Covid Response - A request to the community

Alex-And-Marcus0
Level 3
San Antonio, TX

Covid Response - A request to the community

Image added by OCMImage added by OCM

This was a post I made on a social media platform that had really positive response. So I am thought I would share with this community in hopes that its helpful and resonates with this group as well.

 

 

Its been a few weeks of the complete chaos that ensued after travel started being shut down across the globe, which cumulated in cities across the world being locked down. I’ve leaned a lot over such a short time about not only this vacation rental industry we all play in, but about the general danger of loud and angry voices overtaking reason and the narrative of a crises.

 

When this corona stuff first came up, I thought it was ridiculous. I am not going to lie, I thought it was overblown and for a virus that wasn’t all that deadly, that people were just being scared of their own shadow. However, as I learned more, I realized that the true threat was the collapse of the healthcare system that would essentially send everyone into a hellish scenario where there simply wasn’t enough medical capacity to facilitate any sort of fundamental care for the entire country. So, I started taking it seriously, and I think I was late to understand how scary close we have been to a complete disaster that would cost countless lives.

 

So I was wrong, and I’ll admit that I mistakenly let my vacation rental business and the impact to my profitability and my clients profitability keep me on the “its not a big deal” track for too long. The fact is, that this thing is serious, and most of us were in denial for quite some time, which had the unfortunate side effect of leading us to find someone or something to blame. “If this shouldn’t be happening, if this isn’t a big deal, then I am losing money because of FILL IN THE BLANK”…Well the obvious choice to fill this gap seemed to be Airbnb. “They were the ones that decided to send refunds back to guests. They are the reason I am losing money right now….Airbnb is clearly just trying to screw over hosts.” Well I am here to say that Airbnb did the right thing, We are the ones who were wrong, biased by our survival instincts for our businesses.

 

Guests who decided not to travel because traveling as normal would literally kill people should not be penalized for that decision. They should not have been pressured into using the reservation either. It is objectively unethical to encourage and/or facilitate behavior that puts millions of lives at risk. We drew a bad hand, sure. Its not fair that the travel industry got completely shut down, but at a certain point, as business people, we have to suck it up and recognize that despite the situation being unfair, the world continues to move and you have to continue to adjust and plan to be successful.

 

Sadly, I have seen much more of the anger and hosts vs. Airbnb leading to hosts vs hosts and hosts vs. guests. The thing is, if you don’t blame the real culprit here, which is a virus that literally shut down the entire global economy in a couple weeks, then no matter where the finger pointing is directed, it eventually will turn to eachother. As a community of entrepreneurs, this should be our shining moment. A time where the community pulls together and does some amazing things in the face of insane and unprecedented circumstances.  Its been awesome seeing some of that the last 2 weeks, but more often than not its  been more about how to sue Airbnb, how terrible Airbnb is, and just general complaining about cancellations.

 

I think its normal to go through that type of phase after such a huge shock to the system, but its time to move on for those who want to be apart of what this industry looks like after this is all over. I propose that if you really want to keep complaining about cancellations and how unfair OTAs are being, and how we should be working towards a lawsuit, then go do it somewhere that isn’t meant to be a forum for business owners and entrepreneurs to collectively work towards being better at owning and/or operating vacation rentals.

 

Fat will be shed during this crises. There is no shame in this not being the space for you anymore if that’s where you feel you’ve landed. I just ask that those who are more focused on complaining than figuring out business solutions (and no, suing Airbnb is not a solution) just stop with the spread of unhelpful rhetoric.. I think there are lots of very bright people in here that would thrive in the new VR world after Corona, but are being directed to instead focus on complaining and being angry vs. proactive and thoughtful about what’s next.

 

I am looking forward to scrolling through my feed again and seeing great dialogue being exchanged between bright entrepreneurs more than what I have seen the last few weeks. Hopefully that day will be very soon.

