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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                              Coronavirus Update

                              Apr 18, 2022 - Decline In New Cases Flatlines
                              • Stays at bed and breakfast inns may decrease if the number of new COVID-19 cases increases again. The Omicron BA.2 coronavirus subvariant has flattened the steep drop in official COVID-19 case counts that the country had experienced after the BA.1 surge in the winter. Hospitalizations and deaths are still decreasing in late April, but concerns are rising about unvaccinated and unboosted people, who remain more vulnerable to serious illness and death. BA.2, which is more transmissible and has spread even faster than BA.1, has quickly risen to account for what the Centers for Disease Control and Prevention estimates to be 86% of all US cases. Twenty states have seen the number of new cases reported daily increase by at least 30% in the past two weeks. Experts believe that two new subvariants may be contributing to this growth.
                              • Hawaii, the last US state with a mask mandate in place, allowed the mandate to expire on March 25. Bed and breakfast inns are likely to benefit from the expiration of mask mandates if travel increases. The US Centers for Disease Control and Prevention's latest guidance recommends that people continue to wear masks indoors in communities with high levels of Covid-19. The agency last week said that more than 90% of US residents are now in a location with low or medium Covid-19 community levels.
                              • The Biden administration has said that there are no plans for a national vaccine passport or certificate of vaccination for the entire US, but states and foreign jurisdictions are taking positions on the matter. New York state, for instance, issues Excelsior Passes to residents who have been vaccinated or tested negative for COVID-19 so they can gain admittance to certain venues and events. Florida Governor Ron DeSantis, on the other hand, signed an executive order banning vaccine passports. The European Union is still developing official standards, while Israel requires fully immunized residents to furnish a paper or digital "Green Pass" to access public places like gyms, theaters and hotels.
                              • Tourism will not fully rebound in New York City (NYC) for at least four years, according to NYC & Company, the city’s tourism promotion agency. Bed and breakfast inns are likely to be among the businesses that are negatively impacted. NYC & Company counts all overnight guests and anyone who travels from more than 50 miles away as a visitor. Its new forecast calls for 38.2 million visitors in 2021, rising to 69 million by 2024. NYC drew a record 66.6 million visitors in 2019.
                              • Many bed and breakfast inns have adopted the American Hotel and Lodging Association’s Safe Stay protocols and tailored them to small accommodations. Touchless check-in, in which guests are handed a sealed container with their room key, single-use bath amenities, and any other essentials that might otherwise be left in the room, is widely used. In-room nonessentials, such as pillows and shams, bed throws, and decorative figurines have been removed. "...owners are sacrificing some of their inns’ much-loved character to keep people safe," says Heather Turner, marketing director for the Association of Lodging Professionals.
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