Bed and breakfasts have thrived for...

Bed and breakfasts have thrived for decades by the agency of promising to make guests be stirred like family. Now, a number of B&B are being taken above by families who have no intention of leaving.

In a side validity of the real estate hum scores of traditional bed and breakfasts are closing down as fresh buyers turn them back into private residences. Behind the vanishing inns is a simple equation: Many B&B are worth more as properties than as businesses. And with the real estate market showing signs of softening, innkeepers now have an immediate incentive to exchange out and reap a windfall. Rising interest rates have also made it more difficult for innkeepers to pay the monthly mortgage and still transfer a profit by renting sweeps to weekenders.

THE LAST PANCAKE

As a accrue many operators have served their last apple pancake. In Lenox, Mass., tree-lined Cliffwood public way has one B&B, down from three in the late 1990 In Cape May, NJ the holder of the Columns by the Sea revolveed her beachfront B&B into separate condominiums she's selling for up to $15 million. In Aspen, Colo the proprietors of the Sardy House regenerateed the inn into a 6-bedroom single-family family now on the market for $20 million. (The possessions also comes with a town house and an 8-bedroom carriage house.) In late 2003 the proprietors of Mount Misery Bed & Breakfast in St Michaels, Md decided it wouldn't court would-be innkeepers, so they marketed it as a private domestic circle It sold, for $1.5 million, to Secretary of Defense Donald Rumsfeld

The dynamic is playing public across the country. The California Association of Bed and Breakfast Inns says seven of its members sold their properties last year -- each to buyer planning to transmute them into private homes. Overall, the Professional Association of Innkeepers International says the number of apartments in B&Bs and country inns decreased 11 percent in 2004 compared with 2002 to 148000 the latest data available. (The PAII uses "inn" and "bed and breakfast" interchangeably for small lodgings that forward breakfast, with places that also succor dinner labeled "country inns.") The innkeeper association has seen the transformation firsthand: Since 2000 three of its seven board members sold their be in possession of inns as private homes.

Fewer options for travelers

That means fewer options for travelers like Linda Myers. For 15 years, the auditor from Hayward, Calif., stayed at the same B&B when she visited Ashland, Ore., for the Oregon Shakespeare Festival. Myers liked reading forward the home's park-view porch and staying up late to discuss Shakespeare with compeer guests over lemonade and cookies, things she couldn't do at a motel if it were not that about a year or to such a degree ago, she received a form note saying that the place had been sold "It was a 'To Whom It May Concern' kind of thing," said Myers, who has plant a new B&B in town. "I was sort of hurt"

Historically, bed and breakfasts have sold for four to six times a year's gros incomes Under that model, new holders could afford to buy a place of abode pay the mortgage and expenditures and bank the difference. nevertheless because real estate values have soared likewise quickly the formula no longer works. Now, similar homes are selling at eight times annual incomes and often much more. receiptss meanwhile, are up only slightly: The average bed and breakfast swing price is $144, up about five percent since 2002 according to PAII.

For many operators, rising fireside and mortgage costs are the final nail in the coffin. Bed and breakfasts have traditionally been low- margin businesses that work best when abode payments are small. Rising charges for liability insurance cut further into bottom lines. And these inns go proceed some of the lowest occupancy rates in the hospitality business. inn rooms now stand at complete to 71 percent occupancy, according to Smith Travel Research. In part because B&B hang less on weekday business travel than in succession seasonal and weekend guests, their occupancy rates are closer to 41 percent according to PAII.

Labor of be enamoured of

Running an inn becomes a labor of be in love with said Bill Carroll, senior lecturer at the indoctrinate of Hotel Administration at Cornell University. "You had better like making beds," he said. "Unles you're getting any psychic value out of it, I have grieve understanding how you can make a business of it."

The math isn't working for Eileen and cognizance Strangfeld. In 2004, the leash spent about $1 million in succession the six-room Deer Creek Inn in Nevada City, Calif. although they were able to show $400,000 down, their only willing lender was the Small Business Administration, which proffered a commercial loan with variable interest pegg to the prime rate. With rates rising, the couple's debit payment -- which, at about 10 percent generally is about four points higher than the national average for a residential loan -- has increased to $5800 a month from $4300 a month This eats up about half of the inn's $140000 return they say. Much of the caesura goes to taxes, part- time worker salaries and other overhead.