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 »
The annual Motel Association of New Zealand conference was held in Hamilton from July 29th to August 1st. One of the highlights from the conference was the award of Life Membership to a motelier who has been heavily involved in the Motel industry over a number of years. Congratulations to Colin Hunt from Taranaki in gaining this prestigious honour.
Following is the accolade about him from his local Taranaki Branch when recommending him for the award.
Colin started in the motel industry in 1995 when he opened Brougham Heights Motel with his wife Beryl. Leading up to this he had sourced the land for the motel and found the investors for the building project.
Colin & Beryl operated Brougham Heights until Jan 2001 at which time their daughter Deborah and husband Mo Tawa took over.
Colin continued developing motels and was involved in the building of BK’S Egmont Motel in New Plymouth. He owned the lease with business partner Peter Kirk until about 12 months after operating the motel the lease was sold.
A year or so later along with several other partners he built Landmark Manor Motel. Managers were once again put in this motel and when the business had grown the lease was later sold.
Colin has been involved in the local Taranaki MANZ branch from the time they opened Brougham Heights in 1995. Firstly he was on the committee and then became President a role in which he remained until 2005. He has always been a strong advocate for the motel industry in Taranaki and has written submissions to council on several industry related issues. He was involved in the Hospitality/Tourism cluster group in conjunction with Venture Taranaki. He has also been involved in the local Chamber of Commerce.
In 2005 he, along with Deborah, Mo & Beryl purchased Amber Court Motel here in New Plymouth. He is still actively involved in the day to day operations of this property.
Colin is regularly approached by people seeking advice about how to get into the motel industry, he has also been consulted regarding different properties in New Plymouth offering the owners advice on everything from the design of the building to the actual operation of the motel.
The Taranaki Branch highly recommends Colin Hunt be considered for Life Membership by the Motel Association of New Zealand inc.
August 05 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 »
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 »
Press Release
www.ezibed.com
10 September 2008
New Zealand owned & operated last minute accommodation specialist Ezibed.com was last night announced as a finalist in the Online Innovation category of the Hawke’s Bay Chamber of Commerce Business Awards.
Innovation is an important aspect for both attracting new customers and retaining existing customers says the company’s Managing Director, Gareth Pearce. The company that was founded in late 2003 has become a leading online accommodation booking website within New Zealand, recently expanding into Australia, Pacific Islands, USA and Canada.
With over 2000 registered accommodation providers, & over 50,000 visitors per month looking for accommodation, the company’s growth has been rapid. Ezibed.com recently launched its new customer focused service solution that allows users of the website to reach customer support through a live ‘instant message’ interface, allowing customers to communicate with the company without having to physically phone or e-mail for support, thus saving time. This was a New Zealand first for an online accommodation booking website.
The company also launched a free text message booking confirmation service to assist travellers who either cannot print their booking confirmations due to them already travelling and not having access to a printer or for same day bookings. All customers who provide a mobile phone number also receive a text message on the morning of their check out as a little extra touch.
With customer service a core focus for the company, Gareth Pearce says that the company is committed to keeping up with technological & consumer trends. “We are still building up our brand awareness within New Zealand, and trying to let people know that they don’t need to go to the Yellow Pages anymore to look for accommodation. If we can provide a fast easy to use website that consolidates all the accommodation in one area and the website has a human touch to it then we will retain our customers and our customers will be our marketers. We’ve already got over 26,000 sales reps out there” says Pearce.
Pearce says that understanding what their users want is critical to the ongoing success of the website. “Our focus is all about offering a quality service to our customers & also our accommodation providers that display last minute rates on our website. We continue to add innovative new features that allow us to engage with our users & this keeps us ahead of our competitors”, says Pearce. Ezibed.com is a New Zealand owned company, competing in a highly competitive environment with large international travel websites.
The company plans to extend into popular Asian cities before the end of 2008.
Press Information: For more information or imagery contact: Gareth Pearce Managing Director 31 Porangahau Road Waipukurau
P: +64 6 858 5442
E: marketing@ezibed.com
Skype: ezibed.com
SOURCE: Ezibed.com
September 10 2008 | Articles for current moteliers and Changes in Motel Trends and Entering the Motel Industry | No Comments »
A recent bad customer service experience has reinforced the fact to me of how important interactions are with customers and how they can make or break a business.
