PAII Industry Report
 Whether
you’re an aspiring innkeeper, an experienced veteran, or anywhere in
between, you’ll learn a lot from
PAII’s 2004 B&B/Country Inns Industry Study
of Operations and Finance.
This just-published analysis of financial and operating data of B&B/country
inns is the only one of its kind. It includes occupancy, sale pricing and
financing trends, prices, employees, revenue and expenses, and is broken out
by geography, size, location and age of business. If you’re an aspiring
innkeeper, it will help you budget both income and expenses, as well as plan
the amenities you’ll need to offer to attract and retain guests.
By studying the data on ADR (average daily rate) and RevPar (revenue per
available room), you’ll be able to see how your property stacks up. For
example, if you have a six-room inn in a rural setting in the Southeast, and
have been in operation for five years, you can see that the average
occupancy in 2004 for your type of property was 39% (number of rooms), 34%
(type of location), 44% (region), 41% (years in operation).
Given the rapid pace of change, the statistics on in-room amenities are
equally compelling. A significant majority of inns now offers luxury beds
and linens (80%) and premium toiletries (76%). If your property is
advertised as a luxury inn and you don’t offer these and some of the other
amenities listed, it’s time to re-evaluate.
Similarly, in terms of overall guest services, 88% of B&Bs surveyed offer
assistance with restaurant reservations and 73% help with event
reservations. A total of 60% offer wireless Internet access, an amazingly
high figure considering many inns are still in rural locations with no
access to high-speed Internet.
Take a minute to peruse the valuable data in PAII’s study. It can only help
you to better understand this wonderful industry.
Travel Trends
Holiday Travel
Vacation from bed-making: Nearly half the respondents of a national
survey, conducted by
Destination Hotels & Resorts, agreed that “daily housekeeping service”
was the biggest perk about being away from home. “The female head of
household makes the decisions about where the family will travel with 20% of
the people surveyed, but “group consensus” (67%) was the strongest factor in
choosing a location. Most of the people surveyed said their family was
headed to the beach (55%) rather than the mountains or the desert and
surprisingly, most families weren’t spending time with extended relatives to
make their holiday special. While 48% said they choose a “new vacation
destination every year,” only 20% “visit relatives’ homes.” “Togetherness
with family” makes the holidays merry and bright (32%) and narrowly won as a
bigger motivator for travel over the holidays than a “great travel package
or discount” (26%).”
Survey sheds light on holiday booking and travel trends: “Results from a
recent
American Express travel survey show 27% of Americans – and a third of
those aged 18 to 34 (33%)—plan to take a pleasure trip before the end of the
year. Americans planning to travel have budgeted an estimated $1,267 for
their total holiday travel-spend, and consumers are looking to spend quality
time with family and friends while making smart financial decisions to make
it happen. Travelers are deciding how to book travel primarily based on
price (33%), discounts and deals (23%), trumped only by convenience (37%).
Travelers will book directly from online travel agencies and websites (28%),
directly from airlines, hotels and car rental companies via telephone (19%),
from the websites of airlines, hotels, car rental companies and cruise lines
(16%), and through travel agents (15%) and tour operators (7%). Eight% of
Americans planning a trip will book online for the first time this season.
Although the majority will stay with family and friends (55%), nearly 4 in
10 of those planning to travel will stay at a hotel, motel or resort (38%).
Others will stay at a bed and breakfast (2%).”
News Roundup
Power of peer reviews: Consumers are 50% more likely to be
influenced by word-of-mouth behavior than radio/TV ads, explains the
2005 Intelliseek research report of consumer behavior. Consumers are on
track to post close to 2 billion comments on the Internet by the end of
2005, a significant increase over the previous year, according to
Intelliseek. “Word-of-mouth behavior among ‘familiars’ [customers] trumps
all forms of advertising and is more trusted than news or ‘expert
commentary,’” the study finds.
Worldwide spa sector is booming: Propelled by the growing wellness trend
worldwide, the
spa business is booming. In the U.S. alone there are now more than
12,000 spas, up from 1,400 in 1990. According to a recent survey, 33% of
leisure travelers say spa access is a primary consideration in making
travel plans.
Hotel visuals among top influencing factors in selecting a hotel online:
According to a recent survey, 73% of people who stay in hotels when
they travel say they start their stay by researching hotel accommodations
online. When asked to consider what factors other than price and location,
online travelers cite the hotel’s written description (71%) and
visuals (69%) as the top two most important factors, according to the
survey commissioned by VFM Interactive and conducted by Harris Interactive..
More than one in four (28%) rated visuals as “very important,” more than the
description of the property (23%) and information about the destination
(17%). Respondents found various types of visuals important and useful in
choosing a hotel. While still photographs rate highest in importance, rich
media tours and videos also show broad consumer appeal.
The Over-50 Crowd
British over-50s log on most: U.K. tourists over the age of 50 are
leading the boom in online travel, according to a report published this
week. More than 86% of over-50s have visited a travel website in the past
year, and 1.5 million of them booked holidays online in September. The most
popular U.K, website for the over-50s during the summer of 2005 was Expedia,
with 2.3 million visitors, followed by Lastminute.com, with 1.5 million.
Baby boomers book travel online: A new
AARP Services travel study finds that “55% of baby boomers consider
themselves adventurous, and 77% feel they are more adventurous than their
parents.” The study also found an increase in the number of baby boomers
booking travel online. Key factors important for planning boomer leisure
travel include “a beautiful, scenic destination that promotes relaxation,
has good weather, and presents no pressure of schedules to meet.”
