The coronavirus pandemic has transformed the way businesses operate – including those in land asset management. Here are four ways the pandemic has impacted the industry.
Land Transactions & the Cloud
At the beginning of the pandemic, there was uncertainty about how land asset transactions would be affected. These deals are the backbone of the land asset management industry, so this was at the top of everyone’s minds.
So far, we’ve continued to see a steady flow of transactions and the application of LITAS combined with LITAS BOOST, the due diligence platform behind most of the industry’s major transactions. But while land asset transactions haven’t slowed, they do look a little different than they did at the beginning of 2020.
Like every industry, in-person meetings are no longer the way most land asset deals happen. Instead, virtual meetings have taken over. But for virtual land transactions to take place, businesses need access to the necessary data and documents online. Fortunately, cloud-based solutions have made this possible.
Cloud-based systems offer a number of benefits, including better accessibility and flexibility. Land asset managers with access to these technologies are able to manage transactions from anywhere. While this was an important benefit before, it’s become indispensable as most of the industry is working from home.
When the country went into lockdown, many asset managers were worried about how it would impact their recreational leases. This non-timber income is really important to these businesses, and there was no telling if stay-at-home orders and a national recession would hurt renewals. The prospect of losing customers or of customers being unable to make payments were both real possibilities for much of the industry.
Fortunately, based on our Recreational License Management System data, we haven’t seen a significant impact from the pandemic on leasing. Renewals stayed strong at around a 99% renewal rate, and most new leases were picked up.
With the pandemic starting right at the lease renewal season, land asset managers used a few strategies to accomplish this. Many were able to keep fees the same as previous years to help customers. Some managers offered discounts or extensions to customers who might have had trouble making payments. This helped keep leasing rates high with minimal impact on revenue. Some land asset managers were even able to keep their annual increase fees in place as planned. If anything, access to recreational land and the demand for it is increasing as the pandemic continues to restrict other activities.
Another contributing factor was the role of online leasing. Online leasing platforms allowed customers to browse and purchase leases while stuck at home. They also made them more accessible and convenient than in-person or mail-in orders.
Going forward, it’s likely that the importance of online leasing will increase. And it’s easy to see why.
eCommerce consumer sales increased 44% in Q2 in this year. Consumers have never been more accustomed to buying things online. So, it’s no surprise they are enjoying the convenience of leasing land online.
Overall, high renewal rates and steady leasing income were a welcome surprise. Considering that six months ago it looked like recreational leasing income might disappear, this is a great sign of how the industry has been able to weather the storm.
eCommerce Payment Platforms
In addition to offering pricing and payment options, some businesses have also started using eCommerce platforms to streamline online payments for recreational leasing.
As more recreational lease transactions move online, asset managers are in need of a centralized place to manage the payments. Because of this, more businesses than ever are using a simplified eCommerce platform to keep expenses low, reduce administrative work and increase efficiencies.
eCommerce platforms also make it easier to complete lease transactions, which increases leasing rates. Recreational clubs and leasers were very pleased with the online payment option, and most took advantage of this opportunity.
Early adopters in the industry were already implementing eCommerce platforms. But the pandemic has accelerated the rate of implementation for this new technology. Based on data we’ve seen in ONEConnect, the industry as a whole has seen a major increase in utilizing online payments.
Looking forward into 2021 and beyond, we expect leasing to continue to play a pivotal role in recreational leasing and for more asset managers to adopt the technology.
New Uses for GIS
Over the last 20 years, GIS has become a vital technology for the land asset management industry. But this year we saw it emerge as a powerful crisis management tool.
Public health agencies and organizations around the world are currently using GIS mapping to track and trace the spread of the coronavirus. For example, the Center for Systems Science and Engineering at Johns Hopkins used arcGIS to create a COVID-19 dashboard to visualize the spread of the virus.
More recently, government agencies and technology companies are using GIS to track wildfires in California and the Western U.S.
Looking forward, it’s possible these creative applications will inspire new and innovative GIS applications for land asset management.
Overall, the land asset management industry has been able to weather the storm of 2020. New technologies have made it possible for asset managers to maintain or even grow their business during times of uncertainty. It’s likely that these events will serve as an impetus for the industry to modernize workflows and embrace innovation.