Looking for some help

[TREX]

Hello, I have been a member for some time, maybe posted once a few yrs ago, but I find myself in a place now where I need to seek out the advice and experience of seasoned innkeepers for some help. For a little background, My wife and I are in the process of restoring a historic 2 story brick school house into a Bed & Breakfast Inn with 6 rooms, a wine and craft beer pub with wood fired pizza in one side of the cellar and a spa in the other side. We live in east central Iowa, 4 miles off Interstate 80(a major thoroughfare from the west coast to the east coast), a historic Presidential birthplace and library, National park, along with a historic main street 4 miles away and a major Big Ten University 12 miles away. We have a population of over 1.5 M within 60 min of us and we are located 300 miles or less from 6 major Big cities. We have also worked with the consultants of the B&B team where we took the aspiring innkeepers 4 day workshop. And, we only have 3 really active B&B's within a 30 mile radius.
We live across the street from the school and after we purchased the property in the fall of 2017, we started working pretty extensively with our local SCORE chapter to develop our business plan and projected financials. We had 3 mentors that really put us through the process of making sure that this was a viable project. We started the renovation process in late 2019 with monies from my retirement using ROBS that gave us a good start in the renovation process while we searched for a lender to take us the rest of the way to completion. Then Covid hit, and we all know what it did to the hospitality business as we faced a moratorium on any lending. We hired a broker to help us find funding just before a total shut down of lending. Our broker has been very diligent in finding us some lenders now that things are opening up but we are facing some hesitation from some of the lenders as being a Bed & Breakfast and being grouped together with the larger hospitality businesses. Our broker has told us many times that when talking to lenders, we would have been funded prior to Covid, but now things are different. I have read various articles that the Bed & Breakfast industry is seeing more people choosing a Bed&Breakfast vs a larger hotel chain because of the personal touch that innkeepers provide and they feel safer in a Bed & Breakfast. So my reason for writing this post is because, I just received an email back from a lender who we are actively working with that states: "Lets differentiate why a guest would choose the B&B compared to a nice hotel room or why would a couple choose that option" I would love to hear any feedback or insights to help me answer this lenders question. Thank you in advance!

 

[gillumhouse]

People choose a Bed & Breakfast over a hotel BECAUSE: fewer people as guests, quieter (no slamming doors at all hours and no kids running up and down the halls). more personal service, awesome breakfasts instead of "make your own waffles"), GOOD coffee (sometimes even great coffee), and rooms you KNOW are clean. It feels more homey - because it is. Also the innkeepers KNOW the area and can point out things to see and do, the best restaurants, ice cream places, and warn about hazards on-going such as construction projects.

The innkeeper can create personalized itineraries for the interests of THAT guest.

This comes from an innkeeper of a 3-room 25-year old start-up in a small city 7 miles from an Interstate. There are at least 6 hotels AT THE EXIT but the B & B is chosen by discerning people. An example: October 2020 all 3 rooms were booked by a family for their Father's funeral for 3 nights. The funeral home was at least 15 miles from the B & B. they had ONLY themselves to associate with instead of many guests in one of the at least 15-18 hotels nearer along the Interstate. They had filling breakfasts served at the time they needed in the mornings. (Another guest here for her Father's hospital stay/funeral needed a dress for the funeral and I was able to arrange for a dress shop in town to be opened for her in off-hours, a hotel could/would not do that. She did not have to find transport to the mall - she did nit have a car.)

 

[Anon Inn]

Personal service
Cleanliness
Safety
Good food with attention to allergies and restrictions

 

[JimBoone]

I'm the odd one, 8 room motel, bed without breakfast, yet more like my friends here than the typical motel/hotel. I've learned much following my friends on this forum. I'm on the edge of a tourist town with many large hotels. Reviews cover items like, Clean, Friendly, Like visiting family. I think the difference is that the B & B or small property operator personally cares about the guest that visits, that guest is treated like family or friend.

why a guest would choose the B&B compared to a nice hotel room

Because the B&B room is much nicer than the average nice hotel room.
Because the B&B operator cleaning or supervising the cleaning has a vested interest in the results as opposed to an employee on a rather limited time schedule to get the job done and gone.

