First, let me start by saying our hearts go out to anyone that has been affected by the coronavirus. Unfortunately, from the sounds of things, it isn’t over, and this will affect many, many more people.
What’s happening around the world right now is absolutely crazy. I never thought that our world would be disrupted so quickly by a disease.
It’s mind-blowing.
It’s been hard to get an idea of what to expect, and how to appropriately react to everything that’s happening.
As if the actual events aren’t alarming enough, there’s also a lot of misinformation coming at us.
With so many unknowns coming at us all at once, it’s hard to know what to believe and what to do.
I’ll try not to be too alarming in my post, but I also do not want to downplay the severity of what is happening around us.
I’ll cover what we’re doing and expecting. Hopefully, this information will help you figure out what you can do to get through this rough patch.
How Bad Is Coronavirus?
I’ve heard people both inside and outside of the vacation rental industry say that this is like the flu. Some have even said it’s less dangerous than the flu or similar to a cold.
I don’t know where they are getting their information, but this is absolutely not the flu.
Think of it from a logical perspective. Right now there are 5 countries on lockdown, essentially closed for business – China, Italy, Norway, Spain, and now France.
When have you ever heard of that happening – ever – in history?
This has never happened, ever.
It can not possibly be just the flu. These countries all have a lot to lose by doing what they did and yet they still did it.
That should tell you something.
It makes me incredibly nervous knowing that some vacation rental ‘experts’ are telling their followers that this isn’t a big deal.
If you follow that advice, and they’re wrong – you will be in trouble.
However if we were to flip that around – say you think it’s a big deal and plan for it and then nothing happens – there’s no harm no foul.
Which seems smarter to you?
The way we’re looking at it, it’s best to plan for the worst-case scenario. Hopefully, the worst-case scenario doesn’t come true, but if it does we’ll be prepared for it.
How Long Will Coronavirus Affect Your Vacation Rental
Not all vacation rentals will be affected the same. I think it’s clear that we’re all going to be affected in some way – it just won’t be the same for everyone.
We have two vacation rentals, one is in the Poconos mountains in Pennsylvania and the other is in Kissimmee, next to Disney World.
Neither one had a guest asking about the cancellation policy… until Disney World announced it was closing its doors.
With the announcement, every Disney property booking until the end of the month was asking about our cancellation policy.
So far the Poconos property hasn’t really been affected. That, of course, may change.
If it becomes difficult or impossible for your guests’ to travel to your property then sadly, your income will dry up. As of right now, if most of your guests fly to get to your property then it would be reasonable to expect cancellations.
If most of your guests come from an area that is now quarantined or if your property is in a quarantined area, then your out of business until things get back to normal.
Personally, we initially planned on not having bookings for a couple of months in both properties.
We increased it to three months when we realized that China still hadn’t gotten back to normal.
They imposed super strict laws on their people in an effort to slow down the spread of Corona and despite that, they’re two months into it and still haven’t recovered.
In the U.S., we haven’t (and won’t) have anything close to what China did to their people, so there’s a strong chance it’ll take longer for us to recover than China.
We updated our plan to 3 months of no bookings. Again, we hope it won’t be that bad – but if it is, we’re already expecting it.
How We’ve Prepared For Corona
We live in Florida and have gone through a couple of hurricanes. One thing we’ve learned through those experiences is how important it is to prepare. Although this isn’t a hurricane, we’re treating it like it’s hurricane Corona, the big one.
Like I said in the prior section, we planned for a couple of months worth no income.
Our vacation rentals are our main source of income, so it goes without saying that imagining not having any income for a couple of months was a very uncomfortable exercise.
Although it was uncomfortable it was absolutely necessary.
These are the things we’re doing to prepare ourselves.
Cut costs
This is both personally and in our business. Anything that isn’t absolutely necessary needs to be stopped. Save as much as possible, where ever you can.
We like to provide things like a welcome pack and all kinds of perks intended to increase the amount of 5-star review, those have all stopped.
The goal right now isn’t to get reviews, it’s to make it to the other side of this crazy storm.
Figure Out Your Nut
If your property is vacant for two or three months, what are the bare essentials you have to keep paying for? It’s what I like to call the nut.
You need to be able to cover the nut. With us, if a property is vacant for that long we can turn off the cable, stop the pool and hot tub services, turn off the pool heat, HVAC, unplug the refrigerator – reduce the costs where ever we can.
As far as we know, right now the banks will still be expecting their monthly mortgage payment. So if you have a mortgage (which we do) then you should figure out where you’ll get the funds to make the mortgage payments for the next 3 months.
Preparing Personally
We don’t know how the government is going to try and slow down the spread of Corona. What we do know is that testing was the best way to minimized exposure when it was first detected in the country, and we did a really poor job of testing.
Now the only other way to stop it from spreading is by reducing social contact.
There are many levels of reducing social contact. In the states, we’ve already reduced most of the large gatherings, which is good.
Ultimately, at one point or another, we will be required to stay at home for some amount of time. So we have food, water, medicine, and cash.
Our personal plan was similar to our business plan. We prepped with the expectation of staying home for a couple of months – and God we hope it’s not even close to that amount of time.
Be Logical And Be Safe
Those are our thoughts on what is going on with the Coronavirus and our vacation rental business.
I hope this wasn’t too alarming and has helped give you a framework of what you can expect and do to prepare for the crazy times that the Coronavirus has brought our way.
During this uncertain time, it’s important to think things through calmly and logically. We have the advantage of being able to see how things unfold in the countries that have been affected before us to gauge how things progress.
How have you prepared your vacation rental business? Let me know in the comments below.
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