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How much does it cost to start a bed and breakfast?

This article was written by our expert who is surveying the industry and constantly updating the business plan for a bed and breakfast.

bed and breakfast profitability

Starting a bed and breakfast requires substantial upfront investment and careful financial planning.

The total startup costs for a bed and breakfast typically range from $150,000 to $950,000, depending on property size, location, and quality standards you want to achieve.

If you want to dig deeper and learn more, you can download our business plan for a bed and breakfast. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our bed and breakfast financial forecast.

Summary

Launching a bed and breakfast involves significant upfront costs that vary widely based on location, property type, and quality standards.

The most substantial expenses include property acquisition, renovation, furnishing, and establishing operational systems before welcoming your first guests.

Cost Category Typical Range (USD) Key Details
Total Startup Investment $150,000 - $950,000 Includes property, renovation, and setup
Property Purchase $250,000 - $1,000,000+ Varies significantly by location and size
Renovation Costs $20,000 - $100,000+ $100-$200 per square foot
Furnishing (5 rooms) $25,000 - $50,000 Mid-range quality for guest comfort
Monthly Operating Costs $3,000 - $8,000 Utilities, cleaning, maintenance, supplies
Cash Buffer (6-12 months) $50,000 - $150,000 Essential for surviving low occupancy periods
Annual Staffing $40,000 - $100,000 If not owner-operated

Who wrote this content?

The Dojo Business Team

A team of financial experts, consultants, and writers
We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the bed and breakfast market.

How we created this content 🔎📝

At Dojo Business, we know the bed and breakfast market inside out—we track trends and market dynamics every single day. But we don't just rely on reports and analysis. We talk daily with local experts—entrepreneurs, investors, and key industry players. These direct conversations give us real insights into what's actually happening in the market.
To create this content, we started with our own conversations and observations. But we didn't stop there. To make sure our numbers and data are rock-solid, we also dug into reputable, recognized sources that you'll find listed at the bottom of this article.
You'll also see custom infographics that capture and visualize key trends, making complex information easier to understand and more impactful. We hope you find them helpful! All other illustrations were created in-house and added by hand.
If you think we missed something or could have gone deeper on certain points, let us know—we'll get back to you within 24 hours.

What is the average total startup cost for launching a small bed and breakfast, including property purchase or rental?

The total startup cost for a small bed and breakfast ranges from $150,000 to $950,000, with property acquisition representing the largest single expense.

Property purchase costs typically range from $250,000 to $1,000,000 or more, depending heavily on location, size, and local market conditions. In high-demand tourist areas or major cities, properties suitable for bed and breakfast operations command premium prices.

For those considering rental options, expect monthly costs between $1,500-$3,000 for residential properties or $2,500-$10,000 for commercial properties. Down payments for purchased properties typically require 10-20% of the total property price, plus additional mortgage fees and closing costs.

The all-inclusive startup figure includes not just property costs but also renovation, furnishing, licensing, initial marketing, and working capital. A modest, cost-effective approach can launch a bed and breakfast for around $200,000-$500,000, while higher-end or larger properties may require $750,000 or more.

You'll find detailed market insights in our bed and breakfast business plan, updated every quarter.

How much does it typically cost to renovate or adapt a property to meet bed and breakfast standards?

Renovation costs for bed and breakfast properties typically range from $20,000 to $100,000 or more, calculated at approximately $100-$200 per square foot.

Per-room renovation costs generally fall between $12,000-$50,000, depending on the scope of work and quality standards desired. Historic buildings often require 20-30% higher renovation budgets due to preservation requirements and specialized materials needed.

Common area renovations, including lobbies, dining spaces, and guest lounges, typically cost $20,000-$100,000. If you need to install or upgrade a commercial kitchen to serve breakfast, budget an additional $50,000-$150,000 for professional-grade equipment and compliance with health regulations.

Always include a contingency fund of 10-20% of your total renovation budget for unexpected expenses, which are common when working with older properties or discovering hidden structural issues during construction.

This is one of the strategies explained in our bed and breakfast business plan.

What are the expected costs for furnishing guest rooms, common areas, and dining spaces to an acceptable quality?

Furnishing costs for guest rooms typically range from $2,500 to $6,000 per room for mid-range quality that meets guest expectations.

