While summer means time off for many students, it can be time without revenue for student housing departments and owners. Here’s what some facilities, universities and owners are doing to fill the void in summertime.
As students prep for final exams and make summer vacation plans, many student housing properties, on- and off-campus, begin preparing to fill a void — the vacancy void created by the absence of students. While approaches and resolutions differ by market for on-campus and off-campus housing, both types of properties face the same cyclical dilemma of maintaining occupancy levels throughout the non-academic months.
Conferences & Camps
Many university housing departments and privately owned student housing properties have established a presence in the conference and summer youth program businesses, which proves successful at maintaining occupancy levels throughout the summer.
“This year, Penn State University will host 140 summer conferences, 80 of which are youth sport camps,” explains Conal Carr, director of housing operations at Penn State University in State College, Pennsylvania. “That comes out to 31,268 guests staying for 101,026 nights.”
The conference and youth camp businesses are very lucrative for student housing properties and on-campus housing departments and bring in a sizable amount of revenue.
“In terms of summer conference programs, UCLA probably has one of the largest conference programs in the country,” says Jack Gibbons, associate director, office of residential life at University of California, Los Angeles (UCLA), in Los Angeles. “We stay pretty active and at times we’re full — not at full 9,400-bed occupancy, but we’re 7,500-room full.”
Additionally, UCLA’s aggressive summer program brings in approximately 10 percent of the housing department’s revenue, which helps to decrease housing costs for students during the academic year.
This added revenue is such a driving force at UCLA that conference and youth camp programs are taken into consideration during the planning, development and construction process on campus. Although students are the university’s primary audience and focus, new residential buildings are planned and developed with the school’s summer conference program in mind.
Gibbons explains that different residential plans and facility amenities, like meeting space and audio-visual equipment, allows for the accommodation of various conferences and youth programs. While youth camp attendees could be accommodated in the traditional double- or triple-occupancy dormitory-style residence hall, with a communal restroom, adult conference attendees would prefer private suites and private baths. UCLA’s housing portfolio offers both options, which makes it a popular conference location for local, national and international programs.
During the summer, UCLA’s residential halls operate much like a conference hotel — offering linens, maid services and other amenities for conference and camp guests, depending on the negotiated terms. This personalized service coupled with the location and amenities helps to attract large annual conferences, such as programs for the California Teachers Association and the Federal Bureau of Investigation.
Along with offering typical hotel services, properties with dining facilities add an extra amenity to the package for conferences and camps. Many universities and student housing properties offer dining and meeting facilities that are included in a neogiated all-inclusive rate.
Norb Dunkel, assistant vice president and director of housing and residence education at University of Florida’s (UF) Department of Housing and Residence Education in Gainesville, Florida, explains that the popularity of UF-hosted conferences is so great that the university typically has to turn down one in every three requests, but student priorities are still on top.
“With space being limited as it is, our priority is to projects and summer session students,” says Dunkel. “Whatever space we have left goes to camps and conferences and that has proven to work very well and be very beneficial to us.”
Even though conference and camp requests are high, UF’s first priority for summer months is academic, whether housing summer session students and orientation students or other university-related programs. Additionally, the university uses the summer months for capital improvement projects across its housing portfolio.
Taking a portion of the housing portfolio offline for repairs also helps universities maintain occupancy levels throughout the summer, although it can prove challenging when the housing is in high-demand for summer programs.
“The greatest challenge is providing deferred maintenance for the buildings since they are used throughout the summer,” notes Carr. “We generally take six to eight buildings offline all summer for major projects and another eight to 10 for parts of the summer. The demand for space is great, and, at times, we need to forgo a simple project, like painting, since we can’t take the building offline.”
Properties also face additional challenges in the conference and camp business, especially during the recent economic recession.
“Although conference services help boost summer occupancy and revenue, it can be difficult to forecast conference revenues as these groups tend to be more sensitive to systematic risk especially downturns in the economy, state and federal budgets, or state legislation,” says Jerry Wojenski, assistant general manager at Education Realty Trust’s University Towers in Raleigh, North Carolina.
