Just Six Guests
IS IT RIGHT FOR YOU?
Bed and breakfast provides an opportunity to start a business almost anywhere in the country at relatively low cost but any business venture, however low-key, needs pre-planning and research.
Is there a market for this sort of operation? Can you afford to do it? Will you enjoy the experience? Does your property, or the property you intend to buy, have suitable accommodation and is it in a location that is likely to attract customers? What type of venture do you have in mind – a traditional bed and breakfast providing a service in the locality where it is situated, or a luxury ‘home hospitality’ package where guests join the hosts for gourmet dinners in candlelit dining rooms? Paramount is an examination of your personal objectives, as all other decisions will depend on this.
LOOKING AT TOURIST PATTERNS
If B&B providers are to get their fair share of the tourist traffic it is helpful if they understand the trends so they can focus on the right markets from the outset. Visitor numbers can vary from one year to the next depending on national and world events, the general state of the economy and the weather. The terrorist activities in 2005 delivered a severe knock to the tourist industry, particularly in London, but confidence rallied in 2006 with a record 32 million international visitors. To this figure can be added the 53 million UK residents who took holidays of one night or more away from home and the 19 million who stayed overnight on business trips.
The USA, France and Germany send us the most visitors, rather more as holidaymakers than on business trips, and Eastern Europe and Asia have become the key growth area. Threats of terrorism and environmental issues over air travel may have a future bearing on overseas visitors, but could benefit domestic tourism, and the hosting by Britain of the Olympics and Paralympics in 2012 is set to give us all a big boost.
Although the bed and breakfast share of the market might appear small in percentage terms it is growing steadily. In some areas of the country there is a shortage of accommodation and there is currently a recruitment drive by our local district and town council to encourage providers.
Accommodation used by UK residents 2006
B&B and farmhouses 13%
The VisitBritain website publishes monthly figures on room occupancy and bed occupancy (single occupancy of a double or twin room). Perhaps not surprisingly B&B falls behind in both tables. There are many possible reasons, but it is partly attributable to hosts not being available at all times to take bookings, as is the case with more commercial establishments with full-time reception staff.
Annual bedroom occupancy by type of establishment (%)
......Hotels Guesthouses B&Bs
2003....2........ 51..... 46
2004... 63....... 52..... 47
2005... 62....... 53..... 47
2006... 65....... 50..... 50
Annual bed space occupancy by type of establishment (%)
......Hotels Guesthouses B&Bs
2004... 47....... 40..... 36
2005... 46....... 41..... 36
2006... 49....... 39..... 38
Most visits are of short duration, from one to three nights. Our personal experience supports these statistics as we have found our British holidaymakers are invariably on short leisure or family breaks and our overseas guests are on touring holidays spending a few nights in each location. This suits us very well – the guest who spends two or three nights under our proof is our ideal choice.
Average length of stay and spend per nightJune 2007
Holiday - 4nights £51
Business- 2nights £166
Although Easter to early autumn is the most popular time for breaks the seasonal nature of tourism is not as apparent statistically as might be expected. The retired have freedom of choice and many workers now favour taking short vacations throughout the year. Couples enjoy leisure breaks without children and with smaller families the number of years during which parents are restricted to school holidays is reducing. Unfortunately our experience does not bear these figures out, our occupancy rate from January to March being much lower than these statistics suggest. This may be because we are in a semi-rural location and city breaks, particularly in places such as London, York and Edinburgh, may distort the picture.
...........2003 2004 2005 2006
January ....28.. 31.. 29.. 30
February ...37.. 37.. 36.. 37
March ......36.. 39.. 40.. 39
April ......42.. 45.. 43.. 47
May ........47.. 47.. 47.. 49
June .......49.. 52.. 51.. 53
July .......54.. 56.. 54.. 58
August .....59.. 58.. 56.. 61
September ..53.. 53.. 52.. 57
October ....47.. 48.. 47.. 48
November ...39.. 39.. 40.. 41
December ...36.. 36.. 36.. 41
- Social trends are bringing about a new and evolving pool of B&B hosts who are looking for a more satisfying way of life coupled with an income and find supplying serviced accommodation integrates well with other commitments.
- Retirees. Where one or both partners have recently retired. With folks living longer and with the prospect of many years in healthy retirement it can be helpful to have something to supplement the pensions. For most of us our home is our greatest asset and making an income from a property too large and/or expensive for two is an alternative to downsizing. Not only will it help with cash flow but there are additional bonuses in keeping a family home going with plenty of accommodation when the children and grandchildren return for holidays and festivities – particularly important with scattered and extended families.
