How Corporate Housing Providers Should Prepare for a Hybrid Rentals Strategy

The rise of hybrid rentals—accommodating both short-term and long-term stays—is transforming the corporate housing landscape as it fuses the residential and hospitality assets into 1 super asset class.

There’s a good reason why landlords and operators are looking into this seriously – Buildings have shown an increase in NOI of ~30% by adopting a hybrid strategy for rentals.

It makes sense too right?

• You want a few rooms (say 40%) of your building to be locked into longer term rents (6 months – 1 year), which create predictable cash flow.
• You can complement this with (say 30%) of bookings being taken for ‘extended stays’ between 2 weeks to 3 months, which bring higher rentals compared to the above.
• Finally, you layer the icing on the cake by earmarking some rooms (say 30%) for nightly or weekly stays, where the ADR (Avg Daily Rates) are highest albeit with lower predictability 

Providers must adapt to this shift to stay competitive and meet the evolving needs of their clients.

Here’s how corporate housing providers can effectively prepare for a hybrid rentals strategy:

Start by Understanding Licensing Requirements

Navigating the regulatory landscape is critical when implementing a hybrid rentals strategy. Different cities and jurisdictions have varying rules regarding short-term and long-term rentals. This includes defining what is short term vs what is long term, licensing restrictions, season licenses, etc. 

Ensure you are compliant with local licensing requirements, zoning laws, and tax regulations. This might involve acquiring multiple types of licenses or adhering to specific operational guidelines for each rental type.

Get Your Services Team Ready

A seamless service ecosystem is the backbone of any successful hybrid rental strategy. Ensure that essential services like housekeeping, reception, and maintenance are efficiently coordinated to cater to both short-term and long-term guests.

For short-term stays, the emphasis should be on rapid turnaround and immediate service responsiveness. For long-term residents, focus on maintaining consistent quality and building a rapport with the guests.

Refocus Your Marketing and Sales Efforts

Marketing and sales strategies need to be tailored to attract both short-term and long-term guests. Obviously, you don’t have these varying customer types from the same source.

For short-term bookings, leverage online travel agencies (OTAs), social media, and targeted advertising to capture last-minute travelers. For long-term stays, build relationships with corporate clients, relocation agencies, and utilize content marketing to highlight the benefits of extended stays.

Understand the different customer journeys and tailor your approach accordingly.

Leverage Technology

Technology is a critical enabler of a successful hybrid rentals strategy. Invest in the right tools to streamline operations and enhance guest experiences.

• Property Management System (PMS): A robust PMS can help manage reservations, track occupancy, and streamline communication with guests. Choose a PMS that supports both short-term and long-term rentals and integrates seamlessly with other systems.
• Channel Manager: Utilize a channel manager to distribute your listings across multiple booking platforms like Booking.com, Airbnb, Expedia, etc. and keep availability and rates synchronized. This ensures maximum exposure and minimizes the risk of overbooking.
• Guest Experience Platforms: Implement technology that enhances the guest experience, such as mobile check-in/check-out, digital concierge services, and personalized communication tools. These platforms can help create a smooth and enjoyable stay for all guests, regardless of the duration.

Train Your Team

Your team plays a crucial role in the success of a hybrid rentals strategy. Provide comprehensive training to ensure they are equipped to handle the unique demands of both short-term and long-term guests. Training should cover customer service skills, operational procedures, and the use of technology platforms that support hybrid rentals. Empower your staff to deliver a consistent and high-quality experience regardless of the length of stay.

Launch, Measure and Re-Strategize

Regularly measure the performance of your hybrid rentals strategy and be prepared to make adjustments. Key performance indicators (KPIs) to monitor include occupancy rates, average length of stay, guest satisfaction scores, and revenue per available unit (RevPAU). Use these insights to refine your approach, identify areas for improvement, and ensure your strategy remains aligned with market demands and operational goals.