This is the first of a three-part series about creating a more stable income base and increasing your profits. The first step, and thus the first article in the series, is determining your primary reason to be in business. The next two articles cover basic and more advanced income pillars.
The inn, or boutique hotel, market is more competitive today than ever before. A clearly defined market niche is important so your potential guests can examine the promised guest experience at different properties to decide what experience they want this time. A clearly defined market niche helps you target your marketing efforts so the people who want what you are providing can find you in the online marketing noise.
Determining and developing a market niche is as important in the inn industry as it is in corporate branding for the big guys. Differentiation is vital for a your inn’s success. That’s how you stand out from the crowd.
Part of owning and operating a successful inn is knowing what your primary intent is, or your business focus. That’s true for every business, and I think even more so in the highly competitive lodging industry we are experiencing today.
Determine Your Primary Purpose
When the merchants on Boulder, Colorado’s, Pearl Street — the main street in town for generations — decided to convert the street to a pedestrian mall, their first discussion was about what their purpose was in forming a pedestrian mall. Initially, they thought the focus was to create a merchandising center, but as the conversation developed and evolved, they realized that they really were creating was a place that was safe for people of all walks of life to come together and interact. Boulder’s Pearl Street Mall is still one of the most successful pedestrian malls in the country, even after over forty years. Why? Because the merchants understood what they were creating, and have been faithful to that vision. Similarly, an inn’s purpose might not simply be a lodging property, but rather a place to that provides a fun and safe environment, as well as a comfortable place to sleep.
Successful innkeepers know what their purpose is and stay faithful to that purpose. Those are the innkeepers that experience the same kind of popularity and success as Boulder’s Pearl Street Mall. I’d like to think that you recognize your purpose as a multi-pillared operation. Start by determining what your primary income pillar is and then consider other income pillars that support your primary pillar and broaden the income opportunities of your property.
What is the primary focus of an inn? The standard way of answering that is guestrooms are the focus and primary purpose. I have seen inns decide that their restaurant, bar, or wedding/meeting business were the primary focus, though. If you keep in mind the Pearl Street Mall success story, then providing place of great experiences and safety is a more important focus and purpose to your inn’s success. It’s my experience that guestrooms have a better profit margin than just about anything else you can do with your inn, so it makes sense they would be the raison d’etre — your primary focus.
Ideas for Basic Income Pillars is the second article in the series.