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Resources

Rental Management Policies

From time to time we introduce Operational Policies, which are created for the purpose of trading transparently and fairly.

The nature of the services we provide sometimes put us in the centre of two key parties; being our Partners (Property Owners) and our Guests (or sometimes Travel Agents). During the normal course of business we need to make decisions which impact either one or the other party, which can at times lead to a negative sentiment. Here we outline how we manage certain situations and what our approach is in the interest of mediation and dispute settlement.

Our management agreement encourages our partners to participate in various online & digital marketing projects which we believe will assist properties to stand out from the competition. In addition, the digital initiatives we support will often provide a unique media library which we can utilise in future marketing campaigns. 

Nox’s marketing department have contracted social media experts, who advise us on the suitability of such projects and our partners can be assured that we will only place bookings in your property which have gone through our due diligence process. We fully support cooperation and engagement from our partners on any content curation initiatives and you can access more information on our policy here

Capex : Capital Expenditure, also known as Capex, refers to all capital improvement costs of owning hotels over an asset’s life span, including such capital costs that prolong the economic life of the asset.
We assist our partners in running a hospitality business, and therefore lean on global hospitality industry norms. We encourage our partners to plan their capital expenditure throughout the duration of ownership of the asset. Our inspections process may from time to time flag a property as being unsuitable for us to represent, as the property has reached a point of disrepair where Nox is simply not comfortable representing it. We recommend the following guidelines:
 

– Allocation of between 5% and 7% of annual revenue to be kept aside for capital expenses. This is supported by a study conducted by the International Society of Hospitality Consultants.

– In terms of planning, this is a useful article to assist property owners with appropriately managing the quality of the asset, which obviously improves a future market selling price (should that ever be the case)

– Nox can support a budget allocation by holding a reserve fund, retained monthly, in an interest-bearing escrow account. 

– Most importantly, capex allocations will ensure that your property continues to get good quality guest feedback, return guests and an optimally trading asset. 

Our business is focused on providing hospitality management services to support an active rental operation, at a premium level.

It is common for properties to be refurbished or closed off for maintenance for extended periods of time. We respond to guest feedback regarding any repairs, maintenance or upgrades which need to be done and have the right to hold back rental payments until such time as the property is remediated to standard and in keeping with the marketing collateral we have produced.

Our team of Property Managers (PRO’s) are primarily focused on ensuring that your house is operating optimally in and around guest bookings.  We use a system whereby we categorise tasks on the following basis, and from time to time we will inform you of any escalations in terms of task priority:

URGENT: Needs to be concluded within 24 hours.

HIGH: Needs to be concluded prior to the next reservation.

MEDIUM: Needs to be concluded within a month of being reported, ideally less.

LOW: Longer term. It might be the kind of job that is scheduled for after season etc.

WATCH: Something to keep an eye on, and escalate if it deteriorates.

We conduct many different types of inspections to ensure your property is well maintained, and meets the expectations we set out with our marketing content. If a property does not meet our internal brand standards, we will record it as a “FAIL” and we will trigger the following process:

  • If it can be resolved within 24 hours: we will not inform the Partner (and in most cases it will not require Partner input or money to repair or fix the issue). Examples could be a pool that’s turned green or a blocked toilet. 

  • In all other instances, we will notify our partner with a link to Property Inspection report, which will outline the issues we’ve found as well as give reasons as to why the property has failed the inspection process. 

  • Marketing and availability will be suspended until the issues are resolved and the property has been re-inspected, and we may have to move existing reservations, or provide the guests with other compensation.

  • We will work closely with the partner to remediate the property quickly so we can reinstate the marketing activities. 

Extended maintenance and project management works can take up a very significant period of time, which has a direct impact on service delivery to our day-to-day operations. Our PRO’s will advise our Partners if a specific project is taking up significant time, and are authorised to introduce external contractors and project managers to oversee the work through to completion, or at least until the house is “rental ready” again.

Much against the preconception, it is not common for guests to intentionally or maliciously damage a property.

We manage approximately 5,000 reservations per annum, and we have no more than 2% of these resulting in a damages charge. The average charge is generally no more than about R3,000 and is mostly for deep cleaning or minor replacements and repairs of furniture.

We do not charge guests for damages, repairs or replacements in the following instances:

  • Where the damage is a result of fair usage or the property or due to wear and tear and importantly, where the cost of the repair or replacement is less than 1% of the rental value.
  • The badwill created with guests often leads to negative online reviews, as well as removes any chance of return or repeat bookings to the property.

Should you be concerned about breakages and/or damages in your property, we advise you to take out a specialised insurance solution, which is a condition of our Management Agreement. More information can be found here.

