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Does your area have as many B&Bs as it did 10 years ago?

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altlogin

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On our island in Washington state, in 2002 when we bought our B&B there were 22 members in our association, and we had about 1/3 of the beds on the island. Now in 2010, there are 11 members, and about 1/6 of the rooms. Several are no longer members but are still in the industry. The majority of them sold as private houses. There is only ONE new B&B in the past 8 years. There are a number of new vacation rentals. That seems to be growing.
In Port Townsend, many a B&B is on the market, but the asking price for the B&B precludes all but the wealthy from buying. And they don't need to make a living running a B&B. It seems that looking at the market today, the numbers run something like this:
If you have a 5 room B&B that sells for say, $600,000 and with 50% down you need a $300,000 mortgage, and your monthly will be somewhere around 3,000. IAssume your operating expenses are about $30,000 a year. So your 5 room inn needs to make 66,000 or about $13,200 per room just to break even. Without owner's salary, retirement plan, etc.
So I think that is why so many inns stay on the market, and those that sell often go to private homes. So over time, we have fewer B&BS. At least in our market.
Comments appreciated.
Richard
 

toddburme

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Your mortgage payment would be about $1500 with today's rates. So 9,600/room to break even.
edit: $125 for an average room night and you need to book 64 rooms a year with your model. I am new but that seems doable. I think the 50% down is a bigger detriment.
 
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In a 40 mile area of Harrisonburg, I think 7 seven have closed up and 3 have opened up. This is 8 years observation as a cottage B&B owner. Mary in Bwater, Va.
 

EmptyNest

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We have lost several here and more are on the market. No one wants to pay what they want and they are not worth it either. We are still just living in ours and probably will until the economy improves....so we have no thoughts of being able to sell it. That's ok with us. We can live here indefinitely.
 

JBloggs

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Welcome Richard!
There are a couple other WA State Inns on this forum. :)
You nailed it, and most people in this economy do not have 50% down, we are for sale and the majority of lookers have NOTHING or some miniscule amount to put down which doesn't even affect the monthly mortgage amount, it doesn't cut it. So to the bank, no the figures would not support the mortgage, and given the new owners are leaving their jobs to work in a new industry, they also, are not proven in the banks eyes.
On the other hand, many inns are practically giving THE BUSINESS away as they are now selling it at the real estate only cost, so for that it is a bargain.
Given the for sale amount you suggested, there are those looking who think they will find an inn FOR THAT SALE amount (which again, is mostly the real estate and they get the entire biz and all conveyances for free) will EARN $100,000. If it did make $100K then the for sale price would be much higher.
We had people contact us with TWO couples wanting to live at the inn and operate it. LOL!
 

EmptyNest

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Welcome Richard!
There are a couple other WA State Inns on this forum. :)
You nailed it, and most people in this economy do not have 50% down, we are for sale and the majority of lookers have NOTHING or some miniscule amount to put down which doesn't even affect the monthly mortgage amount, it doesn't cut it. So to the bank, no the figures would not support the mortgage, and given the new owners are leaving their jobs to work in a new industry, they also, are not proven in the banks eyes.
On the other hand, many inns are practically giving THE BUSINESS away as they are now selling it at the real estate only cost, so for that it is a bargain.
Given the for sale amount you suggested, there are those looking who think they will find an inn FOR THAT SALE amount (which again, is mostly the real estate and they get the entire biz and all conveyances for free) will EARN $100,000. If it did make $100K then the for sale price would be much higher.
We had people contact us with TWO couples wanting to live at the inn and operate it. LOL!.
I just looked at BBONLINE and found this place. Can't believe this price! Obviously it must not come turnkey and the photos maybe are years old?????
 

