Motel Mingle Forums Motel Chain Membership Do the Fees Outweigh the Benefits?

This topic contains 17 replies, has 9 voices, and was last updated by  Cassius 1 year, 3 months ago.

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  • #1266


    BMM

    Participant

      It would be interesting to hear if any of you have joined or left chains and how you feel this has impacted your business.

      i.e. do you feel that the fees outweigh the benefits?

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    • #8546


      Cassius

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      • Topics Started 2
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        We as managers have worked at a number of motels in the past few years mainly as relief managers sometimes short term ie 2 week sometimes long term 6 months to a year. From Katherine down to Eden. Out of 11 motels we worked in, 6 have left Best Western during the last five years. Most say before the internet they were great but now the OTA’s have taken over. Plus you do not have the affiliation fees and the cost buy pens and all the sundries from them.

      • #4068

        Busybees
        Busybees

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        • Topics Started 22
        • Replies 231

          So BMM it now just 2 months since you left, its probably a bit too soon for any real feedback
          Allseasons, you have been out for over a year, any feedback for the rest of us??

          No i would not be part of a chain, if we had a choice.
          As I said previously, we are bound by our lease to be part of a chain. We have spoken to the landlord, and yes we can leave Arra but we must then join another one. So I guess its best to stay with the devil you know.
          I had a chuckle when 1 read “pens and stationary”. in 3 years we have received 3 free pens and 2 free shirts,2 caps and lots of stickers (of which I still have no idea where to use them!!) I think we have received 3 bookings from head office, and a handful from the book in those 3 years.
          On the other hand our fees have risen, again and again. We are now being charged more for emails and web hosting. We had our own channel manager, our web hosts and the emails were working fine, when we first took over the motel.
          3 years ago we were held over a barrel, where we had to move over to their channel manager or pay double fees (as the fee for channel manager was incorporated into the Arra fees) and still pay for the channel manager of our choice, so naturally we moved over. We now have to change web hosts AGAIN, due to their original not being reliable enough and having no support. So now we have 3 choices, keep the outdated, move across to their new one or choose our own (again we had one before but HAD to move).
          IF there is an advantage I guess,its you do have support for everything in a “one stop shop”, albeit from 9-5, with some very friendly staff. I can send an email and they will action it for me, and follow it up. They do offer some advice on other matters.BUT that’s where it stops!!
          BTW those “more and more benefits” we were discovering STOPPED then and there!!
          We must also stay with AAA as part of our agreement, so hopefully the “new” business will provide something for its costs.
          We too have cancelled cartoscope maps and yellow pages.
          P.S. BMM…..LOVE “some misguided whim put forward by our CEO.” I wonder if he or any of the directors are members of Mingle?? it would be interesting for them to read this forum that’s for sure!!!

        • #3817


          BMM

          Participant
          • Topics Started 6
          • Replies 46

            2 years ago, I started this topic and appreciate the feedback. As of now, we have terminated our contnot ract with our chain and are now trading as an independent Motel. We are not naïve enough to believe that this will not cost us some business, but believe that the hit will be minimal and offset, in part, by the reduction in our expenses of ongoing membership fees. Chains, whether by their own choice or perhaps efforts to survive are putting more demands on their members and forget that not all of us are in the same needs or are in this business for the same end game. Some of us are progressive and looking for the ultimate rewards, while others of us are looking at this as a winding down occupation.
            I am not suggesting that we should not be aware if what is happening, but we do not all want to be 4 star properties. We have built up our business over our 12 years of ownership and will continue to investigate all avenues of advancement, but will now do this by choice, not by some misguided whim put forward by our CEO.

          • #3334

            Mr Petersen
            Mr Petersen

            Blocked
            • Topics Started 4
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              Well said bellavilla, And that is why our rates are going up and we lose a few budget hunters. Just had another pair in. Want to look at several rooms. “We will think about it, We have another place to see first.” You would swear they are moving in permanently.

