FAQ: Agency.CapeHolidays Management Services
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FAQ’s This is not the question you should ask CapeHolidays. We suggest you read what our guests and owner have to say about us. When you list your home it has ZERO trustability; no reviews and no bookings. But, when we list your home, under our Flag – CapeHolidays, your home is seen as a SuperHost home immediately. Our GOODWILL becomes yours. To be SuperHosts: We must maintain a 4.8 star rating with positive reviews (more on criteria). Something we have achieved: As you can see we score 4.9 out 5 for every of the nearly 600 guests who reviewed us. Designed for success from 2009. For this reason, we are SuperHosts and very proud of it (see our profile at Airbnb). Obviously, we can, with confidence, say we are a successful professional Airbnb Agency in Cape Town. Because of this Badge of Trust, we share it with owners who are willing to work with us and have remarkable accommodation. Unfortunately, choosing remarkability is not that easy. Why? Because the final judge is the very critical guest who paid to stay and have earned the right to review your home. These guests come with high expectations. If your home fails at the first booking it will be uphill to recover. When we choose, the owner and/or the home, incorrectly we could lose our SuperHost status. Therefore, we must be supercritical before a holiday home is added to our portfolio. In other words, SuperHosts attract more business because of established trust. This overcomes the lack of trust you have when you list your home from ground-zero. It takes time and lower rates to attract guests when you are new and competing with the masses out there. I have said it: We are a team working together and the sky’s the limit. And there is nothing like reading reviews from happy guests. Wait. You’ll see. It’s fun to bank good money while everyone is happy! Read more on criteria to become SuperHosts. The short answer: NO! This is a common concern for new owners. As we implement our trust-building phase we use competitive rates to attract reluctant guests to stay and get reviews at the new accommodation. The Consequences of AirBnB’s Commoditization On Rates It’s only after new owners become familiar with the painful reality and impact of AirBnB’s commoditization of the short term accommodation market, that they change their mind about our rate setting philosophy. After this introduction let me address the concern about low rates equaling bad guests. When we talk about low rates to buy trust we are talking about competitive rates only and not Rock-bottom rates. As you know, we don’t have the accommodation seeker’s trust yet, and we must use our only effective driver, namely rates, to overcome resistance to book. The guests who book initially are the same guest who may pay premium rate tomorrow. But with no reviews (trust) forget it. Only a remarkable holiday home at a bargain will do. In the market we operate, guests are not poor. Let me make a statement based on experience. Even if the rates are competitive you still get great guests. Now let me share why I say this: The real risk is not bad guests but rather uneducated guests. With today’s social media profiles guests cannot hide any longer. We started our business in 2009. This was before social media. And many people left homes untidy as there was no recourse. Even owners got away with shoddy offerings. Today Your Social Profile Is A Valuable Asset. When a guest book and stay they review us. And these positive reviews made us SuperHosts. Trust! As guests depart we review them. And they establish trusting profile overtime. Today we all know the consequences of a bad review for both parties. Let me repeat: Even if the rate is competitive no guests will risk getting a bad review knowing other hosts will not approve them with a bad previous review. The only risk for us is first time users on Airbnb. Unfortunately, they are not familiar with the implications of getting a bad review and how it impacts their future ability to use Airbnb. And some of them, ignorantly, will not leave the property in the same clean state they received it. When they get hit with a bad review they never again treat any Airbnb place poorly. And if they do they get blocked. Our challenge is to make it as difficult for new guests to book without first qualifying (See Forbes article above) them and then we educate them on what we expect. To answer the question: No. Competitive rates are not the cause of bad guests. Bad guests are mostly new guests unfamiliar with their responsibility. Many owners want CapeHolidays to manage their accommodation in Cape Town, Simonstown etc, list it with Airbnb and other; the problem is they may wonder if their home will make the grade. Some owners may have an inflated perception of value and expect the ultimate; obviously, when our knowledge of the market does not meet the owner’s expectations we sit with unnecessary conflict. It’s therefore not only the accommodation but includes qualifying the owner. Read more here on how Agency.CapeHolidays.info does business getting 4.9 out of 5-star reviews every time. Instant Booking is one of the features hosts don’t really have an option with. Airbnb gives you another option where guests can first discuss a booking. But still, you cannot decline if you don’t have a very good reason. And guests don’t like being rejected when your calendar shows availability. And if we cancel the hosts will never keep their status as a SuperHost (see more). Let’s get to the details: What the above means is that everything works extremely well if the agent can ensure 100% calendar integrity. As agents or hosts, we cannot do our business best without instant booking. The obvious question is; how many bedrooms should my Airbnb ideally have? My quick answer is that the number of bedrooms is a driver when trying to make money with Airbnb. But! If everything is not equal; then other drivers are more important. Like The Following Airbnb Success Drivers: Location: Critical. We have two beautiful apartments against the mountain. The two-bedroom is royal but seventy steps up, with spectacular views. The one-bedroom is as great but at 15 steps only, also with views. However, income is not really different. Interior and outside living: Guests pay premiums for funky or modern places with sunny light and inviting living areas. Imagine sun-loungers and a deck. It sells.
Water: I mentioned beach location; if you cannot bring the beach to your Airbnb accommodation then try a pool or hot tub . And it does not matter if the sea is just 50 meters away. Airbnb guests will pay a premium for water. Marketing Philosophy and Rules: You cannot measure your Airbnb success until you have learned by failing. Going in with an attitude of…. “why do they need a pool? Can they not see the sea?” , or “who wants to watch DSTV on holiday?” or guests “ must pay high rates; I pay high rates at hotels!” or “they should stay a minimum seven days!” These comments are at least shortsighted and show ignorance. And will cost you dearly. Dearly! It matters only if they look exactly the same, at the same location, with a similar interior. If not then most of the drivers above are critical. For more on investment advice: Airbnb Cape Town Airbnb success drivers, I suggest you complete our free questionnaire. The questions we ask will assist in getting a better idea. And you may be surprised to know that your Airbnb rule sets may be a killer driver. After you completed the questionnaire our calculator crunch “numbers” and sends you a report; automatically emailed to you. More below. P.S. One bedrooms have a disadvantage as the change over costs for a one-bedroom Airbnb is as much as it is for a two-bedroom and even three bedrooms. Two-Bedroom change-over costs nearly as much as a 4 bedroom but if you give me two two-bedroom apartments next to each other then I take two x2. I’ll rent them as a 4 bedroom or 2x two bedrooms. But, I suppose this is not the only way to look at it. Now we are opening-up flexibility as a driver. See FAQ on flexibility here. But let me stress: we should never focus on cost. Cost should be driven down but be careful. Cost is a negative concept. If your one bedroom has everything I mentioned above and via the questionnaire then a one-bedroom can beat the best. Excellent question: How Do You Setup An Airbnb In Cape Town? Today I just want to discuss flexibility. Let’s kick off with this quote from the FAQ “Why Are The Number Of Bedrooms Not That Important?” Great question. And it depends…… If you can do list your accommodation on Airbnb and manage it yourself then it’s best you do it yourself because; On the other hand an Airbnb Agent in Cape Town like Agency.Capeholidays may assist you better if the following are important? After all that said and done; we believe it’s better for a Cape Town homeowner to try to become a SuperHost if she believes she has the time and attitude. If not she may always feel a bit of resentment and that will not be ideal for our Agent & Owner relationship. We have been there. It’s not ideal. But when we have mutual trust we make a winning team. Let me qualify: When is the best time for an owner to stay at their property if they want to maximise income? Obviously, if you are not interested in a high return then it does not matter when you stay. Let me pack it out for you: Let’s start with what is maximise income?” Maximising income is quite simple if you follow a strategy that works. This means you should focus on occupancy and not setting high rates, and on getting more reviews (trust) and eliminating all resistance to book . Read the FAQ (1) where I discuss high rates and time-to-action (demand). To set prices on Airbnb it depends on the number of reviews we have and the established demand. Assuming we list a new property with no reviews and the owner wants to maximise income annually; we go through the following with the owner: Airbnb Pricing Strategy Philosophy Part 1 Airbnb Seasonal Rate Calculator Part 2 Let’s consider the following email from a new owner with a lovely 4 bedroom accommodation in Simonstown. She would not be able to manage her home or market it. This is what she told me after I asked her for her annual income expectations: New Owner The financial data was as follows for the period May 2018 to June 2019 – 12 months. The loft room was booked for 191 nights at an average of 752 rand per night and generated 143697 rands for the year. The garden suite was booked for 181 nights and had an average nightly revenue of 1419 and generated 256921k for the year. Total revenue after booking sites costs was 400618k. New Owner This is really an achievement. Agent CapeHolidays Interesting. And your logic makes sense. Obviously we need to see the home. And I believe if it gets foolproof remarkable interior with lots of flexibility like 8 single beds (can be made in Kings), for example, then it should exceed our own expectations. These are the homes we prefer. Looking at the figures you shared the owner is doing 50% occupancy during the year for both properties. Excellent. And a good sign. This means even higher occupancy/rates during summer as winter is relatively dead. The average Airbnb occupancy for this area is much lower. Obviously ours are on average 20% higher and winners a lot higher. But it took about 12 months of building trust with each property to get there. New Owner I would consider this a benchmark to use and hopefully surpass as the entire house would now be available at time that we are not there, this obviously also depends on when we plan to use it too. For now my view is that we should be able to add a further 200k to the value above. To answer your question we would expect to achieve a minimum of what has been achieved historically and add up to 100k on top of this after costs and achieve a gross 550k before your 20% costs. This is a view based on the data we have, I am sure you will have a view, please could you give us your opinion and experience. Reasonable! Who would argue? Agent CapeHolidays Due to various issues (like meeting expectations) we only start off a new home if we can achieve the owner’s goal at 35% occupancy. This does not mean we will not try and beat it. But agreeing to a new house where 50% occupancy is required, to achieve the R550 000 goal, then we may disappoint you before we start. And that’s not fair on you. Agreeing at the kickoff stage to higher occupancy than what is our norm will cause pressure to maximising rates rather than working on getting trust, and adjusting rates to address occupancy based on supply and demand during the first 12 months.[/su_highlight I must say that I am confident we can achieve 50% and higher occupancy to meet and exceed R550 000 but why make a promise just to keep the owner happy? Why not rather exceed expectations after 12 months? Our Motto We don’t have to be the biggest accommodation agency in Cape Town or Simonstown! No. We only want to be the best! This implies that we can walk away; as we are not trying to win a deal at all costs. No. We rather shake hands and walk. Ensuring we will always look the owner in the face knowing we did what was best for both parties. The simple answer is that we manage all unique and remarkable Cape Town accommodation (see the areas we cover here). We never said it must be luxury. Not necessarily. All we want is for guests to say Wow. Like these reviews (more here). But back to your question: If we consider peak rates ; our large homes rent for as much as R45000 per day, while small two-bedroom apartments about R2000 per night. You can see the rates vary a lot. But let me just warn you; don’t get too excited looking at R45000 per night. Outside of peak this home will rent for a lot less. And very few homes will ever rent for R45000 per night. You can read more on how to qualify your home here.