I have trouble coping with the new age customer service call centers which most large companies appear to have taken on as a necessity of modern times and my experience with one of the “Customer service representatives” yesterday did nothing to improve my beliefs. The short version of this story is that my daughter purchased a Hewlett-Packard laptop in February 2007. She has not had a good run with her computer and during the 17 months she has owned it she has needed to replace the battery charger four times. This hasn’t been an issue to date and I have to say Hewlett Packard have been very good at simply replacing the charger by sending a new one. That is until yesterday. When she rang yesterday she was told that her laptop was no longer under guarantee and she would have to pay for a charger. The last replacement charger was more than 3 months old and so no longer under guarantee.
As she is a young university student she was quite upset at the prospect of spending $100 on a new charger and maybe having to do this every four months. So being the good mother I try to be, I rang the Hewlett Packard customer service center to express my concern at what I considered to be a possible inherent fault in the lap top chargers. This is where I came across what I considered to be bad customer service.
After giving me his name, Mike, which was not a reflection of the accent I was hearing, the young man proceeded to tell me that as the charger was older than three months it was no longer under guarantee and they could not replace it. I should have known then to stop but I tried to make this “service” person understand that my problem was not their policy on replacements, but that it was the continual malfunction of these chargers which possibly reflected an inferior product when comparing them to other laptops on the market.
He simply repeated that they could not replace the item as it was out of guarantee. A fact I already knew as it was now the third time we had been told this. I tried in different words to say that I understood that was the policy but this was not an isolated instance it was an ongoing issue with this laptop which I felt had not been fixed but just deferred until the guarantee was expired. The “service” representative replied “I do not want to repeat what I have already said.” Leaving me with the distinct impression he didn’t care and wasn’t hearing what I was actually saying.
After several attempts to get ‘Mike’ to listen to what I was saying I realized I was pushing the proverbial up hill and so asked to speak to his manager as I was not happy with the response. To my amazement I was told no one else in the company could talk to me as they would just be repeating what Mike had already told me. My next statement was that I would like the number for the complaints line as I was not happy about this process. Again to my amazement I was told that they did not have a complaints phone for me to ring. Dumbfounded I then asked “Is there no way I can contact Hewlett Packard with a complaint?” Grudgingly I was told that they only have an e-mail I could use if I had to. The e-mail address was not forthcoming though and I still had to ask for the details so I could contact the company. I was left feeling very frustrated, exhausted and angry.
This whole experience made me think of the cost of the item and the damage which can be created to a business by the customer service. I have now taken to print via the web with my disappointment and named the product and company. My daughter too has taken to print via the web. How much damage does this create for the companies reputation? Statistics show that 71% of people will change their mind about a product on the basis of another persons review. My review of Hewlett Packard doesn’t stack up well for them.
It isn’t just large companies who are affected by this, all businesses must offer exceptional customer service to retain the customers they have and create that vitally important word of mouth advertising. My specialty area of motels is no exception to this rule. A motel which provides a great customer experience, is interested in and tries to solve a guests problem will always succeed over a motel which simply provides a facility and has a take it or leave it attitude. If you operate a large motel it is also vital that your staff know what your customer service ethics are and deliver the same experience for your guests. The biggest thing with customers is to remember they are people who want to feel cared for and wanted.
September 09 2008 | Articles for current moteliers and Entering the Motel Industry | 5 Comments »
There is a growing phenomenon of websites that publish feedback from gusts that stay at commercial accommodation, including motels. Web-cred is of increasing importance as a motel’s consumer rating is being formulated and exposed to the world by guest reviews. Past guests are more than happy to share accommodation experiences and future potential guests are using these reviews to determine their accommodation choice.
The importance of your motel’s on-line consumer “rating” will soon outstrip rating systems such as Qualmark. The Internet not only is making the traditional “Agent” redundant, but will soon be threatening traditional quality assurance programmes. In the very near future, it is conceivable that a motel’s “star rating” will be solely determined by on-line reviews. This is daunting territory for many motel owners as the reviewers’ data is raw, live and very pointed… who can argue with the adage that the customer / market is always correct!
