Twitter for Bed and Breakfasts 3.0

Here is the third installment of my exploration of the world of Twitter (the “Twitterverse”). My Twitter ID is @InnConsultant. Follow me if you like what I am saying.

In Part I and Part II, I discussed how I first got into Social Media, and how I got hooked on it. I found it a really good way to get good returns marketing small businesses like Bed and Breakfast Inns. It truly compliments all of the time and effort that you put into having a really good blog, by providing effective advertising for all of your new blog posts. Here are my thoughts after a few months on Twitter.

First, as I stated in earlier posts, there is a real etiquette to Twitter. People will stop following you if your tweets are just ho hum! This is an information sharing concept, so if all you are doing is trying to sell, sell, sell, they will turn you off. What people want to know is who you are and what you really think about things. In other words, why are you “interesting” enough to follow? At the present time, I am amazed to find that I have over 230 really diverse people who follow me, and I am following more than that. I am not really trying to drum up followers now, they seem to just find me. Most of them are interested in travel and hospitality, which of course is what I am all about. So I seem to be getting people to follow me that share my interests. And that is the whole purpose of this effort.

So, I don’t try to sell anything to anyone. I am also very careful about my on-line reputation, so I don’t rant and rave (even when I feel like doing so!). I comment frequently about other people’s tweets, either retweeting (“RT”) or replying (“@” ____). Sometimes, I send someone a private message (“DM”) where what I have to say is either personal or not something of interest to the world of followers. What I try to do is to share information about things that I am interested in and provoke thoughtful conversations about those things. What I am really doing is trying to show people who I am and why they should listen to what I am saying. I am learning about other people who I follow and who both share my interests and are interesting people. One thing is for sure. I have come to really admire some of the people that I have “met” on Twitter, without really ever seeing or hearing them. What an amazing thing!

Another interesting thing is the local nature of Twitter. Following people in your community or state is a good way to build up a reputation or persona on Twitter. This translates into a whole new world of networking, especially in the on-line community of people who are practicing Social Media on a daily basis as part of their jobs. I have found a whole group of people twittering away in and around Portland, Maine, who are great sharers of information about social media and how it works best.

Now the business part of the equation. People who are interested in who you are also are interested in what you do. Your followers want to know what differentiates what you do from what others do, and why that makes you interesting? So if you have the best Bed and Breakfast Inn in the World, Country, State or even just your local city or town, you can show people (like your guests or prospective guests) why they should come to stay at your Inn as opposed to going elsewhere. Now how do you do this?

Like all marketing advice, the main idea of differentiation is to tell who you are clearly and convincingly, and what makes you different than all of the others. The tough part in Twitter is that you only have 140 characters to provoke an image to the readers (i.e. the World). While this requires some thought, not all images need big and long trains of words. A quick pop about those amazing thick and tangy, fresh Maine blueberry pancakes you served at breakfast may be enough to tweet a great image to your followers. If you have fantastic restaurants and wine nearby, tell people about the great meal you had there (i.e. what you had not just that it was good). Tell them about all of the festivals and doings in your local area, so that they get a feel about why they should come. Convey a thought image in just a few words. This is quite different that just announcing a reduction in price to try to get people to come. What is happening is that you are describing what your Inn is all about, and why they should come to see you as the Innkeeper. You are really invoking a feeling in the reader. If they get the sense that you are a good and interesting person, then that is most of the battle right there.

So, give it a try. We keep hearing about all of the success stories of Inns on Twitter. If you don’t believe me yet, try following @HoptonHouseBnb. Karen Thorne, from Shropshire, UK, is probably the most Social Media savvy Innkeeper I have ever seen (or is that “heard”). Look at what she does on Twitter, and you will find a perfect role model for your Tweets. What are you waiting for?

Reputation Management for Bed and Breakfast Inns

There is a new concept in the world of Internet Social Media. “Reputation Management” is essentially the ability to deal with the consumer generated reviews and comments about your Inn business posted throughout the Internet. There are now hundreds of web sites allowing consumers (i.e. your guests) to post comments about how they perceive your Inn and the experience that they had while there. How many Innkeepers have been hurt, embarrassed, upset, angry, and just plain pissed-off about an unfair review on TripAdvisor? Well, now is the time to think about how you best can deal with these issues. They are not going to go away, and the comments on TripAdvisor and the other review sites can have a dramatic impact on future web-based reservations. This means business, and you need to treat this as a serious concern.

The first issue is really the essential one. How can you prevent a bad review from happening? Not possible is what most will say; eventually it will happen to you. However, perhaps prevention is the best advice. That gets us back to good old hospitality and superior service. The people at TripAdvisor told us at PAII that most adverse comments are really about the Innkeepers. Either they were grouchy, touchy, angry, or the like, or they were not present when guests had issues that were important to them. If it is all about the Innkeepers, then perhaps prevention can happen before a complaint is broadcast to the universe. Also, many bad reviews are about Innkeepers rigidly sticking to their policies, particularly their cancellation policies. In this connected world, it just may be good business to waive a cancellation penalty rather than go through the difficulties surrounding a bad review. We know of one very smart Innkeeper who has been at it for over 20 years without any kind of policies (no deposits, no cancellation fees, and money back for whatever reason if the guest is not happy with the Inn). In the long run, this may be the best policy for an Inn.

The next step is to make sure that you have the opportunity to intervene if there is a problem before the guest leaves. It just may not be sufficient to ask the guest at check-out if everything was OK with their stay. That question is better said the other way around, such as “Is there anything we could have done to make your stay better?” It is hard to get guests to tell you what you need to hear, especially when they are trying to check-out and anxious to get home. Comment cards no longer seem to work, because the guest perceives that it may be a waste of their time. Those guests that had a bad experience often find the anonymity of the Internet the perfect setting to wail away at the perceived treatment that they got at the Inn. Intervening at check-out, or better yet at breakfast before they leave, may be the better choice. At that point, if they are unhappy, you can take direct action to explain your side, and to try to resolve the issue before it becomes everyone’s issue. Also, you need to have a clear policy as to what to do with a guest who just did not have a good experience. It may not matter whose fault that was, but you need to do something about it. This may mean that you may have to give that guest something of value, particularly if it was the fault of the Inn and it was a serious issue.

