Guesthouses and B&B's in Key West have proven to be practically recession proof. The Monroe County Tourism Development Council (TDC) maintains very exacting data on hotels and guest houses of all sizes and room rates throughout the Keys. According to the TDC, Guesthouses in Key West have prospered significantly in Occupany Rates, Room Rates and Revenue per Room steadily for the last ten years. Since 2010, average Daily Room Rates are up 55%. Presently there are six Guesthouses for sale in Key West. Below is a brief review of each.
The below Guesthouses are listed in order of Sales Price - Low to High.
Andrews Inn is located near to the Hemingway House and is just 1/2 block off Duval St. Andrews Inn was formerly a single-family home built in the early 1900’s in what was then considered to be one of Key West’s more affluent suburbs. It has been a Guesthouse since the early 1990's.
There are six units, each with private entry and full ensuite bathroom. The common area features a commercially licensed heated pool/spa, spacious sundeck, and laundry. There is a commercial kitchen licensed for 14 seats and a separate manager's office.
Andrews Inn has a Two-Palm Designation in Florida's Green Lodging Program.
Andrews Inn is listed for sale at $2,490,000.
Suite Dreams is unique in that it is one of the few Guesthouses located in a residential Key West neighborhood - in this case the Casa Marina neighborhood on the southeast side of the island.
The Suite Dreams Guest House is situated on a large corner lot and consists of 5 suites each with separate entrances, living rooms, kitchens or kitchenettes, and queen or king size beds. The suites can be combined in such a way as to create larger suites with 1, 2, 3 or 4 bedrooms. Up to 18 guests can be accommodated, a perfect situation for a large family or a getaway with friends.
Suite Dreams is listed for sale at $2,550,000.
Caribbean House is located in the thriving neigborhood of Bahama Village.
There are ten brightly colored guestrooms, all of equal size, however, each has it's own Caribbean atmosphere as reflected in the multicolored decor of the room All the rooms open on the balcony and each features ceiling fans, air conditioning, flat screen color TV with cable, small refrigerator, private bathroom and free wireless access. There is a separate business office and manager's apartment on the third floor.
Caribbean House is listed for sale at $2,800,000.
The Garden House is located in the heart of Old Town Key West just two blocks away from the pimary commercial street and district of Duval St.
Garden House has twelve bedrooms, ten with private bathrooms and two rooms that share a bathroom. The heated lagoon-style pool features spa jets and a cascading waterfall. The property has abundant natural flora and while all rooms have a private porch or balcony there is also an upper level deck open for any and all to relax and enjoy the view. The property is also licensed for a 12-seat restaurant.
The Garden House is listed for sale at $3,350,000.
Knowles House is an elegantly restored house with a verifiable history dating back to the mid 1860's.
Knowles House is ideal for guests seeking a traditional Key West guest house. It is the perfect combination of tropical charm, casual elegance and a relaxed island atmosphere. There are eight bedrooms each with private bathroom and a licensed 12-seat restaurant. Knowles House has been a Guesthouse for 20 years and has a strong repeat business, a 4 1/2 Star Trip Advisor Rating and is AA Rated.
Knowles House is listed for sale at $3,395,000.
Tourist Development Council
The Monroe County Tourist Development Council tracks very closely the tourism industry in Key West and the Florida Keys. At their web site are the reports of a variety of related studies and tourism fact sheets. Few elements of the tourist industry are as closely watched as Where do Tourists Stay in Key West. An annual report details the business results for Luxury, Upscale, MidPrice, Economy, Budget and Guesthouse accommodations.
Occupancy Rate
Since 2010, the average annual Occupancy Rate for Guesthouses has risen from 77.4% to 82.6%. The winter months of January thru April show rates of 88% and higher with rates tailing off to 75% in August, September and October.
For all hotels and guesthouses in Key West in 2015 the average annual Occupancy Rate was 84.5%.
Average Daily Rate
Average daily room rates for Guesthouses have increased from $162 in 2010 to $251 in 2015, an increase of 55%. Every month has shown year over year increases, In 2015, the months of January, July and September each saw an increase of 10% or more over the same month in 2014.
For all hotels and guesthouses in Key West in 2015 the average Daily Room Rate was $293.
Average Revenue per Room
Average Revenue per Room, RevPAR, for Guesthouses have increased from $126 in 2010 to $207 in 2015, an increase of 64%.
Again, the winter months of January thru April show the highest values, ranging from $247 in January to $307 in February. Though the summer months of August and September have the lowest average RevPar, they are up 79% and 70%, respectively, since August and September 2010.
For all hotels and guesthouses in Key West in 2015 the average RevPar was $248.
Conclusion
Certainly each Guesthouse has its own revenue and cost structure. Some guesthouses have commercially approved kitchens for its guests and other income streams like bikes or recreation rentals, However, there is a guideline to use as a reference point.
Over the past five years the sale price divided by the number of transient licenses has yielded a steady average of $400 - $412,000 per license; i.e., a sale price of $2.4M divided by 6 transient licenses or $3.2M/8 transient licenses both equal $400,000.
In addition to the six Guesthouses shown above, there are at least two Guesthouses that have been recently taken (temporarily) off market. Plus I have a pair of Guesthouses (both located on Duval St.) whose owners have told me they are ready to sell.
If you have any comments or questions, please contact me here.
Good luck!
Additional information: