Finances

This is the third article in the Income Diversity And Profits At Inns series. The previous two articles cover the need to define your primary purpose for being in business and basic income pillars. Start with the first article, if you haven’t read it yet, and work you way back to here. Read Part 1, Define Your Purpose First, and then Part 2, Basic Income Pillars.

Increase Your Income Pillars — Advanced

• Spa
  A spa can be open to both guests and the general public. It’s a more complex service and income pillar than many you’ll consider, so check with a spa consultant like <a href=“http://www.hfdspa.com/”> Health Fitness Dynamics</a>. This expands guest options for how they spend their time and may be just the excuse they need to visit a specific location — and your property. By making the spa open to the general public, they are given a glimpse of your inn’s experience for their own use or for referral to their out-of-town guests. Either way, income potential is strengthened and expanded.
• Referred Business
  Affiliate programs aren’t new to the inn industry, though they may be known by other names. Things done under this income pillar should be considered added value to guest services. I’m not suggesting this be a nickel-and-diming approach to business at all; I intensely dislike that approach to hospitality. I see the services you offer as part of the total inn experience and so are included in the room rate or paid as a referral fee by the company you sent the business to. These services you add augment the inn experience for the guest and are added value to the guest that you can profit from. This is your concierge service. What services augment the inn experience? Taking care of rentals — bike, skis, boat, skates, or jeeps, for example — for your guests is a good example. Giving referrals to guests for mixology classes, balloon rides, whale watching, carriage or hay rides, restaurants, tours, flowers or plays, is another possibility (and of course, making the reservation would be a plus). Making arrangements with companies you feel good about associating with to be paid a commission for your guests’ business is the key to this income pillar. These services can be promoted through packaging and joint marketing campaigns as extras for guests to take advantage of and enjoy. Since affiliate programs are an extra service, consider it an income pillar.

Check Regulations
Be sure to check with regulatory agencies regarding your ideas for income pillars so that you stay legal with your business. Will the income pillar idea be allowed in the your inn’s zoning area? Zoning impacts parking, signage, utilities, and safety. Does the inn’s license allow that activity? If you hit speed bumps in this income pillar, is it possible to get zoning and licensing expanded to allow for your ideas around these additional income sources?

Having multiple income pillars helps you thrive in good and bad times because your income potential is broadened. It’s good business to have income diversity.

This article on basic income pillars your can incorporate into your business affairs covers those businesses that are part of the inn itself. These are simpler opportunities that involve less effort or expense on your part.

Reading the first article in the series, Define Your Purpose First, will be a good springboard to this topic.

Increase Your Income Pillars — Basics
What additional activities fit with and support your inn’s concept? I’ve already mentioned restaurant, bar, and wedding/meeting businesses. There are lots of options for you to consider. Your personality, location, and dreams will help guide which additional income pillars blend with your inn idea. A gift shop, spa, and affiliate programs (like teaming up with a bike shop, gym, carriage-ride service, or even an Uber or Lyft driver) come to mind immediately as additional income pillars that can reasonably be incorporated into your inn’s environment. The opportunities are limited only by your imagination, zoning/licensing, and finances.

• Gift Shop
  A gift shop is a natural with an inn because your guests may need something they forgot to bring. If their guest experience has been wonderful, they want to take a memento of your inn home with them; a gift shop item fits the bill. I knew an innkeeper years ago who created a guestroom’s worth of income from her gift shop, which occupied a corner of her inn’s kitchen (accessible to her guess). She didn’t have to change the beds or clean rooms for that income; she merely treated her guests well, giving them the experience they sought and she promised, and then let them buy myriad items with the inn’s logo, location and contact information printed on them. What a show of appreciation those purchases were! She considered her gift shop easy money. Guests may love your soap, hand lotion, coffee mugs, bathrobes, and any number of other items in your gift shop. Heck, there are big-chain hotels that offer their sheets, pillows, and even mattresses in their online gift shops. The profit on all these items can be lucrative.
• Meeting Space
  A meeting or special event space is another great income producer for inns. That space can be rented out to others as requested or used by guests if available. Renting the space to outside groups provides attendees with the chance to see the property and experience the inn’s atmosphere and hospitality. Their experience may lead them to return for a getaway of their own, or booking their own even there, increasing your lodging business and income. The charged rental fee ideally is great enough to not only provide additional income but to also cover the use, utilities, and wear and tear, improving the inn’s bottom line. As long as the meeting space business doesn’t interfere with the lodging business — the common areas promised to the guests — it’s a great income pillar to add.
• Food Opportunities — Picnics
  Breakfast is a given at a bed and breakfast, but not necessarily at other boutique properties. And what about lunch and dinner at any inn? Providing food opportunities can be a wonderful income pillar. There are numerous simple ways delicious meals can be prepared for overnight guests. Picnic lunches or dinners can be as simple as a bagged or basketed meal. The items you include in a meal should be easy to keep on hand: bottled water/soda/juice/wine/beer, cookies, fruit, and vegetables. For the entree portion, consider a sandwich, quiche, pot pie, cheese and sausage, or hard boiled eggs and caviar with french bread and cheese. Just be sure to avoid the use of Styrofoam and use either durable or compostable containers (to keep a lighter environmental footprint). How you package the meal (whether it’s bagged or basketed) depends on the meal itself, the price you charge.
• Food Opportunities — Dining
  Providing food service to your guests is a big decision. Running a restaurant is a whole other business dimension than running your inn. That said, dinners can be an easy service that will win your guests’ hearts forever. Dinners served at the inn can be served either in the guest’s room or the dining room, and by prior arrangement. If you don’t have a full kitchen to work from can still arrange for delicious and fresh food to be served. I’ve offered foods that range from fresh pasta to gourmet pot pie to lasagna, served with a vegetable, dessert, and beverage. You could also hire a private chef to cook special meals for your guests, if that’s more your style. This is a profit center you can consider when it’s offered like this, so don’t fall into the trap of thinking this is something that should be done for your guests only at cost. It’s not necessary to be as gouging as some room service menus are, but it’s not a cheap option for the guest either. This is an additional service being provided for guests, for their convenience, so consider it a viable income pillar.

The next article, Advanced Income Pillars, is the third and final in this series on Income Diversity And Profits At Inns.

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.