59 Replies 59
Alex-And-Marcus0
Level 3
San Antonio, TX

Hello everyone,

 

Its been a little difficult to keep up with my pledge to try to counter balance unhelpful, angry, derogatory, or otherwise just trolling like comments with things that might be helpful, or at least thought starters on what you can do moving forward with an eye on successfully managing your business through this crises.

 

This post is a big one, so I am going to lump the last few attacks into one post here. So thank you to   @Sarah977 @J-Renato0   @Sam397  for the posts (also they share the honor or all being multi-post contributors!)

 

As everyone who has been hosting in any consistent way knows, cleaners and maintenance folks are critical to being a good host. Without good cleaners you can’t trust that things are guest ready, cleaned and disinfected. And I am betting that most here have had the 11pm call that something is broken and hopefully most of you had your go to maintenance person to help in a pinch when it does happen.

 

Well, while we are hurting during this time, so are our most valuable partners, the cleaning and maintenance contractors. I have found that in many cases our cleaners and maintenance staff may not know that there are relief options out there for them, given their income has been greatly impacted by Covid 19 and they are entitled to help just like the owners of the homes or the property managers are.

 

Below is an email I wrote out to my cleaning folks, that maybe will serve  as a template of sorts for you. I worded it in an informal manner to cater to the audience, so that may not be the style you choose, but I am hoping it’s a starting point. I think its our responsibility to educate our partners on their options, and I hope that everyone is doing just that, so that these unsung heroes of the vacation rental industry can get the relief they need to put food on the table and pay their bills while we ride through the storm.

 

Let me know if you have any questions, and thank you again to   @Sarah977 @J-Renato0   @Sam397     For your posts!

 

Dear XXXXX XXXXXX,

 

First, I want to thank you for the amount of work and dedication you have put into making this company successful. Our cleaners are a fundamental part of our business, without you, we cannot be successful, and you and your family’s hard work for us certainly does not go unappreciated.

 

In the extremely difficult times we are facing right now, where travel has essentially ground to a halt, I want to be sure you know that  XXXXX, the team and I are doing everything we can to try to support you and keep you working and paid throughout this crises.

 

A part of our efforts to take care of our cleaners, we want to share with you some of the government relief options that available to you, which I encourage you to sign up for ASAP if you qualify. The funds are limited and the applications are processed on a first come first served basis. Below you will find instructions on how to fill out the application for the Economic Injury Disaster Loan. Please reach out to me if you have any questions on it! Below are detailed instructions as well as the amount XXXX has paid you during the 12 month lead up to the crises, which you will need to complete the applications.

 

  1. Two Types of Loans
    1. Payroll Protection Program
      1.       This only applies to you if you have a payroll under a registered business. I won’t cover that application here, since, to my knowledge, you don’t have actual payroll. If you do, please let me know because  this is a very very good program for those with payroll (i.e. you’ve paid payroll taxes). You can also apply as an individual proprietor on this program, but there is no forgiveness for the loan amount, although the interest rate is favorable at .5%. If you do not have payroll, you have until the 10th to make a decision as that is the first date you can apply as a sole proprietor for the Payroll Protection Program, and in the meantime I would suggest  you apply for the EID, outlined below.

 

  1. Economic Injury Disaster Loan (EID) (https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-...)
    1.        The SBA’s Economic Injury Disaster Loan provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic. This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19.
    2.       Under this program, you will apply and input the gross income and costs of goods sold, and then you will hear back from a lender on how much you qualify for. You will want to apply for the $10k “advance” as well, which is 100% forgiven (meaning you do not have to pay that back), and anything above that will be re-paid under a 3.75% interest rate, with favorable terms. So to reiterate, if you apply,  you could get $10,000 in relief funds that do not have to be paid back, and anything above that you will have to pay back.
  •       To give you my personal opinion: taking on debt is a very serious thing. What you don’t want to do is “steal” or borrow from your future income unless you absolutely need to. So, if you apply and find out you are qualified for some amount and only some of that is under the “Advance” option, meaning you will have to pay back some of it in the future plus interest, you need to be sure to set a plan on how to be sure you can afford to pay that back. The best feature of this is that you can qualify for a forgivable $10k that you will not have to pay back, and we hope that will be enough for you as we generate more demand on our end to keep you working. Once you find out how much you qualify for, be sure to ask your lender exactly how much you will owe out of that and when. I would be happy to give you my thoughts if you reach out with your specific situation on what you qualify for. Whatever you decide to do, remember that the portion that in not the forgiven “advance”, will be owed to the government. So don’t spend this money unless you absolutely need to, as it will be coming directly from your future income.

