Measuring 'progress'

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Madeleine's picture
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What's the most important parameter that you measure? Dollars? Occupancy? Revenue? Expenses? Repeat guests? Other? What ONE metric do you think is the most important to measure?

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OnTheShore's picture
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We are a seasonal business, only open for about 5 to 6 months out of the year, with the major part of our reservations being made in the other 6 months of the year. So we are tracking nights booked and revenue booked as our two major indicators, recording the data at the end of each month and comparing to previous years for which we have similar records, like this:

But as JB says, it's not really until the end of the year that we can finally see the full picture.

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Madeleine's picture
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We were not planning to be 'seasonal' but we've found that the more hotel rooms that open up the fewer guests we get in the 'off' season (Nov-Apr). When we got here the only month that was really 'slow' was Jan. Now, Jan is so slow we close completely for 6 weeks. And we go on vacation for 2 weeks in April.

Madeleine's picture
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So, if you're not really tracking during the year, are there no 'course corrections' that you make? Not just you in particular, either! Does anyone lower rates to spur bookings? Raise rates to slow them down? Put up a special if a day/week/month is lagging behind what you want?

Generic's picture
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02/24/2011

Constantly. There's a website out there that tracks how many times you lower rates, what it doesn't track is how many times you put rates up...

When I have orphans, I change the price. When I have two nights together in a whole, I change the price. If I have just one room left on a weekend far in the future, I change the price (hey, it's in demand, might as well.) I also change minimums from time to time and open up single nights on the edges of other reservations as well. We sometimes get those single nights filled at a high price (no online booking discount). 

Prices are always in flux, so is availability. That is why I tell people that any price they see is subject to change at any time. Sometimes just looking at the new reservations that came in, cause me to change prices immediately.

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OnTheShore's picture
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Well, we are tracking bookings during the year, and if we were significantly lagging behind where we thought we should be for that time, we would be looking for additional ways to spur bookings, which could mean offering specials. Also, some of the cottages get booked much more slowly than others, so we do look for ways to try generate more interest in those, from contemplation of renovations/improvements that would make them more attractive to identifying new advertising channels. Obviously these strategies vary in the time period of their impact (renovations: next year; new advertising channel: this year and next year; special deals: this year).

We have never felt a need to slow bookings down! laugh 

(If there were a reason or time period when we did not want too many bookings, like right now with our "Big Infrastructure Project of 2013" still not quite done, we would block off the dates on the availability calendar.)

 

gillumhouse's picture
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All I can say is Thank GOD for long-term needs in the area for a NICE place. It probably shot the crap out of ADR but it lifted my revenue to a thing of beauty with a LOT less work (no breakfasts and once a week cleaning/laundry as opposed to nightly).. My electric bill is higher by a little due to lights on 24 hours a day. Had the been a "normal" year (meaning none of the long-term folks), I would be slitting my throat! SLOW is not the word for it. Sticking to policies has been great when the leave early and we ain't staying kicked in. Sorry - ka-ching! Not my fault.

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I don't measure anything until the fat lady sings.

(and you all usually hear her, as I come here and end of year questions...up, down, comparable, etc)

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Silverspoon's picture
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Since we have 23 years to compare to, I measure our occupancy and total $$ by the month and year and compare to other years.  Figuring about 3% inflation, our goal is to work less but not make less....yet.  Next year we will cut back on our work and accept the decrease in $$ that comes with that. 

Our May was AWFUL here as well.  We were down 50% from 2011 and 25% from 2012.  Rates for May have been the same for the last few years.  I think the cool weather really put a damper on things so now that the sun has finally come out, I hope the reservations will start to pick up.

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Madeleine's picture
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Oddly - I left our winter rates in effect for the first 2 weeks in May this year. Those are the 2 hardest weeks to book at shoulder season rates. We were up by 20% from 2012 and 13% from 2011. Because the rates were lower and we got more guests because of that? Don't know. Maybe they would have paid shoulder rates. I'll never know.

So, do I count that as a win? If it's a one-off then it's nice for this year but how do I bring those guests or guests like them back for another stay?

It's too soon to say it's because of the new website. Eye-wink

Madeleine's picture
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Part of the question has to do with what is important overall. If you're 'the only game in town' you can have high rates and crappy service and not care if anyone comes back. If you're one of 25 inns and you have lower revenue but really high repeats you might be looking to start to nudge that towards higher rev without losing the high repeat rate.

Eventually it ends up being a juggling act. You can't take your eye off any of it for too long.

Breakfast Diva's picture
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Madeleine wrote:

Part of the question has to do with what is important overall. If you're 'the only game in town' you can have high rates and crappy service and not care if anyone comes back. If you're one of 25 inns and you have lower revenue but really high repeats you might be looking to start to nudge that towards higher rev without losing the high repeat rate.

Eventually it ends up being a juggling act. You can't take your eye off any of it for too long.

Totally agree! Right on target Maddie.

 

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02/18/2012

I like the question. I think it also depends on what you may be particularly interested in tweaking.  Of course, we want to make money, so profit is the key...and underlines everything. But for example, I'm in my first year of business in a new inn.  What I immediately track every month is occupancy, as that's what I'm most interested in growing.  At the same time, I know what our break even number is for occupancy, so I have that in mind when looking at the numbers.

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Agree with Eric.  It is a combo.  Running at high occupancy does not necessarily mean a successful business.  What we all should hope for is to find the medium -  lowest occ / highest rate of return.  Once you found it you have your ideal price.  Problem is the ideal changes faster than I can get to it.  crying

Generic's picture
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I measure occupancy, average rate and total. And May was AWFUL... really really AWFUL. The idea is to get average rate up while either getting total to stay about the same or up. Occupancy around 90% in the summer... too high and it's time to increase rates.

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