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 2,600 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 that experience peaks and valleys in tourist traffic.
Industry size & Structure
The typical bed and breakfast (BNB) operates out of a single location, employs fewer than 10 workers, and generates about $885,000 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 2,600 firms that employ about 13,800 workers and generate about $2.3 billion annually. However, the Association of Lodging Professionals (ALP), estimates 17,000 BNBs in the US with an estimated worth of $3.4 billion. In some states, BNBs under a certain number of rooms do not require licenses. In addition, BNBs that 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 ALP, 79% of US BNB owners live on the premises.
Industry Forecast
Bed and Breakfast Inns Industry Growth
Recent Developments
Jun 5, 2024 - Prices Decline Amid Weakening Demand
- Producer prices for travel accommodation firms, which include bed and breakfast inns, declined by 2.1% in March compared to a year ago after rising 1.9% in the previous annual comparison, according to data from the US Bureau of Labor Statistics. The high cost of living is weighing on many Americans' willingness or ability to travel and reducing demand for overnight stays. Employment by bed and breakfast inns contracted 16.3% in March year over year and remains well below pre-pandemic levels. Meanwhile, average wages at travel accommodation firms rose 1.9% over the same period to $20.80 per hour, close to their record high in December, BLS data show.
- Bed and breakfast inns that have struggled to hire enough staff during recent peak summer seasons can expect relief from the expansion of the H-2B visa pool, the American Hotel & Lodging Association reports. President Biden in March signed into law the Further Consolidated Appropriations Act (H.R. 2882), which authorizes the Department of Homeland Security (DHS) to increase the number of H-2B temporary nonagricultural workers if it determines that “the needs of US businesses cannot be satisfied during fiscal year 2024 with US workers who are willing, qualified, and able to perform temporary nonagricultural labor.” Upon making that determination, DHS can approve an expansion of the H-2B visa pool by nearly 65,000 visas. These extra visas will be crucial to filling seasonal jobs in the hospitality industry – especially those in remote vacation destinations. According to Indeed, there are currently more than 80,000 hotel jobs open in the US.
- In April, US News & World Report unveiled its inaugural list of the 250 top bed-and-breakfasts, inns, and small hotels across the United States. The rankings recognize top properties in 17 US cities and small towns – from Maine to Florida to Texas – selected based on US News user research indicating that staying in BNB accommodations in these destinations would be of particular interest to travelers. BNB properties were ranked based on star ratings and expert and guest sentiment by collecting annual awards from distinguished travel publications and TripAdvisor use scores, the magazine explained in a press release. BNBs in Asheville, North Carolina; Bar Harbor and Portland, Maine; Boston and Salem, Massachusetts; Key West and St. Augustine, Florida; and Fredericksburg, Texas, all made the list of best in their markets for 2024.
- The US ranks 17th out of 18 top travel markets in terms of global competitiveness, according to Euromonitor International. Only China performed worse, according to the study released by the US Travel Association in January. The USTA blamed decades of underinvestment and a lack of focus and coordination from federal policymakers for the nation's poor performance. While the US is still the most desired destination for global travelers, it slid to third in total visits (behind Spain and France). In 2023, it’s estimated the US welcomed nearly 67 million international visitors – down from 79 million visitors in 2019, and only 84% recovered from pre-pandemic levels, far behind other competitors’ recovery rates, according to the study. Countries were ranked by national leadership, brand & product, identity, security & facilitation, and travel & connectivity, with the US underperforming in national leadership and identity, security & facilitation.
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