Background
From a historical perspective the Walpole Inn is considered to be one of America’s oldest inns since it was constructed in the early 1760s and then subsequently renovated by the latter half of the 1990s. Not only that, the inn itself is conveniently located in a corridor near Boston, New York City and Montreal making it an ideal get-away that isn’t too far away from the normal hustle and bustle of city life.
Further enhancing the appeal of the business is the fact that many of the old homes and scenic vistas from the 1700s have been well preserved lending the area a historic feel which permeates the environment. This makes the inn an ideal place to stop, relax and enjoy a short vacation away from the stresses induced by living in a city.
Current Status
The Walpole inn enjoys a well established reputation within the state of New Hampshire as one of its most historic yet comfortable locations to spend the night. Upon further investigation it was seen that the previous owners of the Walpole inn had significantly improved the infrastructure of the inn by adding in a variety of modern conveniences and comforts to the historic site.
This comes in the form of in-door air-conditioning, modernized bathrooms, internet connectivity and even cable television. The inn even comes with a private tennis court and billiards room which shows the level of dedication that went into making the inn as comfortable as possible for a wide variety of guests.
Industry Characteristics
Gross (2010) notes that one of the more interesting outcomes of the 2008 financial crisis which spun the U.S. into an economic downturn which lasts to this very day is the fact that this has subsequently changed consumer behavioral trends regarding vacations (Gross, 44). Many Americans have become hesitant in taking international vacations due to the perceived higher cost and the current environment of economic uncertainty which pervades the U.S. job market.
As a result this has created sharp declines in the patronage of U.S. consumers of various international destinations however this has also created a subsequent incline in the number of consumers that have opted for local scenic destinations. This is explained by Triantafihlidou et al. (2010) as being the direct result of the perceived “safety” of local vacation spots and the relatively low cost nature of various getaways and retreats that dot America’s rural countryside (Triantafihlidou, 7914 – 797).
This has actually been a boon for various Bed & Breakfast inns, small hotels and even motels located in townships across the country that either have a distinct scenery or a certain degree of history attached to the town itself. It is based on this that investing into an inn has never looked as ideal due to the increase in consumers that have opted to patronize local districts due to their perception of affordability.
Further exemplifying this fact is the data in the study of Jones and Chen (2011) which examined changes the amount of consumers in various hotels within the U.S. As Jones and Chen (2011) explain there has been an increase of 25 to 35 percent in the number of consumers utilizing inns and small hotels around the country and as such also echoes the notion of this project regarding the viability of investing into a Bed and Breakfast in New Hampshire (Jones and Chen, 83 – 90).
Future Plans
Within the next three years the goal for this project will be to increase the overall guest capacity of the inn. This will be done through significant renovations in the inn’s current structure by adding a new wing to the building and ensuring that the look and feel of the added section conforms to the style of the 1700s.
In order for this to be accomplished the number of visitors that come to the inn must be increased and it was perceived by the group that the best way of doing so was to create advertising campaigns that will be done in several nearby cities so as to increase awareness of the inn and its services to the general public.
Research
In examining the viability of this project the group planned to examine how the recent financial crisis has impacted the number of guests within the New Hampshire area. It was assumed that due to the current environment of economic uncertainty that people would less willing to spend money on vacations and instead opt to focus on their job lest they show themselves to be burdens rather than needed resources by the company they work for.
This behavior was observed by Smick (2011) in his examination of the impact of the 2008 financial crisis on the working culture within the U.S. and as such does not bode well for hospitality businesses that rely on a constant stream of guests (Smick, 25 – 28).
Taking this into account it was noted that between 2008 and 2010 that the number of guests that had frequented the New Hampshire area had significantly dropped to less than 20% of normal guest capacity. In fact this occurrence led to numerous businesses that relied on a constant stream of tourists to subsequently shut down with the Walpole Inn being the latest “casualty” so to speak in this trend that encapsulated the period from 2008 to 2010.
Further research into the issue revealed that a sharp decline in consumer spending as a result of the job loss rate further exacerbated the 2008 financial crisis which led to the steep decline in tourists into New Hampshire. While such findings would normally not bode well for any potential business ventures that centers itself on the rural hospitality industry various business entrepreneurs stated that such a time was actually an opportunity in making.
One of the results of the 2008 financial crisis which came about due to toxic subprime mortgages was that real estate prices across the country had dropped to significantly low levels. In fact the real estate industry in the U.S. at the present can be considered a “buyer’s market” with significantly lower prices as compared to a few years ago when the price of real estate was reaching exorbitant levels.
In fact the current asking price for the Walpole Inn has been set at $785,000 which is a significant bargain when taking into consideration the historic value of the inn itself as well as the various amenities and improvements that have been added onto it within the past 10 years.
