Drive More Direct Bookings Without Sacrificing Your Bottom Line

One of the best – and worst – things about the hospitality industry is how much most hotels have in common: they’re offering relatively similar products and have a great deal of competition within their immediate marketplace – other hotels, alternative accommodations and the OTAs – which, in most cases, leaves hoteliers waging an uphill battle to profitability.

But instead of thinking outside of the box when it comes to boosting direct bookings, decreasing the cost of acquisition and increasing overall RevPAR, most hoteliers continue to follow the old-school playbook (which probably smells as musty as my Great Aunt Tessie at this point) every day, every month and every year, hoping and praying for a different result.

Making an already difficult, competitive and complex market even more so, technology – and consumer demand – continue to evolve at a lightning-fast pace with the coming-of-age of the newest generation of travelers: Millennials (cue groans here!).

So, obviously, that’s the bad part of our current shared experiences. But, wait… it’s not time to run for hills just yet!

Let’s not forget all the good happening in the hospitality industry now: legislations are changing that help hotels win back market share from the OTAs, Airbnb began allowing hotels to list their rooms on the site (giving hoteliers a new sales channel) and we, as an industry, are learning, each and every day, how to improve our operational strategies and, as a result, boost our bottom lines. Today, hoteliers also have access to a smorgasbord of operational technology that helps boost direct bookings and RevPAR, without even lifting a finger. Three cheers for automation!

All that is to say that today’s hoteliers have a great opportunity to use innovative, out-of-the-box reservations, revenue and channel management strategies that will differentiate your property from the hundreds or, even, thousands of direct and indirect competitors in your marketplace – which is the subject of our article, the third and final part of our Discounting is for Dummies article series. (If you’ve fallen behind on your reading, read Part One and Part Two here). Today, we will examine how automation – using technology that you may even already have – can help boost your property’s bottom line: more specifically, I will share tips and tricks that will help your property leverage the power of your CRS to improve your direct booking conversion rates AND boost your RevPAR.

Of course, we all know what a CRS is: it is the hub connecting all your distribution channels – including your brand.com website, metasearch engines, the GDSs and online travel agencies – to your property management system (PMS). You may (or may not) also be familiar with the top benefits of a CRS:

• An effective CRS gives your property access to ALL your distribution channels through a single platform, making it quick and easy to manage inventory, pricing, the property’s website, among many other valuable features.
• A good CRS grows as your business does. Whether your property gets a huge influx of reservations at one time (because of a special event) or because your property continues growing in popularity over time, your CRS should adjust its performance accordingly to ensure that it is as productive as possible – no matter how meteoric your growth becomes.
• Your CRS can make it much easier for your property to handle complex reservation requests (hello, bleisure travelers!) with no extra muss or fuss.

But, there is one additional, lesser-known benefit of using a CRS: by using a sophisticated, integrated, well-rounded CRS solution, your property can increase your direct booking conversation rates. 

**MIC DROP**

Just kidding, I’ll pick it back up to tell you how to get your CRS started on boosting your direct bookings, TODAY. By adding these built-in CRS features into your reservation management strategy, your property will quickly see the impact that it can have on your property’s occupancy, ADR and RevPAR.

So, let’s get started now with the first CRS feature that you should leverage NOW:

FEATURE: OTA Rate Comparison Pop-Up

The new and largest generation of travelers (read: Millennials) are primarily looking for a great travel experience, BUT they also prioritize value, as they often travel for much longer periods of time than previous generations did. Unfortunately, most consumers believe that the room rates on the OTAs are much lower than offered through properties’ websites, making it unlikely that a Millennial will book directly without double-checking rates offered by the OTAs and metasearch engines.

But there’s an app (platform?!) for that!

Your CRS can enable OTA Rate Comparison Pop-Ups to potential guests who are checking the availability and pricing of your rooms on your brand.com website; the pop-ups show real-time rates from the top OTAs and metasearch engines, making your potential guest comfortable that he/she is getting the best rate on their upcoming trip – and making them more likely to book directly.

This feature also benefits hotels; using OTA Rate Comparison Pop-Ups is a great way for your revenue management team to ensure that the property’s OTA room rates automatically match the lowest rate, while remaining in parity.

FEATURE: Persuasive Messaging & Tagging

While shopping online, have you ever seen a message in the corner of your screen saying: “Hurry, there is only one more of this item in stock!” If you’re like most people, you will click BUY immediately; the fact that it is almost out-of-stock made you realize that you CANNOT live without it.

The Persuasive Messaging & Tagging feature shows a potential guest that others are looking at and/or booking rooms, at that exact moment (social proof) and that the property is so popular that they are almost completely booked (scarcity). The combination of these two psychological triggers are powerful ones, and ones that your CRS can help your property leverage to boost direct bookings.

