Starting your own Guest House (2024)

Scene:

You are in your 40's, 50's, or 60'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 guest house. 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 guest house experience.

Another Scene:

You live in South Africa. You are trying to improve your life and the lives of your family. Owning and running your own guest house would be a way to work towards a better life and would also empower you to be free of having to do a low-paying job for someone else. You could learn and grow your life while building something that you could be proud of. And you know you would really love to host wonderful guests from South Africa and from around the world!

These are two example scenarios taken from years of visiting guest houses around the world, helping owners, speaking with guests, and through this web site, communicating with over 100 different people interested in running a guest house, or already doing so. This web resource is the result of my research. As a marketing professor for 25 years I was fascinated by how successful hospitality businesses such as guest houses market themselves. I wrote and published case studies of some interesting ones. And rather than leaving my findings on how to run a successful guest house gathering dust I am sharing them here in the hope that it will help others interested in starting their own guest house or those wanting to do so in a more financially abundant manner. Can you add your own thoughts and wisdom? Please contact me and share them!

Why a "Guest House"?

A guest house is a romantic notion. It is quite different from a "bed and breakfast", hostel, lodge, hotel, or motel. Here are some differences between these types:

• Bed and breakfast: A room or rooms in someone's home that are offered for a night or two, with breakfast included. As a guest you are actually staying in someone's home. Typically a "B&B" stay is a personal and intimate experience that comes with a quiet bedroom and your own private bathroom. B&Bs 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 typically in a dedicated building, with mostly shared rooms of 4-8+ people in a room. Sometimes breakfast is included. Usually bathrooms are shared. Hostels are preferred by young travelers wanting the very lowest price, the opportunity to meet other travelers, and the freedom to party in the lounge of the hostel or at nearby bars, pubs, and dance places.
• Lodge: A hotel in a geographically special location which usually offers meals in their restaurant or includes meals when the lodge location is remote. Not cheap, but guests are willing to pay a lot more for the access to nature, beautiful geography, and/or special experiences a lodge can offer. The logistics of running a lodge can be more complicated and expensive as there is usually no nearby grocery store to get supplies from, for example, and getting to the lodge takes longer.
• 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.
• Motel: This is similar to a "hotel" but designed for people to drive and park their vehicles there. Hence the "motor hotel" short form "motel", first used in California, USA. Typically 10-30+ rooms in size (hotels, for contrast, can be up to hundreds of rooms) and specifically designed for travelers driving places. Normally modest in price and amenities to reflect their more transient nature and lower-cost price.

There are many variations on these definitions but the purpose of stating them is to make clear that they are different from a "guest house" in important ways. These differences include:

• A guest house 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 for attractions, and sometimes even engages with guests socially, giving them a connection to the town, city, or area where it is located.
• A guest house usually offers more privacy than a bed and breakfast, but is less quiet as there are usually several or many guests staying at the same time.
• A guest house's central offering is an intimate, friendly, relaxed, easy-going, social place to stay. It does not usually have luxury services like a pool nor usually shared rooms, like a hostel. Bathrooms may be shared or private.
• The owner most often lives in the guest house, or on the property in a separate dwelling.
• Guests can be any age, but some younger travelers prefer the lower prices of hostels.
• Guests are primarily international travellers - individuals and couples - not large groups, families in general, or large families specifically.
• Guest houses sometimes provide breakfasts, adding to the social and personal nature that many travelers enjoy.

Guest House Principles and Practices

Here are some key principles of successful guest houses and how these principles lead to specific practices of value:

Principle #1: Guests feel welcome, safe, certain, comfortable, and relaxed in the best guest houses.

Practices:

• The owner or a full-time staff member speaks the local language and usually at least one other, such as English. If guests come from local countries then these are the key languages to be able to communicate in.
• Guests of all kinds are welcomed and made to feel at home.
• The owner/staff member who first greets guests has good welcoming skills.
• The owner/staff member who first greets guests is friendly and hospitable.
• The owner/staff member on duty is available throughout the day and early evening to greet, settle, and help travelers.
• As noted above, guests are primarily international individual or couple travelers. This is an important distinction to make as in many relationship oriented countries families travel in large groups and would not stay at a guest house. Instead, they would book two or more rooms in a hotel, expecting to have a social experience amongst themselves. International independent single and couple travelers expect the opposite: The chance to meet and socialize with other guests and with the owner and staff. Guest house owners that understand this make sure that there is a great social atmosphere and help it be a really positive one by joining in the socializing as appropriate.
• 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 (online bookings for example). They are clearly trained and empowered to feel part of the success of the guest house.
• The owner and staff are culturally adept and adaptable to meet 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 something on them, like a name tag, making clear they are staff.
• The guest house 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.