Survey of Appropriate Age Demographics
In order to test the viability of the business project chosen by the group an informal survey was conducted among local residents aged 28 and above which comprises the average type of demographic that patronizes various inns and small hotels. All participants were asked to fill out a short online survey regarding their opinion towards staying at an inn and whether they were in a position to do so considering the current economy.
Nearly 70% of respondents stated that they would stay at an inn provided that it had a reasonable price and was located in an area that was easily accessible. When ask to further justify their responses they mentioned that in various rural locations finding a good hotel is quite hard, as such many of the respondents have actually already had significant experience in staying in inns of various types during their out of state trips.
When shown a picture of the Walpole Inn and given a general description of the inn itself along with its various amenities the survey participants indicated that they found the inn to be rather pleasant and the in-house services and amenities to be quite interesting. Various respondents went on to state that what is important about an inn is the general atmosphere of the place and the “feel” of the location which contributes to a pleasant stay at the location.
It is based on the respondents of the survey participants that the group was able to see that based on appearance, amenities and general “feel” of the location the Walpole Inn does seem like a good investment in the future should the proper opportunity present itself.
Market Analysis
Research data from 2011 reveals a rather interesting trend in the past year wherein consumer spending has significantly increased by the latter half of 2011. Some financial analysts have connected this rise in consumer spending to the recovering local economy and as such this can be used as an indicator for new investments into hospitality projects within America’s rural locales.
Another way of looking at this scenario is to examine the various consumer demographics within NYC (New York City), Boston and Montreal in order to determine the extent of economic recovery within the region that encapsulates the customer base of the Walpole Inn.
Based on the study of Wu et al. (2011) which examined the degree of economic recovery within the U.S. and its impact on consumer demographics it was seen that while the recovery has been slow there was a notable increase in the spending habits of the middle class demographic within the cities of New York, Boston and Montreal (Wu et al., 86).
This demographic is composed of business men and women as well as local business owners in such cities who used to frequent rural New Hampshire as a way to “get away from it all”. An increase in the spending habits of this demographic is a positive indicator for the viability of investing into the Walpole Inn since this means that the “dry spell” that affected New Hampshire could in fact be abating resulting in the subsequent return of a semi-normal flow of tourists into the New Hampshire area.
Another way of looking at the potential of this particular project is its location in conjunction to various cities with population bases of high income individuals. Since the Walpole inn is located 2 hours away from Boston and just 4 hours away from New York or Montreal this enables it to capture the potentially hundreds of thousands of guests that such cities could provide for the business.
Further examination of the economies of all three cities reveals that within the past year there have been significant gains in terms of economic recovery from the financial crisis. As mentioned earlier, consumer spending in all three cities has increased which has resulted in more tourists flocking to local townships and historic locations.
Taking this into consideration it can be stated that by applying sufficient tactics of marketing and promotion the Walpole Inn could become a popular location for such tourists to spend the night on their way to other scenic locations within the country.
In fact data from various studies shows that there has been a significant increase in the amount of guests in inns and small hotels as of late within the Eastern half of the United States with most of the guests coming from either Boston or New York. Based on all the facts presented it can be seen that the market for inns within Eastern half of the country is growing and as such can be considered a viable and profitable opportunity for an enterprising team of individuals to take advantage of.
Another factor that should be taken into consideration is the constant flow of foreign tourists into the U.S. with a large percentage going to various famous locations such as New York and Boston. While many of these individuals stay in hotels within the city a new trend has emerged wherein many tour organizers have started bringing tourists to more inexpensive locations outside of the city.
With New Hampshire being situated relatively close to New York and Boston as well as having many historic locations and interesting sights, tour organizers have begun to organize mini-trips into the state where foreign tourists can stay the night in any one of the region’s small hotels and inns.
It must be noted though that these “mini-vacations” aren’t exactly new in the sense that the practice has been going on for several decades with tour companies promoting inexpensive tours around New Hampshire for school field trips, business getaways and an assortment of other markets.
With foreign tourists looking for an inexpensive means of taking in as much as possible these short forays into America’s more scenic states has caught the eye of various travel agencies and as such a marked increase in the number of foreign tourists has been noted in New Hampshire.
Taking this into consideration the Walpole inn could benefit greatly from going into a joint agreement with various tour organizers and could offer the inn as an inexpensive and above all ideal location where foreign tourists can stay the night. This could greatly increase the reputation of the inn and through word of mouth the end result could be a subsequent increase in international clientele as the demand for staying at the inn increases.
Pricing
When examining various inns that encompass the same consumer demographic as the Walpole inn it was seen that inns such as the Brannon Bunker inn which enjoys a similar reputation to the Walpole Inn with the same level of amenities and services charges its customers an average of $100 a night. This comes complete with a sizable breakfast in the morning as well as access to the various facilities within the inn itself.
