How to start a Bed and Breakfast business

If you're looking for a new business opportunity and are interested in tourism and hospitality, starting a Bed and Breakfast is worth considering. 

According to the Bed and Breakfast Association, the UK's B&Bs generate around £2 billion annually, surpassing budget hotels in terms of revenue.

Tourism is one of the UK's most robust and profitable industries. 

Visit Britain predicts that by 2025, the UK’s tourism sector will be valued at over £257 billion—nearly 10% of the country’s total income—and will support about 3.8 million jobs nationwide.

You don't need to join a large hotel chain or establish an amusement park to benefit from the UK's growing tourist numbers. 

Sometimes, all you need is a couple of spare rooms.

Starting a Bed and Breakfast, however, is not a quick or easy process, especially for those new to the hospitality industry. 

There are many factors to consider before opening and many more to manage once the business is running, which can be overwhelming.

Our guide will help you discover how to successfully run a Bed & Breakfast, attract guests using booking sites like Airbnb, and build a positive reputation.

Read our guide on reasons to start your own business.

What is a Bed and Breakfast?

A Bed and Breakfast, or B&B, is a small lodging typically run by a family or a small team who also live on the property. 

These establishments generally offer fewer than ten rooms for guests.

Staying at a B&B offers a cozy, home-like atmosphere with touches of simple luxury, a rich historical feel, and unique character. 

Guests can also enjoy authentic food and beverage experiences. 

B&Bs are particularly popular for weekend getaways, romantic trips, or special occasions like weddings.

Research has shown that B&Bs in the UK receive higher guest ratings than hotels, with B&Bs averaging around 89.6% compared to hotels at about 80.8%. 

This high satisfaction rate is largely due to the personalised service that B&Bs provide.

Finding the right property to turn into a Bed and Breakfast

It’s a good idea to conduct market research to help you understand your target market, familiarise yourself with the competition, and determine if the type of property you have available is financially viable.

If you’re buying a new property to turn it into a Bed & Breakfast, consider an area with high demand and a low supply, as this can lead to high rental costs and increase the property’s value over time.

It’s important to consider the target demographic to help you determine their needs.

For example, if you’re targeting families holidaying with young children, you might look for a property near parks and recreational areas.

Another aspect to consider is your profit margin, as you’ll need to calculate if your B&B is financially feasible, meaning you’ll need to factor in costs such as:

• mortgage and rental payments
• renovation costs
• utility bills
• maintenance expenses
• any marketing fees you may need to pay.

How much money can you make from running a Bed and Breakfast?

Any business has the potential to be profitable, and that's the goal. 

By providing an exceptional guest experience and gaining popularity, your property can achieve profitability through effective management and strategies. 

However, before reaching that point, you need to establish a steady revenue stream by attracting regular bookings.

So, will you make money running a Bed and Breakfast?

When you break down the numbers, it's often unrealistic to expect to earn your entire living from a single B&B property. 

Let's consider a six-room property with a nightly rate of £90:

If all rooms are occupied, that's £540 per night.

At full occupancy, over 365 nights a year, the gross annual income would be £197,100.

At full occupancy, the gross annual income would be £197,100.

Considering average B&B occupancy rates can typically be around 50%, this figure drops to approximately £98,550.

You also need to subtract expenses and taxes, which can be significant, to determine your net income.

Remember that how much you can charge for a night at your B&B will depend on a number of factors such as the time of year and the level of competition, more competitors can drive prices lower, leaving less profit after deducting fees.

Ultimately, whether running a B&B is right for you depends on your personal situation. 

If you've had a successful career and are looking to supplement your previous income, a B&B might be a great fit.

Understanding the UK regulations for Bed and Breakfast businesses

Before getting your Bed and Breakfast off the ground, there are a range of regulations you’ll need to ensure you comply with to legally operate a B&B in the area and we’ve included just a couple that your business may need to comply with below.

One of the first things you’ll need to obtain is planning permission from your local council as running your B&B from a formerly residential property (like a family home) could be construed as a ‘change of use’.

You’ll also likely need planning permission if you need to do any building work to get the property ready for guests.

If the property is mortgaged, you will need to ensure that you aren’t breaching the terms of your mortgage.  

The terms of the mortgage need to be carefully checked as some don't allow for the property to be rented without specific consent from the lender, or for any kind of business to be conducted from the property.

As the owner of a business in the UK, you will be required to pay income tax and register for and charge VAT if your earnings exceed a certain threshold.

B&B owners must ensure they have appropriate home insurance to protect themselves from legal accountability; let your insurance provider know you plan to use your property for commercial rentals, as this could affect your insurance premium. 

Some insurance policies might not pay out in the event of damage from guests if you are commercially letting your property, so if in doubt, always check with your insurance provider first.

