The Covid-19 pandemic caught the world off-guard, and the travel industry has been the first to bear the brunt of that economic impact. With our borders likely to be closed for months, now is the time to:
- Assess the impact on your property
- Rethink your core customers
- Modify your marketing strategy
- Communicate with current and future renters/guests
- Stay informed
1. Assess the impact on your property
Is your holiday house located in a region that is likely to see fewer holidaymakers or fewer business travellers with no international tourists?
The situation is enough to send anyone into panic mode, but before assuming the worst-case scenario, it's important to take the time to assess your actual impact on bookings and occupancy rate. Each holiday house owner will be different as each owner’s financial position differs – some need to make enough to cover all costs including a mortgage, others might only need enough to cover fixed costs like rates, insurance and marketing.
While it’s tough to predict how coronavirus will play out long term, staying on top of the big picture trends as opposed to reacting to immediate dips will help you prepare strategically.
2. Rethink your core customers
With New Zealand’s closed borders and international travel halted in the medium term it's time to review who you are attracting to stay.
In the short term we still have stranded tourists, with thousands of cancelled flights and closed borders around the globe, some deciding NZ is safer than their home countries. As the alert levels change and regional travel becomes a possibility, there will be opportunities to rent out your holiday home. Consider making your property as homely as possible, for example adding a laundry service, or installing a washing machine if there wasn’t one before. Think about offering a more relaxed check out time and consider putting a weekly stay rate to attract longer than normal stays.
With thousands of Kiwis tipped to come home, and the fact that they can’t simply remove tenants from their homes, there will be an opportunity for longer-term bookings of two or three months in order for people to get established or await their own properties’ tenancies to end.
Kiwis who have had to cancel trips overseas might still want to get away for a holiday.
These domestic tourists will likely book shorter stays and look for luxury on a budget to help them feel like they are well away from home. Many luxury properties which normally rely on international bookings will need to review the nightly rate they have been charging to be able to fill them with local tourists
Many workplaces around the world have employees working from their home– these people could well be over their own scenery and will add to the staycationers on the lookout for nice holiday homes. They will be looking for luxury stays that also have good wifi and possibly a workspace so they can take a slightly extended stay mixed in with their work.
3. Modify your marketing strategy
While lowering your pricing may not be the most popular option, it can help attract renters using a price filter to search longer stays. You can also look at weekly/fortnightly rates and set these up at cheaper nightly rates than a shorter stay.
If you’re not using Channel management systems to look at yields, you can easily look in your region to compare asking prices to similar properties.
Luxury properties might want to make it very clear in their listing that they are temporarily offering special reduced rates.
To attract those planning future vacations, introducing a more flexible cancellation policy at this time of uncertainty may help them feel comfortable booking. This may mean that you could lose the odd booking close to the check-in or cancellation period.
With some of your local restaurants, shops, museums, parks, adventure activities etc possibly closed or operating at a reduced level, these may be less of a selling point than having top-notch amenities like wifi speaker systems, fast internet, a fully stocked kitchen, kids’ toys and games or pet-friendly spaces. Put these features high up when writing your listing.
4. Communicate with current and future renters
While we all practice social distancing in the physical world, communicating in the virtual one will benefit your business.
Reach out to renters to set up expectations/processes for checking in – you may well be doing this differently and in a contactless way, with lockboxes, or keyless entry. Let them know what additional cleaning measures you are taking to ensure their safety.
Despite your best communication efforts, you’ll likely face some coronavirus related cancellations. While typically renters that cancel are not your favourite there are very likely extenuating circumstances leading to their cancellation.
5. Stay Informed
Outside the health risks themselves, often you get conflicting information. To keep on top of it all we suggest the following.