You are in your 40's or 50's and feel like you want to do something new with your life...something international, related to travel. Remembering your fondest feelings of traveling internationally, you suddenly realize you would love to have your own guesthouse. A place where wonderful guests visit from all over the world, enriching your life and the lives of each other with delightful conversations and a shared experience in your beautiful rooms, garden, guest lounge, and dining room. New friendships emerge and you feel that you are offering a truly special part of yourself to people through your guesthouse experience.
This is us. We spent some time recently, traveling and exploring the idea of starting a guesthouse. And we have stayed in many guesthouses in many countries over the years and have talked to dozens of hospitality owners, travelers, and others interested in the same idea. This web resource is the result of our research. Rather than leaving our findings gathering dust, I am sharing it here in the hope that it will help others interested in starting their own guesthouse. Can you add your thoughts and wisdom? Please contact me!
Why a "guesthouse"?
A guesthouse is a romantic notion. It is quite different from a "bed and breakfast", hostel, lodge, or hotel. Here are some differences:
- Bed and breakfast: A room or rooms in someone's home that are let out for a night or two, with breakfast included. You are actually staying in someone's home. A personal and intimate experience. Usually a private bathroom. B and B's can have high prices in many places as they are considered a special experience. Great for people who really dislike the impersonal experience of a hotel.
- Hostel: A minimalist accommodation in a dedicated building, often with primarily shared rooms of a dozen or more people in a room. Sometimes breakfast is included. Usually shared bathrooms. Usually preferred by young travelers wanting the very lowest price, the opportunity to meet other travelers, and the freedom to party.
- Lodge: Usually a geographically remote hotel which provides meals due to being remote. Not cheap, but guests are willing to pay more for the access to nature, geography, or special experiences a lodge can offer.
- Hotel: Simply the renting of a dedicated room by the night, with varying features and services available, resulting in varying price levels. A generally impersonal experience, but lots of privacy.
There are many variations on these definitions, but the purpose of stating them is to make clear that they are different from a "guesthouse" in certain ways. These differences include:
- A guesthouse has "guests". A more personal experience where the owner greets and checks in guests, helps them feel welcome, often provides travel advice and booking help, and sometimes even engages with guests socially, giving them a connection to the town or city where it is located.
- A guesthouse usually offers more privacy than a bed and breakfast, but less than a hotel.
- A guesthouse's central offering is an intimate, friendly, relaxed, easy-going, social place to stay. It does not usually have luxury services like a pool, such as hotels have, nor usually shared rooms, like a hostel. Bathrooms may be shared or private.
- The owner most often lives in the guesthouse, or on the property somewhere.
- Guests can be any age, but younger travelers don't like the prices being higher than hostels.
- Guests are primarily international independent individual or couple travelers, not large groups, families in general, or large families specifically.
- Guesthouses sometimes provide breakfasts, adding to the social and personal nature that many travelers enjoy.
Guesthouse Principles and Practices
Here are some key principles of successful guesthouses, and how these principles result in specific practices:
Principle #1: Guests feel welcome, safe, certain, comfortable, and relaxed in the best guesthouses
- The owner or a staff member speaks the local language and usually at least one other, such as English.
- Guests of all ages, sexes, and styles of being are welcomed and made to feel at home.
- The owner has good welcoming skills.
- The owner is friendly and hospitable.
- The owner is available during the day to greet, settle, and help travelers.
- Guests are primarily international independent individual or couple travelers, not large groups, families in general, or large families specifically. This is an important distinction to make as in many relationship oriented countries, families travel in large groups and would not stay at a guesthouse. Instead, they would book two or more rooms in a hotel, expecting to have a social experience among themselves. International independent travelers expect the opposite: The chance to meet and socialize with each other and with the owner and staff. Guesthouses that "get it" make sure that the social atmosphere and owner + staff leadership in socializing is provided.
- Staff are managed well, treated like family, and paid well. This results in the staff, and not just the owner, being friendly with guests.
- Staff have a clear and professional system for doing their jobs. They are clearly trained and empowered to feel part of the success of the guesthouse.
- The owner and staff are culturally adept and adaptable, meeting the needs of different traveler profiles.
- The owner and staff have good problem solving skills.
- Staff are able to take initiative in meeting guest needs and in managing guest expectations proactively and in response to issues that arise.
- Staff have uniforms, making clear they are staff.
- The guesthouse handles online booking queries promptly, professionally, and personally, creating a relationship with potential guests before they even arrive.
Principle #2: Rooms are intimate, safe, comfortable, and private
- A locking door that provides proper noise, light, and intrusion protection.
