I am seeing a lot of stress and worry turn in to panic, fear, and anger. I thought I would take a moment to share some thoughts and ideas with my fellow hosts to hopefully assuage some of those fears.
What about my income?
First things first... we are not helping ourselves, our community, the AirBnb brand, nor the peer-to-peer rental market by being hard-nosed about refunds. Get yourself in the mindset that during this time, you will offer 100% refunds. I promise that people will not only remember AirBnb, but they will remember you if you go above and beyond. You are in the hospitality business, so act like it!
With your mind in the right place, you can begin to really look at how to minimize the damage. Step two here is to plan for a minimum required income. Look at how much money you need to just barely get by and cover all your expenses. Don't even think about profits. Right now, you're just trying to hang on to your assets.
Now you can finally look at your options:
- Long term rental - contracts can be made to last only on a month to month basis, up to single year leases. You can even go longer if you like. You can rent to singles or families. You can still use the AirBnb platform to handle all the liability side of things without needing to draw up independent contracts. Be aware, however, that if you do use AirBnb for long term rentals, you may still be dealing with cancellation issues.
- Quarantine refuge - Whether you advertise to regular folks or to health professionals, there may be opportunities to rent your space as a place to quarantine. Goodness knows that hospitals are struggling to keep up with the influx of patients. Just be sure that your cleaning regime rises to the challenge.
- Local Business workspace - with the restrictions on social gatherings, many companies are struggling to hold meetings without breaking restrictions. If you are able, you can alter your space and advertise to companies as a location for essential company meetings and temporary office space.
- Quarantine relief - All jokes aside, many relationships may not be prepared for the stress of being in proximity 24/7. Open your doors to local guests interested in either getting away from the cabin fever madness or planning a "local getaway" where they can just have a change of scenery for a few days with the whole family.
- Get creative - Think of other ways to use and advertise your space that is unique to you. Find the right mediums and keep advertising!
None of those options work, I'm doomed!
While it may feel like you are out of options, chances are, the worst case scenarios still are not so bad. In many countries, including the United States, mortgage and rent relief is currently available for up to 6 months, maybe even longer. You may have to do a little bit of paper work to qualify, but you should have plenty of time for that with your properties currently sitting vacant. And if even that sounds like too much work, many banks and lenders have already expressed that they will not collect any late fees, report delinquent loans, or foreclose on any outstanding unpaid mortgages.
Use this moment to take a deep breath and exhale that sweet sigh of relief... it's going to be okay!
As business owners, we all knew we were taking a risk. If you didn't, well, welcome to the joys of running a business where lessons are usually learned the hard way! Truly, this is an opportunity for learning and growing and becoming an even better host. If your worst case scenario means losing your property, swallow that hard pill and beat the banks to it. Sell before it is taken from you. Take control of your situation before someone else takes control from you. Then wait and you can start again with all the lessons of how to be even more successful the next time around.
I think I can survive, but what have I learned?
What works best for you to plan for the future? For me, I always try to follow a 6 month rule. Keep a large enough savings to cover all of your financial obligations for up to 6 months. What would happen if you lost every single penny of income? How long could you float on savings? If the answer is less than 2 weeks, then that is a major problem and you may want to consider getting some financial advise on how to manage your budgets.
Let's review some lessons:
- Disaster can strike at any time, plan on it!
- Always have a reserve to cover your costs.
- Consider multiple alternatives, avoid "putting all your eggs in one basket"
- Have an exit strategy for when things get too hard to handle.
- Never assume that your good fortune will last forever.
In the end, most of you are likely already well aware of these things. Many of you also have much more that you can add. I know that by sharing these thoughts, I am helping potential competition to be more competitive, but I also hope and wish for everyone to succeed in their endeavors. Remember to stay solution-oriented. Don't give in to victimization and don't compare your misfortune to someone else. Think about what it takes to keep moving forward!
Best of luck to all you fellow hosts!