What is Serviced Accommodation? With Jason Living

So what has been the boom in service accommodation? When I say service accommodation, I mean like short stay. What was the catalyst for this? So where you see now all over the country and in towns and cities, you've got. You've got people that are taking a residential home and changing it to short stay accommodation.

I think it'd be right to say that, you know, there's never sort of one specific factor. I think it's a number of things. I think the rise of, say, Airbnb is a significant factor. You know, that certainly kicked off the idea of people renting out a room in their home on a short stay basis. And that business model has morphed into people letting you know whole properties. The origin of Airbnb was very much someone staying in your home.

Welcome back to the Boost Hospitality podcast. This is a brand new season. This is season number six, episode one. And this season I wanted to do something a little bit different and I wanted to talk about the world of serviced accommodation. So over the course of this series, you're gonna find out everything that there is to know about serviced accommodation. First and foremost, what's it all about, how to get started, the do's and don'ts of getting started, how to grow a service accommodation business, the differences between hospitality and service accommodation, and also how you can increase direct bookings for everybody in the world of service accommodation. Today we've got a gent called Jason Living who is coming on to this podcast. Jason has got a long history with property and service accommodation. I'm going to let him introduce himself in a second and we're going to go in and we're going to talk about service accommodation and everything else that you need to know. So sit back, relax, and we will get on with the show. So, Jason, welcome to the Boost Hospitality podcast. If you could please just take a couple of minutes and introduce you your business and how you got started in serviced accommodation. Sure.

Thanks very much, Mark, and great to be here. So my background is very much from the property side. I qualified as a chartered surveyor sort of more years ago than I care to remember, sort of early 1990s and worked as a commercial planning consultant in London and had a property there that I'd originally bought, then moved out of and rented out. And I moved up to Yorkshire and worked in the Northeast from the sort of late 90s. And when I got there, I started buying investment property, residential property to let out and built that up to a pretty significant scale through the 2000s. And as everybody now knows, you know, back in 2002, 2007, 8, 9, all became rather difficult and we sort of scraped through by the skin of our teeth and you know, really then set about, I suppose climbing out of the hole we'd fallen into. And part of that was really looking at the process properties we've got and trying to find ways of maximizing our return from those properties. So it's really self catering accommodation, but not necessarily unlike a lot of the hospitality industry, not necessarily in either holiday or pure leisure destinations. So these might be city centre or even just generally urban areas, anywhere where people are going and working away from home. So our typical clientele would be people who might otherwise stay in budget hotels, certainly contractor only things, budget hotels, you know, smaller B&Bs, family establishments, those sort of things. So it's a bit of an intro to me and a bit of a lead into what serviced accommodation is all about, which as I say, we've been doing some of our properties for about five years now.

And how many properties do you look after in the UK?

So total properties all over rental stock is about 185, mostly in the northeast. We've got a couple in London and about a dozen in Merseyside. But the short stay stuff, the serviced accommodation is just in Sunderland where our office is and we've got 18 flats or apartments that we use for serviced accommodation. I increasingly sort of verge towards calling it short stay accommodation because I think it's a more, it's a more inclusive term I think, I think service accommodation has particular connotations about it. Some people will say to you serviced accommodation is where it's being serviced every day, sort of hotel style. And there are no doubt sort of establishments of that nature in larger cities. So we probably sit somewhere between that and your typical self catering accommodation where people are staying for a week.

The general misconception and the assumption with serviced accommodation is that it is mostly contractors, business people that are staying at these. But it's not, it's you get holiday goers, you know, who are also staying, you know, people that are just looking for two nights away like say short stay accommodation. Where was the term service accommodation first coined, do you remember? Or is it just.

No, I'm not sure. I think it's one of those things that's been about for years and I think another misconception is this is something that has just happened in the last few years and that's absolutely not the case. I can remember staying in a service department in London 30 years ago. So this sort of short stay accommodation has existed for a long time. I just think for a number of reasons it's perhaps come to the fore, become more prominent. It's a significant growth area.

So what has been the boom in serviced accommodation? When I say service accommodation, I mean like short stay. What has happened? What was the catalyst for this? So where you see now all over the country and in towns and cities, you've got people that are taking a residential home and changing it to short stay accommodation.