- Windows with natural light coming in. Thick, full curtains or blinds.
- Comfortable, newer mattresses.
- Mattress covers and full sized higher quality bed sheets. Both are newer and in excellent condition
- Generous blanket options, for people who need more warmth.
- At least 2 full sized, thick, newer pillows per double or larger sized bed.
- Decorated - the room has some character.
- Warm colored paint
- No fluorescent lighting in the room. The room is well lit with incandescent, halogen, or full spectrum LED bulbs.
- A side table with a reading lamp.
- Storage space such as a shelf, dresser, luggage stand and/or closet.
- Wood that adds to the feeling of warmth in the room.
- Very clean
- Recently painted
- Very well maintained. Everything works in the room.
- Simple but strong, solid furniture. Not clunky, tiny, or worn out.
- Double pane windows for quietness, if in a noisier and colder area. At least solid single pane windows in places where double pane are either not available or prohibitively expensive.
Principle #3: Bathrooms are sanitary, nurturing, available, and certain.
- Very clean. If shared, cleaned 2 or more times a day.
- 24x7 hot water.
- Sufficient water pressure.
- A spacious shower stall
- Well lit with warm, bright, incandescent lighting.
- Instructions posted for anything unusual or potentially unclear about the bathroom facilities.
- Well stocked with toilet paper and hand towels.
- Bath towels provided for guests.
- Ventilated with an exhaust fan.
- No drain smells. Plumbed properly.
- If shared, a locking door that provides full privacy protection.
- Sufficient space to move around and change clothing when showering.
- Ceramic tiled throughout.
- Modern fixtures.
- Well maintained - paint, appliances and fixtures, tile grout, lighting.
- Decorated - with some character.
- A shelf for belongings. Hooks for clothes. Bars for towels. Soap shelf in the shower. Vanity or shelf for toiletries. Little details such as these are important!
Principle #4: Spacious, friendly, comfortable, welcoming, and social common area(s).
(pictured at right: A lovely rooftop guest lounge with couches, tables and chairs, hammocks, plants, decorations, and wifi)
- Common area is separate from the bedroom area to protect from noise transference.
- Contained space (intimate) but open and bright.
- Quiet spaces and social spaces.
- Variety of seating options, including couch, hammock, armchair, and table & chairs available.
- Chairs have cushions.
- Lots of plants.
- Optimal: A rooftop terrace, patio, or lounge in a warm climate country. Even better: With a nice view.
- Decorated - character.
- Books and games.
- Guests feel free to be themselves - not being watched suspiciously by staff.
- Not a thoroughfare for staff.
- No fluorescent lighting. A mix of festive, functional incandescent, halogen, and full-spectrum LED lighting.
- Lit well at night.
- Lots of electrical outlets for computer and smartphone users.
- Good wifi service in common area(s).
Principle #5: Logistics are relaxed, trustworthy, professional, clear, certain, and feel safe.
- Good reservation system - online bookings, deposit taking, payment method options, clear and simple cancellation policies.
- Each room is bookable online individually and separately. This gives guests the feeling of certainty in what they will be getting upon arrival.
- Lots of recent photos of the rooms, bathrooms, and common area(s) on the guesthouse's web site.
- Comprehensive web site. Local and English languages at least. German, French, and other languages included even better.
- Group bookings options made clear, if offered.
- Clear check-in and check-out policies and practices.
- Extra services available and clearly signed and priced. Example: Travel bookings.
- Clear and friendly signage, information provision, and instructions throughout.
- A positive welcoming tone rather than a suspicious and punitive tone in all dealings.
Principle #6: Extra value and special character - the "wow!" factors
Practices: (not all required)
- Organized social events
- Free breakfasts that are both tasty and generously portion-sized.
- Towel service for rooms and local beach (if applicable)
- Internet computer station with printer.
- Free filtered water access.
- Beer, soft drinks, juices, and snacks for sale.
- Kitchen for guests to use.
- Wifi service throughout the guesthouse.
- "Above and beyond" service from the owner and staff.
- Bicycle, boat or other rentals available at low cost to guests.
Economics of a Guesthouse - Business Model Comparisons
The very best guesthouses have solid business models and practices. Prices at these places are usually higher than competitors, not lower. A strong business model, professional practices, and higher prices allow the owner to continually update, refresh and maintain the facilities, and pay staff well. A virtuous cycle develops for guesthouses that operate professionally. A quickly degenerating cycle develops for those guesthouses that operate without care for facilities, staff, and guests. Most disheartening are those guesthouses which try to offer a really low price and skimp on everything, with guests trading off financial savings against a poor experience.
