Crisis Management for Vacation Rental Companies

1. Introduction

The last few years have brought many challenges to the Vacation Rental industry as a whole. Economic downturns, natural disasters, disease and terrorism have all made it harder to sell destinations around the world. This latest incident along the Gulf Coast is yet another setback, but your organization can take steps to effectively overcome the fears and worries of visitors and rebuild their confidence.

We had over 100 companies sign up for this webinar. Some of you are currently experiencing a situation that requires crisis management and some of you are the crisis management planning process. Because of the urgency of the situation for our clients on the Gulf Coast, many of the examples we present will be in reference to the BP incident we are currently facing,

Whatever situation your company is in, the information we are going to present will help you implement a plan to get through difficult times in our industry.

2. Overview

This webinar’s focus is helping property management companies (PMCs) through the first few weeks of a crisis. It includes:

Looking after your customers Media messages and marketing Looking after your business Looking after your staff

3. Looking after your customers

News travels fast, so your customers will soon be in touch (unless you get to them first). What are you going to say to them? What should your staff say? It is important to communicate with both customers and staff on the situation as it unfolds. Your staff needs to understand how inquiries are to be handled as they are your interface with the customer, as they can easily win or lose business.

The mantra must be “business as usual” as you present a calm, factual approach with your customers and your staff.

3.1. Customers that are with you now or over the next few days

3.1.1. SafetyYour number one priority must be the safety and security of your staff, your customers and yourself. To do the right thing you need reliable information.

3.1.2. Resources

Work through the following questions.

What is your hub source of factual information? Is it local government and/or tourism agencies? What factual information are they sharing?

What facilities in your neighborhood are operating/not operating? What transportation systems are affected in your area?

Use the answers to these questions to prepare information for your staff and customers. The tone should be factual and calm with an absolute emphasis on following security advice. Even at this early stage the aim should be to operate “business as usual” as much as is possible.

3.1.3. Websites

We live in an era of instant communication and your customers will use Websites to inform themselves. It is important that you review your own Website and post some information immediately. This can be developed over the next few days but a brief statement reassures customers that you are knowledgeable, credible and well prepared.

If your local government or tourism agency has set up a factual page pertaining to the crisis, offer a link on your site.

If you have a Content Management System (CMS) this will be an easy set-up process for you. Just be sure to link to your information clearly on the home page without making it the main focus of your home page, or if you have a news/blog section - link directly to that page from your homepage, and place all "oil spill" information there for your clients to stay up to date with the progress.

If you work with a Web designer to complete your updates, establish a protocol with him/her for crisis situations (i.e. a different fee to be “on-call”). Also, if you are faced with an evacuation, make sure you know how to contact him and what his availability will be.

If you are starting with a new designer, Crisis Management should be addressed in your contract. This protocol will be much more efficient if you address it before a crisis situation occurs rather than after.

As the event unfolds, add photos and videos to your site, and be sure to optimize them for the search engines. The media does not have to be perfect, one of our clients sent a staff member to beach every day to take photos and video and uploaded it to their website via YouTube and has gotten significant web traffic, press and become an authority on the situation with her clientele. Use keywords in the title of your blog, news post, photos and video such as Oil Spill Update from Gulf Shores, Alabama, or Oil Spill Travel Updates from the Florida Panhandle.

Submit your blog posts to technorati, your videos to Digg, and your photos to Flickr. Of course, all updates can also be posted on social sites such as Facebook to reach a larger audience.

3.2. Customers that want to cancel

3.2.1. Cancellations and Customer Service

It is inevitable that some visitors will decide to cancel or postpone their visit. They may feel that they would not be able to do all the things that they had planned so they would prefer not to come at all. If this happens where do you stand?

Your legal position will depend on your cancellation policy. If you do not have one in place it may well be something you want to consider for the future as it avoids any ambiguity. Having a written cancellation policy that visitors agree to at the time of booking will make life considerably easier should it be necessary to make a claim for losses from cancelled bookings.

Cancellation provisions within the contract can only be applied when these terms were made clear at the time of booking. When the booking is subsequently cancelled you have the right to invoice for whatever monies are outstanding (having deducted any deposit paid).

If someone is cancelling due to a crisis and you decide to refund their deposit/rent, make sure you document the reason and the original amount of each cancellation. Your company and your owners may be eligible for reimbursement of lost revenue, tax credits or grants based on documentable losses.

