ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, January 18, 1996 TAG: 9601180055
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
DESPITE RISK, the industry is flourishing. There was a fourfold increase between 1980 and 1990 in the number of bed and breakfast inns.
B&B, shorthand for bed and breakfast inn, might also mean buyer beware.
Most operating inns that are for sale in this country barely turn a profit or are losing money, aspiring innkeepers were told at the bed and breakfast industry's annual state conference, held in Roanoke this week.
Despite the risk for new ventures, the industry is flourishing. There was a fourfold increase between 1980 and 1990 in the number of bed and breakfast inns, defined as lodging establishments that serve breakfast and include it in room prices, and country inns, which serve breakfast and lunch or dinner or both, according to industry figures. Their numbers exceed 20,000, slightly less than half of all lodging establishments.
With the economy strong, Americans have a thirst for travel and specialty inns want to increase their share of that business.
More than 300 conferees were expected at the four-day conference at the Hotel Roanoke and Conference Center. Most are working innkeepers attending specialized lectures with titles such as, "More Income Without More Debt." Meeting separately, a few dozen people who think they want to become innkeepers underwent a reality check to see if the business was for them.
In that meeting, industry consultant David Caples said some of the newcomers are there because truck driving, being a plumber or whatever they were doing before just got old. Other freshman innkeepers instinctively knew they were cut out to care for guests.
To start, Caples said, a would-be innkeeper needs a business plan - a deeply personal statement of one's dreamed-of bed and breakfast inn, with details down to the profile of a typical guest or guests and the amenities he or she will want.
Questions should arise in the brainstorming process, Caples said, such as, "Am I going to have corporate guests who don't want footboards because they feel hemmed in?"
People who want both to have fun and make money at innkeeping must invest in the right property and improvements, if any. Before buying, it's wise to check an inn's performance by the average price paid for one of its rooms for one night, Caples said. The industry average recently was $103.
The average daily room rate is higher at B&Bs than full-service hotels, for whom a comparable figure would be $85. The rate for all lodging establishments hovers around $67.
Bed and breakfast inns do their best business on weekends, which Caples described as the "cream of the traffic." It is possible to run an inn weekends only, as long as reservations can be taken any day. It is easier to make money, however, by luring midweek travelers, such as people on business. A fax or other business machine placed in a room can be such a lure.
An innkeeper is doing well to have 35 percent of gross revenue left over after paying expenses except the inn's mortgage, Caples said. The remainder after paying the mortgage should be about 9 percent of revenue, with only taxes and depreciation left to figure.
To make profits grow, established inns should raise their room prices each year until the market feels the pinch and bookings go flat. From then on, the innkeeper should care more about keeping rates up than keeping the inn full, Caples said.
As for other perks of innkeeping, many owners live in their own inns by themselves or with family, enjoying much lower living costs than if they rented or owned a separate home.
LENGTH: Medium: 71 lines ILLUSTRATION: PHOTO: WAYNE DEEL/Staff. Rocco Capozzi (foreground) learns toby CNBmake omelets Wednesday during the bed and breakfast industry's
annual state conference at the Hotel
Roanoke. color.