What Not To Do Wednesday-Argue With Market Price

I am originally from the Eastern Shore-“The Delmarva Peninsula,” as we call it. This stands for the Delaware/Maryland/Virginia Peninsula. Delmarva is known for agriculture, amazing beaches and Maryland Blue Crabs! If you are from Delmarva-and Maryland specifically-you most likely LOVE crab and know how to pick them.

When you buy crabs at any time of year in Maryland, you are going to pay, “Market Rate.” There is no set price-the rate is based off daily supply and demand. Marylanders know it, don’t argue with it, and if they want crabs, they pay it. If the crab industry gets this concept-why are we still so backward in the Outdoor Hospitality Space?

Too often, we hear owners say to us, “Our rate is too high; we are not worth this.” I remind them, the market is telling them otherwise. Their revenue is up and the market is paying the rate.  The market is telling them they will pay that rate and they are worth it.

They seem to be very scared to allow rate to be pushed. I say to them what I say to my staff…“Numbers don’t lie.” Numbers will tell us when the market has not been pushed enough or when it has been pushed to the limit. Yet, daily we have park staff or owners want to buck the market and go rouge.

I find this to be a battle unique to this industry. Never did we have Marriott micromanage our revenue managers. They cared about the rate and occupancy balance, and if these were working, they never drilled down into what we were charging or the occupancy percentages. They just wanted revenue managed.

Here at AOS we find it takes very savvy owners and investors to understand Revenue Management. Some are just never going to get it-and that is the struggle we see this industry when managing revenue. The familial relationships they form with their guests, and the contra-market thinking lead them to lose revenue every day because they are not willing to agree with the market and charge market rate. 

Take a lesson from the mighty crab industry, allow us to set your prices at market rate and make you money while doing it. By doing so, you will see overall revenue increase even if occupancy falls. This is the magic that happens when the market is heard.

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What Not To Do Wednesday-Focusing on Occupancy ALONE

As most of you know, almost our entire AOS management team came out of the hotel world. We were primarily associated with the Marriott Brand of hotels. It is here that our team and our revenue managers perfected their skills.

When revenue management is done properly, the balance between rate and occupancy results in maximum revenue generation for the owners. This is the goal of revenue management-NOT increased occupancy alone.

Case in point-a resort in our AOS portfolio. When looking at their November numbers, their occupancy is down 5% over last month, but revenue is up over $8000. In addition, this park does not pass electric on to their long term guests, thus they are what I call, “Double Dipping.” They are up in revenue, down in electric expense, and all this at a lower occupancy.

Most often in this industry, owners do not understand this principle out of the gate. They panic when they see empty accommodations, but with a little education, they learn the rate occupancy balance is really what is ideal.

With AOS on your revenue, the overall picture is a balance that results in year over year growth in REVENUE-even if occupancy is down.

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The OTA Debate-Will The Outdoor Industry Ever Understand?

One of the most hotly debated topics at this year’s ARVC convention was over the use of OTA’s (Online Travel Agencies). Passion ran high on both sides of the debate-and often the facts were lost in the mix.

We at AOS are firm believers in using OTA’s as a revenue generation tool. Let’s put it this way-if power brands like Marriott and Holiday Inn believe they must be on the OTA’s to compete-then YOU must be on them to compete.

Take Air BnB for example. Statista 2019 shows that by year 2022 Air BB will have 46.5 Million users. Currently, they have 41.1 million. AOS parks on Air BB rent their roofed accommodations 85% of the time on Air BB or VRBO. This is 85% worth of business that they would likely not have if not for the OTA’s. This number is astonishing and not to be ignored.

Some of the typical arguments against OTA’s go something like this..

If we go on OTA’s we are competing with hotels and we cannot win.

False-If we can get a guest out of a hotel into a cabin with outdoor space, a yard, and a great experience, we rarely if ever lose them back to a hotel.

Campers do not use OTA’s.

False-As stated above, a vast majority of our cabins accommodations are booked on OTA’s. This is fact.

OTA’s create “Price Wars” between parks and should be avoided.

False-OTA’s allow you the ability to highlight your amenities and attractions to a market looking for experiences rather than stays. Connecting your park to OTA’s helps you reach that audience and show why you are better at offering an experience rather than just a bed.

