Dealing with Coronavirus as a Hospitality Newbie

“It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” — Charles Darwin

In late 2019, I decided to start a serviced accommodation business as my route into the eclectic world of property. I have always been keen on the property sphere ever since I stepped foot into one of my fathers’ BRRR projects at the age of seven, even now I can still smell the sawdust that was in the air on that day. After months of research I took the plunge and with a minimal survival budget created Classy Comfort Ltd. My background is in operations management, so I know how important planning and foresight is, with this in mind I laid the foundations of the business as if we already had multiple units across many locations. Unbeknownst to me this was a decision that would ensure our survival. With only one unit in our portfolio I had a professional Word Press site created that linked to the relatively new Zeevou, a property management suite with inbuilt channel manager that was still in Beta at that time. Things were difficult at first, having this setup and an automated cleaning/linen service on a single unit meant we barely broke even on business cost. I questioned myself daily under my breath and all the people around me did it quite loudly. “You need a 9-5 Oliver,” was a common theme I heard for weeks. I pressed on regardless, my subconscious told me it was the correct way of operating, I am a big believer in trusting gut instinct. I also thoroughly believe in my own ability and I rank in the top 1% for stubbornness, so it did not matter to me what the doubters said.

Over the course of the next two months we added three units using various financing strategies that I learnt on the fly, please understand the intricacies of business were all brand new to me and most still are. We really ironed out the kinks operationally, working with Zeevou’s Partner Success Team we had a fully automated guest experience, I still engaged the guests on booking however as I felt that personal touch was important. Our units were functional, photogenic and unique, and we put an inordinate amount of effort into their development to ensure we catered for the widest possible market in our goldmine area. We went above and beyond for every guest and this bore fruit quickly, the only reviews that have not been 5* have been from people that don’t understand the review system and then the odd crazy person, I can live with that.

Role on February and I hear about a certain situation in China that could possibly reach the UK, “Surely not,” I told myself and proceeded to source a further two units, I was taking action and nothing was going to stop me. At this point we had attracted the attention of numerous investors; we had a working formula and they wanted to join us on the journey. We had the funding for six more units in our area and were looking further afield for an entire block of apartments, the rapid expansion I had prepared for was at my fingertips.

As we went into March the virus and moreover the panic really took hold in the UK. We were finishing the uplift on another unit and started to see other operators get cancellation after cancellation. For a week this occurred in the background and to my surprise we didn’t have a single one, stupidly I made the assumption that we were not going to be affected as our product was superior and you know…nothing ever happens to you, right? Then lockdown began. The mobile notification sound for OTA cancellations is the same as the notification sound for new bookings so at first, I just thought we were hoovering up other business, I was wrong. In the space of four working days we lost every booking from March and April, in the coming weeks everything from June followed, around £25,000 total.

This was all occurring while we were steaming into another uplift of a four-bedroom house. Everything was signed for and the investor was still keen. I heard of other operators giving back their units in panic and for maybe a couple of days I slumped into a bit of a depression. Had all this effort been for nothing? Of all the possible business sectors I could have chosen I decided to pick hospitality and then a global pandemic decides to occur…what luck. Tourism is nonexistent and we mainly housed tourists, the OTAs are cancelling free of charge and we almost exclusively used them for bookings. Giving up never crossed my mind once, however. I collected myself and looked to my support network for guidance. I must thank my mentor Ashley Banfield here, he has a Whatsapp group set up for his mentees and I have to say the wealth of knowledge and guidance that flowed through it as this crisis unfolded probably saved the business. I leant on the advice offered and implemented everything: Covid guidance front and center on listings, special cleaning protocols, renaming listings to target keyworkers, offering massive discounts for monthly stays, FB adverts, Gumtree adverts. We had never paid for any direct marketing before but here I was running multiple campaigns across multiple platforms at a reasonable cost.

