AN OCCASIONAL SEMINAR - NOT QUITE READY TO RETIRE?
It is now over fifteen years since we made the fateful (yet delightful) decision to run an Inn in paradise, Costa Rica - our Pura Vida Hotel. Our only regret was “why didn’t we do it sooner?” So this article and the 1/2 day seminar it relates to are intended to help the would-be Costa Rican Innkeeper get started on their dream.
First here's some reasons why we chose the country - at least in this article from International Living, Costa Rica makes a whole bunch of sense in this weird world we live in. And the water is fit to drink everywhere you go.
The following is a summary of a seminar I now give periodically to people who have a specific interest in moving to Costa Rica AND who are considering opening a B&B or Inn but are not sure what they may face making it work in Costa Rica.
SO YOU WANNA BE A COSTA RICAN INNKEEPER?"
“The work never seems to be done, you are plagued by phone interruptions, sporadic eating patterns, late night arrivals, a water heater that burns out when the Inn is full, the travel writer who arrives unannounced when the septic tank is being pumped” from “So You Want To Be An Innkeeper”.
So why would ANYONE want to do it AND move to Costa Rica and collide head on with a different culture in a language you don’t understand?? There are so many questions that perplex an aspiring Innkeeper (or an old hand moving to Costa Rica). PAII has a good list and we had many specially for the local environment:
- What government agencies do I need to get started?
- How can I find a manager/assistant innkeeper?
- I keep getting bills from this international guidebook. Do I need to pay? (nope, ignore them)
- Where/how should I be marketing on the Internet?
- What should I pay my staff?
- A staff member is stealing from me, what do I do? What is the process to fire an employee?
- Should I add a dinner service?
- Should I work with travel agencies?
- Do I need ICT? (national tourism board)
- How do I find a good plumber? (there are none, it's better if your Inn is 1 story).
These are just a few questions that baffle some new Innkeepers anywhere on the planet. I will try my best in this seminar to separate out the specific questions and issues that a budding Innkeeper in Costa Rica is going to face
LOOKING FOR THE INNKEEPER, LOOKING FOR THE INN
Who makes a good Innkeeper? We have met 100’s of Innkeepers from 100’s of previous careers and there is no single answer but there are characteristics that you can bring to the table that will be critical to your success in this “business”.
For a multitude of laughs you must start by reading Herman Wouk’s hilarious tale of Innkeeping in the Caribbean – “Don’t Stop the Carnival”. From the chapter titled “The Quake”:
“ . . . On his first week of Caribbean hotel-keeping, Norman Paperman had netted thirty seven dollars and forty cents. There were reasons for this shocking figure to be sure. The payroll was large: cooks, maids, waitresses, steel band, and gardener: none of them were paid much but it added up to a lot. There had been the terrible water purchase. Money had to be set aside for the bank; and this he would have to do for some 300 weeks to pay off the loan and the notes. The revenue from the new units was supposed to balance off this drain, but they remained unbuilt. The game room stood open to wind, moon, rain and sun, undisturbed by human hands (for weeks). Bids to complete the job had come in. The range of prices was imbecile. The low bid was $1500 the high was $21,000. Collectively the (local) contractors seemed to have as much reliability as a flock of migrant birds, and little more knowledge of construction.”
It is important to understand that Herman Wouk’s character runs into FAR fewer problems than you will. The first and most important thing is to recognize is that this new career of yours CAN be a 24 hour shift and it is SO much easier to handle if you have a partner. We know of many single Innkeepers but I would suggest they have some very very hard days they don’t want to talk about.
The second thing you need will be a high degree of patience and tolerance combined with the ability to enjoy interacting with strangers at 5pm AND 5am. If this is a new move to Costa Rica, the first year will leave your patience wearing thin if all you want to do is sit on a beach and drink Mai Tais. If you are an Innkeeper AND you don’t speak Spanish your patience will be strained to the limit. In fact don’t even bother if one of the couple does not have some language skill!
If you think you can make it past those speed bumps, it is time to consider researching the market and pondering locations for your B&B. This takes some travel around the country – when we moved I had already been here maybe 8 times and had a good sense of coastal vs central valley vs forest issues. I understood something about city vs country issues and in particular the challenges of access to infrastructure in a developing country.
For example healthcare is available everywhere at very low cost but the village clinic in the Zona Sur (southern Costa Rica on the Pacific side) is no place for complicated issues.
One issue many miss is the absolute need to understand your community. I’d ask the question “where is grandma?” If the community you are thinking of moving to has no social fabric, has no generations of individuals living in the neighborhood you may be in for a rough time. Where is grandma? In some areas an active civic or business association such as exists in some beach towns is critical for the future of that community (do you really want a 10 story condo to dwarf your cute little Inn in 5 years?).
