This post by Guesty user Stefan Nikolic, Managing Director of Zodiak Management, offers practical strategies for maintaining business stability amid coronavirus.
Reduce Expenses
As in any economic downturn, businesses need to cut costs. This is the hard part for any business owner, especially if there’s only a small team in place to begin with. Small teams are more like families than workplaces.
For your key players, consider reducing their work hours to an agreed-upon amount instead. If you explain why this is necessary and help your employees understand that their sacrifice now will mean that the business survives in the long-run, then most will be happy to help out. This will likely bring everyone closer together and help cement a stronger team down the road.
The largest expense most companies have is payroll, but other expenses you can look to reduce in your property management company could be:
Office space: We don’t have a physical office at Zodiak and never have. People are used to working from home now, so use this as an opportunity to cut this expense altogether. If you’re scared of having a totally virtual workplace, then just take a look at Zapier as an example for how they did it – here’s a great article from them to get you started.
Operational expenses: Consider talking with your service providers and vendors about possible payment plans or other ways they may be able to help out. Remember, we’re all in this together.
Conveniences that aren’t 100% essential: Maybe you’re renting a car park for you and your staff, or perhaps there are accumulated expenses that you didn’t notice before because things were going so well. Take another look at your profit and loss reports from the last three months and comb through for any unnecessary expenses that can be reduced or eliminated.
Embrace Longer Bookings
We’re based in Auckland, New Zealand and there have been a lot of tourists and temporary workers that have simply been stranded here until they can get a flight out. This has allowed us to secure some pretty long stays with our current average length of stay sitting at 15 nights. In addition, we have quite a few stays that are over a month long, though a few shorter stays are starting to come in as local tourism has picked up a little after the lockdown was lifted.
As there are not many short stays at the moment to rely on, we are incentivizing extended stays by offering weekly discounts of 10% and monthly discounts of 20%. This way, you make your listings more attractive for longer bookings but you keep your regular base prices in case you do receive a shorter stay reservation.
If you have any long stays already booked in, then ask them if they are keen to extend – these guests may be stranded until transport goes back to normal, so this is an easy way to get some more nights booked without finding new guests.
Stay Flexible and Generate Extra Income
Use the spare time you have to establish other revenue streams for your company to supplement the income from short-term rentals. For example, you may want to try getting some new clients/homeowners by offering long-term rental management alongside your short-term rental services. This works well if clients/homeowners are hesitant about short-term rentals at the moment — you don’t lose them and can convert their properties to short-term rental management when things do return to normal.
Additionally, with everyone now very conscious about cleaning, you might want to upgrade your cleaning protocols as well as the cost that goes with them. Guests today won’t mind paying more for a professional clean because it is synonymous with peace of mind. Just make sure your cleaning quality justifies the prices you’re charging.
“It’s not whether you get knocked down, it’s whether you get up.”
We’ve all been knocked down by COVID-19. Whoever gets back up after this challenging time is definitely going to come out a lot stronger!