B&B is "living like ordinary people", in which "stay" is life, and all value lies in the product value, or needs and demands reflected in personalized life. When everyone chooses a B&B on Airbnb, they try to choose something that they expect and have value for. They also choose products that they are interested in, the owner's unique lifestyle, or things that are in line with their own values.
From an investment perspective, we need to understand what exactly we are investing in?
Last year we spent a long time investing in Yunnan, Guizhou, Zhejiang, Guangxi and Jiangxi. I have looked at some of the places where B&Bs can be opened, and I have also experienced and stayed at many B&B owners’ products. You will find that there is a characteristic: most of the current B&Bs are actually low-end boutique hotels or guesthouses in a different way. Most of them do not have unique personality and independent identification symbols in their design and living experience.
The accumulation of decoration standards for a good accommodation product may form a standard in B&Bs. Compared with similar design standards, everyone cares more about non-standardized unique experiences, bringing different satisfaction to so-called needs. feel.
Three aspects tell you: What do B&B investors invest in?
The first aspect: avoid investing in B&B hotels like a boutique hotel
B&Bs start from Basically, most of them are properties or spaces that the owners own and create according to their own lifestyle to entertain guests. Management is one of them, but it may not be the most important part.
At present, many homestays in China are more like hotel development and real estate development in disguise. In addition to renting land, there are also people who buy land to build B&Bs. From the construction of the entire B&B, heavy asset investment is also carried out in accordance with the configuration method of a boutique hotel. Therefore, in the early stage of capital-intensive investment, the later stage of cost recovery using ordinary accommodation is a difficult thing to understand in terms of capital.
Many projects are very good, but the investment amount is too high and the later investment recovery period is too long. We even have to consider the off-peak seasons and the reception capacity of B&Bs, so in the end there will be a very embarrassing problem when settling the accounts. , which means that this method is not financially feasible.
The second aspect: How to view a B&B from an investment perspective, and what should the funds be invested in?
B&Bs are not limited to opening in rural areas or suburbs of cities, they can also be opened in cities. In between, it can be a B&B in the city or a B&B in the countryside. But its original intention is to represent the product concepts and your accommodation experience guided by the lifestyles of different B&B owners.
From an investment perspective, we are more concerned about what kind of experience these products can bring to demand, and what kind of fission mode this demand will trigger in terms of experience.
A combination of "room fee + non-room fee" income
Everyone knows that some investors have invested in "like hometown", which means "hometown" in different places. are different. This is why we emphasize that B&Bs must have a very unique product personality and the values ??of the B&B owners.
We hope to have a very unique accommodation experience and have a very good scene space in the entire accommodation-based experience. This scene space will be connected to the future accommodation-based experience. Can guide you on various things related to vacations, gifts, activities, etc. Therefore, from an investment perspective, such a subject matter does not only rely on the recovery of room fees, but more of a complex of "room fees + non-room fees" income formed by the form space and scene space of the product. .
Different products must be combined with regional culture. However, B&Bs and people-like life are more supported by the values ????of the B&B owners and the different needs of the experiencers. Whether it is consistent with the local regional culture is not very important. What is more important is what kind of life attitude the host should present to his guests.
There is a ceiling in room fee income itself
According to the characteristics of the entire revenue management, there are obvious seasonal differences in B&Bs, and there are also cyclical differences, that is, off-season, peak season, weekends The difference on non-weekends. From the perspective of revenue management, what can contribute to cash flow in B&B hotels is based on the hotel management method. Among the revenue management methods, the rhythmic revenue implementation methods implemented can be closely related to evaluation results and revenue.
Compared to all investors, this part has a ceiling, because the number of rooms is fixed, and the corresponding demand for rooms is also limited under the influence of cyclical low and peak seasons, so the room fee income itself There is a ceiling.
On this basis, we hope to use non-room fee income to develop the whole thing based on the B&B experience. The services provided by the room fee can also improve the products of our own accommodation. experience.