Once you have found the ideal location and a great Inn for sale, can you rent it or run it for a few months for the existing owner? This would be ideal! Better can you run the Inn for a month or two during Semana Santa or Christmas as a renter when the strangest things happen in some villages?
BED AND BREAKFAST OR AN INN?
This big question boils down to decisions you can make about doing dinner and a 6am to 11pm operation. And another big factor is that Inn management is quite different from 1 to 3 rooms, from 1 to 10 rooms and from 10 to 30 rooms.
As we both like to eat (and cook) we decided to call ourselves an Inn and do a nice dinner with advance reservations. For us that is both a lifestyle issue, a successful revenue generator and a way to gain a reputation for our Inn beyond the modest concrete and bedding of the lodging we market to guests.
But what is An Inn? I compiled the following definitions from “So you want to be an Innkeeper” and various sources and modified them for the reality in Costa Rica.
HOMESTAY, HOST HOME
This type of establishment is an owner-occupied private home where the business of paying guests is secondary to its use as a private residence. Hosts are primarily interested in meeting new people while continuing their present employment or retirement. These are usually between 1-3 rooms. Breakfast is the only meal served. These are often associated with language schools in Costa Rica.
B&B, BED AND BREAKFAST, INN
Formerly a single family dwelling usually in the 4-5-room range but may be larger, this owner-occupied establishment is both a home and lodging. This establishment advertises publicly and posts a sign. Breakfast is the only meal served and only to overnight guests. The often-bigger B&B Inn may host events such as weddings, small business meetings, etc. Room numbers of the B&B Inn range from 4-20.
A property or building with individual rooms with private and/or shared baths. A central meeting area is available for lectures or gatherings. Three meals are included or there is a restaurant on/near the premises. May also include Cottages or Cabins, usually in a rustic/rural setting and found throughout jungle areas of Costa Rica – you’ll know it when they describe the accommodations as “rustic”.
The Inn offers overnight lodging and meals, the owner is actively involved in daily operations, usually living on site. These establishments are, in fact, B&B Inns, which serve at least one meal in addition to breakfast, and operate as "restaurants" as well as overnight lodging accommodations. A country inn with a full-service restaurant serves these additional meals to the general public. The number of rooms tends to range from 6 to 30.
ACQUIRING AN INN
This question demands more than we have space for in a short essay. I advise reading all the books in the section called “Moving Here” books on our web site
You will have legal, setup, insurance and other concerns and our advice is simply to find a damn good lawyer. We went through 4 (count em 4) in our first week here. We ran into lots of unexpected issues in the process such as previous owner terminates all employees and all are rehired on take possession day 1. Did we mention the fun and games with Costa Rican banks? Did you know there are no escrow services here? How about no addresses and no mail per se?
The details are beyond the scope of this so sign up for a seminar (best to do that with a list of YOUR questions).
THE BUSINESS PLAN
A business plan is a vital step in any business but few Innkeepers do one? I think that is NUTS! On request I can provide an outline of the plan we used. As my background includes a lot of marketing, I do emphasize the marketing aspects of this business. It is MUCH harder to build it and hope guests will come! Many Innkeepers sit there bemoaning their competition when in fact they are their worst competition. The business plan needs to address both what you want to do and how to make that happen as well as what you don’t want to do (to avoid wasting valuable time on dead issues you already decided against). I also urge you to spend time with your staff on the outline of the plan so everyone is in some degree of sync as you get started.
EARLY INNKEEPER ISSUES - YOUR BREAKFAST IS CRAP
What do you want your Inn to "say" to guests. This is the biggest question you must ask. What is "THE BIG IDEA” - “family”, “romantic getaway (adult)”, “backpacker/budget”, “jungle Lodge”, “Holiday Inn”? Once you can answer that question you can start writing your web site text, your brochure and answer guests emails in such a way that the right person finds you AND enjoys the experience. This “theme” of guest type must permeate every aspect of the hotel and how you market it.
Now you must plan your next 3 years. We chose an “internal goal” called “Quality over time”. We made a 1 year and 3 year development plan and budget to try to improve the quality of EVERYTHING over time. We did not have much extra capital so we could not just knock down buildings or make new ones. We had to remodel and we have been doing that every day since.
Costa Rica has a very specific high season vs green season. Some Innkeepers can go close to bankrupt in their first green season as they sit EMPTY September and October paying bills they hadn’t planned for. You need to market for the green season 6 months or better a year ahead not IN September. One adage a fellow Innkeeper likes to say is simply “Think Green Season and the rest of the year takes care of itself!”.
Contracting and construction tales – we have SO many. No advice can prepare you for the challenges and only patience and careful management will help. Everything that can go wrong did. As an example we went through 6 electricians before we found a good one. Lately we got rid of him too!
