Power Search

You are not logged in.
Click here to log in.

 

May 2008 eNEWS

Welcome New Members

Providers

TDY Corporate Housing, Inc.

Daniel Gorman

Brandon, FL

Pacific Coast Accommodations LTD

Becky Bertoia

Burnaby, BC, Canada

Vancouver Extended Stay LTD

Horst Dammholz

Vancouver, BC, Canada

Executive Furniture Rentals

Mark Miller

Toronto, ON, Canada

Neutron Industries

Lisa Brennan

Phoenix , AZ

 

Share the membership benefits of CHPA with your friends or colleagues who are not yet members of CHPA. Invite them to join CHPA at http://www.chpaonline.org/join/become_member.php and begin to receive the same great benefits. Please forward any potential CHPA members to membership@chpaonline.org.

Controlling Vacancy

By Gavan James, Oakwood Worldwide

gjames@oakwood.com

The raw material of the third party corporate housing industry is the stock of apartments you have to rent to your customers. Like any industry controlling material cost, we all must keep a sharp eye on the amount of apartments we rent, and the price we pay for them.

For many of us, the largest variable of the business is the vacant apartment costs. High vacancy can destroy your financial statements when the margins you charge above the raw cost of rent, furniture and other related costs are often only 15% - 30% of your rate structure. One unrented apartment can eat the net profit of ten apartments for some operators.

The following are a series of tips related to several of the main segments where vacancy occurs in a lease cycle. Many tips will be second nature, and hopefully, you will find a useful nugget or two.

Unrented Apartments Between Guests

Balancing the supply of apartments in any key geographic area with client demand is a paramount concern. Here are some tips to control this cost:
  • Understand your demand factors such as seasonal changes, client rental trends, internet rental trends, and other factors that impact demand. Find a method to track year over year trends, and deploy trend reports that factor in history, and current channel trends.
  • Be prepared to adjust stock when trends show an increase or decrease in demand. Diversified stock of leases in any geographic area is key. Long term leases that allow for the largest margins are important to drive revenue, and as long as lease expirations are spread out, you are often able to avoid lease vacancy exposure. Having your stock balanced with six month leases taken out in the first and second quarters allows lease returns in the third and fourth quarters. Finally, renting short term leases and wholesaling from other providers is often an area that allows low vacancy, yet can accommodate high season occupancy peaks.
  • Effectively find apartment communities with flexible lease term arrangements, including win/win lease break clauses.
  • On the rental side of the equation, short term rentals, where allowed by law, are an effective way to mitigate vacancy between guests and the other vacancy areas noted below.
  • Offer your un-rented apartments up for wholesaling to other corporate housing providers. While your margins may be slimmer due to offering competitive rates, mitigating vacancy is usually worth the accommodation.
  • We can always rent our units to the unfurnished rental market if we can not find a paying client. We occasionally do this when committing to an important client and are forced to take leases in a remote area with limited corporate apartment rental options.
  • Trade unit type leases with an apartment community if you have an oversupply of one bedrooms yet high demand for two bedrooms.
  • Careful with your stock on three bedroom apartments. These are notorious for producing high vacancy in many markets as demand is volatile.

 

Vacancy at Lease Inception

The takedown of new apartments allows for seasonal occupancy growth and year over year growth as your business expands. Your operation's profits can be improved greatly by limiting the days you pay for a new unit before your first paying guest arrives.

  • Negotiate to have your unit furnished and set up before you take technical occupancy and have your first guest arrive. Many apartment communities often allow up to 10 days or longer for a new resident to move-in and start paying rent. Ask your apartment managers for a favor and use this downtime to set furniture, housewares, and turn on cable, utilities and DSL services.
  • If you have excessive vacancy due to a client wanting a specific unit that you must pay rent on that is a new set-up, build the excess cost into their rate.
  • Rent short term, where legally appropriate, if the long term rental you were hoping for does not materialize right away.
  • Take great effort to schedule your internal teams and furniture, utility and other contractors in a timely manner to lessen vacancy costs. The last thing you want is to delay guests because of controllable factors.
  • Have a well defined internal program to understand current guest departures to allow for re-renting opportunities and to understand exactly when an apartment will become vacant. At the same time, study your lease expirations with your properties and return apartments to communities in a timely manner.
 

