FAQ: Agency.CapeHolidays Management Services
FAQ’s 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. 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). Instant book has two possible aspects: Let’s get to the details: Read Why Are You Not Keeping Us Informed On The Pipeline Of Bookings? 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. Here’s a typical email from a worried owner. Just one question. With instant booking, how do we vet the client? I would first like to find out who they are etc. I have heard nightmare stories of houses being let and then the owners not being able to get the short term tenants out again. Can I opt out of the Instant Booking option? Guests who can book instantly must: Guest Requirements If you turn on this requirement, you’ll be able to see guests’ profile photos after a booking is confirmed, but not before. It’s turned on. Require guests to submit government ID to Airbnb in order to Instant Book. If they don’t meet this requirement, they will send a request instead. You can decide to restrict guests with children from booking if there are features that are dangerous for children or there’s a risk of property damage. Learn more You can limit guests from bringing pets, but you must reasonably accommodate guests that might bring an assistant animal. Learn more Win Unhassles Airbnb eBook & Plus Advice Worth R10000 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. 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). Instant book has two possible aspects: Let’s get to the details: Read Why Are You Not Keeping Us Informed On The Pipeline Of Bookings? 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. Here’s a typical email from a worried owner. Just one question. With instant booking, how do we vet the client? I would first like to find out who they are etc. I have heard nightmare stories of houses being let and then the owners not being able to get the short term tenants out again. Can I opt out of the Instant Booking option? Guests who can book instantly must: Guest Requirements If you turn on this requirement, you’ll be able to see guests’ profile photos after a booking is confirmed, but not before. It’s turned on. Require guests to submit government ID to Airbnb in order to Instant Book. If they don’t meet this requirement, they will send a request instead. You can decide to restrict guests with children from booking if there are features that are dangerous for children or there’s a risk of property damage. Learn more You can limit guests from bringing pets, but you must reasonably accommodate guests that might bring an assistant animal. Learn more Win Unhassles Airbnb eBook & Plus Advice Worth R10000 The age of people, their sexual orientation, the colour of their skin, their physical inabilities, etc. do not define if they will trample your home, or expose you to risk. You can set an age limit for kids. But that’s about it. You can share liability risks. But only the guest can decide on your honest rules and warnings that will lower expectations. Today, with Airbnb-homeowner and guest reviews you get a legal way to discriminate between good and bad . Consider Transparency As Your Risk Reducing Measure! Bad Airbnb guests have previous public reviews. And if they are not good you don’t have to accept their booking. If they have no reviews you can try and qualify them. But there is no obligation to accommodate zero-reviewed-guest. . We have found the change in guests behaviour pre and post the arrival of Airbnb significant. In the past guests would have very little respect. Today they care. Even owners have jacked up their offering. Because no one gets away with bad stuff today. Transparency: Guests do care about their public profile. The solution today is not discrimination; the real issue is rather: from which marketing site does the guest originate from? If the guest is an Airbnb referral the risk is less than when compared to any other website where there are no social profile risks | no real transparency. NOTE: There is no foolproof way. Things can go wrong. And the way this world operates it will go wrong. But we should always try to minimise risk. 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). Instant book has two possible aspects: Let’s get to the details: Read Why Are You Not Keeping Us Informed On The Pipeline Of Bookings? 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. Here’s a typical email from a worried owner. Just one question. With instant booking, how do we vet the client? I would first like to find out who they are etc. I have heard nightmare stories of houses being let and then the owners not being able to get the short term tenants out again. Can I opt out of the Instant Booking option? Guests who can book instantly must: Guest Requirements If you turn on this requirement, you’ll be able to see guests’ profile photos after a booking is confirmed, but not before. It’s turned on. Require guests to submit government ID to Airbnb in order to Instant Book. If they don’t meet this requirement, they will send a request instead. You can decide to restrict guests with children from booking if there are features that are dangerous for children or there’s a risk of property damage. Learn more You can limit guests from bringing pets, but you must reasonably accommodate guests that might bring an assistant animal. Learn more Win Unhassles Airbnb eBook & Plus Advice Worth R10000 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. 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 authorize work, in an emergency with our proven and trusted workmen, then the owner is not really committed to us and our aims with the home. Most emergencies we may get hold of the owner immediately but if we cannot we must act. Immediately. Why Keep A Management Kitty? 