Alaska's Barter Blog
Alaska's Barter Blog
Now it is possible for the smaller company to integrate “organized barter” into their business, exactly like their larger counterparts, and with results that are equally effective.
Barter is an option that seems to gain prominence in times of economic downturn and good barter is nothing short of great! As with anything new, there may be pitfalls to avoid and questions to ask before taking a wrong turn without adequate information.
Because barter has become a $20+ billion industry, projected at more than a million participating business of all sizes, the opportunities for reducing cash expenses while growing one’s business have expanded exponentially, making available almost any product or service that one could imagine.
With EOA, the buyer is not obligated to purchase from the seller and vice versa. Trading occurs between multiple companies so that thousands of products and services are always available. Most of our members turned to us to ensure that their companies have access to multiple opportunities that support their business success
without the expense of a lot of cash, and without having to keep track of availabilities or manage thousands of possible trade options.
Fortune-500 companies who have built their own in-house corporate barter departments embrace barter as an essential element of conserving cash, and for good reason – it works.
Some companies even mandate that before any cash purchase is approved, EOA must be questioned for a similar product or service. These savvy companies consider the relationship with us as one of their most valuable resources.
Promoting fiscal responsibility, while offering a means of directly reducing cash expenses, just represents responsible thinking. Most companies use this multi-directional, modern format to monetize unused capacities and excess inventory as a sophisticated tool that increases business efficiencies and revenues, while reducing their costs and preserving cash flow.
Regardless of the state of the economy, every financial strategy should be considered to maximize occupancy, revenue and profitability during high and low demand periods. The importance of profit to owners and investors demands a critical look at an underused marketing tool – barter. Hotel executives have a fiduciary responsibility to capitalize on the value of their inventory. With unsold rooms as currency, hotels can position their brands to reach desirable corporate, group and leisure accounts. Many companies successfully use barter to strengthen brand image, pay for daily expenses and to boost demand for their properties while conserving cash to improve their profits.
A proven marketing and financial tool for centuries, barter is simply the exchange of goods and services without the use of money; for the hotel industry, this means using rooms as currency. Barter is successfully used by hotels, airlines, governments, Fortune-500 companies and privately-held enterprises to maximize the value of excess inventories.
EOA An intelligent way to monetize unsold rooms
Using barter provides hotels – from economy to luxury – with a system for selling available room inventory in a way that is consistent with their specific image. Because the typical barter client is a corporate traveler, or incentive group that is not a current customer, hotels can reach entirely new types of clients and sources of future cash business.
Trading hotel inventory through EOA is an effective means of purchasing advertising, promotions and other marketing services when funds are not available or are too costly. It is a viable option that can provide a valuable, competitive edge, especially in a volatile or sluggish economy.
We provide a one-to-one value of otherwise empty hotel rooms for services, allowing the hotel to receive full value of the traded rooms with only the cost per room involved and our membership fees, instead of credit card charges or travel agent commissions.
EOA Ideal for the hotel industry to achieve maximum profit
Since hotels have perishable inventory, bartering complements the hotels operating systems in many ways:
• Hotels require substantial amounts of cash to operate, and bartering provides a way to conserve it.
• Due to the brief tenancy of guests, hotels must continually advertise in order to remain top of mind and maximize business prospects. Therefore, bartering rooms for advertising is an attractive opportunity since ad placements, like guest rooms, are perishable inventory.
Hotels strive to attract clients that fit their target markets and build long-term relationships to attract corporate customers who may represent future cash-paying customers while creating incremental revenues. Consequently, our source of business generates a steady business stream that should not be ignored as a way to find new business.
• Newly opened hotels, which typically need to conserve cash and build customer relationships, strongly benefit from using barter. Their generally low occupancy rates and profitability make us an optimal financial and marketing strategy.
A better option to discounting on the internet, since we provide full value to the hotel and deliver mostly corporate customers
As hotels’ booking cycles shorten, there is increasing use of Internet distribution channels to sell rooms. Unfortunately, it has raised many problematic issues, including:
Price-sensitivity of customers gained through internet channels which can adversely impact a hotel’s revenue and image. Properties that typically cater to corporate executives may find that reduced-rate customers spend less on such incidentals as food, beverage and the business center, and demonstrate less loyalty to the hotel once prices rise.
