Starting up a B and B

Themag

Hey, so starting up a B and B along the wild Atlantic way this year. I will be making 4 rooms available to guest. A few questions I have?
What are the expenses that I am forgetting
vat 9% on each room occupied
Esb
Heating
Laundry
Food
Commission of 15% to online company's like booking.com
Also I was wondering what the occupancy rate is in the west of ireland
I see it was nationally 30% in 2012
32% in 2013
33% in 2014 for B and Bs and around the 45% for guesthouses..

pedronomix

What market research have you done? What local competition is there? How close are you to quality local amenities for restaurants/bars/entertainment? Are all rooms en-suite? Have you approached local tourist organisations for help/guidance?
The list goes on..but primary is as to whether your offering has the market opportunity to succeed, the other questions are part of the financial viability planning but a waste of time until you are sure of a market.

pedronomix

What market research have you done? What local competition is there? How close are you to quality local amenities for restaurants/bars/entertainment? Are all rooms en-suite? Have you approached local tourist organisations for help/guidance?
The list goes on..but primary is as to whether your offering has the market opportunity to succeed, the other questions are part of the financial viability planning but a waste of time until you are sure of a market.

Themag

pedronomix wrote: »

What market research have you done? What local competition is there? How close are you to quality local amenities for restaurants/bars/entertainment? Are all rooms en-suite? Have you approached local tourist organisations for help/guidance?
The list goes on..but primary is as to whether your offering has the market opportunity to succeed, the other questions are part of the financial viability planning but a waste of time until you are sure of a market.

Hey, yes I have done market research, there is a gap in this market in my area and very close to a lot of good attractions. All rooms will be ensuite. thanks for all the questions however you never answered any of mine so would be great if you could...

pedronomix

You will not need to register for VAT at this stage as you are unlikely to reach the threshold. House expenses are just larger number version of the normal generated for the home. You will only incur those expenses for rooms that are let, I would guess that €10pp/day would cover them.

Hotels outside the main centres on the Western seaboard say they have not seen anything like the growth experienced in the larger more urban cities/towns. Teagasc may be able to help more http://www.teagasc.ie/ruraldev/divers_opts/documents/B-B-No11-2.pdf

looksee

Have you considered initial promotional material - good photographs, website, leaflets for local tourism office. A sign board at the entrance.

Extra help - will you be able to do everything yourself? Are you aiming for just having 4 rooms available or do you want to offer an experience? In the latter case you will have to make time for being relaxed and friendly and offering a personal service, which will be difficult while cooking breakfasts and seeing guests off.

Will you have help keeping the house looking attractive outside and doing the garden?

You will need business insurance for the house, public liability etc.

Have you investigated the need for smoke alarms and fire exits? (I am not sure what is involved here but you need to check it out).

Have you checked out tax implications?

Themag

Hey, thanks for the http://www.teagasc.ie/ruraldev/divers_opts/documents/B-B-No11-2.pdf
And I see there it says 40% occanpancy rate for the summer season only and noting for the winter..
I will be letting the rooms all year round and will also let the house out in the winter of there are people interested as I will be targeting the English and German markets.
I have all the fire regs in place and will be setting up a website to link to a pub I run which should help the cause as I have lots of contacts from that..

nicol

@Themag : Would you mind keeping us up to date on how you get on??

I bought a house recently that was being run as a B & B but was closing down. We have a number of rooms we could let out but would love to hear other peoples experiences before taking the plunge.

Cheers

Themag wrote: »

Hey, so starting up a B and B along the wild Atlantic way this year. I will be making 4 rooms available to guest. A few questions I have?
What are the expenses that I am forgetting
vat 9% on each room occupied
Esb
Heating
Laundry
Food
Commission of 15% to online company's like booking.com
Also I was wondering what the occupancy rate is in the west of ireland
I see it was nationally 30% in 2012
32% in 2013
33% in 2014 for B and Bs and around the 45% for guesthouses..

Themag

So just wondering does anyone have a average occupancy rate for there business or willing to share there expected turnover for 2016 in the west coast of ireland

Axwell

Mod Note: You already have this thread open, no need to start another one with questions relating to the same business.

