Winning Brands Corporation (WNBD)

[just_an_ant]

WNBD and the Hotel Sector

Oct 30, 2011 Palm Springs, California: Hospitality Market Trial Now Converting to Orders

A test has been underway in Palm Springs, California. The purpose of the test was to let hotels/motels compare the cost effectiveness and satisfaction by staff and hotel guests after converting to Winning Brands products (1000+ Stain Remover, KIND Laundry Family and CLEAN1 Hard Surface) for sustained housekeeping use. The test involved the replacement of conventional (well known) brands for ours. Success was to be measured by a reduction of cost yet improvement in user satisfaction.

I am pleased to report that all seven hotel properties participating in the Palm Springs test considered it a success, and have started placing orders, effective immediately, for these three products, with the objective of using them regularly.

Nov 23 Update: Hospitality Sector

The gist of the feedback from participants has been that in direct comparison with national brands, Winning Brands products were delivering better results at a better price. The difference is sufficient to justify a switch in regular use. Palm Springs has been the initial testing ground of an organized approach to this sector. More participating hotels will be described in due course, already numbering 8. The next stage of this program is to commence placements in San Diego and Las Vegas.

Dec 11 Shareholder Question: Hotels

We have determined through testing that a 200 room hotel or smaller will require on average $500 per month (at wholesale) worth of product (including all relevant Winning Brands SKU’s), taking into account seasonal adjustments.

The Stage 1 Goal: Hotel Sector was to reach 10 hotels that not only agree to participate in the study, but then prove that the system is delivering the proposed benefits by switching to our brands for the relevant applications. This is the point that we have reached. 10 hotels in Palm Springs have started to use our products as a system, and are placing paid re-orders at the projected figure.

The next planning threshold, Stage 2: Hotel Sector, is to attain 100 properties. We have already noticed an admirable willingness on the part of hoteliers to share beneficial ideas amongst industry colleagues, leading to introductions. Accordingly, in January, we are commencing service to 2 additional local properties that are national banners, with a 3rd national banner decision pending (for local use, first). The targeted 100 properties are likely to contribute approximately $600,000 per annum. The number 100 is not the maximum extent of our ambition for this sector, but rather the number that could be serviced using the distribution model in place for Stage 2 in this sector.

It has always been difficult to estimate the number of hotels in the USA accurately, because definitions vary, registration protocols differ across municipalities and states. 140,000 is considered a moderate estimate. The California Department of Finance has estimated 23,000 in the state. Winning Brands considers a next threshold target of 100 properties to be within reach in 2012, conservatively, based on the emerging Stage2 operating system that has been developed to serve this sector.

Dec 30 Welcome, Comfort Inn, Palm Springs

We appreciate the interest and willingness of a growing number of hotels in our California sector launch to begin using Winning Brands products. We thank the Comfort Inn, Palm Springs, for joining other hotels who find the combination of our laundry, hard surface and stain removing solutions to be a winning combination for performance, value and convenience.

Feb 04 Welcome, Ramada Inn, Palm Springs

We thank the Ramada Inn, Palm Springs, for joining other hotels who find our laundry, hard surface and stain removing solutions to be a winning combination for performance, value and convenience. Congratulations, Winning Brands Team California, for advancement in this sector.

Feb 07 Shareholder Question: Hotels

Is this hotel plan going to end the same way or is there a clear plan on how that 100 client number is going to achieved? Thanks.

ANSWER

There are two groups of hotels. The first consists of those that have formally incorporated our products into their routine. We call these committed. The second consists of those who are using our products on a provisional basis (ie experimenting, trying, comparing). We call these transitional. There are approximately 10 in the first group and 20 now in the second group.

The rate of growth through the year is not likely to be linear, because of this vetting period. It will tend to come in batches. The second group of new prospects were all approached relatively recently based on the proven results in the first group. That second group now needs its evaluation period

We supply this sector through a distributorship arrangement. Therefore, Winning Brands does not carry the overhead associated with the business development, but instead shares a portion of the end-user price to provide adequate margin to the distributor. There are significant associated technical costs for the distributor, including pumps associated with dispensing, training and customer service, etc. Also, the distributor has been determining what personnel to recruit and train for the implementation of Project 100. Bear in mind that the initial stage of the project was testing oriented. Operationalization is getting underway now. It required planning because our goal is to grow far beyond 100 hotels in years to come. California alone has approximately 26,000. 100 properties is only the next stage threshold. A sophisticated distribution concept needs to accommodate the nuts and bolts issues of growth beyond the territory where the activity is occuring currently.

Even when we gain new hotel customers, there is reluctance by most of them for us to use their name publicly because of several factors:

Some might have ties to other suppliers which they feel would be compromised
The local hotel may be prohibited from providing public endorsements by contract with the franchisor
The hotel is corporately owned and local management does not have the authority
A new customer may not want to burn their bridges with a former supplier until that have more history with us, etc.