I would never...

[Biekervi]

One thing I know that I will never do again is...
The experience of this team has been excellent and I thank you all for that. My last question was about starting over and what you’d do differently. New question...
One thing I know that I will never do again is...
Thanks
Greg and Melissa

 

[TheBeachHouse]

Open in the winter. It’s not worth the hassle to be open in winter weather. Ice on the stairs and driveway, heating a huge house, no restaurants open in town, no events. Just not worth the cost or stress.

 

[GoodScout]

Cut my room rates the first time things slowed down.
As a famous pitcher once said, "The cheaper the seats, the louder the boos."

 

[Biekervi]

Cut my room rates the first time things slowed down.
As a famous pitcher once said, "The cheaper the seats, the louder the boos."

That’s a great quote. Pricing is something we are really working hard to research. Do you adjust prices at all based on expected demand or do you keep the same rate through the season?

 

[An Old Tavernkeeper]

That’s a great quote. Pricing is something we are really working hard to research. Do you adjust prices at all based on expected demand or do you keep the same rate through the season?

We aggressively manage pricing from March through Christmas and run greater than 90% occupancy mid-week and virtually 100% on weekends. Prices run as low as $149 mid-week mid-season up to $399 on an October weekend. But during those months I actively mange pricing every day. Both early, or book last minute and you pay more, book last second or book about 30 days in advance to get the best middle of the road pricing.

Like Gretsky said, you miss 100% of the shots you do not take, so I would rather rent a room for $149 than let it sit empty. But that being said from Christmas through March (whenever the weather turns nicer) we start at $139/$169 and then stick to a minimum price mid-week of $119 and $149 on weekends and if you don't want to pay it then it is not worth us opening for a nickel.

 

[GoodScout]

I've decided when I retire I'm going to write a book on pricing. I feel like after 8 years I've completed a master's level course.

Here's my quick and dirty suggestions:

• Figure out what your true cost of the room is. Figure out what your cost for cleaning the room, feeding the guests breakfasts, the cost of the average number of freebies you offer (snacks, coffee during the day, wifi costs, etc). Add that up and average it. THAT'S YOUR FLOOR. Never sell a room for less than that. Do so, and you're actually losing money.
• When things are slow, you'll be tempted to sell a room cheaply to get some cash. Try and avoid the temptation. You'll lose money, the guests will be horrible, they'll write 2-star reviews because you didn't polish their shoes for them, and your mental health will suffer.
• Look at a zero day as a mental health day. You'll need those. When I see one coming up and I feel that we need a day off, I'll actually raise the rate $20. That way if someone does want it badly enough, I made it worth my while.
• Use Yield Management. If you don't know what that is, learn. Charge more when demand is high, and less when it's low. The airlines do it. Large hotels do it. You should too. Many PMS systems have built-in Yield Management (I use ThinkReservations, I know ResNexus has it too). To show how detailed you can be, my YM rules drop my rates $10 when it gets within 30 days and I have zero reservations, then drops it another $10 when it gets within 14 days. If I have 50% occupancy 14 or more days out, it raises the rates $10, and if I have 1 room left it raises the rate of that room $20.
• Likewise, figure out your high, low and shoulder seasons and adjust your rates accordingly. I have one competitor who charges the same rate year round. One year, I came inches from asking him if I could rent all his $149 rooms so I could resell them at $299.
• Monitor your competition, but don't let them dictate your rates. I usually stay about $20-30 a night ABOVE the inn next-door. Why? I offer a higher level of service that's worth $30 more a night. As for low-price shoppers, I give those to the bottom-dollar inn two miles away. They can have them -- and the headaches they create. My guests know they're getting a great experience and don't complain about paying for it.
• Charge extra for extras. We don't charge for a dog to stay with you (it's part of our marketing as one of the world's 12 dog-friendliest hotels), but we do know that once that number gets to 2 or 3 dogs in a suite, the cleaning time multiplies. So we do charge a $25 fee for each dog after the first. Likewise, if you want them to sleep with you on the bed, that's an extra $75 charge for the extra laundering required. If a guest leaves something behind and asks us to mail it, we charge them postage plus $5 shipping and handling for our time. It's OK to give things away. We give our guests LOTS of free extras - snacks, sodas, coffee, wifi - but make darn sure you crow they know about all the extras they're getting by picking you.
• Offer deals, but don't discount. I don't like offering "discounts." If I tell you a room is worth $180 but then say I'm giving you a $20 discount, what do you as the guest think it's really worth? Not $180. Not even $160 now. You're wondering, if I'm knocking off $20, then maybe it's even worth less. Incentivize your guests to do what you want. Stay 2 nights and get the 3rd free. Enjoy a complimentary bottle of wine with your return visit. Give them value, but don't whack away at something that's your most valuable commodity: Your perceived value.
• Use OTA to gain new customers, but never let them undercut you and never become dependent on them. A lot of people on this board don't like OTAs. I find them a useful tool, but only if you're careful in how you deal with them. Your agreement with them says you have to offer them the best rate you offer anyone else. That said, I know a lot of people who add 15% to the rate they give OTAs to cover the commission cost. And you're not required to offer them every room, every day. I'm in a ski market, and I'd be an idiot if I gave OTAs the rights to sell my rooms during Christmas/New Years week when I sell out every year on my own with the highest rates of the year.

