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[00:00:00] Sarah: Hello. Welcome back for another great episode. My name is Sarah Karakaian.

[00:00:03] Annette: I am Annette Grant. And together we’re–

[00:00:05] Both Annette & Sarah: Thanks for Visiting.

[00:00:06] Sarah: And this is the–

[00:00:07] Both Annette & Sarah: Hosting Hotline. 

[00:00:08] Sarah: Listeners, have you ever had a rental that is right off of a new construction project, or maybe your neighbor is renovating their kitchen, and you’re like, what does that mean for my rental? Nicole is facing the same challenge.

[00:00:23] Question: Hi, Sarah and Annette. My name is Nicole, and I’m a newer listener. We currently have two short-term rental condos here on Maui, and I was curious what you guys do when there’s constructions going on on the community that’s out of your control. Do you notify the guests? Do you offer discounts? What can you do to salvage your income?

[00:00:43] Sarah: Great question.

[00:00:44] Annette: That’s a really great question, and thank you for being a new listener, Nicole. 

[00:00:48] Sarah: Yeah. Welcome.

[00:00:49] Annette: New friends. We love it. Okay, let’s dig into it, Sarah. 

[00:00:53] Sarah: I feel for Nicole because I’ve got a duplex that we are gut renovating right now and hoping to be ready by this fall. And of course, it’s a good thing. You mentioned this, Annette. So in the neighborhood where my duplex is at, they’ve demolished truly an entire city block, which, great, that demo is done, but they haven’t started building yet.

I’m like, perfect. They’re going to start construction right when we open our doors. But Annette said, yes, that time is going to be challenging, but when it’s done, what that’s going to do to the desirability of my rental, and for Nicole, your rental too, I’m not sure what’s going on, but hopefully it’ll add to your area.

[00:01:36] Annette: Right. And for everyone listening to the show, obviously, it’s short-term rentals, and it’s that immediate cash flow, potentially, what you’re earning month to month. But I have to believe that most of our listeners are also, um, purchasing the property for some longer-term strategy also. So Nicole, I want to offer that up, uh, that your complex or the condo building that you are in, it sounds like they are making improvements. So hopefully, for your long-term bottom line, it’s going to be a big improvement. I know that’s not what you want to hear today, but let’s just always keep that in mind.

Put yourself in the guest’s shoes. And Sarah and I, we don’t have visibility to exactly what this project looks like, but is it very apparent? Are they going to pull up and be like, wait, I just got rope-a-dope. They totally knew there was construction. This is a top pricing here. Put yourself in your guest’s shoes, um, and how much is it going to impact their stay? And I would definitely let them know about it. I think being honest about the construction being there. That way, you can at least let them know ahead of time if they want to make other arrangements.

Again, it depends on what that construction is. I don’t know. Is it right outside your door and they can see semis coming back, and back hose, and people in and out, or is it just in the distance? There’s a lot of different, um, variables here that we don’t know, but–

[00:03:13] Sarah: It sounds like the guest’s stay is going to be impacted because Nicole is concerned. And so also, Nicole, there was a time that seemed like forever. I managed a 12-unit building, and six of the units were under construction for so long because it changed– oh, two, two and a half years. It changed hands with owners, and then there was issues with– we went through three contractors. It was a thing. Here’s what I did. 

[00:03:37] Annette: So it was just a construction project.

[00:03:39] Sarah: Yeah. Just a normal–

[00:03:40] Annette: I don’t know why we act like every time it’s like, the contractor didn’t show up. They didn’t do– it’s like, yeah, welcome to life. Or just like us with life. Our bookings are down. The guests accidentally used the white towels instead of the black towels. Like, no, duh.

[00:03:53] Sarah: Just expect it.

[00:03:54] Annette: They drank beer. No way. Okay. Sorry. 

[00:03:58] Sarah: But every time, it hits you when you don’t need that right now. But Nicole, here’s what we did, and it worked pretty well. First of all, I feel like if it’s out of your control, maybe it’s the city, um, running it, what have you, we feel like, well, it’s not my control, so why does my average daily rate have to be impacted? But unfortunately, again, perception’s reality. Your average daily rate for that time period does need to reflect the stay and what the guest gets out of the stay. So if they’re going to be impacted, whether it’s early morning, late at night, what have you–

[00:04:27] Annette: An amenity isn’t open to them that normally would be open to them.

