Proven Hospitality

Sorry for the delay in new postings, but the last few weeks have distanced me from my laptop. Now that high school finals are finally over, and I'm home from a weekend business trip "Up-North" (Michigan), I'm ready to get things rolling again. After spending some time with Kevin, we've constructed a newly planned vision as to how we can better serve our readers. Our hope is that we can satisfy these three main objectives:

-Personality and Specificity
-Interactive media that promotes community
-Engaging content that is clear, consistent, and fresh

Hopefully soon, then, you should be able to recognize a noticeable improvement. Meanwhile, I want to share with you a recent experience that Kevin and I went on. As mentioned, the two of us drove four hours north for a two night visit at Crystal Mountain Resort. The intention of the trip was to fully immerse myself within the hospitality business. Why? Because, as of summer of last year, I began works on a proposed new concept for a Zingerman's Bed and Breakfast in Ann Arbor, MI. To give you a little history, Zingerman's is world-renowned for its local deli and eight other food-related businesses. In January of 2o03, it was named "The Coolest Small Business In America," by Inc. Magazine. So, after picking up a ton of business knowledge from Zingerman's, I started work on establishing a business plan for the B&B. Currently, the businesses is making rapid progress towards opening the new business in August of 2009.

So, by visiting the successfully run Crystal Mountain Resort, I was able to better understand the business from its top executives. Noted as the #1 Resort in the Midwest by Ski Magazine, Crystal Mountain generates $35 million in total sales through its real estate, lodging, winter and summer sports. Yet, after meeting with Rick Schmitt, VP of Group Sales, I came to learn some valuable insights about the resort and its industry:

1) Pricing is critical, especially when it comes to room rates. Crystal Mtn conducts weekly meetings to discuss pricing and packages. Given the seasonality of the business, Crystal Mtn has the ability to change rates on a daily basis, if needed.
2) In order for a new development project to be approved for construction, 75% of funds must be collected in advance.
3) While Crystal Mtn is predominantly a golf and ski destination, the resort actually makes more from its conferences and banquets.
4) RevPar is one of the most commonly used terms in the business. It stands for "revenue per average room," and is used a universal index score. It is calculated by:
-(price per room x percent occupancy) divided by (# of available rooms in same period)
5) The hotel business is often compared to that of the food industry since both businesses view its product as perishable from day to day.
6) In determining its target customer group, Crystal Mtn believed that it could make more money by remaining a three diamond resort. 4 diamond resorts require specific services like laundry cleaning, valet, food delivery to rooms, etc.
7) Crystal Mtn has maintained a 55% occupancy average, and has total margins of 35%.
8) Crystal Mtn doesn't actually own the rights to any of its lodging areas. Rather, Crystal Mtn has approximately 430 individuals owners.
9) It's common for resorts or hotel to sell its real estate through two common methods. The first is full ownership and the second is time-shares. The latter allows certain people or companies to purchase a certain amount of room nights per year. An example of this would be Google who would elect for 100 room nights for its corporate visitors to Ann Arbor.

Stay tuned for further updates on my status with the B&B.
-AK