Converting your home to a B & B accommodation business

New Zealand’s tourism sector has grown substantially over the past two decades – with a greater number of ‘free independent travellers’ now spending time touring around the country.

‘Free independent travellers’ are a tourism sector classification describing those visitors who organise their own itineraries, accommodation, activities and transport. They tend to emanate from Australia, Europe, or North America, be mature couples aged 50-plus, enjoy the ‘finer things’ in life, are environmentally-aware, are technology-savvy, and have few qualms about customising their travel arrangements.

In response to what has been this growing tourism sector, B & B’s (the abbreviated term for bed and breakfast lodges) have cropped up across all regions of New Zealand – from homes in the cities’ through to provincial and rural locations where access to traditional motels, and larger hotels varies between ‘limited’ to ‘non-existent’.

National residential manager for real estate agency Bayleys, Daniel Coulson, said that with the growing prevalence of Airbnb, a growing number of Aucklanders and those living in the city’s green belt were generating additional household income by converting their dwellings into B & Bs.

However, Mr Coulson said it was important that anyone considering going down the B & B route factored in a range of social and business factors before fully committing to the enterprise.

“Opening a B & B business is like founding any sort of commercial activity. The better prepared you are before committing wholesale to the opportunity, the more you know about the market dynamics involved in the sector, the more likely you are to succeed,” he said.

“Remember, for many B & B operators the tourism accommodation sector is totally different from what may be their primary source of income – such as a full or part-time job, “ Mr Coulson added.

Here is a nine-prong check list for home owners to consider before launching into the commercial accommodation sector on their city premises and lifestyle blocks.

1. Are you undertaking this enterprise as a commercial opportunity or for altruistic reasons - such as the chance to meet new and interesting people from different cultures? If the former, write up a formal business plan with a detailed costings schedule and business model structure.

2. How are you going to fund the venture? Also worth considering at this point is whether the B & B will be a stand-alone business, or will be a subsidiary activity under the household’s income. With a multitude of development and operation costings, revenues, and compliance costs associated with running a commercial venture, advice from an accountant is highly recommended.

3. How much time are you willing to allocate to operating the B & B as a professional venture? Remember that guests may be booking rooms in the middle of the day or first thing on Sunday morning, and in many instances, they will expect the same degree of service as would be delivered by a four to five-star hotel. And that while you may normally be accustomed to driving the children into school at 8.30 in the morning, your guests could well be expecting their cooked breakfast to be served up.

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