Further examination of other inns showed that prices ranged from $100 to $189 but never really strayed above $200. The reason for this may be connected to the fact that inns within the region may be trying to entice more guests and as such have opted to lower their prices in order to increase the number of people that come and utilize their services. It is based on this that the price the group will set is an average of $100 per room with breakfast included in the morning.
The reason for this is quite simple, if the group will invest into this particular business it will be during a time of uncertain business prospects and as such it would be advisable to set prices at a reasonable rate in order to attract customers and increase the reputation of the inn as an ideal location to head to during a trip to other parts of the region.
It must also be noted that since the Walpole Inn has only 8 rooms the amount of money needed to maintain the facility is much lower as compared to other inns and small motels that have 15 rooms or more. Taking this into consideration it can be seen that the venture can in effect afford to have low prices due to the minimal amount of maintenance necessary.
It should also be noted that one possible strategy that could be pursued is to set rates at $90 per night during the opening week of the Walpole Inn, by doing so and advertising our temporarily lowered prices this should considerably increase the amount of visitors and increase the word-of-mouth popularity of the inn.
Promotion
Promotion through Catering
One unique avenue of promotion that the group can pursue is to have an alternative service for the Walpole inn in the form of a catering service. By naming it the Walpole Inn catering service not only will this promote the inn but it will act as an alternative income stream should business become slow.
The inn has a rather impressive kitchen which the previous owners installed and as such should be well suited towards producing the necessary products for a small catering service. The Walpole Inn catering service will consist of a relatively limited menu for events and parties.
The reason for this is due to the fact that the business plan for the Walpole Inn focuses more on in-house service rather than catering and as such most of the staff and kitchen resources have been set for dealing with a regular crowd of daily customers rather than large orders that need to be made before hand, delivered and served at a party for a prolonged period of time.
The catering service will be available at any time of the day with delivery consisting of a rented van with at least 2 staff members sent as servers for the party/event. All catering events must be requested at least a week before hand in order for the inn to properly prepare and rent the necessary equipment in order to serve food outside of the inn and to be able to assign staff arrangements in order to make up for the personnel sent to the event.
I.T. Promotion
It was determined by the group that one of the best ways in reaching our target markets in Boston, New York and Montreal is to use traditional advertising (newspaper ads) in conjunction with a website with proper search engine analytics in order to help potential travel goers find our site immediately. What must be understood is that there has been an increasing trend as of late wherein more and more people are using the internet as a means of mapping and planning out their vacations.
As such by having an online presence the Walpole Inn will be able to reach its target demographics at far easier and more affordable rate as compared to more traditional means of advertising. The Walpole Inn will have a marginal IT cost of 2,000 for the website setup and design fee as well as $60 per year for host and domain name costs.
The website will consist of a reservation section, a catering request section and a section where potential customers can view pictures of the inn and what kind of food it offers.
The reason why the website will have this particular function is to make it more convenient for our customers to see what the inn has to offer without having to come to the inn itself in order to see it. The reservation section of the site will enable potential customers to see the current availability of rooms on a particular day and make a reservation on the day they want to come and stay.
Not only does this streamline the process of reservation but it takes the burden off of people constantly calling the inn in order to make a reservation on a particular day only to find out that all the rooms are full. The catering request section on the site is there in order to make it more convenient for customers to see our catering menus and make requests via the online messaging system for costs, availability and special requests.
This makes it far more convenient for them to avail of our catering service and helps to minimize the amount of people that the inn staff has to entertain on a daily basis with this particular type of request.
Lastly the information and display section of the site will contain pictures of the inn along with various pictures of the dishes that are served in order to entice customers to come in and try them. Also, the information section will contain a map to the inn as well as check in and checkout times in order to help customers not only get to the inn itself but decide on the most appropriate time to go.
Works Cited
Gross, Daniel, and Jessica Ramirez. “Credit is dead long live cash!.” Newsweek 155.14 (2010): 44-45. Academic Search Premier. Web.
Jones, Peter, and Meng-Mei Chen. “Factors determining hotel selection: online behaviour by leisure travellers.” Tourism & Hospitality Research 11.1 (2011): 83-95. Business Source Premier. Web.
Smick, David M. “How we can avoid becoming like Japan.” Commentary 132.5 (2011): 25-28. Literary Reference Center. Web.
Triantafihlidou, Amalia et al. “Hotels on fire: investigating consumers’ responses and perceptions.” International Journal Of Contemporary Hospitality Management 21.6/7 (2009): 791-815. Business Source Premier. Web.
Wu, Angela et al. “The best & the rest.” Money 40.8 (2011): 86-91. Business Source Premier. Web.