Saturday, August 21, 2010

Freebies – do the Math!

A CNW press release tells the short story of a guest walking into a hotel and being checked-in by the President & CEO of the chain. Who, presumably, had been nursing a coffee in a wing-chair until the check-in counter ticked over to twenty million.

Not surprisingly the bewildered traveler received a few freebies - round-trip airfare for two; two-night stay for two … including all meals; Swedish massage for two; dinner for two; $250 Gift Card; tickets to one of Toronto's major live theatre shows and so on.

Apart from the air-fare my guess is about $300 per item, say $1,500; add the airfare and call it $2,000.

OK, you think I’m low-balling? Then double it, $4,000 or even triple it to $6,000.

Now estimate the revenue from 20,000,000 guests, including trickle-on such as payments from service businesses lodged on the hotel premises (percentage from the coffee shop, percentage from the gift shop etc) and how does it all stack up?

I’m guessing $500 per visitor (not knowing the length-of-stay), so say $10,000,000,000.

Now go back and double my cost of the freebies to $1,200.

It doesn’t really matter does it?

In fact, the freebies seem a bit cheap by comparison.

A two-week all-expenses paid stay in Paris (France!) at peak season would seem cheap alongside $10,000,000,000, whether it is $US or $CDN.

We are left with the question What is the value of the Press release?”.

I’m not sure.

Who (besides me) reads Canada News Wire? With this article, cub journalists looking for a space-filler? The editor of the North Bay NUGGET ?

When all is said and done, it seems like a drop-in-the-bucket for no visible return.

The loser seems to be the President & CEO of the chain, who had to set aside a half-day to chat with local managers while watching the taxis disgorge customers and drumming his fingers on the arms of the wing-chair.

Talk to Me !

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