[00:04:31] Sarah: Sure. And then let them know that you have adjusted your rates accordingly to offset that. And I would let them know. This is my opinion. There might be some other opinions out there, but what we did above the fold in all of our listings, our channel listings, is we had the dates of construction and that the guest may or may not be impacted in this way.

So for us, we made sure our contractor did not start until 9:00 AM, and they finished every day at 5:00. And so we let the guests know. And that on weekends they wouldn’t be impacted except for when they walked in, they might see a vestibule that is temporary to allow the contractors to work during the week. We adjusted our rates accordingly as well. 

And then after the booking confirmation message, also remind the guest. If you are staying with us between these dates, this is what’s happening. We are doing everything we can to make sure that your stay goes smoothly, including adjusting our rates from our competitors to take this into consideration.

[00:05:26] Annette: The other alternative, Nicole– have, again, very little information on your scenario. Is it potentially a place where you could do a mid-term rental for a while? Depending on what the rate adjustment is, would it make sense to have maybe a longer-term stay in there and adjust it accordingly and just know, hey, this person’s going to be in there. I’m not going to have to worry about the guest interaction for a month or two, or three. Maybe it’s a potential where– I know in your message, you’re a realtor. Maybe there’s some realtor friends out there you could connect with if someone’s doing a home renovation or traveling, something. There might be some alternatives if you just see like, holy smokes, it’s just too much.

I mean, you said you had two condos, so maybe looking at a mid-term rental for one and keeping the other one short-term rental. But, um, definitely, I would say, need to let them know, especially depending on the degree of the renovations and the construction, because you don’t want to get any bad reviews from you not giving visibility to the guest. 

[00:06:28] Sarah: No, you need to set the proper expectations so they know exactly what they’re walking into. And Nicole, my final thought for you, and I’ll see if Annette has any before we sign off here. But my final thought for you is we are such at an age of how awesome it is for people just to book their stay and let themselves in. Everything’s automated.

But in this case, and you being a realtor, Nicole, this might be great for you, and obviously, a short-term rental host, is to call your guest after they confirm their booking and make sure they understand what is going to be impacted during their stay. And right after they book too, so that if they didn’t realize it or someone else booked, what have you, you made that phone call, that personal touch.

[00:07:08] Annette: And I’ve got my final word, which just popped into my mind. Nicole, this is a great opportunity. Any of these guests that absolutely supported you during this time, this is a great segue to welcome them back once all of it is complete. So this is something where when they are booked, maybe you do leave them a gift letting them know, hey, thanks. So glad you booked with us during this construction. We’d love to welcome you back and have, um, potentially– it doesn’t even have to be a discounted rate. Maybe it’s an additional welcome gift or something like that. 

But this is a way that you can already be looking towards, once the construction’s complete, welcoming some of those guests, um, back again. I mean, you should always be welcoming them back, but a little extra effort on the ones that supported you during the construction. And if you need Sarah and I to come check out the construction to see–

[00:08:03] Sarah: We’d be happy to.

[00:08:05] Annette: Be your truth telling friend about how bad the construction is in Maui right now, just let us know.

[00:08:10] Sarah: I’ll bring my noise canceling headphones. It’ll be fine.

[00:08:13] Annette: All right. Great question, Nicole. Good luck. Just persevere. This is for all listeners too. This stuff is going to happen. You’re going to have a neighbor that maybe is doing a rehab. Your streets are going to be maybe getting new curves. This will happen if it hasn’t happened to you yet. There is going to be some construction, um, in your area, I’m sure, at some point in time. Or, again, you need to do your own construction, um, on your property. So great question, Nicole. So everyone can learn from that one.

[00:08:46] Sarah: With that, I’m Sarah Karakaian.

[00:08:47] Annette: I’m Annette Grant. And together we are–

[00:08:49] Both Annette & Sarah: Thanks for Visiting. 

[00:08:49] Sarah: Talk to you next time.