If you list your hotel, hostel, or bed and breakfast with Instant World Booking, or other online booking agencies, here is some advice for maximizing your reservation potential:

1)  Ensure your listing is up to date and accurate.  Include as much information as possible, not only about your property, but also about local attractions, restaurants, etc.

2)  Make sure to spell-check your listing.  Incorrect spelling signals to guests that the property is not professionally maintained.

3)  Add photos.  Listings with photos gain at least 4x more traffic than those without photos.  Make sure your photos are large and complement your property and location.

4)  Add a complete calendar of availability.  Your calendar is important, since guests prefer instant booking over online requests.  Make sure you have complete availability online, and at least 6-9 months of availability.

5)  Include an accurate street address on your listing, as well as local directions.  Guests will not book properties that they can’t easily find.

6)  Use Instant World Booking’s low-cost options for accepting reservations on YOUR OWN website.

Remember, it can take several weeks to several months for Google and other leading search engines to effectively index your page on our network of sites.  Instant World Booking has proven to be very successful in gaining top search engine rankings for its listed lodging partners.  One last reason it is very important to use the instant booking method is that we use pay-per-click (PPC) advertising to market your property on Google and other sites.  Effectively use of a PPC campaign can cost you hundreds of US dollars.  However, for our partners who use instant booking, we advertise your property in PPC campaigns for free.

One last note, persistence and patience is the key to success.  Online marketing is “collective”.  This means it is more effective to advertise your property on 2 services than 1.  Persistent online presence is necessary to achieve online name (brand) recognition, and to gain higher search rankings for pages containing your property’s name.  Advertising with Instant World Booking is an extremely valuable, and free, method of increasing your online presence.

Scams abound on the internet, and scammers usually send email to small hotels, bed and breakfasts, and other small businesses

The scammer’s goal is to get the hotel owner to send money to the scammer.  Scammers will make a reservation, and request to overpay it with either a credit card or forged check.   They’ll claim that the check was already made out by a vendor or partner of theirs, and they don’t wish to cancel it.  The scammer will request the balance sent somewhere, usually by Western Union.  Scammers are very creative and there can be many variations to this scam.

How does it work?

The scammer will book a room and claim to have no credit card.  They will ask to send a bank draft, certified check, or money order to pay for the room in advance.   When the check arrives it will be for an amount greater than the value of the stay.  The scammer will then request the balance sent to a third party (i.e. a car rental agency) or returned to the scammer.

Since the funds are drawn on a foreign bank it may take up to three months to learn that it is fraudulent. The B&B or hotel owner is now short the amount of the check or wire they sent to the scammer.  They probably also lost bookings since they held a room for a guest that was never to arrive.  If the scammer paid by a credit card it is surely to be disputed by the actual card owner.

Signs of a Scammer

Overseas/International: Typically the scammer will be overseas or out of country.  They know authorities rarely pursue this kind of international crime.

Urgent: Often the scammer will be acting in an urgent manner and making bookings with short notice.

Long stays or lots of rooms:   They will also want long stays and a lot of rooms, in order to make the booking charge very high.  The scammer will also be very vague about the actual number of guest.

No rate resistance: Scammers will not care about the rate offered.

No interest in location: They don’t care about your location, they will express little or no interest in area attractions, etc.  In fact, it may often be questionable why a traveler from their origin or country will want to travel to a location like yours.

Will not address your property by name in the first e-mail:  The first e-mail you receive will likely not address you specifically.  This is because it will be a general email sent in mass to many properties including yours.

Strange grammar, spelling, and choice of words: The scammer’s grammar, spelling and use of punctuation will be unusual.  Often the scammer will present themselves as a doctor.  Another frequent ploy is that they indicate they are from a religious organization, are holding meetings in your country, and make specific reference to their “delegates” or “delegation” coming to your country. 

Free e-mail account: Often the e-mail will come from a free email service like Yahoo or Hotmail. Legitimate travel agents or businesses rarely use free email accounts.

Send money: They want you to send them cash, usually by wire, and quick.

Advice:
If you get one of these emails or letters, remember that if it is too good to be true, it probably is.  If you feel the booking is legitimate, insist on a deposit by bank transfer or credit card and insist that the balance be paid in person.  Whatever happens, do not send them any funds, regardless of what form.

Everyone knows how online booking works these days.  A small deposit is collected from the guest at the time of confirmation.  If you use one of the services that requires you to manually confirm bookings, contact your guests, and get deposit monies yourself, then your booking method is still in the stone ages.  And believe me, there are still quite a few of this type of reservation service that claims “instant booking”, but cannot deliver.  Furthermore, if your online booking method involves a Paypal interface, know that this method still does not work for guests in many regions around the world.  You might also have heard that a Paypal payment interface instantly signals to many that your website is amateur and unprofessional.  This is not exactly the reputation you want to develop for your website.

