Wednesday, March 28, 2007 

Innkeeping 105 ~ How Much Should You Pay For Your Inn?

You might think I skipped right over the session on selecting a location and the session on selecting the right inn.

Wrong! The elements that go into determining how much to pay are many and varied and your selection of a location or a specific inn will determine the relative importance of each of these elements. I believe you should be armed with a knowledge of these elements before venturing out to select a location or a specific property.

Some of these elements that factor into the right price include, but are not limited to the following:

  • Revenue
  • Expenses
  • Cash Flow
  • Condition of the Property
  • Location
  • Property value in an alternative use
  • Interest Rates
  • Supply vs. Demand

All of these elements can be summed up in one term, "Total Return."

Total return determines why a property in Bismarck, North Dakota may sell for 3 times annual revenue, while a very similar property on the coast of Southern California may sell for 10 times annual revenue.

Using this same example, with the cost of living lower in ND, that same property's total operating expenses may run 40-45% of revenue. This would leave cash flow at 55-60% of revenues. Doing the math, this property is selling at a multiple of approximately 5 times cash flow.

With a much higher cost of living in Southern California this property has a higher operating expense percentage at 60%. Again, I'll do the turns out this property is selling at a multiple of 25 times cash flow.

It would appear that the Bismarck property is far more attractive. At 5 times cash flow the ND property will pay for itself in just 5 years, while the Southern California property would take a full 25 years to earn back the price of the property.

Simple, isn't it? I'm sorry to disappoint you but, it is nowhere near that simple.

The above analysis only deals with the elements of revenue, expenses and the resulting cash flow. We didn't even adjust the cash flow for expected room rate increases or expense increases. If rates in ND are projected to increase by no more than 1% per year for the forseeable future, and the CA property can expect increases ranging between 8-10% per year, then the picture changes dramatically.

Factor into those adjusted revenues the expected changes in expenses for each market then you will be able to calculate the Projected Annual Operating Cash Flow.

Now what are you going to do with all that cash flow you have projected? You better pay back the money you borrowed from the bank and maybe, more to the point, you will have to pay them interest as well.

So your $100,000 in projected annual operating cash flow is going to be used to pay the 4% interest and a portion of the principal on your loan. If that principal and interest totals $60,000 that would leave you with cash after debt service of $40,000. What if interest rates weren't 4% but rather they are 8%? Now your bank payment just got projected at $100,000. Oops! If all other factors were exactly the same, would you still have been willing to pay the same price for the inn?

Let's step back to comparing our ND inn at 5 times cash flow and our CA inn at 25 times cash flow. Now consider that the ND real estate values can expect to increase/decrease from between -2% to +1% per year for the forseeable future. The CA real estate market is hot and values are expected to continue increasing 8% to 12% per year. This is what real estate agents jokingly refer to as the three most important principals of real estate; location, location, location. Would you be willing to forego some annual cash flow for a dramatically larger pay day in the future? Are you beginning to see the concept of Total Return and its importance?

You should hopefully see why the discussion of which particular inn you select should come after determining how you should value that inn. I haven't even mentioned many of the elements listed above although they all (and others) factor into the equation. If you have other considerations that aren't mentioned here, feel free to post a comment.

Now it's time to mend fences. You folks from North Dakota, don't take offense. I used your great State as an example because it's always on my mind. I've spent lots of time in this beautiful state and have many wonderful memories of visits from Fargo to Medora. I've watched the Northern Lights dance across your sky and I've climbed on horseback up and down several of the buttes in Theodore Roosevelt National Park (the truth is, the horses did the climbing). It's one of the best places on earth.


Monday, March 26, 2007 

An English Fudge Tour in Kennebunkport...Sweet!

After cooling the fudge on the stone slab,
Mike cut's it into individual portions.
If you have a sweet tooth, mark your calendar. Plan an escape to Kennebunkport for the weekend of April 20-22 and enjoy this first time event in our quaint village.

As part of your weekend stay, you can participate in a tour through each of the seven Historic Inns of Kennebunkport and sample a different flavor of Roly's English Fudge at each stop. (I'm hoping that the Maine Stay's flavor is Roly's original fudge. The leftovers will be put to good use.)

