On today’s show we are talking about what it’s like to stand on the other side of the fence.
Last week my wife and I stayed in a short term rental. The location was amazing and the price was low. The reviews were good but not great. The property manager put out three bottles of wine for the guests, and they were prominently on display as we arrived. Nice touch.
The property advertised free parking included. But what that really meant was that street parking exists in the area, if it’s available.
The interior featured high speed internet, and the performance was excellent. The air conditioning was limited to the bedroom. The beds were two single beds side by side. The sheets were old. The mattress was old. The towels were old. The soap rack in the shower was rusted and hazardous.
Here we were, in the most amazing location, paying only $110 per night in the height of the tourist season.
On our last morning I spoke with the property manager as we were leaving. He manages 44 units. I told him about the short term rentals that I own and how we are commanding prices of over $700 per night in peak season. He seemed to dismiss what I was saying by positioning my property as a luxury property.
What is the difference between cheap towels and expensive towels?
Does it really cost that much more to put proper chefs knives and everything you need to prepare a meal?
Does it really cost that much more to provide salt and pepper and the essentials?
When you assume a perspective that every dollar spent on the customer experience is a dollar less in profit, you may not be focused on what it takes to maximize revenue.
In a market where there is a lot of supply, it’s important to make sure that your product offer is differentiated in the market.
Even if you’re convinced that you will be full in the high season, you will experience vacancy during the low season. If you want to get more than your fair share of occupancy during the low season, you want to have the best possible property reviews, The best photos, and be positioned as one of the premier offerings in the marketplace. You always have the choice of lowering your price at a later time. If there’s going to be vacancy, do you want the vacancy to go to the junk in the market not your property.