Jan 30, 2018
In part 3 of this Q&A, Chris and Jason discuss awareness of Serviced Accommodation, guest types, consumables, specification levels, relocation fees, property management systems and much more.
Show Notes:
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Transcription:
Hi I’m Chris
Hi I’m Ritchie
And welcome to the serviced accommodation podcast.
Today’s episode is part three of my Q&A with Jason Living.
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What we’ve found as well though is the difference in age groups. I’ve found the older clientele who some people are really nervous about using Airbnb and Booking.com because they don’t think, they’ve watched the program on the TV where it’s somebody who’s gone in, taken it off of somebody who doesn’t really it’s being rented out by Airbnb and they don’t think they’re going to have somewhere to stay and they’ve handed their money over. They find it very reassuring to be shown around whereas younger people are very much more used to it and especially more international younger travellers who are used to going around the world with Airbnb very much want that quick just want to be in and, like you, just want to be in and done and thanks very much if we need you, we will call you. But the older people do seem to like it and we’ve got more repeat bookings from that older clientele who then recommended us to family and friends that come to stay in Yorkshire.
Yes. It’s a really interesting point and I think if you are think you are going to do meet and greet I think that’s a training issue for whoever’s doing it just to have that sensitivity to the guests. And as you say some of the indicators you know it might be yeah there clearly probably is an age bias but you know as long as you’ve got your wits about you, it’s not difficult to see those people who are quite happy just standing and chat for 10 or 15 minutes and those people who actually just want to be left alone and you know as I said, whoever’s doing it you’ve just got to make them aware that not everybody wants the same check in process. Some people just want oh there’s your keys, get on with it and other people want to be shown how everything works and what everything does.
I think it’s a really interesting insight there, whereabouts are you based?
In York
Okay. So tourist market, it makes sense. Our exposure to over 50s, absolutely none, across the entire portfolio.
Even the cruise brigade?
Yes absolutely. And that I think is down to the relative youth of the market if you like in terms of serviced accommodation is still a relatively new concept, we still get guests you know like phone up and go how does this work? You know we are exposed to it virtually every day on Facebook, at property networking events everything like that. We’re very familiar with the concept but a lot of the country aren’t and what you’ll find is that with any new concept younger people seem to be quicker to adapt it. And so yeah honestly we have virtually zero exposure to the over 50s market because if you look at our primary customer bases you are looking at contractors and then you’re looking at tourists, mainly 20 to 30s professionals or families at the weekends. So we’re just not seeing that. So it’s a bit of a side point but I thought it was kind of quite interesting to see that impact because it’s simply something we’re not exposed to within our business.
So basically there’s room in Southampton for someone to target the just over 50s?
I’ll be honest, last month that was pretty much my client base.
And I guess that’s because it’s not school holidays, that sort of thing. Yeah and I think we would probably mirror that with the cottage in terms of age demographic. You know we’ve got some contractors in at the moment but in terms of sort of leisure stays, out of peak periods, they tend to be older people definitely.
How do you find as well with like the things that you actually offer within your apartments? Do you just literally just do a basic? One lady phoned me up just to thank me for everything that we’d left in because apparently the last one they’d stayed in there wasn’t even a bin bag left for them, it was literally they walked in and it was just an apartment. I don’t advertise the fact that I always put fresh orange juice and milk in there. My background prior to having this is hospitality so the way I used to train people in hospitality was to exceed the customer’s expectations so therefore by putting it in and not telling them, I’ve already have set myself off on a big level. I tell them we have tassimo coffee machines, I put a couple of pods in, just so then it’s not this is what you could have won so there’s a couple to get them started but they’re also aware so if they want to bring more pods with them they can do as an example. Then just like silly things like sugar and a little bit of tea, yorkshire tea obviously! It’s just like little touches that they’ve found to be, I’ve put little face wipes like makeup remover wipes, I’ll be honest I did that because I was fed up with the white bed linen having makeup on it so I thought if I actually give them the face wipes to use on the off chance they’ve forgotten to pack them, it might actually help them stop destroying the linen. But what kind of things do you put in and do you think I should be marketing it that that’s what’s available? Or am I better to keep doing it how I’ve done? Which is not tell them and so that when they arrive there’s extras?
