For B&B owners, it's no smooth switch from house to guesthouse

When Mark Jerde was just 12 years old, he dreamed of running his own bed-and-breakfast.

"I always liked the idea of being a butler," a laughing Jerde, 55, said recently. "Never aspiring to be the master of the house."

But there were obstacles: He needed a property and capital. It was decades ago, and Jerde was only starting out. Mostly, he thought, there was no room for a home-based B&B in a hotel city such as Philadelphia.

"I just thought it was something that needed to survive in New England," Jerde said.

So the Torresdale native spent decades toiling away: in bakeries and hotels, working his way up from a third-shift, front-desk job at a Motel 6 to a manager's position at the Rittenhouse Hotel. He had aspirations of owning his own bakery, maybe a restaurant. As B&Bs gained popularity nationwide - in the early 2000s, there were 20,000 locations, a tenfold increase from 1980 - Jerde's dream of owning his own was further from reality.

Then a decade ago, Jerde had an epiphany: He and his partner, Neal Orzeck, were close to paying off a three-story, 19th-century rowhouse in Manayunk. The trade school where Jerde had been teaching cooking and hospitality courses for years had just shut down. It was time, he said, to "create the dream."

What he didn't know: His decision to pursue his adolescent ambition would take him down an almost 10-year path, one defined by tremendous work and costs, with no guarantee of success.

Without the backing of national brands, staffs, or corporate money, owners of bed-and-breakfasts and small inns, classified together, often take on more risk and work than traditional hotels - many times charging rates similar to their competition's, yielding minimal profit. According to data from Barnes Reports, which tracks industry trends, average revenue at B&Bs and inns in 2016 was $320,000 a location, before any expenses.

These days, B&B owners face another threat: Airbnb, the San Francisco-based start-up that allows homeowners to earn cash by temporarily renting out their residences, often at prices lower than hotels and B&Bs, and in some places, with fewer regulations.

With 8,000 listings in Philadelphia - nearly 1,000 of them rent spaces for at least half the year - Airbnb, which operates legally in the city, generated $25 million for its local hosts in 2016.

That success has forced B&B owners to confront a growing fear: Their market share could continue to slip. Though no consistent data are readily available, industry observers estimate that there are about 17,000 B&Bs and inns nationwide, a 15 percent reduction from the peak in the early 2000s.

It is unclear how many B&Bs and small inns (which may also serve dinner) exist in the Philadelphia region. An unofficial estimate puts the number in the eight-county area at about two dozen, with perhaps a dozen within the city limits.

"Anyone looking to start a B&B is typically spending thousands of dollars to go through zoning protocols . . . and expenses to operate as a business," said Kris Ullmer, executive director of the Professional Association of Innkeepers International. "There is a place for all types of lodging in the marketplace, but they really all need to be playing by the same rules."

Airbnb has "definitely contributed to some legitimate properties going out of business because they can't compete," Ullmer said.

Jerde entered the market long before Airbnb was a concern. But the B&B industry, which had been booming until 2005, suddenly found itself eclipsed by another boom.

Home prices reached peak highs, and many operators realized that their properties held more value than their businesses. At the time, occupancy rates were hovering at 30 percent to 40 percent, according to industry data.

Yet Jerde persisted, even when the recession dragged and travel demand fell. It was no easy go: There were renovations to do, walls to knock down, estate sales to browse. Second jobs to take, to help bring in cash. And a year-long zoning battle, with an initial rejection and legal fees, to convert the Manayunk house from single-family designation to one for multiple families.

Finally, in April of last year, Jerde opened the doors to his Manayunk Chambers Guest House, an elegant four-bedroom Victorian fitted with fireplaces, chandeliers, iconic artwork, and dark wood furnishings. More than 100 families have passed through.

Jerde's nearly 10-year journey reflects what industry observers say is typical of a B&B's creation. And after all the hard work, operating a B&B is often no glamorous job. With the average one employing fewer than five people, according to Barnes Reports, B&B owners are very much part of the staff.

"You're on duty all the time," said Sherri Holmes, manager of the 12-bedroom La Reserve Bed & Breakfast near Rittenhouse Square.

"Working as an innkeeper or manager of a bed-and-breakfast, I'll tell you: Of all the job experiences I've had in my whole adult life, nothing could come close to the responsibilities of running a bed-and-breakfast," said Holmes, who has operated the B&B for eight years.

As sole employee of the Manayunk Chambers Guest House, Jerde does it all: reservations, housekeeping, maintenance, finances, and cooking, offering guests a full continental breakfast with homemade baked goods.

His services have been well-received: Jerde currently has 54 reviews on TripAdvisor, all five stars.

But as B&B market share begins to dip, Jerde said, the future is finding ways to stay relevant. Guests travel to B&Bs, he said, because they want specific services: a homemade meal, a cozy environment, and more host interaction, none of which, he said, Airbnb can offer.

Airbnb, meanwhile, maintained in a statement that its listings offer "a different and more authentic travel experience."

To boost his service offerings, Jerde said, he was considering offering pastry classes and murder-mystery nights. But for now, he said, he's just enjoying the realization of his dream.

"I always believed that if you build it, they will come," he said. "And so far, they're coming."


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