The EID application process is very simple. And I will walk through it below.

 

 

 

First, go to https://covid19relief.sba.gov/

 

 

 

 

On the page you will see the below fields. In the first box, select the appropriate option, which if you are an LLC, select box 1 and if you do not have a registered business, you will fall under a “sole proprietorship”, so select option 2.

In box 2, review and check all boxes as long as accurate to your situation.

 

From there, move on to the next page.

 

 

 

 

On the next page, you will mostly need to fill out personal info, but I will clarify a few of the boxes you may have questions on.

 

In Box 1 and 2, which are required, it asks for your Business Legal Name and Trade Name. If you are a registered company, like an LLC, you will enter the registered business name. If you are a “sole proprietor”  (you haven’t registered your business, but you default to this if you are conducting business activities), you will enter your legal name.

 

In box 3, you are asked for your EIN or Social Security Number. If you are a registered business, you should have your EIN on your origination documents through the state. If you are a sole proprietor, then enter your social security number.

Once you get down to the box “Gross Revenue for 12 months” you will need to input the amount of revenue you were paid by our company and any other revenue for your business that was outside our company.

 

Your gross revenue from XXXXX for the period they are asking for was: $33,848.13

So add that number t to what your cleaning service has made from other customers for your total gross revenue.  

 

 

COST OF GOODS SOLD

Next up is your Cost of Goods Sold. I know this is probably a confusing sounding term if you aren’t familiar with accounting terms, so let me clarify what it means. While it sounds like it might not apply to you, because intuitively, you aren’t selling “goods”, this term really means direct expenses that go into the service your business provides.

 

Basically cost of goods sold are the direct costs for you to clean a house. For example, supplies you purchase to clean the house fall under cost of goods sold. How much you pay yourself or any one you employee, also fall under cost of goods sold. Driving expenses from each house to the next are also considered cost of goods sold. You will need to be sure you have a record of these expenses in the same way you need to have records for expenses like these on your tax forms each year to write off the expenses for tax deductions.

Cost of goods sold is critical for you to understand even outside of this situation, as it tells you how much it costs for you to clean each home. So be sure that you are keeping good logs of these costs if you aren’t currently.

 

So for example, lets say that you have been paid by XXXX $20,000 in the 12 months leading up to the Covid crises (12 months prior to February 1st). You check your records and during that time you purchased $2,000 in cleaning supplies that you used only for cleaning those homes. You also have a driving cost of $300 that you have recorded as expenses for driving in between houses and to houses from your home. Finally, you also hired some family to help from time to time, totaling up to $1,000 in payment to them. Your Cost of Goods sold is $3,300 (the three expenses I just outlined) and your Gross revenue is $20,000 (the amount you were paid for the services during that period).

 

Its important to note that you can only put cost of goods sold as the amount you spent ONLY for cleaning houses. Do not include any personal expenses (meals, things you used for your own home, ect). Also do not under report COGS, which means if you are writing things off as expenses on your taxes, then you need to put them as COGS on this application. When the loan application is reviewed, they will ask for documentation and it may cause issues if you are not appropriately assigning COGS.

 

The next few fields have to do with if you received compensation through various non-profit type organizations, input the requested info in any applicable fields.

