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Are they cutting us an oil coupon?

This is what the owners of the B & Bs earn

The price of a night in a B&B in Israel is close to the price of an all-inclusive package in Europe.

Returning to the romantic weekends and just before Pesach, we went into the bowels of the numbers and came up with some very interesting findings

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• B & Bs

David Rosenthal

Thursday, 18 February 2021, 00:59

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Take us some good thousands.

Is it profitable for us?

And how much of it does the owner sweep into his pocket?

(Photo: pixabay)

Also this Passover, we will pay for a night in a B&B a price that easily crosses the NIS 1,500 threshold, and in many cases climbs to double that and even more.

In a reality where the cost of renting a B&B daily is close to the price of an all-inclusive package in several countries abroad, the question arises: Is it greed on the part of B&B owners, or when you dive into their accounting books, do you find many of them having difficulty reaching profitability?

In other words, let's be brazen Israelis and be asked: How much money is left for a B&B owner after deducting all his expenses?

In order to reach this figure, we used the Association of B&B Owners in Israel to prepare the calculation, which is based on the working cost , It should be remembered that unlike hotels, where in years as amended the room occupancy rate is 80-90%, when it comes to B & Bs the average annual reaches only 100 nights in which they are used.

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• Advertising costs: The

  public tends to go into large advertising portals, which have a large variety of B & Bs with an advanced filtering mechanism.

  The cost of advertising on such a portal is around a thousand shekels a month, with some B&B owners advertising on several portals.

  Therefore, the cost also climbs to NIS 3,000 a month.

  It should also be taken into account that a site like Booking charges a commission of 17%.

  Total component cost for daily rent: NIS 175

• Laundry:

  Laundry, including disinfection and ironing at a professional level, reaches NIS 100 for a couple with two children.

  Total component cost for daily rent: NIS 100

• Textiles:

  No one is willing to pay 2,000 shekels for an overnight stay in a B&B and to wear a 'worn out' robe.

  The expectation is to get a set of pleasant-to-the-touch and spotlessly clean robes.

  To put it bluntly, the cost of buying textiles for a double room in a (average) accommodation unit ranges from NIS 500 and takes off north to NIS 1,500, in case a pair of quality bathrobes, pampering towels for the pool and rooms are also included.

  According to Ami Sharvit, CEO of Hakol LeZimmer, one of the leading companies in Israel in the field of supplying products to B & Bs, "It should be remembered that this is not an investment in a single unit, since for day-to-day operation the unit owner must purchase at least 3 sets. "Blanket, pillows, rugs for feet, beach and face towels." At the end of the day, in light of the level of wear and tear and shortages, we set the total average cost of the component at NIS 3,000 per year.

  Total cost of a component for daily rent: NIS 30.

• Electricity and water:

  Unlike the use of the home space, the B&B has no consideration of saving.

  The water flows and the hand is light on the button of the air conditioner.

  "I had customers in the winter who turned on the fireplace, but instead of opening the window to ventilate the space, they just turned on the air conditioner," says a B&B owner in the north of the country. "Also, keep in mind that unlike hotels, B & Bs, like water consumption at home, pay On an excess quantity. Of course, the water heating with gas must be added to all this goodness. Total component cost for daily rent: NIS 80

• Complementary products, food and shower:

  Accommodation in a B&B includes many treats such as wine, coffee, soaps, bath oils, etc.

  According to Sharvit, of course there are differences between the B & Bs: "There are those who put basic products such as coffee, sugar and soaps, and there are many who fill the room with every good. Everything at the end of the day has a price, piled up for considerable expenses based on the unit. For example, there are B & Bs where you can find dental kits and pampering toiletries in the bathroom. "

  In the wedding line, the cost can add up to NIS 150 per night.

• Cleanliness: The

  level of cleanliness required in a B&B is different than in a standard house, since it is necessary to take care and clean it while meeting the most meticulous standards.

  "It's enough for a customer to find a single pubic hair in a hot tub, for him to make you a scandal from the movies," says another B&B owner.

  Total cost of a component for daily rent: NIS 150

• Pool:

  Operation and maintenance of a pool involves the use of a robot and the operation of various pumps, including its heating.

  In addition, the pool needs to be chlorinated daily, no matter if it is used.

