Telephone Nancy Donaldson or Susan Brown to inquire about the course they teach in how to run a bed-and-breakfast and you are likely to be greeted with an ambiguous “So, you want to be an innkeeper?”
It is not that they seek to discourage. In fact, they go to great lengths to promote the joys and satisfactions of the innkeeper’s life. Rather, the ambiguity is designed to instill a healthy dose of skepticism in minds that might see running a bed-and-breakfast as little more than an endless house party.
“There is a lot of romantic fantasy attached to it,” said Donaldson, who opened the Old Yacht Club Inn here 17 years ago after leaving a career as a school administrator. “Of all the people we have trained, many more have decided not to become innkeepers than have opened inns.”
Twice a year for the last 16 years Donaldson and Brown, with help from fellow Santa Barbara innkeepers, have run a four-day crash course that provides a mountain of information about the realities of running a B&B inn.
Whether it is information on marketing, suggestions on what kind of flatware to buy, tips on decorating, advice on advertising, a primer on plumbing, notes on how to find financing or ways to deal with the stress of the job, the course offers enough information to temper excessively romantic notions and to launch the committed into business.
“By the time they leave they should have everything (they) need for a startup or for buying an existing inn,” said Brown, who opened the Bath Street Inn here in 1981.
Throughout the years the two have seen their labors translated into successful inns all across the country and have seen reality strike like lightning, sending some people racing for the exit.
“We had a couple who left at noon on the first day,” said Brown.
“They just knew after the first morning session that it wouldn’t work for them,” Donaldson chimed in. “They spent the next three days on the beach.”
When Donaldson and Brown began their businesses, Santa Barbara’s bed-and-breakfast industry was in its infancy. In fact the Old Yacht Club Inn was the city’s first. Since then the business here and elsewhere around the country has become much more complex and far more sophisticated.
“We are beyond the quiet-little-place stage,” said Patricia Hardy, a former innkeeper who now publishes an industry newsletter and heads the Professional Association of Innkeepers International.
Despite the maturation of the industry, Hardy said, there are no signs that the business had peaked. A recent survey done by PAII showed that 90 percent of guests at bed-and-breakfast inns said they would certainly return in the future.
“People are still buying inns and renovating properties,” said Hardy. “It is a stable industry.”
Among the trends in the B&B business that Hardy discussed during the most recent course here was a new phenomenon in which inns are opened to fill specific niche markets.
Hardy noted one new inn in New Mexico that started up simply to serve people who came to the area for the excellent bird watching. Another inn that opened its doors in Mississippi linked its business to a group giving guided tours along the Natchez Trace, the historic route running 449 miles between Natchez, Miss., and Nashville.
Another change Hardy has noted is the growing number of people operating B&Bs as sources of second incomes. “Sometimes it is a couple where the other person has a steady income,” she said. “Sometimes it is an interim step until both can work the inn.”
Much of the course deals with the bottom-line aspects of the inn-keeping business. Donaldson and Brown said the average start-up inn takes three to four years before reaching the break-even point.
“You have to be prepared for a period of losses,” Brown said. “During the first year of operation you will be lucky if you get half of whatever the average occupancy rates are in the area.”
Inns add an average of 10 percent occupancy a year, meaning it could take up to five years before a new inn reaches the local average occupancy rates.
In addition to the initial operating costs for a new inn, there will be capital expenditures related to renovation, the purchase of furniture and other equipment as well as local, state and federal licensing fees that can add up to a great deal of money.
The costs of fixing up old properties–the kind that most appeal to travelers looking for a quaint bed-and-breakfast–can be considerable. Hardy said startup costs for six-room inns are around $300,000.
Adding to these costs, Hardy noted, is the installation of special equipment required to comply with the Americans With Disabilities Act. She said the law, which involves the installation of ramps, special bathrooms and even elevators, covers all inns with five or more rooms.
That leads some people to consider buying an existing business.
