INN LOVE

Imagine a romantic second career, laid-back independence, a paid vacation, a victory over the ole' rat race. Then wake up and smell the coffee.

By Stephan Wilkinson

A fire flickers on the hearth as my wife sits in its warmth, idly doing a piece of needlework. A cueball clicks on the splendid 1918 Brunswick slate table beyond the chintz-covered couch as our 10-year-old daughter discovers the delights of playing pool. Outside, the light of a country evening slowly fades from the quiet streets, overhung with Spanish moss in old Beaufort, South Carolina.

In the glow of a preprandial sherry, I am tempted to put my feet up on the coffee table, except that it's a red-lacquered Chinese antique on which are some impressive-looking books. How delightful, I muse, to be welcomed into the home of such wealthy, privileged friends.

All it took was $75 a night for each of a pair of guestrooms. This is the Rhett House Inn, and the "wealthy, privileged friends" are innkeepers Stephen and Marianne Harrison, late of Manhattan's fast-paced garment business. We are paying guests, as are the elderly couple we'd met at breakfast that morning, who travel the world giving cruiseship lectures on classical authors. ("They're all dead," they explain helpfully.) Also guests are the young marrieds from the airbase in nearby Charleston where the husband is engaged in audiovisual work. ("The unit just came back from Panama where we were documenting all sorts of things," he tells us.)

Family owned, family operated bed and breakfasts or inns like the Rhett House are sprouting up everywhere, catering not only to the tourist trade, but to traveling salesfolk tired of the sameness and sterility of franchise motels and airport hotels.

The boom has come about not only because of traveler demand — and acceptance, now that private baths are the rule even in the smallest inns — but also as a result of an infectious Bob Newhart syndrome. Innkeeping has become a romantic second-career ideal that continues to attract former stockbrokers and lawyers, discouraged marketing managers- — and yes, burned out rag-trade execs — to a career that at first looks like a combination of paid vacation, laidback independence, and victory over the rat race.

"If any other industry had grown from a thousand or so sites to 20,000 in a 15-year period, that would merit a cover story in Business Week," insists Charles Hillestad, who with his wife, Ann, owns a 10-guestroom gem, the Queen Anne Inn in Denver. "But very few observers have noted the growth of inns and B&Bs because it is, literally, a cottage industry."

One reason statistics are sometimes hard to come by, or are contradictory, is that no clear or official distinction has been made between an inn and a B&B. Hillestad's figure of 20,000, for example, includes homestays — private homes with a room available to travelers. You can call your home with its one guestroom a B&B if you want. Or even a small inn, There is no registry to regulate the highly informal business. The number of rooms does not make it one thing or the other, nor does serving only breakfast (some inns serve no food at all).

"Eight years ago, there were no more than a dozen guidebooks on inns and B&Bs. Now there are at least 125," says Pat Hardy, a founder of the Professional Association of Innkeepers International in Santa Barbara, California, and editor of the newsletter Innkeeping. "In the last 10 years, we've added 8,000 to 10,000 new inns in North America."

"Twelve years ago, there were hardly any inns down South," says Michael Sheehan of Prospect Hill, a "plantation inn" in Trevilians, Virginia. "It had been strictly a northern phenomenon since Colonial days. Now there are over 500 in Virginia alone. We consider that an explosion."

One reason the explosion only seems loud is that inns typically have from 8 to 25 rooms and still account for less than 2 percent of the country's total overnight accommodations. A single new 250-room airport hotel is the equivalent of 10 to 30 charming inns — be they landmarks, restored mansions, or jewel-like little buildings that no amount of Sheetrock, concrete block, and Fiberglass shower-stall units could ever fashion.

"The motel boom started in the sixties and nobody gave much thought then to country inns," innkeeper Charles (Chuck) Dedman of Harrodsburg, Kentucky, points out. "Everybody wanted the new, the modern, drive-right-up-to-the-door motel room. Then the pendulum began to swing the other way, and now you see B&Bs opening all over the place."

Steve and Marianne Harrison followed the pendulum swing one May weekend in 1986. Steve, former president of the upscale fashion firm Anne Mein, was growing increasingly discouraged by some looming business problems. His wife, Marianne, was content working in Manhattan as a sought after fashion designer, but she suspected that a change might be invigorating.

On a whim, the Harrisons came to Beaufort that May to visit a friend who already owned a successful inn, and they were instantly enthralled by the lazy, historic little shrimpers-and-yachts harbor town midway between Charleston and Savannah. (If 's not hard to fall in love with the place. If you've seen The Big Chill or read Pat Conroy's powerful novel The Prince of Tides, you too may have done so, for the film was shot at a mansion a dozen blocks from the Rhett House, and the book's magical "Colleton" is, in fact, Beaufort.)