 

[theinnonthird]

Why WOULD they choose a B&B/small inn over a typical motel/hotel:
- personalized service
- individually decorated rooms
- charm, charm, charm
- a really good breakfast

Why SHOULD they choose a B&B/small inn over a typical motel/hotel:
- Because we are owner run and managed and NOBODY WILL EVER CARE ABOUT OUR GUESTS AS MUCH AS WE DO!
And THAT, my friends, makes all the difference!

 

[Eugee2]

All the above and that people enjoy spending time experiencing an area vs making time going through an area.
If you want a quick overnight and want to travel thru an area then maybe a big box hotel is for you.
If you are more leisurely and enjoy the ride vs. a quick overnight and go then a B&B will certainly offer an experience that’s a welcome contrast to the mundane all-the -same corporate hotel experience.

 

[CoffeeTreks]

When people want personalized service and they are looking for an 'experience' not just a stay, they book a B&B, when they want to connect with people and a unique lodging they also book any small, independent lodging option, and when they want to feel safe in a new environment they book small. You hit all of those. What does that mean? From the guest's point of view it means they are putting their trust in you when they want a weekend getaway that will work, when they are unfamiliar with an area and want want to meet their son at his college and have a lovely weekend with him. Many guests want a unique room or a unique place. Think how AIRBNB has seperate categories for unique lodging options, that's because somepeople want to think...hey let's try a romantic night in a schoolroom. Finally, and most importantly there more trust in both you, your service,and increased trust means increased resiliency in difficult times.

 

[FHI2426]

1. You get a large premium over average room price of large hotels
2. More direct control over expenses and marketing
3. You can build relationships with other small businesses and get referrals

Whatever relevant experience you have that will do well for your business add it... and it you wrap the business in an LLC, while the lenders may not like that , if you have substantial assets in addition, they should approve you

 

[GoodScout]

Hotels are large, impersonal, expensive and most amenities are currently shut down.
AirBnBs are a roll of the dice, and you could die.

That's my selling points for inns and B&Bs. Short and sweet.

 

[user 26]

I travel alone and feel safer in a b&b or small inn. I don’t know if this is helpful.

 

[TREX]

I travel alone and feel safer in a b&b or small inn. I don’t know if this is helpful.

Thank you for your reply, This is very helpful! It reinforces what I have heard from a local B&B innkeeper.

Hotels are large, impersonal, expensive and most amenities are currently shut down.
AirBnBs are a roll of the dice, and you could die.

That's my selling points for inns and B&Bs. Short and sweet.

Thank you f

People choose a Bed & Breakfast over a hotel BECAUSE: fewer people as guests, quieter (no slamming doors at all hours and no kids running up and down the halls). more personal service, awesome breakfasts instead of "make your own waffles"), GOOD coffee (sometimes even great coffee), and rooms you KNOW are clean. It feels more homey - because it is. Also the innkeepers KNOW the area and can point out things to see and do, the best restaurants, ice cream places, and warn about hazards on-going such as construction projects.

The innkeeper can create personalized itineraries for the interests of THAT guest.

This comes from an innkeeper of a 3-room 25-year old start-up in a small city 7 miles from an Interstate. There are at least 6 hotels AT THE EXIT but the B & B is chosen by discerning people. An example: October 2020 all 3 rooms were booked by a family for their Father's funeral for 3 nights. The funeral home was at least 15 miles from the B & B. they had ONLY themselves to associate with instead of many guests in one of the at least 15-18 hotels nearer along the Interstate. They had filling breakfasts served at the time they needed in the mornings. (Another guest here for her Father's hospital stay/funeral needed a dress for the funeral and I was able to arrange for a dress shop in town to be opened for her in off-hours, a hotel could/would not do that. She did not have to find transport to the mall - she did nit have a car.)

Thank you for your reply! I appreciate it very much!

 

[TREX]

Personal service
Cleanliness
Safety
Good food with attention to allergies and restrictions

Thank you for your reply!