At the end of the tour, head on down to Roly's English Fudge Shop (or Shoppe...hey it's English ), located right in Dock Square. Mike and Peggy will be making fudge and you'll receive a gift of a half pound of your favorite flavor to take with you.

This will be a great weekend and, if you stay at The Maine Stay Inn, we'll give you some great ideas of where to walk off all that fudge. We will also have a drawing for a $100 Maine Stay Gift Certificate. Anyone who makes it to all seven inns on the tour is eligible.

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Saturday, March 24, 2007 

Maine Maple Sugar ~ mmm Good!

Today was a beautiful sunny Saturday afternoon. As we learned, it was a perfect day for the sap to flow and therefore, the Sugar House at Gile's Family Farm was in high gear.

Frank, our guide, told us how the sap rises from the roots of the maple tree in its quest to nourish the buds that are sprouting on the branches. He explained that the tap collects a very small portion of this sap and does no harm to the tree (as long as the proper care is taken).

We entered the Sugar House and were pleasantly greeted with samples of maple butter, maple nuts and chewy maple cookies.

We learned about the modern advantages of reverse osmosis and of oil fired burners.

The gift shop was an opportunity for everyone to purchase some of the "liquid gold" that was probably made just the day before.

Of course, I bought maple candy. You know, those little maple leaf shaped candies, because I really love them and, a moose shaped maple lollipop (for Janice) because I liked the looks of it.

If you missed this great opportunity, we'll do it again next year. The 4th Saturday of March every year is Maple Sugar Saturday at The Maine Stay Inn. Mark it down on your calendar or, better yet, call us and we will mark you down on our calendar.

"We have the nicest guests!"

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Friday, March 23, 2007 

An Inspirational Event Coming To The Brick Store Museum in Kennebunk

A new and exciting show begins at the Brick Store Museum on March 27, and continues through April 28. A Brush with History: Artistic Interpretations of Archival Images will be a truly unique exhibition.

More than 30 local (and very talented) artists have combed through the vast archives of the museum in search of inspiration. The artists will turn these historical images from old photos and postcards into wonderful works of art.

Lovers of art, lovers of history, lovers of Kennebunkport, there will be something for all. For Janice and I, it's a "Hat Trick," we love all three.

Artists include such local notables as Geraldine Aikman, F. Tina Ambrose, Patrick DeSantis and many others.

Janice and I can't wait to see what these artists have created.


Thursday, March 22, 2007 

Last Chance for Maine's Cross Country Skiing

It appears that this weekend may be it for the 2007 cross country ski season.

Harris Farm still reports 40 km of trails with a 6" to 12" base. Temperatures are supposed to be warm over the next few days. Great weather for skiing but, not so great for extending the season.

So, this is it. Come to Kennebunkport for some fantastic season-end skiing or, just come for some great weather. Either way, the weekend will be a well deserved treat for us all.

Give us a call, we still have some romantic rooms available.


Wednesday, March 21, 2007 

Spring Arrives in Kennebunkport

For those of you who read my articles, you may notice that I always like to include at least one picture. Well, I struggled to find a picture that is representative of the fact that my very favorite season has just started. Spring is here and I love it.

I finally took a picture that I believe best shows the arrival of this year's vernal equinox.

Spring 2007

This weekend is Maine Maple Sugaring weekend. Checkout The Maine Stay Inn's great Maple Sugar trip on Saturday.

Tuesday, March 20, 2007 

The Marginal Way in Ogunquit

The Rocky Maine Coast, photo by Robert Dennis
Just a short trip south from Kennebunkport is Maine's most scenic stretch of the rocky Coast. If you love the ocean and you love to take a walk, make the trip (it's about 30 minutes from The Maine Stay Inn), you will be very happy you did, guaranteed.

The walk along the coast is a little more than a mile long and there are plenty of benches at which to stop and contemplate the beauty of this extraordinary treasure.

This property was a gift to the town of Ogunquit in 1923, by Josiah Chase of York, Maine. Recognizing the value of this attraction, businessmen and local residents worked together to preserve the property.

Begin your walk from Perkins Cove. As you walk along, each look to your right provides a fresh amazing seascape, each glimpse to your left shows off the gorgeous and stately waterfront homes as well as a smorgasbord of local seaside flora.

