Bed and Breakfast Inns

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 2,800 bed and breakfast inns (BNBs) in the US with employees provide short term lodging, often in private homes or small buildings. As the industry’s name suggests, breakfast is included in the room rate. A large number of BNBs have no employees and about 95% are run by owners as a second career. The number of rooms a typical BNB has ranges from four to eleven, with an average of six guest rooms.

Sensitivity to Economic Conditions

Economic downturns and the corresponding decline in travel affect all types of lodging establishments, including BNBs.

Seasonality of Demand

Many BNBs are located in vacation destinations which experience peaks and valleys in tourist traffic.

Industry size & Structure

The typical bed and breakfast (BNB) operates out of a single location, employs 3-4 workers, and generates about $434,000 annually.

    • The actual number of BNBs in the US varies depending on the source. According to US government sources, the BNB industry consists of about 2,800 firms that employ about 9,500 workers and generate about $1 billion annually. However, the Professional Association of Innkeepers International (PAII), estimates 17,000 BNBs in the US. In some states, BNBs under a certain number of rooms do not require licenses. In addition, BNBs which are completely run by the owner (no employees) are not included in the Census count.
    • The BNB industry is extremely fragmented; the top 50 companies account for about 15% of industry revenue.
    • The BNB industry consists almost exclusively of single establishment firms.
    • According to the PAII, about 95% of BNBs are run by owners as a second career.
                              Industry Forecast
                              Bed and Breakfast Inns Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Mar 4, 2023 - Staffing Shortages Persist
                              • Hoteliers are offering a raft of incentives to lure staff as the industry continues to experience staffing shortages, Hotel Management reported in February. A new survey of hoteliers conducted by the American Hotel & Lodging Association (AHLA) shows that nearly 80% of hotels are experiencing staffing shortages, with 22% saying the shortage is severe. The most critical staffing need is housekeeping, with 43% of respondents ranking it as their top hiring need, according to AHLA. While 71% of respondents say they are increasing wages, 64% offering greater flexibility with hours, and a third report expanding benefits, 81% say they are still unable to fill open positions. The numbers are an improvement from the AHLA September survey, when 87% of respondents said they were short staffed, 36% severely so. Respondents are attempting to fill an average of seven positions per property, down from 10 vacancies per property in September.
                              • Just over half of all Americans (52%) are planning to travel for leisure purposes in the next six months, according to the US Travel Association’s (USTA) Consumer Quarterly Tracker for Q1 2023. By comparison, 59% of Americans reported traveling for leisure purposes last year. Younger Americans appear more likely to travel than their older counterparts, with 61% of Gen Xers saying they plan to travel for leisure in the next six months, significantly more than Gen Zers or Millennials. Only 23% of Americans say they plan to travel more for leisure this year than last. Economic uncertainty and the high cost of travel apparently are dampening demand. Americans are concerned about their finances, with 49% rating their current financial status as average or below. When asked where leisure travel falls in their saving priorities for 2023, 22% say leisure travel will be a top priority for 2023.
                              • The pent-up demand for travel that fueled recovery in the hospitality industry in 2022 is expected to soften this year, Hospitalitynet reported in January. Inflation, the drawing down of savings and government handouts accumulated during the pandemic, a looming recession, and layoffs will conspire to keep travelers at – or at least closer to – home this year. Those who do travel are likely to choose lower category hotels, on shorter trips and to closer to home destinations, writes Max Starkov, adjunct professor at the NYU Tisch Center for Hospitality and Tourism in Hospitalitynet. That trend could favor bed and breakfast inns that focus their outreach more on their local markets.
                              • Southern California, South Carolina, Colorado, and New England are among the best places to visit in the USA this year, according to a month by month listing from online travel site and trip planner All Roads North. The best place to visit in January was Southern California, followed by Montana and Wyoming (February), Charleston (March), New Orleans (April), Southern Utah (May), California’s Sierra Nevada (June), Colorado (July), Montana and Wyoming, again (in August), New Mexico (September), New England (October), West Texas (November), and Aspen and other winter destinations in the month of December.
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