This strategy is especially effective when marketing to Millennials; experiencing FOMO (fear of missing out) is highly effective at driving action, as “the majority of adult Millennials stated that they want to say yes to everything due to the fear of missing out (as shown in a study done in the US and UK).”

And, the best part of using FOMO to boost direct bookings: vacations and travel are the one of the most FOMO-inducing experiences for Millennials, making this feature is a MUST if you want to boost bookings with this valuable demographic.

FEATURE: Secret, Locked Deals

This feature helps hotels to use the psychological trigger of reciprocity, in which the property gives the potential guest something special (access to lower rates) in exchange for their email address (and permission to add them to your email marketing list). Secret rates make potential guests feel like VIPs, which makes them more likely to book with you AND it gives you the opportunity to market to them regularly (a good way to increase repeat visits –  the most profitable ones for hotels!).

FEATURE: Abandoned Cart Recovery Strategy

Like in the retail industry, this feature encourages guests who are about to abandon the reservation to complete the booking, using a fully customized pop-up message. Simple but also, highly effective!

FEATURE: Competitor’s Rate Checker

Are you always competing for guests with one (or many) direct competitors in your city? Looking for an easy way to compare their rates without having to search each property’s site manually? The Competitor’s Rate Checker feature makes it easy for the revenue management team to monitor the rates of your pesky competitors, in real-time, from the main online distribution portals; this enables rate changes on the fly and an increase in occupancy because your rates will continue to beat the rates of those dorks over at INSERT COMPETING HOTEL NAME HERE.

FEATURE: Metasearch Management Tool

Consumers LOVE metasearch channels, as they are the OTA equivalent of the OTA Rate Comparison Pop-Up feature that we discussed earlier: they allow potential guests to see ALL of the available rates on ALL of the OTA sites and, therefore, feel more comfortable knowing that they got the best room rate possible.

But, I would bet than many hotels don’t feel the same way about metasearch channels. Managing, monitoring and updating rates on the OTAs, PLUS the metasearch engines can get tiresome; after all, revenue managers are already spending, what must feel like one million years, looking at data, making calculations and updating rates across all these channels.

Having a Metasearch Management Tool integrated into your CRS allows the property’s revenue management team to manage, monitor and connect with the top metasearch engines, all from one simple platform. Rates and availability are pulled from the booking engine and sent to the metasearch platform, with all clicks directed to the booking engine on the property’s website.

Metasearch, managed!

FEATURE: Alternative Offers

Most hoteliers and revenue managers focus on two opportunities (during the consumer booking cycle) to boost revenue: when the guest chooses their room type and then once they have checked-in, with the possibility of buying additional services or food and beverage on-site.

But how many hotels are thinking about the opportunity to upsell (beyond the basic: “Want a fancier room? No? OK.”)? I’ll tell you, it’s not as many as there should be.

Major key alert: upselling is a huge revenue booster and your CRS should integrate functions that automate upselling for every customer who moves from looking to booking, via your brand.com booking engine. Instead of just offering a fancier room (as ALL hotels do, and which most customers rarely consider because it’s so unnecessarily expensive), the Alternative Offers feature in a CRS can automatically suggest special promotions for guests who choose to stay for additional nights and/or can offer bundle packages during the room selection phase of the booking cycle (among many other upselling options, designed according to your property’s business goals and amenities).

Upselling is basically free money, so shouldn’t you have a CRS who will handle that for you, with no muss and no fuss? (Hint: the only right answer is YES!!)

FEATURE: Flexible Date Calendar

My favorite airline booking tool is Google Flights; using their calendar feature, it’s never been easier to compare rates and determine which days make it most affordable to fly. Today, there are so many travelers (i.e. digital nomads and business travelers) who have the flexibility to choose their travel dates to decrease their overall spend – instead of making decisions based on a set date of travel, as was traditionally how people booked flights.

Until recently, there was no tool that allowed travelers the same flexibility when booking a hotel stay; now, sophisticated CRS solutions can show potential guests room rates for a specific date range on a calendar, making it easy for them to find and book the least expensive stay possible – no extra clicks required!

Now, I know that was a long one article so thanks for sticking with me all the way to the end! Let’s finish this article with one very simple question: does your CRS offer all these revenue-boosting features?

Once again, the only right answer is YES!!

About the Author

Mark Lewis-Brown, CEO and President of Vertical Booking USA, is a hotel industry veteran with more than 30 years of experience in the hospitality industry. At Vertical Booking, Mark is responsible for the commercial development of the company’s innovative CRS platform in North America and is involved in key decision making regarding the strategies and development of the group. He also coordinates the development of products and applications for both boutique properties, small and large chains and all other types of properties in the North American market.

