Managing Data, Industry Awards, Pricing and Budgeting and Product Diversity

In this week's episode, we discuss the flood of data and reports shaping our industry, as well as the strategic aspects of property management:

☑️ Swamped with Data: Navigating through the recent surge of reports, webinars, and conferences.
☑️ Awards – To Enter or Not: Exploring the value of participating in industry awards.
☑️ Pricing and Budgeting: Discussing the unconventional approach of the PBSA sector—budget first, then strategy and pricing.
☑️ Product Diversity - is this impacting investment models?

Housed: The Shared Living Podcast aims to bring the latest news, views and insights to the shared living sector.

Each week, Sarah Canning, Deenie Lee of The Property Marketing Strategists and Daniel Smith of Student Housing Consultancy will be delving into a wide variety of subjects and asking the questions that aren't often asked. This podcast is for anyone who works in Student Accommodation, BTR, Co-living, Operational Real Estate or Shared Living.

Disclaimer: The views and opinions expressed in this podcast are the personal views of the individual hosts.

Transcript

SPEAKER_00: 0:00

Hello and welcome to the 14th episode of House, the shared living podcast. We're really glad that you're all still with us 14 episodes in. I'm Sarah Canning from the Property Marketing Strategist.

SPEAKER_01: 0:11

I'm Dan Smith from Student Housing Consultancy.

SPEAKER_00: 0:13

And I'm Dini Lee from the Property Marketing Strategists. Well we've experienced some warm weather finally in the UK and what does that mean? Has that affected our work? Have we been out and about? Have you been enjoying the sunshine Dan and Dini?

SPEAKER_01: 0:27

It's been nice to get a bit of better weather but it's a struggle when you have to go to London when it's hot. That's what I always find. And a lot of my clients and prospective clients are in London. So yeah, it's been a sweaty week of commuting.

SPEAKER_00: 0:38

I must say, I recently made the move from London to Somerset and Somerset comes into its own when the sun's shining. So I have been enjoying it. It's utterly glorious. And yeah, I'm glad to be here and be recording this podcast, but I'll be glad to get outside when we're done. So apart from enjoying slash not enjoying the sunshine, what else have we... been up to. I guess I'm a bit conscious that it feels like loads of people have released reports in the last couple of weeks, which is fantastic. I can be a bit of a data geek sometimes and try and consume as much as I can, but I'm a bit overwhelmed at the moment. There's so many reports and data and it's end of quarter, end of financial year. There's loads of information out there about shared living and developers, operators and advertisers telling us loads of great things, but I just haven't got round to it amongst all of our kind of day job. Dan and Dini, have you done any better than I have? I

SPEAKER_01: 1:34

haven't. I don't think so, no.

SPEAKER_00: 1:38

But I guess one thing I will say, and I think last time we saw Kellyanne from the Class Foundation, she mentioned this, is that A, it's amazing that there's so much data about, because I think, Sarah, when we first came together, one of our bugbears was very much that where's the data, where's the data driving these decisions? And we've definitely made a massive improvement in that. And there is obviously lots of data out there and lots of people are sharing it for free which is wonderful but I guess there is that question is are people able to read it and are using it because there's no point having data if you're not using it and B to Kellyanne's point when we spoke to her was very much are we all doing similar things or are we all taking a different perspective so actually that data is being unique and useful to the sector so I think it is it's great that it's out there we do need to find time to read it because people have put a lot of work into it and it's important that we read it along with the stuff that we put out because I know that we're part of that we do put out inside ourselves but yeah I think there is this and we've said it before is that we don't necessarily work collaboratively enough as a sector to come together and say well actually we're all doing some data why don't I take this bit I take this bit and I take that bit so we all still get the benefit of producing that data but it's also coming from different angles