Themag

So I have got info on expenses, marketing, fire regulations. I live in a good area along the wild Atlantic way with the potential to open a B and B as there is a lack of Accommodation around.
So my questions is what are B and Bs turn over along the west coast of ireland
Or what is your expected occupancy rate for 2016 or what was in 2015??
I see the national average was 35% in 2014
And 33% in 2013.
Please help as this is the last piece of Info i require.

pedroeibar1

Occupancy rates in country B&B’s are low because local tourist count is down, the concept is dated and the product has – for many Irish B&Bs - not moved much with the times. Add to that an excess of hotel rooms in some areas, with some selling rooms at a deep discount just for cashflow to service debt and an expectation (hope?) to gain income on bar/food sales. The Wild Atlantic Way is 2,500 kms long and your B&B is simply a dot somewhere on that route. It’s special to you and nobody else (yet).

You repeatedly ask a very naïve question on occupancy. Nobody can give you an answer that is more accurate than “It will be below the national average” because you have not provided any tangible information. On one “profile” 10 mile stretch of the WWW I know of three hotels – one borderline and surviving on weddings, another obtaining good rates for July / August and closed for much of the off season and in the third the bank put in a receiver last year. Most of the guest houses are gone or inevitably empty for 11 months. However, a hostel aimed at students/walkers is doing very well at school/university holiday times.

Occupancy depends on a multiple of factors-
How much are you going to charge?
How special is your product offer?
What skills do you have to make your place special and get word of mouth advertising / repeat business?
What market are you targeting? (and German and English is not an answer!)

Other costs you have not mentioned are commercial rates, insurance and water charges.

Most people would rather spend 100 or a bit more on a hotel room than 80 in a B&B. A simple “me too” B&B has no real hope, to succeed it must have several “specials” - special management, special location and a special product / experience.

Mrs OBumble

Also "the west coast of Ireland" is quite a long stretch: occupancy in Belmullet (to pick one small and far away place that shows up on Google maps) is likely to be less than on the edges of Galway city.

If there are no BnB's in your area, is that because it's not a natural place to stop? The days of being able to operate with mostly walk-up or drive-by customers referred in by people asking about places in your pub are gone: most will be checking you out on TripAdvisor first.

Mrs OBumble

Also "the west coast of Ireland" is quite a long stretch: occupancy in Belmullet (to pick one small and far away place that shows up on Google maps) is likely to be less than on the edges of Galway city.

If there are no BnB's in your area, is that because it's not a natural place to stop? The days of being able to operate with mostly walk-up or drive-by customers referred in by people asking about places in your pub are gone: most will be checking you out on TripAdvisor first.

Themag

Ok to the people been negative..
So like I already said the B and B will be along the wild Atlantic way route so there is plenty of people interested in the area. There are a couple of old B and B in the area which are outdated and rely on walk ins which is only 7% of the B and B market as 93% is booked online so they are in the Stone Age!
There is one B and B about 3k away which does expectially well and are often booked out and have to send customers further afield. There are many attractions around the area and of course gets a national tourism influx during the summer months.
My aim is to get a 20% occupancy rate year one and I think I will have no issue achieving this and then in year two get that up to 30%.
I will be providing private parking which no other accommodation can provide in our town...
Will have all the mod cons in the rooms so will be of a high standard and with my experience dealing with the public in a successful business already this will help with the personal touchs and dealing with people.
So all in all I have studied the market so a gap in the market and am investing in a quilty product to sell..
But I am only asking about people's experience with running a B and B which no one has really shared yet...

Borzoi

Themag wrote: »

But I am only asking about people's experience with running a B and B which no one has really shared yet...

I can speak of my mother's and hence my experience in the trade mostly in Wicklow. She got out of it for family reasons but also due to decline in trade, as others pointed out the hotels got cheaper, the B&Bs more expensive and as you point out the punters way of booking has changed, no need to drive to a town and walk in to B&Bs to check if they have a room when everyone had a smart phone. If you're hard to book, you won't be booked.

IMHO the standard old fashioned model is dead, you need a unique feature - could be cycling, super luxury , diving, surfing whatever but exploit that niche.