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. If you answered yes to many of these then it’s better you manage and market your own home. You don’t need us. However, if you cannot manage/market then our management and marketing skills will bring you, hassle free , at least 20% more income. Our experience from 2009 will give you a better chance of renting your home for a fair price. Other Cape Town agent’s commission is as much as ours or more. And they have a monthly management retainer as well. If these agencies have bookings or not you pay the retainer. However, if we don’t get bookings you pay zero. Zero commission and zero management fees. Is this fair or would you rather pay us a monthly retainer for doing nothing? Don’t you think our model, of management fees per incident, ensure we focus on rather renting your home for the best possible deal than collecting monthly retainers? Our management function is exclusively available to you at cost . There is no profit for us on management. Our managers get paid each cent we claim for management. Note: guests pays an additional fee for the change over management incidents. It covers about 80% of the management cost. No incidents! You pay nothing. For this, our homeowners choose peace of mind. BTW: We are striving to be the best but we are not there yet. If not we would not have grown our portfolio with very many happy owners. Interesting: Why would our owners send us messages like this if we are not making a difference? The list below may be typical but only the minimum. Each homeowner must take this list and complete it specifically to their own home. When owners have additional house rules the newly updated listed must be emailed to Agency.CapeHolidays.Info where the agent will add it to online listings of the property. With compiled a proformal manual for you to adapt. The manual is not final. It’s the minimum required. 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). Instant book has two possible aspects: Let’s get to the details: Read Why Are You Not Keeping Us Informed On The Pipeline Of Bookings? 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. Here’s a typical email from a worried owner. Just one question. With instant booking, how do we vet the client? I would first like to find out who they are etc. I have heard nightmare stories of houses being let and then the owners not being able to get the short term tenants out again. Can I opt out of the Instant Booking option? Guests who can book instantly must: Guest Requirements If you turn on this requirement, you’ll be able to see guests’ profile photos after a booking is confirmed, but not before. It’s turned on. Require guests to submit government ID to Airbnb in order to Instant Book. If they don’t meet this requirement, they will send a request instead. You can decide to restrict guests with children from booking if there are features that are dangerous for children or there’s a risk of property damage. Learn more You can limit guests from bringing pets, but you must reasonably accommodate guests that might bring an assistant animal. Learn more Win Unhassles Airbnb eBook & Plus Advice Worth R10000 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. 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 our knowledge. We have seen too many times where guests arrived at a prepared home to find another left stuff, used the toilet, or wrinkled a cushion by sitting on it. To keep up the standards across all homes we need homeowners to give us full authority. 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 authorize work, in an emergency with our proven and trusted workmen, then the owner is not really committed to us and our aims with the home. Most emergencies we may get hold of the owner immediately but if we cannot we must act. Immediately. Why Keep A Management Kitty? 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 pass away it’s an extenuating circumstance 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 their property, only the next three months’ worth of bookings must be honoured. As you know; estate transfers take about three months. If this interests the owner, they must just ask us in writing to only open a rolling three-month booking window. The age of people, their sexual orientation, the colour of their skin, their physical inabilities, etc. do not define if they will trample your home, or expose you to risk. You can set an age limit for kids. But that’s about it. You can share liability risks. But only the guest can decide on your honest rules and warnings that will lower expectations. Today, with Airbnb-homeowner and guest reviews you get a legal way to discriminate between good and bad . Consider Transparency As Your Risk Reducing Measure! Bad Airbnb guests have previous public reviews. And if they are not good you don’t have to accept their booking. If they have no reviews you can try and qualify them. But there is no obligation to accommodate zero-reviewed-guest. . We have found the change in guests behaviour pre and post the arrival of Airbnb significant. In the past guests would have very little respect. Today they care. Even owners have jacked up their offering. Because no one gets away with bad stuff today. Transparency: Guests do care about their public profile. The solution today is not discrimination; the real issue is rather: from which marketing site does the guest originate from? If the guest is an Airbnb referral the risk is less than when compared to any other website where there are no social profile risks | no real transparency. NOTE: There is no foolproof way. Things can go wrong. And the way this world operates it will go wrong. But we should always try to minimise risk. It’s obvious, after COVID 19, that the bad brings out the worst in some and the best in others. It’s for this reason that we decided to