It’s not science. You cannot fail. Just go with your gut. P.S. We are not real estate agents who want to make a quick buck. Our relationship must last for years. Excellent question, “how much can I make on Airbnb?” when you intend to list on Airbnb. But what about the Airbnb income calculator? You get some great Airbnb profitability calculators; they tend to only use your property address and the number of bedrooms to calculate your Airbnb profitability. Well, let’s look at…. Airbnb’s own free calculator. For example; look at a two-bedroom in Cape Town. Airbnb suggests a monthly R26 531 (or +R300 000 or $22000 per annum). This is optimistic, to say the least. What about occupancy? I see the norm is a low 37% occupancy. Did they calculate this income at 100% occupancy? I just have too many questions. And you should as well. Personally, I believe the calculators may be designed to lull you into listing your accommodation as very few people in Cape Town would not list their accommodation on Airbnb if they can get the above. You may even consider buying a property because of the high potential Airbnb income. Mistake. We believe you must crawl before you run. And let’s rather be conservative. And consider other factors as well. Your potential income cannot be based on your neigbourhood and number of rooms only; yes, it’s a good start but what about the host’s attitude towards guests, your rules (minimum stays, cancellation policy, discounts, etc.), your location in relation to the beach (or related major attractions), pool, jacuzzi, features, willingness to invest in staging and professional photos? And the list of critical Airbnb income drivers grows. It is for this reason that we developed an in house Airbnb quiz to try and determine if your Airbnb accommodation will make money. No bull. The quiz, obviously, depends on your honesty. But the verdict will be better than using an Airbnb profitability calculator. It may not answer your question; How much can I make on Airbnb? Calculator. No. But when you get the results from the Airbnb Profitability Quiz you will know; if your Airbnb accommodation will make money or not and what you need to correct it. Maximising Airbnb accommodation income is “shorthand” our focus on (long term) profitability over a year. Instead of focusing on maximising daily rates we ensure with our philosophy to: Maximised income depends on trust; high rates depend on high demand. As a Cape Town Airbnb accommodation agency; How to set prices on Airbnb, within reason, maximise income is quite simple if you follow a strategy that works. This means you should focus on occupancy and not setting high rates, on getting more reviews and eliminating resistance to book. Read the following FAQ where I discus high rates and time-to-action (demand). Read FAQ (Will I Make Money Setting High Rates On Airbnb) To set prices on Airbnb depends on the number of reviews we have and the established demand. Assuming we list a new property with no reviews and the owner wants to maximise income annually; we go through the following with the owner: Airbnb Pricing Strategy Philosophy Part 1 Airbnb Seasonal Rate Calculator Part 2 When you list your home it has ZERO trustability; no reviews and no bookings. But, when we list your home, under our Flag – CapeHolidays, your home is seen as a SuperHost home immediately. Our GOODWILL becomes yours. To be SuperHosts: We must maintain a 4.8 star rating with positive reviews (more on criteria). Something we have achieved: As you can see we score 4.9 out 5 for every of the nearly 600 guests who reviewed us. Designed for success from 2009. For this reason, we are SuperHosts and very proud of it (see our profile at Airbnb). Obviously, we can, with confidence, say we are a successful professional Airbnb Agency in Cape Town. Because of this Badge of Trust, we share it with owners who are willing to work with us and have remarkable accommodation. Unfortunately, choosing remarkability is not that easy. Why? Because the final judge is the very critical guest who paid to stay and have earned the right to review your home. These guests come with high expectations. If your home fails at the first booking it will be uphill to recover. When we choose, the owner and/or the home, incorrectly we could lose our SuperHost status. Therefore, we must be supercritical before a holiday home is added to our portfolio. In other words, SuperHosts attract more business because of established trust. This overcomes the lack of trust you have when you list your home from ground-zero. It takes time and lower rates to attract guests when you are new and competing with the masses out there. I have said it: We are a team working together and the sky’s the limit. And there is nothing like reading reviews from happy guests. Wait. You’ll see. It’s fun to bank good money while everyone is happy! Read more on criteria to become SuperHosts. This depends on if you are a new owner on our portfolio or not. We have two kinds of owners: Those established for full-year and those that move out for bookings once or twice a year. I regularly get questions like, “Are you taking a big enough breakage deposit?” Injuries, accidents and your liability seem to be on the back burner. But let me answer your breakage deposit concern first. As an owner, you want to protect your belongings against breakages. You can throw money at the problem or you make it as foolproof as possible. After a thorough foolproof audit and making changes, the next defense is a breakage deposit. How high should the breakage be to cover your home? Can you consider any figure you believe is high enough? Okay. You decide to hit them hard with a high breakage deposit. But the consequence is; no more bookings. Nothing. Obviously, we need to consider the risk. How many breakages occur and how severe are they? Instead of limiting or stopping bookings it’s our view to get a breakage deposit about equal to one day’s rates during high season. But you may be risk-averse and want more. Your only choice (not really a choice) is to get your short term insurer involved. You must tell him you do short term accommodation and want insurance for breakages, accidents and liability claims. Let’s get back to breakages: Action: In general, short term rental accommodation business is easy if you do the common sense issues well. They are simple. But relentlessly risky if skimped. P.S. If it can break it will break. This does not mean we must change to plastic plates and glasses. Everyday use items must be easily replaceable in the blink of an eye. To claim from a guest for such accidental breakages is not ideal. Our Agency Management Terms and Condition are not cast in stone. Some clauses are negotiable. Some others are not. It’s important that you read it. And understand it. This FAQ will answer any issues you may have. Read the T&Cs here. Feel free to ask any questions here: Owners who utilize CapeHolidays Management Agency are obviously interested in costs to manage their Cape Town holiday accommodation. And it can be confusing. So, let me try and explain. Most Accommodation Management companies in Cape Town requires a fixed management fee per month. In our case, we don’t. We could not see why we need to charge owners a fee if there is no activity at the home. This is why our management fee is the cost per incident. The major cost management drivers (change over cost) are: How much are the actual incident fees? This depends on the home but the minimum is currently R350 per incident. But can be different depending on the house. It can change at any time. And owners will be informed if it does. All costs; every-day running the home is not included. These not include fees are, but not limited to, rates and taxes, Internet, DSTV, pool, electricity, etc. The change over cost is per booking. Each booking has at least one meet, greet, and clean. The variables costs are; laundry, consumables, extra service and window cleaning, upholstery- and carpet cleaning (if and when needed). Every guest who books pays the total rate for the stay and an extra, one-off, change-over fee to cover most of the change-over cost but not all costs. You may ask, “why does the change-over-fee not cover all the costs?” The problem is not that we can increase the change over fee but we must consider the total rate the guest is willing to pay. We, therefore, make the fee “just enough”. When we get paid by the guest we deduct our commission and pay you the total excluding the change-over fee. The change-over-fee is credited to your account. This means you get it but it’s not paid to you directly but used to cover costs. When we get invoiced by the contractors (meeting, greeting, laundry, etc) we debit this change-over-credit. Most of the time the change-over fee will not cover the full services rendered, and the reason why we keep a kitty for these costs. Let me summarise: The actual change-over-fee and per-incident management costs are shared with the owner as soon as we have met and discussed the home and the individual owner’s needs. Finding The Cash Flow Spreadsheet when you need it? It is very simple to do on your mobile phone. You can also add it to your desktop computer but today I’ll only share how to save it on your mobile Home Screen! Steps: A few owners only want occasional bookings and not interested in maximising income. Yes. We can assist you. Some Cape Town Accommodation owners only want to get one, two or three bookings during the year. And nothing more. We just need to agree to a different T&Cs (see it here) for your specific needs. These owners either; These owners keep the home for their own use or no use during the year and make certain dates exclusively available to CapeHolidays. Agency.CapeHolidays.info are 100% responsible for bookings during this time and the owner will honour all bookings during the agreed availability period. See the consequences and responsibilities for Instant Bookings. Owners who don’t live in their homes during the year may want the management of their accommodation while they are not here; our T&Cs do not provide for this function. And these owners will need to discuss their needs with us clearly to understand their needs and agree on the management fee to oversee the home during the empty time. Can You Assist if I only want occasional bookings? Read this FAQ. CapeHolidays manage form offices in Simonstown and Green Point Cape Town. From these offices we manage and market accommodation in all the following areas: Instant Booking is one of the features hosts don’t really have an option with. Airbnb gives you another option where guests can first discuss a booking. But still, you cannot decline if you don’t have a very good reason. And guests don’t like being rejected when your calendar shows availability. And if we cancel the hosts will never keep their status as a SuperHost (see more). Let’s get to the details: What the above means is that everything works extremely well if the agent can ensure 100% calendar integrity. As agents or hosts, we cannot do our business best without instant booking. Within 24 of a reservation, you’ll receive an email titled Confirmed Booking. We share the following reservation info: And the CONFIRMED BOOKING may not be changed or canceled by the owner or CapeHolldays. Depending on the BOOKING SITE’s T&Cs we may only receive the money one day after arrival. Obviously, these bookings can be canceled; due to lack of payment or cancellations as per T&Cs. Our objective is not to discourage owner-stays. It will not be reasonable. However, we have found a few owners would do many owner-reservations. And some would change these reservations as things change. And it becomes an administration hassle. We want to assist but have decided that after ten zero cost reservations by the owner per year to charge an admin fee of R450 per reservation/change. This will keep unnecessary changes to a minimum. In extra ordinary cases we can discuss it with the owner. Great question. And it depends…… If you can do list your accommodation on Airbnb and manage it yourself then it’s best you do it yourself because; On the other hand an Airbnb Agent in Cape Town like Agency.Capeholidays may assist you better if the following are important? After all that said and done; we believe it’s better for a Cape Town homeowner to try to become a SuperHost if she believes she has the time and attitude. If not she may always feel a bit of resentment and that will not be ideal for our Agent & Owner relationship. We have been there. It’s not ideal. But when we have mutual trust we make a winning team. In the hospitality business the motto is: The mandate we agreed with the owner is to do everything within reason to get a 5-star review. We can never use the excuse, “Guest, please wait for 24 hours, as we cannot get hold of the owner to okay replacing the geyser”.