Beyond revenue challenges, properties have to create a balancing act between maintaining summer occupancy levels, room turnovers, and preparing and renovating units. For Allison Kenney, assistant general manager with Allen & O’Hara Education Services Inc. in Chapel Hill, North Carolina, careful planning is the key to successful execution of summer programs at Granville Towers University of North Carolina – Chapel Hill. She explains that the company has been able to renovate several floors over the summer months while still maintaining a successful summer camp and conference operation.
“We also devote a lot of attention to where our summer camp and conference groups are assigned,” Kenney says. “During the peak season, some of our camps reach an enrollment of 1,000 or more.”
The Art of Leasing
While catering to conference and camp attendees is quite profitable for many student housing operators — both on and off campus — other operators cater to seasonal residents by offering short-term leases and retain full-year residents by offering 12-month leases.
“Our seasonal short-term leases are very popular with student interns from other universities and colleges that are in a particular city for the summer to complete an internship at local companies,” says John Iannuzzo, vice president of marketing with Campus Living Villages in Houston.
By catering to summer intern students, and the like, properties continue to attract their core demographic audience while maintaining a reasonable occupancy level during the summer months.
To attract summer renters, some companies offer promotional summer rates for short-term leases, which is beneficial to both the operator and the renter, while other companies realize that short-term, summer housing can easily bring in above-market rates as space and time are at a premium. Either approach can be profitable, but knowing your local market is key.
“We exploit every opportunity for our summer occupancy programs, from summer camps and summer session at school, to exchange programs and student storage opportunities. You need to customize your services to the local market,” notes Michael Hanley, senior vice president of operations at Austin, Texas-based Campus Advantage.
Summer residents, especially students and interns, look for properties that make the short-term transfer and move as easy and painless as possible. Providing comprehensive amenities and utility packages for short-term leases can make properties attractive to the summer resident.
“Our buildings are amenity packed,” says George Scott, president of Educational Housing Services in Brooklyn, New York. “Utilities, more than 100 channels of cable, Internet access, free local and long-distance phone calling and fitness centers are provided in an all-inclusive rate.”
These amenities, coupled with Educational Housing Services’ property locations throughout New York City, allow the company to maintain occupancy levels during the summer by catering exclusively to summer interns and students. By offering amenities properties can take advantage of their locations for possible tourists and travelers, especially if the management is willing to operate in a pseudo-hotel mode for the summer months. University Park in Salisbury along Maryland’s coast caters to travelers by offering unit rentals by night, week or month. Additionally, the property supplies linens, coffee makers, televisions and toiletries, along with the full-size kitchen and bathrooms in each unit.
Another way to ensure occupancy levels and cash flow is by only offering 12-month leases regardless of the academic year. Although building a 12-month student base is a gradual process.
“Maintaining the summer occupancy comes with time,” explains Meghan Saliba, marketing and new business development associate with Raleigh, North Carolina-based The Preiss Company. “After we establish that our properties offer 12-month leases, the students just begin to accept it as fact.”
Many student housing properties, especially off-campus properties, are continuing to offer more 12-month leases as students and residents become more independent and integrated into their college location through jobs and social networks. Companies are also pushing full-year leases by offering shorter leases at a higher rate.
“Many students want leases that end in May after graduation — at University Park, we charge a premium for that,” ays Laura Cantrell, community manager with Education Realty Trust Inc.’s University Park Student Apartments in Salisbury, Maryland. “In order to have the contract end in May, students have to pay the equivalent of 11 or 12 payments split over 10 months.”
Overall, student housing properties have faced the challenge of low occupancy during the summer head on and tapped into markets that can benefit from the properties vacant rooms and amenities. Through planning and recognizing and fulfilling its local market’s needs, properties are able to have successful seasonal housing periods that positively affect the property’s bottom line.
“The summer occupancy does not have a negative impact, as we budget to have more vacancies during the summer months,” notes Carleigh Wilt, leasing and marketing manager with Allen & O’Hara Education Services in Lock Haven, Pennsylvania. “There is, of course, a positive impact on the budget when our property, Evergreen Commons, has less vacant beds and more conference housing than anticipated.”
— Amy Bigley