Getting the business model "right" for a specific town, city, and country situation is necessary. The recipe will be a bit different in each place but there are some foundation pieces that seem to be universal. Below is a comparison between a typical guesthouse business model and those of other types of accommodation:
|Type||Source of Profits||Description|
Majority of revenue and profits come from private room fees. Mid-range pricing of room rates, relative to a specific geographic area.
+ travel booking commissions (secondary source of revenue and profits)
+ drink and snack sales (minor source)
Revenue and profits come from a mix of 3 parts: shared room fees. Low-end pricing of room rates.
+ alcohol and snack sales (A very significant source of revenue and profits)
+ travel and tour booking commissions (Another significant source of revenue and profits). At one top guest house, these commissions were very important to the overall profitablity of the establishment.
Majority of revenue and profits come from private room fees, which are higher due to the special natural nature of the lodge location.
+ alcohol and food sales (significant and necessary secondary source of revenue and profits)
+ extra services, such as yoga classes, mountain bike or kayak rentals, etc. .
In summary, the business model of a guesthouse is primarily focused on the quality of the room, the overall facility, and owner's manner of running the place. To maximize profits, the guesthouse owner provides a social, non-party atmosphere, cozy comfortable rooms with character, and excellent facilities such as bathrooms. The guesthouse, then is a "safe sanctuary" from which to explore a city and area. A place to return to at the end of a day of exploring to share experiences with others, get advice, rest, refresh, feel emotionally safe, and get culturally grounded. In exchange for crafting this experience, the guesthouse owner can charge much more than a hostel and have longer-staying and better guests.
Marketing the Guesthouse - How to get lots of bookings
By now it should be obvious that the best guesthouses have some pretty clear principles and practices that make them successful.
But is it enough to simply operate professionally, in a friendly manner, and with awesome service? In other words, does "build a better mousetrap and the world will beat a path to your doorstep", as the old saying goes, work?
The owner of one guesthouse in Belize said that actually yes, "word of mouth" (WOM) is their most powerful marketing tool. This is an established guesthouse, in a good location in town, and with many added services available. The owner is also very customer focused, ensuring the absolute best service.
The result is that he estimates that some 50%+ of his customers are WOM and repeat customers, 25% come from Trip Advisor and the rest from walk-in and other other sources.
Having top Trip Advisor reviews is certainly important, but not everyone uses Trip Advisor and the majority of his business comes from doing the right thing - offering an exceptional experience.
Marketing Principles of Top Guesthouses:
Principle #1: Awesome service is #1
- Guests are communicated with over the internet in a rapid time frame when they contact the guesthouse with a query or reservation booking. Best: Within 12 hours. At worst, within 24 hours. In some countries, 12 hours might even seem long, but we must recognize that guests may be inquiring from other time zones and no guesthouse owner is expected to answer emails 24 hours a day.
- Guests are greeted warmly upon arrival by the owner or a staff member. 100% of the time. No excuses for less than 100%. This is the first time the guest may be in the country, city, and culture. They are hyper-sensitive to everything. First impressions in this case are huge. And they may be tired from traveling, adding to the impact that a warm welcome can give. Having personally experienced the sense of relief when being greeted warmly at a guesthouse after a long day of traveling, I can attest personally to the power of a warm welcome. Finally, I observed a #1 rated guesthouse owner not only meet every single guest upon arrival, but help them with luggage and do the same when they left, staying outside with them until their transportation arrived and seeing them off with a hug and a cheery wave. Did I mention that this guesthouse was #1 on Trip Advisor for their area and category?
- Guests are shown personally to their rooms and are given a full introduction to the guesthouse, making them both feel at home and feel safe that they understand how things work there. Often guests have things on their mind when they arrive, such as an attraction booking they need done urgently. This is a great time to answer any questions they have and help relieve their anxieties at the same time - anxieties that can be heightened by their tiredness after having traveled a long time before arriving.
- Guests are supported fully with their travel information, comfort, and social needs during the stay. Guesthouse owners and staff learn very quickly how to personally and professionally manage guest social needs.
- Guests are treated just as well when they leave as when they arrive. This cements the relationship and creates the natural opportunity to ask them for a Trip Advisor rating and referrals.