JBloggs

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Welcome Richard!
There are a couple other WA State Inns on this forum. :)
You nailed it, and most people in this economy do not have 50% down, we are for sale and the majority of lookers have NOTHING or some miniscule amount to put down which doesn't even affect the monthly mortgage amount, it doesn't cut it. So to the bank, no the figures would not support the mortgage, and given the new owners are leaving their jobs to work in a new industry, they also, are not proven in the banks eyes.
On the other hand, many inns are practically giving THE BUSINESS away as they are now selling it at the real estate only cost, so for that it is a bargain.
Given the for sale amount you suggested, there are those looking who think they will find an inn FOR THAT SALE amount (which again, is mostly the real estate and they get the entire biz and all conveyances for free) will EARN $100,000. If it did make $100K then the for sale price would be much higher.
We had people contact us with TWO couples wanting to live at the inn and operate it. LOL!.
I just looked at BBONLINE and found this place. Can't believe this price! Obviously it must not come turnkey and the photos maybe are years old?????
.
catlady said:
I just looked at BBONLINE and found this place. Can't believe this price! Obviously it must not come turnkey and the photos maybe are years old?????
It says POTENTIAL B&B...there are already others for sale in that area.
PS Wonder why they named it that, and why it has a name, when there is already a well known select registry inn with a similar name right there? You know the one, it was recently purchased.
 

Proud Texan

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Since we've been here, only one has closed. That was because the owner was 88 and running it mostly by herself. We have another that is scaling back, also because they've had a long run. Besides ours, there are two other newer B&Bs and all of us are doing well. It's working well because each of us cater to a different demographic and so there is very little competition.
 

JBloggs

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Since we have been here MORE have opened. Many more.
 
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Welcome Richard!
There are a couple other WA State Inns on this forum. :)
You nailed it, and most people in this economy do not have 50% down, we are for sale and the majority of lookers have NOTHING or some miniscule amount to put down which doesn't even affect the monthly mortgage amount, it doesn't cut it. So to the bank, no the figures would not support the mortgage, and given the new owners are leaving their jobs to work in a new industry, they also, are not proven in the banks eyes.
On the other hand, many inns are practically giving THE BUSINESS away as they are now selling it at the real estate only cost, so for that it is a bargain.
Given the for sale amount you suggested, there are those looking who think they will find an inn FOR THAT SALE amount (which again, is mostly the real estate and they get the entire biz and all conveyances for free) will EARN $100,000. If it did make $100K then the for sale price would be much higher.
We had people contact us with TWO couples wanting to live at the inn and operate it. LOL!.
I just looked at BBONLINE and found this place. Can't believe this price! Obviously it must not come turnkey and the photos maybe are years old?????
.
Says not a B&B ( just a home) so lots of start up cost there. JMU parent wknd here, bfast trays are taken up. Got a minute cruzze the net..Mary in Bwater.
 

gillumhouse

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Welcome Richard.
There has been flux since we opened in 1996. Most, if not all, in the University town north of me have closed - mega hotel rooms have opened there though.
In the next county down the road, one closed due to retirement and another opened. I was the second one in my county, then her husband finished his Phd and they sold as a residence (thius is years ago now). Then another opened in that city, they sold the building to a relative and made their house a B & B and now THAT is closed - they moved on to other things (were only half-as**d open when they were open.
The only one I know of that closed due to lack of business KNEW they would have little business because they WERE in the middle of nowhere and sold their B & B that was in town AND making money as a residence so she could stay on the farm and live in the 1970s (peace!). My town needs another B & B - I just have not managed to find someone who would be good at it who wants to do it.
Any aspirings out there, we have some neat houses here that could be B & B and we DO have enough to support more than one.
What many do not realize is that there can be one B & B anywhere and do OK (notice I did not say great) but if there are tow or more, there must be something there! I have the something there, just need more B & Bs.
 

JBloggs

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"Any aspirings out there, we have some neat houses here that could be B & B and we DO have enough to support more than one."
Support more than one B&B? Howz that? If you are full up and high occupancy then sure, this town here could not support another B&B. I wish it could support us better. My goal, obv to increase occupancy at every turn.
 

Breakfast Diva

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Welcome altlogin!
I'm also in the pacific northwest. In the last 10 years we've had a few inns close in my region but we've had the same number open, so it's status quo. What I see happening which makes perfect sense, is that those b&bs that make an effort and educate themselves on how to market effectively on the internet are succeeding, and those "old school" b&bs are closing down or suffering. Most of what I see that are for sale right now are either way over priced or have closed and are trying to sell.
 