I think it'd be right to say that, you know, there's never sort of one specific factor. I think it's a number of things. I think the, I think the rise of say Airbnb is a significant factor that certainly kicked off the idea of people renting out a room in their home on a short stay basis. And that business model has morphed into people letting whole properties. The origin of Airbnb was very much someone staying in your home. So I think there's been a series of things and then I think just with that growing awareness and I would class myself within that, you know, if I went to stay somewhere, you know, I'm in North Yorkshire, typically might get out to London every couple of months. In the past, I would always have stayed in hotels. Now it depends, you know, I wouldn't always stay in service accommodation, but it would certainly be on my radar and certainly if I was going with more than one person. And I think that's the tipping point for me if I'm just going for.

A night on my, you know, so walk me through, like the simplicity of it. So right now, if you are a home owner and you were currently doing a long term rent model where you had tenants come in and stay for say six months to a year, they now have got the ability to change it up because of these new rules that have come in and they can offer it as a short stay accommodation. Is that how it is basically working? Or explain to me the different types of service accommodation, explain the different types of businesses that are coming into this, which can sort of maybe explain why it is booming.

So I guess at the simplest level, you've got somebody who owns a property that they want to look at maximizing their income out of. And as you say, rather than doing six month plus normal tenancies, they say, look, I think there's a market here for doing short stays. So that's, you know, this sort of owner operator, if you like. I mean, the one thing I would say as a caveat to all of this, and it is a fantastic business, you know, to get into. And I think it has some, I think it has some real positives as a business. It's highly systemizable. You're dealing with an awful lot of repeat tasks, which means it's very systemizable. You can write procedures for everything. It's easy to outsource. But I would say, unless you're doing it at, at a certain scale, and there's no magic in the number, but I always think about sort of doing 10 plus units. Unless you're aiming to get to that size, you're probably never going to get the real economies of scale of enabling you to sort of properly outsource. You know, if you look at hotels, I mentioned Travelodge earlier, basically that's what Travelodge do. They don't own the buildings they operate in, or in the vast majority of cases, there'll be an investment company that owns that building, they will lease it, then let out the rooms to their guests. So on a much smaller scale, that's what you're doing. You're basically letting the property from an investor landlord, you're acting as the operator and then you're getting the guests in and looking after those guests.

And a question that has just come up whilst you've been talking is, how easy is it to get started? Save it. Me, never done it before. This sounds really good. I want to get, you know, I want to start approaching landlords, like, how easy is it for me to get started? Is there any rules or regulations I have to go through any accreditation or can I just simply just start doing the research and get started now?

It's surprisingly unregulated and whether that will, whether that will continue in the same vein, you know, I perhaps, perhaps doubt, you know, I think regulation in some form may well come. And it's one of, I think to some extent part of the hotel industry's gripe about the growth in this type of accommodation is that they are subject to much greater regulation. You know, you are obliged to undertake, for instance, a fire risk assessment, but, you know, there's no, there's no strict certification of anything that needs to go on. So from that point of view, yeah, it is, you know, it is relatively easy. And in terms of approaching landlords, some people, I would say, because you're approaching, whether it's a land, you know, from a rent to rent leasing point of view, you're approaching the landlord, you're approaching a letting agent and you're trying to sell them an idea that something that maybe they've got no understanding of. And that can sometimes be a little bit challenging. Some people find it easier than others. Just like, I suppose, any sales job. Some people are more natural in terms of their aptitude for selling. Selling a concept rather than a. Rather than a product. So. But in terms of, as you say, in terms of regulation, in terms of barriers to entry, really, there aren't any. And certainly when I got into this business with properties we own, but one of the things that struck me in terms of, in terms of getting out there and marketing, is because you can immediately jump on the likes of booking.com and Airbnb. You can start this with nil marketing budget because you only pay those guys when you get a booking. Okay, you do pay and it's a decent commission. But to me, I hadn't got an issue with that, because I hadn't got to. Let's face it, most businesses these days, before you even open the doors, you've got to have a website. You've got to think about your digital marketing and more traditional marketing. Whereas with this, you can start day one and just as your first step, get it on Airbnb. And I'm not saying that's where your business starts and ends, but you can start with very little capital.

And that's when they come to boost Lee, and that's when they come get a website. I know. All right, so people do jump on this. There's no accreditation, there's no regulation. They literally do jump in. What is the most common mistake that you see people making in the industry when they're getting going?

One of the big mistakes, particularly coming from the property side, is not understanding that you need to actively manage your price. Your pricing should be very dynamic. You know, if they start putting their price up, it's because they've seen an increase in demand. Now, you may not have seen that increase in demand yet. You can pretty much guarantee, if they have, you will. So you can afford to start pushing your prices up even before the demand hits.

