A recent article in this magazine admonished company owners to oversee their own public relations; it's not just a good idea, the argument went, but a necessity. Build a reputation in your industry, work each media contact carefully, and the benefits will eventually show up on the bottom line.
Well, Charles Hillestad gets it. A lawyer who with his wife, Ann, opened a bed-and-breakfast in Denver two and a half years ago, Hillestad has been a one-man publicity machine churning quietly behind their Queen Anne Inn. Witness 100 stories and mentions in scores of magazines, including a feature as May 1988's Anatomy of a Start-Up; published articles he penned on the B and B industry; a 1988 Colorado Company of the Year award from Colorado Business Magazine. The inn sponsors charity fund-raisers, heightening its hometown reputation, and the local historic group distributes Hillestad's walking tour of Denver's downtown -- a tour which, naturally, goes right past the Queen Anne.
Not bad for a little 10-bedroom outpost. Even Hillestad concedes, "We've garnered a voice all out of proportion to our size."
How'd he do it? "It's relatively easy to get publicity," he claims. "But you have to have a good product." Actually, it wasn't quite that easy: Hillestad researched each newspaper and magazine and tailored pitch letters to their needs, and he had volumes of industry and Queen Anne information to send out.
In addition, "Charles is a colorful person," says Bernice Chesler, author of several books on bed-and-breakfasts. She describes most new innkeepers as folks who revel in becoming carpenters or plasterers: "The idea of marketing doesn't occur to them." Echos Sarah Sonke of the American Bed and Breakfast Association: "He's very gifted in marketing. Most people in the business are not." Hillestad estimates he spends seven hours a week on Queen Anne publicity, though he still works at his law firm full-time.
While tons of PR is nice, filled rooms are nicer, and it's taking a little longer than expected to get them. After 28% occupancy the first year, 1988 occupancy rose to 45%. About half the guests were repeats or referrals, and one out of seven came after reading about the inn. Sales increased from $86,000 to $139,000. Losses narrowed from $31,000 to $12,000.
Based on the first couple months of 1989, Hillestad is projecting this year's occupancy will reach 56%. That's less than the optimistic 80% presented in the Inc. article -- which he now expects by year five -- but a rate he defends. "Considering that Denver's economy is so bad, to have achieved a 45% occupancy in our second year strikes me as relatively remarkable."
Remarkable? Well, Denver has been skidding for years; it's not as if the rough market was a surprise. Even if the inn reaches 56% occupancy this year, it's projected to make only an $8,800 profit. And that's before any salary is siphoned off to Ann, who manages the place with a staff of nine part-timers and has only recently cut back to five 10-hour days instead of seven. She's deferring her pay to plow it back into the business.
Still, the Hillestads are reaping the intangible benefits they originally sought: evenings spent with engaging guests, conversion of a neighborhood eyesore into a Victorian showpiece, publicity for Charles's law firm. "I enjoy what I'm doing," Ann says. "I truly do. Perhaps it isn't terribly intellectually stimulating all the time. Well, what business is? I've represented the city, shown it in a good light, dealt with problems. I didn't have any delusions about what I was getting into."
Intangible rewards are important in lots of ventures; in bed-and-breakfasts that's doubly the case. As Ann notes, innkeeping is a very personal business. The Hillestads expect to make money, but they acknowledge that financial considerations alone couldn't justify their investment. They also admit they'd be in serious trouble right now if they didn't have their financial resources, marketing savvy, and a lawyer's salary to carry them along. -- Leslie Brokaw