Grandparents bring the family:
Intergenerational travel has become a huge market for the travel
industry as the baby boomers age. According to the Travel Industry
Association of America (TIA), “30% of traveling grannies have taken at least
one trip with a grandchild.” Industry consultants Yesawich, Pepperdine,
Brown & Russell show that almost 60% of kids ages 6-17 would really like to
vacation with their grandparents.
Online Travel Statistics
Good year for travel industry: According to
TIA’s Annual Travel Forecast, 2005 will turn out to be a good year for
the U.S. travel industry, with leisure travel by U.S. residents rising 4%
this year and international travel to the U.S. jumping 7%. “Spending by
domestic and international travelers will increase 7.8% for full-year 2005
to nearly $646 billion. However, slow growth in fourth quarter 2005—a trend
that is expected to continue through the first quarter of 2006—is expected
to contribute to a modest growth forecast for full-year 2006.”
Online travel booking conversion rates are improving: “While the number
of Americans using the Internet appears to have reached a plateau, those who
plan and book trips or vacations online
continues to climb rapidly, according to the Travelers’ Use of the
Internet, 2005 Edition, released by the TIA. A majority of online travelers
(78% or 79 million Americans) turned to the Internet for travel or
destination information in 2005, compared to 65% in 2004. Eighty-two
percent of travelers who plan their trips online also book reservations
online. More than 64 million Americans bought or reserved an airline
ticket, hotel room, rental car or package tour online this past year – up
from 70% in 2004.”
"Today, 34% of online travel bookers claim to make all of their travel
purchases online. Nearly eight in 10 online bookers (78%) use the Internet
to do at least half of all their travel booking. When it comes to leisure
travel, women are more likely to be online travel planners (56%) and bookers
(55%). The 2005 report shows that the most effective online marketing
techniques that trigger a consumer response are unsponsored search engine
results (36%); e-mail recommendations by friends or colleagues (34%); links
on websites (26%); and opt-in e-mails or e-newsletters (21%).”
Web Search For Travel Yields $6.6 Billion in Sales in Eight Weeks: In
April 2005, 35 million U.S. consumers used a search engine to initiate
travel planning, and those who bought travel online ultimately spent an
estimated
$6.6 billion in the category during the eight-week analysis period.
Among those 35 million consumers, nearly one-third purchased a
travel-related service either online or offline within the eight weeks
following the initial search. Among these buyers, 80% completed travel
purchases online. “The discovery that 20% of these buyers ultimately
completed a travel purchase offline underscores the influence of online
research across all buying channels,” says the report.
'Plenty of Industry Growth' Seen For Online Travel: “For full-year 2005,
Merrill Lynch estimates an 18-percent U.S. online agency bookings growth and
43% international online agency bookings growth. For 2006, Merrill expects
"plenty of industry growth." The research firm estimates total online
bookings penetration in the U.S. to increase to 34% in 2006, supplying 20%
online travel bookings growth.”
U.S. Online Travel Market Growth Slows Slightly: Growth rates for the
U.S. online leisure/unmanaged business travel market will continue to dip in
2005, to 26% compared to 29% in 2004 and nearly 40% in 2003. “Online
bookings are projected to surpass $65.4 billion in 2005, representing nearly
30% of the entire U.S. travel market,” according to the recently released
PhoCusWright’s Online Travel Overview Fifth Edition. By 2007, the online
leisure/unmanaged business travel market is expected to represent nearly 40%
of the total travel market, surpassing $93.6 billion. Indeed, well over half
of all travel will be booked online by 2007.
More and more travelers book on supplier websites: “Online
travel bookings in the United States grew by 25% over the past 12
months, according to data from Jupiter Research, which predicted that a
third of U.S. travel sales will be made over the Internet by 2010. Online
travel spending for both leisure and business is expected to reach $68
billion this year and rise to $104 billion by 2010. The research also
indicated a gradual trend toward buying direct. Consumers will book 56% of
travel this year directly on supplier websites, instead of online travel
agencies such as Expedia and Travelocity. That figure is predicted to
increase to 62% in 2010. Jupiter Research predicted that the use of sites
such as Sidestep and Kayak.com will increase as suppliers try to attract
more business to their own sites and price comparison becomes more
appropriate.”
Explosive growth for booking travel on the Internet: Travel planning and
booking on the Web are among the most popular online activities in major
e-commerce markets, and “online
travel sales are growing at an explosive rate (over $115 billion this
year) in the U.S., Europe and the Asia-Pacific regions.” eMarketer’s new
report shows that worldwide spending for personal travel will reach $2.8
trillion in 2005, according to the World Travel & Tourism Council, a
London-based business forum for the travel-tourism industry. Nielsen/NetRatings
research found that “54% of online travel shoppers start travel planning at
an online travel website because of the one-stop shopping convenience.”
Feedback Research also found that 73% of respondents who purchased travel
online researched travel at a general site, but then went to a specific
company’s site to book travel, attributing their decision to lower prices
and special deals.
Behavioral patterns of online travelers: For many consumers, travel
planning is an enjoyable activity. PhoCusWright claims “three-fifths of
online travel shoppers cite
search engines as resources to research their vacations.” A comScore
study of search behavior prior to online purchasing found that 73% of online
travel buyers conducted relevant keyword searches in the weeks prior to an
online travel purchase, and more than three-quarters of the searches
performed by these consumers were based on generic terms as opposed to
merchants’ brand names. Forrester Research found that a majority of online
travelers use search engines to find information about different aspects of
a destination, and for pricing information. |
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Inns for Sale
"We advertised
our B&B in your Inns for Sale section in January and started getting
inquiries a week later. In February, a couple came from Florida to visit us in
Cat Spring, Texas. We made a deal, and they begin officially on April 5 as the new owners. What you are doing
really works." Sunny and John Snyder.
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