Rental Operations Policies

Rental Management Policies

Last update: February 2020

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.

Management and maintenance during non-rental periods

Our business is focused on providing hospitality management services to support an active rental operation.

It is common for properties to be refurbished or closed off for maintenance for extended periods of time.

Our team of Property Managers (PRO’s) are primarily focused on ensuring that your house is operating optimally in and around guest bookings. They do this alongside the Hosts and Housekeepers.

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.

Guest damages and insurance

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 bad will 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.

Winter maintenance

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.

Guest supplies management

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.

Dynamic pricing

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.

Guest complaints policy

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.

Noise management

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.

More information can be found here.

Contract fees

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.

Late departure requests

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 policy; “blacklisting” and “screening”

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

It is not possible to perform screening or background checks within the short term rental industry. 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.

Currently, there are no tools in the industry, globally, which allow us to run a detailed reference on international or local guests. 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. 

Onboarding process for new properties

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.