What the fuel price increase means for your holiday let.
Remember the good old days, when you went to a holiday cottage armed with your own linen and a bag of £1 coins for the meter? Are we returning to these times?
Holiday lets run hot, guests like a break from the bills, ample hot water, leisurely showers and deep baths. Guests often jet in from warmer climes and crank the heating up to 28 degrees, just because they can. As hosts we pay for this with a smile, it is all part of the guest experience. With fuel prices going crazy over the next year how can we manage our situation?
Take a look at the rental market, prices have risen and tenants are keen so you may be able to pick up a Winter rental to cover the worst of the bills, beware of having to hop back in on a higher tariff though, if you swap out the bills.
If you are on a commercial energy deal keep on top of it, don't let it default to the standard variable tariff. Get a good commercial energy broker to work for you.
Definitely use some kind of remote or automated heating management system. I use Timeostat for my warmer properties (although the setting range is a bit chilly for some guests), this is also great for HMOs, Mimonitor is an inexpensive option (although only a wired version available) and I have just bought my first Inspire which can link with a calendar to automatically turn off at check out and on at check-in (next month I will write about the frustrations of setting up such a thing!). No single system does all that you want so do a close comparison first.
We can safely say that our fixed and variable costs will also be rising, laundry services, cleaners, maintenance people and incidental supplies are all subject to big potential price rises. Can our rates stay high enough to cope with the extra costs? Are we going to have to go 'on the tools' to save call out fees? Do repairs to make that furniture last one more season or clean our own places to save on the cost?
The secondary hit for holiday home owners will be the lack of spends in the pockets of our potential guests. This will arguably have a bigger impact than our own fuel bills. Who knows how many potential guests will forego their trips to Portsmouth entirely, or double up in properties, instead of staying separately? Maybe staying with mum for Xmas will be more attractive than getting a short term rental if the fuel bills are biting hard. We will see what the market will do but I predict a slump in demand as soon as the first high bills come in this Winter. A close analysis of your less profitable properties may be needed. We can't put money in the pockets of our guests but hopefully can do enough to survive the coming months.
So if you see people cycling around Southsea, Deliveroo-style, with sacks of bedlinen on their backs it is me trying to save a few bob this Winter!