Reasonable expectation for innkeeper net income?

Bed & Breakfast / Short Term Rental Host Forum

Help Support Bed & Breakfast / Short Term Rental Host Forum:

This site may earn a commission from merchant affiliate links, including eBay, Amazon, and others.

Mrs. G

Active member
Joined
Apr 21, 2021
Messages
37
Reaction score
19
Hello Innkeepers! Another question for you. I'm not asking for anyone to post personal info about their incomes, unless of course, anyone is okay doing that. Just asking what a reasonable expectation for net income would be. I know that is a very broad question. Let's say for an 8-10 room well located charming historic inn in a place with a reasonably robust 8-12 month tourist, business traveler, visitor population. A place not off the beaten path but has some reasonable visitor draw to it so maybe 60% occupancy? If you know of any specific examples of your own place (if comfortable sharing) or others you know of (not naming their inn) then that would be great. What could the innkeepers reasonably expect to make? I've searched endlessly through these threads and have never really gotten a sense of what net profits can be. I've pulled out the calculator to come up with figures but wondering straight from the source of all of you inn owners. Thanks in advance for any info, insights!
 
There is no definite answer to this due to too many variables. Try projecting your expected occupancy, less a percentage for various outlays. Do you have enough in savings or other income to get you through a couple of years while you’re finding your feet? Do you know your food cost roughly per guest per meal? Utility costs per month, tax, ins, licensing
In the past, a general assumption is 5-6 rooms minimum needed in order to make a living solely from the inn. I remember doing this kind of projection before we opened with two rooms. Our goal was to have B&B pay for the costs of running the house. We got there in two years. Since then two stand alone units have been added. Gravy.
 
Last edited:
There is no definite answer to this due to too many variables. Try projecting your expected occupancy, less a percentage for various outlays. Do you have enough in savings or other income to get you through a couple of years while you’re finding your feet?
Yes I'd have a cushion plus my spouse plans to work for several more years. I figured the question would be tough to answer.
 
Agree, too many variables. Are you year round or seasonal. Can you upsell, offer packages, like elopements, photo workshops or cooking classes. What about selling gifts, sheets or robes. There are ways to increase your income if you want to do more than just room nights. There are software programs that you can use to flex rates based on what is happening around town so you don't get taken advantage of. What are some other ideas?
 
Agree, too many variables. Are you year round or seasonal. Can you upsell, offer packages, like elopements, photo workshops or cooking classes. What about selling gifts, sheets or robes. There are ways to increase your income if you want to do more than just room nights. There are software programs that you can use to flex rates based on what is happening around town so you don't get taken advantage of. What are some other ideas?

I would do small elopements/weddings, showers, rent out house to larger groups, birthday parties, etc. If I get a place, I would like for it to be a beautiful historic Victorian, maybe Greek Revival home. Sure, why not have a little boutique selling comforting, enticing things.

My kids are older teens, young adult now. I am ready for a career change and need a new baby now that my own are flown and grown!
 
Last edited:
I am 3-tooms, off the path and all I ever asked of mine was to pay the expenses of the house. the only time that did not happen was when we created the new bathroom & remodeled the original. Ended up getting loans for that to "stay above water" and the house HAS paid the expenses (honking commercial real estate taxes and commercial insurance) ever since. Food costs can get you - I strongly suggest having a freezer (2 if you have the space for them). I just bought OJ - the premium stuff - on sale 2 half gallons for $5 - they are in the freezer. It is usually between 4.50 & 5.00 a half gallon. I bought a pig and that is being packaged for B & B breakfasts - 1 lrg & 1 small slice of ham per pkg, 2 pork chops per, bacon 1 lb per, and the ground in 1 lb packages for me to make my own sausage. I will be once again freezing my berries (blackberries & red raspberries) for the winter & spring until the next harvest. Milk can be frozen when it is on sale. There are a lot of things you can do to keep down the costs. (I took out hedges and replaced with berry bushes for my "fencing".) I have herbs growing all around the house - I have fresh sage year round.

It also depends on how "high end" you are with your inn. The higher your rates, the nicer your linens & amenities, etc. have to be and the higher the expense column. I am in West Virginia and my house is a Four-Square, not a mansion so "high end" I am not.
 
