Boosting Revenue at Year End
By Holly McQueen
Consider turning vacant units into hospitality suites this holiday season.
In today’s apartment industry, the competition is stiff and the race to fill units continues to be a priority for owners. Statistics show that there were an estimated 6,490 vacant apartments during the first and second quarters of 2018 in the United States, and the vacancy rate sat at 6.8 percent as of June 30.
To fill these units, owners have tried everything from improving their ads and offering current residents incentives for referrals, to lowering rents and even loosening their requirements. Yet, there is one simple solution that all apartment owners can implement to not only fill vacant units but add value for current and prospective residents, especially during the holiday season.
We typically see an influx of visitors and out-of-town guests during the holidays, as residents gear up to host dinner parties and get-togethers with family and friends. For residents who live in smaller units, finding room to accommodate overnight guests can be a challenge. It can also be stressful and costly for traveling visitors who would otherwise need to stay in a nearby hotel, as these rooms book months in advance and the prices generally skyrocket during the holidays. To address this need, owners should strongly consider turning their vacant units into “hospitality suites.”
Owners can take their least attractive and most difficult to lease units off the market to generate income and resident goodwill by operating similar to a hotel. With a little sprucing up, these hospitality suites can become a sought-after amenity for residents who want extra space for guests but can’t afford a larger apartment.
Below are a few things owners should think about when adding hospitality suites to their communities:
1. Make sure the apartment is fully furnished.
The goal is for the suite to be just as, if not more, convenient than staying at a hotel. Owners should provide guests with clean linens and towels, soap, shampoo and conditioner, a hairdryer, free Wi-Fi and cable, and any additional sundries they see fit. Having kitchenware, pots and pans and small appliances, such as a coffee machine or toaster is also a plus.
2. Provide guests with free access to all community amenities.
Access to the pool, fitness, and business centers will make guests feel right at home. For luxury owners, providing guests with access to the heated spa and free treats, such as Starbucks coffee, can make all of the difference when visitors choose where to stay when seeing a friend or relative.
3. Make sure the guest’s unit is within close proximity to the resident they’re visiting.
Owners with multiple vacant units across different buildings should try their best to place residents’ guests on the same floor if possible. After all, the idea is for them to spend time together!
What’s great about hospitality suites is apartment operators don’t have to wait for the holidays to use them. They’re a valuable marketing and sales tool all-year-round as residents’ host guests for various reasons and those who can only afford a studio or one-bedroom apartment may not have space for them. These suites can also serve a purpose and save the owner money on hotel costs if residents are temporarily displaced from their units due to maintenance issues or emergencies.
Holly McQueen is the Vice President of Asset Services for GMH Capital Partners Asset Services, L.P. (“GMH”), a nationally recognized leader in the commercial real estate market specializing in the areas of investment, development, construction and asset management.