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megan

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This is the time of year when local memberships come due. While my aunt is away, I am reviewing these memberships and their pricing. The one big local membership she has the inn listed with raised their rates by 15% this year. Looking over this year's room receipts, I can see that this membership is now 1.5% of my aunt's pre-expense income.
There is an option of paying per inn room or paying by income. I can't lie about the number of rooms, but I can fudge the income to get this membership dues payment back to a semi-reasonable amount, meaning less than 1% of her income. Even though 1% is too high, it is better than paying the additional amount.
Not being in this group is not really an option given the promotional opportunities.
So, would you lie about the income to get the lower rate? The lower rate save her anywhere from $100-$700 depending on how much I lie. This is not a normal mode of operation for me. I really don't approve of lying but I really don't see how my aunt can afford the payment this year. I have spoken with the director of the group and she said no to my request to find a middle ground given how bad this season was. She said if we couldn't afford it to not list this year, or pay in installments. Paying in installments costs an extra 1.5% plus a 4% charge for using a credit card.
What do you all think?
 

swirt

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I think part of the question that is missing for me is "How much business (or traffic) did this site deliver for your aunt?"
 

YellowSocks

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No.
....but I'd be tempted...
=)
Kk.
 

megan

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I think part of the question that is missing for me is "How much business (or traffic) did this site deliver for your aunt?".
The answer would be based on how many calls she/we got this year citing finding us using this resource. Keeping track is catch as catch can but it looks like about 7% of the business came from callers who said they found the inn using this resource. It does mean that 93% comes from elsewhere, but this one is local so if someone is just wandering around looking for a place to stay (either in town or on the web) this resource shows up well. I've looked over the forms and there os no place on them that says it is necessary to use gross revenue. Splitting hairs? Or being a good manager of the money?
 

gillumhouse

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I would not lie - it will bite you somewhere along the way. As Swirt said - how much REVENUE did it deliver as in room nights and actual dollars.
Sometimes promotional opportunities are perceived rather than received. Can she generated just as much traffic and revenue though targeted placement of dollars in Directories and ads? That is why I keep an SOB report just as the hotel did. They wanted to know each night on the audit report how many rooms were corporate rate, rack rate, AAA, comp etc. My SOB is BandB,com, iLoveinns, BBonline, my ads, etc although most just say Internet, at least I have an idea of my Source of Business.
Sometimes it is cheaper to create your own promotional. And what are the promotional opportunities? Do they cost an extra fee? My CVB goes to Travel Shows but if I want MY brochure or promo item to go to that travel show, I will pay an extra $100 PLUS supply the brochures or promo items.
Say she expects to need 1000 of my promo item @.49 each that is an expense of $490 + 100 for a total of $590 for that promotional opportunity and depending on the location of that travel show do I really think I will get 10 reservations from it (cost of show plus costs during stay) to just break even?
Consider all the angles and implications and then decide if it is worth it.
 

seashanty

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is this really your decision to make?
are you running the business for your aunt? making business decisions for her?
if you have been left in charge to do 'business as usual', i would figure what the fee will be (based on actual numbers) and renew or not, offer recommendations to renew or not, based on fact. it sounds like the fee is based on an honor system ... and enrollees agree to be truthful.
if you are trying to figure ways to make budget cuts, this is not the way.
 

megan

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is this really your decision to make?
are you running the business for your aunt? making business decisions for her?
if you have been left in charge to do 'business as usual', i would figure what the fee will be (based on actual numbers) and renew or not, offer recommendations to renew or not, based on fact. it sounds like the fee is based on an honor system ... and enrollees agree to be truthful.
if you are trying to figure ways to make budget cuts, this is not the way..
Because the organization only gave everyone until Dec 1 to pay up or get out (and we just got the paperwork today), I have to make the decision without having a chance to get input. If I choose wrong and the inn is off this listing for a year, it may not work to the inn's advantage. I am pursuing some other locations' Chambers for listings. If I end up spending the money for this one, at least there will be something for comparison next year, should anyone want it. If the other groups bring in good business, and this local group refuses to help out the 'little guy' at least that will help the decision process next November.
A small example of how this group prices...this inn would have to pay $1400 to belong, based on income in the range of $100,000-$150,000 (which we just squeak into this year, the season being so slow). This gets a web listing, a place on the local map and referrals from the information center. If we made over $4,000,000 (yes, 4 million), we would pay $4000. It's very skewed toward the big companies, not the small private owners. If I can get the income under $100,000 (creatively) then the inn pays $1200. Still way too much for a small business. If I can get more creative and get the revenue down to $50,000 then it's only $700. The little businesses are all charged over 1% of gross revenue to join.
Thanks for all the comments. I guess I go with the truth and decide if it's worth the money. Next year there will be better information in place, I'm working on getting some real business practices in place-without overstepping my bounds, any and all of it can be tossed if it's not wanted. It's really best to go with what was done, adding in some new chamber listings that are much lower in price.
 