During your visit to The Maine Stay Inn we will provide you written directions and suggestions for wonderful daytrips. Each planned trip includes things that shouldn't be missed, our favorite places for lunch, great places for an ice cream break (you have to take an ice cream break) and many other items of interest.

One last thing, summer is coming and we are booking up early. Don't miss out on a great Kennebunkport vacation by procrastinating.



Tori and Dean: Inn Love

Everybody is talking about the latest reality show to hit the airwaves and there hasn't been a single episode aired yet. Okay, I exaggerated a little...not everyone is talking, just all the innkeepers.

The show, Tori and Dean: Inn Love, is (supposedly) a reality show about Tori Spelling and husband Dean McDermott purchasing and operating a bed and breakfast. Located in Temecula, California, they renamed an existing inn, The Oak Creek Manor, which will now be known as Chateau La Rue. The name is taken from Tori's dog's name, Mimi La Rue. Lucky she didn't name her dog Scruffy.

Its first show is scheduled for this evening on Oxygen TV, aka Oh!, at 10:30 pm eastern time. Unfortunately, their largest audience (innkeepers) are fast asleep by that time. Why not record it or Tivo it? Well, if other innkeepers are like us, they can only do that if the children are at home as they are the only ones who understand those new fangled gadgets.

So the American viewing public is about to see which is more challenging, being stranded on a deserted island without fire and water like my favorite reality show Survivor, or owning and operating a bed and breakfast.

This show could do great things for our business. Many people still believe that a Bed and Breakfast is nothing more than a person's home that has a spare bedroom. While those situations continue to exist, today's typical Bed and Breakfast is far from that. Hopefully, this show will portray what our industry is all about in "reality."

Well Tori and Dean, if you don't already know it, at The Maine Stay Inn, "we have the nicest guests."


Monday, March 19, 2007 

Maple Sugar Saturday in Kennebunkport

Frank and his Dad demonstrate the way sap was
carried before the modern conveniences of today.
Maple Syrup Saturday is the 4th Saturday of March every year. With the cooperation of Mother Nature the sap begins to flow in our Maine Maple trees like clockwork.

Those same Maples that make autumn in Maine a very special place to visit, create a different magic in late March.

Join us this weekend. Saturday morning March 24th, arise to a delicious Maine Stay Inn, New England breakfast. Then, dress warm (or warmly??? I don't know) and it's off to Giles Farm for a tour of how Maple Syrup is made. A little history of the business, some history of the property (it is the site of Maine's first Shaker settlement) and a thorough description of the process.

There will be Maple treats to sample and after this fascinating tour of the Sugar House, it's a short stroll to the dining hall of the Brothers of Christian Instruction for a soup and sandwich lunch topped off with Maple Apple Brown Betty with ice cream.

All of this is complimentary to guests of The Maine Stay Inn. Call today, we still have some of our romantic rooms available.

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Saturday, March 17, 2007 

Happy St. Patrick's Day from Kennebunkport

On this day of the celebration of the wearing of the green, Kennebunkport is all decked out in white.

Today I heard a great joke on the Fox News channel. It went like this:

Sean was driving the streets of Boston desperately looking for a parking space. After many attempts he finally said (in an Irish accent), "Lord if you will find me a parking space, I will attend church every week for the rest of my life and I'll give up drinking."
Sure enough, less than a minute later he spots a great parking space.
Sean then continues, "never mind Lord, I found one."

Happy St. Patrick's Day from all of us at The Maine Stay.

Thursday, March 15, 2007 

Select Registry Means Quality

Seasoned travelers have come to know that the Select Registry of Distinguished Inns of North America is their assurance of quality. Each member inn is held to a set of rigorous standards, the purpose of which is to assure a consistently pleasant guest experience.

Visit any one of the Select Registry Inns throughout the country and you will be given a complimentary copy of the current Select Registry guidebook. This valuable resource displays each of the member inns throughout North America. Just like so many others, you will learn the value of using the guidebook for all your travels.

In Kennebunkport, we have three Select Registry Inns; The Captain Lord Mansion, The Old Fort Inn and The Maine Stay Inn.

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Tuesday, March 13, 2007 

Grissini Italian Bistro ~ Fine Tuscan Italian Food and Wine

Maine Stay Inn visitors on Saturday, March 31, 2007 will have an opportunity to join us for a wonderful Tuscan Italian meal paired with complementary wines at Grissini Italian Bistro.