Here is another suggestion that was a topic of discussion at PAII. Some really thoughtful Innkeepers mentioned that a follow-up email to all of the guests a week or so after they left was a really good opportunity to communicate. One Innkeeper even stated that they do two email follow-ups, one on check-out asking if they could have done anything better for the guest, and the second answering any responses to the first one. If the response is good, the Innkeeper will suggest a few websites like TripAdvisor where the guest could leave a hopefully positive comment. Where the response is bad, the Innkeeper would then take prompt action to try to remedy the problem before an adverse review is posted.

The next step is for Innkeepers to constantly monitor what the world is saying about them and their Inn. This is not as difficult as it seems. TripAdvisor has a service to email al reviews to the Innkeeper. There are meta search websites like Google Alerts and Technorati, which will also constantly search the web for mentions of keywords and advise you if there are any mentions. It is absolutely essential that you know immediately when a bad review occurs so that you can deal with it right away.

Finally, sites like TripAdvisor provide Innkeepers the opportunity to respond directly to a review by posting a management response. This is a really critical aspect of Reputation Management which should be done promptly and dispassionately. In other words, tell it like it is from the Inn’s standpoint, and hopefully the public will understand that not all issues reflect badly on the Inn. TripAdvisor stated at PAII that often a management response is very helpful to the Inn and can overcome a bad review with reason and particularly with a warm and frank answer. This is the hard part, because we all know how hurtful a bad review can feel to an Innkeeper.

This is a brand new world that will take time away from Innkeepers who do not really have time to spare. Our thought is that this area is going to become very important to all types of businesses, especially those in the hospitality world. It is not going to go away, and you need to gear up to handle these issues. We are currently developing an internet based consulting service to assist Bed and Breakfast Inns to handle the many issues present in Reputation Management. Let us have your thoughts about what type of service may be helpful to you.

Twitter for Bed and Breakfasts 2.0

Here is Part II of my exploration of the world of Twitter. I have been tweeting now for about two weeks, and have about 120 people actually following what I am saying on this incredible social media. It amazes me how fast this has grown for me from a peek at a new marketing channel to a full blown way to spread the word about what we do at Quantum Hospitality. More important, I have found so many really interesting people in the Twitterverse to follow. They are writing short notes (140 characters only) about anything and everything of interest to them. Here are my continuing observations about this exploding device.

In last weeks blog article, I described in general how Twitter works, but the simplicity of sending out very short messages belies the fact that a tremendous amount of information is being spiraled around the Internet in this fashion. By using one of many free services to shorten URLs, Tweeters are including references to blog articles and other websites within their Tweets. Once received, each person, if the information is deemed worthy, can then “Retweet” this information to his or her list of followers with a comment. It is this Retweet phenomenon which is the essence of viral marketing. It keeps the message circulating, growing and growing the number of people who ultimately see it. Just think of the possibilities. Imagine your Special Package description gets Tweeted to your friends (presumably your guests) who then spread the word to all their friends, who then send it to all of their friends, and so on. . . . This is the essence of the concept of Repeats and Referral, the two most important kinds of guests and prospective guests a Bed and Breakfast can have. In essence, the marketing potential of Twitter is endless.

Now, does it work? First, there is an etiquette happening as well. If all that you talk about on Twitter is your business, your Twitter followers (i.e. your “friends”) will likely stop listening to what you say. This is a social media after all! They want to know you as a person as well as a business. Here is where all your Innkeeper hospitality comes into play. You can spend a good deal of time on Twitter talking about what is going on at the Inn. It can be as simple as a description of that fabulous breakfast that you just fed to your guests, a description of one of your best guest rooms, or a short note about what is happening in your neck of the woods this weekend. Pictures work great on Twitter, with a Flicr account and a shortened URL, you can include great photos in your Tweets. Again the marketing potential is limitless. The key is to convey the wonderful ambiance of your Inn in 140 characters. That is the Zen of it all.

So the overall answer to the question “does it work?” is a resounding yes! What amazes me is that there are so many bed and breakfasts out there, but only a relative few have caught on to Twitter. This is a missed opportunity. Right now, it appears that the overwhelming number of people on the Twitter channel are people who are into social media as a business. The bloggers and web developers are all there. Also, you will find every form of self help and technical gurus there, as well as some really smart people who just want to learn about the anything and everything of it all. These people are basically your guests or prospective guests.

So what is the first step after signing up for Twitter? You need to get a following that wants to hear your messages. What better way than to put out the word to your guest list that you are now on Twitter. Put the Twitter link on your website, and send an email notice to your guest list with your Twitter ID. Ask them to follow you. Make sure you have the link in all your marketing pieces and newsletters. Set a goal to get a good number of your guest list into following you on Twitter.

Once you have guests following you on Twitter, you can then have a look at who they are following and who is following them. You can elect to follow anyone who is interesting to you (i.e. a potential guest). If you follow someone, they get an email from Twitter advising them that you are now following them. Usually, they will look you up on Twitter, and if it interests them, they can elect to follow you back. This is the social networking feature of Twitter, and it allows you to expand your friends and make new ones. Many, many Tweople have thousands and thousands of followers on Twitter. It is word of mouth at its highest level.

So my advice is “what are you waiting for?” Get going and Twitter on. . . .

Twitter 1.0 for Bed and Breakfasts

This is my first week as part of the Tweople in the Twitterverse. I am trying to discover if Twitter, the new explosion in the Social Media World, is worthy of the time. Is it something that can help Innkeepers connect to their guests and build loyal travelers? My initial conclusion is a resounding Tweet YES!

First, let’s define the process. Twitter is a free Social Media website that asks the simple question “what are you doing?” You have 140 characters to describe anything that you want. Sort of a brief haiku of what is going on in your head. A posting is called a “tweet,” and it goes out to all of the people who have signed up to follow your postings (they are called “followers”). You, in turn, receive tweets from all of the persons that you are following (i.e. your friends), hence the social nature of this new media. That is pretty simple in concept. What it is in reality is like a nuclear bomb on the web. Millions of people are all atwitter about themselves. Here is my own experience over the last week or so.

After I set up the account a few months ago, I shot off a couple of tweets about things that were bothering me, like the new LL Bean credit card. I stopped after a bit, because I wasn’t sure whether anyone was listening to my rants. I just did not get what this was all about. Well in fact, there were at least 8 people in the Twitterverse that must have felt the same way about LL Bean, because they signed up to follow the stuff that I was putting out. I didn’t do anything else, but they seemed to hang in there with me.