 

[Morticia]

Bridal parties. Never again.

 

[JimBoone]

I've decided when I retire I'm going to write a book on pricing. I feel like after 8 years I've completed a master's level course.

I'm probably opposite on many of GoodScout's suggestions, not knocking them, I suppose not aware of them 30 years ago, maybe too old and tired to worry now. My comments in his bullet list.

• Figure out what your true cost of the room is. I wasn't that technical, in the beginning figured I need $100 a day to break even and pay our bills.
• When things are slow, you'll be tempted to sell a room cheaply to get some cash. Try and avoid the temptation. Yes, learned this, the fellow that wanted a deal was likely to depart with your towels to sweeten his deal
• Look at a zero day as a mental health day. Agree fully, early days worried about making the payment, these days, it's more about will I have the energy to get the room ready for the next guest.
• Use Yield Management. Slightly different business model from most here, I haven't used this feature. I'm more interest in getting "my guest" than top dollar. I'm more motivated to require 2 days on the weekend and open up to a 1 day reservation with a higher cost at the last minute if rooms are empty.
• Likewise, figure out your high, low and shoulder seasons and adjust your rates accordingly. I'm more like the competitor, I suppose my thought is to create a following of folks that think of me first rather than price shopping. We are a tiny mom and pop motel in a sea of big fish. My goal is easy going, repeat guests.
• Monitor your competition, but don't let them dictate your rates. My market is the middle of the road folks, not cheap, don't want rough and rowdy, but less than the new properties, hopefully those folks that feel they got a great deal write nice reviews, usually for two old folks in the country we rank well with the big dogs.
• Charge extra for extras. Beyond extra for extra people to discourage packing folks in a room and adding wear and tear, we don't offer much in the way of extras, all is packaged in the room cost.
• Offer deals, but don't discount. I don't like offering "discounts." Me neither, to me a real discount to encourage someone to visit at a slow time helps both, most discount are just "game playing" and I don't play well.
• Use OTA to gain new customers, I think we started business before OTA's existed or became popular and never made the jump to use them. Not having to pay that commission gives me an edge, my view anyway.

 

[Arks]

• Use Yield Management. Slightly different business model from most here, I haven't used this feature. I'm more interest in getting "my guest" than top dollar.

I love the ResKey Yield Management feature. I don't think it reduces"getting my guest" a bit, and it makes me several hundred $$$/year with zero effort on my part. If it's a few days out and I only have 1 room left, it's going to cost a little more. People will pay it.

And it's not always about getting top dollar. I have it REDUCE rates when it's a day or two out and I have multiple rooms going unrented.