Re-rented Apartment Vacancy

Excessive vacancy with re-rented apartments is one of the most controllable areas of vacancy. Understanding the factors that drive this vacancy is key.

  • Your reservation staff and the decision you make with your internal systems can make or break your vacancy factors. If you have multiple reservationists, study their booking patterns to see if there is opportunity for certain associates to negotiate and suggest arrivals that favor fewer down days.
  • Again, in markets where short term rentals are allowed by law, such rentals can mitigate and fill apartments that may have an excessive gap between occupancies.
  • Needless to say, clean and reset your units quickly. Inspect apartments either prior to departure or day of departure. This allows timely scheduling of internal resources and contractors.
 

Unrented Apartments Between Final Guest and Property Lease Termination

This is another area of vacancy that can mount, yet is controllable. Vacancy on this end of the spectrum results from mismatched lease expirations between your clients and the lease expiration of actual property leases, and un-rented periods before you return a property lease.

  • A terrible waste of resources is spending rent dollars on the period between final guest departure and the property lease expiration. One way to avoid this expense is to negotiate a match between guest departure and property lease expiration. Some apartment communities will allow this, as long as you do this in the month past the standard lease expiration, not the days before the property lease expiration.
  • Avoid apartment communities with 60 day lease expiration notice requirements and favor ones with 30 day notice requirements. Some markets such as Seattle are moving to a 60 day custom, however, this can be negotiated.
  • Once again, short term rentals are a great way to have paying guests occupy the period until the final lease expiration.
  • Clean and pick up furniture quickly at the end of a property lease. It is better to negotiate to do this when you have stopped paying rent and have technically returned the apartment.
 

Summary

As much as we need to control wasted resources spent on vacant apartments, we find it important to maintain a good stock of apartments where customers demand them. This does involve the risk on maintaining stock. Hopefully, the above basic techniques provide a framework to operate, and not lose too much sleep counting vacant apartments instead of sheep at night.

Members in the News...

ABODA Employees Know How to Make a House a Home For Local Homeless Families

Redmond, Wash. (March 18, 2008) – As part of its philosophy of serving its communities, ABODA, a national market-leading provider of extended stay and corporate housing services, donated materials, furnishings and lots of elbow grease to transform a house into a home for an area homeless family.

 

On Saturday, March 15, ABODA employees, with their family and friends in tow, gathered to paint, clean up and landscape yet another home for use by Way Back Inn. Additionally, on Saturday, March 29, ABODA will deliver all of the furnishings and supplies, also donated by ABODA, needed for a family to settle in comfortably.

 

Originally started by a Boeing employee who utilized a "Cuss jar" for funding (co-workers had to contribute every time they swore on the job), Way Back Inn has provided temporary, transitional housing or rental assistance to over 500 homeless families with children under the age of 14 since 1991. Of the 11 homes that Way Back Inn has refurbished for transitional housing, ABODA has participated in the structural and aesthetic renovations of six homes to date.

 

Other Companies offer help: After hearing about ABODA's on-going efforts, a Redmond Starbucks Manager, Connie Spain, contacted Starbucks corporate and it was immediately decided that Starbucks would donate all coffee for this early morning and all day event. Additionally, Parker Paint offered ABODA all painting supplies at 25% of the retail cost, saving hundreds of dollars.

 

“I feel proud that our employees give so unselfishly of their time and talents, not just to Way Back Inn but to numerous other nonprofits in the community. ABODA has at its core a strong commitment to use its resources and expertise to help others,” says Ralph Jones , Executive Vice President of ABODA

About ABODA

Since 1988, ABODA has been providing housing solutions and services to leading Fortune 500 companies and professional sports teams across the nation. ABODA Corporate Housing provides All the Comforts of Home ® by offering thousands of unique housing options that blend the comforts of living in a home with the amenities clients need to make their stays comfortable, productive, and rewarding. An award-winning, employee-owned ESOP corporation, ABODA is a recognized leader in employee satisfaction, customer service, and community involvement and was awarded a prestigious place on Washington CEO magazine's "Best Companies to Work For " list. Visit www.aboda.com to learn more. Media Contact: Karen Bruhn, 425.836.8928, kbruhn@verizon.net

 

Churchill Corporate Services Announces Re-Launch of Corporate Housing Website

FurnishedHousing.com Exhibits New Look and More Features

 

April 4, 2008 - Churchill Corporate Services, Inc. has announced the re-launching of its flagship website, www.furnishedhousing.com, which offers visitors more options when searching for furnished temporary housing.