Their friend showed the Harrisons an existing but shabby inn and said, "If 's for sale. Why don't you buy the place? Business in the area is good. I'll send you my overflow, and you can start a B&B."

"If we'd thought more about it, we probably never would have done it," Steve says today. 'We'd never even stayed in an inn until that weekend at our friend's place. But we love to entertain, and we had guests virtually every weekend at our house in Wilton, Connecticut." The Harrisons made an offer for the inn within a month, closed the deal in July, spent the rest of the year renovating and tastefully lightening the dark interior, and moved into their new home and business on New Year's Eve, 1986.

Denver Innkeeper Charles Hillestad doesn't know the Harrisons. Yet he might as well, for he says with wonderment, "I talk to so many people who want to get into this business, though they've never even stayed in a B&B. They don't realize that, hey, this is a small business. That means 60 or 80 hours a week or more." Fortunately, the Harrisons (and thousands of other innkeepers) have learned that the intensity of a home that's a business and a business that's a home requires flexibility, adaptation, and adherence to firm family business principles.

Some innkeepers handle the intensity by living off the premises, but even that has limitations. Chuck Dedman and his family live only half a mile from their Beaumont Inn. "At least I can't see the inn when I'm home," he says. "But there has to be an understanding within the family that the inn comes first. We're closed for three months during the winter and spend a lot of time with our kids then, but the nine months we're open, I leave the house anywhere from 6:00 to 8:00 in the morning and don't get home until 9:30 or 10:00 every evening. Innkeeping is just like running a hospital-you're always on call."

"That's why none of us live at the inn," says Mike Sheehan, whose father, William Sheehan, started Prospect Hill in 1977. "My dad says it saved his marriage, and it's probably saved all of us from saying the heck with this."

Still, Sheehan points out that the standards-setting Independent Innkeepers Association in Stockbridge, Massachusetts, won't grant membership to inns that aren't at least owner-operated. "Mere has to be a feeling of 'family' when guests arrive, someone to say, 'Hi, I'm the innkeeper.' That's very important."

Many small-scale family innkeepers, like the Harrisons, can't afford the luxury of a separate home. For them, living where they work is a necessity. The drawback is that "you have no privacy," Steve Harrison admits. One solution is time off. The Harrisons leave Beaufort frequently. "A lot of innkeepers get burned out," says Marianne. "We have two local girls who come and take over for us so we can get away. We were gone at Christmas for 12 days. Next week we're going to Florida to see Steve's father, and we still keep an apartment in New York City."

Other innkeepers, like Chuck Dedman, fear their guests will miss a host's presence. He advises against being an absentee landlord. "You've got to be there," he says. "People who come to your inn don't want to find that Chuck's down in the Bahamas and will be back two weeks from tomorrow. They want to see Chuck in the dining room. That's what gives an inn a different feeling."

For those who favor getting away, a new occupational category called inn-sitting has been brought to life by the inn boom. "Itinerant receptionists," Charles Hillestad calls them. "You see them advertise, 'You want to take a vacation? I'll come and watch the inn for a week."'

Betty Rundback, author of the annual guidebook Bed and Breakfasts USA, recommends inn-sitting as an ideal tryout for couples who are less impulsive than the Harrisons. "There are inns that are willing to provide a hands-on experience. A lot of them give seminars on inn operation. If you're going to make such an investment, I'd suggest you do this."

A true multigenerational family inn can have an advantage in dealing with inn-sitting: the younger generation can take over when their folks want to get away. Vince and Anne Murphy, who run the Weathervane Inn in South Egremont, Massachusetts, recently agreed to have their son and daughter-in-law run the place. "In the inn business, you try to keep staff to a minimum and do most of the work yourself," Vince points out, "so that when things are slow you don't have to lay anybody off. When things are busy, you just work harder."

When former plastics marketing executive William Sheehan opened Prospect Hill, a romantic, Virginia-Is-For-Lovers sprawl of a main house with outbuildings dating from the 1690s to the 1850s, he ran it with the help of his wife, son, and daughter. Today son Michael is increasingly moving into day-to-day management. "During the first nine years, I worked here part time while I was in school," Mike reminisces. "I did my dad the favor of running the inn while he and mom were on an extended tour of Europe three and a half years ago. When they came back, he made me an offer I couldn't refuse, and here I am." Now his father plays host on weekends while Mike, 27, runs the kitchen and other backstage operations and takes center stage during the week.