I am 3-tooms, off the path and all I ever asked of mine was to pay the expenses of the house. the only time that did not happen was when we created the new bathroom & remodeled the original. Ended up getting loans for that to "stay above water" and the house HAS paid the expenses (honking commercial real estate taxes and commercial insurance) ever since. Food costs can get you - I strongly suggest having a freezer (2 if you have the space for them). I just bought OJ - the premium stuff - on sale 2 half gallons for $5 - they are in the freezer. It is usually between 4.50 & 5.00 a half gallon. I bought a pig and that is being packaged for B & B breakfasts - 1 lrg & 1 small slice of ham per pkg, 2 pork chops per, bacon 1 lb per, and the ground in 1 lb packages for me to make my own sausage. I will be once again freezing my berries (blackberries & red raspberries) for the winter & spring until the next harvest. Milk can be frozen when it is on sale. There are a lot of things you can do to keep down the costs. (I took out hedges and replaced with berry bushes for my "fencing".) I have herbs growing all around the house - I have fresh sage year round.

It also depends on how "high end" you are with your inn. The higher your rates, the nicer your linens & amenities, etc. have to be and the higher the expense column. I am in West Virginia and my house is a Four-Square, not a mansion so "high end" I am not.

That is really wonderful that your rooms pay your house expenses. Your place sounds lovely and I am sure it is. It doesn't have to be 'high end' to be a special, warm, inviting, cozy place that guests enjoy and love. I'll have to keep your food costs tricks of the trade in mind as well!
 
This is a tough question, no doubt. Some years the money is good, other years the furnace and water heater go pfft in the same week and you not only have to replace them you also have to cancel reservations that would have helped pay for them.

Things you have to keep in mind about how much you’re making—the business is paying your housing costs, your utilities, food expenses, taxes, things like that. Where I am, that’s worth about $60k/year. I get to live in a lovely house in a nice town and I don’t have to pay for it. (A 50’s vintage, ranch style house on a postage stamp lot sells for $375k here.)

You should go into this with a year’s expenses saved up in advance. No one expects a pandemic, but it happens. The PO’s here experienced 9/11. Being on the east coast things shut down, travel stopped during what is peak season. Put on your scouting cap and always be prepared.
 
We had a financial planner at the beginning and based on the expenses and the rates then, we would have to have a minimum 34% occupancy to break even. Where we are located, our occupancy rates are rarely over 55%. We couldn't do this without hubs annuity and my SS income, but we love what we do!
 
What could the innkeepers reasonably expect to make?

For me I make a life I enjoy but I have simple expectations, can't answer for others. My uniform is a tattered T-shirt that daughter says I should throw away, we are pretty much a DIY business. Yesterday we painted a storage barn, last week made a small deck, this spring distributed 8 dump trucks of mulch in the garden. I live a good life in exchange for my labor. Wealth is in the property, not in cash that can be spent, I'm not going to retire to something else, this is it for me.

Trying to look at the last couple of years occupancy may average in the 40%, could I rent more rooms, probably, but I'd also have to clean them and that's the sweet spot each of us has to find. I'm sure I could increase occupancy by listing with some OTA's, but then I'd need some help cleaning, and then there would be more wear and tear to repair and would I really profit more, we each have to make that decision.
 
What could the innkeepers reasonably expect to make?

For me I make a life I enjoy but I have simple expectations, can't answer for others. My uniform is a tattered T-shirt that daughter says I should throw away, we are pretty much a DIY business. Yesterday we painted a storage barn, last week made a small deck, this spring distributed 8 dump trucks of mulch in the garden. I live a good life in exchange for my labor. Wealth is in the property, not in cash that can be spent, I'm not going to retire to something else, this is it for me.

Trying to look at the last couple of years occupancy may average in the 40%, could I rent more rooms, probably, but I'd also have to clean them and that's the sweet spot each of us has to find. I'm sure I could increase occupancy by listing with some OTA's, but then I'd need some help cleaning, and then there would be more wear and tear to repair and would I really profit more, we each have to make that decision.

You sound like you have a really nice life you love and enjoy. You are making ends meet and comfortably living your life. What more could you ask for? Sounds good to me! Wealth can exist in many forms not just money. Wealth of time, wealth of friendships, wealth of enjoyment, wealth of creativity. Money is just one form of wealth and it certainly does not guarantee happiness!
 
Back
Top