There is no doubt that the company managing the critical mass of rental cottages in Seaside, FL will determine the brand image of the community. The need to fill a large number of cottages at a discriminating rate requires a substantial investment in marketing, advertising, and public relations. Additionally, as the most utilized service provider for those coming to Seaside, FL, the primary rental company also plays the most integral role in defining what the brand means to people beyond an image on a T-shirt or in a magazine. Finally, the rental company controlling the critical mass has a vested interest in reinvesting in the community and will look for ways to support the health of the community and thus the rental program.
In recent years, the Seaside, FL rental inventory has become fragmented between a wide variety of operators offering a wide variety of service levels at a wide variety of rates. While in some cases variety is the spice of life, it can also be the death of a brand. A key aspect of brand sustainability is meeting or exceeding your customer’s expectations consistently over time. Whether it is the welcome amenity, the in-room amenities, the on-site operations, the quality of accommodations, the friendliness of the staff, the level of cleanliness, the sense of community, the outdoor activities in Town Center, or other aspects of the experience, the Seaside, FL guest has an expectation of their experience as it relates to the brand. And, whether it is providing the lodging services noted above, funding A&E or staff volunteers for multiple events, the primary rental company has a vested interest in supporting these efforts. Unfortunately, if the inventory continues to fragment and a primary agency does not emerge, critical service levels, funding mechanisms, and human capital in the form of a centralized, dedicated team will also erode.
The other aspect of grave concern is protecting rental rates. Seaside, FL has long celebrated the highest Average Daily Rate in the region. And, while in recent years others have tried to close the gap, Seaside, FL remains the leader. As the Seaside, FL rental market continues to fragment the “Seaside, FL experience” will be diluted and confusing and may result in a steep decline in rental rates, repeat renters and home values in general.
The financial pro formas completed on the Homeowner’s Collection use a 20 percent management fee as the base charge to homeowners for management, marketing, and other key services provided. We believe this is sufficient to cover the month-to-month operational costs of the business. So, there is an immediate increase in return to homeowners currently using CRA. Additionally, the beauty of this concept is, whether the fee is 30 percent or 10 percent, any surplus of revenue over expense is distributed back to the members at the end of the year.
While the Homeowner’s Collection is being designed to serve as the primary on-site Management Company for Seaside, FL, we do plan to offer an option-based model. We completely recognize that no matter how good the concept, it won’t necessarily work for all rental owners. So, we do plan to offer some services à la carte and, over time, the goal is to be able to service non-rental owners as well.