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Bartering for the Bottom Line

Modern barter allows hotels to efficiently trade excess room inventory for vital, valuable services.

Friday, January 21, 2011
John Buchanan
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For the last six years, Tony Croy, general manager of the 103-key La Quinta Inn – Milwaukee Northeast, has often saved money when he needed expensive services such as tile and grout cleaning, carpet steam cleaning and air-conditioning maintenance and repair. In fact, Croy said, he gets the vital services at no cash cost. That’s because he barters rooms that would otherwise likely go unsold for some of the key things he needs throughout the year.

“One of the major benefits to barter, especially during an economic downturn, is that I can still get supplies and services that I need to keep my hotel operational, but do so without having to reach into my pocketbook and pay for them with cash,” Croy explained.

He also uses New Berlin, Wisc.-based IMS Barter, founded in 1985 and a pioneer of the barter industry, for services such as window washing and parking lot maintenance and repair.

Don Mardak, founder and CEO of IMS Barter, added that other key services hotels typically barter for today include advertising and media, printing, landscaping and locksmiths.

One key aspect of the relationship for Croy is that he does not have to trade for rooms during periods of high demand or holidays. He simply trades inventory that based on his analysis would have generally gone unsold. Now, he has a way to convert excess inventory to real operational value, while at the same time protecting his cash flow.

“Ever since 9/11, it seems, hoteliers have been tasked to ‘do more with less,’” said Croy, who inherited the IMS deal from his predecessor when he came to the property. “For example, the budgeted amount to make sure that your employees are satisfied has decreased, with more of that money being retained as profit. So, one thing I use IMS for a lot, especially at Christmas-time, is to get gift certificates for movies, pizzas, that sort of thing. And then I put together a $100 to $150 gift coupon package for each employee, so I can say, ‘Hey, I appreciate the work you’ve done all year and this is a token of that appreciation.’”

The simple message for hoteliers, Mardak said, is that sophisticated modern barter offers a unique way to convert unsold room inventory into “trade dollars” that can buy products, supplies and services that hotels use every day. “And you also get good value for the transaction,” Mardak said, “because these deals convert at rates closer to your rack rates than other distribution channels such as OTAs.”

Membership in IMS Barter is free once a hotel signs up on the company’s web site.

Croy said that, based on his success, he now counsels other GMs to consider barter.

“I tell them that if you’re not involved in barter, you should be,” he said. “IMS offers a fantastic program and it’s a win-win for the hotel, IMS and the guest.”

Credit
John Buchanan
Author
Hotel Interactive® Editorial Division
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