Hospitality Industry Stop Discounting Reward Coupon Program

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Increase revenue, RevPAR, occupancy, gross profit, NOI by rewarding loyal guests with $300 Gas or Grocery coupons

Increase revenue, RevPAR, occupancy, gross profit, NOI by rewarding loyal guests with $300 Gas or Grocery coupons

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  • 1. Americas Best Coupons LLC Coupons for the Hospitality Industry Discounting Rooms in this economy is NOT the Solution Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 2. Reward Coupon Program Gas or Grocery Coupons. Use In The U.S.A., Canada and Puerto Rico too! Increase Reservations | Build New Guest Business Drive Higher RevPAR | Create Guest Loyalty Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 3. Reward Coupon Program • CURRENT HOSPITALITY SITUATION – Bad News • Severe recession in hospitality industry • Rapidly declining hotel demand • Falling occupancies • Declining room rates • RevPAR declining – Good News • Minimal new motel hotel supply • Recovery will be rapid and strong in 2011 • Huge opportunities to capture local market share with the right marketing programs and room promotions • Huge opportunities to stabilize or increase values Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 4. Reward Coupon Program • Room Pricing Analysis by Center of Hospitality Research - Cornell University • Analysis of pricing (ADR), demand (occupancy), and revenue (RevPAR) dynamics in the U.S. hotel industry for the period 2001 through 2007 • Seven year study examined hotel room pricing behaviors of the Bad Times (2001-2003) and the Good Times (2004-2007) – 67,008 hotel observations comparing competitive sets in STR reports looking at ADR, occupancy, and RevPAR – Examined competitive pricing of similar hotels of which 98% were branded properties • Results of the Study - Discounting does put “heads in beds” but RevPAR suffers driving down Revenue and the Value of the Room/Property Source: Competitive Hotel Pricing in Uncertain Times – Cornell Hospitality Report June 2009 For a copy go to: http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15087.html Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 5. Reward Coupon Program Exhibit 4 – RevPAR and occupancy percentage differences for luxury, upper upscale, and upscale hotels, compared to the competitive set, 2001 - 2007 Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 6. Reward Coupon Program Exhibit 5 – RevPAR and occupancy percentage differences for midscale and economy hotels, compared to the competitive set, 2001 - 2007 Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 7. Reward Coupon Program What Advice Results from the Study by Cornell University that Hospitality Operators can use. • Room pricing set at between -2% to +2% of your competitive set will have slight impacts on occupancies by significant impacts on RevPAR compared to discounting • Offering guests pricing that are lower than the competition does lead to higher occupancy for the lower priced hotel, but also results in lower RevPAR performance compared to the competition • The best way to have higher revenue performance than your competition is to maintain higher rates. You should not set rates below your true competitors if you want a RevPAR premium. • The study found small differences by market segment or by years of a strong or weak economy, showing consistency across segments and years. Discounting does not stimulate sufficient demand to provide the revenue boost needed to make up for the lower rates. • DON’T START A PRICE WAR WITH YOUR COMPETITIVE SET PROPERTIES, IT WILL BECOME A “RACE TO THE BOTTOM” OF THE VALUE SPECTRUM IT’S LIKE “CATCHING A FALLING KNIFE” Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 8. Reward Coupon Program • Introducing the S-O-L-U-T-I-O-N and the R-E-L-I-E-F to Discounting Gas or Grocery Coupons! Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 9. Reward Coupon Program • Which Motels & Hotels Can Use the Program – Every Motel & Hotel Offering Discounts Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 10. Reward Coupon Program Sample Internet Discounting Promotion Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 11. Reward Coupon Program – Gas Coupons Promotion #1 – Discounted Room Rate • Provide a $300 to $500 Gas Reward Coupon instead of discounting the room rate Promotion #2 – Extended Stay Incentive 1 • Provide a $300 to $500 Gas Reward Coupon instead of discounting the room rate on the 2nd or 3rd nights stay Promotion #3 – Extended Stay Incentive 2 • Build your own loyalty program – For every 3 to 5 nights booked receive a $300 to $500 Gas Reward Coupon – Pays for their gas to return to your property Promotion #4 – Increased Room Revenue / Perform Yield Management • Instead of offering a steep discount off room rates after 12 noon or 3:00 PM, offer a $300 to $500 Gas Reward Coupon How many more can you think of ???? Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 12. Reward Coupon Program BENEFITS OF Promotion #1 – Discounted Room Rate • Keeps ADR, RevPAR Stable • Becomes a Promotional Cost vs. Revenue Reduction • Can deduct promotion expense from taxes • Costs the property significantly less than Discounting BENEFITS OF Promotion #2 – Extended Stay Incentive 1 • All of above + Builds Loyalty to your property • Provides Gas Money to Guests for Return Trip BENEFITS OF Promotion #3 – Extended Stay Incentive 2 • All of above + Builds Loyalty to your property • Provides Gas Money to Guests for Return Trip BENEFITS OF Promotion #4 – Room Revenue / Yield Management • Property shows higher Revenue vs. Discounting • Costs the property less than Discounting thereby increasing Gross Profit and NOI • Increasing NOI creates more value in the property Guests will remember and/or be reminded of your Property Every Month When They Redeem Rewards!!!! Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 13. Rewards Coupon Program • BENEFITS FOR YOUR BUSINESS: – Build your own Guest Loyalty Program – Increase gross profit margin. Just replace Discounting – Increase Revenue and Guest Traffic. – Value promotion, lower cost than Discounting, yet puts you AHEAD of your COMPETITORS in your local market. – STOP CREATING A PRICE WAR Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 14. Reward Coupon Program Reward Coupon Program Projected Results - Increased Value Generated Using Program for 12 Months Based on 10% of Room Nights Being Discounted per Month / Year Assumptions Per Month Per Year # of Rooms 100 Available Room Nights / Month / Year 30 3,000 36,000 Offered under an Occupied Room Nights / Month / Year 60.0% 1,800 21,600 Exclusive Marketing % & # of Room Nights Discounted 10.0% 180 2,160 Agreement for selling to Average Discount in $ & $ per Month $ 25.00 $ 4,500 $ 54,000 the Hospitality Industry Revenue $ Saved per Month / Year $ 4,500 $ 54,000 between America’s Best Coupons, LLC and D. Cost of Reward Coupon Program L. Richardson $300 Gas Reward Coupon Cost 1st 3 Months $ 18.00 $ 3,240 $ 9,720 Development Group, $300 Gas Reward Coupon Cost 4th to 12th Mth $ 16.00 $ 2,880 $ 25,920 LLC Scottsdale, AZ Total Cost of Reward Coupons $ 35,640 Confidential Information Increase in Gross Profit (NOI) $ 18,360 Cap Rate (If Property Sold at the End of 12 Months) 10.0% Increase in Property Value After 12 Months of the Program $ 183,600 Based on 20% of Room Nights Being Discounted per Month / Year Per Month Per Year Revenue $ Saved per Month / Year $ 9,000 $ 108,000 Total Cost of Reward Coupons $ 71,280 Increase in Gross Profit (NOI) $ 36,720 Cap Rate (If Property Sold at the End of 12 Months) 10.0% Increase in Property Value After 12 Months of the Program $ 367,200
  • 15. Reward Coupon Program Reward Certificate Program Projected Results - Increased Value Generated Using Program for 12 Months Offered under an Based on 30% of Room Nights Being Discounted per Month / Year Exclusive Marketing Per Month Per Year Agreement for selling Revenue $ Saved per Month / Year $ 13,500 $ 162,000 to the Hospitality Total Cost of Reward Coupons $ 106,920 Industry between Increase in Gross Profit (NOI) $ 55,080 America’s Best Cap Rate (If Property Sold at the End of 12 Months) 10.0% Coupons, LLC and D. Increase in Property Value After 12 Months of the Program $ 550,800 L. Richardson Development Group, LLC Scottsdale, AZ Based on 40% of Room Nights Being Discounted per Month / Year Confidential Per Month Per Year Information Revenue $ Saved per Month / Year $ 18,000 $ 216,000 Total Cost of Reward Coupons $ 142,560 Increase in Gross Profit (NOI) $ 73,440 Cap Rate (If Property Sold at the End of 12 Months) 10.0% Increase in Property Value After 12 Months of the Program $ 734,400
  • 16. Reward Coupon Program If your Discounting 20% of your Rooms Monthly / Yearly • Your Property will Recapture $108,000 in Revenue and Increase the value of your property by $367,200 By Implementing the Reward Coupon Program Offered under an Exclusive Marketing • Gas Coupons Encourage Return Visits - Agreement for selling to the Hospitality Industry Discounting Does Not between America’s Best Coupons, LLC and D. L. Richardson • Gas Coupons Encourage Extended Stays Development Group, LLC Scottsdale, AZ - Discounting Does Not Confidential Information • Add to the Program by Building Your Own Loyalty Program, for example, $300 Gas Coupon for every 5 nights Booked and Stayed
  • 17. Reward Coupon Program Your Property Name Printed on Coupon Under Issuing Company Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 18. How it works…
  • 19. Pricing for Reward Coupons… • PROPOSAL – GAS or Grocery Coupons of: – $300 Coupon – 1st 3 months = $18.00 then $16.00 thereafter – $500 Coupon – 1st 3 months = $21.00 then $18.00 thereafter Order 100 Coupons of one type minimum for the first order. Name printed on Coupon is $1.00 per coupon. Every order after has to be 100 or more Coupons. Coupons cannot be sold to a consumer. The must be given as a gift at an end result. Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information
  • 20. Questions? • Please call Darrell Richardson • Office (602) 509-3355 • Or email dr@darrellrichardson.biz Mr. Richardson is a Regional Director for American Motel Hotel Brokers Network located in Phoenix AZ and has over 16 years experience in the hospitality industry. Offered under an Exclusive Marketing Agreement for selling to the Hospitality Industry between America’s Best Coupons, LLC and D. L. Richardson Development Group, LLC Scottsdale, AZ Confidential Information