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poisonedantidote's avatar

Scrutiny Required: Is this a viable business idea? why or why not? ( Part: 2 )

Asked by poisonedantidote (21549 points ) August 19th, 2012

Hello again, sorry to bother you all with this again, but I could really use some criticism of my now modified business idea.

For those who did not see it, part 1 is here.

Basically…

I go to all the hotels in the area, and ask them if they would be interested in earning some extra money by taking advantage of my services.

I tell the hotel director, that I will come to the hotel once a week for an hour, to entertain the guests free of charge, as an addition to the entertainment they already have.

I will hand out candy for free to kids, and have fun games that you can win free prizes in.

As well as entertaining the guests for free, I will list their hotel for free on a website that I own, about the best hotels in the area. The website is linked to Facebook, Google +, Twitter, and their hotel will also get mentioned there.

Also, I will take publicity from the hotel about the hotel, and get it put in to almost all the businesses in the area, again, free of charge.

In exchange, they must allow me to sell their guests a special discount pack for the area.

The discount pack contains vouchers for almost all the businesses in the area. The pack costs 50 cents, and it pays for its self the first time you use any voucher within it.

For every discount pack I sell, the hotel will get 30 cents of the 50, and I keep the other 20.

The discount vouchers are sourced from businesses, who pay for their voucher to be included in the pack, knowing they will end up in the hands of 1000’s of tourists.

Who Benefits?

The hotel benefits by getting free entertainment, free online advertising, free real world advertising, and revenue.

The businesses benefit by getting to advertise to 1000 tourists directly inside the hotels, after having established a nice relationship with them via free candy and prizes, for the same price that they currently advertise to 200 tourists, by pestering them on the street.

Businesses would also be listed on another website, free of charge, as a final perk.

Is this a better idea than the previous one?

Can you find any faults with it?

What if anything will go wrong?

Thank You!

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10 Answers

CWOTUS's avatar

1. Giving candy to kids is going to be a bad idea.
Good parents have always raised their kids to not accept candy and other gifts from strangers. So your plan to make those offers to kids undercuts years of parental instruction. Not to mention that some kids will be diabetic, some kids will have various allergies that you won’t know about (and they themselves may not always be aware of) and families who have just arrived at the hotel may not want their kids to have sweets that will tend to energize them, if they themselves want to get to the room and relax after travel that the kids may have slept through. Good hoteliers will know all of this and more, and would prefer that their lobbies be places of business and relaxation, not some kind of carnival midway. So I don’t like that aspect of the business, but it doesn’t mean that it’s a failure because of that.

2. Businesses who include those vouchers in your coupon book (a common enough idea in the States, by the way) may change ownership or go out of business subsequent to your publishing, and may not honor all of the vouchers. Surely not all businesses will cease to function unless there’s some kind of cataclysmic event in the area, but it only takes one or two “I really really really wanted this thing” event to sour people on the lousy coupon book they’ve bought, and then complain to the hotel management (since it was because of them that they bought the thing).

3. Enough of your potential customers among hotel guests already know this, so they may be resistant to purchasing even a steeply discounted coupon book from you. Then the hotel owner / manager won’t want to see you trying to make a hard sale on his lobby floor.

Pied_Pfeffer's avatar

—This is like playing the Fluther version of Dragon’s Den.‘_Den

Can you provide some more details about the market? So far, we know that it is a resort type island in Spain, and the market mix is primarily leisure customers from the UK.

* Is business there seasonal? What months do the hotels run at full occupancy and when is business low? Do any of the hotels and other businesses shut down during slow seasons?

* What percentage of the hotel customers are there on business and leisure? What percentage are retired couples or traveling with children?

As for the business plan, it still sounds like a tremendous amount of work for very little pay. Have you worked out the cost of your time and effort, plus the supplies required? Will the revenue produced not only cover these costs but make a profit for you?

Shippy's avatar

Why not just offer the hotel advertising on your site free or not. Then build the discount vouchers into your site with those companies renting space.

poisonedantidote's avatar

@Pied_Pfeffer

The market is 99% British and German tourists who are seeking sun, sand and sea type holidays.

Business here is seasonal, with hotels opening 6 to 8 months in summer time. All business shut down totally in winter times.