What about public spaces, disabled accommodations and can you do a green hotel? What things can you take a lead role in or be proactive in? So many issues in the beginning! You can get to them over time, you CANNOT get to guest satisfaction over time!
Food & beverage service is a big issue for an Innkeeper yet some think of it as a mere afterthought. There are breakfast issues and dinner concerns.
We got lucky for example when an Innkeeper friend dropped by early in our Innkeeping career and declared categorically “your breakfast is crap”. Guests were far too polite to tell us that our reiteration of the former owner’s breakfast service was no good. We quickly changed EVERYTHING and now get rave reviews for presentation, quality, and breakfast cakes and so on.
Do you have what it takes to do dinner service? This can be a grueling experience or a wonderful revenue generator. It cannot be done if you are to be a single Innkeeper, it should not be done if one of the Innkeepers is not a great cook. See “Marketing the Inn” below.
About those amenities - what makes the difference in "This Costa Rican Inn”? Amenities add value and increase revenue for a usually non capital investment. So you need to look at the cost vs return of a phone, a TV, a new shower head, a luggage rack, a reading light, coffee in room, refrigerator, landscaping, secure parking and more. If you add a refrigerator in the room can you add $5 to the room rate? You can’t imagine the compliments our reading lights over the beds have received.
We spent thousands of $$$ remodeling our Mariposa Casita. It is our best yet and at a certain occupancy level we are confident in, will pay back in about 1 year. There are no investments that you make that pay back in a year that you should not do! A simple decision.
New Innkeepers are faced with a big problem in Costa Rica called “Suppliers”. For a year we looked for soap dispenser for showers – we are not in Kansas anymore! You need to think as local as possible for supplies and support but it does not always work – we have friends now at two local hotels so we call them periodically to shoot the breeze or exchange ideas or suppliers. Same thing for local hiring – 100% of our staff are local referrals.
Many newbies to Costa Rica think they have some credit for their previous work or previous good credit. Most that arrive here are however like newborns and that’s all the credit you get at Banco Nacional. Heavy credit does not work in Costa Rica. And it is useless with a small business like an Inn. We do NOT advise taking on any credit load here. We thought it is far better to start small and grow over time. But your circumstances will be yours alone.
MARKETING THE INN
Who is your market? Is it the general public or travel agents? Travel agents usually do not work well for small Inns with specific amenities and limited resources.
How can you focus by region e.g. North America or “German speakers” or better still even narrower such as “teachers with groups of students from the west coast”?
What type of guest do you want – middle aged well off couples, backpackers, Innkeepers, ornithologists, families, weddings? Everything you do MUST now focus on one or two guest types. You cannot be all things to all people and your Inn ratings will suffer if you try.
What about occupancy? 10%, 30%, 50% any one can be success or failure - what is occupancy? You start with the premise that an empty room is dead inventory and work up from there. In our seminar we answer questions on how to optimize your occupancy without messing your rates up and undercutting yourself.
What about setting rates? What are the rates in the area (visit as many small similar hotels as you can now and always). What are the competitive issues e.g. “airport shuttle included!”.
What about the average revenue per room? It is far cheaper to market extras than to build a new room but what can you sell that YOUR kinds of guests have a real NEED for? In the seminar we examine % of closes to inquiries - if 50% today, what moves it to 60% in a month, revenue per close, length of stay, sales of tours, things the guest can do in your area, guest promotions etc and various things to increase your room occupancy, number of days and revenue per room.
What about a name/a logo/a brand? Gotta do it and if guests can remember you it will be easier to get your referrals coming in in the future. Don’t use a name nobody can pronounce or is too long – your name MUST be the same as your URL. This is why the Pura Vida Hotel has a URL of PuraVidaHotel.com!
What about a brochure? Some think of it as an afterthought but think of new things you can do with a brochure, how it should be designed for best effect, where and how it will be displayed etc. Our brochure design for example has only one purpose - "to find people who need a place to stay on their last night." We send it only to other hotels in the country :-))
What about a Web site? We recommend someone who has done a bunch of CR Innkeeper web sites (although we made our own web site). You should get familiar with web editor once your initial design is done and be committed to building out content over time. Web marketing can cost you a bundle but there are a few things you can do yourself at minimal to no cost – we examine these in the seminar. You must be in charge of and be able to develop your own content (regularly).
How do you get the word out? Most people think of travel agents first – we say maybe/maybe not! Actually we sya they don't work at all for us. Their commissions are high and, in the beginning, you may be willing to give up some control and some revenue to get occupancy and ratings? What about tour operators? They do not work for a small Inn, sorry. Big winners are guide books and travel forums as well as sites such as TripAdvisor.com, facebook etc. At our seminar we can go over the many ways to use these sites and tools to help market your Inn.