seashanty

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this would not be in my budget. can you be a member of a b&b organization that is a member of the chamber of commerce? for some chambers, there is maybe a $300 base rate plus $15 per room. a fee based on gross sales seems unreasonable and way too expensive. are many of the b&b's similar to yours in size etc. members?
you need some math help here, but would 1.5% of the referrals justify that cost?
 

gillumhouse

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is this really your decision to make?
are you running the business for your aunt? making business decisions for her?
if you have been left in charge to do 'business as usual', i would figure what the fee will be (based on actual numbers) and renew or not, offer recommendations to renew or not, based on fact. it sounds like the fee is based on an honor system ... and enrollees agree to be truthful.
if you are trying to figure ways to make budget cuts, this is not the way..
Because the organization only gave everyone until Dec 1 to pay up or get out (and we just got the paperwork today), I have to make the decision without having a chance to get input. If I choose wrong and the inn is off this listing for a year, it may not work to the inn's advantage. I am pursuing some other locations' Chambers for listings. If I end up spending the money for this one, at least there will be something for comparison next year, should anyone want it. If the other groups bring in good business, and this local group refuses to help out the 'little guy' at least that will help the decision process next November.
A small example of how this group prices...this inn would have to pay $1400 to belong, based on income in the range of $100,000-$150,000 (which we just squeak into this year, the season being so slow). This gets a web listing, a place on the local map and referrals from the information center. If we made over $4,000,000 (yes, 4 million), we would pay $4000. It's very skewed toward the big companies, not the small private owners. If I can get the income under $100,000 (creatively) then the inn pays $1200. Still way too much for a small business. If I can get more creative and get the revenue down to $50,000 then it's only $700. The little businesses are all charged over 1% of gross revenue to join.
Thanks for all the comments. I guess I go with the truth and decide if it's worth the money. Next year there will be better information in place, I'm working on getting some real business practices in place-without overstepping my bounds, any and all of it can be tossed if it's not wanted. It's really best to go with what was done, adding in some new chamber listings that are much lower in price.
.
That fee is mind boggling!! I have never heard of a Chamber that charges by the revenue of a business. It is a set fee - period. A self-reporting fee? To someone who had no need to know such private matters as your revenues?
I wonder how many do report true revenue if this is the case. You can get a lot of Directory listings for that much money (including bandb. com's Platnum level!) that would bring you to a lot more attention than this Chamber web site because they are where the B & B guests are looking.
You said 1.5% of your business came from this source. If you are paying over 1% of gross, you are not even breaking even because you have to take expenses from that revenue, therefore will net lessthan you paid. That sounds like a lousy ROI to me. Just my opinion.
 

megan

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this would not be in my budget. can you be a member of a b&b organization that is a member of the chamber of commerce? for some chambers, there is maybe a $300 base rate plus $15 per room. a fee based on gross sales seems unreasonable and way too expensive. are many of the b&b's similar to yours in size etc. members?
you need some math help here, but would 1.5% of the referrals justify that cost?.
There is also a separate B&B rate at $200/room (you can use that if it works out better, for me it doesn't). If I count all the rooms (and not just the year round rooms) the fee is way more. If I only count the year round rooms it's the same fee. That's why I'm looking at chambers in the surrounding areas. I might be able to join 2-3 for the price of the group in town. You know, if this group did the advertising/marketing that the groups in other towns do, it wouldn't be so bad. But this group had one ad all year in a magazine. And they never mentioned B&B's for lodging, just hotels. The problem is, if this inn drops out but the others stay in, then it will be tough to get the passersby. As the crowd that has come here for years (and that I remember from being a kid) start to get very old-and I'm talking 85-90 years old!-this place is going to need to start drawing new guests.
 

