Social Question

poisonedantidote's avatar

Scrutiny Required: Is this a viable business idea? why or why not?

Asked by poisonedantidote (21539 points ) August 16th, 2012

I just had an idea this afternoon for a business, and was wondering if you could see what you think of it. I am mainly looking for criticism or holes in the idea.

Premise 1: All inclusive hotels want guests to leave the hotel so that they don’t drink and eat much, thus saving the hotel money.

Premise 2: Restaurants, bars, car hire places, clubs and other businesses want customers to leave hotels and come to their establishment to spend money.

Conclusion:

I cut a deal with hotels, that I will provide 1 hour of free entertainment a week to the hotel on the condition that I am allowed to advertise places and hand out information packs after the entertainment.

I find 25 hotels that I can provide with entertainment, at a rate of 5 a day.

I then go to businesses and charge them to take their publicity in to the hotels as part of an information pack, said businesses may then advertise in the pack and offer discounts and vouchers, etc.

Additional:

Hotel owners get free entertainment, they get their guests tempted to venture out of the hotel, and as part of the deal, we will even add the hotel to our website of so called “best hotels in the area” with reviews and advertising for them, all free.

Businesses get to advertise to an estimated 20.000 people a week, for the same price that they currently advertise to 1400 a week, as well as also being listed on our website of so called “hot things to do” with reviews and advertising for them.

Note: I can’t just walk in and hand out publicity without entertaining them first, otherwise they will complain of getting spam in the hotel.

Note: I live in Spain, on a tourism heavy island. 200 hotels all in walking distance, 800 more hotels a short ride away.

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9 Answers

Tropical_Willie's avatar

Sounds reasonable, are you the entertainment too?

poisonedantidote's avatar

@Tropical_Willie Yes, and website creator, and the rest.

Should probably mention, businesses would have to provide their own pamphlets, and… The situation with publicity in hotels is real delicate, hence the idea to hide it with entertainment.

Tropical_Willie's avatar

Give it a try not big investment on your part. Goodwill for outside businesses and reduces cost for “all included”.

Jeruba's avatar

What does “provide 1 hour of free entertainment a week to the hotel” mean? Who’s your audience, and how do you reach them? Hotel guests, I get that, but—just people passing through the lobby, or sitting by the pool, or in the restaurant, or what? What are you performing? And how does it represent the places that you want to advertise?

poisonedantidote's avatar

@Jeruba The entertainment would vary from hour to hour. If your hotel is booked at 11:30am, then it will probably be a pool game, with a prize, and perhaps some candy handed out to non participants, and a bottle of champagne for the game winner. If your hotel is booked for 9:30pm, then you get a quiz, some jokes, and the next act introduced.

Hotels in this area typically offer entertainment from 11am to midnight, with perhaps a pause in the afternoon for lunch.

You can expect to see on a typical day: quiz, karaoke, game shows with the whole audience, pool games, sport events, comedians, tribute acts, bingo, and all that sort of stuff.

We would provide 3 activities, depending on the time of day. What that is exactly is yet to be established, whatever it is, it would be a bit more special than the usual ‘resident entertainment’ that hotels here have. It could be close up magic for an hour, quizes, pool games, or some other invention.

EDIT:

My audience would be anyone, typically british.

I will no doubt have 3 or 4 kinds of info packs, so I can target demographics, young, old, family, etc.

Haleth's avatar

“All inclusive hotels want guests to leave the hotel so that they don’t drink and eat much, thus saving the hotel money.”

I disagree. The “all inclusive” part of the hotel stay is meant to be a perk that will bring more people into the hotel. The extra cost is built into the price of admission. Meals, entertainment, etc, might be a “loss leader” for the hotel, where they lose a bit of money on the deal but make more money overall because of the increased traffic. Even so, finding other sources of entertainment won’t be a pressing problem for the hotel, because the primary purpose of a hotel is a place to stay, and that’s what the customers are there for.

If I were a customer at a hotel, free trivia games and information packs would both be unwelcome. I’d rather seek out my own entertainment and services.

