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If anyone knows about B&B, Karen does. Hopton House - a converted granary with three bedrooms - has a five-star grading (putting it in the top seven per cent of rated properties in the country) and a gold award (given by Visit Britain for added excellence)

The Guardian, January 2009


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How Much Money Will Your Bed and Breakfast Make?

Before you consider setting up a Bed and Breakfast you must do your financial projections and work out how much money your B&B will actually make to see if it is actually worth setting up in business.

If you’re buying an existing business you will probably have access to the business accounts which will show you how much money the previous owners have taken each year. This will give you a good idea of how much money you can expect to make. If there is potential to improve the business you may be able to make more money. Or you may make less money than the existing owners depending on how you run the business.

Bear in mind that previous good performance doesn’t guarantee good takings for the future. There may be factors beyond your control, such as a weak dollar, bad weather, an outbreak of foot and mouth , which may all contribute to a decrease in the number of people staying at B&Bs.

If you’re setting up a brand new business what factors will affect your occupancy and potential turnover?

Location, Location, Location

This is probably the most important factor to consider. Your location is going to affect the price you can charge, your occupancy levels and the type of guests you have coming to stay.

If you looked at prices charged by B&Bs across the country you’ll see a wide variation in what they charge even for B&Bs of seemingly similar quality and style.

Even within one area you may see quite a difference in prices. In my area in Shropshire, you will see B&Bs in the popular town centres such as Ludlow, with all of the amenities easily accessible, able to charge  £20-£30 more per night than similar quality B&Bs 10 miles out into the countryside.

Your location and proximity to popular attractions or business areas will affect your occupancy levels. English country B&Bs without any business tourists tend to be seasonal, with most of their guests staying between spring and late autumn. Whilst B&Bs that benefit from business tourists or a popular year round attraction or in a city may well see good occupancy figures throughout the year.

Quality and Style of B&B

The type and quality of B&B you set up will determine the amount of money you can charge and the number of guests you have staying.

Generally speaking, the higher the quality rating of a B&B, the higher the occupancy. Though you need to ensure that your B&B also meets the needs of the guests coming to the area. If you’re in the middle of nowhere on a long distance walk, you are likely to be more attractive to potential walking guests if you provide cheap good value accommodation than if you are running an expensive boutique hotel.

Facilities Offered

The facilities you offer to guests may well have an impact on your occupancy levels. If you’re not within walking distance of a pub or restaurant you may need to offer evening meals to guests to encourage more people to stay.

If you’re next to a famous children’s theme park or a famous dog showground, you will probably reduce your occupancy levels if you don’t take children or dogs.

It’s worth noting that NOT offering a certain facility may attract certain guests. I’ve had guests tell me that they have chosen to stay at my B&B because I don’t take children under the age of 12.

Or, as another example, if you only offer vegetarian food, you will not have those people expecting a full English at their B&B staying but you will be more attractive to vegetarian guests.

If you want to tap into the business tourist market you will need to offer facilities such as internet access, good showers, early breakfasts etc.

How Much You Charge

Obviously the price you charge for a one night stay at your B&B will affect how much money you take in a year.

The price you are able to charge will depend on all of the things we’ve already discussed; location, quality, style and facilities offered.

Pricing can be difficult to get right and I know  some people are uncomfortable with it. On my courses I’ve noticed a tendency for people to want to undercharge for fear of being seen as greedy or pricing themselves out of the market.

I would suggest spending some time on the internet to get to know your local B&Bs and the prices they charge, then setting a price about the same as similar B&Bs to yours.  You can then review your prices over time and adjust as necessary.

Be careful not to undercharge – I think people are as suspicious of services that are priced too cheaply as they are those that charge too much! They want to know what the catch is!