              The upside is that we will be full tonight and we will get our target rate from someone.

            • #3332


              bellavilla166

              Participant
              • Topics Started 3
              • Replies 16

                The cost of a room in a motel summary:
                Price eg; $100 per night
                Gst 10%
                Accommodation provider commission eg booking.com and wotif 12% ( i believe that they are going to raise their rates to 15% this year)
                100 less 12% = 82.00
                100 less gst = 90
                So for a 100$ room we get $78.00
                Less water electricity, land rates, phone, internet, linen, cleaning, channel manager and PMS = I shudder to think

                The room price on line has to be higher to recoup the charges.

                What has happened to the guests?….do they think that it is trendy to book on line?
                If they ring up to book a room we can offer a discount and still be in front

                So getting back to branding…..can you afford $10,000 per month?…i think not.

                The motel business is NOT the same as it was 5 years ago

              • #3311

                Mr Petersen
                Mr Petersen

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                • Topics Started 4
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                  We found that Budget branding was only ever going to bring us down. We discovered that the opposition motel referred to us as the “budget place down the road”. If guests accidentally went to them they would be put off by our ‘budget’ standard.

                  Mountain Man – It is always good to create Premium rooms. We have just started a new venture and that is one of our priorities. We are slowly eliminating our budget chasing clientele. Our predecessors had very low rates. Guests who have been coming for 10 years or so at the same $89 now find that they have to pay $115 or more in peak. Amazing how abusive these “long-term VIP’s” are.

                  And I have to laugh at those ‘tyre kickers’, who leave the husband in the car, down the road. They plead poor, pull out all the discount requests, then want to see a room and return to “ask the husband”. Of course they just drive away. I don’t like showing rooms as nearly every one of them don’t take a room. I know this may lead readers to say “the rooms must be crap”. But they are not. It is just that tyre-kickers are just looking for cheap.

                • #3309


                  Mountain Man

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                  • Topics Started 2
                  • Replies 26

                    Very true, Mr Peterson. Ever notice how the ‘budget’ travellers are the ones who leave their car outside and walk in to check the price….and how after asking for discounts they never spend any other money on restaurant brekky etc?
                    We have a number of ‘premium’ rooms that are the most occupied and by far the greatest yield comes from them.

                  • #3304

                    Mr Petersen
                    Mr Petersen

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                    • Topics Started 4
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                      There are no benefits in being with a chain as far as we are concerned. We were the first motel to change from Budget to Paragon. This was 7 or so years ago. We were sure that we got nothing back from them. We never had a booking from their site.
                      I see a few desperate property owners go to chains when they are losing business, only to leave again a short time later.

                      Most motels do not need chains. Why would you want to hand over revenue like that. Big companies like FourSeasons etc are different. But for family small motels, I suggest better marketing strategies. Try a better website.
                      Most Budget properties are still running on a book instead of a property management software. Some don’t ven have their own domain names.
                      And then to join Budget chain,,whoa. You are just shouting, “I am desperate. My motel is rubbish but I don’t charge much”.

                      I strongly believe that it is the budget motels,that drag down the rest. Get the rates up a little, improve your service and level of quality and improve your business.

                      We have recently stated at a new venture. Previous owners were charging stupidly low rates. Some guests rates were the same for 7 years consecutively.
                      We have increased rates by 20% and more, installed real software, not the free rubbish that we found. We use Xero for accounts and have a book keeper. We don’t steal the cash like most do and we have improved the business income and occupancy.

                      If you want to stay in the game, get a little bit aggressive, spend some money and get rid of the chain and the budget notion. Budget motels are for budget people. Are you a charity or a revenue driven company.