Under-recovery of costs
In some instances, our insurer (Superhog), or AirBnB, will pay out a value which is less than the replacement cost, per standard insurance processes. This is usually deemed as an “allowance for fair wear and tear. ” Nox will pass the costs for any shortfall over to our Owners in these situations. 

Our Summer period generally runs high occupancies. Like any asset, your property will require regular and routine maintenance, upgrades and improvements. This can be of a cosmetic or structural nature.

We strongly advise our Partners to keep 10% of their annual income in a short-notice money market account for purposes of reinvestment.

We conduct annual maintenance assessments between May and September, so please expect your PRO to be in contact with you with a list of recommendations. The basis for this is off the back of past guest reviews, our team’s regular inspections and current design and guest experience trends.

Nox Rentals provide everything that a guest would expect in a luxury rental property.

We encourage our Partners to support the enjoyment of our guests by offering some additional contribution towards Welcome Packs and Guest Experiences.

Our PRO’s will advise on what can be done to exceed guest expectations, especially where guests are paying a significant rental.

More information and suggestions can be found here.

Nox Rentals use highly sophisticated dynamic pricing software to manage daily rates across our entire portfolio.

The basis for our pricing strategy is to utilise market occupancy for each day for the next 365 days and to adjust pricing depending on the low, medium and high demand days. It is very similar to the airline’s pricing model.

The software will take into account other variables when adjusting pricing such as:

Market occupancy – The average occupancy in the market on any given day.
Lead time – The number of days between the enquiry being received and the arrival date. Around 80% of all our reservations have a lead time of fewer than 60 days, so pricing on medium and high demand days in excess of this period are adjusted upwards.
Market size – Our software will assess the movements in the size of the market. The data set is taken off both the Airbnb & Booking.com platforms of all vacation rental properties listed within a radius of your property.
Competitor set – We will assess the pricing of similar properties to yours. We consider location; bedroom size; standard and amenities such as views, swimming pools, jacuzzis and airconditioning.
We utilise three variables when setting a pricing strategy:

Lowest rate – The rate under which we would like no new business. This can be for any given day of the year but is traditionally well above this during periods of high demand and occupancy.
Base rate – What we believe is the property’s ideal rate; effectively a median point at which there is no excess of properties in the market nor guest demand. Our software will use this rate as a basis for adjusting either upwards or downwards depending on market conditions.
Highest rate – Effectively the rate at which we believe guests are not getting value for money. We use comparative properties to set this, and also assess other industry room rates within the hotel and guesthouse sector.
Our revenue management team will often contact our Partners if they see flat market conditions, and suggest dropping or adjusting rates.

At times we will adjust without authorisation if we believe it is in our Partner’s best interests but ultimately our objective is to achieve an annual return for you which meets your expectations.

We assess the performance of your property daily and it is common for rates to adjust by more than 100% in a week.

 

Should we receive recurring guest complaints on a property-related issue which we have previously requested resolution on, Nox Rentals have the right to suspend marketing services until the Partner has resolved the issue.

From time to time, noise and civil disturbance can happen in and around your property. We utilise sophisticated technology to assist us in managing acceptable noise levels. Our approach is to inform guests upon arrival that there is a noise monitoring device installed and that guests will be notified of any pre-set limits which are breached. Multiple transgressions will lead to guest fines, turning off of electrical circuits and/or eviction. 

If your property has been identified as a “noise risk” we will implement a noise monitoring device which will attract a once-off device cost and an annual fee. More information can be found here.

We charge a “contract fee” on each booking to our guests. Some online portals describe this as a “cleaning fee” (particularly AirBnB). This fee fluctuates depending on the tourist season and size of the property, but generally is less than 1% of the booking value. It is included in the daily market rates, and applied to the entire booking and not each night booked.

The fee provides us with a contribution towards operational costs and guest complimentary costs such as:

  • software licensing
  • credit card merchant fees
  • guest welcome packs
  • airport transfers 

Our overall fees are in line with global standards, where the typical range is anywhere between 15% to 40% as described here.

We try our best to accommodate a late departure request from our guests within reason. We believe this adds enormous value to the overall experience, as well as provides them with flexibility when scheduling onward travel arrangements.

Our policy is as follows:

  • Our standard checkout time is 10 am.
  • If guests wish to pre-book a later than 10 am departure in advance, we apply anywhere between a 50% – 100% daily accommodate rate charge. This can be requested and processed anytime up to 24 hours prior to departure and we will typically close the following night off our calendars.
  • When guests request a late departure on the day preceding their departure date, and the property does not have an incoming arrival, we usually offer it on a complimentary basis up until a late departure time of 17:00.
  • Any requests for a late departure after 17:00 will be quoted a 50% – 100% daily accommodation rate.
  • Should the late departure request only be for a few hours, we will let the guests know that the Housekeeper will clean around them so we can turn the property to have it ready and bookable for that night.

