Starting a serviced accommodation business can prove to be interesting and a good opportunity to make money. One key driver in this is the fact that there is an increasing number of people who want alternative accommodation as opposed to traditional hotels. Anyone from a business traveler to tourists can be hosted in serviced accommodation facilities where they are offered such personalized treatment because it resonates with their rather environments.
However, as enticing as it seems, delving into this business has its own set of problems, especially for people who have just started. In case you are seeing serviced accommodation for the first time, there is a high chance that you can mess up in this line of business and such mistakes can cost you when it comes to making returns, market image, and expansion.
This write-up will highlight some of the most rampant mistakes that first-timers make in the serviced accommodation business and more importantly how to avoid them. It is only a matter of developing appropriate strategies that will assist in setting up the firm in the right manner while also ensuring that as a business you can get repeat customers as well as make a name in this busy sector.
1. Skipping Market Research
One reason that the serviced accommodation business fails is the lack of thorough market research before jumping in. A lot of new players think that if they have a property in a good location, it will be easy to get guests. That however is not the case. To succeed, it is important to analyze the local situation, demand, and competition.
Answer: Before deciding on a property, always acquire its comprehensive market details. What are the occupancy statistics, what do guests prefer, and what property types are in demand? Analyze competitor listings to know how guests think and what prices seem to them most acceptable. Good research helps you avoid guesswork and help you price your property sensibly.
2. Choosing the Wrong Location
Location really is one of the most critical factors in the success of property. One hence most serviced accommodation businesses intend a property in the wrong location which is a poor decision and costs them dearly. Resorting to serviced accommodation can not be an ideal solution in every popular neighborhood, rather it is important to know what the guest wants.
Solution: When selecting a location, consider your target market. If you’re targeting business travelers, search for a property close to the business centers or transport links. If the tourists are your market, select a location that is near several attractions, public transportation facilities, and restaurants. A well-constructed strategy concerning a place and its surroundings can play a vital role in increasing your occupancy levels and introducing new guests to your property on a repeat basis.
3. Underestimating Total Costs
A lot of people who enter this market for the first time do not understand the actual costs of serviced accommodation and thus the returns tend to be lower than one expects. And not only buying or renting a building we have to add costs for cleaning services, maintenance, utilities, advertisement, and possibly management of the property.
Solution: Make a proper business plan with a comprehensive budget, which includes every potential cost. Such as a monthly expenditure on electricity, internet, general upkeep, and costs that may be incurred once in a while like fixing or changing certain aspects of the apartment or building. Budgeting for such activities makes sure that you are well prepared and insulated against those scenarios that are financially shocking and are quite detrimental to one’s cash flow.
4. Setting the Wrong Price
What to charge appears quite a gray area for most property managers but even more so for their nascent counterparts because they tend to overprice their property or completely undervalue it. It is vital to charge realistic prices because too high ones will lower the demand for certain customers letting too low ones compromise the business itself.
Solution: Whenever prices are set, the first thing one must do is analyze their competition and find out the appropriate rate that one wants to charge. Using dynamic pricing options is much more efficient whereby prices can be changed depending on various factors. The market pricing erodes competition and ensures revenue is maximized while occupancy levels remain high.
5. Neglecting Your Online Presence and Marketing
As it stands, an online presence is essential in today’s digital age and the absence of one is very detrimental to the serviced accommodation business. This arises from the attitude most hosts have that having one or two listing booking engines is sufficient. Innovation brings the most effective marketing that is important in today’s market, with competition scaling to the highest levels.
Solution: Post your assets for rental on several online sites including Airbnb,Booking.com and Vrbo. Have a business website and link it to relevant social media platforms that are useful for your business as they help attract customers directly. Apart from good business and desk markets, up-to-date photographs of the assets and their details attract buyers or tenants and give the brand a good presence.
6. Ignoring Property Presentation and Decor
Another common mistake in the serviced accommodation business is overlooking the importance of aesthetics. A well-decorated, comfortable, and thoughtfully designed space not only attracts guests but also helps you stand out in a crowded market.
Solution: Invest in stylish, high-quality furnishings, comfortable bedding, and a cohesive decor style. Pay attention to details like lighting, cleanliness, and amenities. A welcoming, well-presented space increases guest satisfaction and can lead to positive reviews and repeat bookings.
7. Overlooking Guest Experience
Guest experience can make or break your reputation in the serviced accommodation business. One of the biggest mistakes beginners make is focusing solely on bookings and not enough on the guest experience. This often leads to poor reviews and fewer return guests.