 

Following the company's recent expansion of local offices throughout the East coast and the state of Arizona, Churchill Corporate Services heralds in a website that presents more detailed information on properties, locations and amenities while exhibiting an updated, fresher look. “The re-launch of www.furnishedhousing.com is much more than just a modern design treatment. We've used the latest web technologies to add new features and functionality that greatly enhance the overall user experience,” stated Robert Montalbine, Internet Marketing Manager. “ Expanded map features, points of interest and comprehensive browsing abilities will help better educate clients about the areas they are seeking for temporary housing.”

 

For over 30 years, Churchill Corporate Services has supplied relocation services and established a sterling reputation for quality, personalized service and exceptional value in the furnished housing and furniture rental marketplaces. Yudel Kahan, President, commented, “The new look and options of our temporary housing website furthers our commitment to provide the best possible resources to our clients and prospects.”

 

For more information about Churchill's temporary housing and furniture rental services, please call (800) 658-7368, or visit www.furnishedhousing.com.

 

About Churchill Corporate Services

Churchill Corporate Services Inc. has been providing relocation services to Fortune 500 clients for over 30 years. Churchill delivers a cohesive group of products and services to support all the aspects of corporate relocation: Corporate Housing, Furniture Rental, Destination Services, and Apartment Management, from our nine locations in New York, New Jersey , Connecticut, Massachusetts, Pennsylvania, Washington DC, Florida and Arizona . Bringing these services together under one entity allows us to provide cost-effective, efficient and convenient solutions to relocating professionals and their families whether their needs are temporary or permanent. Visit us online at: www.churchillcorp.com.

 

BridgeStreet Worldwide Expands Government and Military Focus through Acquisition

Purchase of Temporary Quarters and Temporary Housing Solutions Creates Strategic Alliance

Herndon , VA – April 8, 2008 - BridgeStreet Worldwide, a leading international provider of corporate housing, today announced the company has acquired Washington D.C.-based Temporary Quarters, LLC / Temporary Housing Solutions, LLC for an undisclosed amount. The acquisition includes the assumption of all assets and liabilities related to Temporary Quarters/Temporary Housing Solutions' furnished apartment business. Simultaneous to this acquisition, BridgeStreet has signed an agreement with Madison Hospitality to continue to develop business opportunities within the government and military market segments of the corporate housing industry.

 

"Temporary Quarters and Temporary Housing Solutions are premier housing providers, specializing in the accommodation needs of federal government, federal government contractors, and military personnel, within the Washington D.C. area,” said Jon Wohlfert, managing director, Americas of BridgeStreet Worldwide. “They have built an outstanding reputation for product and service quality in addition to their market segment expertise. We look forward to partnering with this talented team to cater to the government and military segment around the world”.

 

Benj Farmery and Joanna Salmen, the principles of Madison Hospitality, will concentrate on identifying and providing housing solutions to government and military travelers around the world. Federal civilian employees and U.S. military personnel collectively represent more than $150 million in annual long term housing expenditures. “We are excited about the opportunity to combine our government sales expertise with the global resources and knowledge of BridgeStreet Worldwide” said Farmery. “Our foremost concern was aligning our existing and future clientele base with a global, customer-focused organization; we feel confident our government clients and guests will receive unparalleled service and support from this BridgeStreet-Madison Hospitality alliance.”

 

“This acquisition is part of our overall strategic plan to bring unique housing solutions and integrated supplier management tools to government and military personnel. Through our alliance with Madison Hospitality, BridgeStreet Worldwide's unparalleled service offering will allow public sector travelers to make informed, cost conscious buying decisions,” said Lee Curtis, president and CEO of BridgeStreet Worldwide.

 

About BridgeStreet

BridgeStreet Worldwide is a leading international provider of corporate housing. BridgeStreet and its Global Partner Alliance offer over 15,000 corporate apartments located throughout the United States and 50 cities internationally. An award winner both in the U.S. and Europe , BridgeStreet properties meet uncompromising standards of quality, comfort and service. For more information about the company or to learn more about how BridgeStreet is Making Corporate Housing Easy, visit www.bridgestreet.com or call 1-800-BSTREET.

