Our Inns

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Many people seem to think that they’ll get away without bothering with credit cards at all if they’ve only a small B&B or perhaps an equally small holiday apartment. After all, you wouldn’t lose that many guests by not accepting cards, would you?

That’s not an easy question to answer. You might think that people could just some other method of payment and that therefore you won’t lose any potential guests

Amazingly many B&Bs still don’t accept credit cards and thereby end up losing business as many people prefer to pay directly with a card than to have to pay extra charges to lift cash abroad.

But, how do you do it?

Well, there are basically two ways that a B&B or self-catering complex can operate with a credit card.

1. Accept cards solely for deposits; and
2. Accept cards for all payments.

Naturally, it’s possible to start off just taking card payments for deposits and move onto accepting them for all payments. In fact, it’s useful to do exactly this to try out card payments for your business.

If you’re only taking card payments for deposits then you don’t need to sign up with a bank. The simplest way is to sign up with paypal for a business account. Payments received will cost you 3.4% plus 20p so if you take £10 will cost you about 54p (5.4%), £100 will cost £3.60 (3.6%) and £1000 will cost £34.20 (3.42%). These charges are similar to those that a small business would pay were they to do credit card processing via their bank in the UK but somewhat higher than the typical 0.75% for banks in France.

From these figures you’ll see that it’s best to use paypal for deposits. That way a typical 25% deposit will effectively cost you under 1% of the total bill for paypal processing.

You could use paypal to accept all payments but you would need your bookings to be paid 100% in advance to do that as you can’t easily use the paypal system to make on the spot payments (if you really have to you can do it by having the guest logging in using your Internet access and making the payment). So, if you want to accept all payments by card, then you need to get the little credit card machine.

To get a credit card machine setup you need to have a business bank account and, in most cases, have had it for six months although for B&B and self-catering properties the bank will normally waive the six months requirement. In France, you’ll need to be registered and provide your KBIS.

Costs for this vary a lot. You can buy your own machine but they’re rather expensive (typically £300/£500) and therefore most people rent them from the bank (around £20/£30 per month). In most cases you’re better to opt for a fixed installation as the portable terminals can cost 50% more. Other things to consider are which cards you’ll accept. Normally Visa/Mastercard are sufficient (and will include Visa Electron and Maestro). American Express is becoming more popular but is usually more expensive than other cards. If you get a lot of Japanese then it’s probably worthwhile taking JCB. You can even accept various storecards but unless you’re in a shopping centre it’s probably not going to be worth the extra expense.

How do you do it? Open a business bank account then apply for the credit card facility at your bank.

One thing to watch is that you will need Customer Not Present enabled. This lets you charge cards without having the credit card in your hand. You’ll need this to take deposits.

Is it worthwhile doing though? Yes, it is. Sure it will cost you more but you can take that into account in your pricing. If you assume that a credit card payment will cost you 4% then adding as little as 2% to your prices will pay for it all in that not everyone will pay by card and many of those that do will use a debit card which’ll cost you less. So, if you’re charging £50/night that equates to adding £1 to your charges. Incidently, don’t try adding that £1 only to credit card customers as you’ll just end up driving them away.

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We’ve all seen how bad the global economy is at the moment and unfortunately for us in the travel trade, it’s likely to be one of the sectors that’ll be hardest hit in the year to come.

Why’s that? Basically because holiday expenditure is what economists call “distretionary spending” ie people don’t have to go on holiday. When money is tight, then discretionary spending is the first area to take a hit.

Thus we can expect that people will be taking fewer holidays in the coming year and those that they do take will be cheaper eg shorter, to lower cost destinations or to cheaper properties. How hard it’ll hit you depends a lot on the profile of your property and how you market it but it’ll almost certainly hit you.

On the assumption that it will hit, what can you do about it? First off, forget about increasing prices in the coming year; if anything you should reduce them or at least add additional services at the same cost.