While internet room distribution is designed to boost occupancy and revenues, the real challenge is to wean consumers off discount-price distribution channels as more lucrative opportunities become available.
Hotels receive full value for their rooms when sold through EOA. In addition, EOA’s supplied consumers have more incremental spend as they are not discount shoppers.
Interviews with hoteliers indicate that barter is an option that’s generally “not considered” versus not “preferred.” Here are some of their perceptions about barter, as well as answers to these concerns:
1. Barter is simply not considered.
• This is because there are few organized trade exchanges in the US.
2. Concern for the quality of guests.
• This issue can be easily resolved with contractual provisions. For example, hotels can exclude tour operators.
3. Difficulty in matching the needs of hotels with those of the companies with which they want to trade.
• A hotel’s ability to directly barter with a media company is limited and complicated.
The challenges lie in matching their needs, and in the administrative issues of managing barter relationships among many different companies. This is resolved by working with EOA, which seamlessly facilitates efficient use of trade credits, manage the paperwork and reporting, coordinate reservations and the redemption of room credits, while providing expertise in specific media planning and buying that a hotel might not otherwise have.
4. Difficulty or lack of consensus in establishing the internal barter procedure and bookkeeping protocol.
• Concern for over-charging a hotel’s advertising budget with dollar-for-dollar hotel rooms, can be viewed as undermining the benefits of using barter. However, the true benefit is evident on a hotel’s cash-flow statement – which measures cash-in against cash-out – and not the profit-and-loss statement –where revenues and expenses accrue based on fair market value.
5. Concern about receiving quality advertising placements at real value.
• If a hotel is not a current cash advertiser in a particular media outlet, in most cases, advertising can be secured on a barter basis.
• Once a client is approved for barter, we will reserve the approved advertising schedule and then submit proof of performance just like ad agencies do.
The world of barter through EOA extends far beyond lodging and advertising. Hotels routinely barter for capital improvements, corporate gifts from clocks to golf clubs, and even payment of routine bills. In addition, hotel chains can apply barter to many properties, in effect setting up a national account.
In most cases, because of competition in the lodging industry, and for extra profits hotels will involve the trading of more than just their room nights. If available, hotels normally include meals and beverages and/or recreation through EOA in order to keep guests on site, and ultimately, fuel higher spending.
EOA the bottom line
The hotel industry in Alaska remains a very seasonal business. Recognition of an ever-changing operating environment should inspire hoteliers to examine all possible ways to boost sales performance.
Barter is an underused tool that can make a very significant, positive impact on a hotel’s bottom line. By converting otherwise unsold rooms into marketing dollars, hotels can continue to boost their presence through advertising when funds would not otherwise be available, or they can use trade to purchase needed hotel improvements and professional services that otherwise maybe monetarily prohibitive.
The inclusion of barter in a hotel’s annual marketing budget allows it to expand its sales effort and to dramatically stretch funds to pro actively test new markets and build awareness. Hotels can use EOA to grow their net profits while remaining under the radar of their usual cash customers and competition.
Barter Like Fortune-500 Companies Do
If you were going to make a large purchase, say to remodel your home, would you rather write a check or make an additional sale through barter, by paying with your own products and services (by bartering with other Alaska business owners) while receiving your own wholesale markup discount?
Alaskan business owners have been growing their businesses while improving their lifestyles for more than 24 years through our statewide and worldwide barter network. Alaskan business owners use us to sell their goods and services at full price, while at the same time saving 50 – 90 percent on their businesses expenses by using our EOA credit card.
Bartering has Never Been So Easy in Alaska!
Alaskan Businesses owners and their employees use the web, or their free Android or iPhone mobile app to find other barter members. Then they barter by simply swiping their Alaskan EOA cards through seller’s credit card terminal or POS system for safe, quick, effortless barter authorizations.
Alaskan businesses have been taking advantage of our powerful business tools to earn trade dollars which they then use to purchase goods and services from other member businesses. Some of our 650 Alaskan businesses have been with us for more than 24 years; and EOA trade credits are spendable worldwide!
EOA has been providing professional assistance since 1994!
80% of the world’s fortune-500 companies use one or more of our 650 US offices every day to barter! Alaskan businesses use their products and services for our barter financing: loans and barter lines of credit, instead of cash to purchase many of their everyday business expenses. As we continue to bring them trade sales to repay the loans – so companies can continue acquiring what they need when they need it, without being dependent upon or even effecting their current cash flow.