Yeah.

So that whole dynamic pricing thing is something that's particularly. People come from the property investment side. It's something that's. That's sort of wholly new, I guess.

If as a service accommodation owner who's listening to this and thinking, well, how do I even get started? The example and the story that I can give you from a hospitality point of view is based in Scarborough. My family business, it's got a farm stay, hotel, guest house, cottages here in Scarborough. In 2018, we had Britney Spears play in Scarborough, and it was announced in January and The event and the concert was sold out pretty much within 24 hours. So being a bit proactive, you go on, you instantly close out any dates to the online travel agents via your channel manager. So whether you're using tokeet or free to book or who. So that totally blocked off the dates on there. So you're guaranteed to get your direct booking. And then what you do is you put the rates up because you know that when that gets announced, there's two things that people do. They book the tickets and they look for accommodation. And if you're savvy and if you've got a good presence, then people will naturally come to your website and book with you. And then all you need to do is just, again, like what Jason is saying, assess it every week or every month. And. And the closer it gets to the date, if you've still got availability for those dates, you just start to slowly put the price back down to what your normal rate is, and then you start to open it back up to the ota. So, like Jason said right at the very start, make these booking.com make Airbnb work for you and not the other way around. So if you have got anything that needs selling last minute, put up on those, and I can guarantee that you will get those bookings. So that is exactly it. You said there's a number of mistakes you see people make. What's maybe one of the other ones that's on top of your mind, apart from pricing and knowing your market?

Well, I guess the other thing actually very much feeds into the marketing side. As I said, starting as a sort of first port of call. Booking.com Airbnb will get you a level of bookings. I think where people make a mistake is that they think they can completely rely on those for all of their business. You know, they're going to consistently get 70, 80, 90% occupancy just from being on those. On those, on those platforms, on those OTAs, you know, so the difference between, you know, being 70% occupied and 80%, it might mean you're doubling your profit.

Like you say, if you can. We spoke about this before we came live on the call. If, you know, you build your house on somebody else's land, it's going to fail if you just rely 100 on booking.com and Airbnb. But what happens if they turn around one day and close your account? Simplest of things, and then you're stuck. And, yeah, it's always good to be, like you say, being proactive, trying to increase your amount of direct bookings, because at the end of the day you're instantly making at least 15% more money, more profit, which over a singular booking may not seem all that much, but if you base it over a year, that's a hell of a number.

And I think people look sometimes at their operational side far too much from their own perspective in terms of what suits them, in terms of when do I want people to check in and out, you know, when non refundables, deposits, cancellation periods. Because in an ideal world, from an operator point of view, you want everybody paying 100% when they book, you want them paying a deposit, you want them all turning up between 3 and 4 in the afternoon and all leaving between 10:30, 11:30 in the morning. If that's the way you approach your business, then effectively what you're doing is you're massively constraining your demand.

That's a great bit of advice that I think so many people overlook. But at the end of the day, if you're not appealable to your guests, then they're never going to come back and they're never going to talk about you. When if they just spayed a bit of attention to the people that have already given them money, that have already built up, that know like and trust, then you could make much more money and have much better guests. And there's a fantastic blog everybody should go read. It's A Thousand True Fans by Kevin Kelly. It's a free blog. You can go out and find it, look at it on Google and it's a prime example that somebody should be looking at into their business every single time. What is the one bit of advice that you've seen in the industry that you don't agree with? What would that be?

I guess some of the bad advice around planning about planning use classes because basically a residential property to get into sort of bit of geeky planning is use class C3 and use class C1 is hotels, guest houses and boarding houses technically, which obviously includes B and Bs and sort of similar establishments. Now there are people who are going around saying that, that to run a, let's say just a bog standard house, letting it as a whole house to a family, that you require C1 planning consent. But absolutely you don't, you know, it's not a hotel, guest house or boarding house quite clearly. And I would say to people, you know, most holiday accommodation, it's, it's just a standard residential use class. There have been a couple of planning appeal decisions which I think are questionable, which Start to go down the route of saying, well, if you've got different people staying there every night, have you not materially changed that? Use in planning terms still doesn't make it a Hotel or C1. It then strays into a use class of its own, which again, to get a bit geeky, something's called sui generis, which means a use class on its own. I don't believe so. It's difficult because there have been a couple of appeal decisions, but they're not, they're not court decisions, they're not legally binding. You know, it can only be used as sort of advice or indicative advice on other things. But certainly when I first got in there, a lot of people saying, you know, it needs to be C1 or in order, in order to put your property on business rates, it needs to be C1. I mean, that's just total nonsense. Any, any property that's let for short lets commercially for more than 140 days a year should be on business rates. There's another big tax advantage called capital allowances, which hopefully people in the more commercial world, The B and Bs, the hotels, pubs of this world should know something about that. And if they don't, I'd encourage them to go and find out about capital allowances because it may actually significantly reduce your tax bill.

