Guest Post: STRs Will Be Fully Converted to Self Isolation Lodging Within 2-3 Weeks
Today's #ThoughtLeaderThursday Guest Author: Zafar Mawani
Zafar Mawani's company, Suite Homes Chicago, operates a portfolio of 10 STRs as well as long term rentals and commercial properties. Zafar graduated from University of Chicago with a degree in History, and received his MBA in finance from Colombia University. Before starting his STR venture, Zafar worked in Management consulting for Deloitte and Kearney Management Consulting.
Introduction from James
Today, I'm excited to kick off our newest segment of #ThoughtLeaderThursday. In this segment, we will feature a guest post each week from a thought leader in the STR industry who has a unique, actionable perspective on the future. My goal with this #ThoughtLeaderThursday segment is to highlight valuable ideas and perspectives from around the STR industry that you otherwise may not have seen during your busy day.
Today's post is from Zafar Mawani. Zafar caught my attention after posting a very thoughtful and prescient post on an STR forum we are both in. I did a quick google search of Zafar and was very impressed with his educational and professional background before he joined the STR industry. Zafar agreed to share his thesis on the medium-term future of STR on our VRM Empire platform. I think hearing the following perspective will give STR managers and owners some hope that it's not all doom and gloom, and that STR owners and managers can help this crisis.
Zafar wrote the following post about a week ago. Today, I'm kicking myself for not posting this sooner, because this morning big news was announced that is already proving Zafar's thesis: Airbnb has just announced their initiative to host 100,000 COVID-19 Responders.
That said, this Airbnb announcement is just the tip of the iceberg. As Zafar lays out in the below post, the unique nature of the Coronavirus will lead to many different types of people requiring self isolation - not just emergency responders. Moreover, Zafar makes some smart recommendations on how to not be reliant on Airbnb to match your properties with self-isolators.
“As medical and relief workers require accommodation for response and preparedness, the Airbnb community is in a unique position to help.”- Larry Brilliant MD, MPH, DSc
The situation in the US is changing by the day and by the hour.
Presuming the epidemiological models are correct (which they may or may not be), the huge mobilization to address this crisis will be unprecedented. For the foreseeable future, all travel within the US will be severely restricted. Reliance on tourism to fill your short term rentals is ill advised.
Many of you are thinking about converting to LTR. With the federal ban on evictions, this is risky. Some of you are cutting prices in the hopes that you will grab a traveler who is not traveling.
My prediction is that you will be empty for 3-4 weeks, as the federal response ramps up. After that time, those of you in cities will see a deluge of demand as the National Guard, Army Corps of Engineers and military are deployed to major cities to build additional hospital capacity.
These first responders will need short term housing (not for 2-3 days, but for months) and this will be the majority of your business.
These first responders, coming from other places, cannot be housed in hotels, where they may be exposed to the virus. (The hotels are much more suitable for additional hospital capacity and will be used for that purpose even before convention centers, schools and dormitories.)
Moreover, as doctors, nurses and other health care professionals already living in your town fear contaminating themselves and then bringing back their infection to their families, they too will choose to use short-term housing to go back to after their shift is up at their hospitals (rather than their family homes). They will demand their hospital pay for this housing.
Some patients diagnosed with Covid-19, but not sick enough to be admitted to hospital will choose to isolate at short term housing (and pay for it) rather than return to their homes precisely to avoid the potential of infecting family members.
Lastly, healthy individuals who live in high rises where they need to share elevators, laundry rooms, lobbies, and are worried about touching door handles and buttons may choose to shift to single family homes where social distancing is more possible.
Right now we are in the interregnum period. Tourism has dried up and the mobilization to fight the pandemic is not yet underway, so you are seeing no bookings and fear the worst. It is an abnormal time.
My recommendation is that you hold on tight, change nothing (except to take out all those ridiculous amenities that you can ill afford), and immediately list on direct booking websites such as Houfy and Mark Simpson’s and Eric Karla’s book direct websites.
There is an urgent reason why I think it advisable that as many hosts list on the direct book websites (rather than just BDC and VRBO). And that is the considerable risk you assume by relying on ABB for your marketing.
Whatever our differences may be on whether it was right or wrong to do what ABB did, there are unconfirmed reports by hosts in cities which have declared “shelter in place” policies that ABB has prevented guests from booking properties in such cities. (I do not know if this is true or not true. There is no way to ask ABB corporate about it and to ask a Customer Service Representative in the Philippines is dumber than dumb.)
If, however, the reports are correct, available listings in “shelter in place” cities could be effectively blocked by ABB from being booked. This would be a tragedy to you, the guest and for public health imperatives.
Moreover, the future is uncertain. I have no idea of how well ABB will weather this storm with its overhead.
In addition to listing on other booking sites, you must reach out to your municipality (and HR Depts of hospitals) to let them know about those alternative sites should they need to house staff or first responders from out of town.
This crisis is getting very expensive. I believe the social transfers will be on the order of about $4 trillion if this lasts 3-4 months.
Thanks for reading. If you've found this useful, I'd love to hear from you. Have a submission for #ThoughtLeaderThursday? I'd love to hear about that too. Comment below or reach out to email@example.com.