SPEAKER_01: 2:52

I think the issue is that the data is so expensive I mean there's some brilliant data being produced by Stu Ren student crowd. Obviously UCAS have their data as well. But it costs. And yes, there's some snippets that get put out there. And I totally understand why it costs, because it costs money for them to collect that data. And that's fine. It's the most useful part of what I do, if I'm being completely honest, is analyzing that data. So effectively, I would give the guys at StuRents a call, have a quick chat with them, see what's available on a city level. And same at Student Crowd, anywhere else. Find out what's available on a city level, but also then look for national trends as well to back up. my opinions and it's not me trying to you know the sort of tail wagging the dog it's very much me trying to ensure that my opinions are backed by data and our data has been pretty crap in the higher education industry in particular and it's taken pbsa sector and some private entities to get involved organize that data manage it and allow us to report on it and that's that's great it's just a shame that it it does cost quite a bit of money we're obviously well delayed on the new HESA data. So normally that university enrollment data for each university, each course, each year, each demographic is a year out of date. Well, now it's going to be two years out of date because it's not going to be published until August. It's been pushed back again from January to May and now to August. It's just frustrating that in real time, so that you can make informed decisions from an investment point of view in particular, but also from an operating point of view, because we have to speak to the universities. And it's great for me because I've got good relationships with a lot of these universities so I can quickly call someone at a university in the international team or the accommodation team and find out how are applications looking where are things up to what are they expecting are they going to reduce the grade boundaries to bring more students in during clearing because the markets are delayed and everybody at the moment is asking those questions like what's the data behind it what are the applications saying from each union if you don't have that relationship with your local university you are not going to get that heads up but equally they're all pretty cagey they don't want to give everything away yeah lots of data available lots of reports currently available minimal time to to really go through it but i think that data is a real problem within higher education it's getting there from pbsa and like i said there's some really good credible organizations leading the charge on that

SPEAKER_00: 5:25

well i think between the three of us we should potentially split up the reports read individual ones and then we can come back and report back on the podcast so we don't feel overwhelmed having to read multiple reports and i've got some train journeys to do next week so i will try and i'll pinpoint one you guys can fight amongst the others between you perfect that's a plan one thing that we wanted to talk about today is it's coming up to conference season and kind of hand in hand with conference season comes award season and i know that we get sent lots of things for potentially awards for us to enter but also for our clients to enter and we write a lot of award applications we're always kind of dice dissecting what's valuable what's not valuable for our clients as well as ourselves and again it's another thing that can be quite overwhelming you can get massive FOMO can't you from awards like I should be in it it's going to be great exposure but again it takes time and if you sub it out it can cost money and then you kind of think is it worth it so let's talk about awards Deanie what's your view on entering industry awards? I think they take a lot of work and if you don't do it the right way it's not going to go anywhere and you're not going to get anything and I think in my My perfect vision of the world, it would be independently assessed. It would be something that is real and it is a real accreditation for something that you're doing. They're there to give people exposure. They're there for businesses to run big events and to get people together. And obviously you have to write your own testimonial and prove yourself what you're doing. So therefore it's not independent, I guess is what I'm saying. That's the reason to do it in the sense that what you get out of it is that exposure that networking that ability to do it but it's not something you can just decide to do one Friday afternoon and do it because that's going to be a waste of your time because you're not going to get anywhere and I always refer it back I guess to when I used to work in the civil service and it's one of the best things I ever learned because we had to learn how to do competency-based interviews in the civil service and that's exactly what an awards entry is answer the question look at the criteria and make sure your answer reflects the criteria and you're not doing that then you're not going to get what you want out of it and it's not going to go anywhere so I guess in a nutshell I think they have value I think they are worth investing time and if you know why you're doing it and what you're doing it for but obviously they're not independent awards I mean I guess it doesn't mean that the best person in the room is going to win that award but if you get what you want out of it then it adds value.

SPEAKER_01: 7:56

Do you think there's a correlation between who sponsors awards and who actually wins awards?

SPEAKER_00: 8:02

There's been a couple over the last year where I've almost wanted to prove that point and actually it's been disproven because the person that I thought was going to win based on the sponsor hasn't so I don't know that that's necessarily true with with all awards because they're not independent as such like Dini said you know if you enter an industry one it's industry people that are judging they have to have a opinion of you before they've even seen your award and no doubt the exposure that you've already had the press coverage you've already had and potentially the money that you've spent on sponsorship just means that you're a more familiar brand to whoever's judging you. It probably could sway the result that way, but I'd like to think we're all better than that.

