Benetrends Client Spotlight: Chelan Hospitality, Inc.
Name: Hans Mulder
Opening Date: October 2010
Company: Obertal Inn, Townhomes at Obertal Inn, Alpen Rose Inn
Location: Leavenworth, WAQ: Tell us about your background.
A: I was born in the Netherlands and raised in Ethiopia. My family and I lived there from when I was six months old until I turned 12, and we then returned to Amsterdam. It was while working as a server I realized my love of the hospitality industry. I went to college to get a degree in hotel management. After college, I headed to the U.S. for a semester of study at Cornell University. The visa came with a one and a half years work permit. After the seven-week program, I was offered a job in Santa Rosa, California, as part of the opening team of the Sheraton Round Barn Inn. I climbed the ranks quickly, so the company sponsored me to get a visa for an additional one and a half years. It was here that I met my wife, Andrea, who was my administrative assistant. We married in 1987 and have a daughter, Anneke, who was born in 1998. We have lived all over the country where I have managed large hotels and resorts. After 30 years of working in corporate America, I decided it was time to make my lifelong dream a reality and strike out on my own.
Q: Tell us about your business.
A: Andrea and I purchased the Obertal Inn in November 2010 and the Townhomes at the Obertal Inn in 2013. We are located in Leavenworth, Washington, a quaint Bavarian town nestled in a valley surrounded by the Cascasde Mountain range. Chelan Hospitality, Inc. is the operating company. There were 12 employees at the time of purchase. Nine of those employees still work with us and we have grown to 15 employees.
We have two websites: Obertal Inn and Townhomes at Obertal Inn. We recently added another Leavenworth hotel, the Alpen Rose Inn. It is located adjacent to the Leavenworth Golf Course. We will be updating the website, but for now you can view details at Alpen Rose Inn.
Q: What is one of the biggest challenges you faced and how did you recover?
A: When you put your life savings on the line at age 53 with no fallback option, you've got a lot to lose. Fear can be an inhibitor but also a great catalyst for survival and ultimately to thrive. When we bought the inn, it generated about $532,000 in annual revenue and was basically a mature business. Never did we think we would more than double the annual revenues to $1.2 million in four years. I never thought Id make more money personally than I made as the general manager of a 300-room hotel.
Q: How did you finance your business?
A: My relationship with Benetrends began when I heard about using 401(k) savings to fund the start up of my own business. When I reached out to them to discuss this option, they were very helpful and guided me through the process. After learning more about the process, I decided to move forward. Benetrends help in getting my business set up was invaluable. I sunk my entire life's savings into the acquisition of a hotel. In addition to using Benetrends to fund our business, we found a motivated seller who carried a substantial second note and financed that through a regional bank. The seller note was for $700,000. Our revenues grew immediately and due to this early success, we were able to refinance after and year and a half and paid off the note.
Q: What advice would you give someone who wants to start their own business?
A: Operationally, do EVERY job so you become an expert in everything. When I bought the hotel I worked four days a week at the front desk answering phones, checking people in and out, supervising breakfast service, etc. It gave me really solid insight as to how the business worked and I was able to streamline processes to increase efficiency.
If you understand basic bookkeeping, handle your own finances. Create a solid operating budget annually and check monthly to make sure you’re on target. By the fifth of the month, I have a 95% accurate P&L for the previous month and by the 15th of the month, I close the previous month out. I keep track of monthly and YTD numbers to ensure we are on target.
When I took over the hotel, I created an incentive program for some key employees. Once we made budget for the month, 5% of anything over budget was set aside for our front office employees. Half was paid out by the second paycheck of the month following; the remainder was set aside, paid after year end if we made the annual budget. We pay over $19,000 annually in bonuses and an additional $15,000 in profit sharing. They are the happiest checks I write every year, and my staff is very loyal. We have since made changes to the program. Bonuses are now quarterly, and the amount of bonus corresponds to our TripAdvisor ranking. (We are currently ranked #5 out of 20 hotels in Leavenworth, Washington). If we drop a spot, bonuses get reduced by 20%, but if we get a higher ranking, bonuses go up by 25%. This gives every employee an incentive to treat every guest really well and to handle any complaints until the guest is completely satisfied.
Finally, make sure your partner is truly your partner. I am thankful for the support of my partner in life - my wife Andrea – we couldn’t have succeeded without her. Five years later, we are truly living the dream. We just purchased another hotel, and my wife and I will be taking a 17 day trip to Paris and the south of France, entrusting our hotels to our dedicated staff.
Q: Do you have a favorite story about a customer interaction or any notable clients?
A: We received a TripAdvisor rating of 3 stars - the guest complained about our mattresses. We already had a plan in place to repair the mattresses, but in the meantime we had an unhappy guest. We sent a message to the guest, apologizing for the discomfort and offered a gift certificate for a future visit. The guest responded positively, and we are confident we’ll have another opportunity to provide a great customer experience.
Q: Any awards, certifications, etc. that you want to tell us about? Or do you do any charity or non-profit work you want to mention?
A: We have won Best Lit Building for the Christmas Lighting Festival and the Christmas WOW Award in 2013 and 2014. My wife and I volunteer for the Chamber of Commerce and I serve on two or three committees that coordinate various festivals in the town. We also support a wide variety of charities and local organizations, both monetarily and with gift certificates.
I also am an advisor through PivotPlanet.com, which offers career mentoring.
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