Hospitality Industry Stop Discounting Reward Coupon Program

Americas

Best

Coupons LLCCoupons for 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

Discounting Rooms in

this economy is NOT the

Solution

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



• 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





• 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





http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15087.html




Exhibit 4 – RevPAR and occupancy percentage differences for luxury, upper upscale, and upscale hotels, compared to the competitive set, 2001 - 2007






Exhibit 5 – RevPAR and occupancy percentage differences for midscale and economy hotels, compared to the competitive set, 2001 - 2007






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”






• Introducing the S-O-L-U-T-I-O-N and

the R-E-L-I-E-F to Discounting

Gas or Grocery Coupons!






• 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



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



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 ????


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!!!!

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


Assumptions Per Month Per Year

# of Rooms 100

Available Room Nights / Month / Year 30 3,000 36,000

Occupied Room Nights / Month / Year 60.0% 1,800 21,600

% & # of Room Nights Discounted 10.0% 180 2,160

Average Discount in $ & $ per Month 25.00$ 4,500$ 54,000$

Revenue $ Saved per Month / Year 4,500$ 54,000$

Cost of Reward Coupon Program

$300 Gas Reward Coupon Cost 1st 3 Months 18.00$ 3,240$ 9,720$

$300 Gas Reward Coupon Cost 4th to 12th Mth 16.00$ 2,880$ 25,920$

Total Cost of Reward Coupons 35,640$

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$

Per Month Per Year







Projected Results - Increased Value Generated Using Program for 12 Months

Based on 10% of Room Nights Being Discounted per Month / Year



Reward Certificate Program

Projected Results - Increased Value Generated Using Program for 12 Months

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

Per Month Per Year






Per Month Per Year









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

• Gas Coupons Encourage Return Visits -

Discounting Does Not

• Gas Coupons Encourage Extended Stays

- Discounting Does Not

• Add to the Program by Building Your

Own Loyalty Program, for example, $300

Gas Coupon for every 5 nights Booked

and Stayed

Offered under an

Exclusive Marketing




Coupons, LLC and D.

L. Richardson

Development Group,

LLC Scottsdale, AZ


Reward Coupon ProgramYour Property Name Printed on Coupon Under Issuing Company

Offered under an

Exclusive Marketing




Coupons, LLC and D.

L. Richardson

Development Group,

LLC Scottsdale, AZ


How it works…

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



Questions?

• Please call Darrell Richardson

• Office (602) 509-3355

• Or email [email protected]

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.





mailto:[email protected]

Hospitality Industry Stop Discounting Reward Coupon Program

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