I am shocked at how many vacation rental companies lose money on their housekeeping departments. I get this complaint all the time, and that does not count those who say “We barely broke even.” I find that, if budgeting and accounting is done properly, to be almost impossible to lose money.
Why does this happen? There can be a great many reasons.
1. Here is the single biggest one: the company posts no revenues to the department.
None!! No departure cleaning fees that are charged a renter, no early arrival or late departure fees-these are all posted to reservations. Let me ask you. How brain-damaged is that? How can that possible be accurate budgeting?
Here is what one company does with the cleaning fee revenues:
- The cost of the housekeeper (or sub) and inspector are added as revenue to housekeeping. The excess (profit?) is added to the reservations budget as revenue!
- In short, the housekeeping department has no income to cover their management staff, delivery staff, dispatchers, etc.
Also, when a company creates the percentage of commission it is charging an owner on a rental, those commissions should be computed based on the costs associated with having services to support that rental. Thus a certain cost is associated with each department, and that same percentage of the revenues should go to that department. So, if added into the commission is 1.5% for the cost of the housekeeping department, shouldn’t 1.5 of the commission revenues be posted to housekeeping?
The company posts only expenses to the housekeeping department, none of the revenues that they generate. Can you believe that? But it is true. How can any department make money if their revenue is not posted against their expenses?
2. Nothing is charged for many of the services that the department provides.
3. Too many vehicles.
Every inspector and delivery person does not need a company vehicle.
4. Fair fees are not charged or charged at too low a rate for things like:
- Ordering and maintaining an inventory of linens, housewares, etc.
- Deliveries of items needed in a house are too low for fear of “nickel and diming the owner.”
- No fees for deep clean others than the actual cleaning time. No inventory, inspection, etc.
Steve Craig is the recognized national authority on Vacation Rental Housekeeping. After working as systems manager for a division of the American Hospital Supply Corporation Steve started his adventure in housekeeping with his own cleaning company in 1984. Craig Services Management was actively servicing 17 resorts throughout the state of Florida by the time Steve sold it in 1985 and started his consulting business ProResort Housekeeping in 1986.
Since this time Steve has: consulted with over 200 vacation rental, vacation ownership, and destination resorts throughout the US, Canada, the Caribbean and Mexico; published over 300 articles and newsletters, including the Vacation Rental Housekeeping Professionals (VRHP) newsletter where he served as founder and Director for the past 13 years; spoken at numerous industry conferences by NTC, ARDA, VRMA , FVRMA, CFRMA, Colorado Lodging Association, California Lodging Association and VRHP seminars; and designed and overseen installation of 13 on-premise laundries across the country.
Throughout his entire career Steve has stayed abreast of cutting edge technologies, legal, and operational changes in the vacation rental housekeeping industry. Steve has worked directly with numerous product manufacturers to test their products and share his findings. From new product evaluations, to labor laws, to the latest software programs Steve has recognized, monitored, evaluated, and shared their impacts on the Vacation Rental Housekeeping industry