The hard part of the business is simply being on site - somebody has to be. And that is draining if there's only one person, hard to on a couple.

The plus side is if you like meeting people it's great, and your customers are the best source of new business. But still network other businesses in town send people to restaurants etc and rivals when you're full, they'll reciprocate.

Going back 10 years where my Mom was had 80%+ occupancy over summer. About 20 in Winter but only because a lot of others closed. As far as I'm aware levels have fallen in this sector but if you know what you're doing you could have a proper product.

Good luck with it

Themag

Borzoi wrote: »

I can speak of my mother's and hence my experience in the trade mostly in Wicklow. She got out of it for family reasons but also due to decline in trade, as others pointed out the hotels got cheaper, the B&Bs more expensive and as you point out the punters way of booking has changed, no need to drive to a town and walk in to B&Bs to check if they have a room when everyone had a smart phone. If you're hard to book, you won't be booked.

IMHO the standard old fashioned model is dead, you need a unique feature - could be cycling, super luxury , diving, surfing whatever but exploit that niche.

The hard part of the business is simply being on site - somebody has to be. And that is draining if there's only one person, hard to on a couple.

The plus side is if you like meeting people it's great, and your customers are the best source of new business. But still network other businesses in town send people to restaurants etc and rivals when you're full, they'll reciprocate.

Going back 10 years where my Mom was had 80%+ occupancy over summer. About 20 in Winter but only because a lot of others closed. As far as I'm aware levels have fallen in this sector but if you know what you're doing you could have a proper product.

Good luck with it

Thanks for that message and good information and for been positive:)
When set up I will post on here again

duploelabs

Themag wrote: »

Thanks for that message and good information and for been positive:)
When set up I will post on here again

Consider a decent food offering. You're blessed with amazing produce (dairy and seafood being two that spring to mind). As the previous poster said, value added offerings to your standard b+b will lift it above the rest

pedroeibar1

Themag wrote: »

Ok to the people been negative..
So like I already said the B and B will be along the wild Atlantic way route so there is plenty of people interested in the area. There are a couple of old B and B in the area which are outdated and rely on walk ins which is only 7% of the B and B market as 93% is booked online so they are in the Stone Age!
There is one B and B about 3k away which does expectially well and are often booked out and have to send customers further afield. There are many attractions around the area and of course gets a national tourism influx during the summer months.
My aim is to get a 20% occupancy rate year one and I think I will have no issue achieving this and then in year two get that up to 30%.
I will be providing private parking which no other accommodation can provide in our town...
Will have all the mod cons in the rooms so will be of a high standard and with my experience dealing with the public in a successful business already this will help with the personal touchs and dealing with people.
So all in all I have studied the market so a gap in the market and am investing in a quilty product to sell..
But I am only asking about people's experience with running a B and B which no one has really shared yet...

This forum is about entrepreneurial & business management, so you will get responses from those people, who I doubt are B&B owners. The net profit from a fifty percent occupancy rate (more than double your target) on 4 rooms at current margins would not add up to the minimum wage, and I 'd guess most people here would not get out of bed for that.

People who come to this forum for advice get it on the information they provide, not what is guessed from what they write. You have drip fed info…. You asked for input, and you got responses. In your costings you omitted several key items e.g. insurance, rates - both of which are substantial. Go look it up, especially your household insurance policy. Do you know how much the BF registration process costs? (You have not mentioned that either.;) )

Based on your stated expected 20% occupancy on 4 guest rooms, that translates to about 300 bednights. If you are lucky you will get 60 in July, 60 in August, 40 in April/may/June. That’s 160 and at a push it could rise to 200 or so by year-end but only if the host had the right attitude, was friendly, helpful, etc. and got referrals. That’s a 15% occupancy rate at a push.
I don’t see you getting “up there” with how you express yourself here. But, hey, (your word) best of luck to you. Goodbye.:)
Pedro.
PS I won’t be a customer because I don’t use B&Bs. Why? Because, like the majority of travellers who avoid B&Bs, the notion of staying under the roof of someone I might not like simply appals me. And, oh, FWIW, the biggest potential market for B&B growth is not the two you are aiming for.;)

Themag

pedroeibar1 wrote: »

This forum is about entrepreneurial & business management, so you will get responses from those people, who I doubt are B&B owners. The net profit from a fifty percent occupancy rate (more than double your target) on 4 rooms at current margins would not add up to the minimum wage, and I 'd guess most people here would not get out of bed for that.

