For the fourth year Inngenium, LLC, Lodging Management Consultants has completed a fascinating study of the marketplace of inns and bed & breakfasts for sale nationally. The only study of its kind, it looks at the availability of properties for sale that are actually current or former inns (excluding those marketed as "potential" B&Bs). The study’s author, Hilary Jones, looks at each state individually, then aggregates by region and nationally. The result is "a snapshot of the inn and B&B real estate market."
To put this year’s report into context, the residential real estate boom of the first five years of the millennium are over; the real estate and mortgage markets are in turmoil; prices in many areas of the country have plunged, and inventories are at all time highs. Therefore, it is very illustrative to note that the B&B market has tracked that trend similarly.
Nationally, inventory of inns for sale is up 26.3% over 2007. Average asking prices have also tracked residential trends with prices generally showing a decline, the exception being at the very high end. In the 5-10 room category, prices have declined 7.3% to $1.1M in the past year, while prices are down 8.7% to $1.7M in the 12-15 room category. There were also some individual records set in this study, with the lowest price nationally being in Texas ($160,000) for a bank-owned B&B, the most expensive bed & breakfast (no restaurant) at $8.5M in Florida, and the highest price inn of any kind recorded (a full service property in Pennsylvania) for $10.5M. The price range with the highest percentage of inns for sale was $750K – $1M, with 22.4% of the properties falling into that category.
Of particular note, twice as many inns as last year (43.6%) have been on the market more than a year, and 24.2% have found their way into the study for the past two years. This confirms what professionals in the industry have long said that marketing periods of 2-3 years for an inn are not unusual.
The B&B Team, Inc. was please to be the sole corporate sponsor of the 2008 Inns and Bed & Breakfasts For Sale Study. For a copy of the report, please contact us.