Practices:

• A locking door that provides proper noise, light, and intrusion protection.
• Rooms have windows with lots of natural light coming in and thick, full curtains or blinds for those guests who wish for full privacy and/or full darkness to sleep in.
• Mattresses are newer and very comfortable by international standards. By this I mean they are padded. Many people visiting Mexico, Nepal, and other countries complain that traditional mattresses there are rock hard (I can attest to this). I make no judgement of bed preferences by culture but if a guest house wishes to attract a range of international travellers? Ensure the beds are not rock hard.
• Beds have mattress covers and full sized higher quality bed sheets. Both are newer and in excellent condition.
• There are generous blanket options for people who need more warmth.
• Beds have at least 2 full sized, thick, newer pillows per double or larger sized bed.
• Rooms are decorated - the room has some character. Local photos, art, and other decorations make rooms feel special and guests give really positive reviews when they experience rooms like this.
• Warm colored paint is used in rooms. Psychological warmth is very important.
• No fluorescent lighting in the room. The room is well lit with incandescent or 2700k colour temperature LED bulbs (NOT 5000k glaring white LED bulbs!).
• A side table with a reading lamp is provided for single beds and one side table + lamp on both sides for a double/queen sized bed.
• Storage space such as a shelf, dresser, luggage stand and/or closet is provided.
• When possible rooms have some wood that adds to the feeling of warmth in the room.
• Rooms and hallways are very clean
• Rooms, hallways, and common/social areas are recently painted
• Everything is very well maintained in the rooms and throughout the guest house. Everything works.
• Simple but strong, solid furniture is provided. Not clunky, tiny, or worn out old stuff.
• Double pane windows for quietness are used whenever possible and really necessary in a noisier and colder place. At least solid single pane windows in places where double pane windows are either not available or prohibitively expensive.

Principle #3: Bathrooms are sanitary, nurturing, available, and certain.

Practices:

• Bathrooms are very clean. If shared, they are cleaned 2 or more times a day if there are many guests using them.
• 24x7 hot water.
• Sufficient water pressure.
• A spacious shower stall
• Bathrooms are well lit with warm, bright, incandescent or 2700k colour temperature LED lighting.
• Instructions are posted for anything unusual or potentially unclear about the bathroom facilities.
• Bathrooms are well stocked with toilet paper and hand towels.
• Bath towels provided for guests.
• Bathrooms are well-ventilated with a quiet modern exhaust fan.
• There are no drain smells. Bathrooms are plumbed properly.
• If shared, bathrooms have a locking door that provides full privacy protection.
• Sufficient space to move around and change clothing when showering.
• They are ideally ceramic tiled throughout or have newer linoleum and other water-resistant materials.
• They have modern fixtures: Lighting, taps, sinks, etc.
• They are well maintained - paint, appliances and fixtures, tile grout, lighting, etc. is all in good repair.
• They are decorated so as to have some character. Again, local art makes this space feel special.
• The bathroom has a shelf to put belongings like your room key and phone. There are hooks for clothes, bars for towels, and a soap shelf in the shower, for example. There is a vanity or shelf for toiletries, not just a sink with no-where to put makeup or shaving gear. 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) in Antigua, Guatemala.)

Practices:

• The common area is separate from the bedroom area to protect from noise transference.
• It is spacious
• The common area has contained spaces (to feel more intimate during conversations) but also feels open and bright.
• It has quiet spaces and social spaces.
• There are a variety of seating options including couches, one or more hammocks, armchairs, and table & chairs available.
• Chairs have cushions.
• There are lots of plants.
• Optimal: A rooftop terrace, patio, or lounge in a warm climate country. Even better: With a nice view.
• Common areas are clean.
• They are non-smoking
• They are decorated to feel special.
• There are books and games for guests to enjoy.
• Guests feel free to be themselves - not being watched suspiciously by staff.
• The common/social areas are not a thoroughfare for staff.
• The common/social areas do not have fluorescent lighting. A mix of festive and functional incandescent and 2700k colour temperature LED lighting is used.
• The common/social areas are lit well at night.
• There are lots of electrical outlets for computer and smartphone users.
• There is good wifi service in common area(s).

Principle #5: Logistics are relaxed, trustworthy, professional, clear, certain, and feel safe.

Practices:

• A good reservation system is in place for online bookings, deposit taking, there are different payment method options available, and there are 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 guest house's website.
• A comprehensive and up-to-date website for the guest house has been created and is regularly maintained. Local and English languages at least. German, French, and other languages included if guests regularly come from countries speaking these languages.
• Group bookings options made clear, if offered.
• Clear check-in and check-out policies and practices are detailed.
• Extra services available and clearly signed and priced. Example: Travel bookings.
• Clear and friendly signage, information provision, and instructions throughout the guest house.
• A positive welcoming tone rather than a suspicious and punitive tone in all dealings online and offline.

