Maine Stay Inn ~ An Insider's Guide to Kennebunkport

Where do you go to celebrate a momentous occasion? A special occasion deserves the best...that's why, here in Kennebunkport, we gathered at The Cape Arundel Inn. With breath taking views of the Atlantic, superb service, the appetizing menu and creative dishes, this beautiful Kennebunkport restaurant is unsurpassed.

And the Celebration? Our celebration is of life changes, big life changes. As of just a few days ago, Janice and I welcomed Walt and Judi Hauer to Kennebunkport as the new owners and innkeepers of The Maine Stay Inn.

We first met Walt and Judi just a few short months ago when they visited The Maine Stay Inn with their daughter, Johanna. Back then we didn't realize that the Hauers would become the next innkeepers of The Maine Stay; however we did recognize immediately that they would make outstanding innkeepers when they found the right property for them.

While the Hauers speak of their good fortune of being the new innkeepers of this gracious and historic property, Janice and I are delighted that the thousands of guests that we have been priviledged to know, will continue to enjoy the exceptional hospitality and service for which The Maine Stay is so well known.

So you see, our celebration is one of new chapters. A new chapter in the lives of the Hauer family, a new chapter for Janice and me and, a new chapter in the rich history of The Maine Stay Inn which has been welcoming guests to Kennebunkport for more than 62 years.

The summer of 2008 is shaping up to be a great one. Make your reservations early; the Hauers are looking forward to welcoming you to this quaint and magical seaside village and to the beautiful Maine Stay Inn.

With just a short time behind them, the Hauers already agree, at The Maine Stay Inn, "We have the nicest guests!"

Labels: Innkeeping, Kennebunkport Bed and Breakfast, Kennebunkport Restaurants

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 math...it 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.

Labels: Innkeeping

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."

Labels: Innkeeping

Today, January 12, 2007, The Maine Stay Inn ~ An Insider's Guide to Kennebunkport, was recognized as The Best Blog of the Day by the very popular Blog Directory, The Bestest Blog of All-Time.

Labels: Innkeeping, Kennebunkport Bed and Breakfast, Kennebunkport Inns

The good news...you are correct, it isn't rocket science. Innkeeping will however, call upon many of your different skill sets. Here's a list of the ones that come to mind: hospitality (of course), cooking, creativity, finance, marketing, negotiation, decorating, property management, computer science, people management, bookkeeping, planning, plumbing, carpentry, staff training, painting, patience, diplomacy, networking...okay, that's enough. There are many more and if you doubt the importance of any one of them, then beware. The skills needed are not all equally important and many of them can be outsourced.

So where is the value of attending a seminar? Our experience is that a seminar brings all the things you may have learned through your experiences and ties them all together. All of the talents listed above (and more), are incorporated in a well run, innkeeping seminar.

The one very important tool we learned from our attendance, was the knowledge of the current market values (or prices, or costs) of properties. Not only is this information important, it also changes over time, and it definately varies depending upon the region in which you choose to locate. We also learned some valuable information about the industry averages of operating expenses versus revenue. Without the benefit of this information prior to purchasing The Maine Stay Inn, it would have been impossible to make a well informed decision about becoming an innkeeper (or not).

Was there any information that was left out of the seminar? Yes! Unfortunately, there was one piece of information that we now know that was left out of our seminar (and from speaking with others, it is left out of many seminars) and is very important.

Why was it left out? I truly don't know. What is it? I'm not telling. Actually, I am happy to tell you. Simply post a comment to this article and include your email address. I won't post your comment but, I promise to email you and tell you this very important piece of information.

Some of the excellent innkeeping seminars here in the northeast are:

The B&B Team, Seminars for Aspiring Innkeepers

Inn Your Dreams, Aspiring Innkeepers' Seminars

Should you attend a seminar in the region in which you would like to run your inn? I believe it is important for your instructor to understand the geographic market that is most important to you. If you want an inn located in Hawaii, find someone that knows innkeeping in Hawaii. And don't overlook the importance of the instructor's knowledge of innkeeping. All of the seminars I have listed above are given by instructors who formerly were successful innkeepers. Emphasis on "successful."

To sum up, I recommend that you attend an innkeeping seminar given by a reputable instructor familiar with the region in which you will purchase and operate your inn. Also, I recommend that you post a comment to this site so I can email you the one crucial piece of information that your seminar will likely leave out.

Labels: Innkeeping

Labels: Innkeeping

In this, part two of Innkeeping, the first thing you might note is that I have not proceeded in chronological order with my discussions about innkeeping. It was my intention to do so, however, we just completed redecorating one of The Maine Stay Inn's romantic cottage suites, and I decided to fast forward and write about one of the great parts of innkeeping...the satisfaction of using your creativity and hard work to create something that is spectacular. In this case, as with most, it was Janice's creativity.

