You can believe
Eddie when he gives you
Tips to Increase
Your Overnight Rental Profits
Updated 1/3/2008
A Magic Bullet ~ Pre-paid Check Ins:
Ø
Prepaid
reservations! At least 14 days PRIOR to
check in (30 days prior messes with your online bookers and does not have that
much more of a beneficial effect over a 14-day prepayment requirement). If you are not already doing this, you will
be amazed at how many issues become moot.
Ø
If folks are going to
cancel, they will cancel at the time they have to plunk down the balance of
their payment. This gives you two weeks
to re-rent the unit and cuts way down on battling with scheduled guests who
want to cancel the day before arrival (because they have only have a small
deposit on the line).
Ø
This is a great way to
avoid personality conflicts at check-in that can escalate from a small cut to a
body bag.
Ø
This business model
helps to keep your check-ins from stacking up in your lobby at 4:30 pm on a Friday. Most pre-paid bookings can be emailed
directions and a keycode for a keyless entry, and you can market this as “Express
Check-in”. You will be surprised at
the number reservations that will fall into this “no muss~ no fuss” booker
(especially online bookers) pattern.
Leaking Pennies:
Ø Bill, bill, bill! ~ even when you are just sending
two pillows or light bulbs to a unit.
Those pillows add up and if you are not billing the owners back for
these types of legitimate expenses, you are losing money.
Ø Make a work order or ticket or something like that
for everything relating to the physical property. You can decide later if you want to bill the owner, or not ~ at
least you didn’t forget about it. As a
matter of fact, it’s good for your owner relations for them to see a work order
on their statement with “No Charge” associated with it.
Ø Think of reasons why you could not accept a check for
an advance deposit or a pre-paid balance.
The United States banking laws changed in October 2004 and now only
allows a bank two days to clear a check.
Since you don’t have to wait 10-15 days anymore to see if the check is
good, why not try to collect checks whenever you can to cut way down on credit
card fees. And the added bonus is there
are no charge backs with a check. You
can even call the bank when the check arrives to make sure it’s good.
Housekeeping Means Everything:
Ø What is the solution to what can be a crippling
issue? Inspection. Inspect behind your housekeepers. Hold them accountable. Pay them well (because, remember,
housekeeping is everything) and demand nothing less than excellence.
Marketing and Sales:
Ø To get a true picture of where your advertising dollars
are working hardest, it’s critical to use viable data. Impress upon your staff that this is an
important enough piece of information to warrant more than a cursory inquiry.
Ø You only need a small ad to advertise your web site.
Let it be a workhorse for you, and watch your web traffic statistics HOURLY!
Ø Think of local and semi-local people as a target
market all to themselves. These folks
can help you make payroll during off-season times by offering them a Stay 3/Pay
for 2 special. They can’t usually stay
three whole nights, but hey, you could sell that extra night as an early check
in or a very late check out. “Check out
at 6 pm and be home by 8!” That might
sound appealing to the local working people within a two-hour radius.
Ø Offer your “orphan” nights (the one-niters in between
a check out and another check in) for a greatly discounted price to both the
check out (to give them a late check out) before it and the check in after it
(and you sell it to them as an opportunity for an early check in). Make sure you document that you called or
emailed each party and even went so far as to tell each party that you have
offered (or are going to offer) that orphan night to each of them. If the one you speak with first snaps it up,
you do not owe it to the other party to give them a chance ~ you are trying to
make gravy by selling open nights to an existing reservation. If one calls back to say they’ll take it,
you can say it’s already rented.
Ø Keep a current and complete list of all sources of
your business and post it where reservations are taken. Train your staff to write the source of each
booking somewhere in the reservation paperwork, or on the notes section of a
software program.
Ø You only get to ask them one time how they found
you. Ask your callers how they found
your web site. This will produce much
better answers than asking them “how did you hear about us”, which produces the
vague answer “I found you on the web”.
If you ask “how did you find our web site”, and they didn’t find you on
the web, they will tell you how they heard or which advertisement they saw that
compelled them to call. MUCH better
results!
Ø Can you access the internal workings of your
website? If you were mad at your
webmaster, could you fire that person and hire another? If the answer is “No” because you DO NOT
HAVE YOUR PASSCODES, then you might as well go buy a car and give the keys to
the salesman. You can call the salesman
anytime you need to be driven around in YOUR car. Yes, this is ridiculous.
Ø Look, you don’t have to know ANYTHING about how your
website works to be the boss of it. But
you do need the passcodes to be the boss of it. How can you fire a renegade webmaster if you can’t change the
password and lock him or her out of your business? DON’T BE BULLIED by technobabble. You have common sense and you should use it. You have every right to that vital
information.
Ø Better yet, get your OWN www.GoDaddy.com account (it’s super easy)
and hand out the passcodes, YOURSELF, as you see fit.
Trip Insurance:
Ø This is an easy way to reap a profit with very little
bookkeeping to suck up that profit.
Your guests are buying trip insurance, and they will buy it from you if
you offer it. Contact a vendor (e.g. http://googlr.com/search?hl=en&lr=&q=%22trip+insurance%22+reseller)
to set up an account and start pocketing about $22 for every $1,000 worth of
gross sales on which you collect trip insurance (($1,000 x 6.5%) x 35% =
$22.75). Doesn’t sound like much? Go look at your GROSS sales (including
taxes) and think of the potential… for filing a report and writing a check once
a month.
The Payment Card Industry and You:
Ø Just because you are probably a Level 4 Merchant (not
more than 20,000 E-Commerce transactions a year) does not mean that you
do not have to comply with the PCI (Payment Card Industry) Standards. Also, if you are using MC and /or Visa, you
are also subject to CISP (Cardholder Information Security Program). You don’t have to burn too many brain cells
or spend a bunch of money to comply.
