2004

Quick Overview

To many beleaguered office workers, spending the work day in a historic inn seems like the ideal work environment, not to mention the ideal job. For many retirees looking for a “second career,” a switch to bed and breakfast owner seemingly offers a way to combine a home-based business with the creativity of renovating and developing a B&B property, as well as preparing gourmet meals. Is owning and operating a B& B the sweet deal that it appears to be?

Think again. As a future inn owner, consider the following:

• Are you up to socializing with strangers in the early hours of every morning?
• Are you interested in maintaining an exceptionally clean house, with “houseguests” that never seem to leave?
• Can you financially handle the average minimum investment? The average cost of purchasing an existing Inn in the Western U.S is $649,000, according to the 2002 study from the Professional Association of Innkeepers International. Converting an existing building, could cost you about $271,000, while buying and then converting an existing building could cost $480,000.
• How are your marketing skills and Internet/Web savvy? Most B&B marketing is done on the Internet. (For a helpful article on this see: http://www.innkeepersonly.com/innkeepernews/November-03/index8.asp)


• Are you willing to work extremely long days while on average grossing $50,000 per year?
• Do you mind being tied to your business 365 days a year? Although some innkeepers have the option of closing up in order to take time off, most do not, and are not able to turn down business.

On the brighter side, becoming a B&B owner can be a feasible career for those who already own their property, as well as those who already have an additional career or other sources of income to sustain them initially. If it seems like too big a risk, there is the burgeoning career of an innsitter. When owners of the 20,000 licensed B&Bs in the United States take time off, they call innsitters. As an innsitter, you can enjoy the wonderful aspects of running a B&B without the financial commitment or permanent commitment of owning and running a B&B. These temporary jobs can last a few days to a few months, paying anywhere from $100-$300 per day.

Sources:

“Innkeeping Can Provide a Good Supplemental Income,” by Kathy Gurchiek, The Salt Lake Tribune. http://www.paii.org/images/Innkeeping%20can%20provide%20a%20good%20supplemental%20income-%203_16_04.pdf
“How to Run a B&B and Still See the World,” by Kate Murphy, The New York Times.
http://www.paii.org/images/NYT_article.pdf
“Is Owning a B&B in Your Future?,” Retirement News. http://www.retirementliving.com/RLart205.htm

- Carolyn Ellis

Industry Snapshot: Bed & Breakfasts

Bed and breakfasts are a niche segment of the travel industry. As part of this industry, bed and breakfasts are identified as a private residence that provides a room and a breakfast. While the terms “B&Bs” and “inns” are often used interchangeably, the Professional Association of Innkeepers International (PAII) differentiates between the two in that the former offers only breakfasts, while the latter may also offer lunch and dinner. The two most important factors of bed and breakfasts are their uniqueness and sense of social environment.

Take a look at our 2004 full industry report on Bed & Breakfasts (PDF Format). If you are interested in other industry snapshots, visit our SBDC Business Advisors Toolkit.

- Peter Morales

Links of Interest

Professional Association of Innkeepers International
Innkeeper News
American Hotel and Lodging Association

Did You Know?

Free money! Government grants! No cost financing! Had enough? See our website for links to information dispelling the myth of "free money (See: http://sbdcnet.org/SBIC/trends.php)." Hopefully, these resources can help you convince your clients that money doesn't grow on trees.

Are You Paying Attention to
Demographic Trends?

Does your business depend on out-of-towners? Do you know where they came from, who they are, what they like, and why they are visiting your community? Knowing the answers to these questions can help you plan, price and market your business.

Luckily, since many communities and states depend in some part on visitor spending, government studies of traveler characteristics are available at no charge. State departments of Tourism, Economic Development or Commerce frequently analyze the characteristics, origins and destinations of travelers to their home states. These may include a breakdown of visitor’s reasons for visiting (business or leisure); the origin and destination of travelers (frequently at the Designated Market Area (DMA) or Metropolitan Statistical Area (MSA) level; and estimated per person expenditures.

Combined with data on your business’ own customers, you can know where to market for new business as well as analyze the origin market to better provide services that those travelers are most accustomed to. On occasion, state tourism departments provide special studies for targeted populations. For instance, the State of Texas conducted a study in 1997 that analyzed the characteristics, origin and destination of “Winter Texans” to better understand these special travelers, develop tourism oriented businesses accommodating these types of travelers, and to know where to advertise so that more “Winter Texans” travel to the Rio Grande Valley.

For more information and links to tourism statistics see: http://sbdcnet.org/industry/tourism.php and http://www.tourstates.com/

- Mike Cline

Contact Us

Deborah Schueneman
Carolyn Ellis
Peter Morales
Judith Johnson
Chase Tettleton
Veronica Rodriguez

Linda Hernandez
Gloria Allen
J. Eric Lomeli
Jane Nolasco
Richard Schaefer

Armida Riojas
Frank Salazar
Perry Byers
Juan Cueva
Mariluz Lugo-Gonzalez

Co-Editors: Carolyn Ellis & Judith Johnson

Please email us or call us at 1-800-689-1912 if you have any questions. Feel free to pass this on to other SBDC Business Advisors. If you are not currently subscribed to SBDCNET Connections, sign up on our website under "SBDCNET E-Newsletter."

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This U.S. Small Business Administration (SBA) Grant is funded by the SBA. SBA's funding is not an endorsement of any products, opinions, or services. All SBA funded programs are extended to the public on a nondiscriminatory basis.