Nondiscrimination

In keeping with global standards, Nox Rentals do not discriminate on accommodating guests based on their race, colour, ethnicity, national origin, religion, sexual orientation, gender identity or marital status.

Any instances of discrimination will be handled in line with AirBnB’s detailed policy here.

Blacklisting

We “blacklist” certain guests based on their past manner and conduct within our properties. Unfortunately, guests can very easily change their primary contact details which is our main identifier and if they are aware of previous faults, they can rebook via a spouse / partner / friend. Our Hosts are, however, trained to recognise problem guests and have the right to not check them in if there has been a prior record or incident. This is an internally managed process.

Screening

We conduct screening and background checks via our Trust Partner, Superhog. Our bookings come via many 3rd party platforms (Online and Travel Trade Professionals) and as is well known, all it takes to make a booking on an online portal is an email address, name and credit card.

Our experience is that within the luxury sector, the majority of our guests are respectful and upstanding. We also conduct an in-person screening process upon every check-in whereby our Hosts conduct a character assessment which allows us to build a risk profile for the booking. If we feel that the guests may be problematic, we charge a physical damages deposit to their credit card or take a cash deposit and perform regular inspections during their booking period.

Our properties can be impacted by construction activity in vicinity of the home. Due to the nature of such activity, it’s challenging to accurately predict what level of impact this may have on a guest’s experience. We do our best to set out expectations to guests, by informing them on our marketing material that there is construction taking place nearby, as well as to inform them by email prior to their arrival. Our policy is set out as follows:

1.  15% discount for construction affected days, on the rack rate paid by the guest.
2.  Alternatively, a refund for the days not stayed at that property and a relocation to a property of the same value.
3.  A full refund for days not used.

We strongly advise our Partners to discuss revenue loss cover from insurers and will gladly assist with any necessary documentation in the event of a claim. 

When onboarding a new property, we conduct a full assessment of the property in its current state. We then provide recommendations to our Partners within the following categories:

Overall appearance

We consider the general maintenance, theme and style of the property.

We’ll offer suggestions for improvement and refurbishment, with a view to giving the property its best chance of success in a highly competitive market.

Linens and inventory

We have a list of minimum requirements which ensure that we’re meeting luxury hospitality standards.

Quality linens and kitchen inventory can be purchased through our preferred suppliers. More info here.

Onboarding project management

Sometimes we’re presented with a property which isn’t in a “guest ready” state. IE: The property requires some upgrades and improvements. Our PRO’s will engage with our Partners on a recommended course of action.

Such refurbishments may take a few months to complete; and our preference is to outsource project work to specialist, preferred suppliers who work within the interior, building and project management trades.

We advise our Partners to contract with our suppliers to manage the project directly with them and to advise us when the property is nearing a guest-ready state.

Onboarding fees

We do not charge for assistance with recommendations and suggestions. Our PRO’s will discuss fees with our Partners where we are required to attend to meeting with contractors and technicians during the onboarding process.

We encourage our Partners to take a hands-on approach during this phase of getting your property ready as it ensures that the relationship is started on a solid common understanding. 

Nox Rentals have a Real Estate division at www.noxproperty.co.za which handles our long term rentals and sales functions. The business is licensed with the EAAB (Estate Agency Affairs Board) and our principal is Martin Visser. Depending on market conditions, seasonality and our Partner’s requirements  it can be preferential to market for a longer stay. 

Our Management Agreement governs our short-term rental operations, and upon assessment we’ll suggest a change of rental strategy to our Partners. We encourage our Partners to use our in-house division to ensure continuity in accountability for your property. We market across all the major portals, as well as targeted social campaigns and our tenant database. More information can be found here.

Should a Partner wish to engage the services of an external, 3rd party Agency we kindly ask for you to communicate this to your PRO so we can coordinate viewings and implement an ongoing managed lease arrangement with the Agency. Our experience with handing over your property to an external Agency generally hasn’t been good as lines of responsibility tend to become distorted. For purposes of our guest’s personal privacy, no Agent viewings are to be conducted until in-house guests have been asked and the necessary (convenient) time has been arranged. In some instances we may suggest that Partners offer a contribution towards the guests for the inconvenience caused. 

Please contact your PRO or Nick Taylor for more information.

Overall appearance

We consider the general maintenance, theme and style of the property.

We’ll offer suggestions for improvement and refurbishment, with a view to giving the property its best chance of success in a highly competitive market.

Linens and inventory

We have a list of minimum requirements which ensure that we’re meeting luxury hospitality standards.

Quality linens and kitchen inventory can be purchased through our preferred suppliers. More info here.

