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When I say gross revenue I mean gross - before expenses which equals net revenue after expenses are deducted. I could have a negative earning year but would still have paid B & O every quarter.If the ledger says I charged $100 - regardless of what the regular rate is - I pay B & O on $100. If I take a $100 GC to pay for a $100 room and $30 goes to commission, I still pay B & O tax on $100 because that is what the guest paid for the room. B & O is business & occupation tax and is a city or county, depending, tax in WV for the priviledge of doing business. I want services in my city so I pay it without grumbling because it says I HAD business (many in this city never thought we would) and the city has to pay for services somehow.It is voluntary but people think if you are listed on bandb you also take the GCs and do not believe you when you say I am sorry but we do not take them. Also they often do not tell you until checkout they are using them. Trust me, if I ever get in the position of a guest presenting me with a bandb GC, I will have a a kid getting a super getaway rather than take the hit in cash - unless it was the dead of winter and almost time for the honking loan payment to hit...... Nah. Kids win.I based my comments on the assumption that Joe was referring to B&B.com GCs which probably doesn't represent too many "big resorts"." YOUR THOUGHTS?"
Why would the gift card holder choose to stay at a non-participating B&B to begin with if intending to use the cards for payment?
Why would an innkeeper unsure about the transferability or fine print of the gift cards accept them in lieu of actual payment and run the risk of getting stiffed if they weren't transferable until redeemed?
Why would an innkeeper who is opposed to accepting them for I assume the distaste of having the commission deducted be more than willing to let some other colleague absorb that commission?
As with any discussion of discounting here, I always ask about and adhere to the concept that if you are willing to offer ANY guest a discount or reduction equal to any commission paid to a second party, what is the difference?.GC holders do not always know which B&B's take the GC's no matter how many times the directory makes changes to make it abundantly clear that they MUST inform the B&B BEFORE arrival that they are using the GC. (Which is how I found out I could not access the GC system to check the number to be sure it was valid when I had a screaming guest at my front desk.)Tim_Toad_HLB said:" YOUR THOUGHTS?"
Why would the gift card holder choose to stay at a non-participating B&B to begin with if intending to use the cards for payment?
Why would an innkeeper unsure about the transferability or fine print of the gift cards accept them in lieu of actual payment and run the risk of getting stiffed if they weren't transferable until redeemed?
Why would an innkeeper who is opposed to accepting them for I assume the distaste of having the commission deducted be more than willing to let some other colleague absorb that commission?
As with any discussion of discounting here, I always ask about and adhere to the concept that if you are willing to offer ANY guest a discount or reduction equal to any commission paid to a second party, what is the difference?
Now that I know I can check the GC's I would accept them, check them and then either use them myself or regift them to my kids.
My kids have used the GC's at big resorts, never a small B&B, which is what I would do if I chose to use one that showed up at my door. The philosophy there being that a big resort can absorb a $30 discount faster than a small 4 room B&B.
No one coming here gets a $30 discount (the average GC's total $100, even if they come in $25 increments). The flip side to the question about commissions is that I choose who gets a discount, I don't like having it thrust upon me. And guests will try to get a discount first and then 'mention' they will be paying with the GC once I've knocked the price down by the amount I am comfortable with. All the guest is trying to do is pay the least out of pocket, and who could blame them?
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I think bnbfinder's commission is about 10% lower if memory serves. We don't get very many of either, so the impact isn't very large.
Most of the B&Bs who both accept them and participate in their online reservation system are small B&Bs like most of ours building their businesses. Thats the only reason we do it and we wouldn't if we were even slightly more secure in our projected annual bookings than we currently are.
We all know the business of bigger volume enabling bigger properties to slash rates, offer rooms on priceline, hotwire, etc.. so that goes without saying.
But nobody said what size property they'd go redeem one at.
Thanks for that clarification.
As far as somebody thrusting something on you, the program through B&B.com is voluntary just like you opening your front door, letting a stranger tour your house, eating up your time then dickering over the rate.
I'm not sure I see the distinction.
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Edited for thought that came as I hit save: If I use the GC I not only lose on the commission but I also lose on taxes because it goes on my revenue stream as full charge and my B & O is based on gross revenue so a comp does not get the B & O hit.
.Well, we must be extra lucky because we've NEVER had a single guest spring one on us or even get to the final stages of the reservation process without asking if we accpeted them. I just took a reservation today for one and it was the first question she asked.gillumhouse said:It is voluntary but people think if you are listed on bandb you also take the GCs and do not believe you when you say I am sorry but we do not take them. Also they often do not tell you until checkout they are using them.
Edited for thought that came as I hit save: If I use the GC I not only lose on the commission but I also lose on taxes because it goes on my revenue stream as full charge and my B & O is based on gross revenue so a comp does not get the B & O hit.
I don't know how your accountant does your taxes, but ours is based on gross income received. If it was any other way, NOBODY would ever discount a room.
If your website and brochure say a room is $150 and you give a discount and only charge and receive $125 what kind of crazy taxing body expects you to pay taxes on the original $150?
We also list the commissions paid to any party that acts as a de facto travel agent as a "commission" which is a expense.
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.I don't want to argue with you but if you look at your state and federal tax forms under expenses, you'll find a commissions slot to deduct those expenses.gillumhouse said:If the ledger says I charged $100 - regardless of what the regular rate is - I pay B & O on $100. If I take a $100 GC to pay for a $100 room and $30 goes to commission, I still pay B & O tax on $100 because that is what the guest paid for the room. B & O is business & occupation tax and is a city or county, depending, tax in WV for the priviledge of doing business. I want services in my city so I pay it without grumbling because it says I HAD business (many in this city never thought we would) and the city has to pay for services somehow.
Also, when the income from the card or gift certificate is deposited into your bank account, it only shows the net amount, which I'd have a hard time believing isn't the figure any business uses to calculate your gross revenue.
Your city and county probably charge a sales tax, license fees, property taxes, etc... but I'm thrilled to hear someone besides myself actually understand the connection between taxes and the government services they provide.
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We pay the State $30 every other year for a State license, the City $15 per year for a license, and collect 6% sales tax. Anyone in a County or municipality that has hotel tax collects an extra 3 to max of 6%.
I have been a Councilman, currently serve on several Committees, am the Tourist Info Center (officially), am now City Clerk, and I doubt if I have missed a total of 12 Council meetings since April 1995 so I know what my City deals with and what they do with very little.
Now as President of a Garden Club that received a LARGE bequest, I am in the process of getting the ladies to vote beautification projects all over the City. Have 2 done and a third in the works right now. Have at least 2 more to do before my term ends and they throw me out as President.