Last week, after the mighty Wall Street Journal said that Twitter was hot stuff, I decided to explore this further. What I found just staggered me! First, there are an absolutely amazing number of very interesting people who are talking to the world on Twitter. By doing a search of interests or subjects or anything else you can think of, you start to see the profiles (picture, website, and short bio) of vast numbers of people. By clicking a button, you add them to your “following” list, and, low and behold, some of them look at your profile and decide that you might be worthy of following. Basic networking is then happening, and the more you follow, the more that follow you in return. Then comes a daily stream of tweets about anything and everything, but you can look at what comes in and cull the interesting from those that you really don’t want to read. There is an etiquette to Twitter as well, and clearly if you tweet too much during the day without a whole lot of content and interesting stuff, then your followers are going to turn you off (remove you from their following list). Sort of like immediate feedback about your worthiness. The most “interesting people” are tweeting about things that they have found on the web, and include a URL in their tweet. Other software companies have even set up websites to compress the URL’s into tiny links so that they fit into the rest of the 140 characters that you have to tweet with. So, what is happening is that Twitter becomes an amazing information sharing tool that starts from a very simple premise, but unleashes the power of the Internet to get worthy information to you.

Yesterday, I added a tool called Twhirl that sits on my desktop and monitors the tweets that come in from those who I am following. It has all of the functionality of the Twitter website, and even some great tools like compressing URLs and filtering tweets. It signals each tweet as it arrives. There are numerous tools for Twitter, and I haven’t even scratched the surface of the amazing world of add-ons to make the process better. While the search feature in Twitter is good, there are third market search engines that are incredible in their ability to dig out of the Twitterverse those people who might be relevant to you and your business.

Now let’s talk about electronic marketing for Innkeepers. What most of these interesting people are doing on Twitter is promoting themselves or their products or their blogs or their websites. By creating a group of people who follow them, they are engaging their customers and those people who might be interested in their products or services. So they are setting up a network of people to talk with who might be their customers in the future. Now the tough part. Since this is a social media, the pitch may not be as direct as “I would like you to buy my product.” This is about people, and remember the premise is “what are you doing?” Perhaps you are writing a blog article about a great event to take place near your Inn. You could then tweet what you are doing along with a link to that blog posting. Or you could simply tweet about what his going on at the Inn or anything that makes you more human and likable to your guests and potential future guests. The subjects are unlimited. There are a huge contingent of people on Twitter interested in travel. That is because they first are interesting, very savvy, and literate people. These interesting people like to travel. How do I know this? It is simply because you selected them yourself to follow, and, by their selection, your followers are interested in some of the same things you are. It is elementary, but very, very powerful.

So, that’s all for this post. I will continue to update this subject as I get further into the Twitterverse. If you want to follow my tweets, check out InnConsultant on Twitter.

Recession Reality for Bed and Breakfast Inns.

1. The Numbers Don’t Lie? Once again we are faced with an incredible array of numbers coming out of respected professionals who are trying to figure out the impact of the National recession. The problem is that the numbers can be made to say anything, but a careful review will show that no matter whose numbers are used, the picture is not rosy. Take for example the Gross Domestic Product (“GDP”). The Government released figures in January showing a decline in GDP for 2008 of 3.1 %, the worst in over a decade, clearly signaling the fact that the recession was worse than most economists had predicted. On February 27th, after the markets closed, the Government revised the GDP loss to a whopping 6.2 %. Stocks world-wide are tumbling on that piece of bad news, in fear of a longer recovery period. The downward spiral seems to continue with the report that even revered investor Warren Buffet lost $11.5 billion in the net worth of his Berkshire-Hathaway Corporation.

2. What is the impact on the Inn Business. First, it is hard to get numbers for the Bed and Breakfast Inn business separately. Smith Travel Research (“STR”) is the most respected source of historical numbers for the Hospitality Business, but does not collect data from small properties (under 50 rooms). One data release from STR shows that New England seemed to be holding its own relative to the US National data. For example, December, 2008 results for New England included a drop in occupancy rate of -2.1%, while Average Daily Rate (“ADR”) decreased by -3.6%. This resulted in a huge decrease in Revenue Per Available Room (“REVPAR”) of -5.7%. The National figures during the same December period showed larger decreases in Occupancy of -6.8%, in ADR of -3.2%, and a REVPAR decrease of -6.6%.

For the Year 2008 as a whole the figures are also instructive. New England showed a decrease in occupancy of -2.8%, but an increase in ADR of 1.9%, resulting in a miniscule decrease in REVPAR of -0.9%. The National figures for 2008 were far worse, with a decrease in occupancy of -4.2%, but an increase in ADR of +2.4%, resulting in a decrease of -1.9% in REVPAR.

The numbers from STR show that, until about September, 2008 was a growth year with higher occupancies that dropped precipitously in the 4th Quarter. Rates were still climbing in December, as the Hospitality Business seemed to lag in discounting. Overall, 2008 would be a down year, but only in comparison to the strong growth in the prior three years.

3. New England is not the same. One interesting thing that jumps out of the results shown by STR is that the New England States are not homogeneous. In fact, it was clear in both the December and National results for 2008 that Northern New England (Maine, New Hampshire, and Vermont) fared much better individually than the Nation or their Southern New England counterparts. For example, for 2008 as a whole, Vermont showed an increase in occupancy of +1.9%, an increase in ADR of 4.8% along with a REVPAR increase of +6.8%. While the results in Maine and New Hampshire were more consistent, they were slightly worse than New England as a whole. The bottom line was that overall, 2008 was a non-growth year, with a really cloudy picture for 2009.

4. The Real Data comes from Sales Tax Revenues. Another well respected source of industry research comes from Atlanta-based PKF Hospitality Research (“PKF”). Utilizing results of sales tax collections in Maine, PKF reported that September lodging sales in that state dropped by -12% from 2007, and continued to drop by -2.6% in October on a year-to-year basis. While Maine finished the year 2008 slightly ahead of 2007 (+0.7% growth in revenue), this came after 6% annual growth in the preceding three year period. PKF is projecting as a whole a -7.8% decline in REVPAR for Maine in 2009, which would make it one of the steepest declines in recorded history since the 1930’s. PKF also predicts that Maine will not fare as worse as others, because of its relative low cost and its rural location which fosters escape from the big cities. Presumably this would apply to all of Northern New England with similar characteristics prevalent throughout the region.

