16th June 2020
How to Keep Your Airbnb Business Afloat During COVID-19
Let’s face it – COVID-19 has heavily impacted the tourism industry around the world, despite the optimism we all had at the beginning of the pandemic. Time to face the facts and become realists as we need to save our businesses. Here are some tips we have used at Zodiak Management to help prepare for, and hopefully survive, the COVID winter.
As in any economic downturn, businesses need to cut costs and this is the hardest part for any business owner, especially if there’s only a small team in place to begin with. Small teams are more like families than workplaces, so it can be very difficult to say goodbye to employees. At Zodiak, we tried to keep everyone on as long as possible despite our losses, but you begin to realise that everyone will lose their jobs (including yourself) if you don’t make some necessary cuts.
For your key players, you can think about reducing their work hours to an agreed-upon amount instead. If you explain why this is necessary and help your employees understand that their sacrifice now will mean that the business survives in the long-run, then most will be happy to help out. This will actually bring everyone closer together and help make a stronger team in the long-run.
The largest expense most companies have is payroll, but other expenses you can look to reduce in your Airbnb management company could be:
– Office space: we don’t even have a physical office at Zodiak and never have. People are used to working from home now so use this and just cut this expense altogether. If you’re scared of having a totally virtual workplace, than just take a look at Zapier as an example for how they did it – here’s a great article from them to get you started.
– Software expenses: most Airbnb management companies use a lot of software to automate but these can be costly. Guesty has been great in helping out by reducing their fees, and also a lot of other companies in the industry are doing the same. Breezeway has stopped charging us altogether for example! Speak to your provider to see how they can help out.
– Conveniences that make life easier but aren’t 100% essential to staying in business: maybe you’re renting a car park in the CBD for you and your staff, or perhaps there are accumulated expenses that you didn’t notice before because things were going so well. Take another look at your profit and loss reports for the last 3 months and comb through for any unnecessary expenses that can be reduced or eliminated.
Embrace Longer Bookings
We’re based in Auckland, New Zealand and there have been a lot of tourists and temporary workers that have simply been stranded here until they can get a flight out. This has allowed us to secure some pretty long stays and our current average nights booked is sitting at 15 nights at the moment. We have quite a few stays that are over a month long, and a few shorter stays are starting to come in as local tourism has picked up a little after the lockdown.
There definitely are not enough short stays at the moment to rely on, so we are incentivising longer bookings by offering weekly discounts of 10% and monthly discounts of 20%. This way, you make your listings more attractive for longer stays but you keep your regular base prices in case you do receive a shorter stay.
If you have any long stays already booked in, then ask them if they are keen to extend – these guests are most likely either stranded until transport goes back to normal, so this is an easy way to get some more nights booked as you don’t need a new guest.
Stay Flexible and Generate Extra Income
Use the spare time you have to establish other revenue streams for your company to supplement the income from short-term rental. For example, you may want to try get some new clients by offering long-term rental management as well alongside your short-term rental services. This works well if clients are hesitant about short-term rental at the moment. This way you don’t lose the client and can convert them to short-term rental management when things do return to normal.
Increasing your cleaning fees will go unnoticed by guests at the moment so this is another great way to increase revenue. Obviously everyone is very conscious about cleaning now more than ever, so they won’t mind paying more for a professional clean and for their peace of mind. Just make sure your cleaning quality justifies the prices you’re charging!
“It’s not whether you get knocked down, it’s whether you get up.”
We’ve all been knocked down by COVID but getting knocked down should be expected if you’re running a business. Whoever gets back up after getting knocked down so hard is definitely going to come out a lot stronger. I can’t imagine anything as devastating to the tourism industry as a global pandemic to be honest so it can’t get any worse than this! If you’re company survives the COVID winter, then it can survive anything.