by Bill Furlong, CEO
Steve Milo, an Escapia customer and owner of VacationRentalPros in Venice, Florida presented tips at the VRMA East conference in Charlotte about how to survive and thrive in a tough economy. Steve did a blog post here several weeks ago with some of his tips. Here is the full list of compelling ideas to weather the economic storm – ideas that total over $150k in savings for VacationRentalPros.
Increase your cancellation fee: Steve raised it from $100 to $300. And made it after 48 hours instead of 30 days. Cancellations dropped by 50%. And cancellation fees projected to generate over $20k of revenue in 2009.
Electronic contracts: Roughly ¼ of managers in the room appear to use an electronic contract. The sooner you can deliver a contract to a guest, the more likely the booking is to stick. Helped to decrease Steve’s cancellations by 50%. Doing it electronically saves postage and staff time (Steve estimates $13k per year in savings) and storage space. The service ensures automatically that the signatures happen in the right place. Follow-up emails are automatically sent if the contract doesn’t get signed. Cost of the service Steve uses (EchoSign.com) is $99 per month. And, note that it is very green friendly since no paper is used. 95% of guests will and can do this – 5% of guests don’t have a computer. But the rest can.
Keyless rentals/no check-ins: No staffing required for check-in. Allows managers to have a wider geographical range of properties. Guests prefer not to have to go to two places at arrival and departure. And the keyless entry systems let you see who was the last person out of a unit so you can monitor things. No need to copy keys, search for lost keys, etc. Steve charges owners for the keyless system at the setup and it is a profit center for them.
Restructure the booking fee: Change it from being calculating on just rent to rent plus all fees. Steve uses a 4.5% booking fee. If you have $300 in fees per booking, you can add $15 per booking. Across thousands of bookings, that adds up. For Steve, it will amount to $300k in 2009. Don’t roll it into your rent – that might boost your rent over your competitor just because you roll it into your rent and your competitor doesn’t.
Use Adobe docs for quality control and housekeepers: No more manual paper forms. Can keep historical records. Find info in seconds. Need Adobe at $299 one time license to make unlimited forms. Housekeepers do it through wireless internet in the units so you can get the documents very quickly. Estimated 2009 savings of $12k.
Restructure and rebid travel insurance: Steve did a competitive bid. Increased his T.I. split by 10%. Also changed the basis for how travel insurance is calculated to be on all costs (sales tax and booking fees).
Rebid credit card merchant fees: Steve’s fees were 2.55% in 2008. He rebid it and got to 2.19%. You must analyze merchant statements every month to understand the “true” bottom line “hidden” fees. Annual savings of $15k.
Automate welcome to guests: Steve created automatic “text” welcome emails to guests 72 hours before arrival and pre-recorded welcome phone calls (12 cents per minute per call). Lock code, directions, FAQs, etc. Eliminates staff time of calling people.
Email drafts and auto responders: Created over 200 templates to tackle everything so staff doesn’t have to start from scratch.
Audit your phone bill: Replete with excess charges. Rebid it out. Costs are decreasing from technology (VOIP). Avoid long-term contracts. Estimated savings of $6k per year.
The presenters provided a rich amount of detail in the session beyond what you see below. It was clearly very, very helpful for the audience, which was very engaged in the discussion. A great example of a VRMA session with enormously valuable ideas and information for attendees.
Love the ROI on EchoSign electronic signature - $99/mo to save $13k per year ;) Thanks for the recap!
Posted by: Jason M. Lemkin | April 03, 2009 at 01:05 PM