Mark began his career in the hospitality industry as an owner and operator at boutique properties throughout the US. For the past 22 years, he has worked with leading hospitality industry companies and founded InnPoints Worldwide, a diversified reservation marketing organization (which was later acquired by Genares and, which is now owned by Sabre Hospitality Solutions). Having experience both as an owner and operator and working behind the scenes in product development, client services and marketing for companies providing technology products/services to hotels, gives Mark a unique understanding of the hospitality industry – past and present, making him the perfect candidate for the leadership role at Vertical Booking USA.

The post Discounting is for Dummies – Part Three appeared first on Lodging Leaders.

Drive More Direct Bookings Without Sacrificing Your Bottom Line

Remember last week when we decided that discounting is for dummies – and made it official by shouting it from our rooftop patios? If not, you’ve got some catching up to do!

Today, I’m going to share the second (of three!) important takeaway from this article series: how hotels can boost direct bookings WITHOUT discounting or adversely affecting their bottom lines.

So, let’s get started.

Close your eyes and think back to the last time that you were more than satisfied with a hospitality experience – be it at a restaurant or a hotel. What made it such a positive experience for you? If you’re like most people, it’s because the establishment made you feel special, not like just another customer or a number in a long line of bookings. They cared about you, personally, and wanted to show their appreciation for your business and, because of their attention to personal service, it stood out to you as a very positive, noteworthy experience.

That’s the feeling that guests want to have when they leave the hotel they’ve chosen for their trip. In most cases, they’re not looking for the cheapest room, the most luxurious amenities or the hippest vibe; they want to be shown that they are a valued guest at your establishment – and the best way to do that is by offering additional value-adds if they book directly, to show them how much you appreciate their business AND to lower your property’s cost of acquisition (by boosting direct bookings).

This isn’t a new strategy, by any means, but here’s the twist… Many properties offer value-adds, like airport transfers or free breakfasts, to encourage direct bookings; while these incentives do provide value to the guest and can often be enough for them to decide to book directly, it still means the property’s bottom line is suffering. By offering airport transfer, the property still must pay for a bus or van to transport passengers to and from the airport and for fuel. By offering free breakfast, the property must still purchase the ingredients and pay the staff to cook and serve it to guests.

Luckily, it doesn’t have to be that way. I know that there is a happy middle ground, where hotels can incentivize guests to book directly WITHOUT undermining their bottom line: by offering value-adds that cost the property NOTHING to implement, but which still have high perceived value to potential guests.

So, instead of offering a discount on the room, free airport transfer or a free breakfast, offer your guests a free room upgrade or complimentary early check-in or late check-out – both of which cost you zip/zero/nada, but which guests feel offer more value than a complimentary continental breakfast would.

Let’s look at those examples more closely…

Many hotels charge up to $25 for an early check-in or late check-out; by offering it as a free perk, most guests will be encouraged to book directly, just to get a few extra hours of sleep.

The same principle applies to a free room upgrade. All guests know that the bigger and more beautiful rooms, or the ones with a better view, have a much higher price-tag than the standard rooms, giving this perk HUGE perceived value for guests. Even though it costs you absolutely nothing (as the room is already sitting empty anyway), this value-add alone can make a significant impact on your direct booking conversion rates.

In terms of guest satisfaction, this shows us that perception really is reality. This type of value-added service will also make it more likely that the guest will book with your property on their next trip (more revenue!) – and it doesn’t undercut your profits.

Really, it just makes good business sense (and cents!) for ALL hotels to drive more direct bookings, without sacrificing their bottom line. By doing so, we’ll be able to send a strong message to our friends, the OTAs: “We love you guys, but we’re here to take back our share of the market – one no-cost incentive, at a time!”

Here’s a quick recap on the key takeaways from this article series thus far:

1. Discounting is a dumb strategy; don’t do it!
2. Offer value-added services (to encourage direct bookings) that cost nothing for your property, but which have high perceived value to potential guests; they will feel appreciated and, as a result, are more likely to recommend your property to friends and give you a better rating, post-stay. It’s also a benefit for your property; you save money on OTA commissions AND won’t need to give away the house to convert direct bookings.
3. ???

What is the third and final takeaway from this three-part article series? Check back next week, when we will explain how your choice of CRS technology can also have a significant impact on your property’s direct booking conversion rates and overall RevPAR – and give you specific, actionable steps that you can take, TODAY, to see your bottom line soar (like the many stories of our properties’ beautiful building-scapes!).

About the Author

Mark Lewis-Brown, CEO and President of Vertical Booking USA, is a hotel industry veteran with more than 30 years of experience in the hospitality industry. At Vertical Booking, Mark is responsible for the commercial development of the company’s innovative CRS platform in North America and is involved in key decision making regarding the strategies and development of the group. He also coordinates the development of products and applications for both boutique properties, small and large chains and all other types of properties in the North American market.

