3092, RE: Bed and Breakfast biz idea|
Posted by Phanntom, Sat Oct-25-08 06:20 PM
Check with the management of the property you are employed with now. I did a turnaround on a small niche property in Hollywood and we had the same problem most B&B's have. Too few rooms to spread advertising and promotion costs across. If and X by X ad in the Hotel Directory costs $2,000, it costs both my place with 40 rooms and the Holiday Inn across the street with 750, the same $2,000. So, it costs me $50/room, and the HI $2.50. While it's promotional costs that it's more apparent in, it does affect any fixed cost that applies to the property as a whole. Your purchase cost for the property, interest on the mortgage, taxes etc. all are distorted by the property size.
Ideally, given that it's relatives, you might go to them with your plans and see if they would both give you a short-term lease on the property...say 2yrs. to see if you can make it work. Many hotel/motel properties are leased by management companies that usually work on a fixed lease amount, or a profit split with the owner of the property. This isn't the only way, it's just one way and probably a way I would go about it.