Innkeeping, in a sense, is theater. The inn itself is a carefully crafted set, its staff a cast of characters with the host as its star. The entire experience is illusion, most often the one that beguiled me that evening in Beaufort: that you are guests in the private manse of a prosperous friend.

"A third of our business comes from within 20 miles," says Charles Hillestad, whose Queen Anne Inn is in a restored historic district of downtown Denver. "We cater to urban romantics. We have stage settings. We have atmosphere. We have actors who tend to your needs. It's like being in a play."

"Nobody wants to come into my place and hear me say, 'Boy, have I had a rotten day. The front-desk lady's pregnant and my host is runnin' around with the bellhop,"' Chuck Dedman points out. "They don't want to hear that; they're here to get away from their own problems. So it is theater. It is acting."

Unfortunately, illusion sometimes deceives the would-be innkeeper as well. "People go on a vacation and stay at an inn, and they immediately envision themselves in the captain's chair," explains guidebook author Rundback.

"They think, 'I enjoy people, I can cook breakfast, so I'd make a great innkeeper,'" says Charles Hillestad (whose Queen Anne, like an increasing number of inns, offers many amenities but forgoes the expense and complication of a full-service restaurant). "They imagine themselves clinking champagne glasses with the French ambassador and forget that somebody needs to remove his body hair from the bathtub the next day. You should treat this as a business, not as a dream."

"It looks so easy," says John Shell, formerly an insurance agent who in 1969 moved his family from Atlanta to buy the Hemlock Inn in Bryson City, North Carolina. "You work real hard to keep all the noise in the background when you're hosting. Sitting around the fire, guests think, 'Wow, I could do this!' But the romance leaves pretty quickly when the toilets back up, the groceryman doesn't deliver, and the cook fights with the maid. All of these things are everyday occurrences."

"Bob Newhart has misled so many people about this business," Vince Murphy laughs. "I was reaching into the septic tank the other day and I said to my wife, 'I wonder if Bob Newhart ever does this?'"

The inevitable result is high turnover and frightening burnout rates. One informal industry estimate puts the average ownership of a New England country inn at three and a half years. "We don't really talk about failure rate," explains Innkeeping editor Pat Hardy, "because that means the business goes under. It's more a 'disappointment rate,' where a going business is put on the market. Inn owners say, 'Ahhh, we didn't like this.' It's a conscious decision, not necessarily because they weren't making it financially, but because it just didn't fit."

"Burnout and alcoholism are occupational hazards," John Shell explains. "So many inns have a bar and so many guests want you to come have a drink with them. If that's your way of being sociable, it can be an occupational hazard sure enough."

Like so many new-generation innkeepers who have come from high-powered merchant, marketing, or professional careers, the Harrisons of Beaufort bring a new kind of savvy to the profession that helps them solve problems that might have ruined a traditional innkeeper. For instance, when tourism was badly hurt by the real and imagined impact of Hurricane Hugo in the South Carolina low country, the Harrisons already had other irons in the fire.

For example, Steve had seen that many visitors were lured by the low country just as he and his wife had been; guests would often ask for tips on homes or property for sale. He quickly saw the advantage of selling such real estate himself (rather than referring the inquiries) and has become a licensed salesman for a realtor in town.

More lucrative, however, was a tactic he learned from an innkeeping seminar. "This one guy mentioned an eight-room Vermont inn where the owner put an armoire in the hall and sold gift items from it, and in one year he did $30,000 out of that one spot.

"I came straight home and said, 'Marianne, we gotta buy an armoire.' It cost us $600 to put it together — actually we're doing it out of a converted closet in the dining room — and in the first nine months we've done $10,000 worth of business out of 8 square feet of floorspace. That's over $1,200 a square foot, which is better than Bloomingdale's does."

Marianne took to the project immediately. She traveled to trade shows, poked into small regional shops, and stocked her small shelves so successfully that the Harrisons are now marketing Marianne's mini-giftshop expertise on a consulting basis to other innkeepers. They help inn operators set up and decorate a cupboard, armoire, or convenience nook and then do all the locating, buying, and stocking of that shops wares.

Innkeeping in not generally a young person's business, for few neophytes have the worldliness to run an inn — or the cash to buy one. But some kids have grown up in the business and for them the job is a natural, Pat Hardy insists. "When you talk to people who are particularly successful," she says, "you often find they say, 'Well, my dad had his own store.' People raised in a family business have more of an understanding of what is involved in operating one. They've been through it."