Mark began his career in the hospitality industry as an owner and operator at boutique properties throughout the US. For the past 22 years, he has worked with leading hospitality industry companies and founded InnPoints Worldwide, a diversified reservation marketing organization (which was later acquired by Genares and, which is now owned by Sabre Hospitality Solutions). Having experience both as an owner and operator and working behind the scenes in product development, client services and marketing for companies providing technology products/services to hotels, gives Mark a unique understanding of the hospitality industry – past and present, making him the perfect candidate for the leadership role at Vertical Booking USA.

The post Discounting is for Dummies – Part Two appeared first on Lodging Leaders.

Drive More Direct Bookings Without Sacrificing Your Bottom Line

For many years, hoteliers have been throwing away potential revenues right-and-left, offering huge discounts to lure bookers back from the OTAs and alternative accommodation options. I’m here today to tell you something that I need you all to hear: discounting is the best way for your hotel to go from profitable with a high cost of acquisition, to a property with high occupancy, a low cost of acquisition, but (and this is a BIG but) one that is barely able to afford to stay in business.

I know that if I listened very carefully right now, I would hear many hoteliers angrily protesting: “That’s not true; my hotel has used discounting and it always yields positive results for us. That’s why we keep doing it!”

In response to that, I say: “True, discounting can increase occupancy in the short-term – through both the OTAs or direct channels; however, in the long-term, you will be severely undercutting your ADR and RevPAR.

Remember, occupancy isn’t what keeps the lights on and bank accounts full; ADR and RevPAR do.  

To those hoteliers who are still grumbling in disbelief, let me share an example of why discounting is NEVER a good strategy – even in the short-term – no matter what type of hotel, flagged or independent, size or its geographical location.

It always starts out well; the revenue manager at your hotel decides to offer a small discount, but only for a short period of time so that you don’t drastically decrease their ADR or RevPAR, or undercut the property’s brand value proposition. Sounds good so far, right?

Good news! Your property’s occupancy increases… for a short while.

But then, the competition in your destination catches wind of your successes and discounts their room rate even more. Your revenue manager doesn’t want to lose bookings over a few dollars, so he/she lowers the room rate one more time, to get back on top. Then, the other hotel goes even lower and…

In many cases, hoteliers and revenue managers repeat these price reductions again and again, until the hotel is full but barely earning the money that they need to cover the cost of doing business.

Food for thought… I’m convinced that every revenue manager has seen and is very familiar with that tried-and-true ‘Price is Right’ strategy: betting $1 lower than the lowest price – and, on the show, the contestants would often win, making it a great gameshow strategy.

Could we all have woken up one day and decided that this was our new modus operandi (for those whose Latin is a little rusty, that loosely translates to “a method/mode of operating” and is “used to describe a firm’s preferred means of executing business”)?

My answer: I am sure of it because discounting is the hotelier’s version of that strategy; but, as I said earlier, it’s not the right way to increase occupancy, direct bookings or profit. Why? This isn’t the ‘Price is Right’; this is the highly competitive and ever-changing hospitality industry. By using the ‘Price is Right’ strategy, your hotel must continue discounting your room rate (whether it’s by $1 or $10 each time) on the already discounted rate to remain competitive, creating an ongoing race-to-the-bottom and a recipe for financial failure over the long-term – not just for your hotel, but for all hotels, industry-wide.

Because, while we’re over here giving away the house (or room, in this case), the OTAs are sitting back, watching as we price ourselves out of business – even further compromising our ability to drive direct bookings, while maintaining profitability.

I’ll say that one more time (for the cheap seats in the back!): in our search for hoteliers’ elusive holy grail (direct bookings), we’re helping the OTAs keep their death-grip on their share of the market and hurting our bottom lines in the process. And when you combine that with the OTAs’ HUGE marketing budgets and high-tech everything (another advantage), hotels’ outlook are looking more and more ‘sad face emoji’ by the day.

So, once and for all, let’s throw the old standby, ‘Price is Right’ method out the window and shout it loud-and-proud from our rooftop patios: “Discounting is for dummies!” 

Thumbs-up emoji!

Want to know what revenue management strategy you should be using to boost direct bookings without discounting?

Check back next week to read Part Two of this article where we will outline how to boost direct bookings, minimize the cost of acquisition and take back their fair share of the marketplace – without negatively impacting your bottom line at all. Trust me, you will be happy to that you did!

About the Author

Mark Lewis-Brown, CEO and President of Vertical Booking USA, is a hotel industry veteran with more than 30 years of experience in the hospitality industry. At Vertical Booking, Mark is responsible for the commercial development of the company’s innovative CRS platform in North America and is involved in key decision making regarding the strategies and development of the group. He also coordinates the development of products and applications for both boutique properties, small and large chains and all other types of properties in the North American market.