5. Summary: Batten Down the Hatches! No one likes to consistently hear bad news, but there is little about the economy that seems to be saying that things are going to get better soon. Predictions for a recovery in late 2009 and early 2010 are all that we have to go on, but most economists are hedging on those dates. Similar to the broad-based declines in 4th Quarter, 2008, retail spending, the American consumer seems to have switched to a survival mode, and this does not bode well for discretionary spending at least until there is some better news on the horizon. We have advised our consulting clients of the following:

a. Budget for a decrease in revenue of about 10% for 2009, adjusting expenses as much as possible to that revenue;

b. Increase spending in Marketing, particularly electronic marketing to capture market share;

c. Neither increase or decrease overall rack room rates. Develop packages with adventure travel features which show good overall value. Up-sell rooms whenever possible, and include value-added options with all room rates. Partner with local businesses and cross-market as much as you can.

d. Hold discretionary spending to a minimum and build cash wherever possible in the event that this recession lasts longer than expected. Do not defer necessary repairs and maintenance, but this is not the year to spend money on capital improvements.

e. Remember why you came into the Hospitality Business. It is all about the guests and not the Innkeepers!

f. This too shall pass. Look to the future, because the past is gone forever.

Bed & Breakfast Inns vs. Hotels: We Win, Hands Down!

We spent some time over the Holidays with our family outside of Boston. Rather than displace some of my nephews, we tried the closest hotel. This was a large chain hotel on a major route west of Boston with a huge shopping center across the street. While there were several small (3 room) bed and breakfasts nearby, we thought we should see what the hotel industry was up to. What a mistake!

First of all, we should say that the room itself was newly redecorated, fairly large and well furnished. The bed was a new pillow-top king-size, and the furnishings were standard up-scale hotel furniture. There was a very large, new flat-screen TV with Hi-Def capabilities. There was also free wi-fi and good desk space with plenty of lights and a.c. outlets. It contained the typical business set up with desk and swivel office chair in addition to two other upholstered seats. The heat was the ubiquitous through the wall air conditioning/heat unit, but with a more modern temperature control on one of the walls. The bathroom was standard size, but upgraded with a stone countertop, tile floor, and bowed shower curtain rod, giving the appearance and feel of a larger bathtub. In short, this was a fairly up-scale hotel room, the same to be found in most cities of the Country. What it lacked in charm, it made up with functionality; or so we thought.

We were using reward points left over from the corporate world for one of the two nights of our stay. This is where the trouble started. We had paid for our second night as a deposit, with the first to be paid for by the reward. The cost of the room was quoted as $99 plus tax. When we checked in, however, the desk clerk advised us that we would need to check-out and then check-in again on the next day. They said that they could not guarantee that we would be able to stay in the room, as room assignments for check-ins are made each morning. We advised them that they needed to figure it out, but we were not moving rooms. The next day we did, in fact have to check-out and then check-in again, but somehow they managed to keep us in the room. We then went to breakfast in the dining room. This was a holiday, so they were not serving a buffet. We were seated, and then waited about a half-hour for a server to bring the menus and coffee. Overall, the breakfast was sub-par and the service very poor. When we finally checked out, the desk clerk told us that since we stayed in the same room, which apparently was a higher level than the rate quoted us, we had to pay an additional $50, despite the fact that our written confirmation was clear. We, of course, refused to pay, and the desk clerk said she would discuss it with the manager. After we left, they just charged the difference to our card anyway. We are still waiting for the credit that they promised, but the credit card company will reverse the charge if the hotel does not do so.

The long and short is that in the battle between hotels and bed and breakfast inns, we win, hands down! It is not about luxury rooms, amenities, or discounted rates. It remains true that personal service, quaintness, and charm will win out every time. It is not just about the room. While our room was perfectly adequate, and in fact, in some respects a clear upgrade, it was sterile, lacking any “charm” or individuality. This room could have been found anywhere in the United States. Close your eyes, and you may not know where you are for a minute. One of the things about old house syndrome at bed and breakfast inns, particularly those in older, historical buildings, is that the sounds of the Inn at night, the groans of the boiler or creaks and pops of the radiators, can impact your sleep, at least on the first night. Well try those hotel thru-wall heaters which make a huge noise as they cycle on and off all night. I’ll take charm every time.

The most important thing that we have to offer in our small part of the Hospitality Industry is the personal service that our innkeepers give to their guests on a daily basis. This is what clearly sets us apart from the much larger hotel business, and the one thing that will help us survive the tough times to come. The more the economy gets worse, the more respite, peace and good old fashioned hospitality will be needed to provide our guests with a retreat to recharge their batteries. Do not ever underestimate what we have to offer the traveling public. It is something that hotels can never supply, no matter how many concierges they have. The hotels of the world will compete by price to stay alive. The bed and breakfast industry has a magic wand and can better compete with hospitality, charm, and personal service. For all times, this is what differentiates us from the hotel business, and what will continue to make us successful in the years to come. What we need now is to spread the world that we are open for business as usual, and that means “Hospitality” with a capital “H.”

Lease Option Folly for Bed & Breakfasts

During these difficult times of recession and the credit crisis, we have been thinking more about the use of Lease Options as a method of transferring Inns and Bed and Breakfasts. There clearly are some advantages for both Sellers and Buyers of Inns by allowing a faster closing period without the necessity of finding hard to secure financing. The universe of potential buyers is greater because the down payment (option price) and the closing costs are lower. Yet, I remain troubled about this method for both Sellers and Buyers. Here are the details.

First let’s describe the concept. The Lease Option is an alternative route to Innkeeping. It has been used over the years when financing gets tight or when the Inn in question is underperforming and cannot achieve normal financing. The way it works is that the Seller/Lessor leases the Inn property and business to the Buyer/Lessee for a five year term, keeping in place the existing financing on the Inn. The Buyer/Lessee pays an option price for the option which is less than a normal deposit for a purchase. The Lease is triple net, and the Lessee pays for all taxes, insurance, and maintenance costs. The rent is set at an amount sufficient for the Seller/Lessor to pay its mortgage on the Inn. In some cases the rent is lower at the beginning to enhance the ability of the Buyer/Lessee to improve the Inn’s business and make the Inn more capable of being financed in the future. In most cases a portion of the rent is also set aside as a credit against the ultimate option price, thus allowing the Buyer/Lessee to build up more “equity” in the Inn over the lease term. The Seller/Lessor retains title to the Inn and all tax incidences, including depreciation. Finally, the Option Price set by the Lease is received by the Seller/Lessee, but is not taxable until either the option is exercised or it expires by time or default.

