Bed & Breakfast Inns

Brief Excerpt from Industry Overview Chapter:

The US bed and breakfast (B&B) industry includes about 3,000 establishments with combined annual revenue of $1 billion. No major companies operate in the industry. The B&B industry is highly fragmented: the 50 largest firms generate 15 percent of industry revenue.

COMPETITIVE LANDSCAPE

Demand is driven by personal disposable income. The profitability of individual establishments depends on occupancy rate and operational efficiency. Larger B&Bs may have advantages in providing a range of offerings and prices to suit a variety of traveler budgets. Small establishments can compete effectively by offering superior customer service to target markets. The industry is labor-intensive: average annual revenue per worker for a typical company is about $60,000.

B&Bs compete for overnight accommodations with other hospitality establishments such as hotels, motels, extended-stay inns, country inns, RV parks, and campgrounds. Distinctions between country inns and B&B inns aren't always clear, but typically a country inn has 10 or more rooms and operates a restaurant on premises, while B&Bs average about six rooms and serve only breakfast.

PRODUCTS, OPERATIONS & TECHNOLOGY

The major offering of B&Bs is rental of guest rooms (about 80 percent of revenue): other sources of revenue are gift shop sales, food and beverage sales, and spa services. Some B&Bs also rent their facilities for meetings or events.

B&Bs are typically private homes converted to accommodate overnight guests, primarily as a destination site or, less frequently, as an overnight stopover for travelers. Distinctive features of B&Bs may...