Lyndsay Jackson from the Guest House Accommodation of South Africa (GHASA) shares what you should keep in mind if you’re thinking of starting a guest house, and some of the hidden costs that you might not have thought of.
First things first, do your homework before you open your establishment.
Owning and running a guest house isn’t just about wanting to share your beautiful property with happy guests and cooking them wonderful breakfasts. It’s what goes on in the background, or what we like to call your “back office”, that really counts!
A brief definition of a guest house: The establishment generally has between 4 & 16 bedrooms with en-suite bathrooms and guests have dedicated lounge and dining areas. In other words, they do not share these facilities with the owners of the property. A guest house must offer guests at least one meal per day, which is typically a breakfast.
If you’re thinking of converting your home into an accommodation establishment, you need to consider the costs of renovations & alterations; land use/zoning requirements; increased rates and utilities bills; employee salaries and a plethora of additional “hidden” expenses.
It’s important to decide which echelon you would like to achieve BEFORE you start renovating or building your establishment. For example, a 5-star establishment requires all areas and materials to be of outstanding quality, whereas 3-star level can be more relaxed, even though it is important that materials are of good quality. In other words, the higher the echelon, the more expensive it is to equip and maintain your property.
Some hidden expenses may include:
- Insurance: Public liability insurance is vitally important for your guests’ and your own protection
- SABC TV licences: Each TV requires its own licence
- Maintenance & replacement of items: Increased traffic through your property results in increased wear and tear
- Marketing: You need to tell the world that your doors are open!
- Safety & security: Guest houses are often considered soft targets. Security systems need to be of high quality
- Back-office systems: Costs of property management & booking systems
In summary, owning a guest house can be enormously rewarding – it’s not a job, it’s a lifestyle. Operating a successful establishment requires attention to detail, flexibility and dedication!
For more information on the Guest House Accommodation of South Africa, visit their website.