From the Seller’s standpoint, they are able to get out of the active operation of the Inn and retain the tax benefits of ownership. They receive sufficient sums to continue to pay down their mortgage, and all operating costs are paid by the Buyer/Lessee. The Seller receives sufficient funds at the outset of the option to perhaps put a sufficient deposit on a new house or set aside funds for retirement without immediate tax consequences, but will not have a large payout to say buy a new business. One key point for the Sellers is that they still own the property, and thus, in the event of a default, can get back the Inn business faster than if they had to foreclose a mortgage. Overall, for a Seller that does not have immediate needs for the whole sales price, this looks on its face like a viable alternative, particularly where an outright sale is not possible.

From the buyer’s point of view, again, this looks attractive on its face for those Buyers who want to get into Innkeeping immediately, but lack the resources to make an outright purchase. It is clearly a cheaper route, with less of a down payment, and much lower closing costs (no appraisal or bank fees or transfer taxes). It gives the Buyer five years to develop and improve the business of the Inn, at the same time building up the equity under the lease and, hopefully, improving the overall value of the Inn while the option price remains fixed. However, for both Buyers and Sellers alike, this scheme is both illusory and full of risk.

Here is the main reason why this method is folly for both buying and selling Inns. The cash-strapped buyer is likely buying an underperforming Inn which usually requires an additional capital infusion of working capital in order to improve the business. Sweat equity is fine in a start-up situation, but does not necessarily work where real hospitality experience is needed to turn around a poorly performing Inn. Most of the Inns which are using lease options are full service Inns which are even more sensitive to needing qualified restaurant experience to improve the dining room parts of the Inn’s business. A new Innkeeper, even one with some restaurant or hospitality experience still has a huge learning curve just to run an Inn, let alone improve the restaurant business. The facts are clear that 50% of new restaurants in the United States fail after 3 years, with a whopping 90% failure rate after 5 years. This makes a lease option of a full service inn even more daunting when the new Innkeepers lack hands on restaurant experience.

Another issue follows directly from the fact that the costs are lower because no financial institution is involved. Without a bank being utilized for financing, there also is no third-party looking at the historical cash flow and tax returns of the Inn business, no independent appraisal of the Inn, and, in some cases, no real due diligence of such things as the structural integrity of the building and systems of the Inn. The simplicity of the transaction belies the fact that protections for the buyer are sometimes overlooked. For example, since no title insurance is needed for a bank, often this basic protection in a sale is not present in a lease option deal. If a title problem is found later in the process, perhaps when the option is being exercised, the buyer may be at risk after it has paid the option price and all of the lease payments. Thus, in reality, almost all of the normal sale due diligence needs to be done for lease options as well, making the cost saving factors perhaps irrelevant. Finally, in our experience, with this relatively unusual form of Inn transfer, Buyers do not always receive the legal protections that they need. For example, since the lease is subordinate to the Owner’s original mortgage, at closing of the lease, the Buyer/Lessee needs to receive a Non-Disturbance Agreement from the Seller/Lessors’s bank in order to protect the lease and the option from a foreclosure which may occur due to other issues of the Seller/Lessor with that bank. This simple legal protection may not always be included in such a deal.

Let’s not forget about the Sellers as well. If the deal fails, they get the pleasure of taking back their Inn, perhaps a long time after they had stopped being Innkeepers. The failure of the option is a hard thing to keep private from the buying public, and the result may be that they have to take back an Inn at a time when it is worse off from a business standpoint. Also, if the markets are as tight as they are today, the seller may really have lost a part of the value of the Inn, and be unable to sell it after such a failure.

What we have really seen in practice in the last five lease option deals in the New England area is the ultimate inability of the Buyers to turn around the operations, and the failure to either continue to make the lease payments or to achieve financing of the option. In those cases, each Buyer lost their option payments and ultimately lost the Inn. In some of the cases the causes were due to unforeseen maintenance issues arising after the lease commenced which stripped the Inns of needed working capital. In others, the new Innkeepers had transition difficulties and basically had little inability to run complex Inn operations including restaurants. In other cases, the importance of increasing web-based internet marketing eluded the new Innkeepers, making profit margins even more difficult to achieve. In some cases, the new Innkeepers just realized after a few years that the Innkeeping life was not to their liking, and they were willing to just walk away with nothing since they had no basic personal liability like what they would have for a mortgage in a purchase scenario. The likelihood, in most cases, is that the failure was a combination of all of the above, plus the post 9/11 weakening of the hospitality market that did them in. While all of these things can affect new Innkeepers who purchased Inns the normal way through financed sales, the fact that the financial institution utilized some independent review of the transaction seems to have had a moderating impact on the risk of failure. Most Buyers when facing the failure of their business will fight hard, and perhaps use other resources (such as a part of retirement funds) to make the Inn successful. In practice, we just do not seem to see that willingness to sacrifice all in a lease option situation.

With today’s tight financing and really slow real estate markets, there will be a lot of pressure on Inn Sellers to utilize lease options to achieve their goals. Likewise, Buyers may be convinced to go forward using these methods where they cannot put down sufficient deposits to achieve normal financing or where such financing is totally unavailable due to the performance of the Inn or the credit crisis. In either case, for the reasons stated above, we feel that using this method is both folly and very risky for both sides. It is highly unlikely that we will be recommending its continued use in our consulting practice.

Purchasing a Bed & Breakfast...Is it in Your Future?

Many people decide to become an Innkeeper before they really understand what innkeeping is really about. Innkeeping is a satisfying career. However, if this major decision is not approached honestly, your dream of becoming an Innkeeper can easily become a nightmare! We consider the following the basic five questions a Future Innkeeper should be asking themselves BEFORE they make the commitment to purchase an Inn. These questions cover the who, what, when, where, and how of Innkeeping. We will explore the following questions during the next four week period. Be sure not to miss out!

• Who makes the best Innkeeper?
• What is the typical day at an Inn?
• When is the best time to purchase an Inn?
• Where is the best location?
• How do you go forward with an Inn once it is identified?

If you would like to would like to have immediate results, please e-mail us at office@inns-for-sale.com and we will forward it to you today!

Thanksgiving at the Inn

Thanksgiving is perhaps the best Holiday at a Country Inn. It is the one time that the Innkeepers get to really share their Holiday time with the guests and neighbors and to show their thanks for both a bountiful season and the joys of Innkeeping. I know that we looked forward to this Holiday every year at our Inn.