Mark began his career in the hospitality industry as an owner and operator at boutique properties throughout the US. For the past 22 years, he has worked with leading hospitality industry companies and founded InnPoints Worldwide, a diversified reservation marketing organization (which was later acquired by Genares and, which is now owned by Sabre Hospitality Solutions). Having experience both as an owner and operator and working behind the scenes in product development, client services and marketing for companies providing technology products/services to hotels, gives Mark a unique understanding of the hospitality industry – past and present, making him the perfect candidate for the leadership role at Vertical Booking USA.

The post Discounting is for Dummies – Part One appeared first on Lodging Leaders.

The Series LLC is one of the most effective entities a real estate investor can form. Whether you’re a veteran investor, or a new investor just beginning to build your real estate empire, the Series LLC has many features and benefits to offer you. If you’ve been using a Traditional LLC to manage your investments and have never heard of the Series version, prepare to have your investing world changed forever. When you take advantage of this structure, you’ll not only be able to streamline and grow your business, but you’ll also receive the benefits of lawsuit prevention and asset protection. As both investors and attorneys, we believe that the Series LLC is the best structure for real estate investors who want asset protection while they build their real estate empire.

What Is The Series LLC?

The Series LLC is very similar to a Traditional LLC. The only difference is, instead of being one big company, the Series LLC is a network of LLCs. It uses a parent-child structure. Your parent company is its own LLC, and it can have as many “children,” or Series, as you have assets to place within them. Each asset will have its own LLC, complete with liability protections and many more benefits we’ll discuss below. Take a look at the following diagram for an example of what this looks like in practice.

The set-up is elegant in its simplicity. The operating company, dubbed “Big Daddy” above, is in charge of the kids. Each kid is its own asset. Of course, you could have any combination of properties or property types.

Biggest Benefits Of The Series LLC

The benefits of a Series LLC are numerous. Here are the top reasons you should consider this structure.

Scalability: One Structure, Infinite Assets

With the Series LLC, incorporating new assets is easy. Suppose you spot a cute little fixer-upper property at a great price. When you buy it, all you need to do is a little bit of paperwork and have your attorney sign off on it to add it into the structure. If your Series looked like the one above, your new asset would be “Series 4.”

And you aren’t restricted to just real estate, either. Any asset can go into its own series – cash, gold, cryptocurrency caches, your midlife crisis Jaguar, etc. If you can think of it, you can stick it in the Series LLC.

Tax Benefits And Cost Savings

The Series LLC allows for pass-through taxation and its benefits. This means you’ll dodge hefty corporate taxes and get to file any profits on your personal return. For most people, this is infinitely cheaper. With the help of a competent CPA, you could save thousands.

Other cost savings are relevant for Series LLC owners as well. The clearest of these is evident when you consider how much it would cost to have each asset in its own Traditional LLC. The annual fees would add up. With the Series version, you’re getting an infinite amount of LLCs for the price of just one.

Asset Protection Made Simple

A Series LLC is the foundation of a superior asset protection plan. Real estate investors especially need this structure as a starting point. It offers the single most powerful liability protection of any entity one could possibly form. The reason for this is simple: each “Series” holding its own asset keeps it isolated from everything else you own.

How The Series LLC Prevents Lawsuits

You may think that you don’t need any additional protection from lawsuits because you run an ethical business, have insurance, and try to treat your tenants and customers well. Sadly, if you believe this, you are mistaken. Did you know that one-fourth of Americans fall prey to a lawsuit at some point in their lives? This figure is even higher for real estate investors, up to one-third according to some sources. Why? Because we tend to have more assets for litigious people to want to pursue in court.

The cold truth is that lawsuits are a ruthless, cut-throat business. And like all businesses, they’re after one thing: cash. That means, the more wealthy you become from your real estate ventures, the more likely someone is to try to come after your cold hard cash and any assets. Since success makes you an attractive potential payday for unscrupulous and greedy people. Insurance won’t bail you out of this situation, and neither will your good reputation or even the best business practices in the world. Lawsuits don’t even have to be valid or logical to cost you everything you’ve worked so hard for.

To avoid this fate, you will want as much protection as you can get. Fortunately, the Series LLC can have your back. In addition to being a less attractive target, the Series LLC’s isolation of assets means that if you are sued, only that individual asset is on the line. When implemented properly along with other precautions, Series LLCs are the core of an asset protection plan that is powerful enough to stop lawsuits before your name is even typed out on filing papers.

How Do I Set Up My Series LLC?

Setting up the Series LLC is very simple, but it must be done correctly. Investing in an asset protection plan is one of the wisest moves you can make as an investor, but if you don’t do it correctly, you won’t get the full benefits of asset protection. One mistake with your anonymity or Operating Agreement, and the plan you’ve so cleverly devised could be rendered completely ineffective. That’s why we offer a full-service product where we complete all of the steps for you, and guarantee your anonymity.

