Hope is Not a Plan - Lodging Newsletter April 30, 2020
By Wm, May
Published: 04/30/20 Topics: Covid-19 Virus, Housekeeping, Lodging Newsletter, Yield Management Comments: 0
Several years ago the musical group Grateful Dead wrote "What a Long Strange Trip it Has Been." Little did anyone know how strange it might be.
Lodging suffered the effect of the 9/11 tragedy and the 2008 real estate depression. Now the Covid-19 pandemic is another new labyrinth to navigate.
For years, lodging management has kept getting more intricate, demanding time for previously unnecessary tasks like text messages from guests wanting early check-ins who don't have the courtesy to telephone. Emails 24/7 expecting instant response. Time to review every guest online.
Now every guests wants assurances, before booking that homes are fully sanitized and disinfected.
Of course we have been doing "Happy Hospitality Housekeeping" since our first office opened in 1964. It's nothing new. We spend hundreds of hours talking with people who are scared, rightfully so. Add counselor to our list of titles.
A wise man once said, "Hope is not a plan, but without a plan, there is little hope." Luckily our long standing contingencies and experience has allowed us to run far ahead of the competition during Covid-19.
We can not expect property owners to understand the hours and stress that the Covid pandemic has inflicted on lodging, but we can hope they appreciate our staff who have worked double time to take care of their properties and the plan to make them money as the craziness lessens.
Bad News - In March guests started cancelling everything, online travel agencies were over-riding cancellation policies, and governments were telling people not to go on vacation. The time to speak with every guest, to cancel bookings, and to do bookkeeping doubled the work.
Optimistic - We did not dare hope for a rebound but chose to accelerate spending on advertising, staffing, software services, website hosting, and many other costs. The phrase "All In" applies.
Good News - Plans can't predict the future, but they can predict readiness. As the onslaught of new bookings has arrived, we are again working double time to get back all the bookings that were lost.
New Rules - Advertising on hundreds of websites with differing rules required our software engineers to labor long, often overnight, to adapt functions, and to avoid guest confusion. For example, we can now put in bumper dates between bookings to allow for extra cleaning time.
In the Trenches - Every staff member is overwhelmed with related work. Housekeepers and maintenance pros are working their tails off. If homeowners have not tipped before, now is the time.
S2D2 - Our pricing algorithms (and the scientists who ride herd) received confusing signals in predicting future rates and occupancy. Competitors were plummeting prices trying to sell to guests who were not going to visit under any circumstance.
Version 3.0 - Coincidentally the latest version of our "Studied, Strategic, Dynamic, and Distribute" (S2D2) rate tools came on line in April, allowing us to react quickly to the market. Rates are moving up and down even faster than ever. No one knows what the future will yield, but our science can get owners more than their "fair share."
Late Bookings - The national trend for "Drive-To" destinations does have a downside and that is guests are not booking far ahead. Decades ago as visitors departed from their rental, they booked the following year to return. The 2008 recession shortened pre-booking, but Covid has made it skyrocket. Most guests want to go next week or the week after.
Competition - Online Travel Agents are laying off thousands of employees; 3,000 alone at Airbnb! Major management companies have fired up to 90% of their staff. One company with 2,500 homes shut down completely. Too bad for their clients they did not have a plan.
Negotiators - Now that business is picking up, every guest asks more questions and then almost everyone tries to get a discount. Americans have become like other societies where every purchase is negotiable.
Predictions - Summer is starting to fill in, but no one can predict income for the entire year and not even for the summer. We have a plan and are working on it every day. So far so good.
Amateurs - People who think about being a self-managed "Rent by Owner" never know the insane amount of labor, hours, and expertise necessary to succeed. HomeAway says it only takes 541 hours per year per house to "Do it Yourself".. Jeez.
Many RBO's have thrown in the towel or are selling their homes. We get calls for help everyday and all because we planned ahead. That is what good managers do.
Author: Wm, May, Vortex Managers
Blog #: 0750 – 04/30/20
Sponsor: Vortex Organization – We train quality people to help run unique Inns, Resorts and Vacation Rental Management companies, in an industry that has been a webby net of technology combined with good old fashioned property, guest and owner services. – VortexManagers.com
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