Bed and Breakfast Inns

The US bed and breakfast (B&B) industry includes about 20,000 establishments with combined annual revenue of about $4 billion. No major companies operate in the industry. The B&B industry is very highly fragmented: virtually all are owner-operated, single locations.

The B&B industry is a subset of the $130 billion per year US lodging industry. Classification between country inns and B&B inns isn't always clear, although a country inn has 10 or more rooms and operates a restaurant on premises, while B&Bs average about seven rooms and serve only breakfast.

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 highly labor intensive: average annual revenue per worker for B&Bs with paid employees is about $50,000. B&B owner-operators, who normally do much of the work themselves, may be unpaid employees.

B&Bs compete for overnight accommodations with other hospitality establishments such as hotels, motels, extended-stay inns, country inns, RV parks, and campgrounds.

PRODUCTS, OPERATIONS & TECHNOLOGY

The major offering of B&Bs is rental of guest rooms (about 85 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 ...