 

[TREX]

I'm the odd one, 8 room motel, bed without breakfast, yet more like my friends here than the typical motel/hotel. I've learned much following my friends on this forum. I'm on the edge of a tourist town with many large hotels. Reviews cover items like, Clean, Friendly, Like visiting family. I think the difference is that the B & B or small property operator personally cares about the guest that visits, that guest is treated like family or friend.

why a guest would choose the B&B compared to a nice hotel room

Because the B&B room is much nicer than the average nice hotel room.
Because the B&B operator cleaning or supervising the cleaning has a vested interest in the results as opposed to an employee on a rather limited time schedule to get the job done and gone.

Thank you for your reply!

Why WOULD they choose a B&B/small inn over a typical motel/hotel:
- personalized service
- individually decorated rooms
- charm, charm, charm
- a really good breakfast

Why SHOULD they choose a B&B/small inn over a typical motel/hotel:
- Because we are owner run and managed and NOBODY WILL EVER CARE ABOUT OUR GUESTS AS MUCH AS WE DO!
And THAT, my friends, makes all the difference!

Thank you so much!

All the above and that people enjoy spending time experiencing an area vs making time going through an area.
If you want a quick overnight and want to travel thru an area then maybe a big box hotel is for you.
If you are more leisurely and enjoy the ride vs. a quick overnight and go then a B&B will certainly offer an experience that’s a welcome contrast to the mundane all-the -same corporate hotel experience.

Thank you so much!

When people want personalized service and they are looking for an 'experience' not just a stay, they book a B&B, when they want to connect with people and a unique lodging they also book any small, independent lodging option, and when they want to feel safe in a new environment they book small. You hit all of those. What does that mean? From the guest's point of view it means they are putting their trust in you when they want a weekend getaway that will work, when they are unfamiliar with an area and want want to meet their son at his college and have a lovely weekend with him. Many guests want a unique room or a unique place. Think how AIRBNB has seperate categories for unique lodging options, that's because somepeople want to think...hey let's try a romantic night in a schoolroom. Finally, and most importantly there more trust in both you, your service,and increased trust means increased resiliency in difficult times.

Thank you so much!

When people want personalized service and they are looking for an 'experience' not just a stay, they book a B&B, when they want to connect with people and a unique lodging they also book any small, independent lodging option, and when they want to feel safe in a new environment they book small. You hit all of those. What does that mean? From the guest's point of view it means they are putting their trust in you when they want a weekend getaway that will work, when they are unfamiliar with an area and want want to meet their son at his college and have a lovely weekend with him. Many guests want a unique room or a unique place. Think how AIRBNB has seperate categories for unique lodging options, that's because somepeople want to think...hey let's try a romantic night in a schoolroom. Finally, and most importantly there more trust in both you, your service,and increased trust means increased resiliency in difficult times.

Thank you so much!

1. You get a large premium over average room price of large hotels
2. More direct control over expenses and marketing
3. You can build relationships with other small businesses and get referrals

Whatever relevant experience you have that will do well for your business add it... and it you wrap the business in an LLC, while the lenders may not like that , if you have substantial assets in addition, they should approve you

Thank you very much!

 

[Lee2014]

Hello and welcome!
I worked in B&Bs and hotels. The people who choose the B&Bs want an experience. They want to be part of your life, where should I go to do... What's a good place to eat... The people in the hotel wants their key to their room and slap the Do Not Disturb sign up until they need something and now!
Bed and Breakfasts are much nicer places to stay and work at. In tourist places people tend to want to be at a B&B. If they like to interact with people they stay at a B&B. People that want to be pampered stay at a B&B. People that want peace and quiet stay at a B&B. People that enjoy life stays at a B&B...... People that waited to the last minute, or only want one night, traveling through, etc. they stay at a hotel, motel, or airbnb. I work at a hotel right now. When I leave work in the afternoon we have about ten check ins.... In the morning we have 30 to 60 one night rooms checking out. I miss the B&Bs.