The vast majority are tourists on sun vacation, with the vast majority being 30 to 40 year old people with kids.

The cost of setting up the business is zero, I already have a server for websites and things, the only cost would be $20 a year for two domain names.

If I charge the same 800 a month that is paid to have 200 daily tickets handed out, I can hand out 1000 for the same 800. If I can get 20 businesses to advertise with me its 16k a month, all profit except for tax.

bkcunningham's avatar

@poisonedantidote, what do you do to entertain the guests?

poisonedantidote's avatar

@bkcunningham

It depends on the time of day, we would not have a Karaoke at 10am, but could at 10pm. There are several choices I can go with during the day.

Water polo, blindfold water balloon fights, limbo, arm wrestling, riffle shooting, gambling for drinks, UK top 10 music hits DJ session, quiz, tv game shows with guests, darts competitions, snooker competitions, magic shows, and genrally anything fun.

Hotels usually offer entertainment from 11am to 11pm in these parts, you can just sign up to any of it. Most of it, is honestly quite shit. Usually it is a 16 year old volunteer who is on a working holiday, organizing an event of some sort.

The quality of entertainment I would provide, would be of a similar nature, but more well done. Not that I am better or more talented, I will just have decent equipment.

A lot of hotel entertainers are handed a bow and arrow with some broken arrows, some rope, some raffle tickets, cd’s and told to get on with it.

I would probably develop 3 or 4 things I can go with, and carry them round on a tricycle with a storage unit.

bkcunningham's avatar

Did you mean $50 dollars when you said 50 cents?

Jeruba's avatar

I think there must be several cultural assumptions behind this plan that don’t have universal currency.

The first is the idea of entertainment in hotels. If this is the norm where you are, @poisonedantidote, I guess you should be asking people who are used to it.

I, for one, am thankful that it’s not usual in the U.S., not in any hotel I’ve ever stayed in, in any region. I would find it intrusive and very annoying, and if I were subjected to it I would want to get away from it as fast as possible and never go back there.

The second thing that bothers me is redefining “best hotels” as “the ones that are paying me for advertising.” That would seriously undermine my confidence in your ratings.

And I agree that handing out candy to kids is likely to alienate a lot of parents.

So if these are acceptable ideas in your area, I think those of us who are used to different customs will have a hard time evaluating your proposal. You’d do better to ask people in your own neighborhood.

bkcunningham's avatar

It sounds very much like cruise ship entertainment, entertainment that is offered at hotels during American spring breaks and American hotels that offer camps and activities for children. Daytona Beach, Florida, use to be the king of spring break. The beer companies sponsored every type of game you could imagine. From loading the pool with ping pong balls and playing a game where you had to jump in and find a ping pong ball with a certain number to ice sculpting contests; they thought of everything back in the day.

Pied_Pfeffer's avatar

Thank you for the additional information. One other question that I should have asked is what is the average length-of-stay? The longer the stay, the more inclined a guest would be to purchase the product. The downside is that there are less customers to buy it.

I’m still not sold on the idea that your profit will cover the costs. It takes a great deal of time to make the sales calls on the hotel managers and the retail outlets. There is a great deal of time involved in arranging the whole process, including keeping the website updated. It’s one thing if it is marketing your own company; it’s another if you are a middleman reliant on these outside companies keeping you abreast of any changes.

There is also the cost of replacing, even if minimal, supplies needed. Items get broken, disappear, and just experience general wear and tear over time. Do you have the space to store surplus?

Back to the marketing bit…what booking source to the guests primarily use? From what I’ve seen in the UK, they often use a travel agency. For these guests, marketing on Facebook, Google + and Twitter are non-starters. They are looking for a deal based upon location, rate and availability. If anything, they go to the tried and true search engine sites directly in order to do their shopping. Another disadvantage is that it might be difficult, if impossible, to measure the results. If guests aren’t using your website to book reservations, how would you measure its valu

I think you have a lot of really good ideas. It’s tying them all together that is casting doubts. Personally, I would stick to just one…at least, at first. If offering hotel entertainment appeals to you, then start with that. If it is a non-starter due to the competition from the free, yet less qualified interns, then go with something else. I think that you could really market the quality of your service though, and it might give some of the hotels a competitive advantage over time.

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