I can see why so many people would fall for it because as soon as you started saying those letters to me, my head just glazed over with lot. So I can see that if you get some. Somebody that is up there on the stage or you know, in an ORSA you're a part of and saying that, then you're going to do that. So thanks for sharing that. So what are you doing now moving forward to help the industry, help sa, help people who want to get into sa.

For a while now, I've held various sort of events for people to come to, but we slightly sort of moved on from there because what I found is with those events, you know, it's an awful lot of time and effort to, to put them on. And also people have got a. There's obviously a cost for people to attend, which is related to the cost of putting them on. People have got to travel, they've maybe got to take a day out of their week to come to that event. And you know, all of those things are a constraint. So I thought it would be far better to try to help people online in a way that they can access that when they want to, that works for them so they can catch an hour early Morning, evening, whatever. So I recently launched the Short Stay Living Academy, which is an online membership platform. And each month what we do is we have an expert guest and Mark's been our most recent guest, talking about marketing. So an expert focus each month and we do live Q&As with those experts so people can digest the content, digest the information, come back and ask questions. And my whole focus with that really is to give people massively valuable but implementable information for a relatively low monthly cost compared with a lot of the sort of big headline courses out there. We're talking a much smaller level of investment. Now, off the back of that, what I want to do, particularly for people who really want to get started, a lot of information, that's sort of A to Z. We will be launching an online course alongside or as part of the Short Stay Living Academy. To be honest, like you, I just really enjoy helping people and seeing the results that those people can achieve with the right help and support and knowledge.

So if they want to go and find out more about you, more about the ssl, more about anything really to do with yourself, where's the best place for people to head to, Jason?

Probably the best starting point is I've got a Facebook group, a service to go accommodation group on Facebook, which is Fantastic. Got nearly 10,000 people there called the Serviced Accommodation Network UK. What I'd encourage people to do is come along and join that. That's free and there's some really, really helpful people on there. What I would encourage people to do, rather than just launch in and say, how do I run a service accommodation business? What I always say to people is, look, just spend some time trawling through, there's an awful lot of information on here and then come back with some specific questions. So that's a free starting point, but from that, you know, please come on and ask questions and we talk about the Short Stay Living Academy on there and put forward various offers. People will get an offer when they join the free group to come on board for the Academy. And if you can contact me, Jason Living on Facebook via Facebook messenger, that's probably the. That's probably the easiest way and I'll certainly do everything I can to help.

So you're on Facebook, LinkedIn, most platforms, if they just type in Jason Living Property, service accommodation, I'm sure they'll be able to find you. Thank you very much for coming on and talking about that. And hopefully by now, if anybody's never heard of service accommodation, they have a better idea of this and moving forward. And like I say, if you want to get started, the best place to do it is the Service Accommodation Network. Is it uk? Uk, yeah, because there are, if you type in Service Accommodation Facebook, there is a lot you're going to get presented with. So it's Service Accommodation Network uk. Just look for Jason, he's the admin of the group. And yeah, that's the perfect place to start. And then to find out more about the SSL as well. All right. Thank you very much for joining me. Thank you very much for tuning in to the Boost Hospitality podcast. This is season six, episode one. If this is the first time that you have listened to one of my podcasts, you've got five seasons that you can now catch up on. Go to booster.co.uk podcast. We've done so many different variations of seasons from how to run the perfect Facebook competition to explain about what hospitality owners are doing on a day to day basis to boost their bookings. And also as well, just breaking down some of the jargons and the myths and showing you five steps that you can take to boost your direct bookings today. But my name is Ben Mark Simpson, founder of Boostly. If you want to go find out more, go to boostly.co.uk, and if you'd like to leave a review, please head over to itunes or wherever you're listening to this podcast and leave one of those lovely five star reviews for us. But thank you very much for tuning in and we will catch you for another episode of the Boost Hospitality podcast very soon and kicking.

But I'm looking for. Just let me know.