 

Furnished Quarters Partners With Zipcar to Enhance Guest Experience

As the Selection of Furnished Quarters Amenities Grows, Guests Maintain Additional Conveniences of Home

New York, NY - April 30, 2008 - Furnished Quarters has recently announced its collaboration with Zipcar, the world’s largest and fastest growing car sharing service. By providing its guests with the added option and convenience of Zipcar’s services, Furnished Quarters remains committed to providing exceptional services and amenities for its temporary housing guests. While many of Furnished Quarters 1,200 apartments are conveniently located near public transportation, sometimes a business meeting, an errand or sightseeing might warrant the need for your own personal transportation. That is where Zipcar comes in.

200,000 Zipcar members share 5,000 cars located in more than 50 cities throughout the U.S. and U.K. For just $25 per year, rather than the standard $75 fee ($50 to sign up and $25 application fee), Furnished Quarters’ guests can become members, qualifying them for special reduced rates at just $10 per hour or $69 per day, gas and insurance included. Members who take advantage of this opportunity also gain access to Zipcar’s huge inventory of gas/electric hybrids, such as the Toyota Prius and Honda Civic Hybrid, as well as high-end vehicles like the BMW 325i and Volvo S40. Membership is universal, so members can gain access to Zipcars in any city where they are available.

“Partnering with Zipcar allows Furnished Quarters to provide an added convenience to business and leisure travelers who want an easy way to get around,” said Steve Brown, co-founder and CEO of Furnished Quarters. “Additionally, this new relationship builds on Furnished Quarters’ efforts to preserve the environment by encouraging its guests to use eco-friendly vehicles and carpool.”

Zipcar is a convenient, economical and sustainable form of business travel that has had significant positive impact on the surrounding environment and local communities. In a recent survey, more than 40% of members state that they “would have kept their vehicle, or would have purchased a primary or secondary vehicle, if Zipcar did not exist.” To date, Zipcar estimates it has taken 75,000 privately owned vehicles off the road and saved members more than $5,000 per year.

About Furnished Quarters

Furnished Quarters is the largest provider of temporary furnished housing in New York City. Founded in 1998, the company has since expanded to provide more than 1,200 furnished apartments throughout Manhattan, northern New Jersey and the Boston metropolitan area. Combining the convenience of the best locations with the ease of having a true “home away from home,” Furnished Quarters apartments are stylishly furnished in a sleek, urban, modern design, reflecting the buildings, cities and cosmopolitan lifestyle in which they are located. For more information, visit www.furnishedquarters.com.

 

Churchill Corporate Services Announces New Corporate Housing Office in AZ –

Serving Phoenix Metro Area

Continues to Expand Throughout the US to Serve Demanding Corporate Housing Markets

 

May 2, 2008 - Churchill Corporate Services, Inc. has announced the grand opening of its newest office in the Phoenix metropolitan area. Following the same renowned Churchill standards, this operation's main focus is on creating direct landlord relationships in order to bring the highest level of service to clients. This office joins the longer-established Churchill offices in New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Washington DC and Florida.

 

For more than 30 years, Churchill Corporate Services has provided relocation services while establishing a strong reputation for quality, personalized service and exceptional value in the furnished housing and furniture rental marketplace. This Scottsdale-based office has been launched to expand Churchill's offerings and to meet the increased demand for corporate housing services throughout the western United States.

 

“The seamless move-in coordination for the fast-paced transfer of the international executive is made successful thanks to our team of seasoned professionals and our state-of-the-art technology,” stated Churchill President, Yudel Kahan. “Anytime of the week, day or night, our dedicated staff and cutting-edge software is equipped to handle each detail to the client's satisfaction, resulting in a stress-free transition for each and every move.”

 

For more information about Churchill's fully-furnished temporary housing in the Phoenix metropolitan area, including Scottsdale, Tempe, and Chandler, please call ( 888) 541-3770, or visit www.furnishedhousing.com.

 

If you would like to share news and other events in the corporate housing community, please forward that information to Amanda Cook, CHPA Director of Membership and Marketing, at acook@chpaonline.org.