Arks

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Welcome altlogin!
I'm also in the pacific northwest. In the last 10 years we've had a few inns close in my region but we've had the same number open, so it's status quo. What I see happening which makes perfect sense, is that those b&bs that make an effort and educate themselves on how to market effectively on the internet are succeeding, and those "old school" b&bs are closing down or suffering. Most of what I see that are for sale right now are either way over priced or have closed and are trying to sell..
Breakfast Diva said:
...we've had a few inns close in my region but we've had the same number open...
altlogin has the same situation. Same number of inns as in 2002 (66), just fewer are members of their association.
altlogin said:
...in 2002 when we bought our B&B there were 22 members in our association, and we had about 1/3 of the beds on the island.
22 members = 1/3 of beds on island means total beds on island in 2002 was 66.
altlogin said:
Now in 2010, there are 11 members, and about 1/6 of the rooms.
11 members = 1/6 of beds on island means total beds on island in 2010 is 66.
(Assuming each room has 1 bed. I think I've got that math right. I always loved those math reading problems!)
 

Breakfast Diva

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Welcome altlogin!
I'm also in the pacific northwest. In the last 10 years we've had a few inns close in my region but we've had the same number open, so it's status quo. What I see happening which makes perfect sense, is that those b&bs that make an effort and educate themselves on how to market effectively on the internet are succeeding, and those "old school" b&bs are closing down or suffering. Most of what I see that are for sale right now are either way over priced or have closed and are trying to sell..
Breakfast Diva said:
...we've had a few inns close in my region but we've had the same number open...
altlogin has the same situation. Same number of inns as in 2002 (66), just fewer are members of their association.
altlogin said:
...in 2002 when we bought our B&B there were 22 members in our association, and we had about 1/3 of the beds on the island.
22 members = 1/3 of beds on island means total beds on island in 2002 was 66.
altlogin said:
Now in 2010, there are 11 members, and about 1/6 of the rooms.
11 members = 1/6 of beds on island means total beds on island in 2010 is 66.
(Assuming each room has 1 bed. I think I've got that math right. I always loved those math reading problems!)
.
Arkansawyer said:
Breakfast Diva said:
...we've had a few inns close in my region but we've had the same number open...
altlogin has the same situation. Same number of inns as in 2002 (66), just fewer are members of their association.
altlogin said:
...in 2002 when we bought our B&B there were 22 members in our association, and we had about 1/3 of the beds on the island.
22 members = 1/3 of beds on island means total beds on island in 2002 was 66.
altlogin said:
Now in 2010, there are 11 members, and about 1/6 of the rooms.
11 members = 1/6 of beds on island means total beds on island in 2010 is 66.
(Assuming each room has 1 bed. I think I've got that math right. I always loved those math reading problems!)
Sounds like their association needs to step it up!
 

toddburme

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I assume he meant that B&B's were a third of all the beds on the island including hotels so going form a third to a 1/6 would be a drop. This assumes hotels held steady. Did I read it wrong?
 

gillumhouse

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"Any aspirings out there, we have some neat houses here that could be B & B and we DO have enough to support more than one."
Support more than one B&B? Howz that? If you are full up and high occupancy then sure, this town here could not support another B&B. I wish it could support us better. My goal, obv to increase occupancy at every turn..
Howz that? Because if there is more than one, people feel thre is something there to see and do. Because I could market and advertise better if thre were 2 of us sharing the costs.
Actually the same reason there is more than one motel or hotel in a town. Because people will come if the rooms are there.
 

YellowSocks

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Our area has more than it did 10 years ago. Of course, I wasn't here 10 years ago, so I can't list numbers, and there aren't THAT many B&B's here now. But it has at least one more than it did... ME!
=)
Kk.
 

Arks

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I assume he meant that B&B's were a third of all the beds on the island including hotels so going form a third to a 1/6 would be a drop. This assumes hotels held steady. Did I read it wrong?.
toddburme said:
I assume he meant that B&B's were a third of all the beds on the island including hotels so going form a third to a 1/6 would be a drop. This assumes hotels held steady. Did I read it wrong?
You're probably right. I was just going by where it said, "Several are no longer members but are still in the industry."
 

MTLLodge

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There is 1 that has been around for years and I know of 2 that have been closed for 10 years or more. I'm new and the ONLY 1 with private bathrooms for each room.
 
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