Some kids need to experience the outside world first. John and Ella Jo Shell's youngest daughter, after first declining her parents' offer of partnership in their Hemlock Inn in the Great Smoky Mountains, later changed her mind. Then her husband left his job in banking to join the team. "We're handling the change with as much grace as we can," John Shell says. "A lot of guests put too much emphasis on who the innkeeper is. As soon as our guests get used to our daughter and son-in-law, it won't matter if I'm not there."

Vince and Anne Murphy of the Weathervane Inn are approaching partnership with their son and daughter-in-law cautiously. "My kids and I have an agreement," Vince points out. "We negotiated [duties and responsibilities] for three months and then put it into writing. At the end of the first year, they get a bonus of $5,000, with which they can either walk or stay. At the end of the second year, they get an additional $15,000, in addition to their collective salary, and only then do we discuss partnership. I want to see if this is what they want to do before they get any financial interest in the inn."

Says the Beaumont's Chuck Dedman, 36, "The hardest thing about taking over a family inn is getting the older generation to let go." The Beaumont Inn was founded by his great-grandmother, then run by his grandmother, and passed on to her son and daughter-in-law. "My dad is 74, his mother was the innkeeper, and so was her mother. The new whippersnappers move in and take the reins — we do have crazy new ideas — but sometimes your parents can steer you away from things that aren't going to work. Some children can't take that kind of direction, and they're going to give up."

And how about Steve and Marianne Harrison, who have two children in their twenties, one a daughter, Elizabeth, who particularly enjoys Beaufort? A former editor for Elle magazine, Elizabeth is currently traveling in Australia. I ask her father if he'd ever considered having her take over the inn.

"Now that's an interesting idea," the ex-New Yorker says, smiling. "I've never thought about it. That's really intriguing. . ." Harrison House? It has a nice Rebel ring to it, after all. — S.W.


Tips on successful innkeeping

Second-career inn proprietors who are working with their spouses for the first time have had to learn a number of basic family business lessons the hard way. Here is some of their distilled wisdom:

— S.W.


You'll never get rich

"If nothing else, being in business in South Carolina makes our Manhattan apartment largely deductible," Steve Harrison points out, "because now we use it for buying trips."

The Harrisons still own that apartment because they entered the inn business with enough cash to buy the Rhett House Inn outright for $300,000. They took out a mortgage to pay for $175,000 in renovations. "lt's important to keep your mortgage payments low because in this business you're going to lose money the first and second years, the third year you might break even, and only in the fourth should you make a little money," Steve says. "So you've got to have staying power. You can live off the business in the beginning, but that's all — you're not taking any salary out and you could be getting $30,000 a year from that $300,000 investment alone."

Oddly enough, buying a big old inn doesn't cost much more than buying an ordinary residence. "You see inns from 5 to 10 rooms for sale at prices from $150,000 to $900,000, depending on where they are located," Steve points out. "And an inn can sometimes cost less than a typical large house in the same area because not many people are in need of an eight-bedroom house."

Looking ahead, the Harrison's tot up their inn's potential and figure they'll do a lot better than the typical inn (profiled below), because they are less leveraged and have brisk business year-round, Even at best, though, they might make $50,000 annually, before taxes, from an inn running at 75 to 80 percent year-round occupancy — which is enormously optimistic — plus another $15,000 from sidelines such as a gift comer and consulting work. "But living on $50,000 down here is like having $100,000 a year, or more, in Manhattan," Steve avers. "Ibis business is a way of life,, not away to make money."

—S.W.


A B&B's bottom line

A composite profit and loss statement for a newly-established 10-room bed and breakfast located in a New England town shows the slim margin innkeepers flirt with. Of course, the innkeepers, living on site, have their own mortgage, taxes, utilities, and many expenses paid for, but their disposable income is very low. Net income would be higher if a larger-than-average down payment had been made. The figures, put together by Country Inns of America, a Newburyport, Massachusetts brokerage and consulting firm, assume a purchase price of $500,000, and that the B&B serves continental breakfast.

—Ed.

GROSS RECEIPTS
$75,764
Room occupancy tax
$7,640
Real estate tax
6,840
Insurance
4,119
All utilities
9,879
Supplies
5,240
Cleaning, repairs
6,023
Guest expenses
4,525
Auto expenses
1,858
Advertising
2,659
Professional fees
2,700
TOTAL EXPENSES
$51,483
GROSS INCOME
$24,281
Debt service
$20,760
Income tax
2,281
NET INCOME
$1,240