Contract Types: Manage Inventory, Increase Revenue

Managing availability based on the type of stay is most common in property management. In simple terms, this can be broken down into 3 types:

  • Fixed contracts are those with a definite contract end date,
  • Month to Month contracts are those with no definite contract end date and
  • Fixed rollover contracts are those with an end date until a point in time after which the contract is shifted to a month-to-month basis.

 

Why managing these different types of contracts are important?

  1. Managing Availability will help moderate occupancy and increase revenue: The below table shows the impact of availability depending on the contract type.
Type of Contract Unit Contract Start Date Contract Start Date
Fixed Contract 101 1st July 1st August
Month to Month 102 1st July
Fixed with Rollover 103 1st July 30th September

The impact that this has on the availability is:

Case 1:

The unit becomes available on 1st August. Prospects will be able to make a booking for unit 101 from 1st August onwards.

Case 2:

Due to the lack of an end date, this tenant is assumed to stay with the operator for an indefinite time. If prospects make a booking for unit 102 on 1st August, the operator will need to decide if they wish to move the current tenant out based on the revenue potential and length of stay.

Case 3:

The unit becomes available on 30th September. Post 30th September, the operator will need to decide if they wish to move the current tenant out based on the revenue potential and length of stay.

How to achieve this on our system?

Our system allows operators to control to type of contract based on 2 factors:

  • Contract end date
  • Contract Status
Type of Contract Contract End Date Contract Status Impact
Fixed Contract Should be entered Under Notice Ensures that room is available from the end date.
Month to Month No need for an end date Occupied This indefinitely blocks the availability
Fixed with Rollover Should be entered Occupied Availability will be blocked as long as the unit is occupied.

Note: Once the unit is placed Under Notice, the unit will become available on the system.

 

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