Whether we like it or not, OTA’s are here to stay. If you do not get on them, your competitor will, and you will lose guests due to your reluctance to embrace change and move to where the industry has long been headed. We can stick our head in the sand, or we can move to the future and make money all along the way.

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Say Hello To Some New Faces

As we are heading toward the end of 2019, we are excited to share some new additions to the team.

We have added three new team members in the past month, and we want you to get to know them.

Natassi comes to us out of the hotel and cruise ship industry. To say she is an experienced hospitality expert is an understatement. Any client who has met her knows she knows her stuff and is a great addition to the regional management team. Natassia will be found on all owners calls and she works closely with our OTA management and accounting team.

Chris is new to our Revenue Management department and he is also straight out of the hotel world. Chris worked as revenue manager for Marriott International most of his career and is a seasoned revenue manager. Our clients revenue is safe and sound under his leadership. He leads all yield template creation, comp set analysis, rate sets and yields. We are very blessed to have him on board.

Finally, Jim George is joining our team as the lead in our Marketing Department. Jim’s portfolio is impressive and he has worked for organizations across all spectrums of business. He has worked with NFL, NBA, and other professional sports teams-handling their overall marketing. Jim is a keyword and SEO expert as well a graphic designer and adobe suite specialist. He brings a new level of expertise to our team and we are excited to see what he can do for our client portfolio.

In addition to the team you already know-these new members add additional resources to make our client resorts stand head and shoulders above the competition. You will enjoy meeting them in the future. Go Team AOS!!

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Government Overload

Dreaming about your resort is such an enjoyable process. Looking forward to the guest engagement, planning activities, dreaming about the excursions, shopping for lodging units, and most of all, creating a revenue stream.

What is not so fun…the governmental processes involved in making your dream a reality.

One of the most important services we offer is the ability to walk our clients through the complex and lengthy governmental approval process. Early on in our growth, we hired some of the best minds when it comes to researching and parsing state, federal, and local code. Not only do we walk with them through this, but we also attend the hearings and meetings with them.

The questions to be answered are many. What are the setbacks I have to respect? What about sewer and water? Will the county allow my current road entrance or will they require an exit, a protected lane, or even a light at my expense?

Operationally, there can be even more questions Can I be open year round? What restrictions are in place that may prevent my guests from the full outdoor experience. Am I able to have food, beverage, campfires, or sports activities? What are the costs of the permits, easements, impact fees, or inspection fees associated with my project.

Getting to the bottom of these, and forming relationships with the people that matter, are what we do best. With former federal land use and BLM/Dept. of Interior staff, we know how to work with both sides to make everyone happy and get guests streaming into your resort.

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What Comes In Our Package??

When you sign up with AOS, you get the best of the best when it comes to Outdoor Hospitality experience. Of course, you already knew this!

What you may not know is that our Third Party Management clients have access to in house legal department. Our own J. Michael Hannon is available for our clients and all those sticky issues that come with running a resort.

Just this week, he has navigated clients through evictions, emotional service animal issues, HR related questions, staff background check concerns, and rent control provisions for long term guests. He also tackled FEMA and other regulatory quagmires.

When our regional managers need to get advice for their resorts, these managers can reach Mike and get sound legal counsel. He helps our team and our resorts avoid many of the legal pitfalls that come with having guests and employees. In today’s litigious society, this advice can save a park from needless defense costs.

Michael and his legal expertise is just one of the many services that keep AOS ahead of the competition.

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Glamping Summit

Thanks to all of you who came by our booth and attended our presentation at the Glamping Summit in Aurora Colorado. We enjoyed meeting all of you and are only sorry we did not get to spend more time engaging with you.As promised, attached is our Power Point from the Wednesday morning seminar. We will be posting the video shortly

Again, thank you for sharing your dreams and visions with us! Exciting days lie ahead.

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Upping our Game-Exciting New AOS Offerings

AOS is always on the lookout for ways to enhance our properties and our processes.

In light of this, we have some exciting new offerings for our clients.

Accounting is one of our strengths and we have switched accounting software to better serve our clients needs. We are moving to a platform that allows for more precise budgeting, ability to upload actual photos of invoices, and streamlined cloud based access. This allows any and all clients to not only know their invoices are paid, but actually login to see copies of the invoices and checks.

