Many believe that running a guest house or B&B in Grahamstown is an easy way to make money, as there is a lot of potential for business in Grahamstown through events such as the National Arts Festival and Rhodes University’s graduation weekend.
Many believe that running a guest house or B&B in Grahamstown is an easy way to make money, as there is a lot of potential for business in Grahamstown through events such as the National Arts Festival and Rhodes University’s graduation weekend.
However running a guest house requires more than simply building a few extra rooms and collecting rent.
Running a guest house or a B&B requires a lot of extra costs.
"Every establishment needs a separate TV licence for every single room", says Danny Biermann, the owner of Lantern Hill B&B in Grahamstown. "You have to pay the full fee for MNet and DSTV and have a decoder in every single room."
These high prices force some guest houses to extreme measures. "Some establishments go outside the legal boundaries because of the high prices. You even have to have a separate music licence if you want to play music for your guests. Discounts are available for guest houses but only if you are affiliated with the Automobile Association and the National Accommodation Association of South Africa," says Biermann.
Claire Fraser, the owner of Jenny’s Guest House shared her experiences. "I installed DSTV in my rooms last year", she says. "I have eight rooms, I had to install two dishes and a decoder for every room.
The price came to about R10 000." Fraser, is also the chairperson of the Grahamstown Hospitality Guild and explains how guest houses also have to pay a small fortune in TV licences. "I also have to pay an Mnet licence of R145 per TV amounting to about R1 118 – as well as R14 extra for every channel that is not included in the hotel bouquet- and normal TV licence to the SABC."
TV licences are just the tip of the iceberg when it comes to expenses. "If gas is used", explains Biermann, "any bottle over nine kg has to be protected outside the premises.
You also have to have shut off the valves inside the guest house and one outside. There is also only one certified gas installer in Grahamstown." Even though using gas is expensive Biermann explains that it is another necessary expense.
"There has been many problems with electricity in the past few years, gas is essential so that guest houses do not lose money in the event that there is an electricity failure."
Another concern for guest house owners and potential ones is that minimum wage salaries are also increasing as of July this year. Many guest houses have to employ people for services such as cooking and cleaning rooms if they do not have the time themselves.
This wage increase of 11.1% is going to place further strain on owners as they have to contend with yet more costs. Among the other costs include unemployment insurance, a workers compensation insurance and special liability insurance.
It is difficult for owners of guest houses to continue making profits while competing with others. "You want to give more to your prospective guests and in the current market you can’t charge more because people can’t pay more. The additional costs that the owners have to pay have increased steeply.
There is also a very field in Grahamstown." Frazer says it is also sometimes difficult to charge customers more. "You can only charge to where you are situated in Grahamstown, if you are in Cape Town you can charge more but you can’t charge as much here," she says.
