cost of str operational inefficiency

The Cost of STR Operational Inefficiency & How to Streamline Property Management Processes

How to avoid a prohibitive cost of STR operational inefficiency? Transform your STR operations: cut labor costs and get more done with a consolidated tech stack.

“In the accommodation sector of hospitality, we’re probably in the most complex area. So it comes down to processes, right? Your processes have to be accurate and we’re not in a forgiving industry, we’re just not.”

This is what an STR property manager of 43 units had to say when we spoke with him about the need for operational efficiency.

“With a hotel, they’re all in one building, you can figure it all out. You have people who go do room checks and do your turnover checks. They can centralise it all. But when you’re a vacation rental management company, each one of your properties gets individually reviewed. Each property has to be its own private hotel operation.”

But what are the costs when you struggle to achieve that efficiency across a growing portfolio, with more demanding guest expectations and increasing competition?

In this article, we look at the impact of overcomplicated tech stacks and convoluted manual tasks, including the annual cost of str operational inefficiency operations – as you’ll see, it’s a five-figure sum. 

We also discuss what a streamlined system looks like, and how automating processes with an all-on-one platform can transform the performance of your STR business.

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From clunky software to faltering comms, the reality of non-optimised processes

Repetitive manual tasks that require complex in-house knowledge don’t scale well. Also, they bring about human error and cause stress.

Here are some examples of what you and your team might be up against without streamlined operations:

  • You work with a dozen different dashboards and logins to manage bookings, these tools have overlapping and therefore redundant capabilities.
  • You get tired of waiting on a resolution from a key software service provider and have multiple possible contacts to message any time a technical issue arises.
  • Staff report and address issues with WhatsApp messages and phone calls, making it hard for you to track task status.
  • Guest messages sometimes go unanswered, allowing problems to go unnoticed and resulting in bad reviews. 
  • You manually schedule turnovers using spreadsheets. With every booking update, you have to make multiple changes to your schedules and contact several cleaners.
  • You struggle to find the information you need for specific properties, like where the mains are or when the boiler was last serviced.
  • You don’t accurately track billables, so you often end up paying for repairs or replacements that the homeowner should cover.
RentalReady’s issues management software
RentalReady’s issues and tasks management software, enables tasks, missions and incidents to be seamlessly integrated with all information relating to stays, guests and accommodations.

Below we look at how inefficient processes and a lack of automation affects your business performance, the team, and the guest experience.

A disconnected or limited tech stack

If you’ve steadily added software to your management systems over time, you might have a missing piece to the jigsaw puzzle – for example, a unified inbox, channel manager or guest experience tool

Or, you have all those tools but they don’t seamlessly integrate, so you have to double-check data, correct information, and update the team. This makes it a very hands-on system that’s highly dependent on your staff’s time.

Also, each time you need to update your listings and rates, investigate an area of maintenance, or generate a report for a homeowner, the process is disjointed – it’s slow to jump from one platform to another, key information isn’t immediately accessible, and there are extra steps involved to get each task done.

This adds hours to your work as a management team and affects the quality of your output. Also, it becomes increasingly hard to keep everyone up to date on the latest way to manage each tool. Plus, if you bring a new person into your team, training them on multiple systems is demanding and slow – it could take months before they’re confident enough to work independently.

Furthermore, there could be additional costs to having a complicated tech stack that’s missing key functionality. For example:

  • No natively integrated revenue management tool this could mean you’re slow to update nightly rates, which causes you to be priced out of the local market. Alternatively, you might miss out on a high-demand event that could have increased your revenue.
  • No automated guest screening – you could be accepting risky guests into your properties, which could result in damages, neighbour complaints, or even chargeback fraud.
  • An unoptimised management team – automating tasks like scheduling and guest messaging helps your team operate to its full capability so fewer people get more work done.
rentalready's dynamic pricing feature
RentalReady’s revenue management software optimises your rates and saves you the work of making manual updates.

The extra training and labour cost of str operational inefficiency: £19,380

£19,380 is our estimate of what a disjointed system of manual processes could be costing your vacation rental business. 

We’ve used £15/hour as an average STR manager’s rate based on data from Glassdoor, and doubled that for the senior manager handling their training. Of course, every team will vary, so why not customise each calculation to get a more accurate picture of your business efficiency and operational costs? 