revisit short term rental insurance to best protect our Cape Town accommodation owners and the rental agency (Agency.CapeHolidays.info) they appointed to manage their accommodation. BTW: You know we had a 60 day zero refund cancellation policy with Airbnb but they temporarily negated that, at the start of the pandemic. And can still apply it under extenuating circumstances. Therefore we cannot continue being at risk at their will. There must be a better way to protect income. The main concerns to address: Actions To Take: We will require owners to ensure their policies protect them correctly and that the protection is extended to their agent. The following form needs to be sent to your insurer and sent back to us after your insurance provider completes it (find it here). We believe we have identified such a company. Incompass commenced in 2004 with a specialised team. Today they are South Africa’s largest Guest House Insurance brokerage. Focusing on both personal and commercial for the tourism industry. Even during the pandemic Jan Wink, Managing Director at Incompass, explains how they paid out 1000s of claims (see news article here). The following is a letter from Jan to our owners on what the critical aspects are we need to consider. Dear Agency.CapeHolidays.Info Owner You agreed with Agency.CapeHolidays.Info to manage and market your home on listing sites like Airbnb. You expect a fair return. And from experience, you know you are in good hands. You were well on your way. But then COVID struck. Everyone in the industry suffered massive losses, with booking income dropping right down to zero. And it remained at zero for a long time… The COVID havoc made you think. Made us all think about the exposure to risks, and in this case specifically to the loss of income. No one expected the unreasonable and unjustified harsh attitude AirBnB (and other booking platforms) would take towards their hosts. All hospitality establishments experienced frustration. At Incompass Insurance Consultants we create bespoke insurance solutions for our hospitality accommodation clients – we address risks such as loss of income, public liability, damage or theft by guests to name a few. Unfortunately, most people assume that by having some kind of insurance in place, they’re automatically covered. That’s not necessarily the case – you might be insured on a personal policy, that covers you only in your personal capacity – meaning liability & theft claims will not be covered should the property be used for business purposes. And short term letting is considered business use by South African insurers. Your property’s “type of use” has to include business use, or else any claim could be rejected (even geyser bursts or storm damage). The insurer will use their favourite rejection reason: it’s called “non-disclosure of material facts”. This basically means they were not made aware of the actual type of use of the property and hence will not be settling the claim. But wait – you called the call centre and told them on the phone that you’re renting the place out. Which means you disclosed, and you should be insured right? Right? Except, you might not be. The truth is, that statement you made to the call centre agent often means very little to them. They can often only read from the options available on their screen… What you should rather do is pose 5 specific questions to them, and ask for their answer in writing: Chances are, the words “short term paying guest” is going to result in all of your questions being answered with a resounding “NOT COVERED”. If you receive NO as an answer to any of the above, then you can be sure that you don’t have the widest cover available to short term letting establishments. If you’re going to bother paying insurance premiums, don’t you want to be sure that the cover is 100% correct? Just because you pay your premiums doesn’t mean you’re correctly covered. An additional complication is that your property is managed by a third party. You’re not even controlling the risk… Agency.CapeHolidays.Info often manages all aspects of the booking process – marketing, communicating with the guests, handing over keys, showing guests the “house rules”, dealing with guest complaints, cleaning and being responsible for maintenance as well as repairs & replacement. Agency.CapeHolidays.Info is in full control of the risk, and therefore really needs to be noted as a co-insured. Agency.CapeHolidays.Info has an insurable interest. Incompass Insurance Consultants specialises in short term letting insurance. We strongly advise owners to co-insure their agency when possible, because the agency is part and parcel of the success or failure of the enterprise. The agency is often in full control of the risk, more so than the property owner. And for this reason, we always include the management agent as a co-insured – it gives the insurer fewer reasons to reject a claim one day. Incompass Insurance Consultants help ensure that our clients, who rent out their premises (via agencies or other) to short term paying guests, are correctly (and competitively) insured. It’s so much a part of what we do that we are the largest hospitality establishment insurance brokerage in South Africa and are the preferred insurance provider for the NAA, GHASA and the Tourism Grading Council. What kind of cover does a guest establishment require? It’s not in your (and your agent’s) interest to have the incorrect insurance in place. It’s also not in your interest to pay a higher premium than necessary. At Incompass we address both these issues, thereby giving our clients the widest cover at the most affordable premiums (often lower compared to personal insurance premiums). Disclosing to your insurer’s call centre agent that you’re an AirBnB host is not enough – you need written confirmation, signed and copy stamped, that they can answer yes to most if not all of those 5 very important questions. For more information, visit www.incompass-insurance.co.za/airbnb By Jan Wink, Incompass Insurance Consultants (FSP23418) Win Unhassles Airbnb eBook & Plus Advice Worth R10000 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). Instant book has two possible aspects: Let’s get to the details: Read Why Are You Not Keeping Us Informed On The Pipeline Of Bookings? 