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 »
This workshop was conducted at the recent Motel Association of New Zealand Annual Conference, by a panel of the MANZ Consultant Motel Brokers: John Griffin, Malcolm McCrae, Kelvyn Coffey and John Harrison, answering questions and giving advice as to how you should prepare your motel for sale.
It was a very informative workshop with many points raised and many questions answered by the professional brokers. The key points being; Profit & Loss accounts, Chattels, Presentation and Leases.
Profit & Loss Accounts. It is from these accounts that the purchaser will calculate the return they will get on their investment and therefore the accounts need to be accurate and presenting as much profit as possible. A purchaser or their accountant will expect 3 years accounts not just last years, so you need to ensure your accounts are showing the best profit for the three years not just the year you decide to sell. If you take cash from your business and people are looking for a 20% to 25% return then every $1 you take out costs $4 or $5 on your sale price. $20 dollars in your pocket is $100 off your selling price.
Chattels: When selling it is important to have a complete and up to date chattels list available. The purchaser will want to see this in order to assess the business and a delay in receiving it sometimes looses your buyer.
Presentation: This is paramount when purchasers are looking at a motel. Any deferred maintenance should be completed. Fix that leaky tap so the purchaser doesn’t wonder what else needs doing that they can’t see. Clean and tidy, so it all looks pristine and orderly. A disorganized and dirty complex may make the purchaser think the reason is that the motel is too much work and put them off buying it.
Leases: Leases were the major topic in regards to the length of the lease and terms in them. Currently The Motel Assoc of NZ is working on a draught motel lease to try and replace the old ADLS leases and others which are not motel specific . This new lease will be availabe to new properties as those with existing leases in place cannot be changed unless by mutual agreement. It is becoming common for new leases to be 30 or 35 years in length and most buyers are looking for at least 20 years. Extensions can be granted by lessors but this is usually at a cost per year. There is no set figure per year as it is an individual agreement between lessor and lessee and each motel is a unique business so age & condition must be taken into account. Buyers are insisting on leases over 20 years so it is important to ensure you can extend your lease. This does not have to be done at sale time and can often be negotiated as a part of a rent review. A trade off for a rent increase could be the lessor extending the lease.
For more information on any of the above you can contact one of your professional accredited motel Brokers John or Kathie at John Griffin Realty ltd. Hamilton. E-mail kathie@shepard.co.nz
August 13 2010 | Uncategorized | No Comments »
Out visiting motels recently I came across a couple who made me reflect on how your attitude determines the type of life you have. This couple is in their late 60s early 70s and is running a motel. They purchased the motel as an investment but then needed to go back to the motel which had been seriously run down and basically build the business up from scratch. This included not only building the business but also refurbishing the motel.
Two years on they have a lovely 4 star complex with a business in the growth stage. Their comments were that they didn’t particularly want to be working at their age but that they are enjoying the challenge and are warm with a roof over their head and food on the table so have lots to be grateful for. There welcoming smiles on our arrival certainly didn’t show any signs of not particularly wanting to be there.
Conversely another motel had a couple whose motel was very well kept and immaculately presented. The conversation at this motel however was not punctuated by laughter and consisted mainly of the problems they perceived they were having in life. The welcoming smiles were not broad and open as in the first case and the couple didn’t appear to be at all happy with their lot in life.
In my opinion both couples were in a similar situation but the first ones looked at life differently and so were happier within themselves. We all find ourselves at various stages in our life with things which we are not particularly content with but it is our attitude which makes the difference. Thinking positive makes us live positive. In order to try and achieve this a good task to do is have a GFT list. This is a Grateful For Today list. Each day write down what you can be grateful for today and take the positive things from life. I am certain it is better to live life with a positive attitude than get bogged down with the things which don’t go quite as well as you would like.
June 24 2010 | Uncategorized | No Comments »
Here is an interesting article from the Motella Blog. http://motella.blogspot.com Maybe not the kind of service you need to follow!!! I wonder how it would reflect in the ratings for this motel on trip advisor?
Monday, May 10, 2010
Motel “Complimentary Hot Breakfast”
For those motels that are looking for new marketing ideas, we see that Spoof Times have reported on an innovative way for motels to offer a “Complimentary Hot Breakfast.”
Former guests of the Budget Inn and Travel Center of Wichita, Kansas are suing the hotel for failing to follow through on their advertisement of a “Complimentary Hot Breakfast” for their guests. “It was the main reason that we decided to stay there on our cross country trip,” said Wayne Garth of Denver, Colorado.
When asked how the motel breakfast did not meet their expectations, Mr. Garth said “Complimentary means free, right? At least, that’s what I always thought it meant. My credit card was charged for five $9 meals after we left. There is nothing complimentary about that!”
