11/09/2018 by Chris Peel 0 Comments
3 Ways to Improve Your Occupancy and Profit from SA
3 Ways to Improve Your Occupancy and Profit from SA
Serviced Accommodation (or SA) is making quite a splash as a hot new property application and it’s not hard to see why. Last month alone, I had 7 apartments in London that made over £2000 each profit as tourists snap up the rooms at premium summer rates and September is looking to be a similar sort of month! I regularly see results like this from our properties and the portfolio we manage for our clients in London and Glasgow, but then at the same time I see a lot of comments online forums complaining that people have voids, and terrible rates. I’d like to shed some light onto this and give you some implementable tips that you can use to ensure that your SA is marketed to it’s best potential using online travel agents.
The first thing we need to recognise and be aware of is that SA requires more work in operating and managing it than other property strategies. For this reason it is absolutely essential that it is treated like a business from the outset. The last thing you want to do is take any property anywhere and try to run it as an SA. Ok, you might get lucky and just happen upon a local demand spot, but the chances are you could end up joining the forums complaining about poor occupancy and poor returns.
The first thing we can do to treat this as a business and ensure we’re the ones riding the wave, is to decide where the demand is and specifically target it. If you’re going to be aiming for corporate markets, then where do the local business people like to stay? If you’re going for the tourist market, what’s bringing them to the area and to which areas? If you want to go for the contractor market then where are the local projects that will draw contractors?
So once we’ve decided who it is we’re after for our apartments, how can we market to them? I’m going to discuss three tactics you can use today that I think will make the biggest impact in your business. There are of course many more ways to market your SA which I go into detail in through my training programme and you can get very creative with it, but I’m going to discuss what I believe to be the most impactful ways you can increase your bookings for each of the target markets and things you can do right now!
Online Travel Agents (OTAs)
Love them or hate them, Booking.com are huge, with global reach and a monstrous marketing budget. You won’t beat them on marketing spend so you may as well get used to the fact that you’re going to have to work with them, so why not do it as effectively as possible. I personally advertise my own properties and those that we manage for our clients on over 350 different OTA websites. By far though, we get most bookings from Booking.com, Airbnb, Expedia, and Hotels.com and I love these sites. They aren’t the cheapest and most charge between 15 - 18% commission on their bookings (with the exception of airbnb, whom I love dearly with their meagre 3% commission), but they are your best friends when it comes to marketing. It’s a sad fact that as we all get more and more busy, sites like these become essential for people who want to book something and are in a hurry. Sure, you will get guests who want to shop around and check every possible deal going before deciding but for a large proportion of guests they just want to book with a site they know, a process they’re familiar with, and a brand they trust. So with (at today’s count) 5789 apartments available on booking.com in London alone, how on earth do you stand out and complete? Let’s run through a few steps you can take right now to improve your conversion rate:
Follow the Guidance
Most sites conveniently give you a “listing content score”, with steps you can take to improve. Higher content scores mean higher placement up the rankings. They will literally walk you through how to improve this score and achieve 100%. You’d think this is obvious but the number of properties advertised out there who have a score less than 100% is staggering so you have an opportunity to get ahead immediately. Things that influence this score are whether you have the minimum number of photos and whether they’re of the correct quality. This is another good reason for always investing in professional photography for your property and the reason we have incorporated it as a service we offer to our management clients. Other details that can influence this score are things like whether you’ve selected a full list of amenities, whether you’ve added the bed sizes and layout, whether you’ve told the guest which languages you speak, whether you’ve provided directions to the property from the local major transport hubs. Basically, the more quality content you include in your listing the more you improve your content quality score. As this is 100% in your control I always preach to my mentorship clients that there is absolutely no excuse for you not to have a 100% score. There’s plenty that’s out of your control in business, that to not maximise the impact of the things you can control is just a huge waste of an opportunity.
Clicks, Reviews and Sales Rates
Travel agents earn their money from commission we pay as operators for each booking they secure for us. This means the more we can sell our accommodation, the more they earn. The more clicks, bookings and reviews you get the higher the system will rank your listing as it’s something people are showing an interest in and people want to buy. The more people show interest in your property and want to buy it, the more the travel agent wants to show people the thing that sells. Stunning pictures that grab people’s attention are a great way to get them to click through to your listing, so don’t skimp on the setup and photography of your place. Once you’ve hosted enough bookings, and got your reviews up you may get invited to joint a preferred partner programme if your reviews and sales have been good enough. Generally this involves more commission but I always go for it as just another way to start out and get up the rankings. If you’re interested in some of the other methods you can use to generate massive improvements in your booking rate via online agents, I run a whole section on it in my training programme. Details are at the bottom of this article.
Direct Bookings Increase Profits
As much as I love OTAs as a source of bookings, I do start to resent paying them commissions for the same guest to book through them again. I’d much rather someone who wants to come back comes to us dircetly, and makes the booking 15 - 18% more profitable instantly. You have a great captive audience in your accommodation so market to them directly. We personally use fliers with 3 ways to book on them. We have a phone number, an email and most importantly of all a booking site www.cdpapartments.com which allows people to book in just a few clicks. When I’m saving 15 - 18% per booking that comes directly to us, we can afford to offer discounts to these guests if they book with us instead of through booking.com. It’s important to give people a range of options for contacting you to book so you appeal to as wider audience as possible.
Secondly, we install tablet PCs in the all of our apartments that collect guest’s email addresses and allow us to market directly to them for future visit. This has been affected a bit by GDPR but is still a valuable tool in the fight to secure direct bookings. Once you’ve got an email list you can send out travel tips for your location, recommendations of local attractions, special offers on accommodation or launch celebrations for new accommodation.
Above we have discussed 3 simple but hugely effective ways to improve your booking rate from OTAs. So what’s next? Whatever stage of your property journey you’re at I always believe we are stronger as a collective and for that reason I encourage you to join our Facebook group Property Abundance Community, where you will find a growing community of supportive and encouraging people in property, as well as free tips and training to help you on your journey. I believe in the power of community and the abundance of opportunity so regularly share my learning as I continue to build my national SA and HMO businesses.
Before I wrap up I want to make sure you’re super clear on what the actions you can take TODAY to move you forwards are:
1. Make sure you’re clear on your market and research what the local demand is likely to be.
2. Ensure your online listings have 100% content scores and check them regularly as the requirements often change.
3. Use amazing professional photography to help your property grab attention and get the “click”.
4. Maximise the opportunity you have with people in your apartments by marketing to them directly.
5. Join the Property Abundance Community on Facebook for support and guidance and to share your journey and tips here: https://www.facebook.com/groups/723150368032766/
6. Please like and share our blog on social media to help us to help more people.
Written by Chris Peel.