- It is almost ridiculous how well some highly successful guesthouses integrate with other hospitality service providers, including local restaurants, shuttle operators, and tour guides. Not only does everyone earn a commission on bookings in both directions (room bookings coming and on tours, for example) but guesthouse owners are in the perfect position of trusted advisor to the guest, building their own credibility and customer satisfaction from awesome integrated guest experiences. Making the effort to build and maintain strong relationships with trusted "partners" in the area is what the best guesthouses do. So the key here is "trust". Everyone wins with trust. There is no benefit for the guesthouse owner if the service being provided by partners is not excellent.
- The nature of the relationships are transparent to the guest. This ensures that the guest does not feel they are simply being sold the service with the highest commission, or that nepotism is happening. In highly relational countries nepotism can be particularly problematic for guesthouse owners, as expectations are that family and friendship relationships are #1. A brother who offers to tour guests around is completely incompetent? Doesn't matter: Family comes first 100% of the time. Guesthouse owners must carefully manage local relationships, particularly in smaller centres or places with entrenched bureaucracies. Nepotism works both ways - helping family and friends and hindering enemies.
- Understanding what partner services guests want is crucial. For example, one guesthouse offered an overall great experience to guests but kept booking too inexpensive shuttles for guests. The worn out vans that appeared at the door did not make guests happy. The underlying assumption was that guests wanted the cheapest service. The reality was that guests wanted a modestly-priced service, not the cheapest. The difference had a huge impact on other potential bookings as guests assumed that tours, restaurants, etc. would be similarly the cheapest...and poorest quality, too. This limited the marketing success of travel and other bookings. Interestingly, once the guesthouse corrected this anomaly, they began getting more walk-in travel bookings from people staying at other accommodations! As this guesthouse was well known for being top quality, the nice vans that began showing up were noticed by other travelers. A virtuous marketing cycle developed.
- Understanding each separate guest, and treating their visit as unique and deserving of personal attention for the offering of partner services is key. It is quite a turnoff for guests to feel railroaded into a package deal that really doesn't fit their interests and needs.
- A really comprehensive web site. Multiple languages if appropriate, lots of pictures, clear information, and a top reservation system. A poor or missing internet presence does not mean "our guesthouse is a secret gem". It means an unprofessional, backward, uncaring, and poorly run place in the minds of potential guests. With little information to go on when looking for a place to stay, an internet presence is the determining factor for many potential guests who live far away and who have never visited your country before. Problematic for relational countries is that potential guests want great information and reservation *processes* that lead to self-help bookings. This is a problem because to the relational mindframe, a personal interaction is key, not processes. Many a great guesthouse on all other accounts sits empty, waiting for the phone to ring with a guest wanting to book through a personal telephone interaction.
- A social media presence, such as a FaceBook page, with occasional event and celebration postings, communication with past and future guests, and the creation of a relationship with guests.
- "To Airbnb or not to Airbnb - that is the question!" To mis-quote Shakespeare, Airbnb is a powerful system for offering guest house rooms. It has some attractive features, and some detracting limitations and costs. If you are stuck not knowing how to market your guest house, Airbnb can be a great way to start. But if you are able to make a bigger committment to your marketing, be sure to assess if Airbnb is your best tool. For EVERYONE reading this: Use Airbnb to LEARN best practices for marketing. It is a wonderful tool to learn everything from how to take photos to how to word your ads well. Use the Airbnb internet site to learn all you can about places that are similar to yours, competitors in your area, and about what guests are looking for.
- Great email interaction. As with the web site and social media, interactions with guests who are abroad has heightened importance. Guests read every word carefully as it the only information they have. Email tone, professionalism, and comprehensiveness are all key to ensure with email.
Principle #2: Build mutually beneficial relationships within other hospitality service providers in the area.
Principle #3: Have a great internet presence.
Marketing is one area that can be frustrating for guesthouse owners. On one hand they know that spending time with their guests and offering a great place to stay are the keys to their business. But on the other hand, the business world seems to be telling them there are expensive advertising and marketing services that need to have money spent on. The most successful guesthouses understand that marketing is not magic. It is relationship building. With guests before their visit, during, and after they leave. And building value-added relationships with local hospitality "partners".
Do you need help with your guesthouse marketing? The author of this site is a business professor at a Canadian University, who is very open to offering marketing support. All he asks is that if he ever visits your country and guesthouse, you make it a nice visit for him. :-) Contact him for more information.
The above is one snapshot of what makes a guesthouse both a wonderful place to welcome guests and a financial success, too. Hopefully these research findings help anyone starting or running a guesthouse. If you can add any comments, insights, photos, or other suggestions, please contact me!
Latest update: December 2016
Links and other Resources:
Build Your Own Hostel Overseas - web article