The remaining 50% is paid in a trade credit, with a mechanism in place that converts it to cash. It is disregarded, for now, and the transaction is looked upon purely from a cash standpoint. All costs covered and 10% profit. A cash-flow positive, profitable, transaction and a no-brainer for the hotel management.
A Private, Economic, Finance, Credit and Monetary System
The amount of trade business we do depends on:
WIR and ATS are, for all intents and purposes, banks. They maintain accounts, extend credit and charge interest and fees. They are not subject to banking laws because of the nature of the currency in the accounts. The use of the private currency gives both buyers and sellers a compulsion to act.
In Switzerland, a B2B cooperative was formed, designed to provide new services, including compensating for discounts and use, instead, a private form of money, the WIR Franc, in combination with the Swiss Franc, to buy and sell with other participants. Currently, the WIR System has 60,000 members and generates 6.5B in volume.
ATS is an exact duplicate of Switzerland’s WIR Trade System. WIR issues and manages a private form of money, the WIR Franc, that Hotels, Construction, Manufacturing, Retail companies and Services providers use, in combination with cash, to buy and sell with each other, via dual-currency transactions.
The Swiss sales operation began four years ago with Ezio Valentini and 3 trainees, by affiliating with a hotel and conducting a test, on a small scale, with one property and grow based on results. Today, there are 145 Swiss nationals as brokers. The structure is simple, duplicable and our offices are in the cloud. The sales process is almost mechanical and a new broker can be trained in two days and generating deals in five.
The Profit Generator: The focus is on the NBC Hotel. Three members, each conduct buying and selling transactions using a combination of cash and a private, asset-backed, trade currency, the American Trade Dollar, issued and managed by the System.
The actual cost to OUTSOURCE the sale of a portion of a hotel’s unused and unsold capacity ranges between 20% and 25% of rack rate. The OSP charges 15%. All proposals brought by the OSP have a minimum of 50% in cash.
Corporate Trade and Dual-Currency Transactions
1. The hotel currently conducting a certain amount of business with
The Trade System brings a new client, ABC Construction, to NBC Hotel, resulting in the sale of a room with a rack rate of $200. By injecting the use of the trade currency, the $200 sale results in a net taxable profit of $120, or 60% profit margin for the hotel. The trade currency gives both buyers and seller a compelling reason to act.
2. Having a substantial amount of unused and unsold capacity and the ability to deliver a portion of that inventory at a low cost.
The American Trade System (ATS)
The Principals of the Hawk Group have had a relationship with the WIR System for decades as clients and, for the last four years, as sales contractors. A similar system for the U.S. has been created and an affiliation with a U.S. hotel is sought.
For the last 4 years, we have provided sales services to the Swiss network and plan to use the same methods in the U.S. operation. The idea is to start in the hospitality sector with one property and build from there. The Project, seen from the hospitality perspective:
Example: A hotel with a certain amount of annual sales, of which $5M are sales to corporate entities, exclusive of sales to consumers, not-for-profits and public entities. It contracts with our company, as an Outsourced Service Provider (OSP), a sales contractor, to generate $500K in additional corporate sales annually.
Discounts are the primary method for hotels to compete. The extreme: An OTA sells a $200 rack-rate room for $100 and net the hotel $40, at an 80% discount.
The model is powered by our proprietary sales methods. Our brokers do not commute, travel and there are no brick-and-mortar facilities. We recruit, hire, train and manage using Skype as the office. The savings allow us to reduce the commission to a point where everyone has a compelling reason to act.
As sales brokers, we take a portion of the hotel product certain, or virtually certain, to go unsold and sell it, at rack rates, for cash.