If I were the management of the hotel, I’d be worried that you’d scare off business by trying to market to my customers. The hotel management is going to be very conscious of what will help their business and what will hurt it. If you offer a service, you need to be able to persuade them that it will help them make money, grow their business, etc, and that it will be worth their time and money. I’m just a lowly retail manager, but even I get tons of offers from people with different businesses, trying to sell me things. It makes me skeptical and critical, and only the things that can really help me grow my business stand out.

The part of your plan that has the best value is your idea for connecting separate businesses with each other. That’s called cross-marketing. Say business A is a flower shop and business B is a bakery, and they each have a loyal following. People who are having special events, like weddings or birthdays, might need both cakes and flowers. If you can forge a connection between business A and B, that creates real value and everyone wins. That’s the part of your plan that represents a good value for the business owners, and that’s the part you should focus on.

I don’t know how you would do that… but it’s your business. In my neighborhood, I’d love to see a shared website for the local business district, shared special events, mutual referrals, or a universal loyalty card for all the businesses. Sigh… wishful thinking.

wundayatta's avatar

It is positively Machiavellian!

6rant6's avatar

If there is a hitch I think it is in getting butts in the seats.

Giving away entertainment is not a guarantee that people will come to see it. Free often equates to crappy. People know that. Plus, getting people to come to stellar entertainment is difficult. Entertainment venues spend lots of money advertising.

What kind of conversion rate does your model imply? I’d guess 1% would be doing well, but I could be wrong. That low rate means that the return to the hotels on the cost of printing is going to be very low. Still, if they have progressive marketing managers, it might work.

Pied_Pfeffer's avatar

The idea has potential, especially if it can be crafted into a a four-way win for all parties involved. Here are a few suggestions:

Premise 1: All inclusive hotels want guests to leave the hotel so that they don’t drink and eat much, thus saving the hotel money. I agree with @Haleth‘s statement. For 25 years, I worked for hotel chains that that marketed their product price as all-inclusive for the most part. Rates were based on including the cost of these “free” amenities and closely monitored.

Seasonal hotels that cater to leisure customers just want to get heads in beds. Offering an all-inclusive package entices customers so that they can budget how much will be spent, especially during a long stay.

Premise 2: Restaurants, bars, car hire places, clubs and other businesses want customers to leave hotels and come to their establishment to spend money. This is 100% correct. The challenge is in knowing the audience (the leisure, long-term guest).

My SO’s parents fit this description. They head for Spain almost every winter for a few months. They have no interest in renting a car, and they want British cuisine if dining out. Going out to clubs holds no appeal.

Conclusion: That sounds incredibly labor intensive. Can one person do all of that on their own? You know this specific market and what you are capable of, but I know that I couldn’t pull off such a feat.

I like the idea of offering a variety of entailment to hotels. Long-term guests appreciate it.

Additional: Are brochure racks allowed in these hotels? In the US, as well as several other countries I’ve visited, most have flyers available in the lobby. It doesn’t cost these businesses anything to place them there, other than the printing, which isn’t cheap. If I ran one of these outside businesses, I would rather have the hotel guests who are interested in this business take a brochure rather than have every guest receive one.

20,000 guests a week in 25 hotels means that each of these hotels has 800 different guests a week. Is that the case? What does the advertising look like? Is it something that you put together and manage, or is it a packet of brochures from each of the businesses that sign up for your service?

Some additional ideas:
* There are companies in the US that offer the service of putting together a professional looking binder that goes in each hotel room. There is a letter of greeting from the hotel manager, followed by tabs that separate types of local establishments and contact information, plus a bunch of other hotel-specific information. The binders are free to the hotels. The cost of the service, plus profit, is paid for by the establishments who agree to advertising in it. The company’s agent handling the process is given a complimentary room while they do the leg work of soliciting advertisers.

* Once upon a time, I wrote a proposal to a Washington, DC, hotel manager offering concierge services. My pay would be minimal, and it would be supplemented by commissions paid out by the companies that I recommended. He loved the idea, but couldn’t get approval for it.

* Two of the hotel chains I worked with offered a Manager’s Reception each evening for two hours. It consisted of free drinks and snacks. Several of the hotels worked out a deal with local restaurants where the starters/appetizers were provided to the hotels for free. In return, the restaurant was allowed to advertise their establishment, and they often got gift certificates for complimentary stays to give out as employee recognition rewards. The gift certificates had restrictions on them, such as they couldn’t be used during peak season or special events.

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