SPEAKER_01: 8:45

Yeah, so would I. I don't know. Previously, I have been quite cynical about some of the awards, not all of them, but some of them. And I think that most of them have upped their game in terms of the committees that do oversee the judging. And I think that makes a big difference when you can openly see who is going to be judging the award I think that just means it's much more objective in terms of their... I'd love to see the stats behind, you know, who sponsors and what year and then when they go on to win certain awards. But realistically, I think we've certainly gone beyond that and everybody is held to account in terms of judging. And yeah, you need to invest in the entries. That's key. And I think it's all too easy to just write a quick entry yourself and expect that because you think you've done good things, then great. But actually getting a credibly written award entry makes a massive difference and I do think there's a lot to be said for that I know that's one of the services that you guys offer and I would highly recommend that I'm not as cynical as that I do think that we've moved beyond that and I do think it was a bit of a problem at one point though with people sort of questioning why certain operators won operator of the year there's a lot to be said from looking outside in and not actually knowing the full story but yeah there were a few questionable awards at one point but I don't think we're there now

SPEAKER_00: 10:03

I think what's really useful about doing award entries and I think this is why it helps getting someone from the outside to write them is it's actually a really good opportunity to review what you've done in the past year and quite often for companies that I've worked for they that has then kind of contributed to kind of you know the end of year internal awards and ceremony and it really helps you reflect and kind of coordinate everything that you've done from different departments so I think the process can actually be quite cathartic and not a bad thing I think one kind of health factor that I just want to highlight really is and it goes back to what Dini said about why you're doing it and who you're doing it for is there's a really big difference between awards that complement the industry and ones that benefit a B2C audience and your B2C audience generally don't care about your B2B awards and they take up valuable space on the front page of a website we see it you know all the time with with operators front end end websites that they're talking about, you know, all of the B2B industry awards that they've won. And, you know, the audience just don't care. That belongs on your corporate website and on your corporate documents. And if you want awards for your B2C website, then you need to focus on the customer service awards and the ones that actually come from your residents and your customers. Let's move on. And we've touched on this over a few episodes, but we haven't really dug deep. And that's about pricing and budget. I think we've all worked in enough businesses to kind of know the way it works, that usually a department goes away and works up pricing for the following year. The marketing team are asked to do their marketing budget. Is it all backwards? Deanie, I know you have strong feelings on this, so I'm going to go to you first. I don't think it's probably occurring across the shared living sector. I think it's one of those quirks with PBSA. And I've had numerous conversations with ops managers about why pricing is done in July, August, September in some cases. And the answer is always, well, we can't do pricing until after that because we don't know where occupancy is. But my bugbear is that actually you're budgeting. So you're asked to provide a budget in PBSA generally around this time of year for the next year without even knowing what your product's going to cost. And in every other sector, you do product development, you develop a product, you price that product, you write a strategy for how you're going to market that product and then you do your budget but we do it the other way around and we say well give me a budget then you've got to write me a strategy that connects to that budget and then I'll tell you what I'm going to price that product at the end of it and it's just it's really hard to write a strategy when you don't know where that product's going to be positioned in the market from a price perspective because price is what people are buying into and certain levels of pricing are not going to meet certain customers if you're doing some development in that asset you need to know about that so you need to know what impact that's going to have on price and you need to be able to sell why that pricing is shifting and changing and you can't do any of that if you haven't got that information so as a consequence we are always on the back foot because we find that price at the end and I get the argument is you don't know where you ended up until September but you have a pretty good idea by time to get this time of year where you're going to end up and therefore you can and in most situations you don't actually have to firm up that price until September but at least you can work on an assumption and then you adjust your strategy in September if that assumption was wrong, instead of trying to adjust that strategy when you're halfway through the

