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
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