite different.

Some people acting as salespeople for motels are not business brokers and have not done any specialist training in this area. Others have completed the educational requirements and are accredited by the real estate institute. To my way of thinking it is a bit like the difference between a GP and a surgeon. They have both undergone the same general training but the surgeons with the extra training would certainly be my choice in the specialist area should I require surgery.

Some companies are corporate entities and can often be operated under overseas ownership and conditions while others are small NZ owned and operated. Some companies have policies and procedures which must be adhered to in black and white and others are more flexible and personal in their service. You need to decide which your preference is before contacting a broker.

The internet is a fantastic medium to find information and see what properties are on offer. It can give a great indication of the  motel you are looking at but often doesn’t give you much of an idea as to what the agent is like who you will be dealing with. If you register on a web site and download information about a particular motel it is important to realize that you are also committing yourself to the agent attached to that advertisement for any further dealings with that particular motel. Is this what you want?

In order to choose an agent it is beneficial to find out exactly who they are and what they represent. Ask about their background. What qualifications do they have? Have they had experience in the industry?  Are they a business broker and do they understand the complexities of a motel. Have a look at their website if they have one. Google their name and see what you come up with.

Talk to the broker and see how comfortable you feel with them. You need to be able to discuss things frankly with your broker and trust what they are telling you. A good broker will be able to understand your needs and criteria and find a property to suit you.

As you can see all agents are not the same and it is a choice which you must make carefully. You are probably making a lifestyle change and investing all your savings in a motel. Take the time to find the broker who will enable this process to be a smooth and enjoyable transition for you.

August 25 2009 | Changes in Motel Trends and Entering the Motel Industry and Uncategorized | 1 Comment »

Congratulations to John & Anne Griffin for Life Membership Waikato Motel Association

I attended the Waikato Motel Association AGM on Sunday night and was thrilled to see my Principal John Griffin and wife Anne presented with life membership of the association. Last year John was made an Honorary life member of the Motel Association of New Zealand and this year was presented with the local association life membership as well. It is certainly a mark of respect for him and Anne.
John has been in Real Estate for over 40 years and specializing solely in Motels for the last 30 years. The life membership awards are a reflection of the commitment that both he and Anne have to the Motel industry and all its people. They are mentors to many a new motelier, give advice and assistance to current moteliers, and provide genuine guidance for people entering the industry. On top of this they provide sponsorship and support for many motel industry events and organizations.
From my personal point of view I feel very privileged to have such good people as mentors for my motel brokering career. They are genuine, honest and caring people whom it is an honor to work with and learn from. The ethics within the business make it a very easy and enjoyable place to be.
Congratulations to John and Anne for a very well deserved Waikato Motel Association Life Membership.

July 22 2009 | Articles for current moteliers and Entering the Motel Industry and Uncategorized | 1 Comment »

Monday Morning lists. What are they and do they work for your business?

I recently attended a Debbie Mayo- Smith of  www.successis.co.nz workshop on data bases and part of the discussion focused on Monday Lists.  OK I thought this must be where we sit down and plan how we are going to spend our week so we don’t waste all our time trying to remember what it was we had planned to do!!!

Well no that wasn’t the idea.  Basically the discussion evolved around choosing a day which was the quiet day of the week.  (Often difficult to decide if there is one in the Motel Industry). But anyway on the quiet day rather than mucking around you should use the time to gain traction from existing information you have about your customers.  If you employ reception staff this works as a double benefit as you are paying them to be there over the quiet day so by increasing their productivity you are hopefully increasing sales and turnover without any increase in staff costs. These lists are also not specific to any one industry and can work in any business but just need to be modified to suit the type of business.

So to get to the nitty gritty what are these lists? Basically it is capturing the information you have about your customers and putting it to use. Firstly we have a “Raising the Dead List” This doesn’t mean turning units in to cemetery plots but rather finding our long lost customers. Most front desk programmes have a good record system which will record the information of your client’s last visit. The raising the dead list means that anyone who hasn’t visited you for say 2 months gets contacted to ask why and if there is anything you could do to make them come back.  The contact can be made in a variety of ways such as phone, e-mail or letter but in order to have a discussion and get the person to tell you why they have not returned you really need to talk to them so phone is the best method. You must see what the problem is and work out how to resolve it. This contact makes people believe that they are not just a dollar producing number but that they are important to you and you want to make them happy. It also gives you a method to find out the faults within your business and rectify things which are harmful to the business by causing people not to return to you.

The second list is a 300/500 list. This conjured up images of an intense 300 exercise I do in the gym to strengthen abs but luckily it wasn’t very physical at all. This list is where you pick a number of clients. In this case the number was 500, and offer them a voucher for a service they use which they can keep or give to a friend. A trial was undertaken with 500 clients from a hairdressing business. The hairdresser also had beauty products such as facials etc. The offer was that if the client came and paid for a make up treatment they would receive a voucher for the same value to either use themselves or gift to a friend.  Of the 500 clients 300 of them took up the offer and a large proportion of these gifted the voucher to a friend. This meant an instant injection from the 300 people paying for extra services, the possibility that these people would continue to use these services and so their average spend would increase and also on top of this all the friends who were gifted the voucher were potentially new customers to win over on their first visit.

The concept would need to be thought through with a motel. What extra service can you offer to your existing customers? For instance you may choose 100 people whom you will offer a voucher to the same value as the second night if they stay two nights instead of one on their next visit. Isn’t this a great way to increase the number of customers you have just by using your existing information. Also it is easy to track. You can measure the results far more accurately than with the dollars you spend on print or internet advertising.

These are two great but easily implemented ideas to improve your business in a cost effective way.

July 15 2009 | Articles for current moteliers and Changes in Motel Trends and Entering the Motel Industry and Uncategorized | No Comments »

What information does a buyer want when looking at a business for sale?

Usually my blog is about giving out opinions and useful information in relation to motels however this time it’s a bit of a reversal and I am asking you for your help by letting me know what you look for in an advertisement for a business.

This is a question which is probably relevant to all real estate sales but perhaps seems to be a bit more complicated with a business sale.  Where do we draw the line between confidentiality, the need to show the business information and what details buyers are looking for?

There are probably two views on this subject: one being that the purpose of the information is to encourage a prospective buyer to contact the agent and so if there is too much information on the advertisement there is no need for contact and the agent may miss a potential buyer. The other theory is that an agent needs to put as much information as possible on the advertisement because today’s buyers are much more research savvy and will only call if they have enough details to think it is worth calling about.

If the add is full of photos does it stimulate the interest or does it take the emotional element of the real life touch and feel of the property away from the decision and the buyer makes a decision not to take the inquiry any further and by not contacting the agent eliminates the possibility of gaining more knowledge which could influence their decision.

As buyers of a business what do you expect to see in an add, what makes you revisit a website, and what information do you look for?  Do you want long padded details for instance how each motel room is set up the number of beds etc, or is it just the basic facts such as the length of lease, number and type of rooms etc.

What really makes you pick up the phone and enquire in person?

June 23 2009 | Changes in Motel Trends and Entering the Motel Industry and Uncategorized | 4 Comments »