If we cannot authorise work, in an emergency with our proven and trusted workmen, then the owner is not really committed to us and our aims with his home. We will get poor reviews and going down. Most emergencies we may get hold of the owner immediately but if we cannot we must act. Immediately. Why Keep A Management Kitty? Good question. Note: Your Cash Flow statement is up to date 24/7 and shows you at any time what is in the kitty and what money is outstanding at any time. As you may have read, Agency.CapeHolidays.Info kicked off during 2009. During this time we have had a few experiences we would not wish upon our worst enemies. Luckily we can count these bad experiences on two hands. Some ridiculous, some funny and others; close to madness. Use the links below to read more. New owners are concerned, initially, with the daily rates we set. “Set the Airbnb rates high and I am happy. Rates are my measure of success!” For example, I got this email from a new owner, after we notified him of his second booking. I would have expected the going rate to be higher late in November….but I know you guys know what you are doing. Although he says we know what we do, he is concerned. Correctly so. And most owners, initially, feel the same way. Only high rates will ease their minds. But after they realise we are stacking snow, hand upon hand, building trust they get the idea. Who can stop a snowball of trust? Eventually, they happily bank a lot of money as the trust-snowball gets momentum and picks up speed. Patience is the name of the game. We must crawl before we walk. Unfortunately, rates are not based on fact. It’s based on the time for guests to take action (speed to book or lack thereof – more below), the level of trust you established (reviews for example), perception etc. At the moment your new house has no reviews and therefore no trust. No guest will take action (book your home) without an incentive. Why Would An Airbnb Guest Be Your Guinea Pig? Guests do not book willy nilly. They base their decisions on the ratings by other guests – positive reviews, Superhost status. Do they like the features, the photos, and the rates? There are more, like cancelation policies, etc. You can have it all but with no reviews, your home will come second when compared to similar homes with many reviews. Therefore, you really don’t have much of a choice but to make it more attractive and your only ally – competitive rates. This means you can bring guests to take action faster with rates you may perceive as uncomfortable. At ground zero you are buying reviews. You are paying a price to get trust. Our only aim is to focus on achieving higher annual income. This will change your mindset. You now focus on the long term. One solid hand of snow at a time. Let’s talk time/speed …. The issue with maximizing rates, in isolation, is it ignores time-to-take-action – speed at which you get or don’t get bookings (more below) . High rates are useless if over time you get no bookings. Consider the “slower and faster” time to take action scenario: Use Feedback From Time-To-Action! We are getting feedback from both above. Action speeds up, due to high demand, we can conclude: Our Airbnb rates are too low and we can now increase. If we cannot increase now we will increase the rates for the same time next year. Slowly over time, as we collect more reviews, increase occupancy we tweak the rates upwards. And the owner is happy. If demand slows down we start all over again by reducing rates until guests start taking action faster. And slowly work our way up again. On the other hand; if you are focusing on high rates you may impress your neigbours but not your bank manager. Allow us to do what we do best; focus on time to take action, get bookings and reviews and accumulate. Based on these multipliers we will get better than competitive rates. Why? As we build trust the time to take action reduces (higher demand) and due to demand, we increase the rates. Over time the tortoise wins the race. Patience is the game now. The short answer: NO! This is a common concern for new owners. As we implement our trust-building phase we use competitive rates to attract reluctant guests to stay and get reviews at the new accommodation. The Consequences of AirBnB’s Commoditization On Rates It’s only after new owners become familiar with the painful reality and impact of AirBnB’s commoditization of the short term accommodation market, that they change their mind about our rate setting philosophy. After this introduction let me address the concern about low rates equaling bad guests. When we talk about low rates to buy trust we are talking about competitive rates only and not Rock-bottom rates. As you know, we don’t have the accommodation seeker’s trust yet, and we must use our only effective driver, namely rates, to overcome resistance to book. The guests who book initially are the same guest who may pay premium rate tomorrow. But with no reviews (trust) forget it. Only a remarkable holiday home at a bargain will do. In the market we operate, guests are not poor. Let me make a statement based on experience. Even if the rates are competitive you still get great guests. Now let me share why I say this: The real risk is not bad guests but rather uneducated guests. With today’s social media profiles guests cannot hide any longer. We started our business in 2009. This was before social media. And many people left homes untidy as there was no recourse. Even owners got away with shoddy offerings. Today Your Social Profile Is A Valuable Asset. When a guest book and stay they review us. And these positive reviews made us SuperHosts. Trust! As guests depart we review them. And they establish trusting profile overtime. Today we all know the consequences of a bad review for both parties. Let me repeat: Even if the rate is competitive no guests will risk getting a bad review knowing other hosts will not approve them with a bad previous review. The only risk for us is first time users on Airbnb. Unfortunately, they are not familiar with the implications of getting a bad review and how it impacts their future ability to use Airbnb. And some of them, ignorantly, will not leave the property in the same clean state they received it. When they get hit with a bad review they never again treat any Airbnb place poorly. And if they do they get blocked. Our challenge is to make it as difficult for new guests to book without first qualifying (See Forbes article above) them and then we educate them on what we expect. To answer the question: No. Competitive rates are not the cause of bad guests. Bad guests are mostly new guests unfamiliar with their responsibility. When you list your home it has ZERO trustability; no reviews and no bookings. But, when we list your home, under our Flag – CapeHolidays, your home is seen as a SuperHost home immediately. Our GOODWILL becomes yours. To be SuperHosts: We must maintain a 4.8 star rating with positive reviews (more on criteria). Something we have achieved: As you can see we score 4.9 out 5 for every of the nearly 600 guests who reviewed us. Designed for success from 2009. For this reason, we are SuperHosts and very proud of it (see our profile at Airbnb). Obviously, we can, with confidence, say we are a successful professional Airbnb Agency in Cape Town. Because of this Badge of Trust, we share it with owners who are willing to work with us and have remarkable accommodation. Unfortunately, choosing remarkability is not that easy. Why? Because the final judge is the very critical guest who paid to stay and have earned the right to review your home. These guests come with high expectations. If your home fails at the first booking it will be uphill to recover. When we choose, the owner and/or the home, incorrectly we could lose our SuperHost status. Therefore, we must be supercritical before a holiday home is added to our portfolio. In other words, SuperHosts attract more business because of established trust. This overcomes the lack of trust you have when you list your home from ground-zero. It takes time and lower rates to attract guests when you are new and competing with the masses out there. I have said it: We are a team working together and the sky’s the limit. And there is nothing like reading reviews from happy guests. Wait. You’ll see. It’s fun to bank good money while everyone is happy! Read more on criteria to become SuperHosts. Our Agency Management Terms and Condition are not cast in stone. Some clauses are negotiable. Some others are not. It’s important that you read it. And understand it. This FAQ will answer any issues you may have. Read the T&Cs here. Feel free to ask any questions here: New Airbnb owners should be aware of the hosting risks of Airbnb and do something to limit it. NOTE: In general, you may never even encounter any of these issues. Reading about these risks may scare many owners. If that is the case then you make take this as an absolute. It’s not. The risks are very low. Let’s consider a list of risks of hosting Airbnb guests and solutions here: Airbnb Guests book remarkable accommodation before they book a home with poor photos, boring interior. Homes don’t have to be luxury but everyone walking in should know this is a unique place! We believe….. If it’s not remarkable it’s not good enough. From start to finish, we try to think about designing a more remarkable experience. Feel welcome to ask any question you may have: Excellent question, “how much can I make on Airbnb?” when you intend to list on Airbnb. But what about the Airbnb income calculator? You get some great Airbnb profitability calculators; they tend to only use your property address and the number of bedrooms to calculate your Airbnb profitability. Well, let’s look at…. Airbnb’s own free calculator. For example; look at a two-bedroom in Cape Town. Airbnb suggests a monthly R26 531 (or +R300 000 or $22000 per annum). This is optimistic, to say the least. What about occupancy? I see the norm is a low 37% occupancy. Did they calculate this income at 100% occupancy? I just have too many questions. And you should as well. Personally, I believe the calculators may be designed to lull you into listing your accommodation as very few people in Cape Town would not list their accommodation on Airbnb if they can get the above. You may even consider buying a property because of the high potential Airbnb income. Mistake. We believe you must crawl before you run. And let’s rather be conservative. And consider other factors as well. Your potential income cannot be based on your neigbourhood and number of rooms only; yes, it’s a good start but what about the host’s attitude towards guests, your rules (minimum stays, cancellation policy, discounts, etc.), your location in relation to the beach (or related major attractions), pool, jacuzzi, features, willingness to invest in staging and professional photos? And the list of critical Airbnb income drivers grows. It is for this reason that we developed an in house Airbnb quiz to try and determine if your Airbnb accommodation will make money. No bull. The quiz, obviously, depends on your honesty. But the verdict will be better than using an Airbnb profitability calculator. It may not answer your question; How much can I make on Airbnb? Calculator. No. But when you get the results from the Airbnb Profitability Quiz you will know; if your Airbnb accommodation will make money or not and what you need to correct it. Many owners want CapeHolidays to manage their accommodation in Cape Town, Simonstown etc, list it with Airbnb and other; the problem is they may wonder if their home will make the grade. Some owners may have an inflated perception of value and expect the ultimate; obviously, when our knowledge of the market does not meet the owner’s expectations we sit with unnecessary conflict. It’s therefore not only the accommodation but includes qualifying the owner. Read more here on how Agency.CapeHolidays.info does business getting 4.9 out of 5-star reviews every time. Instant Booking is one of the features hosts don’t really have an option with. Airbnb gives you another option where guests can first discuss a booking. But still, you cannot decline if you don’t have a very good reason. And guests don’t like being rejected when your calendar shows availability. And if we cancel the hosts will never keep their status as a SuperHost (see more). Let’s get to the details: What the above means is that everything works extremely well if the agent can ensure 100% calendar integrity. As agents or hosts, we cannot do our business best without instant booking. Our Airbnb holiday accommodation is all remarkable. They don’t have to be luxury but everyone walking in should say WOW! If it’s not, it’s not good enough. From start to finish, we try to think about designing a more remarkable experience. Use Our Free Quiz To Qualify Your Airbnb Accommodation here. Great question. And it depends…… If you can do list your accommodation on Airbnb and manage it yourself then it’s best you do it yourself because; On the other hand an Airbnb Agent in Cape Town like Agency.Capeholidays may assist you better if the following are important? After all that said and done; we believe it’s better for a Cape Town homeowner to try to become a SuperHost if she believes she has the time and attitude. If not she may always feel a bit of resentment and that will not be ideal for our Agent & Owner relationship. We have been there. It’s not ideal. But when we have mutual trust we make a winning team. The obvious question is; how many bedrooms should my Airbnb ideally have? My quick answer is that the number of bedrooms is a driver when trying to make money with Airbnb. But! If everything is not equal; then other drivers are more important. Like The Following Airbnb Success Drivers: Location: Critical. We have two beautiful apartments against the mountain. The two-bedroom is royal but seventy steps up, with spectacular views. The one-bedroom is as great but at 15 steps only, also with views. However, income is not really different. Interior and outside living: Guests pay premiums for funky or modern places with sunny light and inviting living areas. Imagine sun-loungers and a deck. It sells.
