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Sixth Biennial
Industry Study of Operations, Marketing and Finances
of
Bed-and-Breakfast/Country Inns
by
Professional Association of Innkeepers International


Summary

Since 1988, the Professional Association of Innkeepers International (PAII) has surveyed the owners of bed-and-breakfast/country inns in the US to understand all aspects of this growing segment of the travel industry. Although the survey itself has now become a standard for appraisers, lenders, innkeepers and aspiring innkeepers, it is valuable to focus on a new component: data on the Same Inns who participated in both the 1996 and 1998 Study. Controlling the variable of who participates in the Study has always been a challenge to validity. With the consistency of the same researchers, PKF Consulting gathering the data this year, the tabulation of data on the same inns reporting gives an extra check on the validity of the overall Study.

Method

The 1998 survey instrument of 19 pages was mailed to every innkeeper who was a member of the Professional Association of Innkeepers International in December of 1998, 2500 inns. 289 responded with enough data to be included in the survey. Each participating inn was sent a copy of the overall Study and if they sent in their questionnaire early they received a regional Study as well.

Questions have been modified over the years adjusting for changes in the industry (Internet impact for example) and for what appear to be confusion in responses on the part of the innkeeper-respondent.

Although contracted out to PKF Consulting, the resulting data is closely reviewed for consistency and accuracy by PAII Co-Executive Director Pat Hardy, in order to maintain a continuity of reporting. This year inn owner and long time participant in the Study, Hugh Daniels, MBA, contributed his expertise in the revision of the questionnaire and in the checking of the data.

Results of Interest

This paper discusses only the Same Inn respondents in comparison to the overall participants as a reflection of the accuracy of the Study and as a reflection of the Industry as a whole.
· Number of participants who participated in 1998 Study is 132 or 46% of the total respondents.

· Changes in Owners' Lives

Less hours worked: Average hours per owner decreased by 10 hours from 51 to 41 hours a week.
   The overall respondents decreased hours from 44 to 42 hours a week.

7% of the owners moved off premises to within one mile of the inn with 78% living on premises
   Compared to 82% of the overall Study participants living on premises

17% of the owners transitioned the profitability of their inns; 42% were dependent on an outside income
   50% of the overall participants are still dependent on an outside income, a 9% decrease from the 1996

14% of the inns have a resident manager living on the property
   11% of the overall participants have a resident manager living on site

Same Inn respondents saw their value increase to $630 a week if they were to replace themselves from $586
   Overall the inn owners reported a decrease in their value to $593 from $600 previously.

· Changes in Staffing

The number of employees decreased for the Same Inns, while hours for employees and the number of employee hours per week increased. The number of employees decrease by one-half, while hours per employee and total employee hours increased 6.1 and 18 hours respectively.
   Much smaller differences were seen for the overall inns, but the trend is the same.

Wages increased in all areas for employees at the Same Inns, however no more than 90¢ an hour and as low as 64¢. Housekeepers: $7.87/hour. Innkeepers: $8.95/hour.
   More dramatic differences show in salaries between 96 and 98 among overall respondents with as much as $1.80 an hour increase and 94¢ decrease.

For salaried employees again a steady increase that fits within reasonable expectations. Innkeepers increased to $1,546 from $1,489. Head Housekeepers increased $100 to $1521.
   Overall the increases were: $4 for Innkeepers to $1423 and $319 for Head Housekeeper to $1,573.

· Changes in Room Rates by Feature



Average Published Rate space Same Inns space All Inns
      space       space  
By Primary Room Feature     98 space   96     98 space   96
      space       space  
Basic Room-Shared Bath   $70 space $70   $73 space $70
Basic Room- Private Bath   102 space   93     98 space   94
      space       space  
Audio/VCR   109 space 107     99 space   93
View/Window seat   115 space 106   115 space 104
      space       space  
Balcony/Patio/Garden   124 space 114   116 space 117
Kitchen/Wet Bar/Apt Style   134 space 120   119 space 113
Fireplace/stove   131 space 119   129 space 125
Suite   132 space 119   130 space 121
Cottage/separate building   138 space 139   138 space 122
Whirlpool/spa   150 space 140   150 space 142

Occupancy of the Same Inns was the only tally used in this year's Study as this seemed to be the most accurate representation:

1995 spacer 45%
1996   49%
1997   48%
1998   50%

This occupancy is based on number of rooms rented during a year regardless of seasons closed.


Average Daily Room Rate was also only tabulated for the Same Inns.

1996 spacer $109.03
1997 spacer $115.97
1998 spacer $121.75

While occupancy crept up 2 percentage points between 96 and 98, rooms rates made a healthy 11% jump.



Conclusions

Review of the figures of the same properties from one year to the next reveals a steady growth in this industry, which is not always easy to decipher when different inns participate from year to year. There are very few discrepancies between the "all inns" and the "same inns" showing that the Study as a whole has represented the bed-and-breakfast/country inn industry quite accurately. However, one must refrain from the need to assume broad trends of change in specific areas (e.g. Staff salaries) when using the overall figures.

Presented at the 2000 PAII Convention in Hilton Head, SC


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