It is a great time to share an amazing, traditional Thanksgiving meal with the community. Often we welcomed both lodging and dinner guests to the Inn whose families were far away. This gave us all a chance to celebrate a great Holiday as a kind of substitute family. The spirit of Thanksgiving permeated the air as the fantastic smells from the kitchen provided a welcoming touch to the Fall decorations at the Inn. A moment to stop to give thanks for all that has been given to us, and then a traditional meal served family style with seconds passed until no one could ever want more. Good cheer, great food, good music, and the laughter around the dining room was reward enough for this very special day. For those guests staying over at the Inn, we always brought out the leftovers that night for home-style sandwiches and pie. This was always a very special treat for our guests.

In this year of changing times, we give thanks to what we have, and renew our energies for the work to come.

Happy Thanksgiving to all!

Operating a Bed & Breakfast - Complacency Spells Trouble!

The most recent news from the Hospitality Industry is not good for Innkeepers. Hotel REIT giant, LaSalle Properties announced it was cutting 20% from its hotel staffing (mostly run by large hotel management companies) and has rescinded its 2008 guidance to the stock market. LaSalle reported that its Revpar (revenue per available room) decreased by 11.4 % in October; a huge drop! While the Innkeeping Business does not use Revpar as a measurement, it is fundamentally the same as saying that average daily rate and occupancy combined dropped by that amount. LaSalle is an important bell- weather for Inns because it is comprised of mostly luxury and higher-priced hotel properties. For the full story, please see: LaSalle Orders 20% Cut in Hotel Staffing - WSJ.com.

We hear anecdotally that many Inns and Bed and Breakfasts across the Country have had good years in 2008, at least until the end of October. Now is not the time for Innkeepers to rest on their laurels. A sea change is coming, in the form of a recession, the likes of which we have not seen in our lifetimes. This is also not the time to just burrow in fear of what is to come. As we have said many times before, when there is a downturn, those Inns at the top of their game can improve market share as against the competition. A bigger piece of a smaller pie may save the day after all.

So this is the time to be countercyclical and increase your spending on marketing, especially electronic marketing through your website, blog, and by email. Create attractive packages rather than discount, and spend all of that extra time you have due to declining occupancies to come up with creative and imaginative ways to get your repeat and referral guests to the Inn. Most of all, just lowering the price will not work, and may make things worse in the long run (see previous article on Discounting).

Most of all, have heart. The biggest reason that they come back to the Inn is because your have created a refuge and a respite from all of the problems the guests face at home and in the real world. Remember that this is exactly what the guests need in these troubled times, and they will pay you for this experience.

Buying a Bed and Breakfast? SBA Loans in Trouble

The SBA Loan Programs in 2008 have shriveled up, and that has caused both buyers and sellers of Inns real problems in making deals happen. The SBA has this week taken steps to make loans available again. Now we have to wait and see if these very important changes will solve this problem. Without this solution, and SBA loans once again being made, the purchase and sale of Bed and Breakfast Inns will continue to be slow and difficult for buyers and sellers alike. Here are the details:

The SBA 7(a) and 504 Loan Programs have for many years provided an excellent source of mortgage lending for the acquisition of Bed and Breakfast Inns across the Country. In fact, these are the programs of choice for many Inn buyers. The SBA 7(a) Program provides a bank or other lender a loan guaranty of 75% of the overall loan. While costs are high and paperwork detailed, this is a good way for banks to be more secure in their lending, especially to borrowers who have not been in the bed and breakfast business before.The SBA 504 Program, on the other hand, can provide below market interest rates on a portion of the overall secured mortgage loan to acquire an Inn or Bed and Breakfast. The 504 loans between 30% to 40% of the overall package on a second mortgage basis, and a bank or other lender provide takes the top 50%, leaving the buyer putting up 10%-20% equity (most bed and breakfast inn acquisitions will require 20% equity). The SBA portion of the loan is done on a fixed rate 20-year amortization basis, and because certain expenses are included in the interest rate, it actually decreases a bit every five years to maturity. There are some prepayment penalties involved in the SBA portion of the loan, and the costs of securitization and sales of the loans on the market are high (but includable in the loan). However, overall, this financing vehicle has in the past worked very well for Inn buyers. Until now . . . .

Last month we learned in the Wall Street Journal that overall SBA lending was significantly down in Fiscal Year ending 9/30/2008 over FY 2007. The 7(a) loan program was down over 30% from FY 2007, while the 504 Program dropped almost 17%. The reason was two-fold. First, related to the overall Economic Financial Crisis, the interest rate on SBA loans was based on the prime lending rate which has been decreasing as the Fed has sought to reinvigorate the credit markets. Most bank lending today has been based on the LIBOR which is much higher, thus making the SBA loans difficult to sell. Second, there were many issues for packagers of the securities to deal with based on the SBA rules. For more information see the full article SBA-Backed Loans Dry Up - WSJ.com.

Now we learn that the SBA has finally taken action to solve some of these problems. As of November 13, 2008, the SBA lending programs will now be pegged to LIBOR, and the SBA has also by regulation fixed other technical issues in the securitization and sale of the SBA loans. For the full story, please see: Independent Street : SBA Amends Lending Program to Help Small-Business Borrowers.

Tip Envelopes at Bed & Breakfasts

We realize that many people reading this article may not have their own Bed & Breakfast at this time. However, it is never too early to start collecting information for what you do and DON'T want to have when you do purchase a property. There are many things to consider, but the following is one of my pet peeves!

Tip envelopes - If you ask many current Innkeepers that may say that they have tip envelopes and many guests repond and leave money. The question is how many people don't leave money? I always get the feeling when I see an envelope that I am obligated to leave a tip and I don't like it. It is an added pressure and I am suppose to be on vacation! If an Innkeeper has truly done their job, a tip will AUTOMATICALLY be left, with or without an envelope. So I say, don't intiminate your guests...do an excellent job and the tips will flow!

Running a Bed & Breakfast: Discounting Room Rates Does Not Work!

In troubled times like today, Bed and Breakfast Innkeepers have an overwhelming feeling that the best way through this downturn (say recession!) is to put their room rates on sale. Isn’t that just what the retailers do at Christmas time to survive a bad season? The answer is that discounting in the travel business not only does not work, it creates a pattern of customer behavior that will last for years, even when times are better. Let’s look at the specifics.