Come join us at one of the region's most celebrated restaurants, for an evening of fireside dining with wine tasting and decadent chocolate.

The wine dinner is priced at $65.00 per person, which includes tax and gratuity. Advance reservations are required.

This should be a wonderful evening for "foodies" like me.

If you are a real foodie, you might want to consider a visit to the Maine Stay Inn on the weekend of April 20 and 21. Boy, do we have a treat in store for you.

At The Maine Stay Inn, "we have the nicest guests."

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Sunday, March 11, 2007 

Shipbuilding in Kennebunkport

"Wooden Ships on the Water Very Free"
David Crosby, Stephen Stills, Paul Kantner
The history of shipbuilding in Kennebunkport is rich but, that's not what this article is about. Rather than focusing on the economic boom of 1775 to 1870, when Kennebunkport was one of the wealthiest areas on the east coast, the shipbuilding (actually, boatbuilding) I write about today is taking place just down the street from The Maine Stay Inn.

The Landing School of Boatbuilding and Design was first established in 1978 to provide a high quality education in boatbuilding. In 1979, the Design program was added and in 1999, the Marine Systems Technician Program was created.

The Landing School takes its name from the area of town in which it is located. The Kennebunk Landing area was a major shipbuilding area for nearly 100 years. However, by the 1880's, the large shipyards along the Kennebunk River had been dismantled and the only boats built since then have been small boats.

So why am I telling you all this? This coming weekend, our guests will be treated to a personalized tour of the Landing School. You will see the inner workings of this hands-on trade school devoted to teaching a craft that would otherwise be lost.

True boats lovers might also want to attend The Maine Boatbuilders Show which runs from Thursday, March 16th through Sunday, the 18th.

Upon return to The Maine Stay, you will enjoy a gift of delicious chocolate sweet sloops.

This should be really fun and informative. Give us a call, (800) 950-2117. If you really want to feel a part of this rich history, consider our Captains Suite. We would love to welcome you to the inn.

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Friday, March 09, 2007 

Spring Forward

It's coming early this year and I love it. It starts at 2:00 am, Sunday, March 11.

What am I talking about? This is a trick question! If you answered Daylight Savings Time, you are wrong. The correct answer is Daylight Saving Time. While adding the "s" allows the term to flow from our tongues more smoothly, it is inaccurate. Likewise, the term itself is not accurate as no daylight is actually saved, simply shifted.

Having said that, I don't care because, I love Daylight Saving Time (DST). Just for fun, the following are some facts about Time that you may not have heard before.

The idea of DST was first conceived by Ben Franklin in 1784.

Standard Time was instituted in the U.S. in 1883 by the railroads and then adopted by Congress. Prior to that, the time of day was a local matter. The idea of time zones came into use about a year later but wasn't enacted into law in the U.S. until 1918. Since the establishment of time zones, the zone boundaries have shifted gradually westward. Localities along the eastern border of each zone saw the advantages of extending evening daylight by one hour and therefore opted to move into the more favorable zone, effectively shifting the line to the west.

Prior to the implementation of a uniform DST, passengers on one particular Ohio to West Virginia bus route, had to change their watches seven times in 35 miles if they wished to display the proper local time.

One year the "spring forward" started a riot in Ohio when students of Ohio University lost an hour of partying time. When police arrived, over 1,000 students threw bottles and yelled "Freedom" to protest this terrible miscarriage of justice.

In the Spring, Amtrak trains travelling during the time change instantly become an hour late. Amtrak does their best to make up the time. So what do they do in the fall, when the clocks are changed back (and they are instantly ahead of schedule)? They all come to a halt at 2:00 am and they resume an hour later. No I am not kidding.

Just one more, and this one is audience participation. On the date of changing clocks back in the fall (this year on November 4th) if twins are born, the first born at 1:55 am and the second is born 10 minutes later, at 1:05 am, which one is older?

That's all for now. Tomorrow is Cookie Madness at The Maine Stay. Its schedule will be uninterupted by DST. We hope you are coming. I have to go help with the baking.


Wednesday, March 07, 2007 

Federal Jack's ~ A Kennebunkport Restaurant Review

I have been reviewing restaurants in and around Kennebunkport for about a year now. I am at a loss to figure out why, until now, I haven't reviewed Federal Jack's.