Do your reviews reflect the fact that they’ve found that?
Yeah the reviews are always really lovely and they put in things like oh it’s a nice touch that there was milk there and things like that.
Your guests are marketing it for you then, you don’t need to make the claim.
So serviced accommodation Sunderland, I think we’ve got sort of tea, coffee, sugar but that’s about it. We don’t provide anything beyond that and we’ve only very very rarely had an adverse comment about that because people have an expectation.
Interestingly, with the cottage and I think that’s also what whilst our Sunderland accommodation isn’t you know what I call budget end it is you know it’s lower margin and therefore our margin to provide that you know not just the physical cost but the whole you know systemization around that an organization around it because we’ve got so sort of 17 apartments across two locations and you know getting the cleaners to put the right stuff in the run locations, to be honest sometimes it’s a serious challenge to get them to clean properly you know to actually sort of put the stuff in the right places. You know we provide sort of loo rolls, kitchen rolls, bin bags and that sort of stuff. In the cottage we do, I think we just have a sort of standard thing of a loaf of bread, butter, jam, tea, coffee, sugar, orange juice, milk but we don’t market that we do that but we do tell them before they come in an email when I send the access instructions because what we were finding is some people were turning up with their own stuff and then it was a waste and interesting just simple things like you know the jam because a jar of jam is a jar of jam but if people are only staying for three or four days you know we were just ending up with loads of jars of jam at home with about that much taken out the top so we’ve now bought a bulk load of those little Hartley’s ones, not from a cost point of view but just so frustrating because you can’t then leave that half eaten jam for the next person. As I said we were just ending up with loads of started jars of jam at home. So yeah we don’t market that but that’s you know, have you looked and seen that other places do specifically market that?
Yeah they do, it’s like oh a continental breakfast is provided for the first morning’s stay. There’s quite a few of them in York so I did some competitive analysis and there was a lot around that area that were providing that. And then just looking at reviews, I don’t know how you train people to do it but I was just looking at reviews and seeing where negative reviews near to me were and seeing what those negatives were and trying to change that so say for example a hair dryer was provided but the hairdryer was useless so there’s was no point having the hair dryer so the ones that I bought were good hair dryers whereas the iron, if people steal it it’s not the end of the world but it is a steam iron and it’s sort of working out where to spend my money and where not to.
The key point from that I think is know your audience, know your market and that’s a brilliant way of doing it. Looking at competitors who’ve got similar customer segments for the property and look at their reviews, look at your reviews and that’s also the answer to the question really around orange juice, extra bits, do you do this, do you do that? Well does your customer want it? Does it make a difference to them, are they going to appreciate it? Is it going to improve their experience that will leave you a positive review. You know that’s the feedback loop really. The key point there is understanding your audience because are contractors really going care if we leave them orange juice? They probably only drink beer!
Yeah, if we’ve got decent long term contractor bookings we always give them a of beer to start with. And if you’ve got a decent corporate booking of probably four weeks plus we will go and get them a decent lump of groceries you know some fruit and biscuits and whatever you know probably £20-30 worth but if someone is staying for a month you don’t mind doing that but we wouldn’t do that routinely and again we don’t tell them that so there’s a bit of an upside.
If you’ve got contractors, make sure there’s a bacon butty van outside!
I think the second point is really one you answered yourself. It’s about expectation and exceeding expectations. And again that’s kind of what reviews are a measure of, what were their expectations and did you meet them, did you exceed them? And so if you’re able to set clear expectations to people and then you were able to exceed it then you consistently get good reviews. You know the problematic properties, the ones which don’t consistently get good reviews tend to be the ones where either guests don’t really know what to expect from it beforehand, for instance serviced HMOs which is not a favourite model of mine or you know that kind of property where people don’t really know what they’re going to get from it or where you’re consistently not delivering on what people expect. So for instance if you’re advertising a property on booking.com at five stars you should have very very good guest experience there because you’re going to get people who are very very picky you know and maybe actually they’re going to mark you down to a six because no one met them at the property or because they didn’t have a personal concierge service that kind of thing. So again if you’re setting very high expectations, it’s a real danger because it’s going to be very very hard to meet them. So I think what you’re doing there is spot on.