megan

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is this really your decision to make?
are you running the business for your aunt? making business decisions for her?
if you have been left in charge to do 'business as usual', i would figure what the fee will be (based on actual numbers) and renew or not, offer recommendations to renew or not, based on fact. it sounds like the fee is based on an honor system ... and enrollees agree to be truthful.
if you are trying to figure ways to make budget cuts, this is not the way..
Because the organization only gave everyone until Dec 1 to pay up or get out (and we just got the paperwork today), I have to make the decision without having a chance to get input. If I choose wrong and the inn is off this listing for a year, it may not work to the inn's advantage. I am pursuing some other locations' Chambers for listings. If I end up spending the money for this one, at least there will be something for comparison next year, should anyone want it. If the other groups bring in good business, and this local group refuses to help out the 'little guy' at least that will help the decision process next November.
A small example of how this group prices...this inn would have to pay $1400 to belong, based on income in the range of $100,000-$150,000 (which we just squeak into this year, the season being so slow). This gets a web listing, a place on the local map and referrals from the information center. If we made over $4,000,000 (yes, 4 million), we would pay $4000. It's very skewed toward the big companies, not the small private owners. If I can get the income under $100,000 (creatively) then the inn pays $1200. Still way too much for a small business. If I can get more creative and get the revenue down to $50,000 then it's only $700. The little businesses are all charged over 1% of gross revenue to join.
Thanks for all the comments. I guess I go with the truth and decide if it's worth the money. Next year there will be better information in place, I'm working on getting some real business practices in place-without overstepping my bounds, any and all of it can be tossed if it's not wanted. It's really best to go with what was done, adding in some new chamber listings that are much lower in price.
.
That fee is mind boggling!! I have never heard of a Chamber that charges by the revenue of a business. It is a set fee - period. A self-reporting fee? To someone who had no need to know such private matters as your revenues?
I wonder how many do report true revenue if this is the case. You can get a lot of Directory listings for that much money (including bandb. com's Platnum level!) that would bring you to a lot more attention than this Chamber web site because they are where the B & B guests are looking.
You said 1.5% of your business came from this source. If you are paying over 1% of gross, you are not even breaking even because you have to take expenses from that revenue, therefore will net lessthan you paid. That sounds like a lousy ROI to me. Just my opinion.
.
No, 7% of the business comes from this source. I tried explaining it better in the post to seashanty why it is tough to drop out, and the group knows that so they feel no need to keep the rates in line with what businesses can afford. They lost a lot of big accounts last year because the big toursit places said it was too much to pay and everyone will see them driving by anyway. They can have signs on the roads.
 

gillumhouse

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this would not be in my budget. can you be a member of a b&b organization that is a member of the chamber of commerce? for some chambers, there is maybe a $300 base rate plus $15 per room. a fee based on gross sales seems unreasonable and way too expensive. are many of the b&b's similar to yours in size etc. members?
you need some math help here, but would 1.5% of the referrals justify that cost?.
There is also a separate B&B rate at $200/room (you can use that if it works out better, for me it doesn't). If I count all the rooms (and not just the year round rooms) the fee is way more. If I only count the year round rooms it's the same fee. That's why I'm looking at chambers in the surrounding areas. I might be able to join 2-3 for the price of the group in town. You know, if this group did the advertising/marketing that the groups in other towns do, it wouldn't be so bad. But this group had one ad all year in a magazine. And they never mentioned B&B's for lodging, just hotels. The problem is, if this inn drops out but the others stay in, then it will be tough to get the passersby. As the crowd that has come here for years (and that I remember from being a kid) start to get very old-and I'm talking 85-90 years old!-this place is going to need to start drawing new guests.
.
The problem is, if this inn drops out but the others stay in, then it will be tough to get the passersby. As the crowd that has come here for years (and that I remember from being a kid) start to get very old-and I'm talking 85-90 years old!-this place is going to need to start drawing new guests.
Of course you need new guests - that is why you should look to the web directories. A Chamber that charges that much and only placed one ad as you said is not doing anything for you except bring the same old/same old oldsters!! The new guests are the ones who will see you on bbonline, iLoveinns, and yes definitely bandb.com. You could get listed on ALL the above for less than $1400 per year!! And I bet you will get a much better ROI too.
I pay my CVB $50 per year and if I join the county Chamber it will be $90 for the year. With the CVB I get on their web site, in their annual Guide, and get to list my Specials - as many as I want to put up! I have no clue what Chamber membership will do but I am considering joining this year - for my City Manager if for no other reason. and will find out.
 

