Would You Recommend I Go Into Competition With You?

[Arks]

Just got a message through Air from someone who has 7 acres near my town and was just asking how business is and whether it would be worth their while to open an Air accommodation on their property, asking how demand is, here, for something like that.

I answered honestly, saying business really dropped off when COVID hit, and I don't know if it will ever return to normal, but that I have too much money invested in it to give up now!

 

[gillumhouse]

UGH! To explain, they call you to ask about opening something to cut into your business. IF It was a real ( - licenses, inspected, insured) I would help without thinking about it but AIR? No.

 

[GoodScout]

I have found the obliviousness of amateur innkeepers astounding. They'll ask me for business advice. They'll ask if there's any properties in the area I'd recommend. They constantly (and insultingly) act like they're in the same business that I'm in. ("Hey, we're innkeepers just like you! We own an AirBnB!") They will tell their guests to come to my place if they want breakfast. (We don't take outsiders). In fact, we opened a day spa that does take outside guests just to glom some cash from all these people staying with the amateurs.

The AirBnB model has one thing going for it: Up until now, you'd didn't have to be any good at business to make money - the economic advantages of not having to pay for health inspections, licensing, fire inspections, adhering to code, process credit cards, pay taxes, all gave them enough of an advantage that you could be a moron and still hang right there with professional innkeepers.

Well, customers have tired of it. The #AirBnBust is very real, and I for one am enjoying the schadenfreude. When I read of one man in Arizona losing his shirt because the 75(!) houses he leveraged and bought didn't rent for the Super Bowl and he may lose it all, I make a special cocktail and raised a glass.

They cheated the system and hurt professional innkeepers. Karma has racked up quite a bill, and it's coming due.

 

[Generic]

I haven't had anyone with the audacity to ask me. I would like to tell them that the average burn-out for AirBnB is less than 6 months. That's why they are always looking for new properties. And of course, their business will end on the day that AirBnB decides, because they control the listing. It's like living under the sword of Damocles. Am I assuming too much in expecting to know who Damocles is?

 

[GoodScout]

I haven't had anyone with the audacity to ask me. I would like to tell them that the average burn-out for AirBnB is less than 6 months. That's why they are always looking for new properties. And of course, their business will end on the day that AirBnB decides, because they control the listing. It's like living under the sword of Damocles. Am I assuming too much in expecting to know who Damocles is?

From Innspiring members? No.
From AirBnNoB owners? Their greek God is Koalemos. (super-obscure).

 

[Arks]

After I responded that business has not fully come back from the pandemic, she wrote this to me:

Do you rent it out enough to cover costs? I've been told by several people that there are not enough airb&bs and when they need one there is no availability. Normally, is there enough tourism in town?

I did not comment on the idiotic question about covering costs, but did tell her that there's almost no tourism here, that most of our business comes from funerals, reunions, weddings, etc., and that's mostly seasonal (nobody has reunions in the winter, for instance.)

I mentioned that it's maybe twice/year that there's no availability in town, and if we put in enough lodging to cover those rare times, most rooms would sit empty 95% of the year.

So clueless. I should have encouraged her to go for it and learn things the hard way, like I always do it!

 

[GoodScout]

I prefer your choices.
She foolishly asked a competitor for information. She didn't specify that it had to be accurate information.

 

[JimBoone]

I mentioned that it's maybe twice/year that there's no availability in town, and if we put in enough lodging to cover those rare times, most rooms would sit empty 95% of the year.

Folks visit at peak times and conclude that an area needs more rooms as they never see the slow times.

 

[FrontDesk]

This is an interesting thread. I didn't know about the Air BnB being able to kill your business basically.
And I would think someone would just come stay and visit the town a few times rather than ask a competitor if they were seriously considering another Bed n Breakfast in that town.

 

[Tamelon]

What I do now when a potential competitor asks me for advice is to say, "I'd be happy to help you. As a consultant, my fee is $150 per hour. Would that be agreeable?" I've had one taker actually!

 

[Conductor Cyndi]

What I do now when a potential competitor asks me for advice is to say, "I'd be happy to help you. As a consultant, my fee is $150 per hour. Would that be agreeable?" I've had one taker actually!

Great suggestion!

 

[marj]

Tamelon said:
What I do now when a potential competitor asks me for advice is to say, "I'd be happy to help you. As a consultant, my fee is $150 per hour. Would that be agreeable?" I've had one taker actually!
The one taker you had, so - did they decide to open?

 

[SDnewbie]

Well I am a newbie and now I feel stupid as I did ask a potential competitor for advice at first. Haven't got a reply yet and won't pursue it!

 

[gillumhouse]

Well I am a newbie and now I feel stupid as I did ask a potential competitor for advice at first. Haven't got a reply yet and won't pursue it!

Come to my City in West Virginia. I have been trying to get another LEGAL (licensed, inspected, insured) B & B to open for the last 25 years. I start year #29 in July. One B & B can be anywhere but 2 or more means there is something there to see and do. I will help every way I can - no charge.