Maybe you already have an LLC for your property. This is great, but the Series version is far superior to the LLC alone. Fortunately, you can incorporate your existing LLC into a Series LLC easily. Even better: it won’t cost you any more than you’re already paying for your Traditional LLC. It’s never too early to establish or beef up your asset protection plan. But you can certainly wait too late, and the consequences will be dire. If you haven’t set up anything yet, you are completely vulnerable. Take care of this before you consider buying any more properties. If you have property in your own name, this is even more urgent. Our experts are here to advise you on what methods will work best for your individual situation.

We’re here to help you set up your Series LLC and everything else you need for a bulletproof asset protection plan. Keep the predators and money-hungry attorneys at bay: take action and set up your Series LLC consultation today.

Scott Smith, Esq. is an experienced podcast guest, and owner of Royal Legal Solutions, Austin, TX, one of the top asset protection companies for real estate investors in the country.

Click here to connect with Scott on LinkedIn, or visit the Royal Legal Solutions website.

The post Series LLC For Real Estate Investors appeared first on Lodging Leaders.

As a real estate investor, your most obvious goal is to make a profit. But in order to make a profit, you need to protect the wealth you’ve already accumulated. After all, you’ve gotta spend money to make money. And if you’ve got none to spend, you won’t be able to make much.

Not only does asset protection protect the wealth you’ve already accumulated, but it also protects you personally. It protects your reputation, your credit score and your wealth. However, many investors seem to be getting mislead by financial advisers, CPA’s and keyboard warriors as to what asset protection actually is.

Asset Protection Misconception Number 1: Insurance Protects You

You know what I hear the most from my clients, who are exclusively real estate investors? “I thought all I needed to protect my assets was a general liability insurance policy?” This couldn’t be more further from the truth.

I have nothing against insurance, but when you think about it, they’re almost a criminal business. When you get insurance, you’re betting against yourself. An insurance company is like the house in a game of casino poker. In the end, they never lose. And even if the insurance company pays out for a claim, you still lose because they’re going to raise your monthly premium.

The truth is you do need insurance. But insurance alone won’t be enough to protect your assets. Insurance policies include what are called “exclusions”. Insurance companies include exclusions in your contract to minimize their losses. Remember, their goal is to make a profit, just like you.

Unfortunately most people won’t sit down and read these exclusions. And even if they did, they probably wouldn’t be able to understand the complex legal language insurance companies use in their contracts. What these exclusions do is prevent you from suing a company for any particular reason, as outlined in the “exclusion”. It could be an exclusion for something as simple as a fire caused by a microwave, to a volcanic eruption.

Most liability insurance policies will protect you from a slip and fall. That’s it. When a lawsuit comes around, your insurance company will be nowhere to be found. This is why you need a real asset protection strategy. A proper asset protection strategy is supported by:

• Smart contracts
• Legal entities such as LLC’s, Trusts, and Corporations.
• Insurance

What I like about this bullet pointed list is that it shows how insurance is only one third of an asset protection strategy. If you’re a real estate investor and you only have insurance, that’s the equivalent of going into battle with only one third of the ammo you need.

Asset Protection Misconception Number 2: Forming A Legal Entity Guarantees Your Protection

Yes, LLC’s, Trusts and Corporations do provide you with some serious legal protections. But that’s only if you properly set them up and maintain them. You can’t just form an LLC and do anything you want.

For example, once you have an LLC you have to be extremely careful about not mixing your business assets with your personal assets. The reason you form an LLC in the first place is to separate your business assets from your personal assets. If someone sues your LLC and the court finds out you used your business credit card for personal reasons, such as getting a haircut or going to see a movie, a judge will allow a plaintiff access to your personal assets.

So the moral of the story is, when using a legal entity like an LLC, be sure to keep careful records of your business related transactions, and never mix business with pleasure.

Asset Protection Misconception Number 3: An Asset Protection Strategy Can Be Put In Place Later And Still Protect You

I can’t tell you how many times I’ve received a call from a real estate investor seeking to put in place an asset protection strategy after someone’s just filed a lawsuit against them. Asset protection isn’t like a hat you can take on and off when you please, it has to be put in place well in advance of a lawsuit. This is because there are laws that basically make transferring assets in the middle of a lawsuit illegal.

The bottom line is if you want to protect your assets to the fullest extent of the law, you need a proper asset protection strategy. And if you think an asset protection strategy isn’t worth your investment, I’m going to end this article with 3 facts: Yes, an asset protection strategy will cost you thousands. But a lawsuit will cost you millions. Everyday real estate investors just like you get sued and someone hits the lottery on their assets. Don’t let that happen to you.