Furnishing Category Cost Range per Room/Area Items Included
Guest Room Essentials $2,500 - $6,000 Bed, mattress, linens, dresser, seating, lighting, window treatments
Guest Room Bathroom $500 - $1,500 Towels, bath mats, shower curtain, toiletries, storage
Common Living Areas $5,000 - $20,000 Sofas, chairs, coffee tables, entertainment center, decorative items
Dining Room $3,000 - $10,000 Dining table, chairs, buffet, servingware, table linens
Kitchen Equipment $5,000 - $15,000 Commercial appliances, cookware, dishware, serving equipment
Outdoor Spaces $2,000 - $8,000 Patio furniture, umbrellas, planters, outdoor lighting
Luxury Upgrades $1,000 - $3,000 per room Premium linens, artwork, custom furniture, technology upgrades

For a typical 5-room bed and breakfast with common areas, expect total furnishing costs between $25,000-$50,000 for mid-range quality. Higher-end establishments targeting luxury markets may invest up to $150,000 in designer furnishings and premium amenities.

Quality furnishings are essential for guest satisfaction and positive reviews, which directly impact your booking rates and revenue potential in the competitive bed and breakfast market.

How much should be budgeted for licenses, permits, and initial legal or accounting services?

Licensing, permits, and professional services typically cost between $7,000 to $30,000 during the initial setup phase of a bed and breakfast operation.

Licenses and permits vary significantly by jurisdiction but generally range from $2,000-$10,000. This includes business licenses, hospitality permits, food service licenses (if serving meals), fire safety certificates, and zoning compliance documentation.

Legal fees for business setup, contract review, and compliance guidance typically cost $2,000-$10,000. An experienced hospitality attorney can help navigate complex regulations, draft guest agreements, and ensure proper liability protection.

Initial accounting services for business structure setup, tax planning, and bookkeeping system implementation cost approximately $3,000-$10,000 annually. Professional accounting becomes essential for managing guest payments, tax obligations, and financial reporting requirements.

We cover this exact topic in the bed and breakfast business plan.

business plan b&b

What are the estimated monthly operating costs including utilities, cleaning, maintenance, and amenities?

Monthly operating costs for a bed and breakfast typically range from $3,000 to $8,000, with variations based on property size, occupancy rates, and service levels.

Operating Expense Monthly Range (USD) Key Factors
Utilities (electricity, water, gas) $300 - $1,500 Property size, occupancy rates, seasonal heating/cooling
Cleaning & Housekeeping $500 - $2,500 Whether outsourced or in-house staff
Maintenance & Repairs $400 - $1,250 Property age, preventive maintenance schedule
Amenities & Guest Supplies $300 - $1,000 Toiletries, linens, welcome gifts, room supplies
Laundry & Linen Service $250 - $800 In-house vs. outsourced laundry operations
Insurance (monthly portion) $125 - $400 Property value, coverage level, location risks
Marketing & Online Listings $200 - $1,000 Platform fees, advertising, website maintenance

These costs can fluctuate significantly based on seasonal demand, with higher expenses during peak tourist seasons due to increased occupancy and utility usage.

Effective cost management involves implementing energy-efficient systems, negotiating bulk purchasing agreements for supplies, and maintaining equipment proactively to avoid expensive emergency repairs.

How much should be allocated for marketing and online presence setup, such as website, listings, and photography?

Initial marketing and online presence setup typically requires $3,000 to $10,000, with professional photography and website development representing the largest investments.

Website development with integrated booking systems costs $1,000-$10,000, depending on complexity and functionality. A professional website should include online reservation capabilities, payment processing, photo galleries, and mobile optimization for modern travelers.

Professional photography services range from $500-$2,000 but are essential for attracting guests through online platforms. High-quality images of guest rooms, common areas, and local attractions significantly impact booking conversion rates.

Initial digital marketing campaigns, including search engine optimization, social media setup, and paid advertising, typically cost $2,000-$10,000. Online platform listings on Airbnb, Booking.com, and industry directories require annual fees ranging from $200-$1,000.

It's a key part of what we outline in the bed and breakfast business plan.

What is the cost of hiring and paying staff if help is required for cleaning, reception, or cooking?

Annual staffing costs for a small bed and breakfast range from $40,000 to $100,000 if not owner-operated, with cleaning and housekeeping representing the most essential positions.

Housekeeping and support staff typically earn $20,000-$30,000 annually per full-time employee, with hourly rates ranging from $15-$25 per hour. Many bed and breakfast operations start with part-time housekeeping help during peak seasons before expanding to full-time staff.

If hiring an innkeeper or manager to handle guest relations and daily operations, expect annual salaries between $35,000-$57,000. Kitchen staff or breakfast cooks typically earn $25,000-$35,000 annually, though many smaller operations have owners handle meal preparation.

Many successful bed and breakfast owners begin as owner-operators to minimize initial staffing costs, gradually adding staff as occupancy rates and revenue increase. This approach allows better cash flow management during the critical first years of operation.

Get expert guidance and actionable steps inside our bed and breakfast business plan.

What are the annual property taxes and insurance costs for a typical bed and breakfast property?

