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Beyond The Limits Of Cash or Credit

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There’s No Room For Empty Hotel Rooms!

By Paul Neimark

It was travel director Jennie Moore’s first week at Illinois Trade Association (the largest independent trade exchange in the U.S.) and it was one heck of an introduction to the world of barter.

“Almost my very first project was a request for a convention to be held at one of our hotels in the South,” says Moore. It was a neat place—I’d been there for cash some years earlier with my husband—but construction being done nearby had made their business fall off. Lo and behold, the same day I received a request from a client to hold a series of mega-seminars in just the location where the hotel was.

“That was the good news. The bad news was that the client requesting the seminars, a major carpet installation firm, had recently spent about all his trade dollars with some of our contractors to renovate his facilities. Often, when a client has a good track record as this company did, we extend credit.

“But the proposed purchase of the hotel space for the several seminars was a very big buy, and that kind of credit couldn’t be extended. Here was a perfect buyer and a perfect seller. Here was the perfect barter deal. But it looked like a no-can-do.”

Moore told both clients she would get back to them the following morning and find a way to work it out. “But there didn’t seem to be a way,” Moore said.

“I stayed up almost the whole night thinking about it. I kept remembering the words of Jack Schacht (President of ITA) when he hired me: ‘You can do things on barter you cannot do any other way. The limits of barter are only the limits of our imagination—of our ability to know that in every circumstance, there is a potential win-win scenario. Wherever there is a need, there is someone to fill it. There isn’t a barter deal in the world that can’t be made...’ ”

When Jennie Moore walked in to the ITA complex the following morning, she had a idea—the kind of idea that has made her one of the top barter travel directors in the country. “It was a shot in the dark,” Jennie told BarterNews, “but it was also a beginning. One thing leads to another, and somewhere out there was a win-win situation. I got the hotel director on the phone and told him I could fill his big empty space, IF...”

The IF was this: Instead of using all his barter dollars for advertising this time (the majority of hotels barter rooms basically to advertise in order to get more cash business) I asked him what else he might need.

Of course, if he needed carpeting, it would have been a perfect fit. But he didn’t. In fact, he didn’t need anything but advertising.

Inspiration took over. “Didn’t I read where the owner of your chain is an avid sportsman who fished almost every place in the world?” Moore asked.

“That’s right. He’s about to leave to try and hook some—something off the shores of Australia. I think I heard him say that the only place he had never fished was the North Pole,” the hotel director replied.

“I just may know how to fill your seminar rooms,” Jennie answered. The attractive ITA executive, a true believer in barter who gave up a potential career on network TV to join ITA, extracted the private number of the hotel chain’s owner...finally reaching him at his home late that evening.

Her opening statement: “I’m Jennie Moore, Travel Director of ITA. How would you like your next fishing trip to be at the Article Circle?”

The next morning, in between a dozen other barter deals, Moore called fishing lodges in Wisconsin and Michigan. Finally, she found one that would charter an expedition to the Arctic Circle—and needed all their rooms carpeted!

She put the carpet client together with the lodge (thus assuring him the trade credits to use the hotel) and allowing the hotel owner to take a fishing trip to the one place that he’d never been.

A barter arrangement like that, needless to say, is the exception rather than the rule. The bottom line of barter, where hotels are concerned, is to fill unused rooms and get advertising in return...or hard goods such as carpeting, linens, and fixtures.

Michael Fear of the North Shore Hilton, a northern suburb of Chicago, participated in another minor miracle of barter. “We had a bus, a beat-up old thing that wouldn’t have lasted another six months, which had been used for years to shuttle people to and from the hotel,” he recalled.

“We took some of our barter dollars and went to one of ITA’s auto body members. Now the van is like new! It’s one of those before/after stories.” The hotel also acquired vacuum cleaners, plus paving and striping for its huge parking lot on trade.

Steve Hodges of South Carolina’s Palace Suites in Myrtle Beach, has worked out arrangements with radio and TV stations where trips and hotel vacations are given as promotional items on barter through ITA. “One nice thing I like about it,” Hodges exclaimed, “is that a lot of people who win trips don’t take them.”

Which brings up another fascinating bonus of barter: trade dollars often turn out to be worth more than cash dollars. One ITA executive, for example, booked a trip on trade to an exotic Caribbean island. Her hotel suite was huge and plush and could accommodate four.

So she took three girlfriends—each of whom paid her in cash to share the space for one week. What they paid was half of what they would have had to pay. But the cash to the executive far exceeded the trade dollars she had to use for the vacation.

By networking basically every major American metropolis and North American preferred vacation spot from the exotic Radisson Inn on Sanibel Island to the plush Valley Hilton on the West Coast, and countless others around and in-between, Illinois Trade Association has become a barter benchmark for hotel/travel. The bottom line is few empty hotel rooms for those who are members of ITA.

The reason? President Jack Schacht insists that not only are the friendly skies not the limit, but that barter be built upon bedrock reality. “We are not order takers at ITA,” Schacht stressed.

“Every trade is based upon educating both the hotel and the client to having their best interest met. For example, we know some people are $10,000 traders (annually) and some are quarter-of-a-million dollar traders.

“We know that some hotels hesitate to barter because they fear not being able to accommodate cash-paying guests, or because they feel they would not have proper control over the trade. But if the client and hotel know going in what is best for each, then no problems should result.”

Schacht lists the following guidelines toward that end:

  • Hotel rooms should never be delivered until confirmation that media or goods/services are secured.
  • Any period of the year when hotels project they will be more than 80% occupied should be “blacked out” for trade. However, that should not exceed two months a year or it will be difficult to establish regular trading.
  • The best way to achieve large media buys for hotels is to accommodate seminars and conventions.

It is important to understand that while hotels can deal directly with the media, media may not need that particular hotel. Because barer has so many potential matches, companies like ITA have become experts at media buys and, of course, can provide much more than media for the hotel.

Still, there is no doubt that where hotels are concerned, media is the main message. Maybe the best testimonial comes from the Marriott’s Bauck: “Barter is sometimes an accounting nightmare for me because it means extra bookkeeping. But I have to do it in order to advertise effectively. It fills my hotel with cash customers. And with ITA, which does a superlative job, it works so well that I wouldn’t think of not bartering.”