I also do like mini videos before so once the apartment has been cleaned, it’s literally 30 seconds, a minute, quick run around of open the fridge etc so we’re aware it’s fully clean before it’s let so touch wood we’ve never had it yet but I’, hearing from previous mentors that I’ve had in the past that have had people trying to get money back from Airbnb and booking.com saying that the apartments were filthy and it actually turned out there was like a label in a waste paper bit and that was it and they were trying to get a refund. Do you do something like that or do you not?
We don’t but we have been stung by it. So we had a guest once who turned up to the property and said oh no it’s you know it’s not clean. And so they got booking.com to relocate them and booking.com in their infinite wisdom relocated them to a suite at a five star hotel locally with a nice £600 bill which came with it. Now we had photographs you know we went in with the property manager, took photographs of everything to prove the condition but booking.com are still arguing the cost five months later. So I think in fairness that means they won. Yeah. So I can see the benefit of doing that but again it becomes how often does it happen. And is that the evidence because you know we’ve already got the evidence it was just after they left and it still doesn’t seem to be making a difference.
There are a surprising number of people who know exactly how to booking.com’s relocation process works and we get one every couple of months and you can spot them a mile off because they start talking about booking.com relocating them but that isn’t a language that anyone else will ever use unless you’ve talked to booking.com and been in that situation. So you need to be very very careful when that happens and deal with the right way for sure.
What sort of management staff do you use?
We use Toki, we used Alena on the hotel type sites. We started off, it’s kind of logic/common sense, you want everything under one system. So we started off doing apartments in Alena as well and that was a mistake because it’s great for hotel sites and it’s rubbish for apartments. So we went out there probably last October/November and we looked at the entire market for what was available for serviced apartments and our conclusion was that the best kind of value point for what we wanted was Toki, you know it’s relatively lightweight if you like in that it’s not got loads and loads of advanced features but the key stuff generally that you need is there. You know it’s actually got probably some of the best integration with the OTAs that I’ve seen, I mean bearing in mind that we were probably paying £500 a month for our Alena subscription on the hotels and yet you’d kind of push for a price update and it would take 20 minutes to go through or you’d have a booking come through on one channel and then there’d be a lag of you know 10-15 minutes before it pushed through now that’s opening yourself up to over bookings. And you know, over bookings and relocations, £600 bill not really what you want from it. And weirdly enough for the cheapest software on the market Toki seem to have the best integration because everything is instant you know and that for me is really really important. Having been stung with a £3000 relocation bill before that, that’s another story but Toki is great. The price point is and what we’ve done to kind of advance that a little bit, we’ve just built a software engine above that which handles a lot of the kind of workflow management stuff between kind of cleaners, telephone, staff, scheduling tasks and everything like that. That works perfect for us. You know if you want to take shortcuts then you’ve can use Kigo.
Yeah we use Kigo which is horrible. The challenge is as Chris rightly says the way I put it, what Toki does it does so much more simply and easily. From our point of view we did look at Toki quite seriously about six months ago and it just didn’t have some of the features that we need so payments particularly. Our payments are fully automated. So provided the credit card checks out and all the rest of it the payment comes through on booking whereas Toki, there’s a manual intervention required. I think, it’s difficult because I think Toki has come a long way in a short period of time so some of the things that were perhaps lacking when we looked at it they’ve caught up with slightly. I think the whole email automation in Kigo certainly was more advanced than Toki. I think it probably still is slightly more advanced but again Toki has caught up.
So I think our most recent podcast was on guest communication so there’s lots of tips there.
But in terms of automation, does Toki fully automate?
Yeah, it’s always been very good with emails so you know the key ones you want are when someone books in, a couple of days beforehand and check in e-mails, check up e-mails quite often on the first morning, checkout. So all those things you can automate and have sent out. If you use Airbnb you can pseudo-personalize them, just like make it chatty, make it seem like it’s a personal message when it’s not. And we’ve had like reviews from people saying oh they were really friendly and helpful when we didn’t communicate manually with the guest once, it was automated emails! But if you use language like oh hey it’s the day of your stay, just want to let you know here’s a few details, here’s where the local stuff is, if you need anything let us know. That kind of thing you know it’s getting onto a new topic but the Airbnb audience is very different to booking.com and you can separate that out. So we have completely separate automation flows for what messages are sent to booking.com customers to what goes to Airbnb and it handles all that stuff fairly easily. Set it and forget it.
