The Inn Business: News and Innsights

October 20, 2008
Part II, The Crisis and Inns

The Crisis and Inns, Part I apparently hit a raw nerve. We had many thoughtful responses and many thank you emails for our news encouraging ongoing financing opportunities. However, some of you mentioned the very real problem both prospective buyers and sellers have with shrinking funds for down payment and working capital. Whether equity is (was) tied up in stock market influenced investments or, perhaps more commonly in home equity, it has for the moment diminished. This has understandably created anxiety among buyers and anxiety is not a vehicle to spur action.

This dilemma is compounded by the number of Inns currently on the market. Hilary Jones, owner of the Inn consulting firm Inngenium, reports that there were 931 Inns actively for sale on the internet in early 2008. Given that many small Inns are marketed through residential listings, the real number is undoubtedly over 1,000! While what follows is mostly oriented toward sellers, creative thinking on the part of buyers will prove a valuable tool in finding and buying an appropriate Inn or Bed and Breakfast. read more

October, 2008
The Crisis and Inns

These are certainly troubling financial times. In the past week, Innkeepers (Present and Future) have wondered aloud about the impact of the current crisis on their ability to conduct business.

In truth, there are two financial worlds that function independently of each other, rarely crossing paths. One is the Wall Street based mega investment banking world that creates such products as “credit default swaps.” If you do not know what they are, fear not. No one else does either. Despite that, there are 62 trillion dollars in credit default swaps outstanding (From “Dept. of Magical Thinking”, The New Yorker Magazine, Sept. 29, 2008)

The other banking world is the less visible smaller community and state based banks, which stay close to home, hold no sub-prime mortgages and do not lend to Bezerkistan. These banks are conservative and healthy, with money to lend and the demand is currently soft. They are looking for good loans. read more

August, 2008
Good News!

Let us state unequivocally that the Bed and Breakfast/Country Inn business is thriving in 2008. While macro data is hard to come by, our clients and queries throughout the country show healthy, often double digit growth over 2007. There appears to be several reasons for this. In the short term, the uncertain economy may be keeping U.S. vacationers closer to home. Also the weak dollar has resulted in increased foreign tourism, particularly in the East and from Canadians in Northern states. read more

October 9, 2007:
Mortgage Interest Rates – Up To Date

The whole sub-prime mortgage problem has caused an understandable confusion among future Innkeepers. The Inn business is after all real estate based. We need a building and land to ply our trade. Most Inn purchases involve significant leverage (a mortgage) in the early stages of our Innkeeper life; a mortgage payment looks large in our financial life.

But this latest hiccup on the national (indeed international) level actually creates positive developments in our niche business. read more