Use your common sense about card number security and seek out ways to
protect your information.
Ø Exceeding 20,000 E-Commerce transactions a year or
having an alarming number of charge-backs or security issues ~ could cause you
to be asked to pay money to a third-party vendor to validate your PCI and CISP compliance
(in order to keep your merchant account).
Visit http://www.reservationsbytcs.com/pci.htm to help you wade through the alphabet soup.
Ø The 3 or 4 digit security code (CVV or CVV2) is not
intended to be stored. This means you
can’t write it on a piece of paper in case you need to run the card again at a
later date. You get to enter that
security number one time when you are entering that transaction (swiped cards
include this number in the swipe). If
you need to run the card again, you should call the cardholder to obtain that
security code, again. Entering that
code means the cardholder had the card in his/her hand when you were given the
number. If you ask someone for this
number and they do not have it ~ well, guess what… that means they don’t have
the card in their hands. You can
collect this number during an online booking as long as it’s only processed
with the card ~ never stored for future use.
Ø The number of credit card vendors is dizzying. You have a great luxury in the ability to
shop for rates and terms. It’s a nasty
business ~ one that charges vendors and customers for the privilege of
immediately paying/immediately being paid.
But their cutthroat industry is your advantage to squeezing the highest
technology out of the fewest pennies.
Don’t stop with your bank… they will not advise you of your choices and
you will have to find out for yourself.
Get everything you are promised IN WRITING.
Ø
It’s important to find
a processor who will carry your Hotel status through from the beginning of the
transaction until the payment card folks pay it. Most overnight rental companies are losing the advantage of being
treated as a Hotel transaction versus a Retail status. You have to fight for this because this
often breaks down at the cold-hearted processor level (Paymentech, Vital,
Novus, etc.)
Ø
The best rule of
thumb: TREAT YOUR CUSTOMERS’ CARD DATA
AS YOU WOULD WANT YOUR OWN TREATED…
There is a service out there (www.Shift4.com)
who will store your data for you, which will make a lot of PCI Compliancy
issues moot.
Protect Yourself From Chargebacks (reprinted from educational material from http://www.heartlandpaymentsystems.com/
; modified for overnight rentals)
Ø
Prior to or when guests
check in, have them fill out and sign a registration card/guest agreement.
Ø
Ensure that your staff
is well trained in proper procedures for credit card transactions to avoid
unnecessary card swipe and processing errors and fees (it costs the same to
make a refund as it costs to originally charge the card).
Ø
Always provide guests
with a copy of their final bill/receipt by mailing it or emailing it to their
home address after their stay.
Ø
Make sure your guests
sign their credit card receipts for every card payment you take from them.
Ø
Think of it as
documenting every payment card transaction as if it is going to be charged
back. You will need all this
information to defend yourself in the event of a disputed legitimate charge
(e.g. a “No Show” where you charged the card as a penalty).
Email Everything You Can:
Ø You do not realize the postage and paper savings with
this marvel of modern technology!
Ø Even emailing directions shortly before the arrival
of a pre-paid check in can save you time on the phone.
Ø Emailing a “confirmation of a cancellation” can save
you time and trouble. Ask the guest to
let you know immediately if the cancellation has been in error.
Owners:
Ø
Owners can be divided
into two groups: 1) Investors, and 2) I
Am So Emotionally In Love With My Second Home And I Can Only Afford To Pay For
It If You Rent It At Least 15 Nights Out Of Every Month. Investors are a breeze and only care about
which couch makes them the most money.
The latter is a different story, especially when the real estate agent’s
soothing assurances are still fresh in their minds.
Ø
Kick off the
riff-raff. You can’t afford the bad
feelings and time and labor that it takes to deal with a sub-standard
property. Get rid of your headache
units and watch your stress and costs drop like a penny off the Space Needle.
Ø
To the owners of units
you deem worthy to be on your program ~ make them understand that you all are
in business together.
Technology is Your Workhorse:
Ø You need to learn enough to keep yourself from being
taken advantage of in this confusing realm of E-commerce, which is what you are
doing if you are advertising on the Internet, regardless of booking and taking
payments online.
Ø Your web site visitors are first and foremost
interested in your properties that are available during their vacation days ~ which
are USUALLY not flexible! Make
this easy for them to find units open for their specific dates from your home
page.
Ø
Invest in the highest
and best technology that you can afford and that makes sense for your working
environment. Always on the go? Then you’re looking at a web server in your
office and a laptop in your car.
Working from home in your pajamas, most of the time? Then you need a web server in your basement
or closet, a workstation in your den, and a laptop in your car.
Ø
Why a web server in your office? 1) It’s not rocket science ~ anymore; 2)
they are cheap ~ now (basic web/file servers begin around $1400); 3) a web
server can become the brain of your operation handing out files to your folks
in the office, handing out files to your folks working from home, dishing up a
web site over which you have total control… just to name a few reasons. Configured properly, it’s a great extra
firewall between the Internet and your office staff. You can also think of it as your employee that doesn’t bug you
for a raise or have car trouble or call in sick when it’s not really sick.
Ø
Reason 4) would be that
you will need a file server at a minimum for your critical installed
applications (like QuickBooks or Peachtree, and your reservation system, and
any other application that depends on critical data).
Ø These are the things you need for a basic office
network: A fast Internet connection, a
server, a router, and a workstation.
You might also need a sturdy battery back up for the server and good
surge protectors for the workstation(s).
This is a picture of what all that looks like when it’s networked:
This Visio drawing is compliments of Eddie
Nelson.
Click here to see his illustration that includes the four
most common office network configurations ~> Fast Loading (42k) ~ High Quality (134k)
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http://www.TheCompanySoftware.com/
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