Following 9/11, the Hotel Industry reacted to the basic loss of corporate business by deeply discounting their rates and putting large blocks of unused inventory on third-party web sites. The result was $50 a night rooms on sites like hotels.com which set up a huge expectation with consumers that this was the right price to pay for hotel rooms, no matter what the differences were in quality between each hotel. Many subsequent studies showed that the hotels basically killed their business for several years after the original reason for the discounting had gone away. The PAII Industry Study for 2002 and 2004 shows clearly that while occupancy at bed and breakfast and country inns decreased somewhat over the same period, rates did not go down significantly. Innkeepers knew the value of their product and held their rates. The result was that the Inn Industry basically avoided the meltdown that the Hotels suffered during that time.

By the end of 2007, rates for both Hotels and Inns were higher than in 2001, and occupancy rates had climbed back for the most part to 2000 levels (the best year to date in the Inn business). It is hard to tell where we will end up in 2008, but it clearly will not be a growth year. More important, where will we be in 2009?

Let’s put this into perspective. What would be the impact of your Inn business if revenues declined by say 10%? For an Inn grossing $400,000, that would mean a decrease in sales of $40,000. If the Gross Margin for that Inn (net cash flow/gross revenue) was an efficient 46%, then the net cash flow will also go down by 10%. In this example, the net cash flow would decrease by $18,400 from $184,000 to $165,600. The expenses also have to decrease, and there clearly can be cost reductions since many of the Inn’s expenses are variable and related to occupancy. In other words, as occupancy decreases, certain expenses like housekeeping, amenities and other costs related to occupancy levels will decrease as well. Added to this are the discretionary spending that can be reduced or deferred, all of which leads to the conclusion that even a 10% decrease in revenue will not result in a calamity for a well-run Inn business. It is more like something that needs to be weathered.

Most Innkeepers have a good sense of what the true expenses of operating the Inn are, and can find the ways to reduce costs. More important, most of your personal expenses seem to be interwoven in the Inn’s finances as well, providing a really sound way of reducing expenses. Knowing what is the real cost of the Inn gives you a better way of knowing how much you have to charge in rates to make an adequate return on investment (i.e. to pay the mortgage and have some for yourself) at any level of occupancy. Once you do this, you do not have to discount, you need only charge a fair price to achieve a fair rate of return on investment.

The real concern then remains this nagging feeling among Innkeepers that the only way out of a downturn is to discount. This should be avoided at any cost, because, as described above, once it is done, your guests will never again feel like paying your full rates. It will take many years to climb out of that hole. A better approach is to sell well priced packages and have value-added specials to supplement your rates. This has always worked well for our Industry, and will work again.

Finally, a word about cutting costs. Marketing and maintenance are the two areas that are easy to cut, but have the longest negative affect on your Inn business. This is the time to do what you can to increase marketing, because while the overall travel business may be decreasing, by great marketing you can stabilize or even increase your market share of the business that exists. Deferring maintenance is also something that comes back to bite you, since the cost of making repairs will always be more in the future if something is deferred.

The long and short is that you can favorably impact your results, even in bad economic times. Have faith that this too will pass, but in the interim, cut costs and market, market, market!

Purchasing Bed & Breakfast: Inventory at the Inn…is it Included?

When purchasing a Bed & Breakfast Inn, they are usually sold on a turnkey basis. However, the question of inventory does not always get included in negotiations and this is very important. Purchasing a turnkey business basically means that the Bed & Breakfast Inn should be furnished and able to be up and running when purchased. However, inventory is not always included in the purchase price. Everyday items currently in use at the Inn are included. However, unused/unopened inventory is purchased in addition to the purchase price of the Inn. This can include amenities, sheets, towels, gift area items, liquor (if they have a liquor license), and food items. So do not assume that the purchase price includes these items, as they usually do not. A majority of the time the cost of purchasing the inventory can be offset by advance deposits received from the seller at the time of closing on the purchase of the Inn or Bed & Breakfast.

Buying a Bed and Breakfast? It May be time for a Credit Report

If you are considering purchasing a Bed & Breakfast Inn, now is the time to run a credit report for yourself and see what you will find! One may be surprised to see exactly what happens when you apply for all of those credit cards that you know you will never use, but want to get the “discount of the day”. Well, it is time to clean everything up and get ready to move forward. Having multiple credit cards may actually hurt your rating. Additionally, there always seems to be that surprise account that you closed long ago that magically appears as being open. There are many sites available on the web to get your report so let’s get going!

Buying a Bed and Breakfast in Uncertain Times

In several previous postings on our Quantum Hospitality Blog, we have looked at various ways that Sellers can improve the performance of Country Inns and Bed and Breakfast Inns. All of this was done from the Sellers’ standpoint in order to add value to the sales price. In this Article, we are going to look at these issues from the Buyers’ standpoint. The central question is whether the economic meltdown of recent days provides real opportunities for Inn Buyers to obtain significant bargains? In other words, is the timing right for Buyers to buy Inns?

Here is the gloom: Clearly the Global Economic Crisis has been severely impacted by the lack of available credit. It is likewise certain that real estate prices will take a long period to recover. If banks are unable or unwilling to loan money to businesses, how can Inn purchases be financed in the near term? If Buyers are unable to sell their primary asset, their homes, they are just not going to be able to purchase an Inn.

Yet these are generalizations about the National and Global economy that are not always specifically true in every location in the Country. While we continually hear how much trouble the National and Regional Banks are in, many local banks which have been conservative in their lending practices seem to be weathering the storm. They continue to say that they have money to loan to creditworthy borrowers for good projects. This is especially true when Banks utilize the various SBA Programs which provide them with even greater security for lending to small businesses.

Thus, the immediate answer is that we believe the times may be right for Buyers who are ready and able to purchase Inns, provided that they buy at the right price. While the bottom of the Inn market has not yet been reached, some Sellers have recognized that they either have to wait for a long time to sell or they need to make significant price reductions in order to attract Buyers. Sellers may also have to offer some degree of subordinated seller financing if they want to achieve the highest value for their Inns. The key answer for both Sellers and Buyers is to find a way to price Inns fairly based on reasonable and objective business standards in order to be able to attract lenders to provide reasonable financing.

Credit standards at most banks have tightened considerably. It is clear that borrowers need to have squeaky clean credit records and high personal credit scores in order just to get the banks to talk to them. Likewise, the availability of SBA loans is entirely dependant on the credit worthiness of the particular Inn business. This means that (1) the loan-to-value ratio will be more in the 70% to 75% range today (requiring more money down by Buyers), and (2) the historic Net Cash Flow (earnings before interest, taxes, depreciation, amortization and owners’ salaries) of the Inn must be able to cover the principle and interest payments of the new loan by at least 1.25 to 1.30 times (the “Debt Coverage Ratio”).