Water: I mentioned beach location; if you cannot bring the beach to your Airbnb accommodation then try a pool or hot tub . And it does not matter if the sea is just 50 meters away. Airbnb guests will pay a premium for water. Marketing Philosophy and Rules: You cannot measure your Airbnb success until you have learned by failing. Going in with an attitude of…. “why do they need a pool? Can they not see the sea?” , or “who wants to watch DSTV on holiday?” or guests “ must pay high rates; I pay high rates at hotels!” or “they should stay a minimum seven days!” These comments are at least shortsighted and show ignorance. And will cost you dearly. Dearly! It matters only if they look exactly the same, at the same location, with a similar interior. If not then most of the drivers above are critical. For more on investment advice: Airbnb Cape Town Airbnb success drivers, I suggest you complete our free questionnaire. The questions we ask will assist in getting a better idea. And you may be surprised to know that your Airbnb rule sets may be a killer driver. After you completed the questionnaire our calculator crunch “numbers” and sends you a report; automatically emailed to you. More below. P.S. One bedrooms have a disadvantage as the change over costs for a one-bedroom Airbnb is as much as it is for a two-bedroom and even three bedrooms. Two-Bedroom change-over costs nearly as much as a 4 bedroom but if you give me two two-bedroom apartments next to each other then I take two x2. I’ll rent them as a 4 bedroom or 2x two bedrooms. But, I suppose this is not the only way to look at it. Now we are opening-up flexibility as a driver. See FAQ on flexibility here. But let me stress: we should never focus on cost. Cost should be driven down but be careful. Cost is a negative concept. If your one bedroom has everything I mentioned above and via the questionnaire then a one-bedroom can beat the best. Excellent question: How Do You Setup An Airbnb In Cape Town? Today I just want to discuss flexibility. Let’s kick off with this quote from the FAQ “Why Are The Number Of Bedrooms Not That Important?” You normally search using the suburb’s name. Airbnb selects a relative map area to show all listings in that restricted map area. Unfortunately, Airbnb does not show the actual suburb as known by the locals or how the city demarcates it. When you don’t see your listing, view the Airbnb map. You would probably notice your home is outside of the area Airbnb selected for your suburb. Adjust the Airbnb map and click on Search This Area. Now your listing should show. Can you change this? No, unfortunately Airbnb only uses your actual address to create the map via Google maps and it prefills the address field as you type. It’s not science. You cannot fail. Just go with your gut. P.S. We are not real estate agents who want to make a quick buck. Our relationship must last for years. As you may have read, Agency.CapeHolidays.Info kicked off during 2009. During this time we have had a few experiences we would not wish upon our worst enemies. Luckily we can count these bad experiences on two hands. Some ridiculous, some funny and others; close to madness. Use the links below to read more. Nothing else and nothing less. We are all nice people with a twist. Some twists are not pleasant. Therefore being nice when we have to write an honest negative review is not easy. But it must be done. Unfortunately, when we give the guests a dishonest positive review we defy the objective of building trust. Future hosts depend on an honest review from previous hosts. You depend on it. As they say, “what goes around comes around”. We have had a case where 4 guys booked into a home with 4 great reviews. They were proper con artists and had parties every night. The last night they had [arranged?] a break-in . This puts the owner on the spot and he does not want a bad review with comments about a break-in. And then the hosts either not review they guys or shake hands and agree to share only positive stuff. Well. We did not. We said they are not recommended. And we blocked them. BTW: These guests never laid a complaint with Airbnb or the police. Who would not complain after a break-in? Odd. And we expect our owners who manage to give us the truth as we know you want us to only send you good guys. When you review a guest consider the following criteria: The answer is obviously YES! It would defeat the purpose of the home. Most owners don’t purchase a holiday home just as an investment. No, you want to use the home for fun. Let’s look at management choices using an accommodation agency. What is the concern for owners when they say; the agreement is too restrictive as we may not be able to use the home. Let’s look at our clause affecting you: 3.15 In the event of a non paying guest (friends and family) of the OWNER utilizing the ACCOMMODATION, the AGENT has the option of an admin fee of R450 per owner booking or change to an owner booking after the first 15 owner requests per year. Plus a cleaning fee at the retail rate for the stay (refer to T&Cs for current). Most owners see a last-minute opportunity and arrange to stay at their home. Great stuff. It’s not booked. Why not? Others book their home far in advance. A few owners book a day in advance or change the dates or eventually cancel their own booking. Once or twice no problem but it becomes the norm ……. While all these admin tasks take our attention away from what we do best, getting 5 Star reviews, optimising occupancy. We have an option to cancel the agreement but it may not be beneficial to both parties. It’s for this reason that we have the option to charge R450 as an admin fee. Therefore this clause is only to let owners consider their actions carefully. Making a booking for personal use is great and we encourage it. As long as it’s reasonable. It’s obvious that this clause will not affect 95% of all owners. And if you feel it’s unfair as you plan to make more than 15 personal bookings per year then let us talk. If the owner ensures the calendar is always correct there is no reasonable-justification, for the owner, to cancel; other than for extenuating circumstance (Acts of God). Therefore clause 3.3 in our T&CS should never be an issue. This clause, however, will ensure owners who may not have the best intentions stay honest. And is that not one reason for an agreement; to keep the bad guys honest? The quick answer is you can not cancel any booking. And not reporting unavailability to us for whatever reason has serious consequences. Here’s the long version: Risk. As you know all businesses have some risk. Even though these risks have an extremely low probability please take note. One of the risks is what’s called Instant Bookings. Instant bookings increase the chance for bookings. When guests meet set criteria they can instant-book. And we cannot cancel as we will face severe penalties. Not only is there a cost involved but we can easily lose our SuperHost status. When an owner agrees to our terms and conditions we share this risk and must limit it. We, therefore, must indicate to owners, who may not take this seriously, the risk and consequences. Let me quote the Terms and Conditions: 3.3 If the OWNER cancels or cannot host as agreed, a confirmed booking, a penalty of US$1500 will be paid by the OWNER to the AGENT and the OWNER will be kept liable for any additional losses incurred by the guest who made the booking and any losses occurred by the AGENT, excluding ‘Acts of God’. The loss, when the owner rejects a confirmed booking, is not measured only in monetary terms. No. The cost to lose our SuperHost status is not quantifiable. Booking.Com makes it more difficult. Booking.com says that if you cancel a confirmed booking, you must find alternative accommodation for the guests. If you cannot they will find similar accommodation, and if the rates are higher then you will be liable to pay the cost to relocate the guest. Therefore, we, explicitly, share with the owner the risks and consequences of rejecting a confirmed booking. How often does this happen? Well, infrequently, but we have had one or two peak only owners who have asked us to market and then remove their homes from the market, without notifying us when it happens. In these cases, we accidentally learned about it. Next time we may not be that lucky. The risks are low as long as owners inform us of changes well in advance. Today’s social media profiles make it difficult for most to crook the system. Airbnb, for example, allows guests and hosts to review each other. Not only do you get a rating, like our host rating of 4.9 out 5 stars – for many hundreds of happy guests, we review guests as well. We use Airbnb instant booking and can set various restrictions to ensure only good people book. For example, people with many positive reviews can instantly book. If they only have a few reviews, we can check these and ask the guest pertinent questions. For example; we may ask what is your group make up? You may not discriminate but if you have a potential booker with no reviews who do not answer our questions we may decline. Another way to stop funnies is not to do one night or two night stays. Because party animals only need a home for one night. Guest profiles: Airbnb also uses a system where every user of their platform has to verify their profile. And the more verification you have the higher the trust. All is not sunshine; the host may not always give honest reviews as they feel guilty to do it. This can be a problem for guests with relatively few reviews. Booking.com is pretty useless when it comes to guest verifications as they don’t do guest reviews by hosts. However, the guest can be asked to verify their address and phone number. TripAdvisor is similar to Booking.com. Our own website: The profile of the party is critical. Your best group is family. We have access to social profiles and Google if we need to qualify guests. General: Guests pay upfront; therefore they have money to afford your home. They have their own homes to go back to after their stay. Compare this to longterm renters who may not have their own home yet – this is another issue short term does not experience. And since 2009 we have had less than 0.1% issues with short term rental guests. Therefore the risk for issues is low. If not, we would not be here assisting you. Read more on risks. This depends on if you are a new owner on our portfolio or not. We have two kinds of owners: Those established for full-year and those that move out for bookings once or twice a year. I regularly get questions like, “Are you taking a big enough breakage deposit?” Injuries, accidents and your liability seem to be on the back burner. But let me answer your breakage deposit concern first. As an owner, you want to protect your belongings against breakages. You can throw money at the problem or you make it as foolproof as possible. After a thorough foolproof audit and making changes, the next defense is a breakage deposit. How high should the breakage be to cover your home? Can you consider any figure you believe is high enough? Okay. You decide to hit them hard with a high breakage deposit. But the consequence is; no more bookings. Nothing. Obviously, we need to consider the risk. How many breakages occur and how severe are they? Instead of limiting or stopping bookings it’s our view to get a breakage deposit about equal to one day’s rates during high season. But you may be risk-averse and want more. Your only choice (not really a choice) is to get your short term insurer involved. You must tell him you do short term accommodation and want insurance for breakages, accidents and liability claims. Let’s get back to breakages: Action: In general, short term rental accommodation business is easy if you do the common sense issues well. They are simple. But relentlessly risky if skimped. P.S. If it can break it will break. This does not mean we must change to plastic plates and glasses. Everyday use items must be easily replaceable in the blink of an eye. To claim from a guest for such accidental breakages is not ideal. Our Agency Management Terms and Condition are not cast in stone. Some clauses are negotiable. Some others are not. It’s important that you read it. And understand it. This FAQ will answer any issues you may have. Read the T&Cs here. Feel free to ask any questions here: Owners who utilize CapeHolidays Management Agency are obviously interested in costs to manage their Cape Town holiday accommodation. And it can be confusing. So, let me try and explain. Most Accommodation Management companies in Cape Town requires a fixed management fee per month. In our case, we don’t. We could not see why we need to charge owners a fee if there is no activity at the home. This is why our management fee is the cost per incident. The major cost management drivers (change over cost) are: How much are the actual incident fees? This depends on the home but the minimum is currently R350 per incident. But can be different depending on the house. It can change at any time. And owners will be informed if it does. All costs; every-day running the home is not included. These not include fees are, but not limited to, rates and taxes, Internet, DSTV, pool, electricity, etc. The change over cost is per booking. Each booking has at least one meet, greet, and clean. The variables costs are; laundry, consumables, extra