 

[Biekervi]

Hello, I have been a member for some time, maybe posted once a few yrs ago, but I find myself in a place now where I need to seek out the advice and experience of seasoned innkeepers for some help. For a little background, My wife and I are in the process of restoring a historic 2 story brick school house into a Bed & Breakfast Inn with 6 rooms, a wine and craft beer pub with wood fired pizza in one side of the cellar and a spa in the other side. We live in east central Iowa, 4 miles off Interstate 80(a major thoroughfare from the west coast to the east coast), a historic Presidential birthplace and library, National park, along with a historic main street 4 miles away and a major Big Ten University 12 miles away. We have a population of over 1.5 M within 60 min of us and we are located 300 miles or less from 6 major Big cities. We have also worked with the consultants of the B&B team where we took the aspiring innkeepers 4 day workshop. And, we only have 3 really active B&B's within a 30 mile radius.
We live across the street from the school and after we purchased the property in the fall of 2017, we started working pretty extensively with our local SCORE chapter to develop our business plan and projected financials. We had 3 mentors that really put us through the process of making sure that this was a viable project. We started the renovation process in late 2019 with monies from my retirement using ROBS that gave us a good start in the renovation process while we searched for a lender to take us the rest of the way to completion. Then Covid hit, and we all know what it did to the hospitality business as we faced a moratorium on any lending. We hired a broker to help us find funding just before a total shut down of lending. Our broker has been very diligent in finding us some lenders now that things are opening up but we are facing some hesitation from some of the lenders as being a Bed & Breakfast and being grouped together with the larger hospitality businesses. Our broker has told us many times that when talking to lenders, we would have been funded prior to Covid, but now things are different. I have read various articles that the Bed & Breakfast industry is seeing more people choosing a Bed&Breakfast vs a larger hotel chain because of the personal touch that innkeepers provide and they feel safer in a Bed & Breakfast. So my reason for writing this post is because, I just received an email back from a lender who we are actively working with that states: "Lets differentiate why a guest would choose the B&B compared to a nice hotel room or why would a couple choose that option" I would love to hear any feedback or insights to help me answer this lenders question. Thank you in advance!

I know this is a very old post. I'm just curious. Did you ever get your funding?

 

[TREX]

Not yet! We have been working with a lender now, almost 7 mo, actually the same lender that prompted me to write this post. They recently asked for updated quotes for construction and new personal financial statements, which we thought was a sign that things were moving forward, but we are still waiting to hear back. Our broker has found a few other underwriters that like our concept, our business plan and Financials, but know they will have a problem with the loan committee based on 3 things. #1 is Hospitality business, but they acknowledge it is getting better for hospitality business lending. #2, we are a startup, and #3 we have no prior hospitality experience regardless of the amount of aspiring classes or boot camps we have taken. Any help or advice is surely appreciated!

 

[KenW]

I'm a little stumped...why would they ask a question like that? Usually its..how much equity do you have? How's your credit? How much cash reserve do you have? How much do you have to put down? Show me the business plan. I had 0 experience in the hospitality business but successful in other endeavors. I have always used smaller local banks and actually have relationships with 2..

 

[gillumhouse]

Ask them how much experience they had in banking when they graduated from college. OK, I know you cannot but it is basically the same thing since you have taken Aspiring classes.

You need to prove you are a financial risk for the loan. You have a business plan, concept, and financials - what more is pertinent? You could ask ALP (Association of Lodging Professionals) if they have any studies/Polls that show the current trends in travel and B & B in particular.

 

[KenW]

Ask them how much experience they had in banking when they graduated from college. OK, I know you cannot but it is basically the same thing since you have taken Aspiring classes.

You need to prove you are a financial risk for the loan. You have a business plan, concept, and financials - what more is pertinent? You could ask ALP (Association of Lodging Professionals) if they have any studies/Polls that show the current trends in travel and B & B in particular.

Yes...7 months in it may be time to find another lender.

 

[GoodScout]

We had to go through three lenders and 10 months before we got our financing. It is an incredible gauntlet to run. Good luck and keep plugging away.