If we gave the $10 to book online that would have been $50. We have the verbage that says NO VALID WITH GIFT CERT's OR OTHER SPECIALS/DISCOUNTS..
John here from BedandBreakfast.com.
Ultimately we think this
gift card program benefits the entire industry. There are not many ways for the industry to gain prominence out there - and having a program where a consumer can stay at 4,000 inns is very appealing from a consumer point of view. It is through programs like this where the entire industry is going to get elevated a notch - because in a large scale we can impact many many more customers. If inns do not want to accept them because of our commission, I understand, but I'd like you to put yourselves in our shoes for a minute and really consider the economics.
We incur a LOT of expenses to make this program happen. For starters, we pay the credit card fees on everything - which is almost 3% for these online transactions. Then we custom print every single card on 30mm plastic with custom images. We send a full color directory with every single order now, in a heavy foil-lined envelope, along with a greeting letter and personalized message custom printed for every order. The constant feedback we get from people who won't stay at a B&B is that their impression of B&B's is that they are too small/kitchy/unprofessional/etc. We know this is not true - B&B's are beautiful, professionally run establishments - so we have elevated the quality of our own card product to look as good as an iTunes card, or Hilton, or Starbucks - so from the first impression they start to see how good the B&B industry can be.
So our costs on actual production and transactions are pretty darn high, and our quality is as well. Then you have to add the equipment - the most basic card-printing machine is almost a five digit investment, and you can't just have one in case a machine breaks - which it does pretty regularly. Add to that all of the industrial color laser printers, air-feed folders, etc. and you are talking tens of thousands on equipment and more in parts, upkeep, supplier, etc. Then someone needs to run and maintain this product - there needs to be a team from putting the pieces together on every order, to shipping, dealing with bad credit cards, customers calling in because they lost a card or it didn't show up in the mail. There is a pretty big staff involved with making this happen, and that staff has real costs - salaries, healthcare, etc. Not to mention all of the legal costs to track and maintain compliance with all fifty states regulations. And all of these costs do not even consider the retail channels. For the retail certificates - we literally have to custom design every order, each card carrier is different for each retailer, and we have to fill every single retail store with cards up front - whether they sell or not - and we have to pay for them all in advance, and pay a percentage of every card to the retaier. I do not even want to go into the math because the outlay on it is so large.
At the end of the day, an innkeeper gets someone who redeems a card. Often it is a guest they would not have received if they did not accept the card, and always the card must be accepted for any reservation (those are the rules of the program so that it isn't seen as an airline-mileage deal where you buy them then can never use them). An innkeeper pays no credit card fee on the dollars redeemed... so already an average of 3% comes right off the top and the innkeeper only pays a net 12%. Then we almost always hear that customers spend more than the face value. So after credit card fees - the inn absorbs a true 12% on the face value, and if the consumer spends more (we have pretty good stats that show the average redeemed cert is for 50-60% of the stay), then the real commission on the card is 6-7% or so.
Seems like a pretty reasonable amount to pay for this type of product. We have to stay in business too... and there are real expenses to keep this program going. Hopefully this gives you a better picture that this product isn't as simple as it looks.
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