I am now the "last man standing" in several counties some to the crap that hit the fan in 2020 and others due to age. We have so much to see and do in my area - Interstate 7 miles east of me, rail-trails, events, a restored theater brings in big names performers & events, local festivals, scenery, WVU 45 min door to door, several colleges & universities in the area, covered bridges, wineries, soooo much! Do not be discouraged by these answers. This group is willing to help serious aspiring - they just resented the cheek of someone from AIR asking how is business and is it worth opening.

Ask specific questions and we will answer.

 

[SDnewbie]

Thank you! I can't travel right now or would take you up on your offer. This area is mainly geared to sportsmen -- wildlife all over and we are in a rural area near public lands. Want to do family events and retreats because there's not much here for that. Lots of lakes, streams, and the mighty MO.

We have a unique theme and when we start remodeling will share more. Just closed on the property. Am excited and scared at the same time. Just hope we can do all we hope to do!

We will be licensed and inspected and have about five rooms. My main concern is accounting and bookkeeping -- we have everything covered but that. Going to hire an accountant/tax person, but want to do what I can to keep costs down.

Any suggestions?

 

[Tamelon]

Tamelon said:
What I do now when a potential competitor asks me for advice is to say, "I'd be happy to help you. As a consultant, my fee is $150 per hour. Would that be agreeable?" I've had one taker actually!
The one taker you had, so - did they decide to open?

They were still in the real estate search mode - and had a very different business model (not a true bnb). They were more interested in the market, our demographics, how we got our business, etc. I'm not sure what stage they're at now.

 

[gillumhouse]

I thought you were looking for a place to go into B & B. Although you are welcome to come here, I was saying come open a B & B here in my City! Make sure of what the local zoning/Health Dept./ Fire Codes/ Building Codes/food service regulations etc. are begore you get too far into it. AND GET EVERYTHING IN WRITING!!! Beer/wine/liquor laws & licenses. Taxes.

There are accounting programs out there - QuickBooks and others. Being a Cheapskate (I am also a sole proprietor so my accounting, reporting, taxes (income) is different than an LLC or anything else like that). I have a spreadsheet (ledger) I keep for the business revenue with formulas so I enter the room rate hit enter and it calculates State sales tax, City sales tax, and my B & O tax and totals it monthly/quarterly, and annually. Makes filing my quarterly sales taxes & B & O taxes easy - the ledger gives me the figures. I do another for my groceries & supplies and another for my utilities (mainly to compare months & years). Tax time, I input my checkbooks into an ancient QuickBooks program just for the organization of categories as I do not use it to write checks, pay bills or anything else. I start by telling it I deposited $50,000 into the account and then enter checks. Run the tax report, give the revenue, monthly charges (reservation program, tracking, & other monthly things I have on autopay & annual auto-renew - website & domain names), grocery & supplies figures to my tax guru with all the paperwork. I am small enough (3 rooms) that it works for me. I pay most bills with checks (some months I may have to wait to pay something so I do not do auto-pay - by seeing the bills, I have caught some extra charges or fees that autopay would have just paid. It has worked for us (and my guru) for years.

 

[marj]

Thank you! I can't travel right now or would take you up on your offer. This area is mainly geared to sportsmen -- wildlife all over and we are in a rural area near public lands. Want to do family events and retreats because there's not much here for that. Lots of lakes, streams, and the mighty MO.

We have a unique theme and when we start remodeling will share more. Just closed on the property. Am excited and scared at the same time. Just hope we can do all we hope to do!

We will be licensed and inspected and have about five rooms. My main concern is accounting and bookkeeping -- we have everything covered but that. Going to hire an accountant/tax person, but want to do what I can to keep costs down.

Any suggestions?

I just have to tell you a quick story after reading your knowledge of potential guests, so true! I was born and raised throughout much of SD - basically 14 towns mostly along the I-90 strip. Later when married we went on a trip from the cities (Mpls) in the late fall and I did not make a reservation anywhere as we were only going to Mitchell. I said oh, tourist season is over, it's all brown, cold, will be easy to find a place. Found out there is NO WHERE to stay between and including Sioux Falls and Rapid City and ended up sleeping in our tiny station wagon with a baby. I had no idea Pheasant hunting was such a big deal there! Also slept outside in Sturgis once because so many places were not open when Sturgis is not! Actually, I think most of my SD trips are the most interesting stays! YEARS ago with early internet we booked in the Badlands and the motel was maybe on the reservation?? was straight out of Psycho including the black and white TV... that was truly memorable. Slept with one eye open.
I will be watching for more info on your theme! Also, if you had a place where the dogs could be kenneled or you allowed dogs would be a bonus. I've seen so many who had dogs with in their trucks.
As far as the question, I'm booking all online with Guesty as my PMS and figure all bookkeeping will mostly go through there, other than receipts for purchase expenses. Then I use Intuit quickbooks and have an accountant jump in quarterly.