Dry January
Once again the tumbleweed is blowing through the bookings in the short let industry, what to do?
The usual array of Winter cost-cutting has been in place since November, the cleaning team is supplemented by my own efforts and those of Magdalena as life in the office is quiet but there is one area that I have steadfastly refused to address in previous years. The astonishingly high commissions charged by the online travel agents, or to those of us in the biz, the OTAs.
Unlike residential property, we face a daily battle to get heads-on-beds. We tweak our prices, furiously write facebook posts and, generally, panic unduly about every last void period. Received wisdom is that 75% occupancy achieves the right balance between profit, effort and product. If you drop your prices too low your occupancy will soar but there will be increased wear and tear, cheap guests who nick your teabags as well as attracting the less salubrious types. If your prices are too high you will, of course, remain empty (although with fuel costing £20/day this is tempting!).
The online travel agents are your shop window to the world. The straightforward process of publishing a listing gives you tremendous reach and the best shot at bookings. For this privilege we pay a hefty 15-18% of the top line. So on a 2-night £250 booking we will pay £37.50-£50.00 in commission. We then deduct cleaning and linen at around £50, pay the office and top up the consumable items like toilet roll. A portion of the profit needs to be set aside for renewing our creative and sparkling interiors, covering our 25% void period and the remainder has to beat the rental market to make it a worthwhile strategy. With rents climbing North of £1000/month for a 2-bed flat in Southsea the squeeze is on those top-line commissions.
I have signed up to a course to increase direct bookings, the host is like a game show host, play this game, try this App…isn't this FUN!! Not really, I just want to create more direct bookings…. But as I sit in my office playing the games and 'creating content' the enthusiasm is starting to rub off and I can see the point. All geared up to improve my facebook reach this morning I log on to the socials to see an interesting post about how facebook is dead, groups are not creating leads and it's all on Insta and TikTok these days. I feel like I need a young person to do this…I find learning new socials very challenging but this time I will persevere in pursuit of the elysian fields of #bookdirect. I have started out with a discount on my website for direct bookings and a message out to departing guests to encourage them to come direct next time. Don't worry though; I won't be asking anyone to the living death that is 'we would like your feedback, could you spare us a few minutes'.