- Whereas one option is to utilise an existing property, another is to sell up in an expensive area and buy a larger property in a part of the country where houses are cheaper but which has an appeal for tourists. We have come across several retirees who have moved from the South East to Scotland or the West Country and set up a hobby B&B; their lifestyle change being for both personal and financial reasons.
- Home workers. A rapidly growing number of Britons now work from home. Self-employment has been rising since 2001 with a particularly large increase in 2003, and others are now on contract work, which does not guarantee a regular income. Folks who fall into this category cover a wide range of employment: those in artistic occupations; such as writers, musicians, photographers, artists and craft workers; those in the construction industry such as carpenters, electricians, painters and decorators and those offering complementary health and beauty services such as massage therapists, reflexologists, counsellors and beauticians.
- Similarly, an expanding workforce is spending much of their working day at home on computers, translating, researching or investing, able to do so because of the improvements in technology with the internet, e-mail and word processing. Those employed in these ‘flexible’ occupations are often in a position to host visitors on a relatively small scale and welcome this secondary income to balance the peaks and troughs of their main occupation.
- Down shifters. There is a steady flow of young entrepreneurs, many still in their thirties and forties, who are choosing to move away to the countryside in search of a more fulfilling and leisurely way of life both for themselves and their families. Redundancies in the financial sector have given them the cash to re-evaluate their lifestyles. Many have paid off their mortgages and find themselves in a position to seek a more satisfying existence such as combining a smallholding or other rural occupation with a modest B&B business.
- Full-time parents/carers. If one partner, or a single parent, remains at home to care for children there may be an opportunity to combine this with B&B and the top-up income it promises. Perhaps of all the intending hosts these are the ones who need to think through the potential problems as the demands of the children will have to come second to those of the guests and the two are not necessarily compatible. It does not present a very professional image if your telephone or door is answered by a six-year-old, and whereas some visitors may love having your youngsters around for others it could become an issue.
CONSIDERING FINANCIAL CONSTRAINTS
Whether there are financial risks will depend very much on where you are coming from. Generally B&B will be viewed as a low risk financial option but we all expect to operate our businesses at a profit.
The three main issues are:
- Do you need to replace earned income? With a maximum of six guests this is not really an option if you have to live solely on the proceeds unless you can offer a very high-class product with additional services – such as a home hospitality package. The ‘six guest’ concession is really for the benefit of those entering the hospitality industry because they see it as something enjoyable which will also supply a top-up income and provide some savings on their own household expenses such as hot water, light and heat, the cost of which will be partly covered by the guests.
- Will you be adapting an existing property? Depending on what facilities are already in place you may wish to make structural changes, such as putting in en-suite bathrooms, clearing an area of the garden for additional parking, converting a dining room or including facilities for the disabled. There should be no need for any great capital outlay in the initial stages but depending on how successful the venture is you could introduce improvements at a later date. We chose to put in en-suite bathrooms before we started but knew it would increase the value of our property even if the venture failed.
- Will you be buying a new property to serve the B&B market? Those investing in a new property, bought specifically for this purpose, are unlikely to recoup their capital investment. If the property is already operating as a B&B some of the advertising may already be in place and you should also get feedback from the vendor regarding level of takings, which is helpful in budgeting.
If adapting your existing home, or buying new, you may need to take out a loan to cover the costs and in this event your bank manager will need a business plan.
CREATING A BUSINESS PLAN
However low-key the operation a simple business plan will provide a focus for analytical thinking even if you do not need to borrow money. Should you need a loan it will demonstrate that you have assessed the viability of your ideas with realistic figures of how much you will be spending and what you might expect in return. The figures you present can only be provisional but once you have been running for a year you will have a clearer idea of your occupancy rate and how you can adjust your costs.
Whether you need to make structural changes or not you will still need to estimate and list your start-up expenses (see Figure 1). To meet the necessary standards you may have to fit locks on bedroom and bathroom doors, replace your hot water tank for one with a larger capacity, replace carpets or curtains and add to your stock of pillows, bed linen, towels, crockery and cutlery. Indeed you may need a small business loan just to cover start-up costs.
WEIGHINGUP THE SOCIAL CONSIDERATIONS
The essence of B&B is that accommodation is supplied in a family home with visitors looked after by the family – it is a home first and business second. The over-riding consideration is whether you, and the rest of your family, will be comfortable sharing your home in this way. If you are flustered by having to change your regime to accommodate that of others, irritated by minor mishaps such as mud on the carpet or ring marks on the furniture, or find it difficult to trust strangers, then B&B is probably not for you. You will find the presence of strangers disruptive so will not enjoy the experience and neither will your guests.