It will become increasingly important for moteliers to monitor the Internet chatter on social media sites and networks surrounding their motels.
How can you monitor on-line guest feedback and comments? The answer is simple, easy to set up and FREE! Google Alerts provide email updates of the latest relevant Google results based on your choice of query or topic. Your motel name (and variants of) should be entered into your Google Alerts. Google is the most comprehensive search engine that now indexes the whole blogosphere and consumer-generated sites.
Background
It’s common knowledge that the Internet has changed how travel consumers perceive the credibility of information. Any discrepancy between “official” and “unofficial” content should be dealt with immediately. A motel has to stand by its product and service, but cannot ignore the “popular vote” for its product’s quality.
Research has shown that consumer-generated content on social media sites and networks is perceived as more credible by online travelers. The bigger the disparity between official and unofficial content, the bigger the gap in credibility.
Social Media (Consumer-Generated Media) is online content created by Internet users and made available to other Internet users via Web 2.0 interactive technology applications. Motel/hotel review sites such as TripAdvisor.com are part of the Social Media phenomenon.
Fact
- 38% of US Internet users (72 million) use a social media site at least once a month
- 89% of US Online Buyers read customer reviews before they buy – 43% most of the time, 22% always.
So what are the most important motel / hotel-related customer review sites? There are only a handful that the majority of travel reviewers’ visit:
- TripAdvisor.com: TripAdvisor receives over 30 million visitors every month. The hotel can actively respond to any customer review via the ‘Hotel Owner’s Page’ by using the link located at the bottom of the page with customer reviews and then clicking on the ‘Respond to a Review’ link.
- Expedia.com: Expedia is the largest online travel agency (OTA). Currently the hotel can monitor all of Expedia’s customer reviews, but cannot actually respond to a review.
- Google.com: Google is the largest search engine with 60% of search traffic in the United States, and more than 75%-80% of traffic in Europe. Google provides a sampling of reviews for each hotel from TripAdvisor and other review sites (type in the hotel name + location, and then click on Reviews under the hotel listing). You can then visit each of the review sites and respond to an actual review there if allowed.
- Travel Bug: NZ’s own travel site has yet to generate sales that live up to the hype of its successful big brother, TradeMe. Guest reviews are a relatively new addition.
Action Plan for Monitoring Internet Chatter about Your Motel
It is important to respond to reviews and comments as you are made aware of them, so you can immediately address any issues and act appropriately (both negative and positive).
Here are some quick tips for responding to customer reviews:
- Thank the customer for taking the time to write a review
- Apologize profusely if the customer is right on target with their negative review
- Provide a simple, short explanation of what really happened (if such an explanation is possible)
- Assure the reviewer and motel guests in general that every possible step has been taken to address the problem or service in question
- Offer a direct line of communication between you and the reviewer (via email, direct phone line, etc.) in order to rectify the situation
- To conclude the response, use any elements of the customer’s comments that are constructive (e.g. great location, comfortable rooms, etc) to put a positive spin on a negative review.
Conclusion
Moteliers need to work hard to nurture happy customers and avoid negative postings. They must monitor reviews on review sites, TripAdvisor in particular, and react immediately if an extremely positive or negative review is posted.
Use Google Alerts to monitor all online chatter about your motel.
It’s much better to react to these postings and show your current and potential customers that you are 100% committed to serving them by addressing any and all problems, rather than ignoring complaints. You may be under the impression that responding to a negative review is a wasted effort because this customer will probably never return. However, your response should be primarily focused on assuring the traveling public that the issue is being addressed and the motel is dedicated to customer service.
Your response will also speak to future potential customers who might stumble on this review and the motel ’s response.
August 28 2008 | Articles for current moteliers and Changes in Motel Trends | 4 Comments »
Motels currently available, without being specific, range from small leased motels at $300,000 to large freehold complexes in the $millions. Within these motels the complexes range from highly organized operations to small lifestyle coastal motels. It is therefore important to establish the type of complex that would meet your requirements and suit your individual needs.