Does it send texts as well?
It does yeah.
Yeah. So I think that’s something it’s sort of caught up better on. One of the big holdbacks for us was the lack of web integration in terms of a booking website and I know they have brought something relatively recently. From what I’ve heard it’s still not, it’s still a bit clunky and not very…
Yeah. I mean we built our own from scratch. Now we have introduced an API so it’s very very easy to run.
So can you now because what you couldn’t do and I thought was pretty fundamental and I’m quite surprised it’s taken quite so long to sort it out is in this day and age you know whatever website you’ve got out there it needs to be able to take you know direct bookings whereas for a long time certainly the inbuilt stuff was inquiry only and certainly from our point of view you know that was that was one of the big reasons we didn’t want to go forward with it but I know they have now bought out a sort of a booking widget that you can put onto a website as well as they’ve always had their own sort of self generated websites but again they were there were inquiry only which I just don’t think in this day and age cuts the mustard really.
That was definitely a major limitation. So they rolled out a couple of months ago that you can book on it and actually the Toki websites are pretty good, they look good. They’re instantly generated and you can customize them quite a lot. So you know that would save you a fortune in putting together a website.
Is there still only one person who works for Kigo in customer service?
I mean you had a nightmare with Kigo didn’t you but moving forward from that as I said I
I think the problem with Kigo from a software point of view it seems to me that it’s probably something that has its origins many years ago and they’ve just added bits on to it. What they actually need to do is take the functionality of it and just build a whole new platform with the same functionality and if they did that then, and to be honest we’ve had conversations with them about this and you know where Toki are very good is to keep very reactive to their market and people say we want this, we want that and they go away and you know within a timescale they do it, you know Kigo just you know seem much more of a dinosaur in that sort of respect.
The problem with it is if you’re building up to maybe 20, moving from one to another. Which ones do you recommend? You just get a blanket of oh this one’s best, this one’s best.
Yeah that’s the challenge, and if you Google it there’s 100 plus.
It’s just a case of finding one and we’re set up with a super controller now and she’s good but she ended up running 20 with just the booking.com calendar and then turning the rest off instant book until she could get her head around it.
I know you’ve had good experiences with a super controller.
I mean I’ve heard good things about Toki as well.
As I say the thing from our point of view is we needed some of the sort of higher end functionality I suppose that Kigo has got. Thankfully I’m not the person who has to get in there and make it do things.
If I could ask a personal question how much is your Kigo bill each month?
Well that’s an interesting one I’m quite happy to tell you because one of the reasons we started looking Toki was our Kigo bill was going up and up because their old pricing model was you paid a certain monthly subscription based on your number of units and it was so banded so I don’t know, 10-20, 20-30 whatever it was and then a per night booking fee which was something like 60 cents and it came down, the higher level you were on the monthly the less but actually it built up very very quickly and you know we were beginning to get up into the sort of low thousands of pounds. And so one of the conversations we had with them was you know we’re looking to move because you know this is just going to wind up way too expensive and about that time they started doing a beta test on their own payment processes. So we were using Stripe for card payments and they now have I think it’s called Kigo pay which is ultimately something else badged as Kigo pay but basically they have their own built in merchant account and what they basically said to us is if you test this we will then simply charge you for the payment processing.
So effectively we’re paying nothing for Kigo but we’re paying for the payment processing and to be honest I don’t know what our payment processing bill was before but I know because I just looked at the accounts that it was sort of two thousand quid but I’m sure it’s pretty similar to what we were paying stripe already. You know it would be because we’re processing something maybe slightly more but effectively we’re getting processing in excess of 100000 a month.
But now their model is what they’re looking to do bundle that in and charge people five per cent including payment processing. What I’ve said to people is go back and renegotiate. So they’re in a point of transition as regards their charging model but it’s certainly you know.
A good time to negotiate.
Yeah as I say we managed to do a deal out of it that has overall certainly saved us money.