Accommodations, event tickets, golf rounds and tours booked on the telephone will often be confirmed by a credit card. It is important that customers are advised at the time of booking that their card will be charged in the event of a cancellation and that the guest accepts that condition. To protect your position, it is best to issue a written confirmation. This will provide proof to the credit card company that you met their conditions.

3.2.2. Tracking Lost Revenue

It is critical for the future of your business that you track lost revenue due to a crisis. In certain situations, there are ways to recover some or all of your losses. Your staff will be critical in documenting these tracked losses and communicating these to your owners.

I have a little more to add here.

On our site, we are offering you links to steps for First Resort, Entech, PropertyPlus and V12 for step-by-step ways to track revenue. (Finish links)

3.2.3. Backing up your data

I need to get the links to these processes.

3.2.4. Offering alternatives

If the customer is entitled to a refund they may be persuaded to accept a credit towards a future stay. This has the advantage of keeping cash in the business and allows you to keep your relationship with your customer. You will need to decide some basic issues:

Expiration dates/fiscal year Special conditions, i.e. is it transferable? Seasonal policy

3.2.5. Goodwill and flexibility

You and your staff will be operating under pressure. Try to remember that this crisis will not last forever and your business is for the long term. If you can keep the goodwill of your customers in difficult times it will pay dividends in the end.

3.3. Customers that have bookings for the next few weeks

Once you have dealt with current customers, your next priority will be to protect the business that is “on the books”. Do not assume that silence means your customers are happy. Take action now to reinforce the “business as usual” message.

3.3.1. Being proactive

Some useful things you can do to protect your business:

Review your bookings and identify any that are particularly valuable. Prepare a message for your future bookings in letter, telephone script and Web

form. Identify the positive reasons why customers should still travel. Contact all your customers and tell them that you are looking forward to

welcoming them.

3.3.2. Reassuring your customers and staying positive

Your customers will be anxious and have a lot of questions. To protect your credibility, adopt a policy of full disclosure about what is known and not known. The backbone of your message to your customers must be calm, factual information that is regularly updated.

It is sensible to put yourself in the shoes of your customer and think about what they might want to do. If some activities are restricted then research some alternatives. Check with your neighbors and area partners to come up with some ideas for your visitors and then brief your staff to suggest these.

4. Media Messages and Marketing

4.1. Dealing with the media

In an era of 24-hour news reporting there will be great interest in the tourism industry. You should work on the assumption that you or your staff may be contacted at any time by the media and be prepared. Journalists will always seek out their own sources and look for an original angle on a story so do not be surprised if they contact you.

An issue to settle very quickly is the question of who will speak to the media on behalf of your company. Make sure everyone on your company knows, if they are contacted by the media, to direct all inquiries to your designated person.

In the early stages you will need to be able to answer common sense questions:

What does the crisis mean for your customers? How many visitors normally stay with your company during the time period and

what is that worth? How many visitors will stay away/cancel? How much business will be lost and how much revenue does that mean? What are you doing about it?

Answer these questions honestly and internally first, and then formulate the response to each of these for the media. If your spokesperson is prepared for these questions, you will be able to get through any normal interview during the initial crisis period.

4.2. Providing material to your own employees

If an incident is receiving national or global attention, your vacation rental company could receive requests for information 24 hours a day. While you may have a policy that limits contact with the media to nominated individuals, you should assume that all staff might be contacted for information. A simple one-sheet should be created for all your employees to give a consistent message to the media and in the community. Make sure to keep it short and simple, and be sure to communicate any questions you do not want your staff to answer as well.

4.3. Positive Public Relations

In everything you do it is important to remember the victims and be sensitive to the loss and grief of others. Trying to keep your business afloat is the right thing to do but this must be done with compassion.

In the early days of a crisis it is very easy to believe that there is only bad news. The danger is that this can create a self-fulfilling prophecy. Taking a positive approach means being realistic but optimistic. Try to develop a focus on what visitors will be able to enjoy and emphasize the welcome they will receive from your destination. You may be asked to give an interview to the press on how bad things are. Take this opportunity to tell your story but emphasize the actions you are taking to overcome your problems.

In addition, there are opportunities in a situation like this to create press releases and work with the media to brand your company and its place in your community. Some ideas for generating positive PR:

Brag when your staff is part of a post-event clean-up process. Highlight partnerships with area businesses. Communicate positive statistics when they begin to occur. Communicate any discounts you are offering volunteers or workers. Talk about individual staff stories or visitor stories.

4.3.1.How to write a press release

A well-written press release can generate news coverage for months to come, and establish you as a knowledgeable and reliable resource on the subject matter of managed vacation home rentals and the vacation appeal of renting in your area.

