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June 2, 2008

Room at the inn? | We talk with innkeeping consultant Don Johnson about the pros and cons of the bed-and-breakfast business

By Sara Donnelly
For 13 years, Don Johnson, a Sotheby's Realtor based in Portland, has run a side business called "Inn Your Dreams," in which he schools aspiring innkeepers on the basics of starting a bed-and-breakfast inn. An innkeeper himself for 12 years in Bar Harbor, Johnson has remained close to the inn business despite his new career as a real estate agent (he sells only bed-and-breakfasts through The Swan Agency Sotheby's International Realty in Bar Harbor). He says the pitfalls of the business many consider akin to semi-retirement are still dangerous enough to warrant a crash course like his.

Several times a year, Johnson and 10 to 12 students hole up in a fledgling bed and breakfast in Maine for three days and three nights to hash out what it takes to turn hospitality into a career ˆ— Johnson and the class discuss everything from purchasing an inn to pricing the rooms, from marketing the place to preparing and presenting breakfast.

Mainebiz sat down with Johnson to find out more about how to turn mi casa into su casa. The following is an edited transcript.

Mainebiz: Why would an aspiring innkeeper need to take a course on the business? Couldn't they just shop around for a property and figure out the rest?

Don Johnson: Because the B&B business is a very emotional business. It's emotional because it's like a dream for most people. People who stay at B&Bs, about 50% of them ˆ— literally ˆ— say, "This is something we've always wanted to do." And out of that 50%, probably about 10% are halfway serious about it and probably maybe 5% are serious enough that they're going to follow it and become a little more involved in researching it and so forth. So it's kind of a dream type situation and a lot of people go into it with their heart. I begin the class by telling people that they need to have equal shares of heart and brain. And I show a little figure on a flip chart with a heart and brain and a little equal sign next to it. Because it has heart but it also has to have the brain element, considering all of the financial aspects of it.

What's the biggest misconception aspiring innkeepers have about running an inn?

"If I find the right place, they will come." And that's not necessarily true. They may find the right place, but that right place has to be in a setting where people are naturally coming to it: location location, location. I also do consulting [for start-up inns], and they'll come to me and say, "We found this fabulous place, and it's out in the country, and it's large and Victorian and it has all these rooms and it's only $395,000," and so on and so forth. And I ask the question, "Well, who would your guest be, who comes to the area?" And they'll say, "Well, our guests are just looking for some place to relax and we've got this wonderful atmosphere up in the country." But the next question after that is, "Where will they eat, where will they shop, what are the attractions?" If they can't answer those questions, then no matter how beautiful the property is, it won't work as a B&B.

Where are the established locations in Maine? Where would a prospective innkeeper want to look?

There are actually four major destinations for inns in Maine: Kennebunkport, Camden, Bar Harbor and Boothbay. Not necessarily in that order, other than that Boothbay is usually last on the list only because there are so many other types of accommodations [there], more so than in other areas ˆ— hotels and motels and stuff like that. And then there are secondary destination points, like Belfast and areas that are kind of in-between other destination point areas. And that's not a negative, it's just that the draw isn't there like, for instance in Bar Harbor, [where] the draw is Acadia National Park.

And then there are other areas, there are pass-through areas, and none of them are necessarily a bad place to have an inn, it's just that if you are going to have built-in business, you need to at least be in an area that people are going to come to and have a reason to be there beyond just a great place to stay.

Who's your typical student?

That has changed. It wasn't that long ago that the typical inn buyer was a person in their early 50s who was thinking about retiring, and this was 15, 20 years ago. As they got into it they quickly found out it was not a retirement-type job, it was a job that was very time-consuming, and it's also a lot of work. It's not hard work, but it is a lot of work, because it's 24-7 and you have a responsibility 24-7. And because of that, our age demographic has changed dramatically. I probably have some people now in their 30s. I would say it's a broad range but mostly 45 to 55 is pretty much the standard. A lot of couples, but I always have a lot of singles.

What's the worst mistake a new innkeeper can make?

