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Lodging Update April 30, 2020

By Wm, May
Published: 04/30/20 Topics: 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

Lodging Update May 31, 2020

By Wm, May
Published: 04/30/20 Topics: Comments: 0

Do these letters always sound like we are bragging?

Sorry, we are constantly innovating and redefining how to do far better management than anyone else. So, yes, I guess we want to crow about it every now and then.

As mentioned last month, we have been working for many hundreds of hours for over a year on version 3.0 of our Yield Management Software called "Strategic, Studied, Dynamic and Distributed" (S2D2).

Some of those giant carpet bagging national companies that try to manage vacation rentals from far away like to think they have good yield management - but they have a major hole in their knowledge. They are not local and don't have wide regional data.

But we do because we have been managing on a "Local, Personal and Global" basis. That means we advertise on every possible advertising website, far more than those giant companies.

We also operate local and regional websites to glean far more information, all of which results in the perfect rates. Super high in high season, modest in shoulder seasons, and lower in slow times.

Every property owner loves the idea of high rates. But getting the highest "possible" rate in every season adds greatly to the best net income for owners.

Yield management is far more complicated than can be imagined. So this letter is going to give you a glimpse to the hundreds of factors that go into the algorithm our data scientists use.

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Everyone has noticed how rates vary on airlines and big hotels. Plus, how the rate for a date in the future may go up and down before the date arrives.

I must admit, I liked it better when it was always $250 to fly to Hawaii on a plane where the entire back section was empty, so I could fold up the arm rests and lay down over four seats, take a nap, and wake up in paradise.

Unfortunately, the airlines were going broke until they began manipulating rates to encourage people to book early, or late and to fill every seat. Until Covid, every seat on every plane has been filled for decades.

Best of all, consumers have subconsciously accepted the idea that rates fluctuate. In fact, many seem to enjoy the game of searching for best rates. They willingly move to less desirable dates (such as midweek), which helps the property fill those dates.

Yield Management does not seem logical on its face. The algorithm does not need to know when the high season or holidays occur, because it looks forward to watch rates and occupancy to predict and set our rates when demand and occupancy is high. Likewise, it ratchets down rates when the market has too many nights available and when competitors are dropping rates.

But, of course, weekends are always more popular, more booked and consequently rates are higher. Same with holidays. The high seasons have the same kind of profile and the science pushes those rates through the roof.

National, regional, and local economic trends are considered. Comparable units ("comp sets") are continuously monitored. Inns, Resorts, and Hotel future booking statistics are computed. Amenities, resorts (if any), and neighborhoods contribute, sometimes more and sometimes less.

If there are small holes in the schedule, rates may be adjusted down to get them sold. But if there are openings when the market is tight, rates go up - sometimes dramatically. Bigger openings may be higher because they offer a wider range, or cheaper if the opening is too large.

When Covid arrived so unexpectedly, S2D2 told us rates were crashing. In areas where rentals continued, we won what bookings were to be had. Suddenly, S2D2 told us "Hey something is going on," just as we noticed guests returning. Then it said, "It's time to bump up rates." And then, "Bump them up again".

Not all markets have returned to normal, but in some markets rates have up to doubled and occupancy is higher than ever before. We noticed the corporate managers missed the trend. Their clients lost thousands of dollars, while we grabbed the market.

New vacation rental owners often ask "What will the rate be?" But today, no person sets the rate. In fact, the market sets the rate. Over millennia, in high school, middle school or earlier, we learned price has always been based solely on "Supply and Demand".

The Yield Management idea, which is so closely tied to intricate supply and demand fluctuations, is so obvious and now, with our help, it is being employed to help every vacation rental client we have make more money.

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Author: Wm, May, Vortex Managers
Blog #: 0771 – 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

HelpBookMe Invents Bumper Days to Facilitate Cleaning

By William May
Published: 04/01/20 Topics: Comments: 0

In response to the Covid-19 virus, Vortex Organization's Redstone Software engineers have designed and installed a new system in their HelpBookMe property management software. It adds unoccupied dates between bookings to allow separation for guests and additional housekeeping time. These are called :"Bumper" days.

Vortex is a network of inn, resort and vacation rental management companies who share methods, staff, marketing and technology to provide sophisticated services to lodging owners and want maximum income with minimum fuss. Operators of this website are members of the group.

Trina Flanagan, a partner in the firm, said, "We have always employed strict hospitality grade cleaning and sanitizing standards used to clean the inns, resorts and vacation rental homes that its member management companies serve.:

With the arrival of covid-19, Vortex managers began allowing homes to site vacant at least one day after prior guests depart and before housekeepers or new guests access the home.

But with the advent of online travel agents like AirBnB, VRBO, Booking.com and others, lodging reservations are procured from many sources and automatically downloaded into the Vortex HelpBookMe Software

Penny Taylor, a partner administering reservations at all geographic locations, add, "Although not practical in all locations, the Bumper system, allows bumper dates to be added automatically in all geographic areas and in all properties where that policy is desirable."

Even with the lessening of travel restrictions, the new software capabilities increases safety while making the bumper method to be more selectively implemented.

"Our engineering team researched, coded, tested and implemented the system in record time" noted Ozair Khalid who oversees reservations software. "Neither the corporate management companies or major software providers have not rolled out a similar tool. Too bad for their manager customers."

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Vortex Managers is a network of trained vacation rental management companies and provides its clients with the resources of giant lodging corporations without the cost or delay. HelpBookMe is a proprietary lodging management software system perfected with thousands of hours by expert engineers. For more information on Vortex, call or Email: Info@VortexManagers.com, or Website: www.VortexManagers.com

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Author: William May – Manager, Vortex Managers
Blog #: 0747 – 04/01/20

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