Annual property taxes and insurance for bed and breakfast operations typically cost between $3,500 to $15,000, varying significantly by location and property value.

Property taxes generally range from 0.3% to 2% of the assessed property value, with significant variations between rural and urban locations. A $500,000 bed and breakfast property might incur $1,500-$10,000 annually in property taxes depending on local tax rates.

Comprehensive insurance coverage for bed and breakfast operations costs $1,500-$5,000 annually and should include general liability, property coverage, business interruption, and guest injury protection. Commercial hospitality insurance rates are higher than residential coverage due to increased liability exposure.

Some locations offer tax incentives for small hospitality businesses or historic property renovations, which can significantly reduce annual tax obligations. Research local programs that might offset these ongoing costs during your planning phase.

business plan bed and breakfast establishment

How much should be set aside as a cash buffer to cover the first 6–12 months of low or uncertain occupancy?

A cash buffer of $50,000 to $150,000 should be maintained to cover 6-12 months of fixed costs during low occupancy periods.

This buffer should cover essential monthly expenses including mortgage or rent payments, utilities, insurance, minimum staffing, and basic maintenance costs. Calculate your monthly fixed costs and multiply by 6-12 months to determine your specific buffer requirement.

New bed and breakfast operations typically experience 6-18 months of below-capacity bookings while building reputation, guest reviews, and market presence. Seasonal destinations may face several months of minimal income during off-peak periods.

The cash buffer provides crucial breathing room to focus on guest service quality and marketing efforts without immediate financial pressure. Many successful bed and breakfast owners recommend maintaining an even larger buffer during the first two years of operation.

This is one of the many elements we break down in the bed and breakfast business plan.

What are the typical costs of food and beverage supplies per guest per night?

Food and beverage costs typically range from $5 to $15 per guest per night, with total annual expenses of $20,000-$60,000 for a small bed and breakfast.

Breakfast ingredients and preparation represent the largest food expense, with costs varying based on menu complexity and local ingredient prices. Simple continental breakfasts cost less than full hot breakfast services with fresh, local, or organic ingredients.

Additional beverage offerings like coffee, tea, wine, or welcome refreshments add $2-$5 per guest to daily costs. Many bed and breakfast operations offer complimentary beverages throughout the day as a competitive advantage.

Bulk purchasing, seasonal menu planning, and relationships with local suppliers can significantly reduce food costs while maintaining quality. Consider offering regional specialties that showcase local flavors and support community businesses.

What are the costs associated with booking platforms and payment processing systems?

Booking platform commissions and payment processing fees typically cost 12-25% of total revenue, representing one of the largest ongoing operational expenses.

Major booking platforms like Airbnb and Booking.com charge 10-20% commission per reservation, with higher rates for properties without established direct booking capabilities. These platforms provide significant marketing reach but impact profit margins substantially.

Payment processing fees for credit cards, Stripe, and PayPal typically add 2-3% per transaction. Direct bookings through your website can reduce these fees significantly while building customer relationships.

Implementing a balanced booking strategy that combines platform visibility with direct booking incentives can optimize revenue while managing commission costs. Many successful bed and breakfast operations aim for 60% direct bookings and 40% platform bookings.

business plan bed and breakfast establishment

How much is typically spent on ongoing maintenance, upgrades, and guest experience improvements each year?

Annual maintenance, upgrades, and guest experience improvements typically cost $7,000 to $25,000 for a small bed and breakfast operation.

Routine maintenance including HVAC servicing, plumbing repairs, painting, and general upkeep typically costs $5,000-$15,000 annually. Regular maintenance prevents larger, more expensive problems and maintains property value over time.

Guest experience upgrades such as room refreshes, new amenities, technology improvements, and comfort enhancements typically require $2,000-$10,000 annually. These investments directly impact guest satisfaction scores and repeat booking rates.

Successful bed and breakfast operators budget 2-4% of annual revenue for ongoing improvements and maintenance. This proactive approach ensures consistent guest experiences and maintains competitive positioning in the market.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

  1. Business Plan Templates - Bed and Breakfast Startup Costs
  2. Dojo Business - Bed and Breakfast Startup Costs
  3. Startup Model Hub - Bed and Breakfast Capital Expenditure
  4. Financial Models Lab - Bed and Breakfast Startup Costs
  5. Business Plan Kit - Bed and Breakfast Startup Costs
  6. Dojo Business - Bed and Breakfast Renovation Costs
  7. Little Hotelier - Renovate B&B on a Budget
  8. Operto - Hotel Renovation Costs Per Room
  9. TechVestor - Cost of Furnishing an Airbnb
  10. George International - House Furnishing Costs
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