Mistake #1 – Not understanding the local marketplace
There are three common mistakes people make before starting their bed and breakfast. This post focuses on the first big mistake – not understanding the broader marketplace and the impact it could have on your bed and breakfast.
When I started my B&B, I had spent a great deal of time getting to know my competition, but not taking the time to explore and understand what else was available and how the local marketplace was promoted. It was my biggest downfall for my plans for a year-round bed and breakfast.
Understanding the Competition
Researching the marketplace means more than just knowing what other bed and breakfasts are there.
You need to understand all the options potential guests have. Did you know 80% of people who stayed in hotels did so because they never even thought of B&Bs as an option? (BedandBreakfast.com survey, 2010)
You need to find out what the local vacancy rate is during peak season. If people don’t complain that it’s tough to get a decent place to stay then it may be difficult to fill your rooms.
Doing a web search will bring up the names of local bed and breakfasts that are operating as well as those that don’t exist anymore. You need to find out why those ones that closed, did so – so you can either avoid the mistakes they made, or make the most of the additional opportunities they have left behind.
As an example, when I joined our local B&B association twelve years ago, I was the fourteenth member. Now they are down to three members. What happened? The majority of people running B&Bs when I joined were semi-retired and were interested in some extra income. Over the years, the majority of them have reached full pensionable age, they have family (especially grandchildren) scattered across the country that they want to see more of, and they want their summers off.
Understanding the Area Marketing Strategy
Understanding the local marketing strategy can play a big role in determining who and when I can (or can’t) expect throughout the year.
Who is marketing the area? People need a reason to come to your area before they will look for accommodation. In Parry Sound, it is the major attractions (seasonal), local (who depends on local – i.e. seasonal businesses for their funding) and regional tourism organizations who do the majority of marketing.
What is your area being marketed for? In my case, the location on Georgian Bay brought a lot of people who are into water related activities.
When is that marketing taking place? Currently the majority of money is spent in our peak season. This is the time when individual businesses are spending their money on their marketing also. That means that there are seven months of the year when there is very little or no promotion of the Parry Sound area – and hence, things to do because the market isn’t there..
What mediums are they using to promote the area? Have they been able to keep up with current technology? Is there the will and/or monies to keep up-to-date? Over the years, technology has become extremely portable, decreasing potential guests’ dependence on print materials.
Where are the target audiences located? The large majority of visitors to Parry Sound are from the Greater Toronto Area (two hours away). They have many misconceptions about this area during the off-season that keep them away, even if there were things to do.
Even though I was warned that “the sidewalks rolled up on November 1st”, not only did I not believe that could really be the case, but I was certain that I could personally convince people to come to Parry Sound in the off-season. I put together some great packages and promoted them the best I could. However, after a few years I was able to grasp the fact that people perceive this area as a summer area only and my personal marketing efforts had a limited audience.
I was extremely lucky that my lack of understanding of the local marketing situation was not the end of my bed and breakfast business. It was only the fact that I did so well during the shoulder and peak seasons that kept me financially viable for the first few years while I figured out a solution for the off-season.
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