I would say there are a couple of reasons why it doesn't work for people. One is they buy in the wrong location ˆ— because the dream is taking over the reality in the brain ˆ— or they get into it without knowing exactly what they're getting into and the time element is much, much greater than they ever thought it would be. They're coming out of a 40-hour workweek and they think they're going to have a lot more time ˆ— "Oh, we're in a beautiful area so we're going to go out hiking and we're going to do this and we're going to do that." And they find that, hopefully, they're busy enough that their guests are taking up a lot of their time, and that's what the business is all about.

If we do a survey ˆ— which we do once in a while ˆ— of what was the biggest surprise that an innkeeper has found in the business that they didn't plan on, often, almost always, in the last 15 years since I've been involved in this, people will say, "Well, we were told over and over again about the time element but we didn't quite believe it was going to be so time-consuming."

But the other side of it is it doesn't have to be as time-consuming as people make it. You have to pace yourself, and you have to realize that you need some time off, and if you do that ˆ— a consecutive day each week or a couple of days each week ˆ— and if you do that, it's fine, it works. But it's the people that throw themselves into it and do work 24-7, that by the time the summer is over they're worn out, as you can imagine.

So what's one of the most important things an innkeeper can do starting out?

The most important thing is having an enhancing website so that when somebody looks at it, they feel, "This is where I want to go, this is where I want to spend my time." They can go to a website and look at properties in Camden and they're going to have lots of choices, but the ones that are going to attract them do attract them because of the website, not necessarily the property itself, although that should follow suit. The website is just so important today. And the inns that are not successful, it's often because the website is not up to par. It really is that critical. People want to go to a website, they want to know what they're getting, how much it's going to cost them and what's available to them at that particular inn.

How much money can be made in innkeeping?

Well, not as much as people would like to have, but the other side of it is, it's not as if you have a separate business and then you own your own home. Your business is your home and all of the expenses that are part of a home business are also a part of your private home ˆ— your utilities and some of your food expenses and on and on. Some people say, "I'm looking to make an extra $50,000." Well, that's probably not going to happen. Maybe you're coming out of a business world where between the two of you, you were making maybe $100,000. But you're not even going to come close to that in the inn business. What you're going to do is you're maybe going to make, oh, maybe a third of that. Maybe a third of that. But again, you've got a lot of expenses paid and you're in a place you want to be. It becomes a lifestyle. Unlike other businesses, it is a lifestyle. It becomes your life, there's no getting around it. It's your life.

You opened your first inn in Bar Harbor in 1984 and were in the business for a dozen years before defecting to real estate. What kind of changes in the inn industry have you seen?

At one time ˆ— and I always start the [seminar] talks by saying this ˆ— 25 years ago and even 20 years ago, inns were the lowest-priced accommodations in a given area. Today, they're the highest priced. And because of that there's an expectation level that becomes even higher than the price. So people are looking for more luxurious accommodations, more amenities within the accommodations ˆ— fireplaces, Jacuzzis, Internet hook-ups, certainly gourmet breakfast, which has always been a part of it, but you can no longer get by with a continental breakfast or something simple like that. So with the price range increase, the expectation has increased, and inns, it's important that they follow suit on that.

What's the innkeeping market like in Maine? Are there too many rooms, or not enough?

The amount of people that are interested in staying certainly has not gone down in any way shape or form. It's greater this year ˆ— in fact, most of the inns are saying their advance reservations are stronger this year than they have been for the last few years. And last year was not a bad year. And this year is even better than last year.

The gas price situation does not seem to be a problem at all. But what has I think increased the value of Maine itself is that it is close to urban areas. People aren't taking European vacations anymore because of the dollar, they're not taking longer vacations because of airplanes and all the situations like that, so they're taking driving vacations. Even with the gas, it's still the cheapest way to go.

So people are staying close in and Maine is one of the focuses for that kind of vacation. When people think of Maine, they think of inns, because they think of that New England atmosphere. They think of the coast or even the western lakes and mountains area. I don't think anybody is finding any negatives to business this coming year at all.

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