gillumhouse

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is this really your decision to make?
are you running the business for your aunt? making business decisions for her?
if you have been left in charge to do 'business as usual', i would figure what the fee will be (based on actual numbers) and renew or not, offer recommendations to renew or not, based on fact. it sounds like the fee is based on an honor system ... and enrollees agree to be truthful.
if you are trying to figure ways to make budget cuts, this is not the way..
Because the organization only gave everyone until Dec 1 to pay up or get out (and we just got the paperwork today), I have to make the decision without having a chance to get input. If I choose wrong and the inn is off this listing for a year, it may not work to the inn's advantage. I am pursuing some other locations' Chambers for listings. If I end up spending the money for this one, at least there will be something for comparison next year, should anyone want it. If the other groups bring in good business, and this local group refuses to help out the 'little guy' at least that will help the decision process next November.
A small example of how this group prices...this inn would have to pay $1400 to belong, based on income in the range of $100,000-$150,000 (which we just squeak into this year, the season being so slow). This gets a web listing, a place on the local map and referrals from the information center. If we made over $4,000,000 (yes, 4 million), we would pay $4000. It's very skewed toward the big companies, not the small private owners. If I can get the income under $100,000 (creatively) then the inn pays $1200. Still way too much for a small business. If I can get more creative and get the revenue down to $50,000 then it's only $700. The little businesses are all charged over 1% of gross revenue to join.
Thanks for all the comments. I guess I go with the truth and decide if it's worth the money. Next year there will be better information in place, I'm working on getting some real business practices in place-without overstepping my bounds, any and all of it can be tossed if it's not wanted. It's really best to go with what was done, adding in some new chamber listings that are much lower in price.
.
That fee is mind boggling!! I have never heard of a Chamber that charges by the revenue of a business. It is a set fee - period. A self-reporting fee? To someone who had no need to know such private matters as your revenues?
I wonder how many do report true revenue if this is the case. You can get a lot of Directory listings for that much money (including bandb. com's Platnum level!) that would bring you to a lot more attention than this Chamber web site because they are where the B & B guests are looking.
You said 1.5% of your business came from this source. If you are paying over 1% of gross, you are not even breaking even because you have to take expenses from that revenue, therefore will net lessthan you paid. That sounds like a lousy ROI to me. Just my opinion.
.
No, 7% of the business comes from this source. I tried explaining it better in the post to seashanty why it is tough to drop out, and the group knows that so they feel no need to keep the rates in line with what businesses can afford. They lost a lot of big accounts last year because the big toursit places said it was too much to pay and everyone will see them driving by anyway. They can have signs on the roads.
.
Even at 7% from them my feeling is it is way too much. How do they know 7%?
Where do your guests come from other than this? What do they come to your area for? Quite frankly, I forget where you are.
I am in Podunk as everyone knows. No one thought of this town as a place people would come to. They do.
One year, I concentrated on listings on horse directories and in horse newsprint type magazines to get the overnight stabling and the trail riding guests. Another year I concentrated on motorcycles and this last year, I concentrated on the biking and winery. I keep all the web directories but will change out the ads placements.
I took stock of the assests of the area - the history, covered bridges, craft shops, antique shops, etc - and did routings that I offer with packages.
Newsprint type magazines (meaning not glossy paper) are cheaper than glossy or newpaper ads (bird cage material) and they are targeted audience usually. Horse groups, biking enthusiasts, bird watching.... there is one that goes to Government offices called Recreation News that is out of the DC area but goes all over the Eastern US. Look for newsletters - I joined the Gold Wing Road Riders Assoc and for $25 per year get a biz card ad in the local newsletter. My high school alumni assoc has a newsletter and I advertise in it. Does everything produce? Probably not, but it creates the awareness and it is not expensive. The directories is where you should concentrate - and there again, every group of enthusiasts has an organization that has a web site. Ask for a link IF it is something in your area or that you do.
Only you can make the ultimate decision, but that seems like a lot of money that could be getting national and international attention rather than local.
 