Scott Smith, Esq. is an experienced podcast guest, and owner of Royal Legal Solutions, Austin, TX, one of the top asset protection companies for real estate investors in the country.

Click here to connect with Scott on LinkedIn, or visit the Royal Legal Solutions website.

The post The 3 Most Common Asset Protection Misconceptions Explained appeared first on Lodging Leaders.

In 2014, I conducted extensive research on the challenges and frustrations hoteliers face on a daily basis. My goal was to find ways that technology can make being a hotel owner more enjoyable, productive and profitable. After speaking with more than 100 hoteliers, I have gathered invaluable feedback.

To truly uncover the pain, I intentionally asked open-ended questions, so the responses ranged from very general to very specific. I dug deep and took extensive notes during each conversation, then transferred the responses into a detailed spreadsheet, grouping each of the pain areas into 15 categories with a rating of 1, 2 or 3 for each pain (1=low, 2=medium, 3=high). Here is an overview of my analysis.

Deep Dive Into the Top 5

1. Metrics – Over 66% of the hotel owners I spoke with (2 out of 3) shared their single largest challenge is keeping up with their business statistics. The most successful hoteliers are not only concerned with their revenues, Occupancy, ADR and RevPAR, but they also calculate key metrics like GOPPAR (Gross Operating Profit Per Available Room), NREVPAR (Net Revenue Per Available Room), cost per occupied room, break-even point, and compare the performance of all properties in their portfolio. To do this, you need to gather and analyze data from each of your Property Management Systems and expenses from your accounting system. Until recently, most hoteliers found the cost of installation and monthly service fees for this type of enterprise solution prohibitive.  I was shocked to learn that many resort to using complex spreadsheets, manual reports, and spend countless hours pulling all of this together.

2. HR (combined) – The second largest area of challenge is around HR staffing, training and laws, with a combined total of more than 48% bringing this up. This includes finding, hiring, training and retaining good staff, as well as dealing with HR laws and guidelines for documenting incidents. I’m told that many franchisors do provide good training materials for some positions, but finding them in the sea of resources they provide can be overwhelming.

One Independent hotel owner suggested using free videos from industry vendors to help with training. For example, Ecolab provides numerous training videos online for front and back of house, housekeeping, laundry, restrooms, and more.

Because of the complexities of HR law, many are forced to pay high consulting fees, or worse, they do without and hope for the best. One alternative that some companies have chosen is leasing their employees. Employee leasing can help relieve some of the hassles and headaches of employee-related paperwork and compliances, payroll processing, and managing benefits.

3. Franchisors – I’m sure you’re not surprised that Franchisors made the list with over 21% citing various challenges. The complaints ranged from increased fees, seemingly never ending lists of requirements and expectations, and of course, imbalanced agreements. People have written entire books on franchising, e.g. “Franchising: Is It Fair? How to Negotiate an Equitable Franchise Agreement,” but two key takeaways worth mentioning are:

1. The time to read, understand and negotiate a franchise agreement is BEFORE you sign anything, and
2. There is immense value in building and maintaining good relationships with your Franchisors.

Abiding by all of the set guidelines and staying in contact with the corporate offices will help you maintain a strong and successful relationship.

4. Guest Reviews – Over 21% mentioned online reputation – specifically guest reviews on TripAdvisor, as being a major pain. I ranked it #4 since the pain index was slightly lower than Franchisors. After doing some digging, I found a product called WaveReview that seems to be making some headway in this area. The founder, Geordie Wardman, wrote a great article on How To Manage Your Online Reputation currently published on the AAHOA Lodging Business website, and I’m told the same article will also run in the printed April issue. The WaveReview approach is to help you proactively send a two-question survey to your guests, and if it’s positive, encourage them to post a review on TripAdvisor. If they had a bad experience, the survey logic will direct the guest’s response to a key person you appoint to remedy the situation. This helps to boost favorable reviews and reduce negative ones. Visit them online at www.wavereview.com, and check out their blog, too. Good stuff.

5. Labor Costs – Last, but certainly not least, is controlling labor costs. Over 18% said that analyzing payroll is a regular business practice for them. According to a 2012 PKF Consulting Benchmarking Report, labor costs are the single largest variable expense for hotels and typically range from 30-35% when measured as a percent of total revenue over time. While tedious, comparing each housekeeper’s hours worked to the number of rooms they cleaned is a great way to identify your star employees, and those that need additional supervision. Some owners even calculate the average time spent cleaning stayover vs checkout rooms, and they know, for example, that the average is 18-22 minutes for stayovers and 22-26 for checkouts. If a housekeeper is spending too much time per room, they may be milking the clock; spending too little time, and they may be cutting corners that could lead to a bad guest experience.

However, longer per-room cleaning times may also be an indicator that you don’t have sufficient linen supplies. Pars vary by item, but accepted guidelines call for a par of three – one in use, one in the laundry, and one on the shelf. A par of three also allows linen to rest and extend its life.