If this is to be a joint effort it is advisable to delineate responsibilities in advance. It is all too easy for one partner to become resentful if they feel they are shouldering the bulk of responsibility and having to sacrifice a game of golf simply because guests arrive late for breakfast. This can lead to heated exchanges in the kitchen or black looks in the dining room – neither of which is endearing to your visitors.
Hosts should be prepared for business curtailing their social lives. For instance, by taking advance bookings you might have to refuse an invitation to a wedding or the opportunity of a holiday because you are already committed to a Saturday night booking. Similarly, entertaining or going out can sometimes be problematic if you are waiting for guests to arrive. Whilst this can be frustrating you are free to work out your own strategy and it is this freedom that allows us to say ‘no’ when it is not convenient to take guests that we find so appealing.
The law makes a distinction between a ‘hotel’ and a ‘private hotel’ with B&Bs being classified as ‘private hotels’. The big advantage of a ‘private hotel’ is that you can pick and choose your guests even if you have beds available (providing you are not discriminating on the basis of disability, gender or race), so you are at liberty to turn business away.
On the other hand, if you want as many bookings as possible somebody needs to be on call most of the day, and certainly in the late afternoon, in case a potential client phones. Someone will also need to be at home during the mornings as many guests like a late breakfast, particularly at weekends. Admittedly we have found most visitors, once over the threshold, will adapt quite happily to our prior commitments but we don’t feel it is fair to impose our regime on them when they are on holiday unless it is unavoidable.
You may be asked for early breakfasts, even at weekends. Guests have planes to catch and work commitments to meet so you need to be prepared to be well presented and sociable early in the morning. Five am is the earliest we have served breakfast, but my husband breathed a thankful sigh when the guests turned down the offer of a cooked meal. By contrast, other visitors will be night owls so if you cannot sleep until the front door is finally double locked for the night you may find hosting too stressful. Another potential irritant is having to keep the house tidy – all the time. We get very few ‘cold callers’ but it is embarrassing to have people standing on the doorstep wanting to view the room and knowing the bedroom doors are open, the beds unmade and there are toys spread across the landing.
Friends are often surprised at how cavalier we are towards handing out the keys to our home to folks we don’t know. The fears they express include invasion of privacy, helping themselves to your property, abusing your ‘nice’ things, wetting the bed, and throwing up over the carpet. Although we have had limited experience we have found that guests behave in an exemplary manner and have never made unreasonable demands.
However, we do remember our very first visitors – a young couple with spiky hair and interesting piercings. We locked our bedroom door, craned our ears to hear if they were creeping round the house during the night and almost expected to find the house trounced next morning. As it happened they appeared for breakfast at the requested time, were charming and left their rooms in good order. It was a timely lesson in not being judgemental.
We try to generate a feeling of mutual trust and guests, feeling they are being accepted as friends, behave as any good friend would. Nearly all our guests leave the house after breakfast and do not return until early evening. Once in their rooms we have found they are concerned that the television in their bedroom may be bothering us! We have never had a problem with anything going missing and other operators with many more years experience than us have confirmed this.
As a private proprietor you have no right to confiscate a guest ’s property for non-payment of the bill (hoteliers have this right of lien). But this is negative thinking – unless you are particularly unfortunate the last thing your guests will have in mind will be to skip off without paying. The nearest we have come to a guest taking advantage was when a young lady booked a single room to attend a wedding at a local castle and then brought back a male companion in the early hours. On coming down to breakfast she realised she couldn’t secrete him out without us seeing. She was suitably embarrassed, paid for a double and left without breakfast – we still have a drop-pearl earring as a souvenir.
We have never experienced any deliberate damage, though accidents will happen and you will have to tolerate the occasional scratches on the furniture and the walls on the stairwell getting marked with luggage. To compensate for a few wear and tear scuffs we have found there are many pluses. You will gain control of your life – no boss making unreasonable demands and no more commuting – work is now literally on your doorstep. You can operate when you want to and holiday when you choose.
The first pointer to the type of customer you are likely to attract is your location and the nature of the neighbourhood. If you are surrounded by National Trust properties, period homes and ornamental gardens you are likely to attract tourists. If you are in or near a university town or the catchment area of a public school, visiting academics and parents of students are a likely source. Those in the centre of cities will find visitors attracted by the theatres, art galleries, museums and shopping together with commercial customers with business to transact.