Solution: Focus on providing a seamless guest experience from check-in to check-out. Offer amenities like free Wi-Fi, toiletries, and local recommendations. Communicate clearly and promptly with guests, and ensure they feel welcome and comfortable throughout their stay. Happy guests are more likely to leave positive reviews and recommend your property.
8. Complicated Check-In and Check-Out Processes
Guests appreciate a hassle-free check-in and check-out process. Complex procedures or rigid check-in times are common mistakes in the serviced accommodation business that can frustrate guests and lead to negative feedback.
Solution: Simplify your check-in and check-out processes by offering flexible options like keyless entry or smart locks. Provide clear instructions and be available for any questions. A smooth, convenient experience leaves a positive impression and sets the tone for the entire stay.
9. Not Properly Screening Guests
Many hosts assume that all guests will respect their property, but this isn’t always the case. Failing to screen guests can lead to issues such as property damage, noise complaints, and violations of community rules.
Solution: Implement a basic screening process. Check guest reviews on booking platforms and set clear house rules that outline your expectations. You might also consider a security deposit for added protection. Screening helps you select guests who are more likely to respect your property and ensures a smoother experience overall.
10. Poor Communication with Guests
There is no doubt that guest satisfaction in the hospitality industry can be achieved through proper channels. Novices are commonly seen failing to address guests’ complaints, thus not satisfying their expectations, which ends up being frustrating for the guests.
Solution: Keep in touch with guests through all stages of their interaction with the accommodation from the first contact up to discussions after check out. Replies to questions should be done promptly; instructions on checking in must be unambiguous and readily available, and any problems that a guest might have during check-in must be addressed adequately. Satisfying guests with proper communication increases the likelihood of appreciating the service thus the higher the chances of better reviews.
11. Inadequate Maintenance and Cleanliness
Another common and very unfortunate mistake made in serviced accommodation is the low maintenance and general cleanliness. In terms of money, it is very costly to own a property that is dirty and unkempt since it can damage a host’s reputation in this type of business, and loss in terms of clientele can also be expected across the board.
Solution: Employ an expert cleaning company and ensure frequent maintenance aspects. Beat the time when altering or transferring property before guests come so that you can eradicate any dirt that might turn off the guests even before they come. There are positive reports that even harsh customers, after enjoying clean venues, are usually more than satisfied, resulting in a more impressive reputation for the entire property.
12. Ignoring Guest Feedback and Reviews
This is one sad truth of many new hosts – they often tend to overlook the possibility of guests’ feedback. Overlooking negative reviews in particular, for instance, is one of the costly mistakes of serviced accommodation.
Solution: Take time to read and respond to all guest reviews. Address concerns respectfully and use feedback to make improvements. Positive reviews build credibility, while constructive criticism helps you enhance the guest experience.
13. Trying to Manage Everything Yourself
Starting a serviced accommodation business is a lot of work, and trying to do it all single-handedly is a surefire way to be overworked and have low standards.
Solution: Delegate jobs such as cleaning, maintenance, and even guest communication whenever it is practical to do so. If this is a multi-property scenario, hiring a property manager is a good investment. Assigning work also helps ensure that the focus remains on expansion and enhancing the guest experience.
14. Overlooking Legal and Insurance Requirements
Legal concerns are such that they often fail to appreciate this aspect, and unfortunately, this has legal repercussions as well. No insurance and no permits often bring about plenty of fines, litigations, and costs associated with the destruction of one’s property.
Solution: Check up on local requirements and make sure you have all the necessary documents. Be sure you have liability protection insurance, just in case things go wrong. Getting a legal professional on board allows you to stay legal and preserve your assets.
15. Not Preparing for Seasonal Fluctuations
Some beginners do not factor in seasonal demand, and come to face integration impacts on revenue generation. It is crucial to grasp the ebb and flow of demand to sustain occupancy and revenue.
Solution: Research your area’s peak and off-peak seasons and plan accordingly. Use dynamic pricing to adjust rates based on demand, and consider offering discounts during slower months. Understanding seasonality helps you plan financially and keep your property booked year-round.
Conclusion
Starting a serviced accommodation business can be a rewarding endeavor, but it requires careful planning, attention to detail, and a commitment to guest satisfaction. By avoiding these common mistakes in the serviced accommodation business, you can set yourself up for success, increase your bookings, and build a strong reputation in this growing industry.
Whether you’re focusing on guest experience, managing costs, or optimizing marketing efforts, each aspect plays a role in your long-term success. Learning from these beginner mistakes can help you create a memorable experience for guests and a profitable, sustainable business for yourself.
