Archive for the 'Entering the Motel Industry' Category
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 »
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?
Campaign aims to drive Aussies to NZ slopes again
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Tourism New Zealand launched Sunday its new early-bird ski campaign aimed at attracting keen Australian skiers and snowboarders to NZ’s slopes.
The tourism body said television commercials would run in Sydney and Brisbane for the next two weeks encouraging Aussies to make early bookings.
It also aims to repeat last year’s early campaign success according to Tourism New Zealand Chief Executive Kevin Bowler.
“Last year was the first year Tourism New Zealand and the industry went into market with an early ski campaign and we had a strong ski season, with the industry here reporting an influx of Australians on the slopes” he said.
In 2009, New Zealand’s slopes welcomed around 70,000 Australians with Australian holiday arrivals over the winter season of June, July and August up 28% compared to the same period in 2008. |
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Source = e-Travel Blackboard: J.L
February 09 2010 | Articles for current moteliers and Entering the Motel Industry | No Comments »
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 »
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 »
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 »
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 »
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 »
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 »
Field days is in Hamilton very soon and it brings me to think about tarriffs and price setting for big events and peak periods. It is very important for moteliers to think very seriously and look at the big picture when setting rates for events. We hear stories around the big events such as a house being let for $6000 for the period of the V8’s and it is very tempting to say well if they can charge what they like so can we. There is however a much bigger picture to look at. There are two issues really the first being how do we attract and retain events and the second being how do we attract and retain customers.
In order for Hamilton to be recognized as an event destination we must of course have events being held here and then promote this. As you are all aware word of mouth is the best advertising and promotion so the experience of those attending the event soon spreads to others. If organizers of events receive feedback that the cost of the event was too expensive for participants then they will look at alternative less expensive options. We have experienced complications with events in the past. Very bad media coverage for Hamilton motels when a non WMA member charged exorbitant rates for a very ordinary room during field days was a distinct disadvantage to all motels who suffered from being labeled as a rip off town you would not want to stay in. Then both the larger Jehovah’s Witness convention weekend and the Amway convention moved away due in part to the cost factor of having it in Hamilton. This does not just affect Hamilton motels but also the larger Waikato as there were always spin offs for other areas from these events. For those of us who were around then it was a big chunk deleted from our income when we started to lose these major boosts from the economy. Conversely the growth of the event market can dramatically increase both the income from your motel and the potential selling price.
Many of you will say but why can’t I put my prices up. Everyone else does it. The airlines and the hotels! Well you are correct they do have peak rates and you as a motelier are just as entitled to have peak rates. It is a basic law of economics supply and demand. This does not allow you though just to pluck a figure from the air depending on how busy town is. Your peak rate can not be higher than your maximum rate advertised. If you have an advertised rate in Jason’s of $100 to $160 for 2 people then your maximum rate at any time of the year can only be $160 for two people. Selling your rooms above this rate contravenes the Fair Trading Act and is illegal.
It is not just the illegal side of your rates though it is how it affects your business. The people who attend events are travelers obviously and you can firstly, attract them for the event, and then retain them as a lifetime customer if you treat them with integrity. Not only will you gain them as a lifetime customer you will also have the potential to gain all the people whom they tell about their experience. If you charge a realistic peak rate for your room the customer will look at the facilities they are getting and be aware that for peak season this is reasonable value. They will then assume that your off peak rates are also reasonable and thus have the confidence to both return to your motel themselves or recommend it to others. If your rate is exorbitant then the customer will assume your off peak rate is also not value for money and will “spread the word” How many of them have corporate friends who travel, have relations who will come to the Waikato for various reasons or travel overseas and talk to people who are potentially international tourists. Do you want them to recommend your motel to these people in a positive or negative way? Look after them don’t rip them off and increase the long term value of the business.
I suppose we need to relate all this to a personal experience. How did you feel when you are buying fruit which is out of season. High demand and low supply. If you go to a shop and the fruit is $9.99 per kilo and you buy it knowing that normally in season the fruit is only $2.99 a kilo you are annoyed but think well that is a high season price. However I know if I then go to the other grocery shops and find that they are all charging $7.99 a kilo I feel ripped off and would not go back to the $9.99 shop. Also I will tell everyone I can that the shop is a rip off and go to the other shops as their prices are much more reasonable for the same product. Is that how you want your guests to feel about you?
May 28 2009 | Articles for current moteliers and Entering the Motel Industry | 2 Comments »
Now we are established in 2009 and have time to think and review things it can be a time for reflection and setting some goals which we want to achieve over the next 12 months. I don’t know how many times I have said my goal for this year has been to loose weight. Many of the years however I have been setting the same goal for the next year as I haven’t achieved it. Looking back I can see I was never going to achieve it. I never said how much I was going to loose, how I was going to do it, and how I was going to measure the progress at different stages during the year. It’s impossible to achieve something when you don’t know what it is or how you are going to do it.
This relates to our business as well. Did you set a goal last year? Did you achieve it? If so good on you, really well done. If not maybe it wasn’t the lack of effort that caused it but rather a lack of direction and measurable steps along the way. This is why we need to take some time out once a year and set goals and objectives for our business, otherwise known as a business plan.
In order to do this the partners in your business need to sit down and work out what their vision is, if you haven’t already done that. Then come up with a small statement. Why does your business exist, who does it exist for and what do they expect. Write down what business you are in, who your customer is and what makes you different from others in the same market.
Now that you know what you are there for you need to define what your goals are. What is it that you want to achieve in your business? Look at each area of your business and see how you can improve or change that area. For example Occupancy, income, return clientele, running costs, chattels, customer service to name a few. Define your goals, for instance you may want to increase income by 5%. How can this be achieved?
Now the objectives are formed from the goals. You may say I am going to increase income by increasing occupancy from 60% to 65%. This means I need to increase occupancy by 0.5% each month. This gives you a measurable quantity or a target to achieve.
Next how are we going to achieve this? Maybe by implementing a monthly newsletter to regular guests, introducing a thank you card or e-mail for every guest who stays, giving guests fresh baked muffins on arrival or you may have another idea which is something that is unique and will make you different to the motel down the road. Whatever your goal set yourself a method of achieving it and a method of measuring if this method is working.
Lastly make sure you monitor those goals at the measuring points along the way. Have a bring up system in your diary or on your computer and look to check how the progress is going. You may find that you are achieving well or you may not be meeting the targets. It may be necessary to change the methods you are using or reassess the goal if things are not working out how you planned. If you don’t check and monitor the progress you will be just like me and my weight; at the end of the year you will be surprised to find you haven’t got what you wanted.
Business plans sound complicated and are often put off for other things which seem to be a more immediate need such as re-painting a unit or trying a new advertising avenue. They are of equal importance but are less of a physical thing and so it is harder to see the importance. There is no point painting the unit if you haven’t got any guests to fill it because your competitors have used a business plan which highlighted opportunities to win over your customers.
I know it can seem a bit daunting but a business plan doesn’t have to be a big fancy document. Just write down the steps and follow it through. If anyone would like to do a plan but is not sure where to start just send me an e-mail and I will send you a template document to fill in the blanks. Then you can just start writing after all it will only cost you the price of the ink but could save you hundreds or thousands of dollars on your business
April 21 2009 | Articles for current moteliers and Entering the Motel Industry and Uncategorized | 20 Comments »
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