Package B&B experiences to improve profit potential
VICKSBURG, Miss. -- Those managing historic homes must make a profit while creating a welcoming place for paying guests, a challenge addressed at a recent Mississippi State University short course.
Sandy Havard, MSU Extension Service agent in Warren County, said the summer workshop was a unique training opportunity set up to help improve communities and local businesses.
"We want to spark some creativity and give ideas for ways to expand existing businesses," Havard said. "We want to add value to what Mississippians already have, and help them understand that a bed and breakfast is not just a place to sleep, but a destination."
Rachel Carter, Extension community planning specialist, said the first priority is to capitalize on resources.
“Take advantage of existing tourism attractions, cooperate with existing businesses, and collaborate to benefit your business,” Carter said. “You’ve got to make your product easy for tourists to access, so you have to find ways to make what you offer easy for people to find.”
It is necessary to know the desired customer to maximize what they consider valuable.
“Are you selling a luxury item, a high-end good or a low-cost good?” Carter asked. “Is your client base local, or are you drawing from a wider area?”
The Extension Service has detailed demographic information on every county in the state. From this data, agritourism professionals can mine income bracket information, age breakdown, education level and more. Similar information is available through the Extension Services of other states, making it possible to learn, for example, about an area from which a bed-and-breakfast receives the most guests.
“The top groups who visit bed-and-breakfasts in the state are tourists, business travelers, couples on romantic weekend getaways, those travelling with a college or university, and guests of local residents,” Carter said. “People in Mississippi love their family and are willing to travel to visit them, so that is a great market to tap into.”
Other groups that visit Mississippi and are possible bed-and-breakfast guests are historical tourists and adventure seekers who want a luxury event rather than those who rough it.
“If you want more business travelers, make sure you have a desk and good wireless internet access,” she said. “If you are near a music, cultural or recreational opportunity, keep up with scheduled events and find ways to market your services to those who are attracted to the area.”
Carter said price analysis is very important when determining how much to charge guests.
“We’ve seen many people charging way too little for their product,” she said.
To set the price, first list all direct costs, such as property costs and labor costs, including the cost for the owner’s labor and time. Next, include variable costs such as food. Once all costs are calculated, add 20 to 25 percent for overhead.
“Add to this total 10 to 15 percent to make sure you have room for profit, and then compare that figure to the cost of other facilities in the Southeast doing the same thing you’re doing,” Carter said. “Have a break-even point for what you’re planning to do so you know how many items you need to sell or how many guests you must have or weekends you must have booked.”
Then market the product or service. That means creating a marketing plan and telling potential customers what is offered.
“Many small businesses market as an afterthought, but it’s essential that you have a plan,” Carter said. “If you don’t tell potential customers what you have, they won’t know to come to you.”
Laura Beth Strickland, deputy director of the Vicksburg Convention and Visitors Bureau, said Mississippi B&B’s and rural entertainment options are popular now.
“Agritourism is a growing trend, and millennials want to do hands-on things,” Strickland said. “Build an itinerary for visitors, partnering with local restaurants and growers and attractions to offer the most to your clients.”
The Vicksburg Convention and Visitors Bureau was a sponsor of the short course and hosted tours for conference participants.