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. Here’s a typical email from a worried owner. Just one question. With instant booking, how do we vet the client? I would first like to find out who they are etc. I have heard nightmare stories of houses being let and then the owners not being able to get the short term tenants out again. Can I opt out of the Instant Booking option? Guests who can book instantly must: Guest Requirements If you turn on this requirement, you’ll be able to see guests’ profile photos after a booking is confirmed, but not before. It’s turned on. Require guests to submit government ID to Airbnb in order to Instant Book. If they don’t meet this requirement, they will send a request instead. You can decide to restrict guests with children from booking if there are features that are dangerous for children or there’s a risk of property damage. Learn more You can limit guests from bringing pets, but you must reasonably accommodate guests that might bring an assistant animal. Learn more Win Unhassles Airbnb eBook & Plus Advice Worth R10000 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 our knowledge. We have seen too many times where guests arrived at a prepared home to find another left stuff, used the toilet, or wrinkled a cushion by sitting on it. To keep up the standards across all homes we need homeowners to give us full authority. 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 authorize work, in an emergency with our proven and trusted workmen, then the owner is not really committed to us and our aims with the home. Most emergencies we may get hold of the owner immediately but if we cannot we must act. Immediately. Why Keep A Management Kitty? 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. If you answered yes to many of these then it’s better you manage and market your own home. You don’t need us. However, if you cannot manage/market then our management and marketing skills will bring you, hassle free , at least 20% more income. Our experience from 2009 will give you a better chance of renting your home for a fair price. Other Cape Town agent’s commission is as much as ours or more. And they have a monthly management retainer as well. If these agencies have bookings or not you pay the retainer. However, if we don’t get bookings you pay zero. Zero commission and zero management fees. Is this fair or would you rather pay us a monthly retainer for doing nothing? Don’t you think our model, of management fees per incident, ensure we focus on rather renting your home for the best possible deal than collecting monthly retainers? Our management function is exclusively available to you at cost . There is no profit for us on management. Our managers get paid each cent we claim for management. Note: guests pays an additional fee for the change over management incidents. It covers about 80% of the management cost. No incidents! You pay nothing. For this, our homeowners choose peace of mind. BTW: We are striving to be the best but we are not there yet. If not we would not have grown our portfolio with very many happy owners. Interesting: Why would our owners send us messages like this if we are not making a difference? The list below may be typical but only the minimum. Each homeowner must take this list and complete it specifically to their own home. When owners have additional house rules the newly updated listed must be emailed to Agency.CapeHolidays.Info where the agent will add it to online listings of the property. The age of people, their sexual orientation, the colour of their skin, their physical inabilities, etc. do not define if they will trample your home, or expose you to risk. You can set an age limit for kids. But that’s about it. You can share liability risks. But only the guest can decide on your honest rules and warnings that will lower expectations. Today, with Airbnb-homeowner and guest reviews you get a legal way to discriminate between good and bad . Consider Transparency As Your Risk Reducing Measure! Bad Airbnb guests have previous public reviews. And if they are not good you don’t have to accept their booking. If they have no reviews you can try and qualify them. But there is no obligation to accommodate zero-reviewed-guest. . We have found the change in guests behaviour pre and post the arrival of Airbnb significant. In the past guests would have very little respect. Today they care. Even owners have jacked up their offering. Because no one gets away with bad stuff today. Transparency: Guests do care about their public profile. The solution today is not discrimination; the real issue is rather: from which marketing site does the guest originate from? If the guest is an Airbnb referral the risk is less than when compared to any other website where there are no social profile risks | no real transparency. NOTE: There is no foolproof way. Things can go wrong. And the way this world operates it will go wrong. But we should always try to minimise risk. With compiled a proformal manual for you to adapt. The manual is not final. It’s the minimum required. 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. 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). Instant book has two possible aspects: Let’s get to the details: Read Why Are You Not Keeping Us Informed On The Pipeline Of Bookings? 