In our new series, we chat with a variety of experts and gain some insight into their industry.
Interview with Coleman Washbrook of Raising Standards -- Part 3
What has your experience been since the Covid-19 outbreak started?
Initially, like everyone else, I experienced a tremendous flood of cancellations. We had over 150 cancellations within a five day period. But that allowed us to transition to mid-term rentals, which to me means anywhere from ten days to 90 days.
I’ve also seen a lot of last minute bookings from locals who want to have a place to party and have a good time -- which has created a lot of other unique challenges! But that’s where high quality management and a ton of experience saves big time.
So has your occupancy rate decreased?
Actually, since covid hit, my portfolio that I manage has been just under or just over 80% occupancy during the pandemic when people are supposedly not travelling or going anywhere. So we’re right on target for our occupancy!
Jan, Feb, and March is slow season, with a typical short-term strategy trying to get people in for 2-3 days. But with covid, we kept or reduced our slow season rates but went into longer stay bookings which filled our calendars and increased our occupancy.
How were you able to insulate your clients from some of the negative impacts of covid-19?
Our primary strategy has been to change from short-term to mid-term bookings. There’s a lot of different people who need those mid-term stays.
We have people who live in other countries who just happen to be here and they can’t go home. We have people who are here because they are about to give birth, so they’ve come to the city [Edmonton] for 3 to 4 weeks to be close to the hospital and ready to go. There’s also been workers due to a ton of pipeline construction and those guys, not all of them live in Edmonton, so there’s a lot of out of town workers who are here and they’re busier than ever.
So there’s still a lot of interest but the short-term demand isn’t as high as what it normally was. By not having that demand of short term stays filling up my calendar a month or two in advance, it’s allowed opportunities for these people who are pregnant to book for 4 weeks, or to allow the guys working on the pipeline to book 2 or 3 months, or these people who can’t fly home or who are flying back to Canada to book a few weeks. Our calendars are essentially open to where we can actually host those stays.
There’s a part of me that thinks that demand was always there but my strategy and how we marketed, priced and listed our properties meant we were too booked to even attract or accommodate those people. It wasn’t even an option.
Do you think you’re going to carry forward some of this mid-length booking strategy even after the covid outbreak ends?
I think this strategy will become a part of my tool belt. For some properties I manage, this is the ideal strategy, and for others it isn’t.
For example, for a downtown condo within walking distance to Rogers Place, this mid-term strategy isn’t the most ideal over the next ten years. My assumption is that condo will attract people going to festivals and concerts, so that strategy will be different.
However, for a 1 bedroom walk-out basement suite in the southwest of Edmonton, this is an amazing strategy. It provides an affordable, clean, and functional place to stay for people who are looking for longer terms. And for that homeowner, it provides them higher than normal [long-term rental] income where their property is kept in better condition, and they’ve got more flexibility on the people coming and going instead of a long-term renter who may not be a good fit but are down there for a year’s lease.
What do you think the short-term rental industry will look like post-covid? Will things return to status quo or will things be different? Or, like you, will other people change up their strategy a bit?
When covid hit, Airbnb decided to 100% refund all guests who could not travel, even if the hosts of those properties had strict cancellation policies. Homeowners choose a strict cancellation policy because they want to protect their income as much as possible, and when Airbnb overruled those hosts’ decision to have a strict policy and pulled money out of their account, a lot of hosts felt very violated and out of control. They also felt they had built their investment structure based on something they had no control over, so that has changed how things will play out moving forward.
A lot of hosts have lost their trust in Airbnb and are creating their own website or going to a different website or moving their business to different areas so they can protect their asset and have more control over them, so that in itself will change how the industry works and operates. So will it go back to status quo? I don’t think so. Even in regards to travelling, it’s going to take probably 1 to 2 years or even 3 to 4 years to return to normal, depending on how long it takes for the economic recovery to happen. It’s going to take time.
What about Airbnb rentals themselves? What will change inside the rentals in regards to furnishings and amenities?
What we’re seeing right now, which makes a lot of sense, is a lot of people are working from home and I think that is a global standard that’s changed. Companies that have been on the fence about working remotely were forced into it when covid hit. Now they’re months into it, and their business models are operating differently, families are operating differently. The function and flow of the world has been forever affected.
But people’s needs within the property are different than what they were before and that’s where the change is. People who travel for work will choose to stay in an Airbnb [instead of hotels] for cleanliness or separation from multiple travellers. They will need a place to stay and function and still have space to comfortably work. So I think there are places that may put more emphasis on office or desk spaces within their units to accommodate more people working remotely.
How do you think Airbnb hosts will be able to succeed in the new, post-covid world?
The people who can anticipate the needs of the new kind of traveller by connecting with them and consistently and continually asking them, “what do you need more of during your stay with us?” -- those people will be the top 10-20% who are doubling their income. It boils down to 80/20 principle in regards to furniture, amenities and location.
If you provide the things that people are willing to pay for, that’s the winning formula.
Coleman Washbrook manages 35 listings in the Edmonton area and can be contacted via email (firstname.lastname@example.org) or Facebook (@RaisingStandardsAB).