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Surviving the Recession with your B&B

October 23, 2001

by Kit Cassingham

The benefits of an economics recession discussion are helping you survive and maybe even thrive. Figure out new ways to attract guests and avoid lowering room rates. With the understanding that the public isn't going to quit traveling, you can have confidence in your business success.


September 11 Attacks And The Recession.

I mentioned last month, As I mentioned last month, I attended the International Society of Hospitality Consultants (ISHC) meeting in Santa Fe, NM. You can imagine, there were several points of view shared. Most people were positive about the travel industry's future, near and long-term, and predict that the impact of the attacks will have minimal affect on the lodging industry. In fact, according to Smith Travel Research, occupancy and room rates have returned to almost the same point they were before the attacks. What can't be quantified is what the recession will do to the industry. For this issue, I'll focus on the group's consensus on how to survive in a down market.

Lowering Room Rates

The notion of cutting your room rates, which I've seen promoted by several B&B organizations, was the first notion to be shot down and warned against. The background on that opinion was that inns dropped their rates during the Gulf War and it took ten years for the rates to recover. The conclusion is to leave your rates alone because guests will return soon anyway. The "facts" supporting the stance of not lowering room rates include:

  • 78-81% of the business travelers planned to go forward with their travel plans.
  • The public is not going to quit traveling.
  • Though the public is driving more and avoiding international flights (travelers are avoiding foreign travel, especially the Mideast and Afghanistan, and also New York, and Washington, DC).
  • I learned that regional, drive-in/-by inns are doing better than other inns. Suburban inns have been affected less than urban inns, airport properties have held their ground okay, properties along highways have been the least affected, and resort properties have been the hardest hit, unless they are close to urban areas.

    Attracting Guests

    Your reaction should then be, "how will I attract travelers to my inn?" The quick response is add value, offer consistent quality, and provide travel incentives. Let's look at each of these points individually.

    Added Value

    Give your guest more for their money than you did before. You could include dinner or offer a discount or free wine/dessert at a few select restaurants -- and since restaurants are also suffering now they might provide these offers gratis. Call them and ask. Perhaps your guests would enjoy a chair massage, especially after a long day of traveling. Give your guests a bottle of wine or sparkling cider or a box of chocolates/candy. Do you have an inn product, like jelly, bread, or potpourri? If so, maybe your guests would enjoy a complimentary sample to enjoy and help spread the word about your inn. Consider giving your guests a sweatshirt, T-shirt, or coffee mug with your logo on it.

    Consistent Quality

    Exceed your guests' expectations, a "trick" of high end properties that helps them in a down market. Small properties thrive in down times because of the personal attention they have provided to their guests throughout their history. Clearly define your values and then never compromise on them. Part of consistent quality, in my book, is one-to-one relationships with your guests and treating them right. Flexibility is a key to quality too. Don't forget that consistency in your policies, housekeeping, food service, and hospitality also is part of your Quality.

    Travel Incentives
    Reward past guests privately, not publicly. Offer them discounts or gifts for staying with you. Another concept to work with is the "punch-card" approach (a great use of your computer!) used by other service industries; after "X" stays, the guest earns a free night of up to equal value. I've said for years that your market is not local, but I haven't explained that it is local in the sense of getting referrals and word-of-mouth exposure from the locals. With that in mind, consider both providing more interaction with locals and a "thank you" program for when you do get business from locals. I recently read that one global hotel chain is paying 20% commissions to travel agents for travel booked and used during the three month holiday season of mid-October to mid-January; an interesting concept in light of other hospitality venues cutting travel agent commissions.

    Getting back to basics is my summary and conclusion from the 3 days of meeting and interaction at this conference. Your guests are why you are in business, so take care of them while they are with you; that is your best and most affordable marketing program. Balance the business and hospitality aspects of your innkeeping so that you can thrive in up and down markets. When in doubt, lean to the human and hospitality side of an issue. Be good to your guests and they will be good to you. Hopefully these ideas will spark some solutions you can use in your property. I'll be glad to consult with you to fine tune your marketing plan to increase your success.




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