Airbnb 🏘️ refunding host directed payouts but, issuing a credit for their fees retaining the cash 💰
It’s been one hell of a month. From the first case in the Americas to almost full lock down. Airbnb has updated their extenuating circumstances policy to accommodate for the COVID-19 pandemic. As of now guests can cancel their reservation with a full refund globally if their check in date is on or before April 14th. So what does this mean for this months Airbnb host’s income? Well it’s safe to say that most of the hosts can potentially kiss goodbye this month, and What about Airbnb? That’s another story…
An Airbnb host/guest had to cancel their trip and shared the following screenshot 👇
Judging from this it certainly seems that Airbnb has been refunding the bulk of the payment in cash and their service fees (maybe even the taxes part) are being offered as a credit for the next trip. This is one of a few people in the Airbnb groups that a multiplicity of hosts belong that have come forward with this information. There being not many more hosts/travelers showing this same scenario could be a sign of an isolated event.
BUT!
Let’s play with the idea that Airbnb is doing this, what could the reasons be and what it could mean for them in the aftermath. Of course, Airbnb “the business” needs to maintain a healthy amount of cash on hand for rainy days as do hosts. So this practice is not much more than a way to retain that cash and maintain their reserves. It could also mean that Airbnb has no cash on hand to give in the immediacy… With the global travel industry on a more or less halt OTAs, hoteliers and alternative accommodations providers are feeling the pressure and this is one of the reasons why Airbnb could be doing this. Remember they’re entertaining the idea of an IPO in 2020 and making sure they can survive unscathed or with minimal damage, their valuation is paramount.
The supply can always be replaced
Sounds pretty harsh, but, it’s how the market works. In the infinite game within game theory, it always continues and players shift around the positions. Players will decide not to continue or will be forced to not continue with other players will take their place. It is not a happy thing to think about, but, it’s always something in the back of the minds of every two sided marketplace. If they manage to retain the demand side of their marketplace (keeping them happy) then the supply will naturally gravitate towards it because that’s where the money is. Think about it like, if Airbnb were to lose a significant chunk of market share, Would you “the host” be inclined to list on it? or Would you look to wherever or whomever that market share was distributed too?
So at the moment, if this is Airbnb’s response to this incident I won’t agree with them (mainly because this situation affected hostpitality since Airbnb is one of our channels) but, I could at least understand them. Assuming that this is where their intentions and priorities lie should tell us a very clearly that our businesses should not depend of others to make it’s income.
In our model we have the fortune to have had incorporated other forms of income to be able to start diversifying, but, for those hosts out there solely dependent on Airbnb or solely dependent on only one OTA start considering expanding to other channels or other revenue streams that complement your core model.
-Gian from Hostpitality
Writing your 🏠 listing description 🤔
One of the most arduous tasks of listing construction is writing a good, inviting, lean and relevant description. I’ve written a few in my day and let me tell you it’s somewhat daunting to have to write multiple descriptions, you sometimes think that your creative brain is pretty fried after a few. Here’s a few guidelines I use to make it a little bit easier to write descriptions.
Keep paragraphs small
Have you ever read a giant paragraph all the way to the end and understood every idea that the author wanted to convey. You might! If the author knows how to very well articulate the point and you have a very keen perception, memory and focus to be able to read, remember and interpret the entire plethora of words and information coming into your brain for processing. It is very likely that you are not one of these people and guess what I am also not one of them. It is well known that smaller bits of information with small intervals for processing better deliver your intent than a large paragraph. Just look at this one, to me this is borderline too much.
Just like you and me your potential guest is also this way. They really don’t want to have to read an entire novel to see if your listing is the right one so use the KISS principle, Keep it simple stupid.
