Bed and Breakfast Inns NAICS 721191

Apr 23, 2025 - Consumer Spending Up, B&B Outlook Positive

• Consumer spending rose 2.7% in February 2025, continuing a steady upward trend from 2024, per data from the US Bureau of Labor Statistics. A traditional B&B is susceptible to seasonal shifts in revenue given the regional and specialized nature of the business. The accommodations segment is stabilizing post-Covid and adjusting to new consumer demands for more upscale and individualized guest services. Construction data from CoStar shows that 18% of guest rooms under construction in the US are not associated with any brand as those kinds of licensing deals have become too expensive and less effective. AI has also allowed small and independent - or remote - hotel owners to more easily create and operate their own reservation systems and loyalty programs, helping B&Bs level the playing field.
• Producer prices for travel accommodation firms, which includes bed and breakfasts, rose 2.4% in September compared to a year ago after rising 4.5% in the previous September-versus-September annual comparison, according to the latest US Bureau of Labor Statistics data. Meanwhile, employment by bed and breakfast inns sank 12.6% year over year in September, its lowest level for the month since the pandemic, BLS data show. Average wages at travel accommodation firms rose 2.1% over the same period to $20.90 per hour. Rising consumer expenditures – up 2.9% YoY in August – are supporting rising prices and wages for lodging providers.

• Data from the US Census Bureau’s latest Business Trends and Outlook Survey (BTOS) shows that while large businesses have been leading in AI adoption, very small businesses also had relatively high AI use rates during much of 2023 and 2024. The smallest size class (businesses with 1-4 employees) was found to have the second-highest AI use rate (after business with 250 or more workers) rising from 4.6% to 5.8%. Generative AI can be a useful tool in narrowing the technology and performance gap between small and large firms. For example, generative AI can enable small firms like bed and breakfast inns tackle tasks that otherwise require additional expertise or outsourcing, which can be prohibitively expensive for small businesses. Tasks such as marketing, designing websites, creating images and videos, gaining customer insight, and interacting with customers can all be performed with the help of generative AI.
• The US’s widening wealth gap is expected to be especially evident during this summer travel season, The New York Times reported in July. Wealthier households are more optimistic about their ability to take trips, and the services they are more likely to use — like full-service hotels — are flourishing. Budget hotel chains, by comparison, are expected to report a pullback, NYT reports. “If you go to upscale, you’re actually seeing growth there,” Adam Sacks, president of tourism economics at Oxford Economics, told NYT, adding, “A lot of that has to do with the different financial situations of different income groups.” Full-service hotels are expected to hike room rates by 2.1% this year, while midscale room rates remain flat and rates at economy hotels decline as low-income earners retrench, according to a forecast by hospitality analytics firm CoStar Group.