                    • #2309

                      Busybees
                      Busybees

                      Participant
                      • Topics Started 22
                      • Replies 231

                        We are with the Arra group and AAA, unfortunately as part of our lease agreement we have to stay with both.
                        I’m not too sure just how much benefit there is with the AAA, esp considering the costs and with Tripadvisor, and all the online “reporitng sites” who really needs the stars anymore.
                        Arra, which is Budget, Orbit and Paragon Motels all rolled into one, not too sure, we are discovering more and more benefits, which should have been outlined to us when we first joined. We were paying our fees to them for the use of theirs, and to a channel manager, and PMS (which we inherited, so the guy before us obviously didnt know about them either!) for 2 years. so we were being doubled taxed!! They do have a great IT dept and the office staff are helpful, friendly and efficient.
                        We dont get a lot of bookings via them, but that is not all they offer, and I think once we get all that we are entitled too, maybe it might be worth it. Things appear to be on the improve, I THINK or I hope anyway!!

                      • #2299


                        bellavilla166

                        Participant
                        • Topics Started 3
                        • Replies 16

                          If you think that booking clients on your own is a chore then I suggest a channel manager “netroomz” check it out.
                          It gave the least commission per room and has training videos for you.
                          I’m not an advocate for the company but I found that it works for us.
                          If you want an example of how it works visit our website http://www.bellavillaforster.com and go to the book now button…se for yourself.

                        • #2291

                          Stephanie
                          Stephanie

                          Participant
                          • Topics Started 6
                          • Replies 43

                            We are now going to give up on Golden Chain. As Melwer says the number of bookings because of the chain do not justify the monthly fees.

                            Stephanie@ Redcliffe Motor Inn

                          • #2290


                            melwer

                            Participant
                            • Topics Started 1
                            • Replies 4

                              I Totally agree with bellavilla 166. Most chains behaviour & performance is 20 years old.The days that promoting a certain brand use to create business is over. Most chains have been in Australia much longer that booking.com, wotif.com. Agoda & several others. The percentage of commission for on line bookings for different site is anywhere between 10 – 15%.

                              If you compare the percentage of franchise fee vs booking generated by most chains is anywhere between 40 % to 70%.

                              The most discouraging element of these contracts are the hefty penalty for the early exit fees out of the contracts which anywhere between 3 to 5 years.

                              I definitely discourage anyone to join the old brands which is non productive.

                            • #1999


                              bellavilla166

                              Participant
                              • Topics Started 3
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                                I think that the Chain idea has lived it life.
                                We are now living the new age internet life and have to move on and get on the bandwagon.
                                There are a large number of internet accommodation providers that will list your site for a commission …eg wotif booking.com etc. The cost of the commission out weighs the monthly chain costs for pens stationary etc.
                                It is 2014 not 1990 so move on and cancel the chain franchise. Also while you are at it cancel cartoscope maps and AAA tourism and you will not look back.

                              • #1823

                                Stephanie
                                Stephanie

                                Participant
                                • Topics Started 6
                                • Replies 43

                                  We have bought a Golden Chain Motel. The previous owners had decided to leave the chain, but when we took over we were still in their book and received a lot of bookings via Golden Chain. Unfortunately we missed out on the current book and have noticed a substantial difference. We are looking forward to the new book coming out soon.

                                  Stephanie@ Redcliffe Motor Inn

                                • #1704


                                  allseasons

                                  Participant
                                  • Topics Started 0
                                  • Replies 5

                                    We did our research and after a long drawn out decision decided to join the Arra Paragon chain.
                                    We spoke to lots of people Eg. Arra Paragon chain members, Motel brokers, Motel Suppliers, IT Technicians that are involved in the hospitality industry and well everyone that we thought might have any insight into motel chains. All or them gave us the thumbs up for this chain but quiet a few said most other chains had reached their use by date.

                                    • #2319


                                      allseasons

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                                      • Topics Started 0
                                      • Replies 5

                                        Dont join its not worth it

                                        • #2320


                                          BMM

                                          Participant
                                          • Topics Started 6
                                          • Replies 46

                                            Allseasons, did you join ARRA. Does your comment suggest that this was not a positive move for your business.

                                            I am also a dubious ARRA member, and often contemplate moving to become an independent operator

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