We are neither in Podunk nor a destination. There are a bunch of new hotels/motels being built here. I'm afraid that they will undercut all of the B&Bs here and they will soon be a thing of the past. It's hard to compete with suite style hotels with pools and complimentary breakfasts that are $79/night that are geared for the majority of the travelers that visit this town. I just finished reading some posts on our city's forum on TA and people were raving about hotel rooms as low as $59/night. A quality B&B can't match that price and I wouldn't want to..
I think the larger inns may have more of a problem with the new hotels than the small ones. The people who like B & Bs are looking for rhe service and attention they can get at the small inns.
In the last 13 years, I estimate 1000 to 1500 rooms have been built in this area (Weston to Morgantown - about 40 miles each side of me) and none are newer than 3 years old). My business last year was banner level, this year I am down (I think the hotels are also unless they get conference business). However, I do think there is a place for me in the future. Once people get to the point they know what is happening in their lives. Once the rules stop changing every other month so to speak........
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I disagree. There are quite a few travelers that are looking under $100. What is "banner level" for you for your business, might not be anywhere near what a lot of innkeepers need to support their property, even if they are small properties. We only have 5 rooms and I need quite a bit of business to cover my overhead and we do all the work except mowing the grass and having a part-time housekeeper a couple of days a week. If the occupancy goes up, you need more help because it's physically impossible to do everything yourself.
The hotels here are doing more business than ever and the b&b occupancies are down. It's strictly a function of price point.
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Samster said:
I disagree. The hotels here are doing more business than ever and the b&b occupancies are down. It's strictly a function of price point.
I have seen the same phenomenon here. In a town only ten miles away, two hotels have opened - an HIE and a racino hotel - and the business at the B&Bs there has fallen through the floor. One will be closing for good within a few weeks, after selling at a drastically reduced price to people who will turn into commercial space and apartments. That town is only 5 miles from a national park, where all the B&Bs are doing well this year, and only 10 miles from us, and we are keeping up with last year's numbers. The new hotels have undercut the B&B prices and it's really hurt their business.
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muirford said:
Samster said:
I disagree. The hotels here are doing more business than ever and the b&b occupancies are down. It's strictly a function of price point.
I have seen the same phenomenon here. In a town only ten miles away, two hotels have opened - an HIE and a racino hotel - and the business at the B&Bs there has fallen through the floor. One will be closing for good within a few weeks, after selling at a drastically reduced price to people who will turn into commercial space and apartments.
That town is only 5 miles from a national park, where all the B&Bs are doing well this year, and only 10 miles from us, and we are keeping up with last year's numbers. The new hotels have undercut the B&B prices and it's really hurt their business.
Here's what it sounds like to me...those B&Bs that are having trouble because of the hotels coming in need to change their marketing strategy. If the B&Bs only 5 miles away near the state park are doing well and so are you, then the marketing needs to emphesize the closeness to the destination. 5 miles is a very short distance. Forget about the hotelsmotels reanalyze their marketing. So often innkeepers get into a rut and just keep doing the same old thing. You simply can't do that in this economic environment.
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I agree with some of your points - these inns didn't have the best websites, in my opinion, but I don't know enough about their own marketing budgets to say one way or the other what they spent on marketing. I didn't notice them dropping out of directories. It's inaccurate to say that they completely stopped spending money on marketing, if that is the assumption that you or LB is making.
The fact is that the number of lodging rooms tripled in the space of six months in their little town. The B&Bs in the town near the national park benefitted from half the hotel rooms in that town closing down for a multi-year renovation. My occupancy numbers are good compared to last year, but the hotels in my town are doing about 20% less business than in 2008. As far as I know, all of them have kept or increased their marketing budgets and they are doing more discounting and packages than before.
Sometimes the solution to the problem isn't as easy as just re-doing your marketing plan. If the hotels can afford to undercut your rates, even in the short term, they may be able to keep a B&B sinking deeper and deeper into a spending morass that they can't climb out of. It is what Wal-Mart has done to thousands of small town businesses. And before you leap on me for that statement, I do shop at Wal-Mart and Sam's, although I try to spread the spending around to small local businesses too. The Walmart vs. small town business scenario is pretty well documented.
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All too true, Muirford...and I admire your instinct to always defend someone when they're down.
But it's also true that if we, as Innkeepers, see ourselves as no different than hotels, than it all comes down to competition at the rate level, where we cannot win. Case in point, in Traverse City, many of the hotels are suffering in this economy. One hotel manager (my old boss) told me "I could put 'free rooms' on the sign and it wouldn't make a difference, it's just slow". Drive through town and you'll see "$49.00 special" on every other sign. B&B's in that same town are not having that problem. As has been said numerous times on this forum...hotels are really not true competition for B&B's. When I don't have rooms, people don't ask "what hotels are in the area", they ask "what other B&B's are in the area".
It IS all about marketing....and that does not mean just spending money, it means spending time and effort even more often. Thinking outside the box, updating your website (for instance, keying in on phrases like "your town hotels" or "lodging near your big attraction"), upgrading your rooms, taking new photos, cultivating reviews, starting a blog, starting a group with your "competitors", teaming up with local attractions in advertising (even if it's just a link exchange)...these are all things that cost more time than money.
I realize that sometimes things spiral out of control, but that should happen only after all possible effort has been expended. If your occupancy numbers are good compared to last year, and theirs aren't, what's the difference? What are you doing that they aren't? Maybe it's just that you realize the difference between your place and a hotel and market yourself accordingly.
Far too often, it is lack of information or knowledge that can drive an Inn out of business. Just having access to a forum like this one or a friendly local Inn group can make all the difference. Inns that have been in business the longest sometimes have the most trouble, as progress and technology pass them by....sometimes an innkeeper just needs to know when to ask for help. That does not mean that they're not good Innkeepers, or don't have nice Inns...it just means that they don't know everything they should be doing.
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