Serviced apartment and co-living companies should embrace flexibility to boost their short-term and long-term revenue.
In an uncertain world, it pays to be flexible. From changing consumer preferences to extenuating circumstances, pragmatic companies that adapt their business model in the short-term, prosper in the long-term. Take Netflix and Blockbuster for example. One switched from mailing rental DVDs to streaming and now has over 190 million subscribers, the other declared bankruptcy in 2010.
Movie rental may differ from apartment rental, but the benefits of a flexible, forward-thinking and proactive approach does not. The last few months has radically altered the accommodation playing field and operators employing flexible tactics will have the best chance of winning.
Surfing local waves
The easing of Covid restrictions is a bumpy road with new spikes and rules appearing every week. Since Leicester became the first local lockdown on 29 June, almost 30 other UK towns and cities have either suffered tighter restrictions or currently sit on the government’s ‘watchlist’. Those with symptoms must now self-isolate for 10 days instead of seven. Quarantine restrictions have been imposed on European countries with flare-ups, most recently France, Holland and Malta.
Whether this ‘second wave’ is a tsunami or a ripple, serviced apartment and co-living companies need to respond quickly and effectively. Updating protocols and informing staff of new rules. Repurposing unused spaces in buildings and changing apartments’ stay lengths. No-one can predict the future, but establishing flexible business practices facilitates swift and successful reactions to varying eventualities.
Customers value flexibility
From trains and planes to gym classes and the theatre, flexible booking is becoming the standard in reservations and the accommodation industry should follow suit. In its analysis of the post-Covid US hotel market, McKinsey found that “customer expectations for hygiene and flexibility” will play a major role in the recovery of business and leisure travel with travellers expecting “greater flexibility in cancellation and change fees”.
Guests are more likely to book if they can modify their booking hassle-free, charge-free up to a few hours in advance (some companies are even offering free cancellation to the point of check-in). What’s more, guests should be able to change aspects of their booking according to their preferences, such as flexible arrival times and choosing how often the apartment is cleaned. The more options, the more control, the more flexibility, the more likely guests will book.
According to a Deloitte report on maintaining customer loyalty post-Covid, “putting flexible refund, pricing, and change policies in place and finding other ways to help your customers through this crisis will be beneficial to the long-term health of your company.” But how do you know what fares to set in the first place?
When it comes to pricing, operators must not only consider the unit size, location and length of stay (providing discounts for longer bookings), but also a range of customer factors, such as demographic, likeliness of return booking and current national mood (local spikes will reduce desire to travel no matter the location).
Res:harmonics partners, such as PriceLabs, offer operators a simple solution. By providing minimum and maximum parameters for any given unit, PriceLabs uses data to dynamically adjust your rates according to market factors, such as local trends, events, demand and competition, so that your prices best reflect the current situation.
Stay length diversity
As guests need to change their plans, so do operators. After witnessing the collapse of the short-term rental market during lockdown, operators should diversify their options offering a mixture of short, medium and long term stays. Longer occupancies not only provide a steady revenue stream, but the ability to move between stay lengths for various units means less apartments gathering dust and more gathering income.
What’s more, operators should proactively help guests change their stay from short-to-medium term. Given the changing nature of Covid rules, allowing current guests to extend their stay for reduced rates will encourage more to do so.
Set for the future
Embracing flexibility is not just a short-term fix to get through the next year; flexibility is the future. As technology advances, so will customers' expectations. Be it managing their own housekeeping rota or extending their stay for an extra week, guests will look to operators that allow them to modify their bookings with a touch of a button. At res:harmonics, we give operators this power. From real-time management and dynamic communication, our platform facilitates flexibility and allows operators to reap the benefits. It’s minimal effort, maximum gain.