Onboarding project management

Sometimes we’re presented with a property which isn’t in a “guest ready” state. IE: The property requires some upgrades and improvements. Our PRO’s will engage with our Partners on a recommended course of action.

Such refurbishments may take a few months to complete; and our preference is to outsource project work to specialist, preferred suppliers who work within the interior, building and project management trades.

We advise our Partners to contract with our suppliers to manage the project directly with them and to advise us when the property is nearing a guest-ready state.

Onboarding fees

We do not charge for assistance with recommendations and suggestions. Our PRO’s will discuss fees with our Partners where we are required to attend to meeting with contractors and technicians during the onboarding process.

We encourage our Partners to take a hands-on approach during this phase of getting your property ready as it ensures that the relationship is started on a solid common understanding. 

On our freehold and some sectional title properties, we install exterior signage to ensure that the immediate community; being neighbours, armed response companies and guests are able to quickly identify the property and to have the means to contact us should the need arise. 

We also install in-property signage to communicate with our guests, and to remind them of local rules and regulations as well as to inform them of services which may assist them having a better experience whilst in your property. From time to time we’ll install signage to ensure our guests are aware of property-specific notices regarding the impact of weather conditions as well as local Body Corporate or community rules. 

  • After 15 years of loadshedding, Nox has been forced into making it mandatory for all of our properties to have some form of power back up in the event of electricity cuts. 

Our objective here is as follows:

  1. To ensure that the lights stay on during outages, and to create an environment where guests are still able to enjoy themselves in your property and have access to entertainment appliances such as televisions and music as well as internet. 
  2. To work towards becoming self-sustainable and ultimately, “off grid.” Major global booking platforms are now actively promoting properties which have some form of sustainability in their listing; which encompasses recycling initiatives, less laundering as well as an active approach to using natural energy rather than fossil fuels. Our research indicates that these properties typically have a 36% higher conversion rate that non-sustainable listings.

What does this mean for you?

  • We’ve contracted a specialist, NB Projects, to find solutions for all of the requirements a property may have; be that a one bedroom apartment or a nine bedroom villa. They’ve given us some further information which is also enclosed to this communication. 
  • We’d like to encourage you to think about how your property can provide some form of power backup. If you have any contacts or providers that you think you could consult, then please do so and our PRO’s (property managers) will work with anyone you would like to. 
  • Every property is unique in it’s requirements, so we’re unable to give accurate “ballpark” figures but we anticipate that you should be budgeting between R80,000 and up to R500,000 for a full solar, off-grid system. We will happily facilitate this through a deduction from rental income over the coming months. 
  • If you’d like a property assessment and a quote, please do get in touch with your PRO. 

Nox are sensitive to the complexities of this project, and have therefore consulted with specialists who will offer guarantees on both the installation and the underlying product. We’re well aware of a number of opportunistic contractors in the industry and we’ll offer support and knowledge wherever we can should you need advice but please make this a priority and hopefully we can allay any guest concerns well before they arrive. 

Compensation policy:

  • Meeting our guest’s expectations is paramount to the success of our properties as well as your property’s reputation. From time to time we have guests who simply are unsatisfied with the provisions in place, leading to aggravation and, occasionally, some heated demands for compensation requests. 
  • As Partners, it’s our primary objective to keep the guests in your property. However, we run a fine balancing act between keeping our property owners happy and keeping guests happy. 
  • We’re finding that guests do not appreciate the severity of load-shedding, and of being without power in a property for six, eight or twelve hours in any given day. On arrival they find it is intolerable to have to carry around emergency lights etc.
  • Our intention as a company is to ensure that all properties have adequate power backup in place, and intend to delist properties without power backup at some point in the course of 2023.
  • Where a property does not adhere to our minimum recommended backup power (all lights backed up, and adequate plugs for internet connection, entertainment, and guest devices), the following compensation will now be available to dissatisfied guests: 
– 20% compensation for days affected by loadshedding. Nox will not reduce management fees proportionately. 
– In the event that the guests refuse to stay in the property, we offer a full refund and Nox will still charge the fees on the reservation.
Nox doesn’t restrict our partners from using their properties whenever they wish. There is, however, an “opportunity cost” of usage which our team will gladly calculate for you. 
 
It’s important that we all manage your calendar’s availability accurately, as “double bookings” can cause enormous brand damage to your property as well as Nox’s perception of professionalism. After what can be a significant financial and emotional investment into booking a property, guests react very negatively to being relocated and, together, we should work on minimising this. We therefore request that partners follow this procedure when requesting dates for their own use:
 
It’s important to remember that, per our contract, any “partner use” dates that are requested when there is an existing booking which needs to be relocated, will incur the standard 20% fee on the relocated booking value. No partner bookings will be accepted via a Whatsapp or email request. 
 
Please contact your PRO if you have any queries.

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