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
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.
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
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
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
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.