There are more B&Bs than ever — but is anyone making money?
Up against sleek, über-modern boutique hotels and luxurious mega-chain properties, one might assume bed and breakfasts — with their cosy charm oft-associated with Victorian loveseats, frilly drapes, four-poster beds and precious china — are passé, or a last resort, if you’ll pardon the pun. But in some ways for years they’ve been giving guests what other accommodation businesses are just starting to offer.
Tracking the overall performance of the B&B segment is a challenge. Although they’re regulated provincially, some municipalities require B&Bs to have licenses and some don’t. Industry groups collecting data on lodging properties often overlook B&Bs. The Hotel Association of Canada (HAC), for example, doesn’t register accommodations with fewer than 30 rooms, says HAC president, Tony Pollard. To make matters more complicated, B&Bs can mean different things to different people. For example, Canada Select, a national accommodations rating program, breaks B&Bs up into three categories: B&Bs, B&Bs/Tourist Homes and B&B Inns.
Still, if you look at the few stats that are out there, the segment appears to be anything but dwindling. In Canada’s most populous province, the Ontario Ministry of Tourism’s stats indicate the number of B&Bs has increased steadily, from 208 in 2000 to 434 in 2006. Tourism B.C.’s Product Services manager, Wanda Hook, says the province’s numbers have hovered around the 800 mark from 2005 to 2008. Across Canada, B&B owners claim 90 per cent occupancy rates through peak seasons.
In fact, when it comes to the success of B&Bs, staying power has more to do with the operators than the establishments, says Rex Davidson, owner of the six-room ThistleDown House in Vancouver’s North Shore. “The main challenge for B&Bs as an industry is the longevity of B&B owners,” he says. “People go into it with great expectations of having lots of spare time and they just don’t. Burn out is pretty common.”
Davidson estimates an average lifespan of three and a half years for a single person running a two- to three-room B&B, or five years for a couple. The good news is that when they sell there’s always another prospective B&B owner ready to scoop up the property. This could explain why B.C.’s B&B Innkeepers Guild (a provincial quality assurance association to which Davidson belongs) has approximately the same number of members year after year.
Most B&B owners agree they don’t see other players in the accommodation industry as competition, pointing out each style of lodging offers a unique option for an increasingly diverse and discerning clientele. “People travel today for their own pleasure and they choose the accommodation that’s perfect for them,” Davidson says, adding the people choosing B&Bs look for unique, personal experiences at reasonable rates.
Paul Hyde, owner (along with his partner Michael Sunley) of the seven-room Banting House Inn in downtown Toronto, says his clientele is “extroverted, easy to please, not a demanding bunch.” The rooms range from $104 to $155 per night, and although Hyde claims a few regulars visit Toronto every week for business (he gives them better prices), the majority of guests staying at Banting House (and for that matter at most B&Bs) are leisure travellers.
The people who frequent B&Bs often choose them for their well-known features — staff that is knowledgeable about the community, flexible check out and breakfast times, and a cosy atmosphere with personalized service and high-end or “green” bathroom products. In fact, B&Bs have offered these types of amenities for years, with other hotel properties just starting to catch on. But that doesn’t mean B&Bs should forego modern amenities like Wi-Fi, DVD players and cable TV. (Travellers of all types are loath to miss American Idol.)
Nevertheless, for a B&B to be successful it must have the basics covered, offering comfortable beds and great breakfasts. For some B&Bs the breakfast is a draw unto itself. At the 12-room Queen Anne Inn in Annapolis Royal, N.S., Greg Pyle and his wife provide guests with a wealth of choices: homemade granola and yogurt, muffins, fruit parfaits, omelettes and waffles with locally produced maple syrup. At Banting House it’s much the same, with breakfast served between 7 and 11 a.m. And Davidson says the food is a major draw at ThistleDown, too. “We provide really unusual breakfasts. This morning it was wild trout with Limoncello mayo. That’s why people come.” (The owners of both the Queen Ann and ThistleDown run restaurants as well, which are open to the public for lunch and dinner. It’s a great way of bringing in local clientele and earning extra income.)
Without a strong corporate or business-travel base, B&Bs rely heavily on tourism, and therefore, are season-specific. Annapolis Royal is one the oldest settlements in Canada. “Our engine here is history,” says Pyle. He’s not kidding — there are approximately 20 B&Bs in the town, which has a population of only 400. At the Queen Anne, a heritage home that’s around 150 years old, the rooms range between $159 and $179 per night for most of the summer, but in the off-season they’re all $99. Average occupancy from July to September hovers around 90 per cent. In June and October it’s closer to 60 per cent. “And off-season, if we’re at 35 to 40 per cent we’re happy,” Pyle says. To counter such a short peak season, they market the house as a destination for weddings and events. They even offer a “Lord-of-the-Manor” package for groups to rent out the entire house, with full access to the kitchen.
In Vancouver, where winters aren’t as foreboding and there are plenty of urban attractions, the busy season is slightly longer. Davidson says occupancy at ThistleDown is in the mid- to high-90s from April through to October, petering off in November. In February and March it’s around 50 per cent. One room is $165, three are $195 and two are $295. At Toronto’s Banting House the season is longer still. “We’re very steady, if not full, from March to December,” Hyde says. Most New Year’s Eves he’s fully booked, too.
But unlike hotels, B&B’s typically shut down for several months a year. ThistleDown closes for December and January, Banting House closes for January and February and the Queen Anne closes for almost five months of the year, between December and April. This gives B&B owners a chance to enjoy some privacy and time to refresh the rooms. “The floors and the Persian carpets take a beating,” Pyle says. He renews the rugs annually and paints at least every two years. At Banting House, Hyde just replaced four beds and he frequently restyles the decor. “For people who’ve been coming here for five or six years, upgrades and changes are welcome.”
And with B&Bs operating with such miniscule marketing budgets, repeat business is vital to success. At ThistleDown, returning guests make up 38 per cent of the clientele; at Banting House, they account for some 30 per cent. Besides repeat customers and business garnered through word-of-mouth, B&B owners say the web is the best way to market their properties. “We often ask guests how they found us,” Pyle says, “and most of the time it’s the Internet.” Print advertising has low returns and is simply too expensive, he points out, and websites are relatively easy to create. Many also belong to destination marketing organizations. “It’s more to market the town,” Pyle says. “Once we steer them here, then they can decide which property they want to stay in.”
Unfortunately, with so much overhead and so few rooms to let, it’s difficult for B&Bs to make a lot of money. It doesn’t help that housing prices are hitting astronomical levels. And there are other challenges, too. “In eight years our insurance costs have doubled,” Pyle says, adding he hasn’t raised room rates in the past three years. Increased gas prices and a stronger Canadian dollar also mean fewer American travellers. Like other businesses in the hospitality industry, Pyle acknowledges the B&B market is struggling. “But it’s surviving just because of what it is. It’s a unique way of travelling, of getting into local culture.”