Principle #6: Extra value and special character - the "wow!" factors

Practices: (not all are required)

• Organized social events
• Free breakfasts that are both tasty and generously sized.
• Towel service for rooms and local beach use (if applicable)
• Internet computer station with printer.
• Free filtered water access.
• Beer, soft drinks, juices, and snacks available for sale.
• A kitchen for guests to use.
• Strong and very high speed commercial-grade wifi service available throughout the guest house. Wifi does not get bogged down when 3 guests are using it at the same time, for example.
• "Above and beyond" service from the owner and staff.
• Bicycle, boat or other rentals available at a reasonable cost to guests.

Economics of a Guest House - Business Model Comparisons

The very best guest houses 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 guest houses that operate professionally. A quickly degenerating cycle develops for those guest houses that operate without care for facilities, staff, and guests. Most disheartening are those guest houses 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 guest house business model and those of other types of accommodation:

In summary, the business model of a guest house is primarily focused on the quality of the room, the overall facility, and owner's manner of running the place. To maximize profits, the guest house owner provides a social, non-party atmosphere, cozy modern, comfortable, clean rooms with character, and excellent facilities such as bathrooms. The guest house, then is a "safe sanctuary" from which to explore a city and area. A place for guests to return to at the end of a day of exploring where they can share experiences with others, get advice, rest, refresh, feel emotionally safe, and get culturally grounded. In exchange for crafting this experience the guest house owner can charge much more than a hostel and have longer-staying and better guests.

Marketing the Guest house - How to get lots of bookings from great guests

Marketing Principles of Top Guest Houses:

Principle #1: Awesome service is #1

Practices:

• Guests are communicated with over the internet in a rapid time frame when they contact the guest house with a query or reservation booking. Best: Within 12 hours. At worst, within 24 hours. In some countries, 12 hours might even seem a long response time, but we must recognize that guests are usually inquiring from other time zones and no guest house 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 guest house after a long day of traveling I can attest personally to the power of a warm welcome. Finally, I observed a #1 rated guest house 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 guest house 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 guest house, 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. Guest house 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.

Principle #2: Build mutually beneficial relationships with other hospitality service providers in the area.

Practices:

• It is almost ridiculous how well some highly successful guest houses 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 guest house 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 guest houses do. So the key here is "trust". Everyone wins with trust. There is no benefit for the guest house 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 guest house owners as expectations are that family and friendship relationships are #1. What if a brother who offers to tour guests around is completely incompetent? Doesn't matter: Family comes first 100% of the time. Guest house 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 guest house I visited 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 with safe and comfortable transportation, 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 guest house corrected this anomaly, they began getting more walk-in travel bookings from people staying at other accommodations! As this guest house 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.

Principle #3: Have a great internet presence.

Practices:

• A really comprehensive web site. Multiple languages if appropriate, an introduction video, lots of pictures, clear information, and a top reservation system. A poor, outdated, or missing internet presence does not mean "our guest house 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 or area 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 mind frame a personal interaction is key, not processes. Many a great guest house 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 misquote 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 commitment 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 interactions with potential and future guests.

Marketing is one area that can be frustrating for guest house 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 guest houses understand that marketing is not magic. It is relationship building. It is building relationships that lead to high ratings and word-of-mouth with guests before their visit, during their visit, and after they leave. And it is building value-added relationships with local hospitality "partners", as noted earlier.

Frequently Asked Questions - FAQ

• Personal capital. The owner(s) have a sufficient amount of money from an inheritance, from selling other real estate they own, from a business they already own, from stock market gains, from savings over many years of work, from a family member or close friend who partners with them, etc. This is the most common way that guest houses are financed.
• A third-party partner. There are many people who have money to invest and are looking for a safe place to do so. Real estate - the building the guest house will be in - is a safe investment. Sharing your guest house idea with people in your community or region who have money to invest may result in a financial partner willing and happy to help you get started by buying the building you want to operate in.
• Banks and other financial institutions. If you have collateral from another property you own, a business, or from other assets you can borrow money from a financial institution to get started. If you are starting with few assets as the basis of collateral then consider finding a partner (noted above) instead of trying to find a financial institution to finance your guest house.

From Readers of this Resource:

Do you need help with your guest house startup and marketing?

The author of this site is a former marketing and international business professor in Canada who is pleased to hear from you about your plans and needs. I am usually able to answer specific questions by email and offer guidance and suggestions. Contact Paul Kurucz for more information.

The Guest House

The above is one snapshot of what makes a guest house both a wonderful place to welcome guests and a financial success, too. Hopefully these research findings help anyone starting or running a guest house. If you can add any comments, insights, photos, or other suggestions, please get in touch!

Interesting footnote question: Over the years I have heard from many people starting guest houses around the world. But one country stands out far and above all others for the number of people interested in doing so: South Africa. Like 10x the interest from other countries! If you have an insight as to why this is please let me know! I am really curious to understand the reason...

Thank you!