With those very conservative lending criteria in mind, we are basically talking about Buyers buying only Inns that are performing well in today’s business climate as opposed to those Inns that have struggled in the past to achieve profitability. While many Buyers fall in love with the beautiful Country Inn or Bed and Breakfast which could be turned around to reach profitability by their hard efforts, most banks today are not going to lend on potential earnings. The banks only want to look at the past profitability, and what are the risks that, if the economy continues to slow even more than at present, how will the Buyers be able to keep the loans current?

Whether the economic slow-down will impact tourism in the long run is a key factor in all of this decision-making as to timing. It is clear that it will have an impact in the short-term, but what will next summer bring? Predicting flat or somewhat decreased sales seems too optimistic in today’s economy. We believe that sales may decrease next year by a factor of 5% to 10% as against the current year. This must be factored into the Buyers’ pricing and business plan.

In conclusion, ready and able Buyers may find this is an opportune time to buy historically well performing Inns and Bed and Breakfasts at realistic prices. The need is to search out the good opportunities from the very many non-performing Inns on the market today, negotiate the right price along with credit enhancements such as Seller financing, and take advantage of local banks with help from the SBA programs.

Inns-for-Sale.com Website Launched

Quantum Hospitality Group is please to announce that we have launched our new national Inns-for-Sale website. As consultants to the Hospitality Industry, we saw the need for a website with cutting edge features for Inns which are for sale. Our new features are easy to use and include a “Compare” feature which allows a side-by-side comparison of multiple Inns. Additionally, we can support up to ten photos of an Inn, versus the normal one photo. Videos are easily uploaded to allow a birds’ eye view of an Inn for those that thrive on instant gratification. And, of course, Google Mapping! Need we say more!

There are three levels which are available. Bronze level allows a free listing with an overview of the Inn. Silver level allows for one photo and many of the features of the website. Gold level gets it all, including ten photos and video!

Owners who are listing their Inns have many exciting features as well. There is no longer the need to wait for a third party to input your listing. This can be performed directly by the individual. Or, if you prefer, there is “Valet Listing Service” where we can input the listing for you. There are over twenty easily identifiable icons which are available that provide a quick reference for an Inn such as Water View, Outdoor Activities, Wine Spectator, and more. One of the features that we like best is the ability for a Broker/listing agent to have a complete database of inquires received on an Inn including date, name, e-mail address, telephone number, and the complete e-mail message. We are sure these features will work well for everyone.

We invite you to visit our website at www.Inns-for-Sale.com and either shop for an Inn, or list your current Inn which you are selling!

Dessert Recipe: Rebecca's Chocolate Torte

Ingredients:
½ lb. bittersweet chocolate, chopped fine
4 oz. (8 tablespoons) butter, cut into small pieces
4 large eggs, separated
¾ cup plus 2 tablespoons granulated sugar

Garnish:
Confectioners’ sugar
Ice cream
Fresh berries
Mint sprig

Place a bowl over a saucepan of slightly simmering water (double boiler works best), melt chocolate and butter, stirring occasionally until smooth (approximately 5 minutes). Allow to cool slightly.

In another bowl, lightly beat egg yolks and gently add the cooled chocolate. Mix thoroughly.

In a separate bowl, whisk egg whites until soft peeks are formed. Gradually add the granulated sugar until the whites are firm and glossy. Gently fold chocolate mixture into the whites, cover and refrigerate for 4 hours. This can keep in refrigerator for 3-4 days.

When ready to cook, preheat oven to 375 degrees. Butter and flour a baking sheet or better yet, spray with cooking spray and place a sheet of parchment paper on pan. Butter the insides of 6 metal rings that measure 3” wide and 2” deep (we used 8 oz. pineapple cans with the tops and bottoms removed). Dip rings into flour and place on baking sheet. Spoon mixture into prepared rings and bake for approximately 18-20 minutes, until the tops are firm.

Using spatula, remove ring to a plate and cut around edges with a thin knife. Gently remove ring, sprinkle with powdered sugar, scoop ice cream, add berries and sprig of mint. Serve immediately.

Makes 6 servings

Cranberry Apricot Scones

3 cups flour
½ cup sugar
½ teaspoon baking soda
2 ½ teaspoon baking powder
6 oz. Chopped butter
2 tsp. Vanilla
1 cup buttermilk
1/2 cup dried cranberries (or other dried fruit)

1/2 cup dried apricots (or other dried fruit)

Mix flour, sugar, baking soda, and baking powder. Cut in butter until it resembles cornmeal. Add add-ins, mix in the milk and vanilla. Mix until it forms soft ball. Roll out and bake at 400 degrees for 12 minutes. Freeze. Remove from freezer. Defrost. Brush tops with buttermilk and top with sugar. Reheat in hot oven for 5-7 min until golden brown.
Note: If doing a double batch, divide dough into 4 sections. Roll into circle, and cut into 8 pie shapes.

Blueberry Pecan Baked French Toast

4 inch baguette
6 large eggs
3 cups milk
½ teaspoon nutmeg
1 teaspoon vanilla
1 cup packed brown sugar
1 cup pecans (about 3 ounces)
1/4 cup butter (2 ounces)
1/4 teaspoon salt
2 cups blueberries

Syrup:
1 cup blueberries
½ cup maple syrup
1 tablespoon lemon juice

Spray 7"x11" glass baking dish. Cut baguette into 1 inch slices and arrange in one layer in baking dish. In large bowl which together eggs, milk, nutmeg, vanilla, and 3/4 cup brown sugar and pour evenly over bread. Chill mixture, covered overnight.

Pecans: Preheat oven to 350 degrees. In shallow baking pan spread pecans evenly and toast in middle of oven until fragrant, about 8 minutes. Toss pecans in pan with 1 teaspoon butter and salt. Cool and store overnight in container.

Syrup: In small saucepan cook blueberries and maple syrup over moderate heat until berries have burst, about 3 minutes. Stir in lemon juice. Store in refrigerator until morning.

Next Day: Preheat oven to 400 degrees. Sprinkle pecans and 2 cups blueberries evenly over french toast. Combine 1/4 cup butter and 1/4 cup brown sugar in sauce pan. Heat until butter in melted. Drizzle mixture over bread and bake 20 minutes, or until any liquid from blueberries is bubbling. Meanwhile, heat syrup.

Garnish: Whip cream and put dollop on top and top with either a toasted pecan or strawberry quarter, or raspberry.

Serves 10