  To this must be added an offset of wear and tear of means of coverage and additional routine maintenance.

  Total component cost for daily rent: NIS 175

• Fixed expenses: property tax, sewage levy, insurance: An annual insurance premium for an average B&B that includes coverage for the owner's liability for damages caused to the customer's property and body, including coverage for fire damage, etc., reaches NIS 1,500 per year.

  To this must be added the sewer levy and the payment of property taxes.

  Of course, their height varies from B&B to B&B, but for the purpose of this calculation, we have assumed that the cost of all these components reaches NIS 4,000 per year.

  Total cost of a component for daily rent: NIS 80

• Communication:

  Lease payment including payment for infrastructure and supplier: Total NIS 179 per month. Total component cost for daily rent: NIS 2

• Wear and tear: Wear and

  tear does not end with textiles, but exists in all the means used for the well-being of those staying in the B&B, including kitchen equipment, mattresses, furniture, electronics and air conditioners.

  Its height depends, of course, on the quality of the products, how often and how it is used.

  The average value of general wear and tear is about NIS 5,000 per year.

  Total cost of a component for daily rent: NIS 62

• Legal advice and accounting:

  The annual cost of accounting services amounts to at least 3,500, without including the cost of preparing the annual report.

  In addition, like any business, the need for legal advice arises from time to time.

  Total component cost for daily rent: NIS 81

• Fire fighting: The

  language of the regulations and the requirements of the policy force the owners of the B & Bs to install a fire extinguishing system that includes hoses, sometimes also smoke detectors and fire extinguishers, for which an annual health certificate must be obtained.

  The estimated cost paid per year is about 1,000 shekels.

  Total component cost for daily rent: NIS 12

• Personnel expenses for the operation of the B&B:

  Most of the B & Bs are operated by their owners, when there is no market figure that will express the scope of the job invested in it.

  The conservative estimate is 50% -75% of the job for the operation of each unit, with the average salary in the Northern District being about NIS 8,000.

  For the sake of calculation, we have not addressed this aspect.

• Gardening:

  The average cost of renting gardening services for an area the size of an acre is about NIS 400 on average per month.

  The intention, of course, is not for the initial construction cost, but for maintenance and ongoing care, which amounts to NIS 4,800 per year.

  Total cost of a component for daily rent: NIS 60

• Color:

  Many B&B owners renew the color at least once a year.

  The cost of this component is up to NIS 2,000 per year per accommodation unit.

  Total cost of a component for daily rent: NIS 20

And here it is more clearly

(Photo: PR)

After deducting the variety of expenses from NIS 2,000 that the customer pays for renting the B&B for the night, an amount of NIS 483 remains in the owner's pocket.

On the face of it, this is a handsome amount, but it should also reduce the payment of income tax and social security, which can reach a rate of about 40 percent.

"The bottom line, when you take into account the cost of the manpower employed in the maintenance and day-to-day operation of the B&B, and in light of the fixed costs, we conclude that there is no economic justification for operating a single B&B and even two B & Bs." "For the consulting company Pareto, which provides economic consulting services to government, public and business entities." This figure is especially important in light of his (mostly) absence from the system of considerations of those who set up a B&B.

This dream has a price, both for the landlord and the tenant (Photo: Great Vision)

"The time has come for the public to know exactly how things work behind the scenes. I am tired of every Israeli with big eyes, thinking we are getting rich at his expense. The owner of three B & Bs in the north of the country, "The industry is in fierce competition and our level of commitment to the well-being of the vacationers and their standard of demands is steadily rising every year."

"We are not counted by the Ministry of Tourism," notes David Peled, CEO of the Golan B&B Group and a senior figure in the Israel B&B Association, "The state is aiming to help hotels as a result of their strong lobby and it is missing out on huge investments." "Being in the periphery would lead to its strengthening and positive immigration to it. The Ministry of Tourism should push hard for the establishment of regional associations with full funding for the benefit of moving the industry."

In conclusion, says Sharvit, "there is no shadow of a doubt that in the last decade there has been a change in the public's attitude regarding the quality and nature of the experience that a stay in a B&B provides, and evidently, the accommodation unit owners make considerable efforts to meet the high standards." "Fortunately, many of the visitors appreciate the level of investment. Apparently, the data shows a significant percentage of returning customers."

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