Sometimes it is hard to yield to long held prejudices.  Looking at Bed and Breakfast models is one of those areas where I have resisted recognizing an emerging (or emergent) mode as a viable route for aspiring Innkeepers.

For many years we have preached that an Inn or Bed and Breakfast with fewer than eight rooms was not a viable entity.  And from a strictly business measurement, this was and is true.  However, today most B & B’s have six or fewer rooms.  The turning point for me was information from the PAII  (Professional Association of Innkeepers International) Industry Study.  Similar numbers from the 2006 and 2008 studies showed that over 80% of Inns with five rooms or less did not view their B & B as their primary source of income.  In recent cases, this meant that one of a couple held a job outside the B & B.  The owners of B & B’s this size did not usually make a clear distinction between home and B & B.

In other words, they saw most expenses as being related to their home.  Whether they operated as a B & B or not, they would have real estate taxes, insurance, utilities, maintenance, etc.  Since typically staff is minimal to non-existent, the expenses unique to B & B operation are minimal.  When you add some expenses to the business the tax benefits add to the equation.

Of course all is not champagne and roses (except of course for the guests),  the business ties you down; the working partner returns from work to … work!  There are all those guests to put up with. 

Finally when it comes time to sell, the real estate value usually trumps what business value can be eked out of numbers that are not meaningful to a buyer.  In other words, the hard work of building some business that worked for the owner does not work for a new situation.  The result is that there is no final reward for the business effort, but in some cases renovations to enhance the business can have a negative effect on the saleability and value of the property.

That being said, I have come to recognize the validity of the smaller B & B as a lifestyle as long as the owners recognize the business limitations.