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How to Run a Profitable B&B/ Guest House

 

Running a B&B or guest house is one of the most fulfilling jobs. One of the most commonly asked questions I get is, how profitable is running a B&B/ guest houses business? My honest answer is, IT DEPENDS! It is very difficult to give a one word answer to this questions as there are a lot of factors at play. In this article, I will unpack some of the factors to best answer this question.

 

In a nutshell, like any other business, running a B&B or guest house should give you a profit. Otherwise, there wouldn’t be a need to even think about running an accommodation business if it didn’t give profit. If you apply these tips, they should work for you regardless of where in the world you are! Here are the 6 most important “Propers” that will make your B&B or guest house give you a good profit. 

• Tip#1 - Proper location
• Tip#2 - Proper pricing
• Tip#3 - Proper facilities management
• Tip#4 - Proper marketing strategies
• Tip#5 - Proper staff management
• Tip#6 - Proper financial management

 

Proper location

The B&B industry is a notoriously industry. You have got to be aware of that and choose a location that will work on your advantage. No matter how beautiful your establishment is, if the area is not attractive or safe the guests, you will struggle to fill up the rooms.

 

Consider the following when choosing a location for your guest houses:

• Attractions - The reason why people visit the area: Find out what attractions are available around or on the vicinity. Is there a beach, tourist attraction, university, hospital, church, etc. around the area? In most cases, weekend travelers are leisure travelers, but you also need business guests during mid-week so if there are businesses around, then you have a chance of getting bookings from business travelers.

 

• Accessibility – how accessible is the area. Nowadays, there’s a growing trend of travelers either driving to your location or hiring a taxi or Uber to drop them off in your B&B. If the area is far away from everything, then guests may find it unattractive. Even if they book once, you may never see them again.

 

• Safety – to your homework and ensure that the area is safe. No guest wants to get robbed while visiting your B&B. Check reviews about the area. If your B&B is in a good area, you stand the change of getting more customers.

 

• Over-supply than demand - Choose an area that is not overpopulated with B&Bs and hotels though. Someone may be selling his/ her B&B to you because the supply is far bigger than the demand. A perfect example is with the South Coast. When the Durban International Airport moved north, the traveler preference shifted to the likes of Ballito and Umhlanga, which are close to the airport.

 

Proper pricing

 

 

Believe it or not, guests still consider pricing a lot when making a booking. If you charge too high, you will chase customers to your competitors and if you charge too low, you will invite trouble. Check the other B&Bs and guest houses around the area and be in the mix. Even if you attract the international market, bear in mind that pricing plays a major role in the guest’s decision on whether to book or not.

 

Also be mindful of Airbnb. Airbnb is a growing trend among bookers, so ensure that your guest house is competitive in terms of your rates.

 

Proper facilities management

Of course you need to have attractive facilities. Ensure that your facilities are well managed. Remember, word of mouth is the best form of marketing. So your guests will definitely tell others about your guest house, and if they enjoyed your facilities, they will return.

 

Here are things to have in mind:

• Ensure that your facilities are attractive and don’t show signs of wear. If there’s maintenance issues, make sure that it gets fixed immediately.
• Have facilities that will keep your guests entertained. E.g. a swimming pool, bar, TV, games room, gym, etc.
• Make sure that you have a reliable WiFi service. WiFi has become the number one amenity in the recent years.
• If you have a garden, keep it well-manicured. The overall facility must be spotlessly clean!
• Rooms must be spotlessly clean, have adequate lighting, plugs, proper comfortable beds, properly working bathroom facilities, etc.

 

Proper marketing strategies

Of course you will know by now that no matter how attractive your B&B or guest house is, if you do not marketing it, nobody will know about it. You need to spend a lot of time marketing your B&B in order to attract guests and make money.

 

Here are some amazing marketing ideas to marketing your B&B or guest house:

 