In the countryside riding or walking may be the draw, whilst the dales and mountains will attract hikers, climbers and cyclists. Those situated within walking distance of any of the long distance footpaths such as the Offa’s Dyke Path, the Pilgrim’s Way or Hadrian’s Wall will find these a source of custom. We have hosted walkers trekking the Vanguard Way on a number of occasions. The coast and lakes will attract those who enjoy water sports, fishing and bird watching. Theme parks and zoos will attract families and all areas will appeal to motorists whether pursuing a hobby such as photography, local history or archaeology or just generally enjoying the sights.
Close proximity to a motorway, railway or airport can be in your favour if guests wish to travel but a disadvantage if they are looking for somewhere quiet to chill out. Those looking to buy a property will have greater freedom of choice and need to look at what will bring people to the area and for how many months of the year. Bear in mind that traditional British visitor destinations such as the Lake District, Wales, Scotland and the West Country will have a short tourist season compared with the towns and cities. Your location will also influence the continuity of business. Those relying on tourists will run a more seasonal operation, and repeat bookings are less likely.
Your nearest tourist information office will have the knowledge to fill you in on local demand – if there is little it is unlikely you will be able to start a viable business however desirable your property and however much advertising you do. Forgive the cliche´ but ‘location, location, location!’ is still the key to success. The good news is that there is scope in most towns and throughout rural Britain.
SELECTING THE RIGHT PREMISES
Bearing in mind the greater sophistication of the average traveller you will need to think about what is likely to bring customers over your threshold rather than that of your competitors. Look at the competition. Are there plenty of commercial places around? Are there similar establishments in the area? If not maybe you will be filling a gap in the market but check this out as it looks suspicious if no one else has seen the business opportunity.
On the other hand, if you find there are already a large number of similar establishments don’t necessarily be put off as a glut in an area can boost business. When we are touring we would choose to visit a village where we knew there were half-a-dozen or so accommodation possibilities rather than a hamlet where there was only one. As with other businesses, antique shops come to mind, grouping can be an advantage and there may well be enough business for everyone – it will be up to you to establish a competitive edge.
Every guest has different priorities but plus points are a home of architectural or historic interest; an attractive setting or good view; pleasing external appearance of property and garden; potentially quiet location without too much traffic noise; off street parking for cars – particularly in urban areas; availability of an evening meal and use of leisure facilities such as a swimming pool or tennis court. We are fortunate in overlooking farmland and an American lady inspecting our double bedroom was immediately won over when she saw the flock of sheep just beyond the garden fence and exclaimed excitedly to her husband ‘Look honey, woollies!’.
WHO WILL BE YOUR CUSTOMERS?
If you are providing a traditional B&B your potential clientele are likely to be looking for economically priced rooms and/or more personal service than they would receive in a hotel or travel lodge. Whatever the initial reasoning visitors are more likely to be well travelled than a few years ago and increasingly discerning.
With the present exchange rate on currency the more reasonable prices asked for B&B, together with the opportunity to see the inside of a British home and chat to the host family, are a great attraction to those from overseas. The expansion of regional airports and budget flights is likely to see visitors from overseas venturing beyond the usual popular areas of London, the Cotswolds and Edinburgh. We are fortunate to be within an hour’s drive of Gatwick airport and the Channel Tunnel terminal so accommodate a number of foreign visitors often at the start or end of their vacations.
About 70% of our visitors during our first summer were from abroad, mainly Europe, but others were from Canada, South Africa, Australia and the USA. Regrettably, with the rate of exchange and concerns about terrorism, the number of longdistance travellers has fallen off during the last few years.
The domestic market embraces both holidaymakers and those visiting family and friends. It accounts for much of the weekend trade with guests attending 21st, wedding, silver, ruby and golden anniversary celebrations. There is also a sad side – local residents needing to accommodate family during terminal illness and funerals.
This locally generated business is supported by recent research which has revealed that visits to friends and relatives, who live too far away for a day trip, has increased by a third in the last five years. With the smaller size of modern houses many of these travellers need to stay in hotels, guest houses or B&Bs. We frequently host grandparents who find the cramped conditions and early mornings spent with their families too taxing, or sons and daughters visiting their parents in local residential homes. House seekers, some at the viewing stage and others who need accommodation for a few days whilst they move, are another source of guests. There are some stately homes in our area and we have found stallholders showing at antique and craft fairs have supplied us with a regular clientele on particular weekends over several years.
