Smart Money. Running a Bed & Breakfast

The 2010 Commonwealth Games saw hotels in the national capital raise their room rates in anticipation of an influx of tourists for the event. But when the games took place, many hotel rooms remained empty.

It appeared that the mushrooming of relatively cheaper bed-and-breakfast, or home stay, accommodations in the city was responsible for the hoteliers’ disappointment.

The backpacking traveller doesn’t want to spend all of his money on hotel rooms. So this opens a window of opportunity to earn some supplementary income.

A spare bedroom or two and bathrooms, and a big helping of hospitality, are what you need to make a start in the bed-and-breakfast business. Your home is certainly cosier than the sterile environment of a hotel. And there are ample people willing to pay for a comfortable stay and personal attention in a friendly environment.

But there is a lot of competition in the space. So what are the factors that go into making your bed-and-breakfast venture a success? The most critical one is location — the more conveniently situated you are to airports and train stations, historic parts of the town or other tourist attractions, the likelier you are to attract interest from tourists visiting the city.

Second, the comfort and service you offer your guests will work to differentiate you from the competition; it will be decisive in whether they will recommend you to other travellers.

Consider aspects such as whether the temperature is comfortable, bathroom is attached, and if the bed and pillows provided are appropriate for a paying guest. Look into whether annoying household noises creep in.

Give the rooms a fresh coat of paint too. You do need to spend some money to rectify these issues to make your happy home a little homelier for your guests.

Third, food is an integral part of the bed-and-breakfast experience; so get creative and serve a traditional breakfast for the area that you’re in.

You don’t necessarily need extra help to run a bed-and-breakfast, but hiring someone could reduce your workload and ensure smooth operations.

There are certain basic rules that you need to follow while operating a home stay in the country. First, you need to be registered with the tourism department, which categorises such accommodations as “Gold” and “Silver” based on the facilities they offer. In some States such as Kerala, there are other categories too, such as “Diamond”.

To qualify as a home stay, you also need to reside in the house and provide breakfast to guests at a tariff that is decided beforehand to avoid discrepancies. Be prepared for a visit by local tourism department officials, who conduct an inspection of properties before granting permission.

Note that the registration fee could be in the region of ₹5,000. The department might conduct a surprise inspection after your business is operational to ensure that standards are being maintained.

There might also be other requirements, which vary with States. For example, home stays up to three rooms in size in Himachal Pradesh are exempt from luxury and sales tax, but if you are larger, you also have to pay commercial rates for electricity and water. But this doesn’t apply to Kerala or Delhi.

In many locations, it is also mandatory to declare the running of a home stay to the local authorities and police. Visit your nearest tourism department to get all the requisite forms and information.

You should do some advertising of your own too, since you won’t get many guests until the word spreads about your room. List your bed-and-breakfast on a site like airbnb.com , which features home stay accommodations in over 190 countries. The site charges a 6-12 per cent fee on bookings.

You could also try Bedandbreakfast.com or sites like nivalink, which also feature home stay accommodations. These sites also charge for listings. You can also list your home stay on travel planning sites such as tripadvisor.com and expedia.com , which charge a variable commission on bookings.

This apart, put up signs on bulletin boards in public areas. Create your own web page to advertise your home and its attractions, with good quality pictures.

Which leaves the final question: what do you charge? The rule to work by is to have realistic expectations.

Set the rent based on the expected cost of hosting a guest and your expected profit from their stay.

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