Bed and Breakfast Market Analysis for Aspiring Innkeepers

In this current challenging economic time, it's more important than ever as an aspiring innkeeper to do as much research and analysis as possible. Whether you are looking to start your own bed and breakfast or to buy an existing "turnkey" bed and breakfast, knowing what to expect. Another term for this is "Market Analysis"


A Market Analysis will help you determine the answers to these questions:

• What trends are occurring in the bed and breakfast industry?
• What are the strengths and weaknesses of the location?
• Who are your key competitor(s)
• Are the local visitor and economic trends favorable to the location?
• What are the potential market segments available to B&Bs in the location
• What occupancy levels and average room rates could you achieve?

Let's look at each of these individually:

INDUSTRY TRENDS
Recognizing these industry trends can help you determine if you are looking for your potential bed and breakfast in the right state/region/town. Often, it's difficult to get the numbers you need to make an educated decision. Here are some resources to go to:

• The state association of where your potential B&B is located
• Professional Association of Innkeepers International Especially useful is the PAII industry study.
• Local Extension and State Tourism Offices, Convention & Visitor Bureaus (CVB) and Destination Marketing Organizations (DMO)
• Seminars and workshops
• Industry magazines and online bed and breakfast websites

BUILDING AND LOCATION
It's the same as buying any piece of property...location, location, location! I can tell you from personal experience that it will be more of a marketing challenge if your bed and breakfast is located in an area that is off the beaten track. Certainly not impossible, but definitely more of a challenge.

It is important your location be visible, accessible, and attractive to the market you are trying to attract. We wanted a romantic getaway, relaxed, comfortable and private. That suits or location. If we were located in an urban center, it would be more difficult since guests visiting urban centers typically are there to see the sites, be very active, or are visiting friends or relatives. It would make it more difficult to create "our vision" and attract our "perfect guest" in an urban setting. Seriously consider how your vision fits the location.

Analyze the Building and Area. Figure out who will be your potential guests.

• Charm and appeal of house
• What's the first impression when driving in
• Condition of the building
• Size of bedrooms and public area
• Adjacent land uses
• Are there any new commerical or residential developments in the works?
• Neighborhood safety
• Restaurants and stores nearby?
• Parking
• Neighbors
  

I can not stress this enough...CHECK OUT THE ZONING RESTRICTIONS!! There are many horror stories out there about aspiring innkeepers purchasing a property and don't find out until after the purchase that there are zoning problems. Get everything in writing from the city and county. Don't fall into the trap of having an employee tell you "oh, no problem", then further down the road you are denied your license.

LOCAL MARKET AREA
You can have a wonderful house in a nice area, but is it in a location where it will attract a significant number of overnight visitors?

Lodging establishments, which depend on tourists as part of their customer base, typically rely on local attractions to draw customers. Attractions can be both natural such as beach/ocean, canyons, state parks or tourist areas touting fine restaurants, museums, music venues, etc.

Also important is the size of the bed and breakfast you are want and what the nearby workforce is like. We are located in a rural area near the ocean and a very small local population. It's been very difficult over the years for us to find staff during our peak season. If we had a larger bed and breakfast I really don't know how we could staff it in our busy season. It's very important to asses these type of issues.

Find information from city and county sources on whether the area is on the increase or decline. How are the local store and restaurants doing?

Some Tourism Trends to Consider

• Parks
• Museum visitation
• Amusement and attraction visitation
• Casino
• Festivals and events visitation
• Snowmobile/ATV trails
• Boating activity
• Hunting/fishing activity
• Golf course usage
• Biking/hiking trail usage
• Visitation to colleges or universities
• Visitation to local hospitals

In the next blog post, I'll explore the rest of the list and try to tackle the local "competition", occupancy projections and financial projections.

Stay tuned!

Diane Emineth,
Bed and Breakfast Seminars
www.bnbseminars.com