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Adapting to Change - Lodging Newsletter September 30, 2020

By Wm, May
Published: 09/30/20 Topics: Behavior, Housekeeping, Lodging Newsletter, Vacation Rental Management, Vacation Rentals Comments: 0

A funny thing happened on the way to the Covid mess..

Ok, there is nothing funny about Covid, but there have been numerous changes to the world in general and to lodging in particular which are unexpected or even bizarre. This letters explain what they mean to property owners and how we have adapted to the upheaval.

After the March deluge of cancellations, bookings surged greater than ever before. There are many factors, but the biggest one is people just wanted to "get out of town" and driving-to destinations won out.

Staying in a private home or small lodging facility allowed guests to remain socially distant and yet allowed them to get into the out of doors.

With shopping, restaurants, movies, and other past activities prohibited, "discretionary income" actually increases for folks still employed.

For these and other reasons, rental income grew for most homes but management had to recognize and adjust many other factors. Some of these alterations had been inching into existence before Covid, but it escalated the changes.

Some changes require property owners to recognize and adapt to them fast in order to accommodate the many new guests anxious to rent their homes. Owners who accept change will prosper. Those who don't will lose out.

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TREND - Vacation Rental popularity has grown steadily for two decades, right through the world shaking events of 9-11 and the economic travails of the 2007-2008 real estate depression. Once guests try a vacation rental, they stay at hotels less, and our industry grows.

NEWBIES - This summer, additional guests who had never rented a vacation home before were booking. Those "Samplers" will permanently embrace rentals just as those did before.

But first-timers are always sensitive to every little thing. They make incorrect presumptions about what a rental is and is not. They expect 24-7 service, they complain if the weather is bad, and if there is not a 100 quart baking pan in the home. As before, the solution is to provide ever increasing amenities, more service, and higher hospitality for those traveling to relieve stress and strain in their lives.

SENSITIVITY - Every lodging manager strives to keep guests happy. A decade ago, the arrival of online guest reviews made that mandatory. Covid sensitivity increased illegitimate comments

HOUSEKEEPING - Our cleaning has always exceeded guidelines, but we increased training reminders and rewarded staff. Newbies ask lots of questions, so we answer them over and over again.

MAINTENANCE - Our staff always seek to fix every little thing very fast. But if something larger breaks - such as a water heater - now it must be replaced same day. Notifying owners in advance takes a backseat to taking care of maintenance wiki wiki (quick) as they say in Hawaii.

AMENITIES - Owners got to decide what amenities they offer in their homes including Internet, Cable TV, and local phones. Now they have no choice. With work-at-home and study-at-home, an owner who omits any required amenities loses tens of thousands of dollars per year. For some it is time to join the current world.

LATE BOOKINGS - Decades ago guests booked far in advance, often six months to a year. Although the "booking window" has decreased over the years, Covid bookings are made a few days or a few weeks prior to arrival.

RATES - In March our Robust S2D2 Yield Management software said, "Hey where did demand go?" but we held rates and waited. Early May it said, "Demand is skyrocketing. I am raising rates." Each morning we followed the Las Vegas idiom to "let it ride" watching rates go ever upward.

EARLY - LATE - With Covid cleanliness concerns, it is odd that many more demand early arrivals and late departures. Our methods of managing requests proved even more valuable during this time.

INSTANTEOUS - Guests have always expected quick service, but Covid demands instantaneous. Forgot the code? Answer the phone and give it to them (again.) Power goes out? Determine if it's wide spread. Need local restaurants? Provide the answer cheerfully of course. Forgot driving directions/? Stay on the phone and direct them step by step.

GROWTH - Projecting income was impossible but beginning in April, dates booked up last minute and owners made more money than ever before. Covid has turned the world and specialty lodging on its ear yet again. Managers who adapt fast will see owner income soar.

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Author: Wm, May, Vortex Managers
Blog #: 0790 – 09/30/20

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

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.

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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.

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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