Rural Hospitality – Bed and Breakfasts
Market characteristics of Rural Hospitality – Bed and Breakfasts
Most of the rural hospitality rooms are concentrated in moshavim and kibbutzim. The preferred region in Israel for the development of bed and breakfasts is northern Israel, and there is no small amount of development in the Western Negev region, Eshkol, the Arava, Eilot and more.
A strong degree of seasonality – the sector operates on average around 80 days a year, mainly in summertime and festivals.
The price level is low relative to hotels – the pricing basis is around 60% of the rates at tourist class hotels in the area.
Based mainly on domestic tourism – 80% - 85% of all occupancies are by Israelis. In addition, there is customer loyalty to the site, depending of course on service and satisfaction!
Customers of Bed and Breakfasts
The market is currently based on domestic tourism. The main target audience is those interested in unique hospitality and/or hospitality at a relatively low cost. Specific market segment can be identified, and includes:
Families – generally families where the parents are aged 30 – 40 with young children
Over fifties and young couples – without children constitute a potential off-season market segment
People seeking unique styles of hospitality – hospitality with a religious ambiance or hospitality in Arab or Druse villages.
Incoming tourism – a market segment still in its infancy
Competitors in Rural Hospitality – Bed and Breakfasts
Direct competitors – include rooms in the same geographical area, price level or similar service. Towns adjacent to urban areas will be in moderate competition with low-grade hotels and boarding houses, and will nevertheless maximize the city’s entertainment options.
Indirect competitors – effective before making a reservation and deciding what type of holiday/entertainment to select. This of course includes all accommodation alternatives located in the designated geographical area, from youth hostels to luxury hotels.
Equipment required
The required equipment can be divided into permanent equipment and current/depletable equipment.
Building or mobile home or a combination – industrialised construction, various types of cottages or cabins and more.
Permanent equipment: furniture, sanitation accessories and so forth
Current equipment: towels, sheets and so forth. This equipment wears out and must be replaced occasionally.
Depletable equipment: soap, toilet paper and so forth
Marketing methods
Joint activity by means of regional tourism societies, the Internet, travel agencies and holiday companies, outdoor signage, advertisements in the regular press and in publications geared at travellers, producing promotional products, public relations.
Factors affecting success
Location – holidaymakers prefer staying in a region where holiday activity is offered.
Service – creating a special rural ambiance and a personal attitude towards customers contributes to loyalty.
Level of rooms – a high level in terms of design, furnishing and additional accessories such as air-conditioning, Jacuzzi, intimate meals and so forth.
Entry barriers in the sector
The initial investment is relatively high. The Ministry of Tourism has regulations on establishing a building for rural hospitality, and operates an assistance network for entrepreneurs who meet defined criteria. A threshold requirement is the ability to obtain a building permit.
Investment required
The Ministry of Tourism helps with a grant of 25% of the recognised investment in hospitality units, for setting up 2 – 8 hospitality units in a moshav/town/city or 15 – 50 units on a kibbutz, for those who meet the defined criteria.
Turnover and profitability in the sector
The daily turnover per room depends on the season, region and direct expenditures, which stand at 40% of the revenues if breakfast is served, or 25% - 35% of the revenues if breakfast is not served.
Licences and certification
Certification from the local urban/regional planning committee (a business licence from the local authority is contingent on obtaining permission from the Health Ministry, which must be renewed annually), the consent of the Israel Lands Administration for irregular land use for purposes of rural hospitality, certification and licensing from the Ministry of Tourism.
Insurance
Building and content insurance, third party insurance, employer’s liability insurance, inventory insurance and loss of profit insurance.
In addition to the aforesaid, consulting with an insurance agent regarding the insurance required is advisable.
| Rural Hospitality – Bed and Breakfasts
Most of the rural hospitality rooms are concentrated in moshavim and kibbutzim. The preferred region in Israel for the development of bed and breakfasts is northern Israel, and there is no small amount of development in the Western Negev region, Eshkol, the Arava, Eilot and more.
A strong degree of seasonality – the sector operates on average around 80 days a year, mainly in summertime and festivals.
The price level is low relative to hotels – the pricing basis is around 60% of the rates at tourist class hotels in the area.
Based mainly on domestic tourism – 80% - 85% of all occupancies are by Israelis. In addition, there is customer loyalty to the site, depending of course on service and satisfaction!
Customers of Bed and Breakfasts
The market is currently based on domestic tourism. The main target audience is those interested in unique hospitality and/or hospitality at a relatively low cost. Specific market segment can be identified, and includes:
Families – generally families where the parents are aged 30 – 40 with young children
Over fifties and young couples – without children constitute a potential off-season market segment
People seeking unique styles of hospitality – hospitality with a religious ambiance or hospitality in Arab or Druse villages.
Incoming tourism – a market segment still in its infancy
Competitors in Rural Hospitality – Bed and Breakfasts
Direct competitors – include rooms in the same geographical area, price level or similar service. Towns adjacent to urban areas will be in moderate competition with low-grade hotels and boarding houses, and will nevertheless maximize the city’s entertainment options.
Indirect competitors – effective before making a reservation and deciding what type of holiday/entertainment to select. This of course includes all accommodation alternatives located in the designated geographical area, from youth hostels to luxury hotels.
Equipment required
The required equipment can be divided into permanent equipment and current/depletable equipment.
Building or mobile home or a combination – industrialised construction, various types of cottages or cabins and more.
Permanent equipment: furniture, sanitation accessories and so forth
Current equipment: towels, sheets and so forth. This equipment wears out and must be replaced occasionally.
Depletable equipment: soap, toilet paper and so forth
Marketing methods
Joint activity by means of regional tourism societies, the Internet, travel agencies and holiday companies, outdoor signage, advertisements in the regular press and in publications geared at travellers, producing promotional products, public relations.
Factors affecting success
Location – holidaymakers prefer staying in a region where holiday activity is offered.
Service – creating a special rural ambiance and a personal attitude towards customers contributes to loyalty.
Level of rooms – a high level in terms of design, furnishing and additional accessories such as air-conditioning, Jacuzzi, intimate meals and so forth.
Entry barriers in the sector
The initial investment is relatively high. The Ministry of Tourism has regulations on establishing a building for rural hospitality, and operates an assistance network for entrepreneurs who meet defined criteria. A threshold requirement is the ability to obtain a building permit.
Investment required
The Ministry of Tourism helps with a grant of 25% of the recognised investment in hospitality units, for setting up 2 – 8 hospitality units in a moshav/town/city or 15 – 50 units on a kibbutz, for those who meet the defined criteria.
Turnover and profitability in the sector
The daily turnover per room depends on the season, region and direct expenditures, which stand at 40% of the revenues if breakfast is served, or 25% - 35% of the revenues if breakfast is not served.
Licences and certification
Certification from the local urban/regional planning committee (a business licence from the local authority is contingent on obtaining permission from the Health Ministry, which must be renewed annually), the consent of the Israel Lands Administration for irregular land use for purposes of rural hospitality, certification and licensing from the Ministry of Tourism.
Insurance
Building and content insurance, third party insurance, employer’s liability insurance, inventory insurance and loss of profit insurance.
In addition to the aforesaid, consulting with an insurance agent regarding the insurance required is advisable.
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