service and window cleaning, upholstery- and carpet cleaning (if and when needed). Every guest who books pays the total rate for the stay and an extra, one-off, change-over fee to cover most of the change-over cost but not all costs. You may ask, “why does the change-over-fee not cover all the costs?” The problem is not that we can increase the change over fee but we must consider the total rate the guest is willing to pay. We, therefore, make the fee “just enough”. When we get paid by the guest we deduct our commission and pay you the total excluding the change-over fee. The change-over-fee is credited to your account. This means you get it but it’s not paid to you directly but used to cover costs. When we get invoiced by the contractors (meeting, greeting, laundry, etc) we debit this change-over-credit. Most of the time the change-over fee will not cover the full services rendered, and the reason why we keep a kitty for these costs. Let me summarise: The actual change-over-fee and per-incident management costs are shared with the owner as soon as we have met and discussed the home and the individual owner’s needs. Finding The Cash Flow Spreadsheet when you need it? It is very simple to do on your mobile phone. You can also add it to your desktop computer but today I’ll only share how to save it on your mobile Home Screen! Steps: New Airbnb owners should be aware of the hosting risks of Airbnb and do something to limit it. NOTE: In general, you may never even encounter any of these issues. Reading about these risks may scare many owners. If that is the case then you make take this as an absolute. It’s not. The risks are very low. Let’s consider a list of risks of hosting Airbnb guests and solutions here: Airbnb Guests book remarkable accommodation before they book a home with poor photos, boring interior. Homes don’t have to be luxury but everyone walking in should know this is a unique place! We believe….. If it’s not remarkable it’s not good enough. From start to finish, we try to think about designing a more remarkable experience. Feel welcome to ask any question you may have: This is not the question you should ask CapeHolidays. We suggest you read what our guests and owner have to say about us. A few owners only want occasional bookings and not interested in maximising income. Yes. We can assist you. Some Cape Town Accommodation owners only want to get one, two or three bookings during the year. And nothing more. We just need to agree to a different T&Cs (see it here) for your specific needs. These owners either; These owners keep the home for their own use or no use during the year and make certain dates exclusively available to CapeHolidays. Agency.CapeHolidays.info are 100% responsible for bookings during this time and the owner will honour all bookings during the agreed availability period. See the consequences and responsibilities for Instant Bookings. Owners who don’t live in their homes during the year may want the management of their accommodation while they are not here; our T&Cs do not provide for this function. And these owners will need to discuss their needs with us clearly to understand their needs and agree on the management fee to oversee the home during the empty time. Can You Assist if I only want occasional bookings? Read this FAQ. Many owners want CapeHolidays to manage their accommodation in Cape Town, Simonstown etc, list it with Airbnb and other; the problem is they may wonder if their home will make the grade. Some owners may have an inflated perception of value and expect the ultimate; obviously, when our knowledge of the market does not meet the owner’s expectations we sit with unnecessary conflict. It’s therefore not only the accommodation but includes qualifying the owner. Read more here on how Agency.CapeHolidays.info does business getting 4.9 out of 5-star reviews every time. Instant Booking is one of the features hosts don’t really have an option with. Airbnb gives you another option where guests can first discuss a booking. But still, you cannot decline if you don’t have a very good reason. And guests don’t like being rejected when your calendar shows availability. And if we cancel the hosts will never keep their status as a SuperHost (see more). Let’s get to the details: What the above means is that everything works extremely well if the agent can ensure 100% calendar integrity. As agents or hosts, we cannot do our business best without instant booking. Our objective is not to discourage owner-stays. It will not be reasonable. However, we have found a few owners would do many owner-reservations. And some would change these reservations as things change. And it becomes an administration hassle. We want to assist but have decided that after ten zero cost reservations by the owner per year to charge an admin fee of R450 per reservation/change. This will keep unnecessary changes to a minimum. In extra ordinary cases we can discuss it with the owner. An Owner Pieter recommended Sandra and husband John. Around the dining table, they heard about the slug of money Pieter got renting his home over peak. The one couple got easy money over Christmas and the others wanted to be part of the rainbow. Sandra showed us their upmarket apartment close to the beach. It was not guest ready yet. But we assisted in staging the accommodation and the photos were really great. This is going to be a winner. We sent them the T&Cs to read, discuss, agree, sign and send back. Nothing. Eventually, we got an email; We know Peter who has a property that you have rented over the high season period. We are comfortable with a similar arrangement with our property. Long story short; the: similar arrangement was based on a handshake. Although low incidence, renting out accommodation has various risks. And things had to change. Easy verbal arrangements are great and easy but…. Various parties with different expectations make it difficult to just shake hands on hope for the best: The rare incidents can be severe. Let me explain: Since starting out Cape Town Management Agency during 2009 we only had three cancellations due to extenuating circumstances. All during 2019. An insignificant issue as measured in incidence and 4% in value. The three owners feeling the brunt and are out of pocket. These cancellations occur last minute. And in most cases, guests book two months in advance. Meaning; we will not get another booking. Two of the affected owners, we paid a substantial amount, said they were not aware we market their home on Airbnb and did not realise the risk. One owner asked us to share the risks in more detail. Obviously, this is one example of many. An agreement has various purposes: Our Terms and conditions are general. It may not cover all your specific needs. Certain clauses are negotiable others not. We can add, and adapt some. Did you know Agency.CapeHolidays.Info have nearly 1000 4.9 out of 5 Star reviews? We must be doing something right. Consistently. Our Airbnb holiday accommodation is all remarkable. They don’t have to be luxury but everyone walking in should say WOW! If it’s not, it’s not good enough. From start to finish, we try to think about designing a more remarkable experience. Use Our Free Quiz To Qualify Your Airbnb Accommodation here. Exclusive Mandate: The Owner gives Agency.CapeHolidays.info authority to act on its behalf regarding the marketing and management of the Owner’s property for short term holiday rentals as per our T&CS. The main focus of the mandate is the availability calendar; as your agents, Management of the property: We cannot manage and get 5 out of 5 star reviews if unauthorised persons access the home without or knowledge. We have seen too many times where guests arrived at a prepared home just to find another left stuff, used the toilet, or wrinkled a cushion by sitting on it. In the hospitality business the motto is: The mandate we agreed with the owner is to do everything within reason to get a 5-star review. We can never use the excuse, “Guest, please wait for 24 hours, as we cannot get hold of the owner to okay replacing the geyser”.
If we cannot authorise work, in an emergency with our proven and trusted workmen, then the owner is not really committed to us and our aims with his home. We will get poor reviews and going down. Most emergencies we may get hold of the owner immediately but if we cannot we must act. Immediately. Why Keep A Management Kitty? Good question. Note: Your Cash Flow statement is up to date 24/7 and shows you at any time what is in the kitty and what money is outstanding at any time. Yes. It happens. How do we manage future bookings for owners who want to sell or who are very sick? Obviously, if you die it’s extenuating circumstances and we are allowed to cancel. With terminal illness or selling of your accommodation, you have a transition period where you may want the bookings to continue. And it is possible. Let me remind you of the T&C clause in question: This clause does not change at all, other than for extenuating circumstances. But there is a way to limit the exposure and it is very simple: You close the future booking window from 12 to 18 months to only three months in advance. This means at any time when the owner sells her property, only the next three months’ worth of bookings must be honoured. As you know; estate transfer takes about three months. If this interests the owner, she must just ask us in writing to only open a rolling three-month booking window. An owner may think that it’s easy selling their home while we try and keep guests happy. Unfortunately, the consequences are not obvious to the outsider. Paying guests will not tolerate intrusions. Never. Ever! You can ask nicely; they may oblige but deep down they are disappointed when “their home” is intruded upon. We are extremely protective of our SuperHost status (more here), and our nearly 1000, 5 out of 5-star ratings. We will not sacrifice quality under any circumstances. Therefore, while we manage and market your home, you must be aware of the limitations. There is a price to pay for this. And it may be better to cancel our agreement than to compromise our commitment to you, your home and the guests with high expectations. You know the saying: There is a conflict between your needs to have a rental income and selling your home. Your rental agent must ensure the integrity of the home at all times while the real estate agent wants access now and will do whatever to get access. We must find a way for all three interested parties to work hand in hand. The following procedure is applicable while we have a mandate to market and manage your home. Obviously, if the owner believes it is too restrictive then we need to consider the request. But if the request limits our ability to ensure guest’s privacy or a third party interferes with the quality (as we have set it up for guests), then we must reconsider the agreement. Please read this FAQ first for some background info. As you may have read, Agency.CapeHolidays.Info kicked off during 2009. During this time we have had a few experiences we would not wish upon our worst enemies. Luckily we can count these bad experiences on two hands. Some ridiculous, some funny and others; close to madness. Use the links below to read more. New owners are concerned, initially, with the daily rates we set. “Set the Airbnb rates high and I am happy. Rates are my measure of success!” For example, I got this email from a new owner, after we notified him of his second booking. I would have expected the going rate to be higher late in November….but I know you guys know what you are doing. Although he says we know what we do, he is concerned. Correctly so. And most owners, initially, feel the same way. Only high rates will ease their minds. But after they realise we are stacking snow, hand upon hand, building trust they get the idea. Who can stop a snowball of trust? Eventually, they happily bank a lot of money as the trust-snowball gets momentum and picks up speed. Patience is the name of the game. We must crawl before we walk. Unfortunately, rates are not based on fact. It’s based on the time for guests to take action (speed to book or lack thereof – more below), the level of trust you established (reviews for example), perception etc. At the moment your new house has no reviews and therefore no trust. No guest will take action (book your home) without an incentive. Why Would An Airbnb Guest Be Your Guinea Pig? Guests do not book willy nilly. They base their decisions on the ratings by other guests – positive reviews, Superhost status. Do they like the features, the photos, and the rates? There are more, like cancelation policies, etc. You can have it all but with no reviews, your home will come second when compared to similar homes with many reviews. Therefore, you really don’t have much of a choice but to make it more attractive and your only ally – competitive rates. This means you can bring guests to take action faster with rates you may perceive as uncomfortable. At ground zero you are buying reviews. You are paying a price to get trust. Our only aim is to focus on achieving higher annual income. This will change your mindset. You now focus on the long term. One solid hand of snow at a time. Let’s talk time/speed …. The issue with maximizing rates, in isolation, is it ignores time-to-take-action – speed at which you get or don’t get bookings (more below) . High rates are useless if over time you get no bookings. Consider the “slower and faster” time to take action scenario: Use Feedback From Time-To-Action! We are getting feedback from both above. Action speeds up, due to high demand, we can conclude: Our Airbnb rates are too low and we can now increase. If we cannot increase now we will increase the rates for the same time next year. Slowly over time, as we collect more reviews, increase occupancy we tweak the rates upwards. And the owner is happy. If demand slows down we start all over again by reducing rates until guests start taking action faster. And slowly work our way up again. On the other hand; if you are focusing on high rates you may impress your neigbours but not your bank manager. Allow us to do what we do best; focus on time to take action, get bookings and reviews and accumulate. Based on these multipliers we will get better than competitive rates. Why? As we build trust the time to take action reduces (higher demand) and due to demand, we increase the rates. Over time the tortoise wins the race. Patience is the game now. The answer is obviously YES! It would defeat the purpose of the home. Most owners don’t purchase a holiday home just as an investment. No, you want to use the home for fun. Let’s look at management choices using an accommodation agency. What is the concern for owners when they say; the agreement is too restrictive as we may not be able to use the home. Let’s look at our clause affecting you: 3.15 In the event of a non paying guest (friends and family) of the OWNER utilizing the ACCOMMODATION, the AGENT has the option of an admin fee of R450 per owner booking or change to an owner booking after the first 15 owner requests per year. Plus a cleaning fee at the retail rate for the stay (refer to T&Cs for current). Most owners see a last-minute opportunity and arrange to stay at their home. Great stuff. It’s not booked. Why not? Others book their home far in advance. A few owners book a day in advance or change the dates or eventually cancel their own booking. Once or twice no problem but it becomes the norm ……. While all these admin tasks take our attention away from what we do best, getting 5 Star reviews, optimising occupancy. We have an option to cancel the agreement but it may not be beneficial to both parties. It’s for this reason that we have the option to charge R450 as an admin fee. Therefore this clause is only to let owners consider their actions carefully. Making a booking for personal use is great and we encourage it. As long as it’s reasonable. It’s obvious that this clause will not affect 95% of all owners. And if you feel it’s unfair as you plan to make more than 15 personal bookings per year then let us talk. If the owner ensures the calendar is always correct there is no reasonable-justification, for the owner, to cancel; other than for extenuating circumstance (Acts of God). Therefore clause 3.3 in our T&CS should never be an issue. This clause, however, will ensure owners who may not have the best intentions stay honest. And is that not one reason for an agreement; to keep the bad guys honest? The quick answer is you can not cancel any booking. And not reporting unavailability to us for whatever reason has serious consequences. Here’s the long version: Risk. As you know all businesses have some risk. Even though these risks have an extremely low probability please take note. One of the risks is what’s called Instant Bookings. Instant bookings increase the chance for bookings. When guests meet set criteria they can instant-book. And we cannot cancel as we will face severe penalties. Not only is there a cost involved but we can easily lose our SuperHost status. When an owner agrees to our terms and conditions we share this risk and must limit it. We, therefore, must indicate to owners, who may not take this seriously, the risk and consequences. Let me quote the Terms and Conditions: 3.3 If the OWNER cancels or cannot host as agreed, a confirmed booking, a penalty of US$1500 will be paid by the OWNER to the AGENT and the OWNER will be kept liable for any additional losses incurred by the guest who made the booking and any losses occurred by the AGENT, excluding ‘Acts of God’. The loss, when the owner rejects a confirmed booking, is not measured only in monetary terms. No. The cost to lose our SuperHost status is not quantifiable. Booking.Com makes it more difficult. Booking.com says that if you cancel a confirmed booking, you must find alternative accommodation for the guests. If you cannot they will find similar accommodation, and if the rates are higher then you will be liable to pay the cost to relocate the guest. Therefore, we, explicitly, share with the owner the risks and consequences of rejecting a confirmed booking. How often does this happen? Well, infrequently, but we have had one or two peak only owners who have asked us to market and then remove their homes from the market, without notifying us when it happens. In these cases, we accidentally learned about it. Next time we may not be that lucky. The risks are low as long as owners inform us of changes well in advance. The short answer: NO! This is a common concern for new owners. As we implement our trust-building phase we use competitive rates to attract reluctant guests to stay and get reviews at the new accommodation. The Consequences of AirBnB’s Commoditization On Rates It’s only after new owners become familiar with the painful reality and impact of AirBnB’s commoditization of the short term accommodation market, that they change their mind about our rate setting philosophy. After this introduction let me address the concern about low rates equaling bad guests. When we talk about low rates to buy trust we are talking about competitive rates only and not Rock-bottom rates. As you know, we don’t have the accommodation seeker’s trust yet, and we must use our only effective driver, namely rates, to overcome resistance to book. The guests who book initially are the same guest who may pay premium rate tomorrow. But with no reviews (trust) forget it. Only a remarkable holiday home at a bargain will do. In the market we operate, guests are not poor. Let me make a statement based on experience. Even if the rates are competitive you still get great guests. Now let me share why I say this: The real risk is not bad guests but rather uneducated guests. With today’s social media profiles guests cannot hide any longer. We started our business in 2009. This was before social media. And many people left homes untidy as there was no recourse. Even owners got away with shoddy offerings. Today Your Social Profile Is A Valuable Asset. When a guest book and stay they review us. And these positive reviews made us SuperHosts. Trust! As guests depart we review them. And they establish trusting profile overtime. Today we all know the consequences of a bad review for both parties. Let me repeat: Even if the rate is competitive no guests will risk getting a bad review knowing other hosts will not approve them with a bad previous review. The only risk for us is first time users on Airbnb. Unfortunately, they are not familiar with the implications of getting a bad review and how it impacts their future ability to use Airbnb. And some of them, ignorantly, will not leave the property in the same clean state they received it. When they get hit with a bad review they never again treat any Airbnb place poorly. And if they do they get blocked. Our challenge is to make it as difficult for new guests to book without first qualifying (See Forbes article above) them and then we educate them on what we expect. To answer the question: No. Competitive rates are not the cause of bad guests. Bad guests are mostly new guests unfamiliar with their responsibility. When you list your home it has ZERO trustability; no reviews and no bookings. But, when we list your home, under our Flag – CapeHolidays, your home is seen as a SuperHost home immediately. Our GOODWILL becomes yours. To be SuperHosts: We must maintain a 4.8 star rating with positive reviews (more on criteria). Something we have achieved: As you can see we score 4.9 out 5 for every of the nearly 600 guests who reviewed us. Designed for success from 2009. For this reason, we are SuperHosts and very proud of it (see our profile at Airbnb). Obviously, we can, with confidence, say we are a successful professional Airbnb Agency in Cape Town. Because of this Badge of Trust, we share it with owners who are willing to work with us and have remarkable accommodation. Unfortunately, choosing remarkability is not that easy. Why? Because the final judge is the very critical guest who paid to stay and have earned the right to review your home. These guests come with high expectations. If your home fails at the first booking it will be uphill to recover. When we choose, the owner and/or the home, incorrectly we could lose our SuperHost status. Therefore, we must be supercritical before a holiday home is added to our portfolio. In other words, SuperHosts attract more business because of established trust. This overcomes the lack of trust you have when you list your home from ground-zero. It takes time and lower rates to attract guests when you are new and competing with the masses out there. I have said it: We are a team working together and the sky’s the limit. And there is nothing like reading reviews from happy guests. Wait. You’ll see. It’s fun to bank good money while everyone is happy! Read more on criteria to become SuperHosts. Today’s social media profiles make it difficult for most to crook the system. Airbnb, for example, allows guests and hosts to review each other. Not only do you get a rating, like our host rating of 4.9 out 5 stars – for many hundreds of happy guests, we review guests as well. We use Airbnb instant booking and can set various restrictions to ensure only good people book. For example, people with many positive reviews can instantly book. If they only have a few reviews, we can check these and ask the guest pertinent questions. For example; we may ask what is your group make up? You may not discriminate but if you have a potential booker with no reviews who do not answer our questions we may decline. Another way to stop funnies is not to do one night or two night stays. Because party animals only need a home for one night. Guest profiles: Airbnb also uses a system where every user of their platform has to verify their profile. And the more verification you have the higher the trust. All is not sunshine; the host may not always give honest reviews as they feel guilty to do it. This can be a problem for guests with relatively few reviews. Booking.com is pretty useless when it comes to guest verifications as they don’t do guest reviews by hosts. However, the guest can be asked to verify their address and phone number. TripAdvisor is similar to Booking.com. Our own website: The profile of the party is critical. Your best group is family. We have access to social profiles and Google if we need to qualify guests. General: Guests pay upfront; therefore they have money to afford your home. They have their own homes to go back to after their stay. Compare this to longterm renters who may not have their own home yet – this is another issue short term does not experience. And since 2009 we have had less than 0.1% issues with short term rental guests. Therefore the risk for issues is low. If not, we would not be here assisting you. Read more on risks. This depends on if you are a new owner on our portfolio or not. We have two kinds of owners: Those established for full-year and those that move out for bookings once or twice a year. I regularly get questions like, “Are you taking a big enough breakage deposit?” Injuries, accidents and your liability seem to be on the back burner. But let me answer your breakage deposit concern first. As an owner, you want to protect your belongings against breakages. You can throw money at the problem or you make it as foolproof as possible. After a thorough foolproof audit and making changes, the next defense is a breakage deposit. How high should the breakage be to cover your home? Can you consider any figure you believe is high enough? Okay. You decide to hit them hard with a high breakage deposit. But the consequence is; no more bookings. Nothing. Obviously, we need to consider the risk. How many breakages occur and how severe are they? Instead of limiting or stopping bookings it’s our view to get a breakage deposit about equal to one day’s rates during high season. But you may be risk-averse and want more. Your only choice (not really a choice) is to get your short term insurer involved. You must tell him you do short term accommodation and want insurance for breakages, accidents and liability claims. Let’s get back to breakages: Action: In general, short term rental accommodation business is easy if you do the common sense issues well. They are simple. But relentlessly risky if skimped. P.S. If it can break it will break. This does not mean we must change to plastic plates and glasses. Everyday use items must be easily replaceable in the blink of an eye. To claim from a guest for such accidental breakages is not ideal. Our Agency Management Terms and Condition are not cast in stone. Some clauses are negotiable. Some others are not. It’s important that you read it. And understand it. This