muirford

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If this is a proven source of business, consider that dropping a good marketing tool may not be the wisest thing to do in what is a soft economy. Unlike some, I do believe that the economy is faltering - I don't know how it couldn't be when as a nation we've run up the country's debt to over $10 trillion - but I believe that it will affect businesses differently depending on the value proposition you offer. Is that tourist traffic - walk-ins and referrals from the CVB - is a market in which you need to be competitive? You should consider adding some of those directories anyway - at least bbonline and bedandbreakfast.com - if possible. Without knowing more about where your aunt's guests come from, it's a little hard to say that spending $1400 to make $7000 is a bad business decision. Can you afford to lose the $5600 if you can't fill in the guest book from other sources?
Good tracking for the year is essential so that you'll have the information to make choices next year. It's hard to make a dollar if you don't spend a dime. In this case, I guess you are spending two dimes to make a dollar. Most experts recommend that you spend about 10% of your gross income on marketing. How does this expenditure factor into your overall budget?
As a note, I get as many website referrals from my town's CVB website as I do from any single directory, including bandb.com. Those hits are at least as qualified as the ones coming from the online directories - they are people who are looking for lodging in my town and already know at that point I am a B&B. Fortunately my link costs a lot less, but they do get 1/2 of my hotel/motel tax dollars.
 

YellowSocks

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If this is a proven source of business, consider that dropping a good marketing tool may not be the wisest thing to do in what is a soft economy. Unlike some, I do believe that the economy is faltering - I don't know how it couldn't be when as a nation we've run up the country's debt to over $10 trillion - but I believe that it will affect businesses differently depending on the value proposition you offer. Is that tourist traffic - walk-ins and referrals from the CVB - is a market in which you need to be competitive? You should consider adding some of those directories anyway - at least bbonline and bedandbreakfast.com - if possible. Without knowing more about where your aunt's guests come from, it's a little hard to say that spending $1400 to make $7000 is a bad business decision. Can you afford to lose the $5600 if you can't fill in the guest book from other sources?
Good tracking for the year is essential so that you'll have the information to make choices next year. It's hard to make a dollar if you don't spend a dime. In this case, I guess you are spending two dimes to make a dollar. Most experts recommend that you spend about 10% of your gross income on marketing. How does this expenditure factor into your overall budget?
As a note, I get as many website referrals from my town's CVB website as I do from any single directory, including bandb.com. Those hits are at least as qualified as the ones coming from the online directories - they are people who are looking for lodging in my town and already know at that point I am a B&B. Fortunately my link costs a lot less, but they do get 1/2 of my hotel/motel tax dollars..
muirford said:
As a note, I get as many website referrals from my town's CVB website as I do from any single directory, including bandb.com. Those hits are at least as qualified as the ones coming from the online directories - they are people who are looking for lodging in my town and already know at that point I am a B&B. Fortunately my link costs a lot less, but they do get 1/2 of my hotel/motel tax dollars.
I get traffic from mine, too. And I recently discovered that they are the most comprehensive listing of lodging (including farmstay and rental cabin) for the area (at least until I get my new website up). I think I'll start using Chamber/CVB websites more often when I travel.
=)
Kk.
 

EmptyNest

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I think part of the question that is missing for me is "How much business (or traffic) did this site deliver for your aunt?".
The answer would be based on how many calls she/we got this year citing finding us using this resource. Keeping track is catch as catch can but it looks like about 7% of the business came from callers who said they found the inn using this resource. It does mean that 93% comes from elsewhere, but this one is local so if someone is just wandering around looking for a place to stay (either in town or on the web) this resource shows up well. I've looked over the forms and there os no place on them that says it is necessary to use gross revenue. Splitting hairs? Or being a good manager of the money?
.
Then use your NET income. You won't be lying and it is probably more realistic anyway.:)
 

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