Add your unique selling points
Your here to sell your property and you want for yours to shine over others. This is why you should add some unique selling points of your property. If it’s beachfront, cool part of town, convention center, etc; whatever it is you have to make it look like your property is the property. It is also advisable to leave some things to be a happy surprise for the guest like a cool pinball machine or your wall of vintage photos of the area. These things will earn you that fifth star that some guests believe hosts have to earn. 🙄
Include notable amenities or features
I do this part after two descriptive paragraphs (remember small) and I list them out as bullet points or more like an itemized list. This further adds to the KISS principle I abide by. This is an actual business practice you can apply to almost anything and you could even apply it to daily life, because why would you want to further complicate your life it’s hard enough as it is. Don’t add anything too technical, people aren’t really that interested in how your TV has 1000 channels and it has 120Hz display. It’s pretty funny that my largest paragraph is actually my keep paragraphs small section… 😂
Add some notable locations near you
Get people directly the door by also letting them know what things are nearby and/or what they can do nearby. Leave out any complicated instructions on how to get there or get to your property, the description is a selling point not a directory.
Now this is not all going into the summary, remember you only have 500 characters to convey the most relevant, lean and concise snapshot of your listing. The sections are as follows:
Summary
The Space
Your Availability
The neighborhood
Getting around
So I suggest you use all of the sections to showcase that specific category of information. This was very challenging until I started thinking about some guidelines I could follow for new descriptions.
-Gian from Hostpitality
The Importance of Keeping Your Space Updated 😎
There are multiple ways to interpret this title and maybe multiple ways to answer it. I want to make sure that it’s very clear what we are going for. Keeping updated means that you are constantly looking to improve upon your space and we’ll tell you why you should care as a smaller host.
You know how it seems that more and more companies are appearing in your area providing short term rental accommodations? Well the main reason it seems that way is because it is that way. Companies like Vacassa, Sonder, the Airbnb acquired Lyric, Turnkey to name a few are making major efforts to expand into more markets. Well, What does that mean for you? It means that you are now competing with a big fish that just dumped a giant amount of inventory into your market diluting the results.
How do you compete?
Some hosts think you can’t and maybe sometimes their right. But, more often than not you may have a very good fighting chance to keep your mom and pop rental going and there’s a pretty obvious way to do so. You have to update your space (referencing our definition).
This can mean multiple things for you and your rental. An update could be a remodel or an constructing an extension (If the property is yours) or redecorating to find a niche. Let’s look at the three to see what can be done in each scenario and which could apply to you.
Let’s start with Redecorating
Often times the easiest and fastest way to get yourself differentiated. Look at your space and see what could be changed easily to give the space a newer look and feel. During this process take into account the following to make your process more effective:
What type of guest frequents your market?
What guest niche is your big fish competition possibly not servicing well?
What would make your space different?
Answering these three questions would definitely be at the top of my list to see how I can be more effective in my new competitive environment.
Remodel (HGianTV as my significant other likes to call it)
This would be a natural next step to your process if you believe redecorating won’t cut it because the space even though the furnishings, appliances, etc are modern the walls, cabinetry, flooring, etc looks dated. In this case you would look into a remodel to bring your space up to date. This will give your space a fresh new appeal and you may even appear as a more valuable option to potential guests because if your rental looks just a bit nicer than the bigger fish’s one then the massive elasticity of the marketplace will work in your favor.
Constructing an extension? What? Construction?
Yeah! Seems a bit out there but, check this out. I also what to make sure that I make it very clear that you would only resort to this very cautiously and that you MUST be the owner of the property to do construction and to have the necessary permits and avail. Phew! Now that the legal cover is out of the way let’s dive in. Sometimes a remodel or redecorating alone won’t cut it and you would look into a step further. Here’s an example of a scenario, you find out that your competition doesn’t service well big groups and your area has a nice demand for bigger groups so there’s an opportunity.
After identifying it you would then search out what extra space is needed in my rental to be able to meet this, if you already have enough space then a remodel might do the trick. So, in essence you would head into this to accommodate the new rental strategy and in accordance with your long term vision of the property. What good is an extension that you just made to extend your rentals value a few years and then when you decide to do something else with it the extensions don’t amount to extra value in the traditional market.