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. Here’s a typical email from a worried owner. Just one question. With instant booking, how do we vet the client? I would first like to find out who they are etc. I have heard nightmare stories of houses being let and then the owners not being able to get the short term tenants out again. Can I opt out of the Instant Booking option? Guests who can book instantly must: Guest Requirements If you turn on this requirement, you’ll be able to see guests’ profile photos after a booking is confirmed, but not before. It’s turned on. Require guests to submit government ID to Airbnb in order to Instant Book. If they don’t meet this requirement, they will send a request instead. You can decide to restrict guests with children from booking if there are features that are dangerous for children or there’s a risk of property damage. Learn more You can limit guests from bringing pets, but you must reasonably accommodate guests that might bring an assistant animal. Learn more Win Unhassles Airbnb eBook & Plus Advice Worth R10000 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. 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 our knowledge. We have seen too many times where guests arrived at a prepared home to find another left stuff, used the toilet, or wrinkled a cushion by sitting on it. To keep up the standards across all homes we need homeowners to give us full authority. 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 authorize work, in an emergency with our proven and trusted workmen, then the owner is not really committed to us and our aims with the home. Most emergencies we may get hold of the owner immediately but if we cannot we must act. Immediately. Why Keep A Management Kitty? 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 pass away it’s an extenuating circumstance 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 their property, only the next three months’ worth of bookings must be honoured. As you know; estate transfers take about three months. If this interests the owner, they must just ask us in writing to only open a rolling three-month booking window. If you answered yes to many of these then it’s better you manage and market your own home. You don’t need us. However, if you cannot manage/market then our management and marketing skills will bring you, hassle free , at least 20% more income. Our experience from 2009 will give you a better chance of renting your home for a fair price. Other Cape Town agent’s commission is as much as ours or more. And they have a monthly management retainer as well. If these agencies have bookings or not you pay the retainer. However, if we don’t get bookings you pay zero. Zero commission and zero management fees. Is this fair or would you rather pay us a monthly retainer for doing nothing? Don’t you think our model, of management fees per incident, ensure we focus on rather renting your home for the best possible deal than collecting monthly retainers? Our management function is exclusively available to you at cost . There is no profit for us on management. Our managers get paid each cent we claim for management. Note: guests pays an additional fee for the change over management incidents. It covers about 80% of the management cost. No incidents! You pay nothing. For this, our homeowners choose peace of mind. BTW: We are striving to be the best but we are not there yet. If not we would not have grown our portfolio with very many happy owners. Interesting: Why would our owners send us messages like this if we are not making a difference? The list below may be typical but only the minimum. Each homeowner must take this list and complete it specifically to their own home. When owners have additional house rules the newly updated listed must be emailed to Agency.CapeHolidays.Info where the agent will add it to online listings of the property. The age of people, their sexual orientation, the colour of their skin, their physical inabilities, etc. do not define if they will trample your home, or expose you to risk. You can set an age limit for kids. But that’s about it. You can share liability risks. But only the guest can decide on your honest rules and warnings that will lower expectations. Today, with Airbnb-homeowner and guest reviews you get a legal way to discriminate between good and bad . Consider Transparency As Your Risk Reducing Measure! Bad Airbnb guests have previous public reviews. And if they are not good you don’t have to accept their booking. If they have no reviews you can try and qualify them. But there is no obligation to accommodate zero-reviewed-guest. . We have found the change in guests behaviour pre and post the arrival of Airbnb significant. In the past guests would have very little respect. Today they care. Even owners have jacked up their offering. Because no one gets away with bad stuff today. Transparency: Guests do care about their public profile. The solution today is not discrimination; the real issue is rather: from which marketing site does the guest originate from? If the guest is an Airbnb referral the risk is less than when compared to any other website where there are no social profile risks | no real transparency. NOTE: There is no foolproof way. Things can go wrong. And the way this world operates it will go wrong. But we should always try to minimise risk. With compiled a proformal manual for you to adapt. The manual is not final. It’s the minimum required. It’s obvious, after COVID 19, that the bad brings out the worst in some and the best in others. It’s for this reason that we decided to revisit short term rental insurance to best protect our Cape Town accommodation owners and the rental agency (Agency.CapeHolidays.info) they appointed to manage their accommodation. BTW: You know we had a 60 day zero refund cancellation policy with Airbnb but they