Farm Diversification

Rural Bed and Breakfast 'bed' occupancy rates have been relatively static at around 33-36% over the last 8 years. Economic conditions, fuel prices, currency exchange rates and weather can all impact on demand for accommodation. The provision of high quality accommodation is essential in order to attract customers. The offer of specialist facilities or services (e.g. cycle hire or other activities) may help attract business from specific groups of customer, although this may incur additional costs to the business.

Further information on marketing initiatives in Scotland such as walking and cycling tourism and accreditation to some of Visit Scotland’s Welcome Schemes (covering Ancestral Tourism, Anglers, Bikers, Children, Classic Cars, Fieldsports, Golfers, Groups, Visiting Golfers, Walkers and Cyclists) may increase interest in your accommodation.

A business plan, incorporating a marketing plan, to identify how, and to whom, the business will market itself should be prepared. Marketing advice can be obtained from VistScotland and local and/or national associations in the UK such as Farm Stay. A website has become almost obligatory as a marketing tool for any new, or existing, business.

Visitor and tourism trends for each of the VisitScotland regions (including regional B&B occupancy rates can be viewed on the VisitScotland's Research and Statistics website. Here you can find reports detailing the local tourism market with statistics about visitor numbers, trends, etc.

Guidance on appropriate bedroom dimensions and furnishing is available from VisitScotland (Guidance Notes for Guest Accommodation Operators on Quality Grading).  This booklet also provides guidance on the achievement and assessment costs of VisitScotland grading quality standards.  The quality of bedrooms is very important, as guests are likely to spend much of their time there. All rooms should have separate access from the corridor, be numbered and have its own lock. Adequate heating and lighting is essential. Beds, wardrobes, linen, duvets, blankets, pillows, dressing table, alarm clock, radio, TV, etc will also be required for each bedroom.

Adequate toilet facilities; at least one bath or shower with washbasin for every six guests must be provided.  At least on WC (separate from the bathroom) for every six guests is also a minimum requirement.  More bathrooms/WCs, especially if en-suite, are necessary to meet higher quality assurance standards, as well as the higher standards now generally expected by guests.

Guest lounges will need to be of an appropriate size and suitably furnished.  The dining room must be able to accommodate all guests and a buffet area.

The kitchen area should be adjacent to the dining area and should be large enough to cope with the preparation and cooking of food for the number of visitors. It should be well equipped and fitted out and be easily cleaned. 

A dedicated website for marketing walking has been established - Walkingwild.com and further information on cycling tourism can be found on Visit Scotland's cycling pages.

These are very dependent upon existing facilities. Costs will include any structural alterations (e.g. creating en-suite facilities, adjustments to kitchen) furniture, bedding, cutlery and crockery, etc.

In many cases the capital outlay may amount to over £2,000 per bed space (depending on amount of building renovation required).

Budgeted costs should include; additional electricity/gas, catering costs (cost of breakfasts, tea/coffee/biscuits), labour - often a major underestimate, cleaning, insurance and advertising. 

Total variable costs can be expected to be about 35-40% of revenue, but may be higher if additional labour is employed.

Bed & Breakfast charges range from £25 to 60+ per adult (depending on quality and location).

Evening Meal charges from £15 per adult upwards and can offer the chance of additional income.

Season: can range from 12 weeks to 52 weeks depending upon location (the average reported by Farm Stay is 38 weeks).

Occupancy Rate: This will also vary depending on location, facilities etc. Visit Scotland's occupancy rates shows Scottish average bed and breakfast bed occupancy rates for 2010 varying from 14% in December and January to 64% in August, with an annual average of 37%. The average length of saty ranged from 1.6 nights in Perthshire and the Highlands to 2.2 nights in Fife, Angus and Dundee, with a Scpttish average of 1.8 nights

Bed and breakfast businesses must comply with all necessary legislation and advice should be sought from the appropriate authorities.  This includes; Fire, Health & Safety, Food Safety, Planning /Building Control, Insurance requirements and so on.

Please see the Scottish Government's Practical Fire Safety Guidance for small Bed and Breakfast and Self-Catering Premises for guidance for B&B's operating with no more than 8 guests or self catering accomodation that accommodates no more than 10 guests.  For larger premises please see the Practical Fire Safety Guidance for Medium and Large Premises Providing Sleeping Accommodation or see the FireLaw website

Current Scottish Government guidance is that if you offer bed-and-breakfast accommodation in your own home to six people (or less), you will not be liable for Non-Domestic Rates as long as you are living in the property. You will pay Council Tax instead.

In addition, Disability Discrimination Act (DDA) legislation means that guest accommodation providers have to make reasonable adjustments to the way in which they deliver their services so that they better meet disabled peoples’ requirements. Since October 2004, the DDA expects service providers to remove, alter or provide a reasonable means of avoiding any physical barriers to accessing and using their premises. When designing your accommodation regard should be given to the special needs of people with disabilities.

Location: If not on a main road, additional marketing and advertising costs may be incurred, with more reliance on advance bookings rather than passing trade.

Privacy: How does the farm family react to other people in their house? Do all members enjoy meeting, and conversing with, the general public? How does the farm family react to other people in their house? Do all members enjoy meeting, and conversing with, the general public?

Training in a wide range of subjects relevant to the provision of bed and breakfast accommodation is available through VisitScotland the Scottish Enterprise network, Business Gateways and local tourist forums. 

Through the Scottish Rural Development Programme (SRDP) 2007-2013 funding is now available for rural businesses throughout Scotland for diversification and renewable energy projects. Specifically, support is delivered through Rural Development Contracts – Rural Priorities which was launched in April 2008. For further information about what support is available see the Section on Rural Development Contracts – Rural Priorities.