UK B&Bs Top List of Most Expensive Purchases

I am musing on taking a three-day walk (that’s a hike to you U.S. dwellers) somewhere in the United Kingdom. I would arrive at Train Station A, walk to Accommodation Provider A, walk the next day to Accommodation Provider B, and then on the last day, walk to Train Station B for my return home.  
But there are two things in the U.K. that are expensive: trains and housing.
 
And hotels, although they are temporary in nature, are housing nonetheless.
 
As I looked around the country for bed and breakfasts accessible to where I wanted to walk, I was taken aback by the cost.
 
Nowhere did I find a B&B for less than £85 ($123) a night. Most cost as much as £100 (£145), and many require a two-day minimum stay, and that’s not just during long, holiday weekends.
 
I wondered why this is. I understand that some of these B&Bs are utterly delightful—thatched roofs, gardens lovingly kept over decades, unique vistas and feels, wonderful owners and even in some cases excellent gastronomy.
 
Luckily for my curiosity, U.K. insurance company Direct Line for Business has done some research on this. Last summer the company looked at the most expensive types of business to purchase and operate, and guess what came top of their list. Yes, B&Bs, at least when the valuation price is compared to the turnover of the business. 
 
Apparently, B&Bs have a sale valuation of £4.49 ($6.51) per £1 ($1.45) of turnover generated. In distant second place are care homes, where the number is £2.56 ($3.71), while the average for all small business in terms of this same metric, the research report added, is £1.74 ($2.52).
 
That means B&Bs are more than 158% more expensive to purchase. To recoup heavy start-up capital allocation, naturally B&Bs need to charge a relevant price.
 
It might be the common perception that the weather is always horrid in the U.K., but there is no lack of domestic and international tourism eager to seek out the green and off-the-beaten-path locales of the country.
 
B&Bs are delightful experiences for those really wishing to spend. As I looked around the Internet for more reasonably priced stays—and value is relative, I know—I uncovered poorly executed websites and mediocre accommodations.
 
There is a reason for this.
 
Sara Wheeler, who owns a B&B consultancy as well as the SW Bed & Breakfast property in Swindon, England, told me that many B&B owners are more advanced in age and had passed the point where they wanted to invest in their properties.
 
There are also new entrants, Wheeler said, and this is where the hope lies for the betterment of the sector, but only, she said, if they do not make one common error.
 
“B&Bs are very expensive to purchase, and owners often make a mistake in terms of pricing on the purchase cost of the property,” Wheeler said.
 
“Owners need to price accordingly in terms of what they have done to the property, not on what they have bought it for,” she said. “Owning a B&B is a highly emotional proposition, as you are sharing where you live, and people might not always like what you have in your home, but you have to look at what the market is doing around you. To not do so is commercial suicide.”
 
Wheeler also pointed to the rash of U.K. TV programs in which celebrity hoteliers critique B&Bs—perhaps they are underperforming, perhaps they need reinvention?—as a reason guests now are far pickier over accommodation levels.
 
That is not necessarily a bad thing, Wheeler said, but she added that “B&Bs are subject to massive pressure to perform under very high standards.”
 
Expensive is easy to swallow if the experience is good, but rather I am convinced mediocrity is just a form of cheating, especially when there is a limited choice in any geographic area.
 
The Direct Line research also showed that buying a pub—another great emblem of the U.K.—was considerably cheaper, £0.96 ($1.39) for each £1 turned over. But this negative direction probably is more worrying, certainly with many, many pubs having closed down in the last 25 years, a trend that continues today.
 
B&Bs are more than 367% more expensive in terms of this metric than pubs, but there probably are few B&Bs that have pubs as part of their operations—I’ve never seen one—and many pubs do have rooms.
 
With trends like this, though, I worry the countryside will become the resort of those better off than the majority of the nation, and that would be sad.
 
There are alternative accommodations, however, and guess which San Francisco-based lodgings provider came up with goods?
 
Indeed, Wheeler said such platform-based distributors are piling on the pressure on her sector, causing prices to rise.
 
“Airbnb will make the industry go back to being 1970s Blackpool,” Wheeler added, referring to the Lancashire resort synonymous with early British tourism.
 
“No fire alarm system, and you get a room full of their children’s playthings,” Wheeler added.
 
Email Terence Baker or find him on Twitter. 
 
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