The numbers are only part of the equation, interior design and functionality are a primary consideration to leverage, data tools and market insights.
The orchestration of revenue management is not easily determined. The granularity of data management for online price positioning and demand is actually governed by the product and the target consumer. One of the most important places to spend money is clearly on the actual product, the property. It increases demand, price opportunity and reduces operational work.
Identify your target market
To get a firm grip on this subject, every business first needs to determine what sector they are in, their objectives, their portfolio location, guest demographics and income models. As with most things in this industry a central city apartment sleeping 2 (let’s call it an Airbnb for fun) and focussed on 1-night business & leisure stays is different to a beachside retreat where the palm fronds hang over doors and wood-framed shutters bring a whole new feel to a longer stay comfort environment.
Urban businesses rely on OTAs to a great extent, as do single hosts and managers in some traditional vacation rental locations, but all are fighting hard to develop higher margin direct revenue.
The master lease companies are rapidly developing brands with consistency across inventory and hooking into loyalty programs. Traditional rentals are creating “bookdirect” tools and campaigns, but all need to sway the consumer to book down that particular channel and putting a great product center stage is critical. Creating that visual environment online and increasing subsequent guest references (another rev management tick box) is paramount to success.
Hotels have recognised the Short Term Rental challenges and providing a better $-space return with improved amenities is a winning strategy in this arena. Also with companies being proptech focussed including door entry, the property presentation online is even more important as staff disappears from the front of the house.
The property image, the space, the comfort, the amenities and subliminal visual messaging provided by well designed and curated properties are central to everything. With communal spaces currently off-limits, it’s worth thinking about their future designs and speaking to experts too on this front.
How can this all be achieved?
There are thousands of individuals and companies who regularly advise on interior design and decor and can advise of furnishings, fixtures and fittings. Many have little experience in rentals and some are seriously expensive and can be independent of owner or landlord input which can be a recipe for disaster. This is a specialist sector and requires specialist knowledge and a keen eye on client ROI.
Balance Sheets and Brands
This is now a capex environment, where balance sheet expenditure and cash flow is critical to success to future investment. But it’s not just a blanket (excuse the pun) expenditure, it’s how you spend it. “The whole is greater than the sum of the parts” is never truer here and adds value to the business.
You wouldn’t ask a plumber to build you an extension but you need them to do the plumbing. It’s the same with taking a property and planning its position and opportunity. It requires a multitude of skills, a vision, overall project management, access to trades on the supply of goods, decor, fixing and delivery of the final product. This saves money, time and accesses valuable experience, adding more value to the business.
Contract it out
These services are to be found in companies as it removes the burden of inexperienced decision making, focuses on your needs, manages the entire operation and deliver the property that will book and help to establish your brand.
If you want a cost-effective and skilled company with plenty of experience which removes the headaches and works with you on delivery. You can then worry about the other thousand things necessary to improve your revenue management, but the core product will underpin your expansion and brand development.
Over the last 20 years, Richard has been an owner of a private rental portfolio, owned and sold sizeable management companies, is a rental tech company founder and has been a VP of a US master lease company.