Brown estimated operational inns in California sell for about $100,000 per room.
“That is a lot of money, but at least you avoid other startup costs and know approximately what your income will be from the start,” Brown said.
Yet, even when they are fully operational, the profit margins from inns can be small.
According to a survey prepared by PAII, a four-room inn (a fairly common size for a B&B) will have an annual income of around $12,452–and that is before deductions for mortgage payments, income taxes and any profit drawn by the owner.
As the inns grow in size, so does income. The survey showed a six-room inn pulls in an annual income of $29,095, an eight-room inn $53,826 and a 12-room place $93,239. Inns with between 13 and 20 rooms top out with incomes estimated at $168,767.
During the years they have run their course, Donaldson and Brown have seen a wide variety of people turn up at their door who were considering the bed-and-breakfast business.
There have been lawyers, doctors, real estate brokers, people who were about to retire, people who were fed up with what they were doing and people losing their jobs.
“During the downsizing in the aerospace industry, we had a lot of engineers looking into inn keeping,” said Brown.
On one recent Sunday in early autumn a group of 18 people, all but five of them women, came together in this graceful seaside city about a hundred miles north of Los Angeles to decide if, indeed, they did want to be innkeepers.
Some were already well on their way, having purchased property or having found an existing B&B they planned to buy. Others were still exploring the idea, feeling their way into a possible lifestyle or career change.
At 59, Warren Rucker was the oldest of the group. Having reached a stage in his career where he was ready for a change, Rucker was shopping around for an existing inn he could purchase and ultimately earn enough to supplement his retirement income.
“We are looking at a place in Sedona (Ariz.),” said Rucker as he ate lunch in the garden of the Upham Hotel where Donaldson and Brown were holding their latest session.
The Upham, a six-room operation with what Rucker described as a spectacular view of the local red rock landscape, runs at an average of 70 percent occupancy. The business is on the market for about $600,000.
According to the figures produced by PAII, an inn like the one Rucker is considering would produce an annual income of about $29,095 before mortgage and income tax.
“We have to see if there is some creative financing out there,” Rucker said.
Kathy Finnegan was much farther down the road to being an innkeeper.
Finnegan and her husband recently purchased a 5,700-square-foot house in Tucson and were hard at work converting it into an eight-room inn. They hope to attract guests year round, especially during baseball spring training season when teams descend on Arizona.
A former school teacher, Finnegan also runs an antique business and decided to go into the bed-and-breakfast business just a few months ago. The couple, who will live in the inn with their two teenage children, plan to open the doors to the Abierta La Puerta inn in January.
She enrolled in the course at the last minute and then rushed from the meeting at the bank, where they closed on the new inn, to the airport for the course in California.
“We do things in a whirlwind,” she said.
DETAILS ON THE B&B COURSE
Nancy Donaldson and Susan Brown conduct their four-day B&B course in April and again in September with enrollment limited to 35 people. The session begins with a reception on a Sunday evening and continues through that Wednesday evening.
In addition to the seminarlike classes, the course includes tours of area bed-and-breakfasts and informal consultations with local innkeepers. There is also an opportunity to observe early morning breakfast preparation at an inn.
The intensive course costs $395 per person, or $725 per couple. That includes a Sunday night reception and dinner on Monday as well as three lunches. Lodging is additional, although Donaldson and Brown and other participating inns offer discounts to those attending.
The fee must be fully paid in advance and there is a three-week cancellation notice. They accept Visa and Mastercard.
For more information, or to enroll in the course, contact Nancy Donaldson, The Old Yacht Club Inn, 431 Corona Del Mar Drive, Santa Barbara, Calif. 93103 (805-962-1277 or 800-676-1676; fax 805-962-3989); or Susan Brown, The Bath Street Inn, 1720 Bath St., Santa Barbara, Calif. 93101 (805-682-9680 or 800-341-2284; fax 805-569-1281).
