Lemonade innkeepers in a lemon economy

© Sandy Soule, BedandBreakfast.com

Recent BedandBreakfast.com surveys are making it clear that while some innkeepers are having a hard time, others are breaking records for occupancy and revenue. In the worst recession in decades, what are the “lemonade” innkeepers doing right? Here are some ideas to consider:

Lemonade innkeepers:

1. Have a strong Internet marketing presence, with a good website, great photos/videos, reviews, online reservations, social marketing.
2. Practice yield management and value pricing to increase reservations.
3. Adjust operations and amenities to better suit guests’ needs.
4. Maximize best practices to increase repeat and referral business.
5. Stress the value of the B&B experience in all marketing.

We’ll take a closer look at each of these below, but first, let’s look at the numbers.

Here are some statistics from our most recent innkeeper survey, covering the second quarter of 2009. (See complete survey results here.)

• 45% of U.S. innkeepers were either even or up 10%-30% over last year
• 44% were off by 0% -30%+
• 17% were off by 10%-20%

Some of the trends reported during this recession are:

• Increased last-minute bookings
• More bargain hunters
• More one-night stays
• Increased repeat and referral reservations because travelers are less likely to take chances

How does that compare to the hospitality industry overall?

• The decline in leisure travel is much less than the decline in business travel.
• Because the B&B industry gets most reservations from leisure travelers, innkeepers are generally less affected by the downturn.
• 15% decline in the 2009 U.S. corporate travel market; 11% in U.S. travel market overall (PhocusWright)
• Average daily rate (ADR) will drop by 9.7% in 2009; RevPAR is down 17% year over year (Smith Travel Research)

Innkeepers gave several reasons for why they’ve seen an increase in business. Here are the key ones:

• Reviews
• Online reservations
• Improved website
• Overall internet marketing
• Facebook/Twitter/blog
• New photography
• Repeat and referral business
• One-tank trips
• Value pricing

What are innkeepers whose reservations have increased doing that those whose business is down are not?

• 55% attribute increased reviews to their increased bookings, compared to 28% who are down.
• 6% upgraded to real-time reservations, compared to 0% for those who are down.
• 12% added social media, compared to 8% who are down.
• 19% plan to have professional photos taken to increase/maintain reservations, compared to 12% who are down.
• 52% of those who are up allow packages to be booked online, compared to 44% who are down.
• 38% say they’ve had an increase in sales because of packages, compared to 25% who are down.
• 10% of innkeepers whose business is down said they plan to do nothing to increase/maintain their occupancy!

So what are the “lemonade” innkeepers doing right?

1. Strong Internet marketing presence, with a good website, great photos/videos, reviews, online reservations, social marketing.

Be sure to follow these five rules for reeling in today’s distractible customers:

• Grab their attention. Unique, outrageous and highly creative marketing can break through the clutter.
• Keep the message short or they won’t read it. That’s why Twitter is hot. Cut the message to increase impact.
• Allow prospective guests to take action quickly. Have an obvious “book now” button and phone number.
• Keep it simple and intuitive. Travelers will not stay on your site long enough to figure out how to find where things are.
• Respond immediately to get the reservation, the repeat guest, and the referral. This is an instant world. Perfect service is now the expected norm.

Here are some things innkeeper Chloe Tuttle from the Big Mill Inn does:

• Great website plus professional photos: “I watched the photographer, learned a lot, bought a good camera, and I keep posting more photos.”
• New keywords are driving traffic: heritage, homestead, farm, acres, lakes, green, eco-friendly, line-dried sheets.
• Commercial and “long-term” guests fill up rooms midweek: “No one else around here offers weekly/monthly rates. These guests usually go home on the weekends, they don’t need breakfast, and will often switch rooms at my request.”
• “I hired someone to do the cleaning, giving me more time for Internet marketing and mingling with guests. It’s great!”

Big Mill Inn also has a blog. Chloe shares recipes, tips for going green, and stories from growing up on the farm—all things that tie into the theme of her inn.

Online reservations
Make sure it’s easy for guests to book on your website. Have an obvious “book now” button and phone number.

Reviews
Reviews increase reservations! Below are traffic numbers from two inns in the same resort town in the United States. Inn A has a total of 7 reviews on their BedandBreakfast.com listing. Inn B has 53 reviews.

Inn A, with just 7 reviews, has had a 20% drop in click-throughs to its website.

Inn B, with 53 reviews, has had a 52% increase in click-throughs to their website. The number of website click-throughs has surpassed last year’s, and we still have four months left in 2009!

