Expect huge changes in the Short Term Accommodation industry moving forward past the COVID 19 crisis. I expect there will be four main areas you'll need to revise as part of your STRA business strategy.
1. Property Cleaning
2. Insurance
3. Cancellation Policy
4. Increased Regulation
Spotless
The cleaning of your property will come under more scrutiny than ever before by guests. It's time to consider who and how you clean your property. Guests will have an expectation that you'll employ similar standards as those in hotels. We address some cleaning issues in a previous blog here. Make no mistake, the cleanliness of your property will feature more prominent in reviews as guests have a more heightened awareness of personal hygiene. In my opinion, we should all treat our cleaning as commercial cleaning and take the appropriate precautions for the safety of guests and cleaning staff. Whilst COVID-19 has drawn our attention to disease transmission, its not the only infectious disease easily transmitted through contaminated surfaces or body fluids. Do the products you currently use offer the disinfectant protection you need?
Time to review your Insurance
Beware.... as we emerge from the COVID crisis, insurance companies will be revising their policies to cover themselves, not you. I expect many policies to change around 'business interruption' insurance. While the vast majority of travel insurance policies already exclude pandemics, I expect other policies will follow. Mark your renewal date in your diary now, and take the time to review your product disclosure statement and disclaimers. Take a 'What if' approach to your renewal and don't be afraid to ask questions. Some of the speciality insurance companies dealing in short-stay accommodation have currently put a moratorium on any new policies until after the COVID crisis. This is a clear indication they'll be reviewing their risk and making the appropriate adjustments to future policies.
To cancel or not to Cancel
There's no better time to investigate more direct bookings and becoming more independent. During this COVID crisis, it's clear the big end of town, the multi-national OTA giants Airbnb and HomeAway have shown they intend to support guests and protect their own financial interests. Airbnb, created a sweeping wide 'Extenuating Circumstances' policy over-riding individual cancellation policies ensuring travellers received a full refund. HomeAway was late off the mark and offered ranking incentives for those owners who offered full or 50% refund, BUT.... have now devised a new plan to filter out of the traveller searches, those properties that do not offer a 'relaxed' cancellation policy in the future. A 'Relaxed' policy enables guests to cancel up to 14 days prior to arrival without penalty.
The issue is not whether Airbnb and HomeAway made the right decision during these unprecedented times or whether owners should or should not have refunded guests. The issue is that the OTA's have shown they can, without consulting the owners, change policy to over-ride individual cancellation policies when it suits them.
The future with OTA's only holds more grief when it comes to cancellation policies. As we have seen numerous times, OTA's will protect self-interests and shareholders before property owners. Every property is becoming increasingly like their inventory rather than a 'partner'.
Direct bookings will always offer more flexibility and control over managing your cash flow with deposits and will now no doubt offer you more protection against cancellations.
and on top of all that....
I expect we'll see an increase in regulation activity from governments. While many major cities around the world are already addressing regulations for Airbnb style properties, we might just see the industry under the microscope when it comes to health and safety from a government perspective. This may not be in the next 12-18 months, but I think the government will be looking at all industries in relation to their health and safety practices. When it comes to hygiene short term accommodation won't be immune, pardon the pun.
We need to be careful moving forward that we don't have a knee-jerk reaction to the current crisis. I think changes to HomeAway's cancellation policy is exactly that. As an industry, we need to ensure we have rational discussions with owners on ways to improve health and safety and not enforce a one size fits all approach to any future regulations.
(Opinions expressed are solely my own and do not express the views or opinions associated with any third party person or business. Opinions are not designed to be business advice.)
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