1. Search Engine Optomization (SEO) – create a fresh website and make sure that it is searchable on most search engines like google.
2. Google Maps – Ensure that your budiness is on Google Maps. It is important to include your rates, link to your website and contact details on your Google Maps. Also respond professionally to guest reviews as this will impact on  your future guests. 
3. Pay Per Click (PPC) – Run paid ads on google. Over time, they will pay off. Ensure that you are targeting the right audience in order to minimize clicks that won’t convert to bookings. There’s a new tool now called Google Hotel Ads. Be sure to enroll for this tool.
4. Social Media – You will be amazed with the number of bookings you will generate through social media like Facebook, Instagram, etc. Also consider using social media influencers to generate more engagement.
5. Specials – Run specials during off peak season. It is better to have your room booked at a cheaper rate than to not book it at all.
6. Local partnerships – have a relationship with B&B owners around your area. If you are fully booked, refer guests to the B&Bs and guest houses that you have a relationship with, they will most probably do the same. Ensure that the establishments you refer guests to are of the same quality as yours or even better. Also consider price comparison. If you charge R800 per night, it makes no sense in referring guests to a boutique hotel that charges R2 500 per night.
7. Blogs – Don’t just market your B&B; market your area. Write blogs about places of interest in your area then link to your website for accommodation bookings. E.g. 10 things to do in Dullstroom.
8. Real-time booking engine - Make sure that your website has a good real-time booking engine. It must be easy for guests to make a booking. One booking engine that’s really good and affordable for B&Bs and guest house is nightsbridge. It allows guests to book immediately and shows availability and room costs. 
9. WhatsApp – Also use WhatsApp for bookings. This number must be attended to timeously. A lot of guests make use of WhatsApp for enquiries and bookings these days.
10. Exceptional customer service – Treat every customer with respect, regardless of race, religion or creed. Make sure that your guests receive exceptional customer service. The reason why guests choose B&Bs and not hotels is personalized service. When your guests receive exceptional service, they will market your guest hour FOR FREE!
11. Loyalty – Run loyalty programs. Award guests who have stayed with you so that you increase the number of regular guests you have.
12. Online Travel Agents (OTAs) – List your B&B on as many online travel agencies (OTAs) as possible. The likes of booking.com, etc. 
13. Guest reviews – Read and respond to reviews. Even the negative ones. Most online reviews are on TripAdvisor, Facebook, Google and many other online websites.
14. Local tourism associations – Develop a relationship with local tourism associations. In this way, you will be known and you will also be well informed about what is going on around your area.
15. Get star graded – While this is not a mandatory, grading your establishment with the Tourism Grading of South Africa will give your B&B the competitive edge. As their slogan says, “Putting stars where they belong’, a start graded B&B is regarded as more credible than the one that isn’t.

 

Proper staff management

It is very important that you manage your staff properly in order to maximize satisfaction and repeat business.

 

Here are some tips to help you better manage your staff:

• Give your staff enough training to deliver the best customer service possible.
• Ensure that your staff look presentable. Buy them uniform.
• Treat your staff like family – know their birthdays, pay them well, involve them, compliment them when they did well.
• Clearly define your staff duties and responsibilities.
• Teach your staff to take initiative in ensuring to meet your guests’ needs. Even when you are not around, they must be able to take great care of your guests.
• Do not overwork your staff.

 

Proper financial management

Of course you may make your money, but if your financial management is not up to scratch, you will make poor decisions that may affect your profit.

 

Here are tips for proper financial management for your B&B/ guest house:

• Budgeting – Budgeting is of utmost importance for the running of your B&B and increasing profits. Ensure that you do a proper budgeting for everything including forecasting start-up income and expenses, day-to-day income and expenses, etc.

 

• Monthly expenses - You have got to budget for your monthly expenses including water, electricity, insurance, telephone charges, internet charges, DSTV charges, stationery, salaries and wages, vehicle expenses, accounting and legal fees, bank charges, rental expenses, advertising and marketing, travel and accommodation, OTA commission, etc.

 

• Record keeping – Be sure to keep track of your daily transactions.

 

• Keep your operational costs down – Make sure that you have systems in place to keep your costs down. Whether is it buying supplies from the affordable supplier or minimizing electricity usage. Keeping your costs down will ensure that you maximize your profits.

 

In closing, here is something to think about: A 5 bedroom B&B that charges R800 per night, makes a monthly revenue of around R96 000 at 80% occupancy and around R48 000 at 40% occupancy.

You will realize that in order to maximize your profits, you have to maximize occupancy and minimize costs. The long and short of it is that bed and breakfasts and B&Bs can be very profitable. If you are able to attract guests and impress them, you will cultivate a high number of return guests and enjoy good profits.

 

 

If you are planning to open your own B&B or guest house or you aare already in the game but you want to sharpen your sword, please check out our Bed & Breakfast Management Course. This is the most practical course you will find. You study in the comfort of your own space - no travel and accommodation fees. You can also start and finish anytime according to your pace. 

 

Are you a B&B or guest house owner? What do you think about these tips? Where is your establishment located? Please leave us a comment. 

 

Warm Regards, 

 

Samkeliso Nkwanyane

Hospitality Coach, Speaker and Consultant