2021 Will Be the Year That Managers Stop Being Passengers and Start Piloting Their Own Marketing Futures
The story of the past decade in vacation rentals has largely been dominated by two companies, Airbnb and Expedia, both of which, intentionally or not, have begun distancing themselves from the term “vacation rental.” In 2020, both companies went into hyperdrive.
Airbnb’s IPO dominated headlines in 2020, and with good reason. As a comeback story, it is hard to beat going from its valuation being cut in half one month to just a few months later seeing it exceed $100 billion in its first day of trading. Yes, the company which many had left for dead earlier in the year had become, at least for a time, worth more than rivals Booking.com; Expedia; and even Marriott, Hilton, and IHG, combined!
When it came to distancing themselves from vacation rentals, Airbnb and Expedia each made a move that stood out. The first move was the complete absence of the term from Airbnb’s S-1 prior to going public. For a category that accounts for the majority of revenue in the short-term rental market, this seemed to be an odd oversight, though clearly it did not deter many investors.
The other move was Expedia’s retiring of the HomeAway brand and going all-in with the Vrbo brand, rather than what the acronym had originally stood for: vacation rental by owner. This could be seen as a nod to the more professional nature of the business or, like with Airbnb, distancing itself from being pigeonholed into vacation rentals as a category.
What does this mean for vacation rentals as an industry and for professional vacation rental managers specifically? As we welcome a new year, it is clear that—as with so many other sectors, such as office work, live events, and education—the year 2020 and the COVID pandemic that defined it will change vacation rentals in the coming decade in some dramatic ways.
Prior to 2020 and COVID, many managers had struck a Faustian bargain with sites like Airbnb, Vrbo, and Booking.com, in effect saying, “We will rely heavily on you to drive guests to our homes.”
And for a decade this largely worked. Demand for short-term and vacation rentals grew daily; and, combined with the billions of dollars (literally) these companies spent each year to attract guests, the deal was win-win in many ways. Sure, there were grumblings about the take-rate of the sites, the opacity of and changes to their algorithms, and indifferent customer support, but these were more pet peeves than existential concerns.
Then, COVID hit, and with it came three main obstacles:
Lower Search Volume
The first obstacle was the disappearance of search demand. With health concerns and at times outright bans on travel, people simply weren’t searching for new and exciting places to visit. While a rising tide lifts all boats holds true and had held true as search demand climbed for vacation rentals, the opposite is just as true, that a receding tide leaves all boats high and dry in shallow water.
Decreased Marketing Spend
The second obstacle compounded issues with the first. As virtually every business looked to cut costs during the pandemic, the easiest and most obvious place for booking sites to save money was in marketing. Since search volume was already decreasing, this decrease in spending meant that booking sites were attracting a smaller piece of a smaller pie. The sites simply sent fewer and fewer prospective guests—those few who were still searching—to their properties.
The third obstacle may have done the most long-term damage to the relationship between professional managers and listing sites. Some of these sites, without consultation with their suppliers (managers and hosts), chose to prioritize guests when it came to refunds, unilaterally changing cancellation policies after the fact. This move alone put many livelihoods at risk and caused damage yet to be repaired.
As with any crisis, however, this one comes with opportunities.
The flip side to less spending for marketing from the big listing sites is that it has given many professional vacation rental managers the ability, and perhaps even made it necessary, to drive their own search traffic to their properties, outside of the listing sites. In normal times, there is always an open question of what the most efficient way is to attract new guests.
The year 2020 was far from normal, and, as 2021 ushers in a new normal of sorts, this remains a viable option for many property owners and managers.
Another big opportunity—and a differentiator for any professional vacation rental manager going forward—is the ability to creatively stimulate and generate new demand for what they offer.
I have written in the past about the opportunity and need to not just be reactive to demand but also proactive in generating it. For example, managers in Blue Ridge, Georgia, created the Blue Ridge Blues and BBQ Festival which turned the destination’s slowest weekend into one of the busiest for vacation rentals and the local economy as a whole.
However, creating an event isn’t the only way to increase demand. In 2021, you can and should look for creative ways to generate your own guest demand. But where to start?
A great place to start is with your prior guests as the people who stayed with you in the past are more likely to stay with you again.
How good have you been about collecting information about them? Do you just have the email of the people making the bookings, or have you found ways to get more information on more of the guests staying at your properties?
This information is a gold mine. If you are collecting information correctly, you know when they booked, what type of property they chose, when they came, how long they stayed, how many people came with them, and who they are. Ideally, you know how they found you in the first place and what they liked (and did not like) about their stay. Communicating with these prior guests via relevant email and direct mail is an efficient and cost-effective way to start generating new demand.
Marketing campaigns targeted to these guests are just the tip of the iceberg—like “You liked us in the summer, but you will love us in the winter” or “Cabins are not just for vacations—a short drive and you and your family can work and study remotely in the beautiful setting of . . . ” or “Did you know that you could get two weeks for the same price you paid for one last summer if you come visit us in the fall?”
Prior guests may have a lot on their minds and may not be proactively looking to book with you. However, with a well-designed and well-timed nudge, they might just jump at the opportunity to stay with you once more. Seize the opportunity!
As you test these strategies, you will learn what works for your guests and thus for you and your business. Double down on what works, cut what doesn’t, and launch new experiments as you go. You can also begin to group guests into “personas” and start thinking about where similarly minded prospective guests might be found that you can market to. The opportunities are virtually endless.
All of this is to say that in 2021, more than ever, you will need to “own” each guest and each relationship. As with anything worthwhile, it will take a lot of work but will be well worth it.
When you are taking off into smooth skies, it is fine to be relegated to being a passenger in the jump seat of the plane. As you hit turbulence or even find yourself coming in for a crash landing, you may realize that you need to upgrade to the pilot’s seat and learn to fly for yourself—and fast.
The year 2021 will be the one in which more professional managers earn their wings. Will you be among them?