Barter Lines-of-credit for Alaskan Hotels
Even though interest rates are the lowest they’ve been for many years, financing is very difficult to acquire, and even for those with excellent credit, as banks are very picky who they lend to, as their interest income is so low. However, for the hundreds of Alaskan business that are part of the EOA network, this credit crunch has not been such a hard ship. As EOA has been making low interest barter loans (3% simple interest) and providing Alaskan businesses easy financing for more than 24 years!
EXAMPLE: An Alaskan hotel needed a $100,000 renovation. They approached EOA’s Anchorage Alaska office looking for a barter loan to offset their cash costs. We sat down with them and identified $50,000 in possible barter purchases that was available in Alaska through EOA that they needed for their project. We quickly gave them a $50,000 unsecured barter, low interest line-of-credit, which they subsequently repaid in less than a year – by accepting the barter as payment for their otherwise empty room-nights that would have otherwise not have been rented.
Alaskan EOA cardholders either use their free Android or iPhone mobile apps or EOA membership website to find the barter product or service that they want. EOA cardholders are compelled to bypass their competition, and purchase what they need through barter – because of the way they get to pay (trading which gives them a sale each time they buy.)
Their barter loan created massive benefits for the hotel, over their conventional bank financing. Their Bad loan was easily repaid with $50,000 worth of new barter sales, which was also brought to them by their lender, EOA!
EOA loans also:
1. Brought the hotel new barter sales – from EOA’s huge worldwide customer base.
2. EOA means less competition – because almost all of their competition does not accept the EOA card.
3. Saved the hotel a lot of money – as they repaid their entire barter loan only with additional sales from their otherwise unsold room-nights. Business they would not of had otherwise.
4. Loan repayment did not touch the hotels cash flow – as they did not repay their barter loan with cash earned from their existing customers, but trade dollars earned from new barter customers.
5. Loan debt did not show up on their credit score, that they’d added to their current debt load, however...
6. Hotel’s loan repayment will be added later (after it has been completely paid off) to improve the hotels credit score – if hotel owner wants this.
7. And just like any bank loan, all their barter financing expenses were also tax deductible, with some very powerful added tax benefits.
Since the incremental cost of renting an otherwise empty room for the typical hotel is around 15 percent of rooms selling price, bartering hotel’s actual out-of-pocket cost of paying their loan back was only $7,500 for their $50,000 barter loan!
This thinking also follows the cost structure set by the IRS, who only allows a hotel to deduct the actual incremental “specific out-of-pocket costs” of a donated room-night. CPA’s agree that the IRS is correct in not figuring in the bartering hotel’s usual overhead costs that remain unchanged, and would be there regardless if they rented that room out or not. The actual costs of making incremental sales do not include a business’ overhead costs; and remember, all EOA barter sales are incremental.
When all was said and done, their EOA barter loan was far nicer to their company then their matching $50,000 cash loan (that took weeks of paperwork) they received from their long-time local banker – which their banker only gave them after the hotel could show that they already had half (50%) of the renovation costs covered from a barter loan through Alaska’s EOA office.
Last we heard they are still making monthly cash payments on their bank loan, that each month takes away from their cash flow and does not produce any new customers for their hotel.
Non-EOA, business owners have to rely upon Craigslist Alaska barter to move excess inventory. A huge problem with Craigslist barter is that business have to desire what is offered in Craigslist Alaska for the same value as their offering on Craigslist, and also wanting at the same time as the person offering what they are willing to trade / barter on Craigslist. With Craigslist Alaska barter you are also on your own for any problems that may result from poor performance, delays, or non-performance of offerings. As no one polices ads contents or the ethics of those who sell through Craigslist Alaska barter. For this reason, and for many others, for the last 24 years hundreds of Alaska barter businesses trade / barter within EOA Commerce Network.
Our dedicated barter staff assures fair business practices among it’s hundreds of Alaskan members, while providing the necessary funding (cash & trade) for optimum business growth. We also issue detailed monthly statements of all member purchases and sales, plus annual 1099B forms for tax purposes.
EOA IS LEGAL And Good For Alaskan Businesses!