In an uncertain economy, guests want to be sure they’re making a reservation at a place they’ll like. Reading reviews from other guests gives them the assurance that they won’t be wasting their money on a stay that doesn’t meet their expectations.

Social networking
The most popular social networking sites include Facebook, LinkedIn, Twitter, and MySpace.



Social marketing is the equivalent of hanging the curtains in your B&B – it can be done after you’ve addressed the basics. Having a blog, Facebook page and Twitter account is great, but don’t let them distract you from the priorities: great website, photos, reviews and online reservations.

2. Practice yield management and value pricing to increase reservations.

“We always raise rates at the beginning of the year so we can maximize revenue for premium dates when the inn is most likely to sell out.” – Jim & Cathy, Inn at Lake Granbury, Granbury, TX

3. Adjust operations and amenities to better suit guests’ needs.

“We serve breakfast until 11 a.m., and on occasion, have given Gen X/Y/Millennial guests who want to sleep in free lunch instead of breakfast. Younger guests want 'something to do‘, so we tell them about the nearby casino, mountain bike trails, hiking and canoeing on the Cedar River, etc. We might recommend the local hangout for a burger & brew instead of our romantic, candlelight dinners. You listen to what guests want, and do your best to provide it for them – in the most creative way you can." – Sherrie Hansen, The Blue Belle Inn B&B and Tea House, St. Ansgar, IA

"We offer long leisurely breakfasts from 8:30 to 10-ish; the latest we served one was 2:30! We offer a full range of Wi-Fi/multimedia, providing up-to-date magazines and books, and even playing dance/chill/urban cool tunes in the breakfast room. We have created a Facebook page. We try and answer the phone or respond to any e-mail with personality and a little humor. All in all we try and relate to the 21st-century needs of clients, which does cause us to pigeonhole our market, but we passionately feel that what you do, you should do well.” – Dora and David, Woodstocker Inn, Woodstock, VT

A J.D. Power 2009 survey says that hotel guest satisfaction is up:

• Many hotels successfully focus on guest satisfaction, despite reductions in rates, head counts, in-room amenities, and renovations.
• Extraordinary guest service in a consistent manner is a recipe for continued success.
• Bedding and pillow choices and free parking are now among the top "must-have" amenities.
• Free breakfasts and Wi-Fi plus pillow-top mattresses and flat-panel TVs are also top choices.

4. Maximize best practices to increase repeat and referral business.

Consider starting a frequent stay program. For example, reward those who have stayed with you for seven nights with one night free.

Off-peak gift certificates. Give guests a $25 or $50 gift certificate that can be used at certain off-peak times (mid-week, low season). The gift certificate should be transferable so that if your guests can’t use it, they can pass it along to friends, potentially granting you some new guests!

Thank-you gifts and upgrades for returnees. The results of our recent surveys show a dramatic increase in the percentage of repeat guests. A hand-crafted mug like the ones below from Deneen Pottery is a classy souvenir, and your guests and their friends will see your name and logo each morning when they pour their coffee.


Photo courtesy Deneen Pottery

If space is available, offer arriving guests a free upgrade or their choice of open rooms. They’ll love the idea that they paid for a regular queen room but get to enjoy the king suite. The incremental cost to you is minor, and they’ll love you for it. Not only will they be more likely to return, but they may decide that your top room is worth reserving in advance at the regular rate.

The recession means more repeat guests.

“Guests don’t want to take chances in a down economy. Innkeepers who combine a good location, a quality product, excellent service, and a premier guest experience will weather the storm. We have had success with last-minute midweek specials -- stay two nights, get the second at 25% off. We have also had success upgrading guests to a balcony room or giving them a choice of rooms on arrival -- a surefire way to make guests feel special. We are also booking more multi-night stays and packages this year.” – Jim & Cathy, Inn on Lake Granbury, Granbury, TX

5. Stress the value of the B&B experience in all marketing.
We all know how much value B&Bs provide by including special amenities that hotels nickel and dime guests for. Be sure you state it in your marketing!

Kalaekilohana in Na`alehu, HI, lists all the extras on its website. 

Click here for a press release we distributed about the value of B&Bs.

We also host a free webinar called Selling the Value of B&Bs over Hotels. To sign up for this or any of our other free webinars, log in to your Home Base and click Educational Webinars in the table under Free Member Benefits.

Take some tips from the “lemonade” innkeepers to overcome the economy and get more heads in your beds.