The casual atmosphere at Federal Jack's is inviting and, although it is a brew pub, it is suitable for families as well as couples looking for a nice dining experience.

Federal Jack's menu is diverse (again, great for families) from your typical "pub" food, to some very impressive entrees like their Potato Encrusted Haddock or their Lobster Ravioli.

While I have tried and loved their Thai Shrimp, typically I go for the pub fare. Their burgers are awesome and when I'm in the burger mood, I always gravitate toward the Cheddar Bacon Burger (No description necessary as it's all in the name).

A more frequent choice for me is the Reuben. Not every place makes a good Reuben but, at Federal Jack's they are great. It's piled high with lean corned beef (don't even think about trying to slip in pastrami on me) on toasted rye bread. Just the right amount of sauerkraut, swiss cheese and thousand island dressing. I'm getting hungry!

I'm sorry, I jumped ahead, let's go back to the beginning. Their beer is unbelievable. They have some wonderful selections and, of course beer is never better than when it is fresh and it doesn't get any fresher than at Federal Jack's. Here's a tip, get the beer sampler. That way you can get a taste of a full range of their brews.

For starters, their Classic New England Clam Chowder is really great but, someone really should get the Award Winning, Texas Two-Pint Chili. If it were me, I'd get the chili and take a taste of the chowder from Janice. Of course, I would give her a taste of my chili (dessert is the only course I don't share).

Okay, now it's onto the Reuben., go back and re-read if you need to.

And finally, for dessert, don't read the menu, I already know what you want. Once again it's Award Winning. The Chocolate Vanilla Float is extraordinary. Made with Federal Jack's homemade chocolate soda, vanilla ice cream, whipped cream and a cherry on top. Once you taste it, you will understand why it took first place in the Chocolate Lover's Fling and Auction in Portland, Maine.

When you are in Kennebukport, don't miss Federal Jack's, it is one of The Maine Stay Inn's top picks. It's fun and it has excellent food. And, if there is a ball game on, you won't miss anything, there are flat panel TV's all over the place.


Monday, March 05, 2007 

There's Always Things To Do In Kennebunkport

The Wells Reserve at Laudholm Farm is having a wonderful and informative event this Saturday, from 10:00 am to 12:00 pm.

Eileen Willard, an experienced naturalist and a teaching assistant at the University of New Hampshire will conduct a winter tree walk. Ms. Willard will guide a group through the winter wonderland of Laudholm Farm showing us how to identify the various species of Southern Maine trees.

It's not as easy as it sounds, remember there are no leaves on them at this time of year.

Reservations are required and we will be happy to help you with that. Also, while the trees have no leaves, they do have snow on them (that's a hint, dress warm or warmly , math was my subject).

If you have never visited Laudholm Farm, this is a great reason to discover this special treasure.

When you complete your nature fix, return to The Maine Stay Inn and it's time to work on your cookie fix (now your talkin'). Tour each of the seven Historic Inns of Kennebunkport and sample each inns' signature cookie. Take home the signature cookie recipes and vote for the inn with the best chocolate chip cookie (a vote for The Maine Stay could mean extra cookies for you).

Nature and cookies, a great weekend combination.

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Saturday, March 03, 2007 

Kennebunkport's 2nd Annual Nott House Reception Was a Great Time

This evening, guests of The Maine Stay Inn and the other Historic Inns joined their innkeepers for a reception and tour of the Kennebunkport Historical Society's Nott House. Entertainment was provided by our local harpist, Emily who shared her heavenly sounds with the group.

Each innkeeper brought their favorite hors d'oeuvres and a package of recipes was given to each guest. At the conclusion of the evening, each of the inns held a drawing and gave away a gift certificate to one of their lucky guests (congratulations Hank and Carole!).

The Nott House is similar to a time capsule. It gives us a glimpse of life as it existed in the mid-1800's when Kennebunkport's shipbuilding industry thrived and made this quaint seaside town one of the wealthiest in New England. The carpets, furnishings and wallpaper are original to the house. They reflect the four generations of the Perkins and Nott families who occupied the home from the late 1700's through to the mid-1900's.

If this sounds like fun, plan to join us next year. Better yet, think about coming to another of our activities that we are holding in the coming weeks.

At The Maine Stay Inn, "we have the nicest guests."

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