The Federal Government, IRS, TEFRA Act, Accounting Principal Board Opinion #29, Financial Accounting Standard Board FASB #30, and CPAs regard EOA trades as a legitimate and legal method of doing business in the United States.
Alaska businesses simply swipe buyers EOA cards through their POS and credit card terminals; while buyers use our iPhone and Android mobile apps and websites to search our extensive database when wanting to purchase.
TRAVEL THE WORLD And Spend Almost No Cash!
Alaskan companies can barter with 650 US cities and 250 cities in other countries and in Alaska. They’ve been trading with Alaskan companies for more than 24 years! EOA allows local companies to trade their goods and services for everything from: Tickets on the worlds largest airlines, to hotels, resorts, cruises, car rentals, tourist attractions, shopping, restaurants and more. And businesses can pay for all of it later on with their own products and services.
Travel Worldwide from Alaska through EOA
Worldwide travel from Alaska enhances the value of your barter membership by providing families access to airline tickets, resorts, restaurants, car rentals and other tourist related services worldwide through barter from our office in Alaska. Using trade dollars earned in Alaska to pay for barter travel expenses allows EOA members the ability to travel the world from Alaska – almost cash free.
And our barter travel department provides complete barter booking services for all our members, in and outside of Alaska. Our dedicated Alaskan barter travel team not only books what you request at 100% trade when available, but also searches for unique barter services outside of Alaska that most travelers would of otherwise not known of. And while away from Alaska – on your barter trip, our travel department is just a phone call or email away. We are located in midtown, Anchorage, Alaska. We pride ourselves on providing top notch barter service for those away from Alaska, and for those using barter to visit Alaska. Our travel department has 24+ years of barter booking experience.
Please note that not all available barter services are available in Alaska – and the same choice restrictions our local Alaskan barter membership has is also felt worldwide when using barter to travel outside of Alaska.
Few Alaskan barter businesses run at 100 percent capacity. EOA offers Alaska businesses the ability to trade / barter their excess time, space, personnel or inventory for trade dollars (barter) that can then be spend with a wide Alaskan businesses and worldwide, instead of cash.
Improving your lifestyle by offsetting any of these expenses against new sales EOA brings you: as an Alaskan EOA merchant who uses barter you are able to access an exciting array of lifestyle enhancing opportunities for yourself, your staff and your family while improving your balance-sheet and reducing your overall cash outlay that would otherwise not be available.
People go into business for many reasons but one of the most compelling is the desire to enjoy a finer lifestyle. It doesn’t always work out that way. All too often businesses who do not barter, absorb most of their cash, and the business owner simply survives on what’s left. Frequently Alaskan employees live better than the business owner.
EOA offers business owners the ability to barter; to convert equity tied up in slow-moving bad assets into needed products and services. This process helps hundreds of Alaskan businesses to thrive by allowing the owner to barter, and thereby reallocate cash saved and letting Alaskan businesses purchase directly using barter credits received from additional and future barter sales.
For Alaskan families, vacations become a lot easier to justify at half the cost, or less by using barter, and EOA is able to offer Alaskan barter business owners a range of hotels, restaurants, car rentals, limos, tourist attractions and other entertainment options without the need for any additional cash outlay, through barter.
CRAIGSLIST AND BARTER
Non-EOA, Alaskan business owners have to rely upon Craigslist Anchorage to move excess inventory. With Craigslist and all one-on-one barter transactions a business has to desire what is offered in Craigslist Anchorage for the same value as their offering on Craigslist, and also wanting what is offered on Craigslist at the same time as the person offering what they are willing to trade / barter on Craigslist Anchorage for. And you are also on your own for any problems that may result from poor performance, delays, or non-performance of offerings on Craigslist and all other one-one-one barter transactions. As no one polices ads contents or the ethics of those who sell through Craigslist and other totally web-based barter sites. For this reason, and others, for the last 24 years hundreds of Alaska barter businesses trade / barter within EOA Commerce Network.
Our website is many times confused with Alaska's Barter Island, which is an island on the Aleutian Island chain; which naturally has nothing to do with www.alaskabarter.org, EOA, or craigslist Anchorage's barter.
Bartering Hotel Rooms: An Underused Marketing Tool That Reaps Financial Gain
Enhance Your Lifestyle by Bartering: Any one can afford if they barter!
Call Us: (907) 345-8000
Finance Str.10 New York
FinanceStr.10 New York