Beginning a Bed and Breakfast in Virginia
Authors: Charlotte A. Reed, Economic Development Specialist, Tourism, Virginia Tech; Kimberle A. Badinelli,
Research Associate, Virginia Tech; Dr. Thomas A. Potts, Extension Tourism Specialist, Clemson University;
Carole Jones Amos, Rural Development Coordinator, South Carolina Department of Parks, Recreation
& Tourism
Publication Number 310-002, Posted June 1998
Bed and Breakfasts in Virginia
Identification of Success Factors
Table of Contents
Summary
by Tammie J. Kaufman
Research Completed: April, 1994
In the spring of 1994, Virginia bed and breakfast operators were polled to determine the attitudes, beliefs or personal characteristics they felt were necessary for success in the bed and breakfast industry. The primary purpose of the study was to provide information to current and potential B&B owners and operators and to expand on the limited research which is currently available on this growing industry. The study identified: (1) the demographics of Virginia bed and breakfast operations; (2) successful bed and breakfast operations based upon their self definition of success; and (3) the attitudes and beliefs owners and operators think are necessary for success in running a bed and breakfast operation.
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SUCCESS FACTORS IN THE BED AND BREAKFAST INDUSTRY
Limited academic research has been conducted in the bed and breakfast industry so it was difficult to conclusively identify factors or elements which contribute to success or failure. However, Bangs proposed that the greatest detriment to success in the B&B industry is underestimating the amount of work involved in this type of business. Bed and breakfast operations are appealing to entrepreneurs, but prospective owners must be prepared for hard work. As with most small businesses, the business requires attention twenty-four hours a day, yielding no free weekends or vacations for the owners or operators. Failure to anticipate or be prepared for the hard work involved contributes to the estimated 10 percent annual failure of inn operators in the California B&B industry (Bangs, 1987). Many people also undertake a bed and breakfast operation naively and undercapitalized (Hardy, 1991).
Research by Dun and Bradstreet (Buchanan & Espeseth, 1988) found the following reasons for the failure of bed and breakfast operations (in decreasing order):
- Inadequate sales
- Competitive weakness
- Heavy operating expenses
- Poor location
- Excessive fixed costs
- Other problems indicating poor judgment (Buchanan & Espeseth, 1988, p. 8).
The B&B industry is one of those rare businesses which may operate for reasons not entirely dependent on financial return. In a nine-state survey, 88 percent of the bed and breakfast owners considered their business to be successful whether or not it yielded financial profit above or beyond the associated costs of operation. In fact, a number of people noted that the business was personally very rewarding for them and, therefore, a success, even though it was not a financial success (Brown, 1990). One operator states that the hard work and limited profit is worthwhile because of the interaction with interesting people and the new friendships which developed as a result of that interaction (Walkup, 1991).
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SURVEY POPULATION AND RESPONSE
For this study, the businesses surveyed were members of the Bed and Breakfast Association of Virginia (BBAV) which was representative of bed and breakfasts throughout Virginia. They differed in size, amenities offered, price per room, and region of state.
One hundred and twenty-four of the 174 surveys were returned, resulting in a 71.2 percent response rate. B&B's representing all regions of the state responded to the survey. The data were collected from November 1993 until January 1994.
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BED AND BREAKFAST OPERATION INFORMATION
Over half of the respondents were located in cities with populations under 10,000. Most began operating after 1984 and 96 percent of the owners or managers began management of the bed and breakfast after 1982. A large percentage of the bed and breakfasts had between two and eight guest rooms and between one and eight private baths. The bed and breakfasts with shared baths generally had two shared bathrooms. Over half of the owners or managers were 50 years of age and older and were highly educated. Fifty-five percent of the businesses were managed by operators whose sole occupation was operating the bed and breakfast and the majority lived on the premises. Most operations had 24-hour staffing and a parlor or lobby area for guests. Few had a restaurant open to non-guests or offered catering, but approximately one-third served dinner to guests upon request. Over 41 percent had public meeting rooms for rent, and a majority had the capacity to hold between 15 and 50 people for meetings. Few bed and breakfast operations had gift shops, sold antiques, or other retail operations. Generally, they did not require reservations but recommended them.
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RESULTS
This study attempted to identify behaviors, beliefs or personal characteristics which current B&B owners or operators felt were important for a successful business. The most significant included the following: 1) family support; 2) experience in the hotel and restaurant industry; 3) managerial experience in large businesses; 4) positive beliefs and attitudes about the industry; 5) personality of the owner-manager; 6) use of financial data; 7) the inn as the owner's sole means of support; 8) significant knowledge of the bed and breakfast industry; 9) past experience in the bed and breakfast industry; 10) considerable knowledge of cash flow and accounting principles; 11) good relationships with employees and guests and 12) good interpersonal skills.
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SUMMARY
The bed and breakfast industry is growing rapidly and many B&B's have become destinations for travelers seeking the unique experience associated with this type of lodging. New businesses are being opened continuously by entrepreneurs who expect to capitalize on their current popularity. The purpose of this research was to identify attitudes, beliefs or characteristics of owners and operators which would assist in making the business a success. Clearly, the findings support the need for objective analysis of the potential owner's or operator's personal beliefs, attitudes and experiences. Successful operators need family support, knowledge of the bed and breakfast industry, some experience in the B&B or hospitality industry, and a good education in general business practices. They should be aware of the competition and be active in the community. Prospective operators must fully understand the B&B industry; they should not perceive the operation of a bed and breakfast as a simple hobby, but as a lifestyle and business choice. The result of this understanding will be a rewarding and fulfilling business which meets its owner's or operator's personal and financial needs.
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REFERENCES
Bangs, S. (1987, May). Staying Inn Business. Restaurant Hospitality, pp. 127-128.
Brown, N.E. (1990). Nine-State Survey of Bed and Breakfast Establishments. Ames, IA: Iowa State University, Department of Hotel, Restaurant and Institutional Management.
Buchanan, R.D., & Espeseth, R.D. (1988). Developing a Bed and Breakfast Business Plan, [North Central Regional Extension Publication No. IL-IN-SG-88-2]. Urbana, IL: University of Illinois Agriculture Publication Office.
Hardy, P. (1989). A Review of Studies on Bed and Breakfast Homes and Inns. Santa Barbara, CA: Professional Association of Innkeepers International.
Walkup, C. (1991). B&B's Offer Small-Town Charm to Weary Travelers. Nation's Restaurant News, 25(45): 7 & 152.
A complete copy of the study with literature review, description of methodology, discussion of statistical relationships and references is available in the Virginia Tech Library. For information regarding ordering or reviewing, contact or visit the Reference desk of Newman Library (703-231-9232) and ask for information on the Masteržs thesis by Tammie J. Kaufman, submitted April 18, 1994.
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Summary