We have added FAA drone certification and CADD renderings to our in house services. Here are just a few examples of our marketing departments work. These renderings are invaluable when marketing a new build or presenting to governmental entities.

Amenities Area
Yurt Village

Even more exciting for us is our new “AOS Pathways” program. AOS Pathways (Career Development) is a structured, collaborative time for those employees who wish to develop their professional skills in order to enhance their careers. There will be dedicated time with AOS staff work on the foundational skills needed to develop into a higher role. Managers can recommend one staff member per period to take part in the course. If you are interested you should let your manager know. They will let you know when the courses are available. 

Coaching Opportunities- We believe in paving the path for others to succeed. AOS will work with all managers to implement a coaching structure that encourages self reflection and improvement throughout the year, ultimately resulting in a higher performance by engaged employees. Performance- based evaluations are held once a year.  

We are always enhancing and adding services to serve you better. Hope to see you soon at both the Glamping Conference in Colorado and ARVC in Tennessee. Happy Friday!

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Discount Double Take

This really should have been a, “What Not To Do Wednesday,” blog post, but since I was traveling Wednesday, I decided to blog about this major, “No No,” today.

In the world of outdoor hospitality, discounts are handed out like candy. You would never find hotels, restaurants, or airlines handing out discounts the way many in our industry feel compelled to offer. Just this week, I spoke to an owner (NOT an AOS park) and pointed out how much money he lost by offering discounts during a highly coveted football weekend. Not hundreds, but thousands of dollars. This is bad business!

The very first park I ever ran as GM, we offered no discounts. However, we trained the staff how to handle this in a very savvy way. When someone would ask, “Do you take (fill in the blank) discount, we would say, “The best discount we offer is on a stay seven nights or more. May we extend your booking to seven nights or more in order to offer you this discount?”

Not only did this stop the conversation over discounts, but it often turned a 4 or 5 night booking into a week long booking. It also prevented the staff from having to say, “No,” to the “Do you offer discounts,” question.

The other way we avoided giving discounts during peak season is by setting aside special weeks for firefighters, military, and policemen. We would offer special rates to them at a time when they could enjoy the park and we needed the occupancy. We would create special events just for them-free of charge.

Offering flat discounts regardless of time period is a bad practice. When demand is high and supply is low, discounts can cut deeply into revenue. Offer your guests a fantastic guest experience and great accommodations and you will not get pushback when you do not cut your rates with discounts during peak periods.

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What Not To Do Wednesday-The Old Bait and Switch

When setting expectations for your guests, it is important to be realistic about what they will experience once they get to your property. Setting unrealistic expectations may get them to your property, but it will not turn them into satisfied, long term guests. You may win the battle, but you will lose the war.

A few years ago, we booked a condo in Lake Tahoe for a family getaway. My husband booked it on VRBO and it looked great. It slept 8 people and was just off the lake. We arrived with high hopes, only to check in to a unit that was a fraction of what was promised. The deck was old and peeling, the porch furniture consisted of one ratty old chair, and the coffee pot was a small little four cup coffeemaker for a unit that slept 8. The lake are near the unit, shown as full of water and waters sports enthusiasts in the photos, had been dry for years.

Park owners can easily make the same mistakes. Just recently we were working with someone who suggested they were not going to use the photos of their site when setting up their online booking page. We were stunned and suggested they NOT take this approach. In fact, the only time we do this is when a park is under construction. We use true to life stock photos and we make the change as soon as the park is open and we can take real photos of the functioning sites.

First of all-this is a sure sign that something is amiss about your sites. It is like looking at a real estate listing of a home, but they never show the interior.

Secondly, if you do get the guest to book, you are surely going to hear about it once they arrive. Furthermore, in this day and age of social media-the whole world will hear about it as well. As soon as I returned from my Lake Tahoe trip, you better believe I let any future renters know that this condo was not all it was cracked up to be.

Lastly, it you know your park is sub-par, do something about it. A little paint, soap, water, and tightly held rules and regulations can go a long way in putting “Lipstick on a Pig.” In our condo’s case, a $100 set of porch furniture, some deck stain, and a $12 coffeemaker could have made up for many of the ills we had with this unit. Showing accurate pictures of the lake area would have allowed us to make a more informed choice.

When setting guest expectations, be clear, be accurate, and take care of the little things that can go a long way!

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