 

Next you will fill in a bunch of personal information until you get to the Business Activity field. For this field, enter “Personal Services”

 

In the next field, detailed business activity, select “Maid and Cleaning Service”

 

 

 

 

Once you are done, you will move to the next page and fill out the remaining fields as applicable.

The final guidance I’ll give, and this IS CRITICAL, is to check the box on the last page that says something like “I want to be considered for the “advance”….that is what will put you into consideration for the forgivable $10k.

 

 Then click on submit and you will be done. Hopefully you will hear back in 3 or so business days. Be sure to save your application number!

 

I hope this helps as you work though this difficult time. Know from our entire team that we are here to help, and please do not hesitate to reach out me personally with any questions. Feel free to text me at XXXXX any time, and I will give you a call back ASAP.

 

Thank you again for everything you do.

 

Best wishes,

XXXX

 

Also - this email had pictures of the form I took from screen grabs on the site....they didn't paste in, but you can sort of see where they were by the big gaps in text haha. 

@Alex-And-Marcus0  Im sorry but I couldnt read all that, you lost me at" As everyone who has been hosting in any consistent way knows, cleaners and maintenance folks are critical" . I am assuming since you mentioned me by name that there was something in there that related to me specifically,  I dont suppose you could you copy that part and re-post it? Please.

@Sam397 I am sorry, Sam. I am not offering that service at this time. 

 

Hopefully for the sake of the cleaners who depend on your business just as you do, you will reconsider taking the time to read. 

Sarah977
Level 10
Sayulita, Mexico

@Alex-And-Marcus0  It's great that you did the research for your staff to make it easier for them to apply for benefits. I'm sure it will be appreciated.

However, you make presumptuous statements, as if they are somehow universal facts. "As everyone who has been hosting in any consistent way knows, cleaners and maintenance folks are critical to being a good host. Without good cleaners you can’t trust that things are guest ready, cleaned and disinfected."  No, cleaners and maitenance folks aren't necessarily critical to being a good host. I do my own cleaning and any maintainance I can't do myself I would need to hire someone to take a look at regardless of whether I was hosting or not. Your involvement in your rentals seems to consist of a management role. That's fine, but assuming that is the situation of all hosts is incorrect.

@Sarah977 While nitpicky, I am going to classify this as non-trolling and respond. 

 

I think my statement applies for your situation as well. A good host has a good cleaner or cleaners and maintenance. That statement and you doing the cleaning and maintenance  yourself are not mutually exclusive. In this case, you are the one doing the cleaning, thereby making you the "cleaner".

 

The point is that you have to have cleaning that is well done and good maintenance for a good guest experience. This is borderline trolling, because I think you know this, and are arguing for arguments sake; But in case you are not, you too can apply for disaster relief in the same way the cleaners can, although your gross revenue and COGS will obviously cover much more than what someone who only does the cleaning would charge. The key is that in order to do it correctly, you should value the cleaning you are doing under COGS for your sole proprietorship or LLC that operates and/or owns the rental. Effectively, you are paying yourself. I'd consult with an accountant if you need further clarification to ensure you receive the disaster relief options you are entitled to. 

 

 

@Sarah977 That is of course unless you don't live in the US, which you do not, and I didn't notice that before. I guess for anyone else who is in the same situation as you are, but in the US, that last reply would maybe be helpful. For you, I am unfamiliar with what options your country has. Hopefully they are offering relief as well.

Randa342
Level 2
Great Barton, GB

Isn’t the underlying cause of this pandemic mankind’s greed. In the face of this crisis Let’s take time to ponder and reevaluate our priorities. 

J-Renato0
Level 10
Rio de Janeiro, Brazil

Alex-And-Marcus

Can you compact your last post into 20 lines at the most? 

Then I may read it.

Thank you.

