What Not To Do Wednesday-Trust and Not Verify

Ronald Regan had a wonderful saying, “Trust but Verify.” This is the motto he lived by when dealing with Cold War Russia. It was a motto that led to the eventual fall of communism across the globe.

This is a motto we live by when dealing with the finances at our AOS managed parks. We trust our park’s staff, but we verify they are doing things correctly.

This week we are helping a client who is buying two parks. At both parks, the owners suffered at the hands of staff embezzlement.

Since we watch our clients numbers daily, we catch “odd” behaviors-sadly, many parks do not catch nefarious activity until is it way too late.

When we came upon our second park in one week with this issue, I said to my team, “How does this happen?”

One of my staff quickly replied, “They do not run their parks like a business, but rather as some sort of social club.” She could not have been more correct.

The owners of both parks mentioned above looked upon their staff as, “Family,” and never reviewed the books each day. This is where AOS takes a different approach. We immediately catch things like ongoing refunds, management credits, and excessive number of cancellations. When we notice oddities, we dig deep to discover the details and verify the legitimacy of the action. This is paramount to running a well oiled machine.

Most owners do not have time to look over the staff’s shoulders. They are too busy running their business to run their business. 3rd party mangement companies have the time to dig deep, and pay for themselves by catching such errors or ommissions.

Whether you run your park, or hire 3rd party management-make sure you look at your number daily!

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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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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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