We spoke with La-Terra, real estate experts who work with landlords at all stages of the hotel and short-term rental real estate cycle, about the benefits of redesigning short-term operator's assets in preparation for the return of the business and leisure travellers in the UK.
COVID-19 has had serious implications for the UK's real estate market and across much of the globe. Governmental restrictions and a decline in tourism has significantly reduced vacancy rates. According to La-Terra, this trend does not seem to be declining as they predict that both business and leisure travel will continue to be restricted for the next six months.
Money for many short-term rental operators is much tighter than before due to the increased vacancy from limited travellers. However, this is made even more significant, considering that government support for hotel operators will be coming to an end shortly. With this in mind, it is essential for operators to consider implementing alternative business models to ensure that profits are maximized, says La-Terra.
"A change of use for hotel assets should be seriously considered in certain cases," says La-Terra
If rental operators are looking to stand out among the tightening competition, La-Terra recommends that distressed assets should be upgraded. Updating old furniture to better meet the new demands of incoming guests should be considered to better access the market. Additionally, it is recommended that such assets are of premium quality.
At Fülhaus, we offer furniture rental packages that are paid monthly. Therefore, allowing businesses the opportunity to quickly update distressed assets while maintaining a budget. While rental packages are an affordable option for hotels and short-term rentals who want to release liquidity back into their business, at Fülhaus, design and quality are top priority so that businesses can offer a luxury experience to their guests without the expensive price tag.
Certain assets have now become more of a priority since the beginning of the lockdown measures. In particular, a strong wifi connection and desk area are of more importance than before. Investing in top-end furniture pieces is also of much higher priority if one is to stand out in the current market. Ultimately, if a hotel or short-term rental want to stand out in the market and continue to operate, they must establish themselves as the best in class. Therefore, according to La-Terra, product and service are essential.
Finally, according to La-Terra, trends show the growing popularity of co-living spaces due to COVID-19. Assets can be updated to convert commercial spaces to residential or C1 units, which also see an upward trend throughout major cities in the UK. Showing that although the rental market as a whole is experiencing a downturn, assets can be updated or converted to maximize liquidity during this time.
More information about La-Terra can be found at www.la-terra.co.uk.