Koloa Kai Direct Booking Agent Program

*Operational cost estimates include expected, cyclical expenses for routine service, maintenance, re-stocking, etc. of the rental property.
Description of Services & Fees

• Direct Booking Commission: 15%
  • Comprised of 10% booking commission plus 5% Advertising fee.
  • May supplement existing rental management agreement.
  • Advertising Only Service: Advertisement on up to 5 marketing channels, quotes, inquiries, and referral to owner for direct booking with existing management.
  • Note: This plan is for advertising services only, and is not a rental management service. 
  • Hawaii Travel Agency License: TAR 7175

How do we arrive at the numbers in the infographic?
Let’s look beneath the hood and check out how this will work for you.

Owner’s Net = Gross Rents – Operating Costs

• Gross Rents = The total amount of rents collected from your rental (tax not included – that is calculated separately for reporting purposes.)  This figure is generated by taking the Average Daily Rate (ADR) for the period and multiplying it by the number of occupied nights in that period.  A typical period is one month. 
• Operating Costs are broken down into the following areas:
  • Owner Expenses = about 3% of Gross rentals on average.  These are the basic costs associated with maintaining the property so that it can be used as a vacation rental.  This includes routine maintenance, cyclical upgrades to appliances & fixtures, etc.  
    
    [The Assumption made with regard to the calculation of Existing Manager and Booking Commission, below, is that the Existing Manager will continue to book 80% of the reservations and that Koloa Kai will supplement by contributing 20% of the reservations. ]
  • Existing Manager Commission = 48% of gross rentals X 80% of reservations taken = 38.4% of Gross Rentals
  • Direct Booking Commission = 15% of gross rentals X 20% of reservations taken = 3.0% of Gross Rentals

Let’s put it all together in an Example:

• Average Daily Rate (ADR): $165
• Occupancy: 70% – Existing manager + Koloa Kai Supplementing Reservations
• Period: 30 days

Gross Rentals = ADR X Occupancy X Period = $165 X 70% X 30 days = $3,465
Gross Rentals = $3,465

Next, let’s calculate the Operating Costs:

• Owner Expenses = 3% of Gross Rentals = 3% X $3,465 = $103.95
• Management Fees = 41.4% of Gross Rentals [38.4%-Existing Manager + 3.0% Koloa Kai] = 41.4% X $3,465 = $1,434.51

Operating Costs = Owner Expenses + Management Fees = $103.95 + $1,431.51 = $1,538.46
Operating Costs = $1,536.46

Now from Above, Owner’s Net = Gross Rentals – Operating Costs = $3,465 – $1,536.46 = $1,926.54
Owner’s Net = $1,926.54

To Calculate Owner’s Net (%), just divide the Owner’s Net by the Gross Rental.
Owner’s Net (%) = Owners Net ($) / Gross Rental ($) = $1,926.54 / $3,465 = 56%
Owner’s Net (%) = 56%