That customer area is wide-ranging: families, couples, groups of friends, companies, athletes, the elderly, etc. In order to meet the growing demands of the different target groups, initiatives and offers have multiplied.
Currently there is over fifty terms refers to rural accommodation in the various Autonomous Communities. Some of the most common concepts are: rural hostel, rural accommodation, tourist apartment, rural tourism apartment, village house, town house, rural house, manor house, country inn, farmhouse, farmhouse, Masovería, Pazo, inn…
What motivates an entrepreneur to start his business with a focus on rural accommodation? In some cases it is the opportunity to live a more leisurely life in contact with nature, in others it is the opportunity to rehabilitate a rural property and make it profitable. In this sense, a country house can be much more than an economic addition. It is estimated that The average return is between 8% and 10% of the investment and about 100 overnight stays per year are considered good performance.
Take into account
Among the most important aspects to consider when considering this type of deal, we highlight:
Legislation. Rural tourist establishments are subject to their own rules, which must be known by heart and which regulate, among other things, the following aspects: classification, modalities (flat share or full rental), categories (e.g. holm oaks or ears of corn), technical and aesthetic characteristics (number of pitches, dimensions, heights, etc. ), obligations of the owner, regulations on equipment, accessibility, utilities, security, state of conservation, signs, etc. The Autonomous Communities have exclusive powers to promote and organize tourism on their territory.
Location. In order for the stay to be appetizing, there must be favorable aesthetic, cultural and natural environmental conditions, as well as the possibility of developing activities or sports.
seasonality. It represents one of the biggest challenges for the sector. You have to be able to attract customers outside of the traditional leisure and holiday periods: Easter, summer, long weekends… At least 50% occupancy is required, i.e. between 150 and 200 days a year so that a rural tourist accommodation is profitable.
Differentiation. Standing out from the crowd and fighting against the typical seasonality of the industry is another important aspect. “People don’t travel to sleep, they travel to get to know each other, to experience something – sleeping is a consequence of the journey. Rural tourism has to adapt to the new times. We cannot continue with models from 20 years ago. Rural tourism is a unique product and that needs to be passed on because it undoubtedly constitutes its value.” This sums up the importance of differentiation Suzanne Ayalawhich opened one of the first rural hotels in Extremadura in 1998, The house of Pasaron, adaptation of a mansion in the beautiful town of La Vera. How to differentiate? Specializing in certain customer segments, facilitating activities or sports, looking for alliances in the city – for example local tour guides – offering local products are all possible options.
Service. Another excellent way to set yourself apart is warm and efficient service, which customers highlight when sharing their rural accommodation experience. Entrepreneurs in the industry are often “multitaskers”. However, it is advisable to outsource tasks such as laundry, cleaning, gardening, maintenance, administration and instead focus on service and customer care aspects as well as setting quality standards for operations.
Financial support. It is one of the most important activities and sometimes one of the most forgotten. It must also be constant over time as it is difficult to rely on customer loyalty in this type of activity. Time and resources must be devoted to devising and implementing an appropriate online and offline communications strategy, as well as reputation monitoring and management.
OUR ASSUMPTION: INVESTMENT PLAN
Furnishing rural accommodation requires a significant investment. If you don’t own the property, the size of the purchase and the refurbishment and conditioning tasks can discourage more than one. It is generally estimated that, due to the low average occupancy (20%), caused by strong seasonality, eight years of recovery must be invested per 50,000 euros.
In our assumption An entrepreneurial couple buys and opens a country house distributed on two floors of about 90 mtwoin a town in Segovia, acquired as property, creating a limited liability company.
Regarding investments, the section is about immobilized materialin which the following elements stand out: House + Reform (€120,000), Kitchen Supplies, Tools and Utensils (€5,000), Furniture and Furnishings (€20,000) and Computer Equipment (€1,200).
Other important investments are: intangible assets/computer applications (€600), recruitment and start-up advertising costs (€2,000), start-up costs (€850) and working capital (€33,349).
Our investment plan It also includes depreciation, that is, the effective depreciation suffered by the various fixed assets as a result of their operation, use or obsolescence. The depreciation process allows for the creation of a fund that grows each year by the amount of depreciation for each fiscal year in order to have the funds needed to replace the asset at the end of its useful life. The investment does not affect the profit and loss account, but its annual depreciation does: Depreciation of fixed assets represents an annual expense for the company and as such is reflected in the profit and loss account. The depreciation method can be linear (same every year), accruing or declining. The straight line or constant method is the simplest and most commonly used and is calculated by dividing the cost by the years of the asset’s useful life. There are some tables prepared by the Treasury which determine the maximum coefficients (expressed as an annual percentage applicable to the acquisition cost) and the minimum depreciation values (expressed in maximum years of useful life of the respective assets). depending on the type of goods.
OUR ASSUMPTION: BUSINESS PLAN
Our house will have 5 double bedrooms and a dining room with 5 tables with a capacity of four people each, for a maximum of 20 people. The assumption was that occupancy would start out low and grow month-to-month as the clientele got to know them. The first idea is to charge €95 per double room in the low season and €115 in the high season (holiday months, Easter, Summer and Christmas) and thus position yourself in a market with purchasing power.
It offers the possibility of having a breakfast and dinner menu for €25/person/day. It is expected to achieve 39.50% occupancy on stays in the first year, with 8-day off-season stays calculated for the full month and increased during the holiday season. For the dining room, we assume an occupancy of 50% of its capacity, which means that we calculate a maximum of 10 menus per occupancy day. In this case, the same occupancy percentage is applied, since we are always interested in paying special attention to our guests. The key to success is getting the reservation and renting the dinner + breakfast menu. With the above data, the accommodation and menu forecasts for the first year are €49,413.75.
As for the purchase of raw materials and other ingredients for the preparation of the dishes, it was assumed that they would not be stored. The demand for them will depend on the closed reserves. The relative weight of purchases compared to sales has been estimated at 20%: in order to achieve this margin, it is necessary to offer a fixed menu for dinner, with a maximum of 2 or 3 dishes. As food and luxury goods, the input tax is 10%, but is not taken into account in the profit and loss account, but is cash-effective as with the sale.
Are you thinking about building or promoting your own country house?
Discover the practical business plan guide “HOW TO SET UP A RURAL ACCOMMODATION”