Monday, March 22, 2010

Big Ruby's guest house in Key West

Big Ruby's in Key West is no more. As I describe in my original post below Big Ruby's was on the market and was sold mid-2013. There are big changes - first, it is now called The Cabana Inn. It is no longer gay and male only, it's now adult only. So this will disappoint many of the long term gay visitors, and it's another nail in the coffin of male gay only guesthouses in Key West - down from 20 of them in the 80s to just Island House today (for male + gay only).

On the positive side, Big Ruby's was going to seed and needed new investment and TLC, and a new manager/staff… and all of this has now happened. The reviews from new visitors anyway seem positive.

If you want info on all your gay hotels and guesthouses options in Key West - click here.

Or on the Key West gay scene generally.

The above was added in January 2014.

Here is my original post from March 2010, below.

I don't know how long it's been on the market, but I notied in the Citizen this weekend that Big Ruby's Key West, the gay guesthouse just off Duval Street, is for sale for a mere $6.9m.

It a dreadful advertisement in the Citizen but I've cut and pasted it here:

It's expensive but it might be worth it: Big Ruby's is a large, beautiful property with loads of rooms. And it's a location to die for, half a block from the good (commercial/busy) end of Duval.

But there are some issues. Comapre the $6.9m price tag with the asking price of $7.8m for the Cypress House (March 2008). And remember that the Cypress House is a bigger, more historic, more popular guest house.

Which brings us to the value of the underlying business. Of course, I have not seen the P&L of Big Ruby's business - I don't know how much profit they clear a year. But personal experience and a few other clues leads me to believe that the business is on shaky ground.

Five years ago Big Ruby's was the king of gay guest houses, setting the pace and the quality by which others followed. But times have changed. If you look at TripAdvisor Big Ruby's is now ranked #39 of 99 B&Bs in Key West. Alexander's now leads the gay charts at #8. Cypress House is #26; Island House is #49.

So, TripAdvisor, who cares?

Well, actually in today's world a good (or bad) TripAdvisor ranking and review makes a massive difference. I'm a fan and swear by TripAdvisor. In this case, and having stayed in both places several times, I think TripAdvisor is a very accurate reflection of the quality of product.

Big Ruby's slide down the rankings was self-evident to anyone who stayed there and saw the decline over time. The British owners were too remote and distant, and there was dismal and unmotivated local management. The classic TripAdvisor complaint about Big Ruby's (you just have to read this one!), whist extreme and some time ago, is reflective of a deeper malaise.

Compare to the new star, Alexander's. The owner is not always present, but visits a lot. The local management are great. And the whole experience is brilliant. Note also the strategy at Alexander's of encouraging lesbians as well as gay men and also welcoming straight folks too - moving with the times.

Let's look at the stats. As of today, 9 out of the total of 46 reviews of BigRuby's were rated poor or terrible - 19%. That's a lot. Alexander's by comparison: 1 out of the 195 reviews were rated poor or terrible, 0.5%.

I do wonder why Alexander's has so many reviews. In Feb and so far in March, Alexander's has had 17 reviews. In the same time period, Big Ruby's has had 2. (The top rated B&B in Key West had 5). Maybe it's to do with the fact that Alexander's offers free on site internet access. But I suspect it's mainly to do with a younger and richer (and so more laptop literate) demographic that Alexander's enjoys.

So what?

Well, congratulations to Alexander's for setting such a great example. I am not able to assess whether Alexander's is able to command a price premium over Big Buby's (because BR's website is so bad you cannot see the cost, or availabilty, of the rooms). But I bet they do.

The good news if I were buying Big Ruby's is that there is massive opportunity. You have the property and location and some remining goodwill from past and ex-clients (just).

The bad news is that a lot needs to be done to win the business back. And, that considered, I imagine there is plenty of scope to negotiate down that very greedy $6.9m asking price.

Full disclosure: Apart from loving all the team that work there and that I stay there twice a year, I have no commercial interest in, and receive no payment from, Alexander's. I have stayed in Big Ruby's several times, although not for several years.