FAQ will answer any issues you may have. Read the T&Cs here. Feel free to ask any questions here: Owners who utilize CapeHolidays Management Agency are obviously interested in costs to manage their Cape Town holiday accommodation. And it can be confusing. So, let me try and explain. Most Accommodation Management companies in Cape Town requires a fixed management fee per month. In our case, we don’t. We could not see why we need to charge owners a fee if there is no activity at the home. This is why our management fee is the cost per incident. The major cost management drivers (change over cost) are: How much are the actual incident fees? This depends on the home but the minimum is currently R350 per incident. But can be different depending on the house. It can change at any time. And owners will be informed if it does. All costs; every-day running the home is not included. These not include fees are, but not limited to, rates and taxes, Internet, DSTV, pool, electricity, etc. The change over cost is per booking. Each booking has at least one meet, greet, and clean. The variables costs are; laundry, consumables, extra service and window cleaning, upholstery- and carpet cleaning (if and when needed). Every guest who books pays the total rate for the stay and an extra, one-off, change-over fee to cover most of the change-over cost but not all costs. You may ask, “why does the change-over-fee not cover all the costs?” The problem is not that we can increase the change over fee but we must consider the total rate the guest is willing to pay. We, therefore, make the fee “just enough”. When we get paid by the guest we deduct our commission and pay you the total excluding the change-over fee. The change-over-fee is credited to your account. This means you get it but it’s not paid to you directly but used to cover costs. When we get invoiced by the contractors (meeting, greeting, laundry, etc) we debit this change-over-credit. Most of the time the change-over fee will not cover the full services rendered, and the reason why we keep a kitty for these costs. Let me summarise: The actual change-over-fee and per-incident management costs are shared with the owner as soon as we have met and discussed the home and the individual owner’s needs. Finding The Cash Flow Spreadsheet when you need it? It is very simple to do on your mobile phone. You can also add it to your desktop computer but today I’ll only share how to save it on your mobile Home Screen! Steps: New Airbnb owners should be aware of the hosting risks of Airbnb and do something to limit it. NOTE: In general, you may never even encounter any of these issues. Reading about these risks may scare many owners. If that is the case then you make take this as an absolute. It’s not. The risks are very low. Let’s consider a list of risks of hosting Airbnb guests and solutions here: Airbnb Guests book remarkable accommodation before they book a home with poor photos, boring interior. Homes don’t have to be luxury but everyone walking in should know this is a unique place! We believe….. If it’s not remarkable it’s not good enough. From start to finish, we try to think about designing a more remarkable experience. Feel welcome to ask any question you may have: This is not the question you should ask CapeHolidays. We suggest you read what our guests and owner have to say about us. Excellent question, “how much can I make on Airbnb?” when you intend to list on Airbnb. But what about the Airbnb income calculator? You get some great Airbnb profitability calculators; they tend to only use your property address and the number of bedrooms to calculate your Airbnb profitability. Well, let’s look at…. Airbnb’s own free calculator. For example; look at a two-bedroom in Cape Town. Airbnb suggests a monthly R26 531 (or +R300 000 or $22000 per annum). This is optimistic, to say the least. What about occupancy? I see the norm is a low 37% occupancy. Did they calculate this income at 100% occupancy? I just have too many questions. And you should as well. Personally, I believe the calculators may be designed to lull you into listing your accommodation as very few people in Cape Town would not list their accommodation on Airbnb if they can get the above. You may even consider buying a property because of the high potential Airbnb income. Mistake. We believe you must crawl before you run. And let’s rather be conservative. And consider other factors as well. Your potential income cannot be based on your neigbourhood and number of rooms only; yes, it’s a good start but what about the host’s attitude towards guests, your rules (minimum stays, cancellation policy, discounts, etc.), your location in relation to the beach (or related major attractions), pool, jacuzzi, features, willingness to invest in staging and professional photos? And the list of critical Airbnb income drivers grows. It is for this reason that we developed an in house Airbnb quiz to try and determine if your Airbnb accommodation will make money. No bull. The quiz, obviously, depends on your honesty. But the verdict will be better than using an Airbnb profitability calculator. It may not answer your question; How much can I make on Airbnb? Calculator. No. But when you get the results from the Airbnb Profitability Quiz you will know; if your Airbnb accommodation will make money or not and what you need to correct it. A few owners only want occasional bookings and not interested in maximising income. Yes. We can assist you. Some Cape Town Accommodation owners only want to get one, two or three bookings during the year. And nothing more. We just need to agree to a different T&Cs (see it here) for your specific needs. These owners either; These owners keep the home for their own use or no use during the year and make certain dates exclusively available to CapeHolidays. Agency.CapeHolidays.info are 100% responsible for bookings during this time and the owner will honour all bookings during the agreed availability period. See the consequences and responsibilities for Instant Bookings. Owners who don’t live in their homes during the year may want the management of their accommodation while they are not here; our T&Cs do not provide for this function. And these owners will need to discuss their needs with us clearly to understand their needs and agree on the management fee to oversee the home during the empty time. Can You Assist if I only want occasional bookings? Read this FAQ. Many owners want CapeHolidays to manage their accommodation in Cape Town, Simonstown etc, list it with Airbnb and other; the problem is they may wonder if their home will make the grade. Some owners may have an inflated perception of value and expect the ultimate; obviously, when our knowledge of the market does not meet the owner’s expectations we sit with unnecessary conflict. It’s therefore not only the accommodation but includes qualifying the owner. Read more here on how Agency.CapeHolidays.info does business getting 4.9 out of 5-star reviews every time. CapeHolidays manage form offices in Simonstown and Green Point Cape Town. From these offices we manage and market accommodation in all the following areas: Instant Booking is one of the features hosts don’t really have an option with. Airbnb gives you another option where guests can first discuss a booking. But still, you cannot decline if you don’t have a very good reason. And guests don’t like being rejected when your calendar shows availability. And if we cancel the hosts will never keep their status as a SuperHost (see more). Let’s get to the details: What the above means is that everything works extremely well if the agent can ensure 100% calendar integrity. As agents or hosts, we cannot do our business best without instant booking. Within 24 of a reservation, you’ll receive an email titled Confirmed Booking. We share the following reservation info: And the CONFIRMED BOOKING may not be changed or canceled by the owner or CapeHolldays. Depending on the BOOKING SITE’s T&Cs we may only receive the money one day after arrival. Obviously, these bookings can be canceled; due to lack of payment or cancellations as per T&Cs. Our objective is not to discourage owner-stays. It will not be reasonable. However, we have found a few owners would do many owner-reservations. And some would change these reservations as things change. And it becomes an administration hassle. We want to assist but have decided that after ten zero cost reservations by the owner per year to charge an admin fee of R450 per reservation/change. This will keep unnecessary changes to a minimum. In extra ordinary cases we can discuss it with the owner. An Owner Pieter recommended Sandra and husband John. Around the dining table, they heard about the slug of money Pieter got renting his home over peak. The one couple got easy money over Christmas and the others wanted to be part of the rainbow. Sandra showed us their upmarket apartment close to the beach. It was not guest ready yet. But we assisted in staging the accommodation and the photos were really great. This is going to be a winner. We sent them the T&Cs to read, discuss, agree, sign and send back. Nothing. Eventually, we got an email; We know Peter who has a property that you have rented over the high season period. We are comfortable with a similar arrangement with our property. Long story short; the: similar arrangement was based on a handshake. Although low incidence, renting out accommodation has various risks. And things had to change. Easy verbal arrangements are great and easy but…. Various parties with different expectations make it difficult to just shake hands on hope for the best: The rare incidents can be severe. Let me explain: Since starting out Cape Town Management Agency during 2009 we only had three cancellations due to extenuating circumstances. All during 2019. An insignificant issue as measured in incidence and 4% in value. The three owners feeling the brunt and are out of pocket. These cancellations occur last minute. And in most cases, guests book two months in advance. Meaning; we will not get another booking. Two of the affected owners, we paid a substantial amount, said they were not aware we market their home on Airbnb and did not realise the risk. One owner asked us to share the risks in more detail. Obviously, this is one example of many. An agreement has various purposes: Our Terms and conditions are general. It may not cover all your specific needs. Certain clauses are negotiable others not. We can add, and adapt some. Did you know Agency.CapeHolidays.Info have nearly 1000 4.9 out of 5 Star reviews? We must be doing something right. Consistently. Our Airbnb holiday accommodation is all remarkable. They don’t have to be luxury but everyone walking in should say WOW! If it’s not, it’s not good enough. From start to finish, we try to think about designing a more remarkable experience. Use Our Free Quiz To Qualify Your Airbnb Accommodation here. How to set prices on Airbnb, within reason, maximise income is quite simple if you follow a strategy that works. This means you should focus on occupancy and not setting high rates, on getting more reviews and eliminating resistance to book. Read the following FAQ where I discus high rates and time-to-action (demand). Read FAQ (Will I Make Money Setting High Rates On Airbnb) To set prices on Airbnb depends on the number of reviews we have and the established demand. Assuming we list a new property with no reviews and the owner wants to maximise income annually; we go through the following with the owner: Airbnb Pricing Strategy Philosophy Part 1 Airbnb Seasonal Rate Calculator Part 2 Great question. And it depends…… If you can do list your accommodation on Airbnb and manage it yourself then it’s best you do it yourself because; On the other hand an Airbnb Agent in Cape Town like Agency.Capeholidays may assist you better if the following are important? After all that said and done; we believe it’s better for a Cape Town homeowner to try to become a SuperHost if she believes she has the time and attitude. If not she may always feel a bit of resentment and that will not be ideal for our Agent & Owner relationship. We have been there. It’s not ideal. But when we have mutual trust we make a winning team. Maximising Airbnb accommodation income is “shorthand” our focus on (long term) profitability over a year. Instead of focusing on maximising daily rates we ensure with our philosophy to: Maximised income depends on trust; high rates depend on high demand. As a Cape Town Airbnb accommodation agency; Exclusive Mandate: The Owner gives Agency.CapeHolidays.info authority to act on its behalf regarding the marketing and management of the Owner’s property for short term holiday rentals as per our T&CS. The main focus of the mandate is the availability calendar; as your agents, Management of the property: We cannot manage and get 5 out of 5 star reviews if unauthorised persons access the home without or knowledge. We have seen too many times where guests arrived at a prepared home just to find another left stuff, used the toilet, or wrinkled a cushion by sitting on it. In the hospitality business the motto is: The mandate we agreed with the owner is to do everything within reason to get a 5-star review. We can never use the excuse, “Guest, please wait for 24 hours, as we cannot get hold of the owner to okay replacing the geyser”.