Cost factorExample tasks & requirementsTime spentFrequencyHourly wage/training costAnnual total cost
Manual processesScheduling, data entry, tracking work done, reporting, team messaging20 hours/weekEvery week£15/hour£15 x 20 hours x 52 weeks = £15,600
Training new hires on multiple systemsTraining staff on 6 different systems30 hours (5 hours/system)Per new employee (2/year)£30/hour£30 x 30 hours x 2 new hires = £1,800
Induction training on multiple systemsEmployee induction training30 hours (5 hours/system)Per new employee (2/year)£15/hour£15 x 30 hours x 2 new hires = £900
System updates (self-training)2 updates per system per year12 hours/year (1 hour/update)Annually per employee (6 employees)£15/hour£15 x 12 hours x 6 staff = £1,080
Total£19,380

*Note: Consolidating your tech stack with a single end-to-end PMS resolves the inefficiencies represented here AND replaces the tools you currently pay for. With RentalReady’s Rise plan, a 50-unit portfolio costs £13,200/year.

Whatever the specifics of your business, there’s no question that the cost of not optimising your systems is high but there’s also the opportunity cost to consider.

Instead of formulating housekeeping schedules, checking through invoices or training the team on the latest software update, you could be adding creative touches to units, elevating the guest experience and marketing your services to new homeowners.

The impact on team morale

How inefficient, repetitive work affects your team is harder to quantify than some of the ideas mentioned above, but that doesn’t make it any less costly. Stressful practices lead to fractured team relationships and affect people’s ability to do their job well. 

Poor efficiencies can also lead to burnout, which is not only damaging for the individual experiencing it, but also your team as a whole, and potentially your customers, too. Continued stress also causes people to seek work elsewhere, which means you have to replace them with new hires that require training and support.

How bad processes affect the guest experience

As our property manager of 43 units observed earlier, the vacation rental business can be very unforgiving – and guests especially are often most vocal when their expectations go unmet. 

So, if inefficiencies in your booking or scheduling systems bring about a missed clean, the guest will complain and maybe request a refund. Equally, if your guest arrives to a property and has to wait half an hour before they can access it, expect a one-star review. Likewise, guests expect you to be highly responsive – one missed message can be damaging.

This is because modern STR guests demand all the flexibility and independence that comes with a vacation rental stay, but they want the luxury service of a four-star hotel. So any friction in their customer journey from the time they book until after they check out can affect your Airbnb status and future occupancy rates.

On the other hand, consistently delivering outstanding service to your guests and homeowners has entirely the opposite effect. Next, we talk about how to do just that by streamlining your operations.

rentalready's unified inbox
RentalReady’s unified inbox simplifies your guest communication tasks and gives the whole management team visibility on any key issues.

Optimise your operations with an all-in-one STR platform

To fully streamline your operations and optimise your management processes, you need a complete system like RentalReady that consolidates your tech stack into a single platform. This minimises your operational costs and makes you a scalable outfit, letting you add units to your portfolio without adding to your workload.

Plus, when an issue arises, you’ll have one point of responsibility you can immediately turn to – instead of dozens of individuals when you’re working with multiple disparate software solutions.

Here’s an overview of how RentalReady’s all-in-one STR platform makes you more efficient:

  • 100% native end-to-end PMS
    (200+ data points for each property – a typical OTA has around 50)
  • Channel manager
  • Revenue management and dynamic pricing
  • Automated payment processing
  • Unified inbox
  • Smart guest messaging
  • Automated cleaning schedules
  • Automated task management
For a more complete look at how RentalReady brings all your STR solutions and processes into one location, see here: View All Features

Operational efficiency and your KPIs

“You have to rely on systems. That’s what’s important – that the tech is able to connect with your processes to make sure those efficiencies are being increased.”

This is the manager of Brighton Flats again and, when you consider the cost of str operational efficiency that we’ve estimated in this article, it’s hard to disagree.

So how do you rely on your systems and seamlessly connect your processes with automation technology? The answer, of course, is by consolidating your tech stack with a complete STR management platform like RentalReady.

By turning to an all-in-one platform that connects all your solutions, you can:

  • Decrease your staff-to-unit ratio
  • Reduce your workload, labour and training costs
  • Decrease your cost per unit
  • Increase your revenue per room (RevPAR)
  • Reduce your guest messages
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*Name changed to protect anonymity