SPEAKER_01: 13:39

year. Yeah, no, I get it. It's such a complex thing. And I've seen this from kind of both sides of the sales and marketing director of Nido at one point as well. Now, you can't set your pricing until you know exactly what your occupancy is. That is the major issue. So once check-in weekend has been and gone and you know roughly where you stand there and that you'll probably close out as start dates for universities get pushed back a little bit, you know where you'll be by the end of September The issue that we've got is that operators are jumping very, very early with their pricing now. So gone are the days when I first started in the industry nearly 10 years ago, where you knew that you had September, October, potentially November, and you could launch your prices in early December and have a bit of a rebooker campaign. And then you could launch out to the direct let and to the public either end of December or probably just wait until you get back and launch after Christmas. That doesn't happen now. I did the track I took on the baton from Fatty from Aparto, who does the launch tracker for all the prices. And he's done that for quite some time, certainly the last few years, but didn't have the time this year and couldn't do it. So I took that on. And by the end of September, there were people launching rates. And I was pretty shocked at that. Then you see in October, the likes of Homes for Students and Unite both jumping on the same day. And that is, you know, realistically, that's 120,000 beds that were launched in terms of terms of their pricing then really quite early. I think we do need to make sure that it's, again, it's not the tail wagging the dog and that we have the marketing budgets fully aligned to those revenue budgets based on occupancy and that revenue underwriting as well. And, you know, it may be it's a case that you need three types of budgets based on the rough occupancy that you think that you'll get to make sure that your marketing budgets can be done early. So if you're at 90%, then, you know, you can activate certain levels. If you're at 100%, then, you know, that you've done pretty well. You can rely on what you've done this year. It's just a tricky one to sort out the phasing of. And there's a lot of guesswork, a lot of estimation, but marketing teams in particular do need that flex. They need to be able to adjust up and down and have some kind of contingency in there. Every good marketeer will build in some contingency in some way, shape or form. I also think that you need that in terms of sales and revenue as well. It's just a tricky one with how short that time period has got between check-in weekend and then launch your new rates?

SPEAKER_00: 16:04

I don't think the process is very efficient because what you inevitably have is usually the property teams do their own competitor analysis. Your acquisition slash finance analysis will go and do their own competitor analysis to come up with pricing but independently the marketing team were asked to do their budget and the ops team and they probably go off and do their own competitor analysis which means that everybody is doing it in a really inefficient way as a marketing director i would always prefer the the pricing the development the acquisitions team would come and say this is what we know about the market and this is where we're likely to go with pricing you know give give you a hint an indication at least even if it's not completely firmed up need developers have promised the investors a return so unless something very very significant happens in a market they're going to go with the pricing that's in the underwrite and or more you know whether the market has gone well or not i think it would only be in a really drastic situation that that would change so therefore the numbers are kind of set anyway we're i think you know when we talk about price setting and a marketing team doesn't need to know you know to the penny of what the pricing is going to be until we actually need to put it on the website and you know and do all of the marketing stuff. But until that point, we just need an idea. Are we going heavy? Are we likely to be increasing by 10, 20%? And what else is happening? Who else is building? How's the market gone? Because there is a department that will know all of that. And then the marketing team can go, crikey, that's going to be tough. We're going to need bigger marketing budget because actually you're putting the prices up. There's four more developments opening down the road and this is going to be tough. If we don't know that information inflation we're probably just going to do the same as what we did last year we'll probably add three percent on for inflation you know and then lo and behold by January budget's just not going to be enough for that really tough market that another department's put us in.