At the seminar we will discuss the 4 best marketing ideas in Costa Rica (from Pura Vida Hotel - everyone else's will be different!). By best we mean those that meet two criteria – an increase in bookings and an improvement in perception of the hotel and its services from 4000 miles away.
THE GUEST EXPERIENCE
This is what an Inn is really all about and you need to work EVERY detail.
The Pre – Arrival for example needs to weed out smokers and solve transportation questions before they are even asked if possible. I think of it as the mental taste buds needing some preparation so that the right guest experience happens almost effortlessly (at least that’s what the guest should experience). And your “Welcome” at 6am or at midnight – must always be “welcome”.
The Room must always ready even if you have no reservation – fortunately we live in a country of perpetual fresh flowers. How do you say "yes" to guests every request? Our staff understands and has been trained that YES is the right response (the occasional havoc this causes far outweighs guest attitude to the alternative response).
You need to think of every interaction – for example the simple idea that staff (who meet guests) need to introduce themselves and say hi in whatever language they are comfortable with. Even the exit needs to be thought of including how to ensure feedback & how you or your staff responds.
You will meet our staff at the seminar and feel free to ask them for their perspective on what the guest experience should be at Pura Vida. Hotel.
This is a huge topic so, for this introduction, I’m just going to include some of the elements we deal with that make up the smooth running of our Inn. Each Inn will have some additional ones and we can cover them in a seminar:
- Make a list of what you LIKE to do and hope your partner can do the rest - your partner needs to make up for all your defects and you theirs
- Innkeeping can be a 24 hour shift (only 16 hours if no restaurant) - single owners need a great manager on site
- Staffing determines success – issues include hiring, costs, the Caja (social welfare/healthcare system), job descriptions. Hire the best you can afford, do not skimp on staffing but take action when they fail to perform. Wages, 6 month raises, 13th month pay, vacations, holidays etc – we will go over hiring and development practices at the seminar.
- Security and strategies on how to avoid internal and external losses. The bigger the property, the more accessible the property, the more things will disappear. Testing your security from inside and from outside. The balance of a public space and Fort Knox
- Reservations - examples of good and bad reservations tools. Email is vital - samples of what we use at Pura Vida Hotel. A good reservations log is essential as electricity is not a given in CR
- What to do when you are not there – how to run on 1/2 speed not 0 speed
- . . . and other stuff like backup systems, overflow & working with local Hotels, build relationships in the neighborhood, the bill - cash, credit cards, taxes etc
YOUR VILLAGE AND YOU
There are two good reasons for community involvement (probably more). You will decide what yours are. Ours include the simple idea that working with our local public school is likely to have more positive effects on our future neighborhood than any one thing we can do. The other is that when the weird occurs, you’ll need to be one with your community.
How can you get involved - paint a schoolroom, assist your local police, show up at fund raisers, pay the little kids for whatever it is they are selling (then donate the ticket), install trash bins or bus shelters, participate in a neighborhood watch etc. In our case we are active at our local public school and have begged and cajoled every guest who comes here to donate books to the school library – many 1000's of books now.
Most Innkeepers we know are active in their community in some way unique to them or their skills or the needs of the neighborhood.
TO CONCLUDE - TAKE A LOT OF BREAKS :-))
We have made a business that is also our lifestyle - it allows us down time when we want it and travel in country and overseas as we like. But this is not the easiest of jobs to do in a tropical country or anywhere else. It is harder in a country that is less developed and in areas where suppliers and contractors are thin to non-existent such as the Osa peninsular in the southern zone of Costa Rica. Due to such challenges, we think it is critical to maintain the owner’s health and sanity. To conclude here are things we like to do as well as some tips from other Innkeepers:
- balance work and play - block a day a week or run low for a few days (take a break!)
- take exercise and have an outside hobby or passion (maybe something that indirectly assists the Inn e.g. photography, cooking, underwater hockey - a break!)
- travel to other hotels for their ideas (take another break! We try to do one of these each month.)
- feel good about hospitality - or you will go nuts or be driven to drink or both
- run a professional operation (less things to go wrong, build process that stands alone so you can take yet another break!)
There are many good days . . . from Herman Wouk’s “Don’t Stop the Carnival” again:
“The cistern was repaired. The dance terrace was tiled over and the railing was repaired. The pump was working. There was plenty of water, and electricity was restored in all rooms. The maids were back on the job. The lobby was straightened up, shining and clean. All this was the doing of Hippolyte Lamartine and his strange crew.”
A FEW MORE INNKEEPER SECRETS
. . . will be included in your seminar or just come visit and chat about the joys of tropical Innkeeping with any of us who took the plunge here in Costa Rica. And don’t forget to take a break every now and again and explore this wonderful country we now call home (and work).