Improving the accommodation experience and personalized products
Some B&Bs provide breakfast, spa, and souvenirs, which greatly enrich the guests' unique experience in the B&B. At the same time, it also smoothes and supplements risks in addition to room charges, and on this basis, more possibilities will be added. Such a subject matter is a better sample for B&B investment. Therefore, among usually good subjects, room fee + non-room fee is a relatively rich and comprehensive cash income status.
From the perspective of cash flow costs and expenses, non-standard things are used to exchange money, but we also need to use standardized things to control costs and expenses. In the standardization part, we hope to improve efficiency and carry out cost control and expense control through effective standardization, so that profits can be generated in the income formula.
From an investment perspective, for all standardized things, we pay more attention to the replicability of the same B&B in different regions. The operational efficiency of the team, including some related energy, energy consumption, and even linens, PA, and all the efficiencies that can be brought about, can be replicated and scaled under the premise of limited resource conditions.
The third aspect: Regarding investment and B&B location selection
Many people think location selection is very important, which is true from an investment perspective, because it can avoid risks to a great extent. But that doesn’t mean that a B&B located in the best location and with the best resources will definitely succeed? I don’t think this is absolute.
So from an investment perspective, compared to the location selection of a B&B, we will pay more attention to the physical aspects of the demand side of the product itself to realize the possibility.
Let’s look at the “Xuli” B&B. In terms of transportation accessibility, the location of Xuli may exceed the concept of many so-called suburban B&Bs in cities. Some people may think that the location is a bit problematic. However, the uniqueness of the product itself will eliminate the thinking of looking at the product with real estate thinking. For example, Yaya likes the product "Xuli" very much. She feels that driving 5 hours to that place to experience living is not an obstacle.
In essence, B&Bs are different from what we call hotels and real estate development in terms of the influence of geographical factors on site selection. It would be an important question but not an absolute one. "Floating Cloud Ranch" is a good product made in a place that everyone thinks is illogical, so the core of the B&B is still the product.
To see whether this B&B product is good from an investment perspective, we must first see whether the owner of the B&B likes this place. If he likes this place, transform his likes into a lifestyle and product. Then this thing will naturally have people who like and identify with it to experience and live in it.
In the early stage of investment, investors should pay special attention to three issues!
Hotels in our city are completely different from standard real estate development. In addition to these three issues, there are many will attract our attention. When investing in homestays, we will pay special attention to and understand these issues, especially when doing preliminary research.
The first one is about whether the B&B’s procedures throughout the land property and leasing process are sufficiently risk-resistant and meet the requirements of legal protection.
At present, most people’s land for B&Bs is obtained through leasing relationships. Most of them are farmers’ land. There is very likely to be great uncertainty in the future. Land disputes will lead to future operations. A problem occurred. It is very important to have a stable and safe rental environment and a legal land use agreement.
The second one is that we will attach great importance to the team. First of all, the B&B owner is very important, but the team that provides overall support and operations around the B&B owner is also very important. The thing we invest in will not be an isolated product. It must be scalable and replicable. Therefore, while emphasizing standardized things to improve efficiency and control costs, we also attach great importance to the stability of the team in the process and the team's integrity. Experience and understanding of B&B products are actually services.
For example, a B&B host’s smile to his guests is a very important issue. The first is whether he can smile, and the second is whether he is friendly. This is the most basic representation of service. The smile of the host is very important, and a B&B system that matches the smile is also indispensable in terms of demand.
The third one is that in B&B partnerships, we attach great importance to the equity structure of the partner team and the so-called corporate governance structure. From the perspective of capital availability, we hope that in this process, the ownership structure and corporate governance will be relatively simple, which will be conducive to future scale and even future exit.
So for a large number of shareholders, the structure of the equity is very complex, and even in the early stage, there will be a lot of equity shareholders through crowdfunding. This is an obstacle for investors, that is, in the future, this company will consider products and products from a capitalization perspective. In the process of large-scale replication, corporate governance structure and shareholder structure are an obstacle.