B&Bs; survive hotel downturn


While the last few years have been hard times for hotels, from plush palaces to mundane motels, bed-and-breakfasts have been doing comparatively well, according to hotel analysts.

Fear of flying in the age of terrorism coupled with an economic downturn has left hotels with a shortage of their mainstay: business travelers. But the uneasy climate has spurred a desire for the brief getaway, and that has been good for B&Bs; and their slightly larger cousins, country inns.

Some road warriors also stay in B&Bs; as relief from the sameness of chain hotels. The keepers of little inns, often with no more than a handful of rooms, have responded with such amenities as high-speed Internet connections and free local phone calls.

At least 19,000 bed-and-breakfasts and country inns are now operating around the country, according to the Professional Association of Innkeepers International, a trade group based in Santa Barbara, Calif.

"People still want a vacation and they still want to be pampered," said Marti Mayne, spokeswoman for a Denver-based online directory of B&Bs; called bedandbreakfast.com. "People want to feel safe and secure and they don't want to travel very far. When it comes to business travelers, they're increasingly becoming unhappy with the additional fees hotels are charging."

In a B&B;, breakfast, which can run to six courses and dessert, is included in the room price, which averages $136.70 nationwide, according to the inn-keepers' association. Some B&Bs; offer rooms for as little as $40 a night, Mayne said, while rooms with a whirlpool and fireplace can go for $350.

One of the big appeals of bed-and-breakfasts is that, in many ways, they are the opposite of hotels.

"Hotels say: 'Our location is convenient, we're near the sights of the city, or we're near the amusement park,' " said Bjorn Hanson, a specialist in the hotel business at Pricewaterhouse- Coopers, the consulting firm. "But the bed-and-breakfast people say: 'Come here, we have the ambience. You can do things that are less organized, not, for example, go to the ride that starts at 9 a.m.' Bed-and-breakfasts offer that getaway experience."

The hotel and bed-and-breakfast businesses peaked in 2000 with the booming stock market. In the next two years, occupancy rates were down 7 percent for hotels, but only 4 percent for B&Bs; and country inns, according to a study by Michigan State University and the hospitality group of PFK Consulting in Atlanta.

PricewaterhouseCoopers noted a slight improvement in the hotel business this year, and Hanson said hotels were expected to do even better in 2004. Pamela Horowitz, the chief executive of the Professional Association of Innkeepers International, said that there had been little change in the B&B; business this year, but that "people are pretty optimistic about next year."

A result of the improvement in hotel business, Hanson said, is that there are "fewer of the very deeply discounted room rates."

Instead of declining after business peaked in March 2000, room rates at bed-and-breakfasts rose a little more than 6 percent in the next two years, according to the Michigan State-PFK Consulting study, to $136.70. But the B&B; business is more seasonal than the hotel business. Overall occupancy often runs 20 percentage points lower for them than for hotels, and the dip over the last two years caused several hundred to go out of business, according to the Professional Association of Innkeepers International.

"The hotels are still making money," said Robert Mandelbaum, an analyst at PFK Consulting. "They're just not making as much as they did in the late '90s."

Sixteen years ago, John and Diane Sheiry bought the Waverly Inn, a 14-room bed-and-breakfast in a big white Victorian house in Hendersonville, N.C., in the Blue Ridge Mountains. He cooks the big breakfast, dishes like Moravian whole-wheat, buttermilk pancakes with blueberries; she keeps the inn looking good and takes care of the books. Her sister, Darla Olmstead, bakes chocolate cakes and cherry pies and does the laundry; an employee cleans the rooms.

Many of the inn's guests, who pay an average of $130 a night, double occupancy, go to the area to hike, to visit the Flatrock Playhouse and to see the home where Carl Sandburg spent the last 22 years of his life. Other clients include those doing business at the hospital up the street and the nearby plants run by Kimberly-Clark, GE, Borg-Warner and other corporations.

"We've got six or seven major chain motels about two miles from us, and we haven't suffered anywhere near as much as they have," Sheiry said early one Friday evening in October, when he was welcoming a full house for the weekend. "Our revenues are up this year over last and all the indicators are that next year is going to be better."

In brief

Winners of five stars

The 2004 Mobil Travel Guide awards gave five-star ratings to 30 hotels and 14 restaurants around the country.

The winners, which were announced Oct. 22, include well-known hotels like the Four Seasons in New York and the Peninsula Beverly Hills as well as first-time honorees like the Woodlands Resort and Inn in Summerville, S.C.

Four-star accommodations on the Mobil list range from the White Barn Inn in Kennebunkport, Maine, to the Ritz-Carlton in St. Louis, Mo., to Averill's Flathead Lake Lodge in Bigfork, Mont., and Lost Creek Ranch in Moose, Wyo.

For a complete list of the winners, visit the Web site www.mobiltravelguide.com.

The awards coincide with the release of Mobil's Regional Travel Planner books on the Northwest, Southwest, Northern Plains, Great Plains, Texas, Northern and Southern Great Lakes, the South, New England, New York, the Mid-Atlantic, Coastal Southeast, Florida, Canada and Northern and Southern California. The books are $18.95 each.

In 2004, Mobil will also issue a series of City Guide books on Boston, Chicago, Las Vegas, Los Angeles, Miami, New Orleans, New York City, Orlando, San Francisco and Washington, along with specialty guides on subjects like traveling with pets and "America's Byways," on 100 famous drives.

-- Associated Press

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