In general terms there are two ways of entering the industry, either you purchase the freehold land and buildings together with the business of the motel or you just purchase the “business” of the motel while renting the land and buildings, this is known as a “Lease”. Generally the decision as to which way you go is determined by the amount of capital you wish to invest and the type of lifestyle you are looking for EG: a “way of life motel” (say coastal relaxed low return for capital invested) or a “business motel” with a good bottom line.
It is often difficult for people first looking at purchasing a motel to come to terms with investing a large amount of money in a lease which does not contain any “bricks and mortar” as such. It is important to realize that when you purchase a lease you are buying all the chattels, i.e.: beds, furniture, carpets, drapes, crockery, cutlery, office equipment etc., almost everything except the land, bricks and mortar and roof. Also you are purchasing the right to operate that motel business in that building for the number of years on the lease. As long as you abide by the terms of the lease no-one can take that right away from you. Obviously then when buying a lease the length of the lease is an important factor.
With the purchase of a freehold going concern you are buying all of the above but also including the land and buildings. This is another way of entering the industry but as the returns on your investment are lower you would need to invest in a more expensive freehold than a less expensive lease to give you the same returns whilst operating the motel.
Under ideal conditions the cost of operating a motel will equate to 33% to 40% of the true turnover of the business (depending on the efficiency of the operator, items hired or owned and turnover mix). If it is a leased motel the ideal rental will be 28 to 33 % of the true turnover, leaving the balance of turnover to service any debt and provide an income for the operator. Please do not apply this formula rigidly as each operation must be looked at as a business on its own taking location, local environment, length of lease and history into consideration.
The Motel Association of N.Z. have compiled a book which may be of further interest to you. This book “An Introduction to Purchasing or Leasing a Motel”. can be purchased by writing to the Motel Association of New Zealand, P O Box 27 245, Wellington or visit their website www.manz.co.nz.
August 21 2008 | Changes in Motel Trends and Entering the Motel Industry | 5 Comments »
Amid the hype at present to make motels amongst other things more environmentally sustainable we have been encouraged to become more energy efficient and lighting is an area being targeted. The following article from the Dominion Post makes one question if we are in fact following the correct path. Maybe it is a case of implementing change without realising the consequences.
Warning on eco bulbs
By KAY BLUNDELL – The Dominion Post | Friday, 15 August 2008
KENT BLECHYNDEN/Dominion Post
CONCERN: Energy-saving lightbulbs are reported to be melting, blowing up and blackening surrounding electrical equipment.
The Government’s safety agency has warned the Fire Service about the potential hazard of energy-saving lightbulbs, a memorandum to firefighters reveals.
The memo, of which The Dominion Post has a copy, warns that compact fluorescent lamps, or eco bulbs, are reported to be melting, blowing up and blackening surrounding electrical equipment.
The concerns have been passed on to the Fire Service by Energy Safety, two months after Energy Minister David Parker announced plans to phase out traditional bulbs in favour of eco bulbs.
Many instances of bulbs failing went unreported to the Fire Service or Energy Safety, the memo said. People often chose just to replace a defective bulb.
Fire Service national fire investigation manager Peter Wilding confirmed he put a message out to staff “to be aware of the issue and pay particular attention to these faults”.
There were reports that eco bulbs had burnt out and scorched fittings, causing smoke stains, and in a few cases they had caught fire.
“If it does get to a state of flaming or scalding, if in any doubt, call the Fire Service. We do not know if there is a manufacturing fault, a user fault or a dud batch, but we want to give the public assurance we are trying to be responsible.”
A spokeswoman for Mr Parker said Energy Safety had received no reports, however, of eco bulbs causing serious problems.
Mr Parker announced in June plans to phase out traditional incandescent bulbs from late next year because they waste electricity. It is estimated that by changing lights Kiwis could save almost $500 million of the $660 million spent each year on lighting electricity.
Energy Safety senior technical adviser Bill Lowe confirmed the agency had received reports of eco bulbs ceasing to work, not lasting as along as expected, blackening, scorching, smoking and their glass breaking. But no structural fires had been reported.
The agency had received 13 complaints about eco bulbs in the past fortnight. Communications with the Fire Service had been increased in an attempt to confirm what problems existed.
August 15 2008 | Articles for current moteliers and Changes in Motel Trends | 4 Comments »
