Short-term rental owners and managers have always been self-reliant, and oftentimes it leads to being known as an industry that fails to share and help each other. In fact, we can be quite vicious amongst our own.
From my own experience, I have witnessed some intense behaviour, some of the worst being competing STR hosts removing lockboxes with bolt cutters, dobbing each other into the council, and even staying at competing properties to be able to write bad reviews.
It could be suggested that if some STR owners and managers spent as much time on positive customer-focused solutions as they do on attempts to sabotage competitors, they might have themselves a very popular and successful business.
Unfortunately, the time to share should have been done about four months ago, before the COVID-19 pandemic. There was plenty to go around for those that chose this industry for the right reasons, and it would have been the perfect time to share knowledge, resources, and create some strength in numbers. Having said that, coming together as one now is still essential, even if it is more out of necessity and survival.
The big guys in the tourism industry have done it in the past and we'll continue to see this practice throughout the COVID-19 crisis. Rumours have circulated of a merger between AirAsia and Malaysian Airlines. Some believe it is a matter of when, not if, hotel companies also start to merge to survive these devastating impacts.
This thought process agrees with research conducted by Kimosabee showing that the demand in the hotel and short-let accommodation in 2020 will be on average 2.5 times less than 2019, while at least another 6,800 upscale or luxury hotel rooms will be added to the Australian market in 2020.
While the big end of tourism receive government bailouts or merge to become even more powerful, the small operators are left to work it out for themselves. Our OTA partners have been forced to drastically decrease marketing spend, with Airbnb suspending all its marketing activities to save $800 million, and Expedia Group announcing an 80% cut in advertising spending. To put this in perspective, it is reported that Booking Holdings and Expedia Group spent almost US$11 billion combined on marketing in 2019 alone.
As a short-term rental owner or operator, there is little support in the way of association or authority. Despite the best efforts of groups like ASTRA (Australian Short Term Rental Accommodation Industry Association), the noise made by certain associations and influential stakeholders who dislike the industry silences most of their work or ability to grow.
So while we've all been hearing the world's mantra lately of "we're all in this together", how exactly can this be practised in our industry? Below are a few ways we think short-term rental owners and operators could employ at a local level to help ensure they emerge out the other end of this crisis stronger.
1. Create a marketplace in your region
Creating your own online marketplace no longer involves large financial spend on a website and IT development. Providers such as Sharetribe and Yelo offer accommodation marketplace plug-and-play options from $50-$500 a month depending on your package.
Although setup and scaling can take some time, creating your own platform with like-minded local hosts can give you all the advantages of an OTA but with added bonuses that you would usually miss out on. You can dictate your own service fee structures and what that revenue is used for, and even collect guest data to contact them with news and marketing offers.
2. Share technology
Many of us use pricing, research, and booking software to ensure we are as efficient as possible with our STRs. Products like Smartbnb, PriceLabs, Guesty, and AirDNA are all subscription-based, and the cost drastically decreases as you add more listings.
For example, Smartbnb charges $25 for one listing, but $11 per listing for 20 listings. If you use a product that you like, maybe it is worth suggesting it to other hosts in your community and ask if they want to join in so you can create bulk savings.
3. Share resources and create group buying
Creating local buying groups or even sharing resources will save you operating costs. I learnt the power of this when living and working in Portugal during a recession in the early 2010s. Businesses on the high street would combine and consolidate into one shop, so I had the opportunity to get a haircut, buy some new shoes, and enjoy a few drinks at a very hip bar all within the same shopfront from different operators.
STRs can similarly share resources such as cleaning supplies, linens, storage units, vehicles or internal systems like Netflix accounts or WiFi (if within range like neighbouring apartments) to significantly lower their operating costs.
4. Share bookings
I am sure we have all turned away bookings that cannot go ahead due to calendar conflicts or because your property doesn’t quite suit certain kinds of stays. You might have even experienced a stressed out bride and groom who are looking for multiple listings to house all their guests.
Creating a network of independent operators through social or business groups can ensure that bookings are picked up by someone else within your community who might exchange the favour at another time.
5. Share knowledge
Sharing knowledge will create a better product for the customer. Most of us host short-term rentals because our property is located in a high-demand destination. A bad stay experience for a guest could harm the potential of their contribution to the local economy, and discourage a future revisit, or even poor reviews of the locality to their own network.
Being knowledgeable about creating exceptional guest experiences and promoting your local area together will help overcome this problem. Shared knowledge can also remove the potential for bad guests and bad experiences with suppliers.
If you are interested in pursuing any of the above or have questions, Kimosabee would be happy to help consult on where your best starting point is. As hosts ourselves, we would certainly welcome collaboration so please get in touch with us.