SPEAKER_01: 18:01

That's where there is that disconnect I think a lot of the time between investors and operators where the investor's given the operator a business case and a business plan and an underwrite and the operator needs to go and hit that where it's just okay well you know we need to find three percent each year so just put that three percent increase at on the rental income each year. And we'll look at it as we go. There's definitely a disconnect because the operators do not want to give any bad news about any market to an investor. That's obvious. You always want to paint a good picture of what's going on. But I do think that quite often operators will therefore blindly walk into an unrealistic underwriting and then not be able to hit it. And that may look like, yep, setting your prices early for the following year. But then if you get to check weekend and you're only at 80%. Well, that throws the business case out of the water because you've underwritten 97% occupancy and you know that therefore you're not going to hit your revenue targets either. So it is a real challenge to coordinate that, to phase that. And I do think operators need to be a bit bolder in the way that they approve these underwritings. Part of the issue you've got is that everybody in the third party sector in particular and in joint ventures is super bullish usually on certain markets because they want to win the business. That's not me saying that they're fraudulently putting revenue budgets forward that are extremely high and OPEX budgets that are extremely low. I've seen examples where I know instantly that they're not going to hit those room rates. And maybe they know that as well. And that's various different operators of different levels. Some of it may be a bit of a lack of understanding of the market. But again, that comes back to your point there about, I suppose, duplication of work. Any good MD is going to make sure that there's no duplication within the business and so you don't need your marketing team doing their comp analysis against any other building on a local level if the sales team are doing it you don't need your ops team doing it you don't need your property managers doing it you need one source of truth you need one person responsible for it and that can then be ultimately what you're then taking forward to the investor but you're right in terms of i've seen it firsthand that so many different people have got different reports different data in different places and There just needs to be that one source of truth that everybody ladders up to that you can then take to an investor and say, well, this is what the market's saying. This is where we're up to within that. So let's make a decision based on that right now. What do we think of the current business case and what do we think of next year? And I do think there's... A lot to be said for deduplicating that and making it a lot easier to just centralise that data in particular so that you can then report on it and then go and budget accordingly.

SPEAKER_00: 20:48

And I think the thing is that data doesn't need to be done manually anymore. That data is out there by student crowd, by student, but I still know that there's lots of operators that are doing it manually and I can't... The investment in those systems and getting that data will give your very busy operators or very busy marketing teams or very busy sales teams valuable time back. But I just still don't understand how you can't take an assumption now. I'm not saying you have to set those rates. I'm not saying you have to put those in front of investors. I'm not saying you have to do anything. But you take an assumption now based on where you think you're going to get to on pricing, and then you build your strategy and your budget around that. And it's not just the pricing. It's also about how you're building up that revenue around for what you're offering returners. If you're doing dynamic pricing, not that I'm a fan of it, how are you doing that? Because all that will impact revenue. your strategy and your budget and if you don't know any of that when you've done your budget you're going to be asking for more money so i just think it's i i get that you can't set it in stone but i'm pretty sure if i went around a bunch of operators now and said where do you think this is going to end up next year they'll give me a figure when you end up in september it's not going to be that far out

SPEAKER_01: 21:53

i just think it's a lot more fluid and i think dynamic pricing comes into that as well everybody's talking about dynamic pricing this year there's a lot that have been doing it for maybe the last couple of years and i realistically is not really dynamic pricing it's tiered pricing systems that's what that's what we've all got from pbsa dynamic pricing is effectively in the hotel industry and hospitality industry where all the prices are published with certain systems so you can see what your competitors are charging what their occupancy levels are everybody plugs into that and then you can set your prices accordingly and you know that works very well for the hospitality industry we are miles away from that yet no matter what any system a system operator or or PBSA operator says they are not doing dynamic pricing, it is tiered pricing. And that's fine, because that's the best that we can do. But it does mean that there is that flexibility, an opportunity to increase your revenue, but also there's a risk there. There's a bit of jeopardy associated with that pricing. And I've seen it go both ways. But equally, you think about this year. Now, we're in May. We're just about to get the Migration Advisory Committee report on the graduate route back. It could have a really detrimental effect on the international student numbers that really could not will drastically reduce international student numbers. And I think that's the concern that I have, that some of these really optimistic occupancy and revenue forecasts that I've seen firsthand may fall by the wayside if something like that does really have a detrimental effect. So then you've got that problem of, okay, well, you've made that decision in May, you get through to September and your occupancy is actually at 80%. You've underwritten 97%. And how do you take it forward from there? I think a lot of this just needs to be done literally at the same time. Everything needs to be coordinated a lot better than it currently is so that you can take some of the guesswork out of it. It needs to be some quick work to adjust some of those business plans. You can't adjust the underwriting. That is what it is. But you need to adjust your business plan at certain times from an investment standpoint. And that will realistically need to be done in mid-September, ideally for some kind of mid-October, late-October launch. But I can literally hear the reaction from all third-party operators. They're saying there is no way that investors will get back to us in time to approve budgets in time for that to then launch within four weeks. I then know that some of their systems are crap and they can't get the pricing out quick enough or set their term sessions. But that is when all of the work needs to be done, in my opinion. It's you know moving straight on from August peak season into September where again that's still peak season for that current academic year but that's when you also need to be finalizing setting budgets and then getting ready to launch in October late October ideally.