First, let me tell you that you absolutely need a professional third party service that is able to collect more than just Visa and Mastercard.  You need a service that is able to collect at least 4 major global card types.  If you feature online booking on your own website, know that almost all booking services are able to collect 5-10% deposit for your bookings.  But is this enough?  No.  You should be collecting from 30% to 75% deposit for every booking taken on your website.  This is for 2 reasons.  One, guests who have found your website, and are interested in booking with you are serious about staying with you.  They know that if they’re paying on your website, they’re going to have some personal interaction with you, and their reputation is on the line.  Fraud transactions on a hotel’s own website is low.  Second, since you know the guest is serious, you want to collect a reasonably high deposit to secure their booking, and eliminate any possibility of problems in the event of a cancellation or no-show.  Instant World Booking recommends collecting either 35% or 50% as the optimal deposit for most hotels, hostels, and bed & breakfasts.

Instant World Booking is one of the only services that enables you to collect more than 10% deposit at time of booking.  In fact, they can enable collection of up to 100% of your bookings at reservation time, effectively enabling you to collect credit cards right online from your own website.  Instant World Booking takes this service one step further, offering full no-show and cancellation protection.  With this service, Instant World Booking guarantees you receive your deposits, even in the event that a guest cancels late or does not show up.

We’ve been giving the latest on some controversial topics about marketing your hotel or hostel online.  We uncover the world of online booking and marketing in a way that hasn’t been done before.  Check out more advice at our blog.  We’ll lead you to the most effective and low-cost solutions for marketing your property.

This is the first in a series of articles which will enable you to answer the most fundamental of questions:  How much is your hotel or bed and breakfast worth?

Protecting the value of your small hotel or bed and breakfast is a primary goal of your business.  But, whether you’re new to the lodging business, an experienced innkeeper, or just looking to buy or sell your property, one key piece of information remains critical.  How much is your hotel or B&B worth?

Whether your property is located in North America, Europe, South America, or anywhere in the world, the basic factors to consider are largely the same.  But how do you begin to calculate the value of a tourism or lodging business?  This is the first in a series of articles we will publish, giving you some new and leading edge techniques on how to value a lodging business.  In this and our future articles, we will reveal some unique methods to determining the value of your business.  Better yet, these methods can also be applied to most small businesses.  If you need to articulate the value of your business in purchase or sale negotiations, we will provide some excellent methodologies to quantify the true market value of your property.

If you’ve looked for advice on calculating a price or value for your small hotel or bed & breakfast, there is only sparse information on the internet.  Some resources deal only with the value of your real estate.  One so-called “Inn Sales Specialist” advocates a method of determining an inn’s market value by dividing last year’s net operating income by a “cap rate” of 9% - 12%.  These are extremely short-sighted methods of estimating value.  Another highly simplistic method would be to take your net annual profit, and multiply by 14, which is the average price-earnings ratio of publicly traded companies over the last century.

These simplistic methodologies are not without value, however.  There is no single way which will lead you to one absolutely correct theoretical value.  What you do want to do, however, is try several conceptually sound methods, and then examine the range of results for consistency.  Don’t ignore qualitative objective measures either.  For example, consider prevailing real estate values in your region, condition and quality, and potential for growth.  If you recently purchased your property, consider the price you paid (the presumed market value at the time) plus or minus value-changing modifications that you will implement with your business plan.

So how do we measure the market value of your business?  We look to sources that traditional real estate professionals and B&B sales specialists ignore, or don’t understand.  We utilize corporate finance techniques, taught at top business schools, but almost never applied to hotel, hostel, or bed & breakfast businesses in the classroom or in practice.  These are the same techniques use by stock market analysts to value Fortune 500 companies.  In fact these techniques were adapted from advanced shareholder value studies originally developed by an expert while working at JP Morgan Chase, and now is a leading specialist in online hotel marketing.  Combining these traditional corporate finance concepts with some new arithmetic, we will show you how to easily compute an estimated market value for your hotel, inn, or bed & breakfast.

The basic formula underpinning our market value computation is:

Market Value = (NI - BV*Ke) / (Ke-G) + BV

Where NI=net income, BV=book value, Ke=cost of equity, and G=growth rate.

We will show you how to use this simple formula to calculate the estimated value of your lodging business.  We won’t get bogged down with complicated mathematical proofs.  The formula above is rooted in very sound financial theory, which we won’t waste your time by explaining.  What we will do is show you how to move quickly past the complicated financial theory, and use simple math in calculating a very useful number: the value of your hotel or B&B.

One quick homework assignment before proceeding to our next article.  There are two values you need to come prepared with, net income (NI) and book value (BV).  Net income is the annual after tax profit of your business, after considering all relevant business expenses and income taxes.  Make sure you adjust your net income figure for any one-time or unusual expenses you may have had during the most recent year.  Secondly, book value is the book equity, or invested capital, in your business.  How much cash capital do you have invested in your lodging.  This includes any original equity investment you have in your property, but does not include capital that you borrowed to invest or purchase assets.  Another way to think of book value is to construct a simple balance sheet.  Add up the total value of all your assets, then subtract any borrowings or debt used to acquire those assets.  What remains is the book equity, or book value, of your business.

Once you have these figures, please look for our next article, where we will explain how to use the formula to compute the value of your business.

For more information on promoting your hotel, hostel, or bed & breakfast, visit Instant World Booking