Revenue, taxes and SXSW in Austin!
Hartz Mountain is a real estate owner based in Secaucus, New Jersey. Hartz owns a variety of premier real estate throughout the country including prestigious multifamily properties: The Whitley (Austin, TX); The Estuary (Weehawken, NJ); 3 Journal Square (Jersey City, NJ); and One Superior Place (Chicago, IL). Hartz is often on the forefront of emerging real estate trends, and they’ve been researching and analyzing short-term marketplaces (i.e. AirBnB) for the last few years. Hartz understands sites like AirBnB and HomeAway are here to stay, and they sought a short-term rental solution to test at their communities. Hartz and their management partner reached out to us to pilot their technology for the management and marketing of furnished guest suites on AirBnB.
Hartz began the pilot with their Austin-based property, The Whitley. The property is located in downtown Austin and in close proximity to the convention center. The Hartz executive team posed the following challenges for the pilot:
We are a unique short-term stay platform because it simplifies tax reporting and payments for its clients. We've partnered with the short-term rental tax experts, Avalara MyLodgeTax. We, along with MyLodgeTax, handle the research and filing and payment of local taxes for our clients.
In the case of The Whitley, Hartz applied for a permit for each short-term unit. Once the applications were approved and permits assigned, the listings went live. On a quarterly basis we automatically calculate the local occupancy taxes from The Whitley’s revenue, and sends it to MyLodgeTax for each listed unit. We then hold back the funds to cover the local occupancy taxes and provides payment to MyLodgeTax who then pays the City of Austin. Hartz and The Whitley team aren’t involved in the process; it’s fully managed by us.
The site team needs to remain focused on their residents and long-term leases. To minimize disruption at the site, we build the listings and manage the short-term guest interaction. Additionally, we want to ensure all guests are treated equally. We've partnered with TransUnion to perform a criminal background check on every guest prior to approval, and every reservation is insured through our policy with Assurant.
We only include Whitley’s site team when a guest checks in and out. In the case of The Whitley, adding a personal touch by having guests meet with the leasing team has lead to a perfect 5-star rating and Business Traveler Ready status.
In just over six months, we had booked 239 reservations totalling 833 nights and more than $200,000 revenue for The Whitley. Over $99,000 was paid out for completed stays from December through third week in June.
Traditionally, multifamily has not been able to capitalize on local events and hyper demand. We open the door for communities to maximize revenue by taking in short-term guests, and pushing rates with event-based and seasonal pricing.
We utilize a yield optimization tool to adjust pricing on a daily basis and maximize revenue based on local events, seasonality, and demand. In the case of The Whitley, it’s ideally located for the SXSW conference. Prior to working with us, Whitley would rent their guest suites at $150 per night even during major events like SXSW. We are maximizing returns, and during SXSW units were booked ranging from $400 to $1100 per night.