Here’s an extra one!
It has to do with this question’s answer: What would make your space different? Sometimes you can successfully instill your brand onto a guest by offering a service, a particular experience or your rental business stands with a value that they are in line with. So really think about this one, don’t just jump into offering everyday brunch as a service it will become exhausting and costly. But, analyze what you could offer and examine what it would cost you. Remember low cost, easy and thoughtful are what you want to go for.
-Gian From Hostpitality
Things to do in San Juan!
You have a lot of choices of places to go in our locations so let us give you a list of places we love and you should check out. Click on the names to open the map locations.
Santurce
La Placita - A place where locals hang out. It’s a staple of Puerto Rican nightlife. Go and try Delavida Resto Bar.
Loiza Street - The link takes you to where the street starts. There are over 50 bars and restaurants to choose from. Here are some of our favorites:
Panuchos - Mexican style where you can grab a quick and savory bite
La Cueva del Mar - A staple seafood restaurant in San Juan
Tostado - Amazing breakfast and modern decor
Dude’s Diner - 1950’s style diner with some killer burgers
Si no corro me pizza - A play on a boricua saying this joint makes a mean pie
El Tap - A quiet place with a giant selection of beers on tap
Piso Viejo - Right next to the Pizza joint with great cocktails and latin music
El Barrio - The Coolest locals bar in the block
Bori Vegan - Amazing all Vegan eatery
Ocean Park Beach - Take our complimentary towels and cooler and your set
Último Trolley Beach - Great place to relax and take in the rays. Our sandals photo is from there.
Condado (Prices go up a bit)
Altamar - Great place to hangout in and eat some great seafood
Condal - Barcelona inspired Spanish tapas eatery with a beautiful atmosphere
Semilla - A small place for cocktails and pretty decent bar food
La Ventana del Mar - Outdoor plaza to relax and bring your group
Old San Juan
El Morro - One of the oldest Spanish built in the Americas
La Puerta de San Juan - The door to the walled city of San Juan during Spanish rule
Punto de Vista - Great rooftop restaurant. Try the mofongo with Garlic Sauce!
El jibarito - A traditional “fonda” this was the way most eateries were in early rural Puerto Rico
La Factoria - One of the top 50 bars in the world. Do we need to say anything else?
Señor Paleta - Cool down with one of these amazing popsicles
Miramar
Miramar Food Truck Park - Multiple choices to fit everyone
Los Pinos Café - Get local Cuisine and get it right
Pure & Fresh Food & Juice Bar - Only vegan eatery with a dedicated juice bar (At this time)
Gustos Café - Great coffee shop and one of the top coffee providers in the island
Casita Miramar - Great local eats restaurant
We went Pro! 📷 (Get it?)
No time to read the whole thing? Listen to it here. You’ll miss the giphs and the jokes though…
Airbnb is getting pretty aggressive in their search for top OTA position and they’ve been doing a good job from what I can tell.
The reason we said we went pro is that Airbnb opened a program in the Caribbean and Central America for “Professional Hosts”. From the info I gathered in my first meet with my newly appointed Airbnb account manager (a privilege awarded with this “program”) Airbnb was in search of multiple hosts that fit certain business criteria and potential for growth to admit into the program. At the moment we are only four.
Apparently it is, for now.
What I mean for now is that this will keep on expanding all throughout markets that are not “top tier” markets (meaning no major cities or destinations). We are thrilled to have this opportunity and see what will become of this.
Our Airbnb Course Material will be even Better!
Since we are working side by side with that account manager and attending platform related meetings our knowledge of how the new changes to the platform work is increasing exponentially. This will help us tailor the information toward our courses and benefit our future students.
We’ll make sure you get an A and your business grows
There are other benefits to the Pro side of Airbnb hosts, like early access to new functions or features, the account manager, meetings to discuss changes to listing construction needs, etc.
We are also debuting our new site with this post!! A lot of changes are coming and the future is looking bright.
