It’s conference season in the multifamily apartment industry, and last week saw me travelling to Turnberry Isle, Miami for the Apartment Revenue Management Conference followed by a trip to Park City, Utah to attend the Property Solutions International user’s Summit. As a speaker and roundtable moderator at both events, I was lucky enough to be exposed to a broad cross section of multifamily owners, marketers, technologists, pricing managers, property managers, asset managers, and executives – and picked up on quite a number of developing trends, opportunities, and challenges facing our industry now and into next year and beyond. For those who were unable to benefit from either of these meetings of your industry colleagues and peers, I’ve collected four important emerging trends (among many) in apartment technology. By no means an exhaustive list, the subjects below seem to be top of mind for most apartment executives and are worthy of following in the months to come.
Net Promoters and Business Intelligence
While an era of Big Data and its manipulation via Business Intelligence tools may not have quite arrived yet, certainly our industry seems to be headed in that direction. Most technology firms are hard at work figuring out ways to let customers access data that to this point was locked up inside property management and revenue management systems. While some of the user interfaces in development already look great, what remains to be seen is how the tug of war between wanting to get at the data versus not wanting to invest heavily in (or paying to outsource to) full-time data analysts will play out. Certainly many vendors are trying to make analytics more easily accessible to operators. One exciting prospect will be the impact of Business Intelligence on Net Promoter Scores, and developing a more quantifiable method of answering questions like "Are my residents happy?" to “Will my resident renew?” to “What will satisfied residents do to help me improve my business?”
Pumping up the Volume on Ratings and Reviews
I believe resident satisfaction is at the heart of our industry’s current obsession with online ratings and reviews. Sure, ratings and reviews within consumer behavior broadly have shown a demonstrable impact on purchasing decisions. The problem inherent in the multifamily industry is a comparative lack of ratings and reviews. Because of slow transaction volume (compare annual apartment leases to the daily turnover in hotels, airlines, and restaurants), the average number of reviews for any given property is still extremely low (see this whitepaper on this multifamily trend ). I’m interested in watching how our industry—particularly with our traditional customer survey and satisfaction partners—works to increase that volume to meaningful levels while maintaining an authentic view, and whether or not when we get to that point we’ll still find the investment of resources into this area as critically important as we do now.
Renewals and Engagement
A much more obvious measure of resident engagement is likely to be found in renewal conversions and the ability of revenue management systems to improve rental rates with satisfied customers. There's probably a great discussion to be had about how we prepare for renewals and whether resident engagement in the 21st Century is more than simply 60 and 30 day out renewal letters. Technology is making the success of operations, maintenance, capital improvements, curb appeal as well as front office staff amicability all the more transparent. Coupled with transparency in online marketing and apartment availability and pricing, I’m interested in seeing if anyone can successfully tie all of these ideas together.
Revenue Management and Apartment Lease-Up
With all of the new supply coming on-line, it’s also no surprise that we’re revisiting the strategic application of revenue management to new community lease-up. Some of the more established methods have been to mask exposure (i.e. extremely low occupancy) from the revenue management system as well as to “stage” releases of floors or otherwise pre-lease a community to reach appropriate demand levels where revenue management can work efficiently. We’re also seeing more operators “turn on” revenue management sooner after property stabilization and optimizing revenue lift instead waiting 60 or 90 days to ease properties into full-blown, systemized operations. In short, new developments are more likely than ever to be using revenue management, and using it sooner than in years past.
Donald Davidoff is the President of D2 Demand Solutions, Inc.