Welcome back to our series: 5 Reasons to Outsource Your Property Operations. Today we look at reason 5.
Reason 5: Flexibility
When considering outsourcing, the first step is to identify which of your activities are core to your business and your strategy. Once you have separated your non-core activities, you can then consider the benefits versus the risks of shifting these functions to an outsourced partner. We have discussed 4 of these benefits in earlier blogs (lower costs, improved quality, focus on core competencies, better risk management). The 5th benefit is flexibility, which is arguably the most important in the short term rental industry.
Starting at the highest level, post Covid, the ability to adapt to the demands of your business is essential. The companies that have survived the last 6 months have found ways to scale back their activities efficiently to adjust to the new environment. Every company that has outsourced specific functions has been able to do this at no cost to their business. Meanwhile those that have kept their activities in-house may have had to face difficult decisions such as letting go of staff and reducing office space, all of which would have been tough for the team and costly to the business.
Leaders who have recently gone through a downsizing process will now be considering what non-core activities can be outsourced so that they can scale back up efficiently as the market recovers, without the risk of having to onboard those overheads again. This flexibility will be critical for short term rental managers when it is still very unclear what the timeline will be for recovery in the travel industry.
If you are a serviced apartment operator or BTR developer, the requirement to increase or reduce your operations could be at a much greater scale. Short term rental managers usually grow their portfolio on a unit by unit basis, but larger operators take on buildings with 50+ units. The average BTR scheme is 130 units and growing. Therefore these companies require highly advanced outsourced partners who can work closely with their clients to deliver the operational scale required within a short time frame. The ability to activate a new building at speed is critical to generating much needed revenues once the lease has been agreed.
A good outsourced partner will not only offer their client the ability to scale up and down, but also the ability to ‘match and adapt’ to their client’s service offering. We are seeing increasing demand for more ‘hotel style’ services to be provided by operators as they seek to enhance the experience for their guests. For example, if a client would like to introduce a 24 hour concierge, then the outsourced partner should be able to implement this quickly, assuming responsibility for ensuring the quality of the new service and the systems and training required to deliver it.
Flexibility creates value in many ways and these can vary between different types of operators, be it a local host management company or global serviced apartment operator. So if you have your operations in-house give us a call and we’ll be happy to talk through how we can help you to deliver the service you’re proud of whilst you focus on scaling your business.