I recently attended a conference of hospitality consultants. One session I sat in I thought was important to share with you. The statistics are from the hotel industry but I believe they are just as valuable and pertinent for the B&B industry. STR (Smith Travel Report) tracks lodging trends and Randy Smith, STR’s founder, presented this information.
- Average Daily Rate (ADR) has increased while occupancy rates have decreased, having peaked at 65%.
- New construction is up, about twice what it was in the 80s. And the market for upscale and economy lodging is holding ground – or growing in demand.
- The cost per occupied room are increasing faster than inflation. Marketing productivity is down, showing a weakening occupancy rate. New technology and new perspectives will improve productivity.
- Hoteliers need to increase revenue. Two ways to do that are to get guests to buy more “stuff” and to get more guests.
I know that some of this seems simplistic, but sometimes that is the information we miss and don’t take action on in our businesses. My translation of this information to the B&B industry is that aspiring innkeepers need to more seriously consider buying existing, turnkey operations. Business-savvy innkeepers will cater to either the upscale traveler or the economy traveler to be successful. B&B innkeepers who offer gift shops, even small ones, will make more money at less expense, translating to a better bottom line. Those in the B&B world must be more proactive in their marketing efforts; and I believe the best marketing effort one can make is treating the guests you have as if they matter to you so they come back.