As a content creator at Bukit Vista, I, Utami, aim to share valuable insights into the common misperceptions villa owners often have about property management. Drawing from our experience with past complaints, this article will clarify these common misunderstandings to help villa owners manage their properties more effectively.
Let’s dive into the common misperceptions and uncover the realities behind villa management!
1. Listing on Multiple OTAs is Better Than Focusing on One
Many villa owners question the need to optimize a single Online Travel Agency (OTA) like Airbnb, and think that expanding their presence across multiple OTAs would be more beneficial. This is a common misperception. While it may seem logical to expand exposure to a larger audience, our experience at Bukit Vista shows that focusing on a single OTA produces better results. By concentrating our efforts, we can establish dominance within the platform, earn positive reviews, increase visibility, and secure top positions in search results.
When we tried to list properties across multiple OTAs, we faced significant challenges. Our listings struggled to compete effectively on any individual platform, resulting in difficulties in price adjustments and decreased demand. Additionally, managing availability across multiple platforms introduces complexity that hinders our optimization efforts. In contrast, focusing on a single OTA allows us to simplify operations and enrich the guest experience, proving that this strategy effectively addresses villa owners’ common misperceptions about marketing efforts.
2. Upfront Costs Are the Only Major Expense of Owning a Villa
A common belief among villa owners is that major expenses are mainly related to the initial purchase and installation. While upfront costs, such as purchasing furniture and equipment, are substantial, they are only part of the financial equation. Regular maintenance is required to keep the villa in top condition for guests, including landscaping, pool cleaning, pest control and regular inspections. Ignoring this can lead to bigger and more expensive problems.
Unexpected repairs can occur at any time. For example, electrical problems, pipe leaks, or equipment failure can result in large costs if not addressed immediately. An example from Bukit Vista’s experience with one of villa owners illustrates well a common misperception. Although occupancy rates reached 90%, they faced net losses primarily due to underestimating ongoing maintenance and unexpected costs such as high-quality linens and high initial electricity bills during equipment testing. These villa owner misconceptions often lead to financial surprises that could have been avoided with better planning.
Read more:Â Strategic Expenses Management for Maximizing ROI in Bali Properties
3. Monthly Revenue Targets Are More Important Than Annual Goals
A common misperception among villa owners is focusing too much on short-term goals, like monthly revenue, rather than the overall annual target. This approach can be misleading and may not reflect the true potential of the villa’s profitability.
At Bukit Vista, we guide owners to concentrate on the annual revenue potential outlined in the business plan, with the minimum revenue target specified as the contract value. By offering last-minute discounts and utilizing dynamic pricing strategies, we optimize occupancy and stabilize booking streams throughout the year. This method addresses the common misperceptions of villa owners and ensures that the focus remains on achieving high returns and inspired investment over the long term.
4. Dynamic Pricing and Short-Term Goals Aren’t Important
A common misperception among villa owners is that dynamic pricing and focusing on short-term goals, like daily pricing, are not crucial for achieving revenue targets. Many owners prefer setting fixed prices for simplicity. However, this approach can limit a villa’s potential revenue.
At Bukit Vista, we emphasize the importance of dynamic pricing to optimize occupancy and achieve annual revenue goals more efficiently. By adjusting prices based on demand and market conditions, we can maximize bookings and overall profitability. According to our contract, this strategy allows us to meet and exceed the revenue targets outlined in the business plan, addressing these common misperceptions of villa owners and demonstrating the benefits of a more flexible pricing approach.
5. Revenue Reports Are Always Clear and Consistent
Many villa owners think that income statements always give a clear and consistent picture of their property’s financial performance. However, they often get confused between three important terms:
- Contract Value: This comes from your business plan and is the expected revenue target for your property.
- Achieved Value: This is the actual revenue you make based on bookings and occupancy rates.
- Accounting Reports: These show the income you earned each month.
Discrepancies happen because accounting reports only include revenue confirmed within a specific month. In contrast, achieved value might include bookings confirmed outside that month. This can create a false impression about your property’s profitability. By understanding these differences, villa owners can get a clearer picture of their villa’s financial performance and avoid common misunderstandings.
Conclusion: Understanding Common Misperceptions of Villa Owners
In conclusion, understanding and addressing the common misperceptions of villa owners regarding the costs and management of their properties is crucial for achieving long-term success. From recognizing the importance of ongoing maintenance and dynamic pricing to focusing on annual revenue targets and optimizing a single OTA, villa owners can better manage their investments by gaining a clearer understanding of these aspects. Additionally, being aware of how revenue reports are structured can prevent misunderstandings about financial performance. By debunking these myths, villa owners can make more informed decisions and maximize their property’s profitability.Â
If you have any questions or need further assistance with managing your villa, contact Bukit Vista today to learn more about how we can help you succeed.