The last time Michael and Betty Dunne were featured in the Property Supplement, back in September 1989, they were in the throes of establishing a successful bed & breakfast on Sandymount Avenue, Ballsbridge, Dublin 4. Novices to the game, they had sold everything they owned to pursue the venture and were determined to make a go of it.
Twelve years on, they are retiring from the business and their premises, Aaronmor, is back on the market. The guest-house is twice its original size, having absorbed the house next door, and it has a three-star grading for accommodation.
It will be auctioned next month as a going concern as one lot, with a guide price of £2.4 million. Alternatively, agent Jackson-Stops will sell the two houses separately, at guide prices of £1.2 million each. With so many families still looking for large homes in Dublin 4, there is every likelihood that at least one of them could be converted back to a single residence.
It's hard to believe that when the Dunnes started out, there were only two other B & Bs in Ballsbridge, an area that now bristles with guest-house signs. "There was no way of knowing that it was going to work," say the Dunnes, "and the risks were high."
First priority was a name for the business, so what better than a double "A" to ensure theirs would be one of the first B & Bs in the telephone book and tourist brochures: they opted for Aaronmor.
The cost of setting up a large good quality guest-house in the 1980s was anywhere between £50,000 and £70,000, according to the Dunnes. And that was on top of the price of the house - in the late 1980s, large redbrick houses in Ballsbridge ranged in price from £150,000 to £250,000. The Dunnes soon developed a thriving business, expanding into the house next door in 1996. "We were getting too big and saying `no' to customers too often; it just didn't make financial sense not to expand," says Betty. Nevertheless, it took a big investment to do so.
The property boom was underway, prices had risen and in all, according to the Dunnes, it took an additional investment of £1 million to purchase, refurbish and amalgamate the two homes into one. If you have money to invest initially, profit margins are feasible, say the Dunnes, but you need to look at it as a long-term investment to reap the true benefit. Their two children have also gone into the business, each running their own B & B almost side by side on the Merrion Road.
The 19-bedroom property is located almost opposite the RDS Simmonscourt and the new Four Seasons Hotel in a busy tourist area. In recent months, many of the staff of the Four Seasons have been billeted at Aaronmor, where B & B rates range up to £90 per night.
The business enjoyed a net turnover of £300,000, which when balanced against expenses, netted a clear profit of £117,554 for the tax year ended December 1999. Although the number of B & Bs in Ballsbridge grew rapidly throughout the 1990s, they have had to face stiff competition from budget hotels like nearby have flocked to such hotels, which offer better public facilities such as restaurants and bars.
Although Aaronmor is filled to capacity at present, the Dunnes are now ready to retire. However, the high capital costs of entry to the business could deter some buyers.
John Brown, spokesperson for Bord Failte, believes that the B & B market continues to be strong. "With 6.3 million visitors to Ireland last year as opposed to two million in 1987, demand has never been greater." As a Bord Failte-approved premises, owners face the cost of public liability insurance and also the cost of registering with Bord Failte. But they also get referrals through the Bord, advertising in its brochures and on its website. Booklets are also available giving advice on starting out.
Expenses involved in running a guesthouse include rates on the property, electricity, heating, food, cleaning, laundry, repair, maintenance, insurance, furnishings, leasing, wages and depreciation.
Aaronmor is ready to move into, with all the rooms well furnished with either bath or shower en suite, direct dial telephone, television and generous wardrobe space. Guests can also use the mini-gym that the Dunnes installed and there is also a lift for disabled access - the only guesthouse in the area to have one, they believe.
Downstairs, the reception rooms are decorated with strong period colours and have feature fireplaces. There is also generous parking to both the front and rear of the property.
"If you like people it's the business to be in. The wrong attitude could close you down in 18 months," Michael believes. "It's not a job for the fainthearted, because it involves a lot of hard work, long hours and a positive disposition."
