- Phil Marchand is the owner of the historic Henry Derby House in Salem, Massachusetts.
- In 2015, he turned the bed and breakfast he was running into an Airbnb that caters to large groups.
This as-told-to essay is based on a conversation with Phil Marchand, 43, who owns the Henry Derby House Airbnb in Salem, Massachusetts. It has been edited for length and clarity.
The Henry Derby House was built in 1838 in Salem, Massachusetts. It was named after the original owner, Henry Derby, who worked as a tailor in town. My great aunt had owned the house since the early 1970s. Then, when my mother and father were looking for a house, they bought it off of her in 1978.
When my parents split around 1984, it was just me, my sister, and my mom. We lived there for a while, just the three of us. That's when she started renting out rooms to make ends meet as a single mom.
I think at one point, we lived on only the second floor and she rented out the entire first floor and vice versa. We had a lot of different incarnations of living in the house in different areas while renting out different parts.
My mother got the idea to run a bed and breakfast from a friend
She started by renting out just two rooms when my sister and I were still living there. My mom and my stepdad lived on the first floor; I lived on the second floor; my sister was living on the third floor; other people were renting rooms on the third floor; and we had two bed and breakfast rooms on the second floor.
My mom passed away in 2012 from uterine cancer. After that, my girlfriend at the time (who is now my wife) and I moved into the house and decided to start running the business full-time. We lived there for three years and did three full seasons as a traditional bed and breakfast. We lived in one room with a kitchen and bath, rented out three rooms, and also had renters on the third floor.
After we had our first child, it all just became too much to live at the house with a baby. That's when we first turned it into a full-time Airbnb in 2015.
Operating an Airbnb is so much easier than running a bed and breakfast
Right now, we rent the whole house as a single unit rather than renting out individual rooms. There are far fewer bookings, there's far less turnover, and we don't have to sit down and serve breakfast.
We also make so much more money. We can make at least double renting it short term then if I had longer term tenants. Plus, because this is my family home, I don't want to run the risk of having a potential bad tenant who I have a hard time evicting. At least I know with Airbnb, the longest guests will stay is a few days, and even if they damage something, it's probably going to be something minor.
Our niche is catering to big groups
There are not a lot of houses in the area that can sleep 10 people. Typically, I get big groups, which are either two families traveling together, or a bunch of friends for a bachelorette party or a wedding.
We've had a couple of groups that came and were rowdy and came to party, and it got a little out of hand. The last really bad group we had booked last minute, and I should have known better. I usually don't take last-minute bookings, because they're more likely to be wild cards.
The group didn't return my rental agreement, which was a big red flag for me. I make everybody sign a rental agreement, which says they're going to respect the property and they're not going to party in the house.
I heard from the neighbors that the guests had a huge party, and when I went in after they left, there were alcohol bottles everywhere. They had also clearly been smoking in the house, and there were burned holes in all my rugs. The only good thing I can say is that Airbnb did reimburse me for all the damages. The worst thing I lost was a really nice rug that belonged to my mother.
I usually book a year in advance for October
This year, Salem has been so busy because of all the "Hocus Pocus 2" stuff. I open my dates on October 1 for the following year, and they'll usually be 100% booked by the end of the month. I'm kicking myself this year, because I probably could have charged literally double with all the movie promotion.
Last October, specifically, I was charging $1,000 per night during the weekend. During the week, I was giving a significant discount from Monday through Thursday for $500 per day, but I'm not going to do that anymore. I just opened the dates for next year, and I definitely increased the rates significantly. I'm now asking for $1,295 per night.
My rates are significantly lower during our slow season, which is in the winter between January and March.
I'd say I spend probably 15 to 20 hours per week running the Airbnb
I respond to phone calls and emails, and my wife does most of the shopping for house supplies. She also helps me do the house checks in between guests.
I didn't have a profit for at least the first five years because of the amount of upkeep and maintenance required, especially since it's an old house. I still reinvest quite a bit, because a big part of it, to me, is the long-term investment. I'm not trying to pull too much money out of it now. I'm more so trying to maintain the property and keep it as a long-term investment.
Occasionally I might get guests who want a hotel experience, but in an old home, that just doesn't happen. They might go down into the basement and see cobwebs occasionally, or they might see a mouse once in a while. There are only so many things I can prevent in a home, especially one that's almost 200 years old.
If we don't end up moving back into the house at some point, we'll probably keep it as an Airbnb. I've been a landlord before. It can be a headache, and you don't really get that much out of it. Owning an Airbnb, on the other hand, is fun. You get to have people visit from all over the world and get to show them your city.