As many B&Bs are cheaper than commercial establishments you should be aware you may be approached by separating couples, casual manual workers employed in the area or DSS clients. Such guests often bring ‘baggage’ and may not fit in with your vision. If this is something you would not be at ease with it is helpful if you have worked out a strategy in advance. We prefer not to have guests for more than a few days and if they request longer we make more detailed enquiries and if we feel it appropriate direct them to alternative accommodation. On a couple of occasions we have had to encourage single men who have booked in from Monday to Thursday to move on, suggesting that something more permanent, such as a bed-sit or flat share, would be appropriate. Others may particularly like these clients as they leave the weekends free for leisure guests.
Not all guests will fit in with your expectations. How would you feel if a couple of teenagers request a double bed or when two women or two men specifically request a double bed when there is a twin available? Similarly if you are hosting guests as a single person you may feel ill at ease with single travellers of the opposite sex. These are all issues that need to be thought about as it is against the law to discriminate.
We have hosted a wide spectrum from honeymoon couples to guests sponsored by the British Legion and find part of the excitement is never knowing who will be next over the threshold. It is this opportunity to embrace other cultures and discuss people’s occupations, interests and circumstances that has provided us with an insight into worlds we previously knew little about.
Business customers accounted for 20% of UK income from accommodation in 2006 and this is destined to grow. What is perhaps more interesting is the statistic which tells us business clients spend three times as much per night as holidaymakers. There is surely a lesson to be learned here and B&Bs located in towns and cities need to be aware of this when pricing their rooms. Regrettably this is an area where there is still an image problem. Those employed in large companies tend to view their personal status, and that of the company they are working for, according to the perceived standard of accommodation in which they stay. In their pecking order B&B is budget accommodation and at the bottom of the list. Our experience of business clientele has been mainly with the self-employed or those engaged in new business ventures anxious not to waste the company’s resources. There is scope for a PR and marketing exercise here to bring corporate clients into the twenty-first century!
For those who establish a business hosting corporate clients there will be repeat bookings from those looking for a more homely environment and we have found business women, travelling alone, often express their preference for the security of a family run bed and breakfast.
There is an expanding niche market for hosts living in suitable privately owned houses to offer a complete hospitality package – bed and breakfast, picnic lunches, afternoon tea and evening meal, all served to the guests as though they were personal friends of the family.
The best-known British consortium of privately owned houses offering this package is Wolsey Lodges. They carry out their own inspections and have approximately 170 properties registered on their books in the UK together with branches throughout Europe. The properties are often of historical or architectural interest, such as converted mills, granaries and schools, and might include anything from medieval almshouses to Victorian manors. Each property tends to have some unique feature to offer such as outstanding views, several acres of well-kept gardens, a lake for fishing, a swimming pool or a tennis court. In addition these private homes are usually furnished to an exceptionally high standard often with antique furniture, quality paintings and fourposter beds.
The level of service reflects the generous hospitality you might expect to lay on for friends. So guests may be entertained to tea and homemade cakes in the drawing room on arrival, followed by pre-dinner drinks taken by a log fire, and the evening meal served in the family dining room with the hosts joining the guests for dinner. The hosts offering this service often have a particular interest or skill in cooking, such as Cordon Bleu qualifications, and specialise in imaginative homemade dishes using the best of local produce. The prices for this sort of accommodation will of course match the service provided. Bed and breakfast is likely to be £30–£70 per head (plus single supplement if applicable) and an evening meal from £18–£50 per head. If you possess, or plan to buy, the right property and have the time and inclination to share your home so fully it is likely to lead to the greatest returns, but requires a high level of commitment and could make heavy inroads into your private life. A difficult customer who is with you overnight can be tolerated; one who is with you for 24 hours over several days might be a different matter.
Depending upon facilities, and the host’s interests or expertise, there are openings for those offering home hospitality to provide additional attractions for which there is an extra charge. Examples are: fishing with hire of tackle; hire of bicycles; guided tours of the locality or with a bias towards special interests such as churches or gardens; golf or fishing instruction or classes in cooking, painting, needlework or any other marketable skill you possess.
This is another niche market for those living on working farms who have the facilities to host guests and provide additional facilities such as farm walks, watching the cows being milked and in some cases participating in the activities of a working farm. Farmhouses are recognised as a separate sub-category of ‘guest accommodation’ under Quality Assurance and many of these working farms are registered with Farm Stay UK Ltd.
Include in your research visits to other B&Bs in different areas and serving different markets. Find out what they do well and where you think you could make improvements. We have stayed in B&Bs in Ireland, Scotland, Wales, France, Germany, South Africa and New Zealand and always take the opportunity to use this form of accommodation at least once a year.
LIKELY REASONS FOR FAILURE
An unsuitable property that does not provide the necessary standard of accommodation;
- lack of market research into local demand;
- too high expectations of income;
- an unwillingness to really share your home.