If you are planning to launch a bed and breakfast (B&B) business, then you need to properly understand the SWOTs (Strengths, Weaknesses, Opportunities and Threats) involved in running a guest house. Moreover, if you are planning to develop a business plan for your B&B venture, then conducting a thorough bed and breakfast SWOT analysis for your project should be an integral part of the document.

This article aims to help you understand what the typical strengths of a B&B business are, weaknesses you should be aware of, opportunities you can take advantage of and threats you need to address.

Strengths of a Bed and Breakfast business:

  • Personalized service: Bed and breakfast businesses are often smaller and more intimate than larger hotels, allowing for more personalized service and attention to guests’ needs.
  • Unique atmosphere and overall experience: Many guest houses are located in historic areas or in a charming setting, which can provide a unique and memorable atmosphere for guests.
  • Local knowledge: B&B owners and staff usually have a wealth of local knowledge and can provide recommendations and assistance with planning activities and outings. Examples include: Best hiking trails in the area, top rated restaurants nearby and other hidden gems not to miss. This “local value” brought by B&Bs should always be emphasized in your bed and breakfast SWOT analysis. This is a key strength you should not neglect.
  • Home-cooked meals: Many guest houses offer breakfast as part of the room rate, and some also offer other meals or snacks. Most of the times, these meals are home cooked using locally sourced ingredients. This is fantastic news for travelers who often seek a “feels like home” atmosphere and wish to experience local, home-cooked food.
  • Flexibility: B&Bs can often be more flexible in terms of accommodating special requests or needs, such as dietary restrictions or early check-in/late check-out.
  • Loyal customer base: Bed and breakfast businesses often have a loyal customer base of repeat guests who come back for the personalized service and homey experience.
  • Lower overhead: Running a guest house involves lower overhead costs compared to larger hotels, which can make it more profitable. To better understand what we mean by overhead costs, we suggest you check out full guide on how to create a B&B financial plan.

Weaknesses of a B&B business:

  • Limited room availability: B&Bs typically have fewer rooms than larger hotels, which can limit the number of patrons the guest house can accommodate at one time.
  • High levels of personal involvement: Owners and B&B staff are often personally involved in the day-to-day operations of the business, which can be very demanding and time-consuming.
  • Limited amenities: A guest house may not have the same range of amenities usually available at bigger hotels, such as a fitness center, a pool or on-site restaurants.
  • Seasonality: A bed and breakfast’s revenue may experience fluctuations in demand and sales based on the seasons of the year and the actual location. If your B&B is located in an area known for its summer resorts, then business is most likely better during summertime while the occupancy rate and revenue are predictably lower during the winter.
  • Limited ability to scale: A B&B may have a limited ability to expand or add additional rooms or services, which can limit the growth potential of the business.

Opportunities of a Bed and Breakfast business:

  • Focus on niche markets: B&Bs can target specific niche markets, such as romantic getaways, family vacations, or adventure travel, to differentiate themselves and attract a specific type of clientele.
  • Taking advantage of local events and attractions: Your guest house can take advantage of local events and attractions to draw in guests. For example, a B&B located close to a popular music festival or sporting event can attract travelers looking for a cost-effective accommodation during the event.
  • Leveraging online bookings: Bed and breakfasts can leverage online booking and marketing platforms to reach a wider audience and make it easier for guests to book rooms via the internet.
  • Diversification of the revenue mix: B&Bs can diversify their offerings by adding additional services, such as packages for special occasions, on-site spa treatments, conferencing and corporate events…etc. These additional services can unlock new revenue streams.
  • Collaboration with local businesses: As a guest house manager, you can collaborate with local businesses, such as restaurants or tour operators, to offer your guests a more comprehensive and personalized experience.
  • Expanding into new markets: Many B&Bs consider expanding into new cities or locations to increase the potential customer base and grow the business. Some even go into franchising.

Threats of a B&B business:

  • Competition: A Bed and Breakfast may face tough competition from other types of accommodation in the vicinity, such as hotels, vacation rentals and inns, which can make it difficult to get business.
  • Economic downturns: The tourism industry is usually affected by recessions and economic downturns and the B&B sector is no exception. Your prospects may be more hesitant to spend money on non-essential travel during tough economic times.
  • Natural disasters: Storms, hurricanes or earthquakes are usually a rare occurrence but when they do happen, they can totally disrupt your B&B’s operations and discourage guests from traveling.
  • Health and safety concerns: Your clients may face health and safety concerns at your guest house, such as the risk of food poisoning or accidents on the property, which can damage the reputation of the business.
  • Changes in regulations: B&Bs may be affected by changes in regulations, such as new zoning laws or health and safety requirements, which can increase costs and compliance burdens.

Operating a B&B business is certainly an exciting idea but it also comes with its fair share of work and dedication. By carefully taking into consideration the strengths, weaknesses, opportunities and threats involved in the B&B business, we hope you can make better informed business decisions. This is why, it is a good idea to run your bed and breakfast SWOT analysis early, prior to launching your guest house project, in order to better understand the business opportunity while minimizing risk.

Finally, if you have not created a business plan for your bed and breakfast project yet, then we highly recommend you check out our ready-made B&B business plan template with automatic financials. We guarantee it will save you tons of time and efforts.