Follow these steps to writing your release in the (Associated Press/AP) standard format can help ensure success: 1. Print the release on company letterhead to clearly identify your business. 2. In the upper left-hand corner, write "For Immediate Release," or, if the release has

time value, "Hold Until XX/XX/XXXX." 3. Flush right (on the same line) tell the editors who they can contact for further

information: "Contact: Mary Smith, 800-123-4567.”

Your press release should... feature an easy-to-read typeface such as Arial or Times New Roman in 12 points

keep the news release to one page if possible -- and if it's not possible, end each running page with "--more--"

provide a short paragraph about your company and more detailed contact information at the end (this is referred to as a “boilerplate”)

conclude with "###" centered at the bottom of the page (this signifies the end)

Editors and producers face looming stacks of news releases every day. How can you make yours stand out? Don't resort to using colored paper or folding your release into an origami duck; such attention-getting gimmicks are the mark of an amateur. The headline is your first and sometimes only chance to hook the editor or producer and keep him or her reading. Make it newsy, clear and interesting. A short subhead below it in italics can also help to capture their attention/interest

Turn It Upside-Down The body of the press release should take the format of an inverted pyramid: critical information goes in the first paragraph (who, what, when, where, why), information of next highest importance in the second paragraph, and so on. Sometimes an editor will print a news release as is, and the inverted pyramid format allows him or her to slice off the last paragraphs if necessary without sacrificing important information. Rule of thumb: Spend 75 percent of your time writing the headline and first paragraph!

Do Target Practice It takes some effort, but slanting your release for your local market can pay off in more coverage. The releases that seem to get the most attention are the ones that are written as if they are news articles for the newspaper’s targeted publication. Research the publication, make sure the readership is appropriate (age, income, interests, etc.), and then tailor the release to that publication.

Cut the Hype You can't fool members of the media, -- so don't try to pass off a self-serving advertisement as news. When an editor or producer reads such a release, he or she sees that you're just trying to get a free ad and tosses it. Examples of real news items are: An event A new marketing campaign Community service A contest A move to a new location The results of a study or survey A new product or service -- but only if it's truly new and unique

Ready, Aim... You don't need to spend a fortune to have someone distribute your release. You can compile your own list for nothing -- just be sure to make it targeted. If you want to get coverage for your business, don't send a release to the automotive editor at Car & Driver, make sure it’s going to the travel editor.

Don't have the faintest idea what media target your audience? We suggest browsing through Bacon's Magazine & Newspaper Directory or Bacon's Publicity Checker at your local library. Or pick up a copy of a magazine directory such as Writer's Market, which is available at bookstores for around $30.

Just be sure to confirm the editor's or TV news producer's name. It's important to call and get the name -- proper spelling, please -- of the appropriate party. You can always send a release to a title, but isn't it better PR to send it to a person? A personal note sure wouldn't hurt, either; especially if you reference something you read in their publication that spurred you to send them info on your activity or event.

4.4. Review Marketing campaigns and your current marketing message

Your review of costs will include a look at what you planned to spend on advertising and promotion. The situation will change quickly and you will need to keep yourself informed and be willing to respond. Tourism officials will be working on your behalf, but you know your business and your customers better than anyone else.

4.4.1. Appropriate Advertising

Quickly assess whether any booked advertising is appropriate. You may decide to cancel some advertising either because it will not generate business or because the message is wrong in the circumstances. For example, Hong Kong Tourism had booked international, color advertising that featured the slogan ‘A breath of fresh air’ scheduled to run at the height of the SARS outbreak when residents were wearing face masks. The cost of cancelling advertising is better than the bad publicity generated by insensitive messages.

4.4.2. Business trips and exhibitions

During a crisis it is very important to be visible to your customers and to encourage a “business as usual” atmosphere. Consider your costs but do not be too hasty in cancelling business events. If you are planning a trade show appearance or sales trip it may worth attending to talk to customers and check the perception and mood in the market.

4.4.3. Your new marketing message

Your new message will be developed over the days/weeks following a crisis once the extent of the damage from the event can be assessed and an informed position can be stated.

You will need to act quickly to replace lost customers. In the short term you will need to offer customers some incentive and this can be a special offer, some added value, a discounted price, a loyalty bonus, a new feature.