SPEAKER_00: 24:45

I mean the point of dynamic pricing although I agree it's not actual dynamic pricing because if it was dynamic pricing the prices would come down as well as going up and we don't generally see that until the end of August and everyone panics and reduces their pricing but with dynamic pricing the point is it was meant to slow down the market. So really, everybody is aiming to get to 100% by the end of August. If you're going too early than that, then it means that your pricing probably not been optimized. So therefore, you know, nobody can make a decision on pricing and budgeting until mid September, if we're saying that, because that's what dynamic pricing has done. And that was the purpose of it. And if everybody is aiming to get to 100% by August, September, then it's done its job. Therefore, we're not seeing this kind of market generally unless you're a nominated site or a soft norms where you are filling super quick anymore so i think dynamic pricing it's done what it was meant to do therefore everybody's still aiming to get to 100 but but later because you're trying to make you know make more money basically and i think the other thing you know that we talk about quite a bit is incentives and and we're being asked by clients oh you know should we discount should we put incentives and you know yes it's great from a marketing point of view it grabs the attention of customers but we always say if you have that budget in your pocket then why did you put your pricing so high in the first place if you're willing to discount you know over a whole building I don't know the equivalent of£10,000 in incentives then why Then why did you just take£10,000 off the revenue and put pricing in that was more realistic? Because students who, or any customer in any market really, that books early should always get the preferential rate. And I think we're seeing this in some markets like Bristol and Glasgow and Leeds. We talked about it before. The same number of students are in those cities. The students haven't gone anywhere, but they're not booking yet. And are they not booking yet? Because they don't have to, because some savvy students are thinking, we're going to get a good discount if we hang on and we hang on, because there's no hurry. So it's self-perpetuating. If operators could get their pricing right in the first place and make it more realistic, they wouldn't have to discount later in the season. And you would stop this cycle of students booking late. The product diversity piece buys into this as well, that actually, because we don't have product diversity, we can't have different rent rate levels and therefore... If you had more desirable rooms at a higher rate, you'd have fewer of them and then it becomes scarcity and then you've got the opportunity to put them up. But because we don't have that, we just have a homogenous mass of rooms that are all the same. We don't have that ability to do that. So I think it plays into the argument that we're always making is that we really do need product diversity. I almost think like product diversity, we have talked about before, but it feels like a whole other subject to get onto really. And I think it would be good to come to this kind of at the end of the the season where we can see where the gaps are. And that will definitely come into kind of the shoe rents data where we can see where that supply and demand is for particular products and what's selling quickly and what's selling slowly. And therefore... what is being discounted at the end of the season but all of that information should be used to price the following

SPEAKER_01: 28:04

year i think that the issue is that we're already seeing they're different budgets a lot of the time and you want to try and keep your rack rate your rental income as high as you possibly can without discounting your room rates and that's for valuation purposes but you That's why quite often the revenue budget will be slightly, or the sort of discounting budget will be slightly separate, stick it in an A&P rather than associate it with the revenue budget. And that is, you know, it's robbing Peter to pay Paul in a certain kind of way. But I do understand it. The issue is that, yeah, anywhere where you've got a cashback of, I would say over£300, you've got your rent level wrong. It's as simple as that. And in the past, I've done£1,500 discounts, incentives, cashbacks at the end of a season, knowing that that was going to be a nightmare for the general manager to manage that building when the rebookers got a much worse rate than someone booking in August. But that was just because we need you to fill. We needed to fill. We saw a way to do it. And we took that decision and made it. And actually, we did okay out of it, I think, because people do expect it. But we really went for the events budget and looked after them. And I had good GMs, so I was able to mitigate any fallout there. But I do think that there's a lot of markets this year where we're already seeing that discounting. And it's not just Coventry or Sheffield. It's some of the newer cities that are showing signs of maturity, should we say. And I do think that's a good thing. think that you know we do need to make sure that investors can make a call fairly quickly on what that's going to do to their business plan whether or not they've got enough within the amp budget to be able to deal with significant discounts or whether they can you know push money into that marketing budget and then keep the rental and the wrap rate quite high but it's yeah like i said it feels like robbing peter to pay paul and and i do think that that will get will get seen on any kind of due diligence and would affect any valuations accordingly. But I know that in the past, it actually hasn't. I just think that people are looking for that kind of thing a lot more now, as some markets do reach a bit more maturity.

