The Logic Behind Inn Policies: Part Two

Policy Explanation #1: The Rationale Behind Minimum Stay Requirements

Picture this scenario: you call an inn wanting to book their most expensive suite for a Saturday night during their high season. It’s your 25th wedding anniversary, so you’re splurging for the best, but when the innkeeper informs you there is a four night minimum on the date you’ve requested, your plans are shattered. Why on earth would a business turn away the $500 you’re willing to fork over now versus holding out for a possible longer booking? I can’t tell you the number of times I’ve ruined someone’s vacation plans because they did not meet our minimum requirements. I honestly hate being the bearer of this bad news and have actually been called selfish, money hungry, and stupid for not taking a booking during tough times in the economy. While I appreciate the name calling and unsolicited business advice, there is good reason for this policy and quite frankly, I wouldn’t be in business if I didn’t adhere to it.

Here’s the thing – the high season is our bread and butter, so we’ve got to maximize our occupancy during that time. This often reminds me of a puzzle in which booking reservations back to back in the same room is key. Sometimes, this means we can take a one or two night stay because it is a perfect squeeze between two standing reservations. For this reason, we try to keep the wording on our minimum stay requirement policy fairly vague – after all, filling those gaps between reservations is the difference between achieving 98% occupancy and 100% occupancy – a feat we have managed the last two Augusts in a row.

In general, though, weekends in the summer, for us, are like gold. We can sell Saturday nights 20 times over that same day, let alone four months in advance. Bottom line is, we’re not worried about selling our Saturday nights and we’ve got to hold onto them for the guests whose stays will spill over to the weekdays. We’ve also got to keep in mind that the longer a guest stays, the less man hours are required. To illustrate my point, here’s what goes into flipping a room from start to finish:

1. Previous guest checks out (about five to ten minutes).
2. Room gets stripped so a set of sheets, towels, and robes go into the laundry (believe me, on days when we have a lot of check outs, the laundry room is a scary place!).
3. Housekeeping staff cleans room (about an hour).
4. Once room is clean, housekeeping marks off that room is finished and one of our interns goes over the room with an extensive checklist to make sure it is properly stocked, the temperature is comfortable, lights and music are on, etc. (about 15 minutes)
5. The intern initials that the room has been checked so the whole staff knows the room is ready for check-in.
6. Once the new guest arrives, a member of staff gives a brief tour pointing out all the amenities and common areas, walks the guest to his or her room, assists with bags if necessary, and checks off that the guest has arrived. (about 15 minutes)
7. Also, bear in mind that taking and processing each reservation takes anywhere from 15 minutes to several half hour phone conversations.

Therefore, with all that’s involved, it is important to stagger arrivals and departures so we don’t have all sixteen rooms checking in and out on say, a Sunday, which is what would happen if we were to sell our Saturday nights in advance. Perhaps this makes me “selfish, stupid and money hungry,” but as an innkeeper, I’ve got to remember that my inn is my livelihood which would not survive without sensible policies like this.

The Logic Behind Inn Policies – Part One

When we bought our first inn, I remember thinking that a lot of the policies we inherited from the previous innkeepers seemed kind of, well, rigid. I mean, I had stayed at countless Marriotts and Hiltons where I was able to cancel my reservation the day I was due to check in and there was never any mention of minimum stay requirements or deposits being taken. So what was up with the strict and lengthy page of policies citing rules involving “14 days notice,” “reservation handling fees,” and “three night minimums?” It took a few months before I thoroughly understood why a small inn’s policies couldn’t mirror those of a Marriott. Which leads me to speculate that aspiring innkeepers or, worse, potential guests, must read the policies of smaller lodging establishments such as ours and wonder where we get off charging guests for reservations they don’t use or demanding a three or four night stay. So, my next few posts will attempt to explain ourselves as well as answer any questions from a business perspective.

Policy Explanation #1: What’s up with a 14 day cancellation policy?

Our cancellation policy states (and I’d like to defensively add that it is a lot more lenient than many other inns in which I’ve stayed):

A deposit of one nights stay is required to guarantee all bookings of four nights or less and two nights stay for more than four nights. We are able to refund the deposit, minus a $30 handling fee, if we are given 14 days notice for a cancellation. Otherwise, the deposit is refundable only to the extent we are able to re-rent the room.

So why do we require 14 days notice when Marriott hardly requires any notice at all? For starters, a Marriott has several thousand hotel rooms across the world. We have just 16 rooms which means not only do we have fewer to sell and therefore retaining a room for a guest means holding over 6% of our potential revenue for the night, but we also have a smaller marketing budget so it takes longer to sell 16 of our rooms versus 16 Marriott rooms. The bottom line is, a small business like ours can’t absorb the lost revenue like a Marriott can. But, you may wonder, why should the guest have to forfeit a deposit just because we don’t have the corporate cushion to recoup our loss? Think of it like this: a guest reserves a four night stay which we have been holding with a one night deposit for, say, three months. The day before they are due to arrive, they cancel due to illness. Fair enough – I probably wouldn’t want to travel when I’m sick either. Now, it seems somewhat insensitive for us to keep the one night deposit given the circumstances; however, we had been holding the room for three months and we’re still out three of the four nights, so really, it’s us taking quite a big hit. Staying at a smaller property like ours is certainly a bit more risky as far as the cancellation policy goes. However, in my completely unbiased opinion, the benefits of staying at an independently owned inn, (i.e. breakfast, WIFI access, afternoon tea, snacks, room service, DVD library, and use of our fitness center and pool, all for no additional charge), far outweigh the slim chance you will need to cancel at the last minute and lose your deposit. Hey, when you look at it like that – you’re actually saving money with all the freebies at a smaller inn!