Stick with us and we’ll lead the way
-Gian from Hostpitality
Excuse me! 🙋♀️ How do you keep your units up to par?
No time to read the whole thing? Listen to it here. You’ll miss the giphs and the jokes though…
WELL I’LL TELL YOU HOW 💁♂️
IT’S A CHECKLIST. PRETTY SIMPLE, RIGHT?
It’s astonishingly easy and hard at the same time. I just wanted a place to put that gif in…
Remember this:
“Nothing is ever as easy as they say it is, but, it’s also not as hard. So strive for the middle”
Maybe it was more of you’re never as good as they say you are, but, also not as bad either so aim for somewhere in the middle of that. This truism is what’s driving this blog, this venture and life.
So now for the meat and potatoes of the post. The industry is getting more and more refined and technical. This means that you as a host, landlord/operator or manager have to be constantly evolving and honing your craft.
Ok, so now, How do you do that?
Frankly, nobody knows what next step you need to take to reach the next level of your craft. That is something that gets revealed in hindsight after you’ve done it. But, that doesn’t mean we can’t make calculated decisions on which direction to take. Even though the market is who will ultimately tell you if you’re right or wrong you must go ahead and take a step for it to tell you if it was the right one.
Now one of the aspects of leveling up is having top-notch inventory, and your inventory is your unit, units, complex, hotel, whichever. That’s the reason a quality assessment is needed so that you can be sure nothing will go wrong with your rentals or if something is wrong you can catch it early on and address it even before it becomes an issue to your guest.
I’ve given you a template you can use for a one-bedroom apartment down below. This checklist is constructed and meant to be done on each checkout/turnover to make sure no damages were sustained during the reservation, and things are ready to host a new guest. We use a similar one for our listings and it ensures that we have no problems 99% of the time.
You can go ahead and create one (re-do it in your doc processor) using this as a template since the editable one is reserved for course takers.
-Gian from Hostpitality
Looking for New Residential Assets (My way 😏)
I use a more of a hybridized way of looking looking for and ensuring that my residential assets maximize their yield and run as efficiently as possible. It’s very likely that there are other people that would do something like this or look at the same factors as when I look for new residential assets. I’ll detail the factors I look at below to give a more granular perspective.
START WITH THE LOCATION OR AREA
As they say location, location, location and for the most part that stays true. I look at the location that I would like to enter or expand on. Then I ask myself the following questions:
How accessible is it?
Is my team able to service it or do I have the capacity to service this new one?
How is the area doing in short term rents and in long term rents?
With those three questions I satisfy my feeling of uncertainty of the area.
HOW ARE RENTS AND RENTAL DEMAND?
In the process of looking for the best possible revenue you would have to look at the rents in the area and where the area is or at least appears to be on the Real Estate Cycle. The Real Estate Cycle graph looks a lot like a bell curve. I’ll add an image so you can see an example:
Now identifying in which phase your market can be pretty tricky sometimes because the phases share traits that can easily send you in the wrong path. We’ll dedicate another post to this not this one.
NEXT: HOW IS THE STR MARKET DOING IN THE AREA?
This is where I diverge a bit since I take into account revenue that the Short Term Rental market can provide to make sure I’m making the most possible at any given time be it by short, mid or long term rents. A quick and dirty analysis should do the trick at this stage, but, once the investment is in the pipeline we need to clean up and get a good idea of how much is it actually going to make.
So now that after knowing where I want to go and enter I count my pennies. So depending on how I would structure the deal then the alternatives to financing it come to play. Real Estate can be a very cash intense model up front I’m nit at the point were I can make this decision on the fly fund the LLC have it sitting for two months and then initiate the purchase process. I’ve had to get creative with my previous investment and the expansion of the company.
To wrap up, with that last line I want to make it clear that there are multiple ways and resources to fund a Real Estate project and theres tons of material out there to check out. Our material will be coming out soon as well so I’ll leave it till then to continue this conversation.
-Gian from Hostpitality