In this edition of counter balancing angry, unhelpful, and/or generally unhelpful posts with something that might be useful or a thought starter, which comes to you courtesy of @J-Renato0 for his unhelpful/trolling post, I want to make sure anyone who has actual employees and operates in the USA knows about the Payroll Protection Program as well as how you might leverage to not only keep your employees paid, but also to improve your listings and/or client's listings if you co-host. 

 

So the Payroll protection program is a really good loan program that is 100% forgivable (meaning you will not have to pay it back) if you keep the same number of employees and payroll spend while you use the funds. So in this instance, say you have 2 cleaners as employees. You pay them $40k a year each, so your payroll expense isn $80k. You would take that number and divide by 12, then multiply by 2.5. That is the amount of a PPP loan you would qualify for. 

 

In the 18 weeks following you receiving the loan, if you have spent that loan amount on payroll and have the same  number of employees, the loan will be 100% forgiven. If you do not meet those requirements, you will either only have partial forgiveness or zero forgiveness. 

 

There are specific rules on everything that I recommend you check out on the SBA website. 

 

Now say that you get the loan and plan to keep payroll and head count up. Well now you have cleaners that you need to pay that aren't cleaning because you don't have the bookings. This means two things to me. First, you have capacity to distribute since you cleaners need to still be paid the same hours, but have less work. Secondly, you have vacancy on your listings that don't normally exist. I would propose you use that capacity and vacancy to improve listings. Think super deep cleanings, complete inventory, SOP creation for each home, laundry systems improvements, ect....figure out the things that cleaner scan do that will add value if they aren't doing turnover cleanings and deploy them to those tasks. You'll have 2 and a half months of payroll hours to pay them for, so I imagine you can do a lot to put your listings in great position to be successful after this is over. 

 

The final point i'll make only pertains to property managers that mange listings for others. The nuance here is that you are likely charging the clients a cleaning fee, which normally goes directly to cleaners, well in this case the cleaners are being paid via forgivable loan, so in order to get clients closer to break even, you can give them "credits" on the cleanings that are happening over the next 2 and a half months for them to pay their mortgage/costs with. Its a low hanging fruit of profitability, which you could also direct to your own overhead if that makes more sense. 

 

I hope this helps at least a few people out there who are considering their options on the relief options!

 

Thanks to @J-Renato0 for the post!

Alex-And-Marcus0

 

Be sure that, I have answered you only because you are always adressing me! 

 

Sorry again, I did not read your last post ! Still too long and boring.  Not readable.
Please, make an effort to use less words and better the information.

Short the text to less than 10 lines.

If you get 3 likes (thumbs up) to your next post, I promissed I will read 3 lines, if you get 4, I will read 4 lines and so on.

 

Please, if you adress me again, use fitting language.

Thanks!

@J-Renato0 Don't worry about it! Keep working hard, and you'll eventually be able to decipher these things!

Juan63
Level 10
San Antonio, TX

@Alex-And-Marcus0 I'd really love to leave a profound rebuttal but I've had this discussion far too many times. My cliff notes reply on all your comments, you just really like to hear yourself talk! Long ramblings that could easily be condensed in a few sentences. You have come to your conclusions for yourself and that's good but to have a condescending attitude on others who simply don't believe in your conclusions is just wrong and silly. It doesn't mean we don't take this epidemic seriously, but some of us don't see this as black and white, or are willing to be part of the feardemic, or be so inclined to just accept government, corporate or media control of our lives. Said my peace...

@Juan63 Despite your condescension and attempt to insult, I am legitimately interested in understanding what it is that your are talking about on not being willing to be apart of the feardemic, ect....I would like to understand that perspective. 

Helló everyone! Tó pay for non-refundable cancellations does not méan to encourage people to travel. Guests are adults responsible for their decisions when booking while COVID-19 was already in many countries Airbnb managed your money without éven asking you. It is the sámé íf bank where you keep your money decided to pax to somebody for -somé very nice thing without asking you . This is what happened with host monex