B&B Industry Reports Healthy Figures
Tuesday, August 04, 2009
Posted by: Ingrid Thorson
Haddon Heights, NJ, July 29, 2009 - The biannual Industry Study of Innkeeping Operations and Finance 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 held steady at 44% in 2008, after results of 44% in 2007, 38% in 2006 and 35% in 2005. Overall, this four-year increase (2005 through 2008) represents a net gain for the industry of about 26%.
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 B&Bs 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 industry in 2008 was 60%, down from 63% in 2007, 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 2008 were so comparatively positive.
B&Bs 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 2008, according to the PAII study, the median “average daily rate” (ADR) at B&Bs in the study was $150, which represented a 3.4% increase over the previous year.
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 available 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 16% increase in RevPAR from 2006 to 2008, reaching a median rate of $58.
The typical B&B provides a long list of amenities that are inclusive of the room rate. The report shows that 93% 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:
- 72% of B&Bs are run by couples
- 79% of innkeepers live on premise
- The typical B&B has between 4 and 11 rooms, with 6 guest rooms or suite being the average
- The average B&B has been open for 15 years
- The average age of the oldest part of a B&B building is 107
- 29% of B&Bs were in rural locations, 23% were urban, 5% suburban, and 43% were village
- 94% of rooms have private baths
- 36% have achieved an "historical designation" by a local, state or national historic preservation organization
- 5,700 square feet is the average size for a B&B
- 93% offer free high speed wireless internet
- Most B&Bs 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 B&Bs provide the following in guest rooms: internet, television, luxury bed/linens, premium branded toiletries, robes, fireplaces, magazines and jetted tubs.
The PAII study is the nation's only authoritative and comprehensive research report on the finances and operations of this segment of the hospitality industry. It is used by innkeepers to compare their businesses with other B&Bs, 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 2009-2010 Industry Study was conducted in the spring of 2009 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 B&Bs 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 http://www.innkeeping.org/.
About PAII: The Professional Association of Innkeepers International is the leading trade association representing owners of bed and breakfasts and country 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).
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