There’s no way to sugarcoat it: these are testing times for the Vacation Rental Industry. After almost a decade of high-speed growth and unicorn valuations, bookings have ground to a halt as the hospitality industry succumbs to worldwide travel bans and the prospect of an economic downturn.
At the time of writing, there is no telling how long the COVID-19 lockdown may last. During the SARS crisis in 2003, it took 6 months from the implementation of travel restrictions for hotel occupancy in China to recover. This is good to keep in mind and quell fears, but the comparison only goes so far.
As news begins to filter through of company-wide layoffs, many Property Managers have entered survival mode. The industry is likely to be in a state of flux for some time and for those who make it through the other side, the current climate provides a veiled opportunity.
As witnessed in 2008, the road to recovery and revival is well worn. Some of the Vacation Rental Industry’s powerhouse names such as Airbnb and Vacasa were founded as the dust of the Great Recession was beginning to settle.
COVID-19 will be no different. This situation requires a dynamic reaction in order to rebound once travel bans are lifted. Below are a few examples of initiatives that Property Managers can set in motion in order to capitalise on this downturn and emerge on the other side, stronger than ever.
Look to target the domestic market
The lack of global coordination on travel restrictions during the COVID-19 contagion period suggests that countries will begin lifting restrictions according to their own timelines. As a result of this we can expect to see a sharp increase in domestic travel before the international floodgates re-open.
Many Property Managers’ core business already revolves around domestic travel. Take a look at Sykes Holiday Cottages – 85% of their guests come from the UK. However, for many others, international travellers count for the majority of bookings and as such, efforts have been focused on attracting guests from far and wide.
There are a number of steps that Property Managers can take to make their business more visible on a domestic level. One of those is to focus on getting listed on top local channels.
For example Cottages.com in the UK. Local tourism boards and visitor centres are another great way to receive referrals from trusted sources.
Another approach is to focus your digital media efforts on domestic travellers. Consider the language and keywords you’re using on your listings and ads. Decide whether local tourists will be looking for the same listing information and tours and attractions services as foreign travellers. What amenities would benefit a local more – car parking perhaps? Domestic tourists are more inclined to search for a shorter stay, so if your minimal stay policy is currently 7+ nights, consider reducing it.
As a first step, moving your focus to domestic leisure travellers is an inexpensive way to attract new guests and help to promote your local area and businesses.
Maximising stay value
Maximising the stay value of every guest will undoubtedly be at the heart of a strong comeback. Pricing software, such as that developed by Beyond Pricing and Pricelabs, gives Property Managers the tools they need to price their properties as high as possible, without discouraging travellers from booking.
Complex algorithms do the hard work for you – providing price recommendations based on market supply and demand, seasonal and day-of-week trends, special events and holiday predictions.
Incorporating these tools into the day to day running of your property going forward will allow you to navigate the inevitable uncertainty surrounding pricing as travel begins to pick up, and help recoup losses made during the downturn.
Look For Streams of Ancillary Revenue
Much like the pricing tools mentioned above, incorporating ancillary services into your guest experience will allow you to maximise the value of every stay. Not only do ancillary services help send extra revenue your way, but they can also immeasurably improve the guest experience.
Offering a range of ancillary services helps lure potential guests to your property. They can vary widely in their function, from Airport Transfers (Welcome) to Bicycle Rental and Tours and Activities (Klook or Take Walks). Look to build partnerships with local businesses and operators to negotiate discounts for your guests and commission for you.
Luggage storage can be another bugbear for Property Managers and guests alike. Offering your guests the flexibility to store their luggage before or after their stays gives them the opportunity to make the most of their stay and can help you manage early arrivals, late check ins and the associated turnover headaches. Stasher has locations in 250 cities around the world and pays a commission for every booking you generate. Check them out here.
Opening up these valuable streams of ancillary revenue will aid in capturing that guest value and keep those 5* reviews coming in. It’s a win win!
Free Tools and Webinars
A number of companies and industry bodies are offering free online resources to help guide and inspire Property Managers during this downturn. These vary from articles to webinars and productivity tools, all of which will help you keep abreast of responses to the virus.
See a list of the most relevant below:
- VRMA – COVID-19 resource hub with handy videos on cleaning and ops management.
- Skift – Daily updated articles on Coronavirus and its impact on the Travel Industry.
- Lodgify – Insightful articles on how to manage your property during the crisis.
- Transparent Data – Handy Coronavirus impact tracking tool + articles.
- VRM intel – Hosting regular webinars discussion action plans for Property Managers.
- LinkedIn Learning – 16 free courses on how to maximise productivity while working from home.
The Vacation Rental industry has already displayed a wealth of compassion and collaboration in the face of this pandemic. Take this time to reach out to local health services and provide accomodation to doctors and nurses working on the frontline. Offer discounts for longer stays and apply for government relief packages as and when they become available.
On an individual level as an employee, whatever your seniority, be action-oriented, organized, and disciplined. You’ll be one of the people whose actions helped the industry bounce back in the face of this once in a generation crisis.