temporarily negated that, at the start of the pandemic. And can still apply it under extenuating circumstances. Therefore we cannot continue being at risk at their will. There must be a better way to protect income. The main concerns to address: Actions To Take: We will require owners to ensure their policies protect them correctly and that the protection is extended to their agent. The following form needs to be sent to your insurer and sent back to us after your insurance provider completes it (find it here). We believe we have identified such a company. Incompass commenced in 2004 with a specialised team. Today they are South Africa’s largest Guest House Insurance brokerage. Focusing on both personal and commercial for the tourism industry. Even during the pandemic Jan Wink, Managing Director at Incompass, explains how they paid out 1000s of claims (see news article here). The following is a letter from Jan to our owners on what the critical aspects are we need to consider. Dear Agency.CapeHolidays.Info Owner You agreed with Agency.CapeHolidays.Info to manage and market your home on listing sites like Airbnb. You expect a fair return. And from experience, you know you are in good hands. You were well on your way. But then COVID struck. Everyone in the industry suffered massive losses, with booking income dropping right down to zero. And it remained at zero for a long time… The COVID havoc made you think. Made us all think about the exposure to risks, and in this case specifically to the loss of income. No one expected the unreasonable and unjustified harsh attitude AirBnB (and other booking platforms) would take towards their hosts. All hospitality establishments experienced frustration. At Incompass Insurance Consultants we create bespoke insurance solutions for our hospitality accommodation clients – we address risks such as loss of income, public liability, damage or theft by guests to name a few. Unfortunately, most people assume that by having some kind of insurance in place, they’re automatically covered. That’s not necessarily the case – you might be insured on a personal policy, that covers you only in your personal capacity – meaning liability & theft claims will not be covered should the property be used for business purposes. And short term letting is considered business use by South African insurers. Your property’s “type of use” has to include business use, or else any claim could be rejected (even geyser bursts or storm damage). The insurer will use their favourite rejection reason: it’s called “non-disclosure of material facts”. This basically means they were not made aware of the actual type of use of the property and hence will not be settling the claim. But wait – you called the call centre and told them on the phone that you’re renting the place out. Which means you disclosed, and you should be insured right? Right? Except, you might not be. The truth is, that statement you made to the call centre agent often means very little to them. They can often only read from the options available on their screen… What you should rather do is pose 5 specific questions to them, and ask for their answer in writing: Chances are, the words “short term paying guest” is going to result in all of your questions being answered with a resounding “NOT COVERED”. If you receive NO as an answer to any of the above, then you can be sure that you don’t have the widest cover available to short term letting establishments. If you’re going to bother paying insurance premiums, don’t you want to be sure that the cover is 100% correct? Just because you pay your premiums doesn’t mean you’re correctly covered. An additional complication is that your property is managed by a third party. You’re not even controlling the risk… Agency.CapeHolidays.Info often manages all aspects of the booking process – marketing, communicating with the guests, handing over keys, showing guests the “house rules”, dealing with guest complaints, cleaning and being responsible for maintenance as well as repairs & replacement. Agency.CapeHolidays.Info is in full control of the risk, and therefore really needs to be noted as a co-insured. Agency.CapeHolidays.Info has an insurable interest. Incompass Insurance Consultants specialises in short term letting insurance. We strongly advise owners to co-insure their agency when possible, because the agency is part and parcel of the success or failure of the enterprise. The agency is often in full control of the risk, more so than the property owner. And for this reason, we always include the management agent as a co-insured – it gives the insurer fewer reasons to reject a claim one day. Incompass Insurance Consultants help ensure that our clients, who rent out their premises (via agencies or other) to short term paying guests, are correctly (and competitively) insured. It’s so much a part of what we do that we are the largest hospitality establishment insurance brokerage in South Africa and are the preferred insurance provider for the NAA, GHASA and the Tourism Grading Council. What kind of cover does a guest establishment require? It’s not in your (and your agent’s) interest to have the incorrect insurance in place. It’s also not in your interest to pay a higher premium than necessary. At Incompass we address both these issues, thereby giving our clients the widest cover at the most affordable premiums (often lower compared to personal insurance premiums). Disclosing to your insurer’s call centre agent that you’re an AirBnB host is not enough – you need written confirmation, signed and copy stamped, that they can answer yes to most if not all of those 5 very important questions. For more information, visit www.incompass-insurance.co.za/airbnb By Jan Wink, Incompass Insurance Consultants (FSP23418) Win Unhassles Airbnb eBook & Plus Advice Worth R10000 |