It was our intention to begin our restoration and redecorating projects with major work to the first floor of our main building, which we completed within the first year of buying the inn four years ago. Continually maintaining fresh paint and attending to minor repairs, small additions are made to each guest room throughout the year. However, we continue with our plan to upgrade the property by focusing on major changes to at least one guest room each year.

The first guestroom we redecorated was the Garden Room and the results were dramatic. Not only is this room beautiful and inviting, but it has become our most popular room. Talk about the power of the internet, it was about a month after we completed the Garden Room before we had a new photo posted on our website. Prior to posting the new photo it was business as usual. The day the new photo was posted, the telephone began ringing with requests for the Garden Room. In many cases guests have asked when it was available so they could tailor there plans accordingly. The results were very satisfying and exciting.

Our most recent project, Cottage Suite 7 already had many great features that are especially popular with honeymooners or couples looking for some time to relax together and reconnect. Beginning with a spacious bedroom complete with a gas fireplace, this private cottage suite boasts a spacious bathroom with luxurious double whirlpool tub and a breakfast room with a bistro table and chairs, sink, refrigerator, microwave and coffeemaker. We offer our full New England breakfast delivered to the door to guests staying in this suite, and this is a very popular option with couples who have come to Kennebunkport for a romantic getaway!

To update, enrich and enhance the look of this cottage suite, we started with a warm yellow wallpaper and combined it with romantic red fabrics dressing the windows and bedding. Furnished with a traditional cherry queen four poster bed and beautifully carved night stands with brass accents, the room comes alive with warmth and color. A black Bombe chest hand painted in gold accents is enhanced with a crackled finish. Two comfortable chairs upholstered in a gold scroll chenille fabric complement the rich red scrolled window coverings.

Hanging above the Bombe chest is an original European oil painting, chosen for its subject and artistic appeal. Creating a sense of place within this romantic suite, the artwork features an oceanside scene familiar to anyone who has ever spent a sunny day at the shore.

We replaced the TV/VCR with a flat panel LCD television with a built in DVD player. The television hangs over the fireplace and the newly fashioned fireplace mantel - the first one I ever built! Janice tells me that it looks great. I know that it is level, square and firmly attached to the wall.

We are very happy with the outcome. Our staff seems to approve and we've re-opened the suite and welcomed guests three times so far. Comments have been superlative! This is very rewarding on top of all the fun we've had planning, designing, building, wallpapering, painting, etc.) and seeing our idea become a reality!

Seen first at the top of this article, this redo is so new that we don't even have a new picture up on the website yet!

Labels: Innkeeping

As we approach our four year anniversary of innkeeping here at the Maine Stay Inn, we decided to write a series of articles about the different aspects of innkeeping. By far the question asked of us by our guests most often is, "how do you like innkeeping?" Our answer varies slightly but is basically the same, "we have met so many wonderful guests from all over the world that it would be hard to consider doing anything else."

The follow-up question..."but isn't it an awful lot of work?" Our answer, "it is alot of work but we have a fantastic staff and the type of work involved is enjoyable."

When we first contemplated the idea of purchasing a bed and breakfast inn, we made the decision to attend a three-day seminar for first time innkeepers. Sure, we had stayed at several inns over the course of our travels but, we believed it would be money well spent to learn about the aspects of innkeeping not seen by the guest. In hindsight, we had already considered and become comfortable with about 80% of the material covered in the seminar. The remaining 20% of the material, we found to be well worth the cost and effort of attending the seminar.

The title of this article, Innkeeping 101, was chosen for two reasons; first, the obvious implication that the article would attempt to educate (similar to a course title, ie. calculus 101) and second, I will, on occasion write an article about a different aspect of innkeeping and, in doing so, will number each in ascending order (next, Innkeeping 102).

Some of the subjects that I expect to discuss will include:

• Considering a change in careers? Is innkeeping an option?
• Should you attend a seminar? How to choose a good one.
• What kind of inn is right for you?
• The purchase. Do the numbers make sense?
• Operating the inn.
• Marketing the inn.

Within each of these general categories are many subcategories. For example, operating the inn involves so very many different aspects, food service, housekeeping, maintenance, customer service, planning, hiring, employee management, and on and on.

We don't pretend to be experts, but we can give you our perspective. You can then choose to do with this information what you will.

If you have questions, please don't hesitate to post them, we will do our best to give a thoughtful response. If we don't have a response for you, we will probably ask another, more experienced innkeeper. Innkeepers here in Kennebunkport are all very willing to share knowledge. The feeling is that, it is in our collective best interests if we all prosper.

Kennebunkport is a bed and breakfast community and the competition raises the standards of all the properties. As those higher standards become expected by our guests, it becomes incumbent upon us to raise them even higher.

Well, that's it for Innkeeping 101. In summary, what we hope you have learned here is simply, there will be more to follow.

Labels: Innkeeping