If we cannot authorise work, in an emergency with our proven and trusted workmen, then the owner is not really committed to us and our aims with his home. We will get poor reviews and going down. Most emergencies we may get hold of the owner immediately but if we cannot we must act. Immediately. Why Keep A Management Kitty? Good question. Note: Your Cash Flow statement is up to date 24/7 and shows you at any time what is in the kitty and what money is outstanding at any time. The obvious question is; how many bedrooms should my Airbnb ideally have? My quick answer is that the number of bedrooms is a driver when trying to make money with Airbnb. But! If everything is not equal; then other drivers are more important. Like The Following Airbnb Success Drivers: Location: Critical. We have two beautiful apartments against the mountain. The two-bedroom is royal but seventy steps up, with spectacular views. The one-bedroom is as great but at 15 steps only, also with views. However, income is not really different. Interior and outside living: Guests pay premiums for funky or modern places with sunny light and inviting living areas. Imagine sun-loungers and a deck. It sells.
Water: I mentioned beach location; if you cannot bring the beach to your Airbnb accommodation then try a pool or hot tub . And it does not matter if the sea is just 50 meters away. Airbnb guests will pay a premium for water. Marketing Philosophy and Rules: You cannot measure your Airbnb success until you have learned by failing. Going in with an attitude of…. “why do they need a pool? Can they not see the sea?” , or “who wants to watch DSTV on holiday?” or guests “ must pay high rates; I pay high rates at hotels!” or “they should stay a minimum seven days!” These comments are at least shortsighted and show ignorance. And will cost you dearly. Dearly! It matters only if they look exactly the same, at the same location, with a similar interior. If not then most of the drivers above are critical. For more on investment advice: Airbnb Cape Town Airbnb success drivers, I suggest you complete our free questionnaire. The questions we ask will assist in getting a better idea. And you may be surprised to know that your Airbnb rule sets may be a killer driver. After you completed the questionnaire our calculator crunch “numbers” and sends you a report; automatically emailed to you. More below. P.S. One bedrooms have a disadvantage as the change over costs for a one-bedroom Airbnb is as much as it is for a two-bedroom and even three bedrooms. Two-Bedroom change-over costs nearly as much as a 4 bedroom but if you give me two two-bedroom apartments next to each other then I take two x2. I’ll rent them as a 4 bedroom or 2x two bedrooms. But, I suppose this is not the only way to look at it. Now we are opening-up flexibility as a driver. See FAQ on flexibility here. But let me stress: we should never focus on cost. Cost should be driven down but be careful. Cost is a negative concept. If your one bedroom has everything I mentioned above and via the questionnaire then a one-bedroom can beat the best. Excellent question: How Do You Setup An Airbnb In Cape Town? Today I just want to discuss flexibility. Let’s kick off with this quote from the FAQ “Why Are The Number Of Bedrooms Not That Important?” You normally search using the suburb’s name. Airbnb selects a relative map area to show all listings in that restricted map area. Unfortunately, Airbnb does not show the actual suburb as known by the locals or how the city demarcates it. When you don’t see your listing, view the Airbnb map. You would probably notice your home is outside of the area Airbnb selected for your suburb. Adjust the Airbnb map and click on Search This Area. Now your listing should show. Can you change this? No, unfortunately Airbnb only uses your actual address to create the map via Google maps and it prefills the address field as you type. Yes. It happens. How do we manage future bookings for owners who want to sell or who are very sick? Obviously, if you die it’s extenuating circumstances and we are allowed to cancel. With terminal illness or selling of your accommodation, you have a transition period where you may want the bookings to continue. And it is possible. Let me remind you of the T&C clause in question: This clause does not change at all, other than for extenuating circumstances. But there is a way to limit the exposure and it is very simple: You close the future booking window from 12 to 18 months to only three months in advance. This means at any time when the owner sells her property, only the next three months’ worth of bookings must be honoured. As you know; estate transfer takes about three months. If this interests the owner, she must just ask us in writing to only open a rolling three-month booking window. Let me qualify: When is the best time for an owner to stay at their property if they want to maximise income? Obviously, if you are not interested in a high return then it does not matter when you stay. Let me pack it out for you: Let’s start with what is maximise income?” Maximising income is quite simple if you follow a strategy that works. This means you should focus on occupancy and not setting high rates, and on getting more reviews (trust) and eliminating all resistance to book . Read the FAQ (1) where I discuss high rates and time-to-action (demand). To set prices on Airbnb it depends on the number of reviews we have and the established demand. Assuming we list a new property with no reviews and the owner wants to maximise income annually; we go through the following with the owner: Airbnb Pricing Strategy Philosophy Part 1 Airbnb Seasonal Rate Calculator Part 2 Let’s consider the following email from a new owner with a lovely 4 bedroom accommodation in Simonstown. She would not be able to manage her home or market it. This is what she told me after I asked her for her annual income expectations: New Owner The financial data was as follows for the period May 2018 to June 2019 – 12 months. The loft room was booked for 191 nights at an average of 752 rand per night and generated 143697 rands for the year. The garden suite was booked for 181 nights and had an average nightly revenue of 1419 and generated 256921k for the year. Total revenue after booking sites costs was 400618k. New Owner This is really an achievement. Agent CapeHolidays Interesting. And your logic makes sense. Obviously we need to see the home. And I believe if it gets foolproof remarkable interior with lots of flexibility like 8 single beds (can be made in Kings), for example, then it should exceed our own expectations. These are the homes we prefer. Looking at the figures you shared the owner is doing 50% occupancy during the year for both properties. Excellent. And a good sign. This means even higher occupancy/rates during summer as winter is relatively dead. The average Airbnb occupancy for this area is much lower. Obviously ours are on average 20% higher and winners a lot higher. But it took about 12 months of building trust with each property to get there. New Owner I would consider this a benchmark to use and hopefully surpass as the entire house would now be available at time that we are not there, this obviously also depends on when we plan to use it too. For now my view is that we should be able to add a further 200k to the value above. To answer your question we would expect to achieve a minimum of what has been achieved historically and add up to 100k on top of this after costs and achieve a gross 550k before your 20% costs. This is a view based on the data we have, I am sure you will have a view, please could you give us your opinion and experience. Reasonable! Who would argue? Agent CapeHolidays Due to various issues (like meeting expectations) we only start off a new home if we can achieve the owner’s goal at 35% occupancy. This does not mean we will not try and beat it. But agreeing to a new house where 50% occupancy is required, to achieve the R550 000 goal, then we may disappoint you before we start. And that’s not fair on you. Agreeing at the kickoff stage to higher occupancy than what is our norm will cause pressure to maximising rates rather than working on getting trust, and adjusting rates to address occupancy based on supply and demand during the first 12 months.[/su_highlight I must say that I am confident we can achieve 50% and higher occupancy to meet and exceed R550 000 but why make a promise just to keep the owner happy? Why not rather exceed expectations after 12 months? Our Motto We don’t have to be the biggest accommodation agency in Cape Town or Simonstown! No. We only want to be the best! This implies that we can walk away; as we are not trying to win a deal at all costs. No. We rather shake hands and walk. Ensuring we will always look the owner in the face knowing we did what was best for both parties. The simple answer is that we manage all unique and remarkable Cape Town accommodation (see the areas we cover here). We never said it must be luxury. Not necessarily. All we want is for guests to say Wow. Like these reviews (more here). But back to your question: If we consider peak rates ; our large homes rent for as much as R45000 per day, while small two-bedroom apartments about R2000 per night. You can see the rates vary a lot. But let me just warn you; don’t get too excited looking at R45000 per night. Outside of peak this home will rent for a lot less. And very few homes will ever rent for R45000 per night. You can read more on how to qualify your home here.
It’s not science. You cannot fail. Just go with your gut. P.S. We are not real estate agents who want to make a quick buck. Our relationship must last for years. An owner may think that it’s easy selling their home while we try and keep guests happy. Unfortunately, the consequences are not obvious to the outsider. Paying guests will not tolerate intrusions. Never. Ever! You can ask nicely; they may oblige but deep down they are disappointed when “their home” is intruded upon. We are extremely protective of our SuperHost status (more here), and our nearly 1000, 5 out of 5-star ratings. We will not sacrifice quality under any circumstances. Therefore, while we manage and market your home, you must be aware of the limitations. There is a price to pay for this. And it may be better to cancel our agreement than to compromise our commitment to you, your home and the guests with high expectations. You know the saying: There is a conflict between your needs to have a rental income and selling your home. Your rental agent must ensure the integrity of the home at all times while the real estate agent wants access now and will do whatever to get access. We must find a way for all three interested parties to work hand in hand. The following procedure is applicable while we have a mandate to market and manage your home. Obviously, if the owner believes it is too restrictive then we need to consider the request. But if the request limits our ability to ensure guest’s privacy or a third party interferes with the quality (as we have set it up for guests), then we must reconsider the agreement. Please read this FAQ first for some background info. As you may have read, Agency.CapeHolidays.Info kicked off during 2009. During this time we have had a few experiences we would not wish upon our worst enemies. Luckily we can count these bad experiences on two hands. Some ridiculous, some funny and others; close to madness. Use the links below to read more. Nothing else and nothing less. We are all nice people with a twist. Some twists are not pleasant. Therefore being nice when we have to write an honest negative review is not easy. But it must be done. Unfortunately, when we give the guests a dishonest positive review we defy the objective of building trust. Future hosts depend on an honest review from previous hosts. You depend on it. As they say, “what goes around comes around”. We have had a case where 4 guys booked into a home with 4 great reviews. They were proper con artists and had parties every night. The last night they had [arranged?] a break-in . This puts the owner on the spot and he does not want a bad review with comments about a break-in. And then the hosts either not review they guys or shake hands and agree to share only positive stuff. Well. We did not. We said they are not recommended. And we blocked them. BTW: These guests never laid a complaint with Airbnb or the police. Who would not complain after a break-in? Odd. And we expect our owners who manage to give us the truth as we know you want us to only send you good guys. When you review a guest consider the following criteria: |
