10 THINGS THAT WILL COST YOUR LODGE, RANCH OR CLUB MORE THAN SOFTWARE
Important business decisions should always be made from a profitability perspective. In fact, one might say a decision based solely on cost, without accounting for the potential returns on your investment, isn’t really a business decision at all. With this in mind, we are highlighting 10 things that can cost your lodge, ranch, or club a whole lot more than the price of good software.
Excessive Credit Card Processing Fees
Credit card transactions are a fact of life, but there is no rule that says you must get taken to the cleaners. Businesses with a goal of processing credit cards at the processor’s lowest rate stand to save 4, 5, and sometimes 6 figures in annual fees. If your lodge, ranch, or club isn’t running a software program that helps minimize credit card processing fees, then you are leaving money on the table.
The market for bookings in travel and outdoor recreation is intensely competitive and a missed booking never comes back. So, it is with this in mind that for every time a phone call is missed, an email slips through the cracks, or you take a day off, one must realize the potential for missed bookings. An easy way to plug this leak is by activating online booking. It is a proven strategy that drives increased bookings and the most affordable way to give your guests the opportunity to book 24/7/365. From a cost perspective online booking technology may look a little spendy at first, until you do the math, and then one realizes it pays for itself so fast it is a no-brainer.
1 FTE (full-time employee)
Sophisticated technology that aligns with your lodge, guest ranch or club can create efficiencies that easily matches the productivity of one or more full-time employees. While the cost of software is only a fraction of that, owners and operators often problem solve by adding payroll when they have another option of simply investing in tools that better their team. Compare the price of good software vs. the cost of recruiting, training, and retaining an extra employee, and it will be obvious which is more affordable in the short and the long run.
If your business isn’t growing then it is going backward, and revenue stagnation is one of the most critical signals that might flash on the radar of your lodge, ranch, or club. By and large, operating costs are mostly fixed and the dynamic of flat revenue in a time of economic inflation is a perpetually declining proposition. What’s more, revenue stagnation is the first stop on the way to shrinkage, and if you don’t put up a firewall, decreasing revenues present a three-fold threat that squeezes cash flow, limits your re- investment, and damages the total value of your business. Software is one of a few tools available designed to build and grow revenue. Owners and operators that balk at the initial cost risk watching their P&L morph from black to red.
Let’s say you have at least one inefficient workflow in your operation that requires an extra ten minutes a day. That 10 minutes adds up to 60 hours in a year, and at normal wages equates to a rough cost to your business of $1000. This isn’t a big issue if you are the exceptional lodge, ranch, or club with only one inefficient process, but if you are like most, you have an array of workflows with potential for improvement. If your software resolves even a handful of these, it is another way an investment in technology puts cash in the bank.
If you’ve been in hospitality for any length of time, then you can absolutely appreciate the value of retaining employees. Furthermore, organizations with high turnover are often entrenched in a software system that is not a good fit with their business, creating a dynamic that actively crushes staff morale. If you think you have this problem, do not waste any time addressing it. The sooner you stop the turnover and give your team a tool that sets them up for success, the quicker your business will be on the way to employee stability and long-term profitability.
Falling Short of Guest Expectations
Increasingly guests expect to utilize some level of technology in doing business with your lodge, ranch or club. Whether it is booking, scheduling or payment, your guests are also business people, and accustomed to using technology in their own lines of work. From this perspective, hospitality software systems can be viewed as a strategy for enhancing the guest experience. Bottomline: No business ever hurt itself by making their guest experience easier and more enjoyable. Additionally, new guest acquisition is one of the most costly needs of any lodge, ranch or club; hence the conviction that software which supports your goal of building a repeat clientele makes for smart business.
Trailing the Competition
Competition is exactly what it seems and there are always losers and winners. Owners and operators who take strategic risks and also do everything they can to mitigate the potential downsides often end up on top. Your competition will come in many forms, whether it comes from destinations similar to yours, or alternative tourism markets seeking to lure customers away from your brand of experience. Don’t take a knife into a gunfight. Those who would eschew the competitive advantages of software, while their peers in the industry implement and execute, should not be surprised if they wake up one day behind the eight-ball.
Resistance to Change
Owners and Operators of lodges, guest ranches and clubs that offer a “classic” experience at a “historic” location don’t get a free pass from the problems associated with resistance to change. Skepticism can be a positive, and due diligence is mandatory, but those who would dismiss revenue generating tools that are proven and in high demand by their customer base would do well to take note of this old advice: “If you do not change your direction, you may end up exactly where you are headed.”
Change is inevitable, and while a stubborn commitment to the status quo may appeal to your sense of pride, integrity, and tradition, beware it may also impede your evolution. In the worst-case scenarios those who hang on to the “old school way” will inevitably watch the world pass them by. In an age of rapid digitization and a time when each new generation expects more from technology, resistance to change could end up costing you and your organization big time.
You get what you pay for, and the best price rarely delivers the best product. Price driven concerns are key to every decision, but make sure your profitability equation balances out. In other words, low-cost software that fails to deliver the desired ROI is just a loss line item when it should be a profit driver. Or more simply, who cares if your software costs $10K if as a direct result your profit margin grows by +$20K or more?
Also, make sure your software partner is positioned to do business for the long haul and has the necessary bandwidth to deliver maintenance and support for as long as you plan to use their product. Search high and low for the software company that best aligns with how you do business and find the team best prepared to help your organization implement and leverage the most from technology now and in the future.
The objective of any software solution is to tip the balance of business in your favor. Focus on identifying technology solutions with the potential for positive ROI and software will help drive your lodge, guest ranch, or club to new levels of profitability.
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