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Bed and Breakfast Market Research

April 5, 2000

by Kit Cassingham

Business changes and keeping up to date with those changes helps you manage your operations better. Following trends helps you anticipate declines so you can modify your operations approach to either avoid the decline or weather the slow times. Even after opening your B&B, it's important to track the results of bed and breakfast market research.

I recently attended a conference of hospitality consultants. One session I sat in I thought was important to share with you. The statistics are from the hotel industry but I believe they are just as valuable and pertinent for the B&B industry. STR (Smith Travel Report) tracks lodging trends and Randy Smith, STR's founder, presented this information.

  • Average Daily Rate (ADR) has increased while occupancy rates have decreased, having peaked at 65%.
  • New construction is up, about twice what it was in the 80s. And the market for upscale and economy lodging is holding ground - or growing in demand.
  • The cost per occupied room are increasing faster than inflation. Marketing productivity is down, showing a weakening occupancy rate. New technology and new perspectives will improve productivity.
  • Hoteliers need to increase revenue. Two ways to do that are to get guests to buy more "stuff" and to get more guests.

I know that some of this seems simplistic, but sometimes that is the information we miss and don't take action on in our businesses. My translation of this information to the B&B industry is that aspiring innkeepers need to more seriously consider buying existing, turnkey operations. Business-savvy innkeepers will cater to either the upscale traveler or the economy traveler to be successful. B&B innkeepers who offer gift shops, even small ones, will make more money at less expense, translating to a better bottom line. Those in the B&B world must be more proactive in their marketing efforts; and I believe the best marketing effort one can make is treating the guests you have as if they matter to you so they come back.

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