You must comply with all safety regulations, including fire safety, and conduct risk assessments of your property, ensuring it is equipped with necessary safety equipment such as fire extinguishers and smoke alarms, and ensure that any gas and electrical appliances are checked and maintained.

You’ll also need to put up Fire Action notices and Fire Exit signs where appropriate.

Depending on the size of the property, you could also be required to install fire doors and emergency lighting.

As you’ll be offering meals to your guests, you’ll also need to ensure your business conforms to food hygiene standards.

You will be required to register with your local Environmental Health Officer who will inspect your business premises for compliance.

If you’re planning to host events you might also need to apply for a personal and premises license to sell alcohol and a Performing Right Society license if you’d like to play music.

Since you’ll be keeping a record of your guests’ names, addresses and contact numbers, you will need to comply with the General Data Protection Regulation (GDPR).

It’s a good idea to seek specialist legal advice before you open your B&B to make sure you have a full picture of the various regulations and legislation that your business will need to be fully compliant with.

How to market your Bed and Breakfast online

Bed and Breakfast owners can use a lot of different methods to advertise their business online.

In addition to having your own website, booking sites such as TripAdvisor, Booking.com, Airbnb, and even Google itself are often used to get B&Bs to attract customers planning a trip to their part of the world.

Competition can be fierce though so to make your listing stand out from the rest and ensure you attract the ideal guests for your B&B, follow these tips:

High-quality photos 

Upload high-resolution and true-to-life photos that showcase your property, and draw attention to its best features; ensure you take pictures in good lighting.

Try to upload images of various angles or rooms to show transparency to potential guests.

Detailed and accurate descriptions

Write a clear and detailed description of your property or room that explains its size, layout, and special features, such as whether it has good Wi-Fi, accessibility, or outdoor spaces.

Highlight anything unique that could appeal to guests, such as a sofa that folds into an extra bed or a balcony that overlooks picturesque sea views.

Competitive pricing

Research similar listings in the area to give you an indication of what rates to set.

Consider offering special deals for last-minute bookings or off-peak seasonal discounts to stand out.

Attractive listing

It may be a good idea to make your listing stand out by using a catchy headline to get the interest of the type of guests you want to attract.

For example, if you’re hoping to attract couples, you may opt for an engaging headline such as “Romantic retreat with city views”; if you’re aiming for families, you could opt for “Family-friendly home, close to the beach.” 

Consider using keywords that guests might use when searching for accommodation in your area, such as ‘beachfront’ or ‘free parking’.

Learn more about Search Engine Optimisation with our six ways to boost your website’s SEO.

How to host your Bed and Breakfast on Airbnb

One of the most popular ways to advertise a Bed and Breakfast is with Airbnb.

Over 150 million users worldwide use the Airbnb website for temporary accommodation – from work-related travel to family holidays – and in various locations from quaint villages, old towns, seaside resorts, or bustling cities.

Airbnb is a modern-day hotel business model, where people book accommodation anywhere worldwide for a specific timeframe through the Airbnb website or app.

Airbnb can be more economical than many hotels, and guests can choose to stay in various properties, from shared rooms to designer penthouses.

Hosting an Airbnb is straightforward:

• first, register an account on the Airbnb website or app
• select the type of property listing you wish to provide, whether it’s a room, an apartment, or an entire house
• provide your location, the number of guests you can accommodate, the dates available, and the cost of a rental
• upload a section of pictures and provide detailed descriptions along with any house rules you decide to set
• after publishing the listing, you can start interacting with guests and manage bookings accordingly.

You can estimate how much money you can make on Airbnb by utilising Airbnb’s earnings estimator.

Preparing the property for guests

Before guests arrive, check that all locks, smoke alarms, and carbon monoxide detectors are operating and that fire extinguishers and any previously agreed equipment, such as child safety gates, are provided.

Ensure your bedrooms have basic and practical amenities such as kitchen appliances, utensils, fresh towels, and working lights.

Ensure the Wi-Fi connection is running correctly; it’s a good idea to leave a note with Wi-Fi passwords available and change these regularly.

Depending on the property type and its function, it would be good to make the interior design inviting for your guests by displaying artwork, mirrors, rugs, and plants.

It can be helpful to supply guests with a map of nearby amenities such as supermarkets, beaches, parks, gyms, and restaurants.

Plus, including a welcome note or fresh flowers upon a guest’s arrival can be a nice gesture.

Tips for renting success 

Provide a professional service by ensuring guests can contact you in case of an emergency, and if they have any general queries, aim to reply promptly.

As with any hospitality service, always try to be as accommodating as possible and use a polite and empathetic tone when handling guest inquiries or issues.

Ask guests for feedback and incentivise them to leave positive reviews through referral deals or repeat guest discounts.

Many booking websites make hosts with excellent reviews more visible to guests, so the more positive reviews you have, the more you can establish a positive reputation and attract future bookings.