Bed and Breakfast Industry Reports Healthy Figures through Tough Economy
Thursday, November 17, 2011
Posted by: Ingrid Thorson
Haddon Heights, NJ, October 2011- The annual Industry Study of Innkeeping Operations and
F inance released this month by the Professional Association of Innkeepers International (PAII)
shows that occupancy rates, room prices and revenue continue a steady climb for the nation's bed and breakfast businesses. The study shows that the median occupancy for B&Bs was up slightly in 2010 at 39%, after results of 36% in 2009, 34% in 2008 and 34% in 2007. Overall, this four-year increase (2005 through 2008) represents a net gain for the industry of about 15%.
Except in a small number of travel markets, occupancy rates at B&Bs tend to lag behind
that of hotels and motels. "This is mainly because most small inns cater primarily to leisure
travelers and are located in destination areas with brief ‘high’ seasons,” says Jay Karen, PAII
President and CEO. The occupancy figure for the hotel over the same 2007 to 2010 time period
went from 63.1% occupancy to 57.6%, according to hotel industry statistics. "We believe many
of the trends in traveler behavior have moved people in our direction, which accounts for our
segment of the lodging industry holding its own in a difficult time” says Karen. He cites the
desire for longer weekends over extended trips, drive-in vacations rather than long flights, and
the rise in demand for unique hospitality experiences over the run-of-the mill as reasons the
B&B product is still a preferred choice among millions of travelers and why figures through
2010 were so comparatively positive. In addition, Karen believes social buying/flash sale
companies, like LivingSocial, are creating new demand for the small, independent property.
Recent research conducted by travel think-tank YPartnership revealed a strong interest
among leisure travelers to stay at B&Bs. Seventy-nine percent of leisure travelers indicated a
desire to stay at a B&B, with Millennials leading the way with 87% interested.
Inns make up for the comparatively low occupancy rates by charging higher rates and providing more personalized services than do the chain lodging properties in general. In 2010, according to the PAII study, the median "average daily rate” (ADR) at B&Bs in the study was $151, which represented a slight increase over 2009.
Another key measure of business success in the lodging industry is Revenue per Available Room (RevPAR). This number is arrived at by dividing total annual room revenue by the number of rooms nights for rent during the year -- thus giving a good picture of both income and occupancy. By this measure, the B&Bs in the study experienced a 14% increase in RevPAR from 2010 to 2009, reaching a median rate of $57.
The typical B&B provides a long list of amenities that are inclusive of the room rate. The
report shows that 97% of B&Bs offer free high speed internet access in the common areas and
rooms, and that a majority of B&Bs provide luxury bedding and linens, bath robes, premium
toiletries, jetted tubs and televisions. Most B&Bs still report hosting afternoon events for their
guests, such as teas, wine tastings, etc. "One interesting statistic we noticed from the study is that there was a slight decrease in the offering of common-area services and amenities, and a slight increase in offering in-room services and amenities,” says Karen. "It seems more guests are asking to enjoy services privately in their rooms, and innkeepers are happy to oblige. That’s the nice thing about B&Bs – as a guest, you can make the experience as social or as private as you like.”
Some other interesting statistics from the study include:
The PAII study is the nation's only authoritative and comprehensive research report on
- 72% of B&Bs are run by couples
- 83% of innkeepers live on premise
- The typical B&B has between 4 and 10 rooms, with 6 guest rooms or suites being the average
- The average age of the oldest part of a B&B building is 111
- 94% of rooms have private baths
- 35% have achieved an "historical designation" by a local, state or national historic preservation organization
- 6,000 square feet is the average size for a B&B
- Most inns provide the following in common areas: internet, magazines, hot/cold beverages, board games, fireplace, refrigerator, newspapers, telephone, cookies/cakes/candies/fruit, fresh flowers and televisions.
- Most inns provide the following in guest rooms: internet, television, luxury bed/linens, premium branded toiletries, robes, fireplaces, magazines and jetted tubs.
the finances and operations of this segment of the hospitality industry. It is used by innkeepers to compare their businesses with other inns, by prospective innkeepers to help develop business plans, and by banks and other financial institutions as a key resource in evaluating the business climate for B&Bs.
The 2011 study was conducted in the spring of 2010 in partnership with Industry
Insights, an independent professional research and consulting firm that specializes in conducting operating surveys, compensation studies, market assessment surveys, customer and other forms of customized research.. The study includes detailed information about the operations and financial performance of inns segmented by size, type, region, and other factors. Copies of the study may be obtained by contacting the PAII office at 856-310-1102 or by visiting www.innkeeping.org.
About PAII: The Professional Association of Innkeepers International is the leading trade
association representing owners of bed and breakfasts and small inns. PAII provides education,
communications, public relations, networking, and research services to its membership and the greater industry. PAII hosts the world's largest annual gathering of innkeepers, the Innkeeping Conference & Trade Show, and publishes the industry's leading trade publication, Innkeeping Quarterly (IQ) and is behind the industry’s first consumer campaign to get more travelers staying at B&Bs and inns: the Better Way to Stay campaign (www.betterwaytostay.com).