SPEAKER_00: 30:28

I think, as I've said before, an underwrite on a spreadsheet is only that, you know, the reality is bums in beds and, you know, and revenue, you can promise all you like on a spreadsheet in an underwrite. But the reality could be completely different and all aspects need to adjust if that doesn't become a reality.

SPEAKER_01: 30:49

If you are an investor and you have an operator coming to you saying, I can get you these rents, no problem at all, you're going to go typically with the operator that is going to give you the highest revenue and the lowest OPEX because that gives you the best business case and will get you the best opportunity for funding or whatever else it might be or the best opportunity for returns. And But that's a significant problem. And I don't think there's been, obviously, there's a load of due diligence that goes on with any of these investments. But I don't think there's been enough oversight of operators or operating partners and the sense checking of those revenue and OPEX assumptions. And all linked to the marketing budgets as well, because I see so many marketing budgets that are just woefully low. I know that agents and marketplaces are taking so much more of people's budgets these days. I reckon across the industry, it's probably about 30% of bookings are coming through agents and marketplaces. I think it's actually about 150,000 bookings a year in the UK. I sort of worked that out the other day. But But I don't think that that's what operators are accounting for. I think they quite often have to go back cap in hand and say, oh, can we have a bit more marketing budget, please? We did tell you this at the start, but this is what we're going to need. But all too often, I'm not sure they actually are saying that at the start. I think it's like... This is what we can run it for. This is how much revenue you'll get. Almost take it or leave it. So there maybe needs to be a bit more oversight and due diligence from investors to ensure that that is going to stack up. That's certainly not me saying that operators are duplicitous in how they are approaching new tenders. I think that there's a lot of investors that could get caught short here in tougher markets with aggressive, very aggressive revenue forecasts and therefore that they're writing into their business. plan so yeah it's it's it'll certainly be an interesting year this year that's for sure

SPEAKER_00: 32:49

it sounds like a product that we could all sell of um actually just helping those investors with their due diligence

SPEAKER_01: 32:55

certainly does well to be fair that is that's what you do that is a lot of what i do thanks very much for that nice little segue yeah no that that that is what i do to a certain extent but that's that wasn't a shameless plug it's just that i've seen it firsthand i i've seen a lot of the the management budgets that get put across my desk with any in or any development opportunity. And quite often I'm sat there thinking there's just no way that that kind of room in that kind of location is going to achieve that revenue budget. And there's no way it will do it with the OPEX that I've seen here and the marketing budget that's attached to it. So, yeah, I think there's a lot of really credible operators out there that are doing a great job and are much more accurate in their forecasting. But I think that we are in a stage where there's a bit of volatility in the market and investors just need to do a bit more due diligence overall in terms of what those budgets are looking like.

SPEAKER_00: 33:52

Well, I think we've all got on our soapbox a fair amount in this episode. We did promise at the beginning we were going to keep it short and we were going to go out and enjoy the sunshine. So I'm holding you two to that. And we will come back to these topics time and time again. Our main topic next week for episode 15 will be our feedback from the LD event. So hopefully we'll have loads of great insight and potentially some ways of concluding some of these discussions that we've had today. So thank you so much for listening, everybody. We've had some great input from the audience about topics to cover, which we will get to in future episodes. So please do keep them coming. Thank you again, and we will catch you soon. for episode 15.