If it is a long-term recovery process, show your company and your staff involved in the community and provide opportunities for guests and owners to be involved in volunteer efforts if appropriate. After Hurricane Katrina, New Orleans offered guests, conferences and conventions volunteer opportunities for visitors. These opportunities keep your visitors involved in the area and assure their return to your rentals.

If the recovery process is short-term, you will want to redirect your marketing efforts from branding campaigns to informative campaigns.

If the crisis event has been widely publicized, this may require cooperative efforts with other businesses and your local and state tourism organizations. Be careful not to give your guests false expectations. If your destination is not ready for visitors to have a

“normal” vacation experience, don’t try to lure them with a message that oversells. Remember to portray trust and credibility in the market.

4.5. Build your relationships

Build and maintain your relationships with all your partners. Tourism officials, area businesses, industry partners, travel agents and/or tour operators, will be able to give you good market intelligence, and you can talk to them about what you can do together to encourage customers.

4.6. Review your online presence

Make sure your Website is working for you.

1. Make sure that your Website provides online search that is relevant to your inventory and provides a booking process that is quick and simple with the least amount of clicks as possible.

2. Make sure that you have either a blog, news, or events section of your website where you can clearly update your guests on the status of your company during the good, the bad, the quiet and the weather/event sensitive times. This gives your guests the ability to make you the authority on what is going on in your area.

3.

5. Looking after your business

When customers stay away, less cash comes into the business. This puts your business, and the jobs it provides, at risk. The vacation rental industry has shown itself to be remarkably resilient, but prompt action is essential. The following steps may help you to be clear about your financial position.

5.1. Assess the size of the problem

The first step is to determine the nature and scale of this crisis. In the first few days all you will be able to do is arrive at your “best guess”. No one will be able to give you certainty so you will need to assemble as much information as you can very quickly. The checklist below suggests some questions to ask.

Checklist: What is the government saying about this event? What is your local tourism partner saying about this event and its likely impact? How long will the current situation last? Are there any similar examples from the past that you can compare? What are your customers saying? How many cancellations/inquiries about cancelling have I had? How strong are my future bookings? How much media coverage is there? What is being reported around the country/world?

5.2. Working assumptions

Having answering these questions, record your conclusions as a ‘Best Guess’ or ‘Working Assumption’. This should answer two key questions;

How long do I think the downturn will last?

How much business will I lose?

5.2.1. Best, middle and worst case

You may find it helpful to describe your thinking as a range of possibilities. So you may arrive at a set of Working Assumptions like this: (These are for illustration only.)

How long will it last? How much business will be lost?

Best 4 weeks, 10% cancelled reservationsMiddle 3 months 25% cancelled reservationsWorst 6 months, 50% cancelled reservations in high season

5.3. Look at the effect on your cash flow

In an ideal world you will have a record of your cash flow for the last 12 months to use as a reference point. This is VERY useful in a seasonal business. The effect on your cash position will depend on both assumptions. For example, a dramatic drop in business and a quick recovery will mean that you may need a bigger overdraft but for a shorter time. You will need to work through your different assumptions and sets of figures to arrive at a range of possible outcomes.

6. Looking after your staff

Your employees are your biggest asset, but also your biggest cost. Involve them as much as possible and communicate your position with them often and simply so that they are an integral part of the process and if you have to make difficult decisions (i.e. shorter working hours) they will be more understanding.

6.1. What can I do to help?

In times of crisis it is up to you to use the full potential of your resources – mainly your people. Here are some tips:

Make a rigorous appraisal of the situation before making any decisions. Stay relaxed, confident and calm - staff will be anxious. Keep yourself informed. Listen carefully to staff. Clearly and concisely keep staff informed. Keep everyone motivated. Let them get on with it.

6.2. Assess and create strengths

You will need to make sure to:

Know your staff (i.e. who has the skills to help you in a crisis) Gather contact telephone numbers for them all Provide training for you staff (i.e. in health and safety, evacuation procedures) Listen to your staff and keep them informed at all times

Monitor the interaction between employees and customers. Don’t assume they know what to say.

Give your employees the following: Procedures for consistently and accurately documenting lost revenue Scripts for talking to customers and handling the media Important links and phone numbers for official updates and advisories A go-to list of who will be handling specific situations Frequent communication (i.e., daily memos, daily department briefings,

email updates)

6.3. Review your staff costs

The biggest element of cost in your business is likely to be your staff. If there is a significant drop in visitors you will need to take action to control these costs. Failure to do so may put the whole business – and all jobs – at risk. Consider all your options before making adjustments, and remember good quality people are hard to find. Make sure to keep the most valuable employees informed and involved.