I have just renewed my insurance for the business and I bizarrely got told by two insurance companies that I phoned up for a new quote they didn’t understand why I had PI insurance because they said they couldn’t see why it was needed.
Are you managing?
Yes they’re on rent to rent and I’ve got an unmanaged as well.
If you’re managing then I mean to be honest the risk I suspect is very low but technically you have a client to whom you’re providing a professional service. So yes you in theory do need professional indemnity insurance.
I’ve got it but it was the fact that two insurers went oh it’s really bizarre that you’re the third person whos called up, I don’t understand why you need it.
I mean the chances of there being a claim are very low risk is very low in that you know there’s all sorts of variations on things but essentially as I would say there’s sort of two distinct rent to rent models. One is actually management you know which people call rent to rent but it isn’t truly, the financial flows may be the same and the other one is where you are, you have a lease on a property. So you are technically the tenant and then you’re letting out. Now if you’re doing rent to rent via a lease you don’t need professional indemnity insurance because you’re not providing a service to the landlord, you’re simply renting their property off them. If you’re doing what might be called rent to rent but is actually dressed up as a management agreement then effectively at least in legal terms you are in theory providing a management service and if you fail to provide that service or provided it negligently then in theory your landlord could sue you for negligence in professional indemnity. If your rent or rent contract is actually a fixed payment one.
You do management management, the way whereby you’re just charging a percentage of every income and a guaranteed rent style. Yes. So under the guaranteed rent style as I say technically you’re managing and you’re providing a professional service because that’s what the agreement says you’re doing. The reality is that the only point at which they would suffer a loss is if you failed to pay them which is more of a contractual dispute than you haven’t provided the service. So again you know you may I would say you may choose not to bother with professional indemnity insurance if you’re doing rent to rent management agreement. If you’re managing then in theory if you did a crap job or you know let’s say for instance you know you had a booking inquiry and you for some reason just failed to deal with it you know and your landlord therefore lost out on a you know three month high money booking because you didn’t do your job in securing that booking then in theory they could sue you for that but the chances of it actually happening are pretty slim.
Do you have PI insurance from a management point of view?
Yeah we do.
The cost is negligible anyway isn’t it?
I got a quote down from one company who were a bit cheeky and say that if you contact them in the first instance they basically claimed the right to you so you’re blocked out of other so say if I phoned Dean and asked him to go and find me insurance he wouldn’t be able to go to certain people that this first company have gone to. They’d claimed rights on it which I didn’t know that when I’d found them and someone had recommended them on as SA page I’m part of.
I had PI for my personal training business and that is obviously all advice and people could probably die if they take that advice wrong! It was like £200 a year for about £10 million or something.
What sort of quotes were you getting for the PI?
The people who blocked me in and I didn’t go for them even if they had been the cheapest but they ended up quoting me £330 for it and I ended up getting it for about £180.
I think that’s probably typical sort of range and what I would say generally with insurance is you know I’m not saying that your coverage is in any way deficient but it’s often the case that the cheapest cover often isn’t the best cover.
Yeah I made sure it covered rent to rent.
And I would say and I always say the same with finance and insurance. I think it’s definitely worth going through a broker because as long as you’ve explained to them exactly what you want then if they provide something that doesn’t actually fit that then again you would be claiming off their professional cover and again within that serviced accommodation market as you’ve said people have run into problems because they’ve got insurance probably from people who don’t really understand what model they’re operating. So you know it is worth speaking to somebody who understands exactly what you’re doing and exactly how you structuring it subject of course not to tying you in and stopping you getting any other quotes.
Who was that out of interest?
It was a lady called Chloe.
As a simple matter of fact you got a quote off them and you haven’t realized that you effectively locked yourself in.
Yes I called another insurer for a quote and they explained to me about it and I think if we’d gone to that insurer we could have got it for £175 but she was charging me £300 and something so we can’t unfortunately go to that however they could then go to somebody else and it was another less than £200 so still significantly less than she had found but it was more the annoyance of people realising that if you go to that company first then that’s what their practice is.
So a recommendation with a vested interest. Not always the best ones!
That was the final part of my Q and A with Jason Living. Stay tuned for next week’s episode.
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