Another way to control labor costs is to develop standard operating staffing guidelines based on needs. Calculate and schedule the support needed based on anticipated arrivals, stayovers, departures, etc., then compare to your payroll to ensure staff hours are being allocated effectively. Tweak, measure, repeat.

Do Any of These Pains Hit Home with You?

After digesting the various pains so many of you face daily, the answer became obvious … a cloud-based dashboard can help you manage 3 of the top 5 pains and make life as a hotelier more enjoyable, productive and profitable. In response, I’m developing a game-changing, cost-effective solution that does all of this and more – LodgingMetrics.

Based on feedback from hoteliers like you, LodgingMetrics can save you more than $3,200 per property, per month. Stop struggling to keep track of your business the HARD way … know the health of your portfolio in only minutes per day. You’re already tracking all of your statistics – why not plug them into a centralized system with powerful dashboards and reports designed to help you identify and solve problems, make informed decisions, drive profit, and align your company?

How would it feel to add $38,000 to the bottom line for each of your properties this year? If you’re interested in seeing what LodgingMetrics can do for you, let’s schedule a demo.

As I dig more and more into these problems, I’ll continue to share what other hoteliers are doing to overcome these pain points. If you have any input, experience or suggestions that others could benefit from, please send me an email. I am also seeking input from Industry experts, researching trade publications, forums, Facebook and Linked In groups, etc., and I’ll be sure to share those findings with you in my next report.

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How often do you dig into your property management system or loyalty program data to look at your guest demographics?  Are most of your guest reservations single occupancy, couples or families?  Do you know if they’re traveling on business or pleasure?  Is the mix different on weekdays versus weekends?  Where are the reservations coming from? If mostly OTAs, which ones?  What kind of cars do they drive? What type of foods sell best in your restaurant?

The more you know about your ideal customer, the more you can address their needs. And, if you know what they like, you can find where they hang out (online) … and then you can advertise to them. For example, if you know that your guests are generally health conscious, then it would make sense to offer healthy food options, a fitness room, or maps for walking or jogging.  Similarly, you could attract new customers by advertising your hotel’s unique amenities on health blogs or communities.

Looking at your internal data is a good start, but that’s only the beginning. You still need feedback from your guests.

One easy way to get to know your guests is to talk with them. While this may seem obvious, it happens less than you might think. Consider building smart questions into your customer service training. For example, when your guest checks in, you might ask them if this is their first visit to the hotel. Why? A first time guest may need more information than a repeat guest. A new customer may want to know the hours of the restaurant, where the fitness room is, etc. Conversely, sparing your repeat guest the usual litany of hotel info is respecting their time.

Consider having your General Manager in the lobby during peak times to personally interact with your guests. Imagine how important your guest will feel if your GM is handing out fresh baked cookies, shaking hands and asking questions. This isn’t just about perception, either. A well trained manager might learn of an issue and solve it BEFORE the guest goes home and posts a negative review.

Surveys are another great way to get valuable feedback. You can, and should, survey your guests on a regular basis, both during and after their stay. Take some time to craft questions that will provide the insights you desire. The merit of a question is ultimately how it will be used and what level of insights it will provide. For example, asking a guest to rate the functionality of the room, rather than the decor, offers a different insight. Questions with numeric ratings are quick for the guest, but then there’s the question of what those values really mean. Open ended questions can allow for greater insights, but too many may be a turnoff for your guest.

Encourage and embrace customer feedback. Listen to them and make adjustments in training as needed. Customer feedback is a gift – even when it’s negative. Think about it. If a guest complains about their experience, they may be exposing an issue in your product or service. If you don’t know about a problem, how can you fix it?  Whether it’s an isolated issue with one guest, or a systemic issue that could affect many, you’re better off knowing about it.

Make calls to the guest room to check on them. Many hotels call the room only minutes after the guest checks in, but is that the right time? A call later in the day, or on the second night, might provide a greater insight into how you’re doing. Better to uncover an issue during the stay so you can resolve it, then afterward when it’s too late.

Monitor social networks and listen to what your customers are saying, both about your property, and in general. Pose questions to your guests on social networks. Considering an upgrade to your TVs? You might ask your guests if they’d prefer TVs that enable them to stream their own content versus more channels on cable.

The OTAs are a distribution source, but these are your customers. Build systems into your process to encourage feedback and build loyalty. Offer pre-printed cards for customers to complete to make feedback quick and easy.

In the end, the more you know about your guests, the better you can serve them. Stop guessing.  Analyze your data and use that information to pose questions to your guests.  Talk with your customers, embrace their feedback, and make adjustments as needed. Build in systems and processes that provide meaningful touchpoints, encourage feedback, and build loyalty.

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