Secondly, you should attempt to diversify your income if possible. For example, if it’s possible to close your place for part of the year and work somewhere else, then look into that possibility. This option is dependant on the profile of your revenue throughout the year eg in our case, we get about 2/3rds of our annual income in July and August therefore it may be more profitable if we were to work somewere else for the remainder of the year.

Thirdly, you should aim to maximise the income from the guests that you do get. You can do this through offering additional chargeable services and encouraging them to make use of the existing chargeable services that you do offer. For example, a B&B can push their evening meals more, others can encourage the use of car rental and the like via their website.

Finally, look to minimise the expenses incurred in running your place. Don’t do this at the expense of quality though as that’ll only serve to damage the reputation of your business. For example, over the winter if you concentrate any guests in a limited number of rooms then you can reduce your heating costs considerably.

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Perhaps the most obvious assumption they make is that Wendy is Superwoman.

Contrary to the received wisdom of guests, it’s not actually possible to remake rooms the instant that the previous guests vacate them. Even if we dropped everything the moment a guest walked out the door it usually takes 30 minutes or so to prepare a room for the next guest. We have a relatively early checkin time of 3pm but others are as late as 6pm but the time from check out to check in is there to enable the owners to prepare the rooms for the next guests. A checkout time of 11am definitely doesn’t mean that you can check in from 11am too!

Of course, we are rarely in the position to drop everything anyway as we’re generally keeping the breakfast room running first thing, checking out guests, clearing up the breakfast room and checking to see if there have been any more bookings during the night. Therefore, it’s generally into lunchtime before we have most of the rooms ready.

Related to this, there is sometimes the assumption that the owners are 100% available to each and every guest. This falls down because there are more guests than there are of us and therefore we can’t be working constantly with one guest to the exclusion of all the others. Most of the time that’s fine but since we don’t have a 1:1 staff to guest ratio on (fairly) rare occasions it doesn’t when several guests want our undivided attention at the same time.

Then there’s the assumption that because we live on the premises, we’re available 24 hours a day. That one falls down because, unlike Superwoman, we need to sleep and therefore we don’t run a 24 hour reception and neither do we serve food at all hours of the day. Yet despite that we have received complaints that we wouldn’t do breakfast at 5am, that we wouldn’t spend 2 hours ferrying people to the train at 6am and that we went to bed before 2am. Clearly, there’s some flexibility in our opening hours but not to the extent that we can constantly stay open well after midnight whilst reopening for breakfast before 6am.

Then there is the assumption that because they have paid for a breakfast that everything is theirs. For example, we reuse unused jams to reduce the cost of providing the breakfast and we also don’t buy enough baguettes to enable guests to make up sandwiches for their lunch. If we were trying to cover the takeaway lunch as well we’d need to increase the breakfast price at least 50%.

There’s also the assumption that no matter how large the booking is, it’s still possible to cancel as though you were cancelling a one night booking. Group bookings are very different affairs to normal ones and it’s rarely possible to rebook the rooms that a large group leave if they cancel early and therefore different charging rules often apply.

Perhaps most interesting is the assumption that you can book on one website because the price is lower but take the advantages of the better conditions listed on another site. Thus we get people booking through systems which cost us 15% commission plus VAT whilst simultaneously looking for the 10% discount that they’d get had they booked directly with us.

Naturally, accommodation owners are all mind readers and/or fortune tellers. Somehow we are supposed to magically know how a guest will be coming, which plane or train they’ll be taking and when they’ll be getting here. Some guests have even discovered facilities to book meals on websites which are hidden to normal mortals yet oddly these facilities don’t seem to reveal to them the times that we’re open for meals.

Finally, there is the assumption that “if it’s not nailed down, it’s to take away”. We spend quite a while preparing a guidebook which we place in each room yet now and again we get people attempting to walk away with the whole thing. Similarly, we pretty much ran out of teaspoons and hand towels over the last year which, in large businesses would be called wastage, but which we call theft. Perhaps most peculiar in this area was one couple who between them managed to get through 28 toilet rolls in a week; quite how they managed to pack them all in their cases is beyond us to this day.

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