Preface
COVID-19 has hit the accommodation sector hard. Hospitality operators and property owners around the world are now struggling not only to weather the immediate impact of global travel restrictions and social distancing measures, but to survive and thrive in a period of prolonged uncertainty.
Our mission at Fortular is to enable the accommodation sector to flourish. At a time of crisis for our industry, we see it as our role to provide knowledge and guidance that can help others make good decisions in the most challenging of circumstances. Smart businesses plan for the worst, and hope for the best.
The greatest businesses are built during the toughest times.
Demand to travel and stay will return and, when it does, it will be stronger than ever. Making the right decisions now will enable your business to profit from that resurgence. We hope you find this short guide full of practical insight and advice. No matter the professional and personal challenges that you are no doubt facing right now, take some heart in the fact that you are not alone.
We are all in this together.
The cold hard truth, a case study
Rather than listening to what others in the market are saying, we advocate making decisions based upon what you see happening across your own business. So we wanted to share what is actually happening across holiday rental properties around the globe, tracked pre and post COVID-19.
“The spread of COVID-19 is the first big threat to the sector”, says Scott Shatford, founder and chief executive of AirDNA, which tracks the holiday rental market on Airbnb. “Short-term impacts to professional hosts are catastrophic as cities enter lockdown and it’s too early to tell how quickly travel demand will recover in a post-coronavirus economy.” According to AirDNA’s calculations, hosts in Beijing, where the virus hit early, saw total revenues drop nearly 43 per cent in March, compared with the year before. In Seoul, revenues fell more than 45 per cent; in Tokyo, the figure was 21 per cent. In Europe, where many countries have imposed home-isolation rules and heavily restricted travel, demand has dwindled. In hard-hit Italy and Spain, some cities saw occupancy rates cut by half.
Malta is no exception. It is a known fact the rental property market in Gozo relies heavily on tourist arrivals, from both the foreign and domestic sectors and is particularly dominated during the high summer season, from June to September when the islands are flocked with tourists and bustling with life. In recent weeks, we have been approached by several property owners who are anxious as to seeing any return on their investment this year – some of whom will be taking their properties away from the market as a natural panic reaction in the face of uncertainty.
These cold, hard facts prompt owners to ask a number of obvious but important questions –
1. Can new bookings be serviced profitably, or is my business operating at a loss?
2. Is it even possible to reduce my operating costs quickly enough to service these bookings profitably?
3. If servicing these bookings is going to be at a loss, can my business afford that level of investment?
4. What are the options available to me?
Where are the opportunities?
There’s a very good reason to fight to keep the lights on. The greatest businesses are built during the toughest times, remember?
As domestic and global travel restrictions are lifted, demand to travel and stay will return. Booking volumes and tourist numbers could spike to pre-COVID levels. The good times are just around the corner – we just don’t know if it’s going to be in 3 months, 6 months or, in the worst case, possibly longer.
Why do we feel confident that this will be the case?
• Self-catering accommodation is perceived to be safer than a hotel for avoiding COVID-19, so will become the preferred accommodation type as demand to travel returns.
• Domestic travel and staycations will spike faster, as restrictions are lifted and long-distance travel remains in doubt and more precarious.
• Economic conditions make a cheaper holiday rental more compelling than other forms of accommodation.
Furthermore, some hosts are reducing their prices in the hope of attracting guests for medium-term rentals while others are opting to tap into the long-let market. QuickLets, Remax, Dhalia and other local estate agencies are becoming popular alternatives on which to list properties.
Ensuring your rental property is compliant with the new MTA standard
As we witness the gradual reopening of Malta’s Tourism Infrastructure and see several restrictions being relaxed, it has become more important to ensure a healthy and safe environment.
These procedures have been integrated into legislation since Friday, 22nd May 2020 and therefore it is important that everyone follows them rigorously.Procedures have been put in place by the relevant authorities to introduce operations on the principles of social distancing, enhanced hygienic practices and minimised infection risks.
For your convenience, we have compiled a list of what is being requested by the Malta Tourism Authority. For a more detailed explanation, please refer to the Resources section below.
Necessary Items Required within a Rental Property
When announcing the below, the MTA said that while this list does not mean that all items are to be used in their entirety all the time, they are to be readily available within the property should the need arise.
Where applicable, each rental property is to have:
- Germicidal disinfectant or wipes for surface cleaning;
- Visors, which are to be regularly cleaned with alcohol before/after each booking;
- Disposable face masks, which can only be used once;
- Disposable gloves;
- Disposable protective apron*;
- Full-length long-sleeved gown*;
- A biohazard disposable waste bag*.
*These items are up for debate. We have contacted MTA for further clarification and we are awaiting their reply.
It is also imperative that each property provides an information folder which includes the telephone numbers of public health authorities, hospitals and medical centres, as well as contact details of public and private hospitals, for them to be used whenever a guest may be ill.
Moreover, where applicable, housekeeping and other staff members are requested to practice social distancing and regular hand sanitising, and they are to wear a masks or a visor at all times.
Contactless payments and applications like Revolut or Curve are to be made available and are to be encouraged, where possible.
If your property has a private pool, the MTA is requesting the following:
- A hand sanitiser dispenser (preferably automated) is to be fixed upon the the entrance of the pool area;
- The maximum number of bathers is to be reduced in half. To work out the maximum number of people in a pool, first you need to calculate the surface area of the pool and then you have to divide by the max bathing load formulae (which varies according to depth). Once you get the maximum amount of bathers, divide that by half. If you have a rectangular pool, click here to use our maximum bathing capacity calculator;
- A two-metre separation in each direction between any umbrella or sunbed in the deck area around the pool. Only one person per sunbed is allowed (unless with infant). All deckchairs and other pool equipment should be disinfected from guest to guest;
- Pool showers are not to be used until further notice. In this respect, owners are requested to advise their guests to shower inside the property before using the pool;
- Pool toys and equipment are to be limited. Apart from inflatable swimming aids (such as armbands) and pool furniture (deckchairs and umbrellas), nothing else is to be allowed in the pool area or in the pool;
- A log sheet of all pool chemicals used is to be kept and maintained at all times.
- MTA Mitigation Measures against COVID-19 for Holiday Furnished Premises
- https://www.mta.com.mt/en/reopening
- EY Malta COVID-19 Industry Pulse Report on Tourism
- AirDNA COVID-19 Data Centre
If your property forms part of a complex with a communal pool, please ensure that your Administrator is taking the aforementioned procedures.
Compliance Sticker
The MTA will be issuing a Compliance Sticker to all those rental properties which would be adhering to all the above mitigation measures. Once given, this sticker can be revoked should owners fail to keep the mitigation measures at a constant. If this happens more than once, the holiday furnished premises’ license will be revoked and the property will have to stop accepting guests.
The Ministry of Tourism has also launched a helpline on which property owners should call if they feel they are ready to accept bookings and thus would need a site visit for the compliance sticker to be issued – the helpline is 21 692 447.
Resources
Everywhere you look, there is a new expert on COVID-19, making new promises or assumptions based on information outside the normal channels. We implore you, please follow organisations with access to official communications and updates. It may feel nice to believe this will be over in 3 – 4 weeks but staying rooted in reality will help you to make informed decisions.
Here are a few links to reputable COVID-19 sources and Industry influencers we’ve put together for you:
Most importantly, stay well, be kind, keep looking after each other and the industry. We will continue to do the same.
If you found this article helpful and would like to get in touch, or would like to ask us a question around any of the content, please drop us an email on info@fortular.com.
