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By Scott and Allison Crumpton
The combined effect of the recession and the events of September 11 have
had an enormous impact on the B&B industry. The result of these two
events has caused inns to migrate into one of two camps. There are those
who have gone (or are going) into financial survival mode and those who
are foraging on the remaining tourism industry.
Survival Mode
Survival mode is based on the belief that the change in financial climate
is short-term. It is a self-protective mechanism which says "If I
hibernate, I can conserve energy and emerge in the Spring unscathed by
the harsh financial winter." Many innkeepers are doing just this
- some out of necessity. They are hunkering down to wait out the winter
expending only minimal financial resources. Generally the first expenditure
to be cut is marketing. Since marketing is the life-blood of business,
this reduces income which precipitates the need to further cut overhead
and thus marketing. The result is a downward spiral into self-imposed
hibernation which was, after all, the intended result. The assumption
is that once winter passes, they will emerge from hibernation to find
business as usual and pick up where they left off.
Dangers of Survival Mode
There are two dangers involved in self-imposed survival mode. The first
is the assumption that when they emerge from hibernation, they will have
business. In reality, they will be starting over and it will take time
to regain the business they had prior to hibernation. The second assumption
is that they will survive the financial winter at all. Unlike the seasons,
financial winters have no predetermined end and Spring could be years
away. Survival mode is risky but unfortunately a necessity for many smaller
inns who lack financial reserves.
Symptoms of Survival Mode
It's pretty easy to spot an inn going into survival mode. Print advertising
and membership in state B&B associations are generally dropped first.
They then take on a do-it-yourself approach toward Internet marketing.
This includes either managing the web site themselves or accepting the
offers of a relative or close friend to handle the job. More importantly,
they begin dropping out of Internet lodging guides which for years have
brought them tons of reservations. The pattern is predictable and an increasing
number of inns are following this pattern daily.
Foragers
Foraging is based on the belief that the change in financial climate
is simply a decrease in available resources. It is an optimistic attitude
which says, "There's still plenty of business out there, I just have
to work harder to find it." Recently we have seen several innkeepers
begin foraging for more business. To the amazement of many (especially
their competition), they are doing better than ever. Expanding your marketing
while your competition diminishes theirs has a doubly positive effect.
Since marketing is the art of spending a dime to make a dollar, your efforts
can really pay off when your competition spends nothing at all.
Smart Foraging
Start with a professionally designed web site. This is the best selling
tool you have and your most important asset -- so why leave it up to amateurs?
I am constantly amazed at the unprofessional appearance of many B&B
web sites. Amazingly, the innkeepers are rarely aware of this fact. Their
defense is that "everyone loves my web site." Correction, everyone
who mentions your web site says they love it - there's a big difference.
Having seen the web sites in question, we can either determine the traveling
public has very poor taste or the innkeeper is not hearing from all those
who went to the competition. I assure you, the traveling public not only
has good taste but frequents the establishments with the more professional
web site. When you consider the cost of a top quality web site is equal
to only a handful of reservations, you have to reconsider your Internet
presence with a more critical eye. Then and only then do you need to start
promoting your web site. When you do, the smart forager hires a professional
to handle the task.
Survival of the Fittest
Competition for scarce resources always creates winners and losers and
I foresee many inns closing their doors in the coming years due to prolonged
hibernation. The boon economy of the 90's created many start up B&B's
- perhaps too many for these leaner times - it is inevitable that a small
town simply will not support 10 B&B inns.
If you're going to survive this financial ice age, you're going to have
to evolve into a forager or you will become extinct. While many are choosing
Survival Mode, the smart marketer can always forage up enough business
to survive and often thrive. Slim pickings also create specialized feeders
- we call these niche markets and they are yet another part of smart marketing.
If you have the resources, now is the time to expand your marketing efforts.
The risks are low and the potential gain is enormous - especially while
your competition is hibernating the winter away.
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