Industry Analysis | Bed and Breakfast Business Plan

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EXTRAVAGANT LUXURY BED & BREAKFAST, CONFERENCE CENTER & RESTAURANT
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2.2.4 GROWTH POTENTIAL

The services industry is one of the fastest growing sectors in the economy of Gauteng Province. The industry shows a growth potential from the increasing demand of accommodation and conference facilities by the government/ municipalities, private/ corporate entities and individuals.

2.2.5 SEASONAL DEMAND

The Tourism Industry is a victim of seasonal fluctuations. Peak periods are between August and November as this is when International tourists come to enjoy the warm climate in South Africa. During the cold periods the industry records very low sales. However, sales tend to be stable from corporate and government related clients. Extravagant Luxury Bed and Breakfast will have a sales mix that will enable it to maintain a continuous positive flow of income.

2.2.6 INDUSTRY PLAYERS

Industry Players can be identified by analyzing the value chain.

The key industry players in the hospitality industry are as follows:

Bed and Breakfasts
Lodges
Casinos
Car hire
Hotels
Guest Houses
Restaurants
Travel Agents
Private accommodation providers
Hospitality/ tourism associations

There are also providers of support services to the industry. They include: research and development entities, providers of business management consultancy services, marketing/ advertising and sales agencies, accountants, auditors, insurance, information communication technology providers, travel/ tour operators, travel agencies and many more.

2.2.7 BARRIERS TO ENTRY

Anyone with a house can easily convert it to a simple Bed & Breakfast. However, there are some challenges that make it difficult to setup a competitive Bed & Breakfast. These primarily include:

The lack of highly skilled, competent and knowledgeable staff
The lack of resources and capacity – this primarily encompasses Financial resources, Human resources, Marketing and Operations
High capital costs
The need for a strategic location
Intense competition in prime areas as well as from well established hotels with powerful brands

2.2.8 KEY SUCCESS FACTORS

The key success factors for a Bed & Breakfast business or entity within the hospitality arena are as mentioned below:

Excellent service
Customer satisfaction
The provision of quality
Having a unique attraction
Skilled and trained management including staff
Market positioning in terms of hospitality
Convenience and reliability
Status in terms of grade
Compliance with the local tourism authority and the law of the Republic
Pricing is also a key success factor
Competitive branding strategies

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