At first nothing happened. I would catch myself from time to time shaking my head in front of the laptop with the knowledge that I owed thousands in rent, my family didn’t seem to grasp the level of stress I increasingly found myself under. I heard of people asking for rental discounts and deferments and for me this was just not something I could do. I dislike confrontation at the best of times and as an introvert this sort of thing makes me feel uncomfortable to say the least. With this in mind I made the calculation very quickly that on the other side of this crisis those businesses that did not need to give back units or ask for rent reductions would be looked on very favorably by agents and landlords alike. Looking to my future negotiations I could see myself using this as a great piece of leverage so set my heart on covering costs at least.

At first it was only Gumtree that seemed to be working in our favor. We managed to house a keyworker in one of our more central properties for two months at 70% of our normal rate. This success perked me up somewhat and now knowing that there was still business to be had I doubled down on our advertising and paid the maximum possible for our adverts, not only this but I constantly tweaked the copy to appeal to our new target market. The leads came thick and fast and the stress and panic subsided to normal operating levels. We are currently housing keyworkers, contractors and displaced families with less operational stress while remaining profitable. 

Zeevou has been a real godsend throughout all of this. We have maintained our strict processes but also relaxed some of our normal guest criteria. We have allowed students and even the odd dog, something I would not have dreamed of doing two months ago. A property management suite that also allows for direct bookings of all types has made a stressful situation quite manageable indeed. I have honestly not been on Airbnb in over a month and I can say operationally, direct long-term bookings are the way to go. We are at 95% occupancy for the next two months at least and knowing what I know now I have no doubt we will be for the foreseeable future. Our investors are happy and have even started requesting more units now the panic has receded. No rest for the wicked, I guess.

With no cleaners working and our linen company AWOL, myself and my better half have been doing everything as required. We have been pleasantly surprised at how well behaved our guests have been and all my past fears about vandalized property and people refusing to leave have dissipated (somewhat…). Vigilance is still my middle name regardless, however.

In the downtime we are looking to improve and grow our direct booking mechanisms to become self-sufficient and ensure we never have to rely on OTAs ever again. Our adverts are still generating leads daily that are passed onto the community of operators in our area. The level of teamwork between strangers has been quite eye opening, it would have been quite easy for everyone to go into their shell and look after themselves through this crisis. Everyone seemed to decide quite early on, without consultation, that we were going to lift together or not at all. I have personally made some fantastically beneficial and lucrative new contacts and intend to keep this trend going.

Zeevou transitioned quickly to help the community with the launch of Here to Help allowing users to allocate property for the usage of keyworkers. Unlike Airbnb they did not stipulate the terms or ask you to give accommodation away free of charge, as the user you still have full control. Others joined suite, and once again, the wider community of operators banded together and lifted one another up to ensure we all come out of this on the other side relatively unscathed.

The old business model has certainly taken a hit, I do not think that is debatable, but with every adversity comes opportunity. The key learnings this has forced onto us all regarding how fragile reliance on an OTA makes a serviced accommodation business are all too noticeable. The bad actors and those that were not in the game all the way have gone under or fled giving legitimate operators a PR headache but an opportunity regardless. When things start to open up again, I have no doubt there will be an increase in demand from UK staycations and the desire people will have for private, safe and secure accommodation instead of hotels. A mini gold rush is coming to serviced accommodation. When? Well, it depends on several factors including the UK Government’s timetable and subsequent ongoing action plan for dealing with the virus. Unlike some I have quite a positive outlook on the economy and the future of the country. In my mind, from a business standpoint, this virus was a good thing and Classy Comfort will certainly be better off because of it.

I can think of many occasions over the last two months when the stress and pressure would have crippled a lesser individual. As entrepreneurs seeking our own destiny, we do not have the luxury of sitting down and letting the world go by. It is up to us to make our future the best future it can be and that is only limited by our own imagination. You think therefore you are. 

Please reach out if you would like to chat.

Lift together.

Oliver Griffiths