 

[gillumhouse]

Another Country heard from: I "discount" Military and Police/Fire " as a thank you. IF someone booked a budget room & the best one is available I might just give an upgrade if I am in the mood. Like JimBoone, I do not do yield management - #1 - would never remember what the managed rate was #2 - too many hotels in the area as alternates.
I thought about the question - I would never - and quite honestly I have a few wish I hads but only one never again that came to memory as I was writing this. I would never take a local for several weeks as their house was being repaired UNLESS I knew them. Took a family I did not know and other than the crawling through windows or having to get the fire dept to get into a room locked with safety bolt (think the kid slammed it as he went out), had to replace a carpet because the older kid, instead of working, spent the days playing games on his computer wearing his oily boots and damaged the bed & floor with scraping the rocking chair around. Mama thought it was OK to bring "friends" in to see the place. Ended up telling them to leave (AND had given them a huge price break cuz I felt sorry for them - DUH!!)

 

[Biekervi]

I'm probably opposite on many of GoodScout's suggestions, not knocking them, I suppose not aware of them 30 years ago, maybe too old and tired to worry now. My comments in his bullet list.

• Figure out what your true cost of the room is. I wasn't that technical, in the beginning figured I need $100 a day to break even and pay our bills.
• When things are slow, you'll be tempted to sell a room cheaply to get some cash. Try and avoid the temptation. Yes, learned this, the fellow that wanted a deal was likely to depart with your towels to sweeten his deal
• Look at a zero day as a mental health day. Agree fully, early days worried about making the payment, these days, it's more about will I have the energy to get the room ready for the next guest.
• Use Yield Management. Slightly different business model from most here, I haven't used this feature. I'm more interest in getting "my guest" than top dollar. I'm more motivated to require 2 days on the weekend and open up to a 1 day reservation with a higher cost at the last minute if rooms are empty.
• Likewise, figure out your high, low and shoulder seasons and adjust your rates accordingly. I'm more like the competitor, I suppose my thought is to create a following of folks that think of me first rather than price shopping. We are a tiny mom and pop motel in a sea of big fish. My goal is easy going, repeat guests.
• Monitor your competition, but don't let them dictate your rates. My market is the middle of the road folks, not cheap, don't want rough and rowdy, but less than the new properties, hopefully those folks that feel they got a great deal write nice reviews, usually for two old folks in the country we rank well with the big dogs.
• Charge extra for extras. Beyond extra for extra people to discourage packing folks in a room and adding wear and tear, we don't offer much in the way of extras, all is packaged in the room cost.
• Offer deals, but don't discount. I don't like offering "discounts." Me neither, to me a real discount to encourage someone to visit at a slow time helps both, most discount are just "game playing" and I don't play well.
• Use OTA to gain new customers, I think we started business before OTA's existed or became popular and never made the jump to use them. Not having to pay that commission gives me an edge, my view anyway.

Wow. This is great stuff and I really appreciate the input on pricing adjustments. I haven’t started research on the tools to do pricing (probably a couple years off) but I am tracking competition pricing to build a guide rule. Knowing that the ability to adjust like that helps me with my research.

 

[Biekervi]

Bridal parties. Never again.

Enough said!

 

[Biekervi]

I've decided when I retire I'm going to write a book on pricing. I feel like after 8 years I've completed a master's level course.

Here's my quick and dirty suggestions:

• Figure out what your true cost of the room is. Figure out what your cost for cleaning the room, feeding the guests breakfasts, the cost of the average number of freebies you offer (snacks, coffee during the day, wifi costs, etc). Add that up and average it. THAT'S YOUR FLOOR. Never sell a room for less than that. Do so, and you're actually losing money.
• When things are slow, you'll be tempted to sell a room cheaply to get some cash. Try and avoid the temptation. You'll lose money, the guests will be horrible, they'll write 2-star reviews because you didn't polish their shoes for them, and your mental health will suffer.
• Look at a zero day as a mental health day. You'll need those. When I see one coming up and I feel that we need a day off, I'll actually raise the rate $20. That way if someone does want it badly enough, I made it worth my while.
• Use Yield Management. If you don't know what that is, learn. Charge more when demand is high, and less when it's low. The airlines do it. Large hotels do it. You should too. Many PMS systems have built-in Yield Management (I use ThinkReservations, I know ResNexus has it too). To show how detailed you can be, my YM rules drop my rates $10 when it gets within 30 days and I have zero reservations, then drops it another $10 when it gets within 14 days. If I have 50% occupancy 14 or more days out, it raises the rates $10, and if I have 1 room left it raises the rate of that room $20.
• Likewise, figure out your high, low and shoulder seasons and adjust your rates accordingly. I have one competitor who charges the same rate year round. One year, I came inches from asking him if I could rent all his $149 rooms so I could resell them at $299.
• Monitor your competition, but don't let them dictate your rates. I usually stay about $20-30 a night ABOVE the inn next-door. Why? I offer a higher level of service that's worth $30 more a night. As for low-price shoppers, I give those to the bottom-dollar inn two miles away. They can have them -- and the headaches they create. My guests know they're getting a great experience and don't complain about paying for it.
• Charge extra for extras. We don't charge for a dog to stay with you (it's part of our marketing as one of the world's 12 dog-friendliest hotels), but we do know that once that number gets to 2 or 3 dogs in a suite, the cleaning time multiplies. So we do charge a $25 fee for each dog after the first. Likewise, if you want them to sleep with you on the bed, that's an extra $75 charge for the extra laundering required. If a guest leaves something behind and asks us to mail it, we charge them postage plus $5 shipping and handling for our time. It's OK to give things away. We give our guests LOTS of free extras - snacks, sodas, coffee, wifi - but make darn sure you crow they know about all the extras they're getting by picking you.
• Offer deals, but don't discount. I don't like offering "discounts." If I tell you a room is worth $180 but then say I'm giving you a $20 discount, what do you as the guest think it's really worth? Not $180. Not even $160 now. You're wondering, if I'm knocking off $20, then maybe it's even worth less. Incentivize your guests to do what you want. Stay 2 nights and get the 3rd free. Enjoy a complimentary bottle of wine with your return visit. Give them value, but don't whack away at something that's your most valuable commodity: Your perceived value.
• Use OTA to gain new customers, but never let them undercut you and never become dependent on them. A lot of people on this board don't like OTAs. I find them a useful tool, but only if you're careful in how you deal with them. Your agreement with them says you have to offer them the best rate you offer anyone else. That said, I know a lot of people who add 15% to the rate they give OTAs to cover the commission cost. And you're not required to offer them every room, every day. I'm in a ski market, and I'd be an idiot if I gave OTAs the rights to sell my rooms during Christmas/New Years week when I sell out every year on my own with the highest rates of the year.

You definitely have a knack for writing. Don’t wait until you retire, start writing you ideas down now and then you can revise when you retire.
This is really great information. Thank you for taking the time to put this all together. I found it amazingly helpful and hope someday I’ll be able to share my experiences with other just as you did.

 

[JimBoone]

Random comments:

Retire/retirement (GoodScount, Biekervi) don't wait for retirement, be happy today. Maybe I'm a dull guy, but can't think of anything I'd rather do than what I do today.

Yield Management (Arks, Gillum) I'm not against the idea, maybe I'm just lazy. Perhaps too many years of using pencil and paper and not changing rates. I tend to look at rates based on what I'd be willing to pay, I'd have to drive home before paying the rates I see some places ask. On the flip side, if it isn't worth what I ask, then that's a room that I don't have to clean. Rates have to depend on the type of property, style of operation, financial position, place in life, one size can't fit all.

Feeling sorry for folks (Gillum) too many folks like that over the years have made me more of an old grump. Every time I've tried to be helpful folks brought their problems with them and made it my problem.

(Biekervi) We're all going to be different and probably change as time passes and we age. Ritzy guests or everyday guests, many rooms or a few, an employed staff or mom & pop does everything? Maybe a bit of what do you expect from life and the business?