People who come to this forum for advice get it on the information they provide, not what is guessed from what they write. You have drip fed info…. You asked for input, and you got responses. In your costings you omitted several key items e.g. insurance, rates - both of which are substantial. Go look it up, especially your household insurance policy. Do you know how much the BF registration process costs? (You have not mentioned that either.;) )

Based on your stated expected 20% occupancy on 4 guest rooms, that translates to about 300 bednights. If you are lucky you will get 60 in July, 60 in August, 40 in April/may/June. That’s 160 and at a push it could rise to 200 or so by year-end but only if the host had the right attitude, was friendly, helpful, etc. and got referrals. That’s a 15% occupancy rate at a push.
I don’t see you getting “up there” with how you express yourself here. But, hey, (your word) best of luck to you. Goodbye.:)
Pedro.
PS I won’t be a customer because I don’t use B&Bs. Why? Because, like the majority of travellers who avoid B&Bs, the notion of staying under the roof of someone I might not like simply appals me. And, oh, FWIW, the biggest potential market for B&B growth is not the two you are aiming for.;)

Can you work out the income that makes a minimum wage cause I have done them wrong.
And what does fwiw mean? Sorry

the_pen_turner

im going to state my reasons for not using a b and b , hopefully there are some bits of helpful info in them


you are under the roof of someone else, so you have to see them on the way in and out

you have a curfew time

you eat what they serve or nothing really

b and b owners are usually in your face more than a hotel. I like the distance

b+bs and more personal but a bit intrusive

owners often want to chat and ask loads of questions

owners treat their business like it is their home (usually is) and expect you to act accordingly

you have to put up with the odd crap that b+b owners put around the property and in the rooms etc. hotels are designed to not offend anyone.

b+bs often have cats and dogs and children running around like they own the place usually because its their house . ( went into a b and b once and there was a cat siting on my bed. I left straight away) and I love dogs

usually don't support anyone with allergies like nuts like a hotel would

b+bs think crap like poi puree and other smelly crap are acceptable in my room

you have to put up household noises like cutting the grass or chain sawing timber ( a bit extreme but I have )

I was once asked by a band b owner to not use all the hot water because she wanted to use it in a few minutes. that would never happen in a hotel

the_pen_turner

im going to state my reasons for not using a b and b , hopefully there are some bits of helpful info in them


you are under the roof of someone else, so you have to see them on the way in and out

you have a curfew time

you eat what they serve or nothing really

b and b owners are usually in your face more than a hotel. I like the distance

b+bs and more personal but a bit intrusive

owners often want to chat and ask loads of questions

owners treat their business like it is their home (usually is) and expect you to act accordingly

you have to put up with the odd crap that b+b owners put around the property and in the rooms etc. hotels are designed to not offend anyone.

b+bs often have cats and dogs and children running around like they own the place usually because its their house . ( went into a b and b once and there was a cat siting on my bed. I left straight away) and I love dogs

usually don't support anyone with allergies like nuts like a hotel would

b+bs think crap like poi puree and other smelly crap are acceptable in my room

you have to put up household noises like cutting the grass or chain sawing timber ( a bit extreme but I have )

I was once asked by a band b owner to not use all the hot water because she wanted to use it in a few minutes. that would never happen in a hotel

Themag

OK so just want to follow up on this thread, three and a half months later after opening my b and b.
always felt that most people here were of no help and just had negative things to say which i could never understand why ye been so negative. if someone has a dream encourage them and guide them.
anyways, my 1st year target was 20%, i am delighted to tell ye that i reach a occupancy rate of 24% in just three months. i have also adjusted my projected target for the coming year from 30% to 42%. allways dream.. again thanks to all and especially the positive guys. now on to my next project!! organise a festival and comments on what not to do please ?