“Now, let’s look at the word hot. They had powdered donuts and bowls of Fruit Loops or Cornflakes. That doesn’t look very hot to me!”
Rahad Patel, owner of the motel, offered the following explanation: “When you enter our breakfast area, my daughter is standing there, thanking you for coming in. She tells people that they look nice, that she likes their clothing, or that they have cute kids. She is very complimentary to all of the guests.”
“My daughter is also dressed in a string bikini while she does this. Even though I am her father, I must say that she is pretty hot. She is also a straight “A” student and is going to be a doctor.”
“Breakfast was served by a very attractive girl saying nice things to people. That qualifies as Complimentary and Hot, doesn’t it?”
May 10 2010 | Uncategorized | 1 Comment »
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 »
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 »
With all the conferences and seminars I go to I seem to find lots of tips and programmes which are so good and time saving I feel I just have to share them and help to make the running of your motel or just your computer life even smoother.
This post stems from a seminar with Debbie Mayo Smith and her book 101 quick tips. The post is about Outlook and the various short cuts and features which you can use with this programme. Some of you may already be using Outlook but some may still be on outlook express. My own personal opinion is that outlook is a far better programme as it has a calendar, tasks, appointments, reminders and other functions which outlook express doesn’t have. Outlook express is simply to receive and send e-mails where Outlook has far more features than that.
Basically Outlook is an e-mail programme combined with a diary and so you can organize your follow up tasks and appointments from e-mails and also set reminders so you don’t forget to do those essential things. I will concentrate on tasks in this post and show how you can improve your organization skills by the use of this programme and a few simple tips.
Once you have outlook you will see a list of folders in the side pane which will include one called Tasks. To create a Task click on this folder then click the New button. Alternatively go to the File menu click on New and then click Task.
In the subject window type a name for your task. Then complete any other boxes on the TASK and Details tabs for information you want to record for the task. If this is a task you need to reoccur. Eg: Paying PAYE click Recurrence, click frequency (daily, weekly, monthly, yearly) for which you want the task to reoccur.
On the Task tab you can set who the task belongs to, assign the task to someone else, make it reoccurring, assign a due date, assign a start date, assign or change it’s status, set a reminder date and time, assign contacts to it, assign catergories to it, make it a private task.
On the Details tab you can, assign a date for it to be completed, assign work hours, assign mileage, assign billing information.
For an animated tutorial on tasks you can go to http://office.microsoft.com/en-au/assistance/HA010929451033.aspx
I find the task set up invaluable for reminding me to contact people and do jobs set for a future date. In the motel business this would be great to remind you to follow up on deposits, confirm group bookings and numbers, pay GST and PAYE, unit spring cleaning rosters and numerous other things.
There are also however tips and shortcuts for setting a task. For instance if you receive an e-mail from a client saying they will confirm numbers for a large group booking by a set date then all you need to do is to click on the e-mail and drag and drop it in to your task folder icon. This will automatically open a new task which contains the content of the entire e-mail. If you want the task to show on your calendar just drag and drop the e-mail in to your calendar and it will pop up with a calendar item containing all the details of the task. Just remember the date will be set to the date you receive the e-mail so if you want to change it to the due date and add a reminder you will need to change the calendar item details then save the item.
If the task is for another person: for instance if you are asking a group booking liaison person for confirmed numbers, then you can click on the task and drag it to your inbox. This will make a new e-mail with all the details of the task for you to simply add a recipient to. Pop in their e-mail address and they have the details from you in writing. If you need to ensure you get the answer back from them for the confirmed numbers just add yourself to the e-mail as a blind carbon copy BCC and when you receive your copy of the e-mail just drag and drop it back to the task folder. This will then set up another task in your Outlook which you can follow up on. When this task comes up for you if you have not received a reply from the person just drag and drop your task back to the inbox which will create another e-mail to that person and say in the message line. I haven’t heard from you yet.
A reoccurring task may be include such things as to contact your VIP customers every two months, send a newsletter every three months or clean light shades or drapes on a regular basis. By creating a reoccurring task it takes the guess work out of when you did it last and when you need to do it again.
There is also an option of a flag instead of a task. This is a quick process of just a right click on the flag at the side of an item such as an e-mail, task or appointment . Then you can set when you want to be reminded of this item. A flag can only be created from an existing item however where a task can be created from scratch.
If your contacts have Outlook and you send them a task they can accept or decline simply by using ALT + C to accept or ALT + D to decline. An automatic e-mail will reply for them. This also works if you need to set up a meeting time for a committee in your calendar but that is another lesson.
October 29 2009 | Uncategorized | 1 Comment »