Recent research confirms that vacation rental guests are staying longer, as a result of the pandemic; there is good reason to believe that this is a lasting trend, with significant implications for vacation rental operators: The extended-stay guest has unique needs. Longer stays also mean fewer stays, with higher stakes and risks to profitability. This is the time to rethink your customer contact strategy and to deliver on a high-touch, guest-centric experience that is profit, rather than cost-driven.
Longer Short Stays
The mass adoption of virtual work and education, migration away from the big cities, and other factors have led to a longer average length of stay in vacation homes and short-term rentals.
Recent data published by flexible rental analytics firm AirDNA shows that the typical length of stay through the summer months averaged five days, up from four days in the previous year.
That’s just the average; many guests are staying significantly longer.
In Great Barrington, Massachusetts, weekend visitors stayed 1.4 nights longer, on average. Data from Point Pleasant Beach, New Jersey showed an average length of stay of five nights, up from three.
Other data points suggest that the trend will continue into fall. In East Hampton, New York, the average booking last fall was two nights; this year, that number will be about double.
In an interview with the New York Times, Eric Grayson from luxury travel agency Discover 7 explained that “the most dramatic behavioral shift emerged in the demographic that can carry their virtual office in a laptop case.”
The acceleration of virtual work is a lasting transformational shift in how society functions. This creates both challenges and opportunities for vacation rental operators.
Different Customer, Different Product
The extended stay experience is a different product serving a different customer.
These guests require more amenities e.g. better kitchen supplies, in-house washers and dryers, stocked refrigerators, additional housekeeping services, trash pick-up detailed information about local resources, etc.
Generally speaking, the longer the guest stays, the higher the likelihood that he or she will call on your team to deliver. In response, guest services teams must be ready with intimate knowledge of where the guest is along their journey, along with intimate knowledge of your product.
“We basically have had to tear down and rebuild our housekeeping department,” said Grimes [of Red Cottage Inc]. “There was a business model that ran under certain assumptions — checkout dates, gaps between bookings. Combine that with the fact that people are living in these houses — three meals a day, more wear and tear — and there has been a huge shift.”
Longer stays also mean fewer bookings throughout the year. This creates multiple challenges. The stakes are higher. Each booking holds more value and more risk, if and when guests cancel.
Consider a property where the average length of stay increases from three nights to five nights. At three nights, there are a total of 121 unique customer interactions (excluding gaps between bookings). At five nights, the total number of unique customer interactions falls to 73.
Now, take a portfolio of 100 properties. Total unique customer interactions fall from 12,010 to 7,300. That translates into a 66% reduction in total unique customer interactions!
Longer average length of stay is clearly great from the perspective of housekeeping and reduction in unit turnover. The majority of guest services requests come during the early part of the stay as customers get situated.
At the same time, each guest is inherently more valuable – both from a revenue and profitability perspective. This ups the stakes for operators e.g. canceled bookings for longer stays, smaller customer lists to market to, less word of mouth, few guest reviews, and more.
The big factor here, when it comes to guest services, is opportunity cost. As the average length of stay increases, vacation rental teams need to switch from a reactive mindset, to a proactive mindset.
The prototypical reservations & guest service team is structured to be “reactive” i.e. the customer needs something; they get in touch; a helpdesk ticket is issued. This “no news is good news” mentality can cost your organization – however.
Having a reactive mindset to CX might have lower direct costs e.g. fewer inquiries means less staffing costs or offsetting CX costs to call centers that pass on requests as they come. The fundamental flaw with this reactive CX model is that it provides zero visibility into the actual cause of the problem.
Among them are canceled bookings and dissatisfied customers that fail to speak out. Other indirect costs are also opportunity costs in the form of lost ancillary revenues. Guests might not know that they need something until they know that it’s available.
It’s like the cancer that grows unbeknownst to the host, and that suddenly manifests into acute symptoms that require invasive treatments e.g. surgery, radiology, and chemotherapy. The damage has already been done. At this point you are treating the symptom rather than the cause.
This is particularly true for extended stays. The total costs of the reactive CX team model increase as the average length of stay increases. What’s the alternative?
Proactive, Guest-Centric CX
Vacation rental operators need to be increasingly guest centric, as the average length of stay increases.
As stated, proactive CX becomes more critical to revenue and profitability, as length of stay increases. So what does a proactive CX team look like and what does it do that is different from a reactive CX team?
What a guest-centric CX team does different
A proactive CX team adopts a seller’s mindset. The old adage of ‘knowledge is power’ applies here. The more your team knows about the customer and your product, the better they can preempt issues before they escalate into real problems; the better they can engage across the entire guest journey.
Having a better understanding the customer mindset also means that operators can develop new products and services to upsell and grow ancillary revenue. For example, guests that stay for one week rather than three days might be willing to pay a premium for a stocked kitchen.
Clearly, there is a limit to how much guests actually want to interact with your brand. Guest-Centric CX also means using multiple touchpoints and data to “listen” to and anticipate your guest needs.
Vacation rental teams that have deeper knowledge and customers have an opportunity to build a deeper relationship between guest and brand.
What a guest-centric CX team looks like
At Extenteam, we specialize in building happy, dedicated virtual teams. We are technology experts with over a decade of vacation rental management & hospitality experience.
Our agents are specialized and trained to serve the needs of operators, and align seamlessly with your existing team, property management system, and technology infrastructure to handle your inbound and outbound inquiries, calls, text messages, emails and other roles specific to your business requirements.
Our HR service layer helps maximize productivity and minimize staffing turnover. This allows time for your team to grow and mature, and to master the products and processes needed to drive true guest centricity into your operations.