May 5, 2015 – Today’s travel trends put vacation rental (VR) professionals in an enviable position–they are in the right place at the right time. Guest demands, expectations and market trends are bringing many opportunities for revenue gains. What can VR operators do to leverage the trends? This:
- Focus on the personalized travel experience that guests are demanding in increasing numbers.
- Take the opportunity to turn OTA-caused “distribution disruption” on its head. As online travel agencies (OTAs) compete for booking dominance, vacation rental operators can leverage technology to capture OTA-sourced bookings and transform them into loyal guests for life.
As savvy vacation rental managers know, it takes more than good luck to succeed. The right place/right time advantage only translates into increased revenue with the right strategy executed. In the words of a leading vacation rental manager, “We have to make our brand stand out on all levels if we want to compete.”
Technology and best practices help VR operators do that. For example, NAVIS gives VRs effective customer relationship management (CRM) tools that:
- Collect and centralize guest data across all distribution channels (including OTAs) for fast, simplified responses that increase conversion.
- Identify the hottest leads among multi-channel inquiries for single-point replies.
- Create relevant, personalized one-to-one messaging for each point of guest contact.
With the right tools, vacation rental operators of all sizes can personalize interactions with their prospects from the very first inquiry. Operators can launch effective 1-to-1 email messages to guests based on when they prefer to travel, where they like to stay, and their preferred activities.
It’s all about them, not you!
Led by Millennials, the vast majority of today’s travelers (66%) are between 18-48, according to Hudson Crossing. Baby Boomers make up another 29%. Their stated preferences make them prime VR prospects:
- They seek to explore their destination and soak up local ambience.
- They often combine business and pleasure, commonly referred to as bleisure.
- They frequently travel with multigenerational friends and family, often called framily travel.
- Most of all, they want a personalized experience that caters to their individual tastes and interests.
VRs are perfectly positioned to deliver an experience that reflects trending tastes, such as homes and condos nestled in neighborhoods; properties that encourage exploration of local venues; and a warmer, more personal ambiance than a transient hotel stay.
Mt Hood Vacation Rental converts increased OTA competition to repeat business using NAVIS lead management
“OTA reservation growth has been scary in our markets,” admits Betsy LaBarge, president and CEO of Mt. Hood Vacation Rentals (MHVR). “Many vacation rental operators in our area feel they do not have the brand awareness necessary to compete, so they rely completely on OTAs.”
LaBarge oversees 30 units at Mt. Hood, located 50 miles southeast of Portland, Oregon. Her company has been a NAVIS customer for 15 years. Mt. Hood Vacation Rentals is in growth mode and competition has heated up in the past year. The local market’s vacation rental supply has tripled due to growing popularity and the past economic downturn that prompted more owners to rent out their vacation homes.
Like many VR operators, LaBarge works with a few specific OTAs to meet the competitive challenge, although many OTAs compete in her market. “One online site targets budget traveler. This is not a fit for our $500/night units, so we list a handful of our most popular, lower priced rental homes here. We hand pick individual units to list on our OTA sites, then convert the guests to Mt. Hood Vacation Rental clients for repeat business. We do this during their stay by delivering a personalized local experience they value. They remember us, not the OTA.”
Vacation rental industry leader Alan Hammond recently confirmed the market trend. “In the race for a competitive edge, control of the marketplace, and profit from vacation rentals, OTAs, rather than promoting management brands, often seem to undervalue or ignore…guest services.” In place of personal service, they offer volume business to vacation rental operators. But once they are established in an industry like vacation rental, OTAs often increase subscription fees, add transaction charges, and consolidate their power as large companies swallow up competitors.
Vacation rental operators are countering OTA competitors with tools that help them automate and strengthen what they do best – create a personalized experience from the first inquiry contact.
Intracoastal Rentals is known for its attractive units along North Carolina’s beaches. Luke A. Waddell, Operations Manager for Intracoastal said, “We list units online with VRBO and several other channels. We use NAVIS’ Listing Lead Management solution to consolidate incoming leads from the various web sources. The online leads come directly into our NAVIS reservation system, which indicates the unit, date, and other details important to the booking. This helps us respond to leads much more quickly. Our faster lead response increases our conversions. With NAVIS’ technology and coaching, our inbound call conversions increased from 20 percent to 43 percent.”
Automated email response boosts conversion rate – ‘We do not miss leads’
Mt. Hood’s LaBarge implemented NAVIS personalized lead response solutions to take back control of Mt. Hood Vacation Rentals’ guest data and respond to inquiries faster for a higher conversion rate:
- NAVIS’ Listing Lead Management (LLM) system captures information from OTA inquiries in NAVIS’ Narrowcast reservation sales system. Inquiries are color-coded to identify the source of the lead for fast, single point response to increase conversions.
- LLM consolidates data from multiple inquiries into one “household persona” to identify preferences for personalized communications.
- LLM alerts reservation staff to new inquiries on the NAVIS Narrowcast Dashboard with a real-time summary of the prospect’s information and inquiry details.
- When staff are unavailable, NAVIS’ Auto Agent auto response system generates an attractive, personalized email based on the requested date, unit, and property detail. NAVIS Narrowcast tracks whether the prospect opened or forwarded the email.
- Unlike responses generated by OTA sites, “Auto Agent responds with an email bearing our logo, our branding, and our units only,” explains LaBarge. “If the requested property is not available, Auto Agent sends a response with photos and descriptions of similar units. If we’re sold out, the email offers an apology and alternate dates.”
“We do not miss leads with LLM,” continues LaBarge. “The consolidated information allows us to understand the prospect’s style and needs. OTAs can’t match this. We respond faster and that equates to more business.” Numbers tell the story. OTAs generally log a 6% conversion rate. LaBarge reports a 10% conversion rate with her Auto Agent responder.
Personalized service = loyalty: ‘People want to be recognized and valued’
NAVIS Reach real-time CRM tracks and responds to specific guest preferences. Effective Reach CRM data collection from multiple third-party sources–whether online or over the phone—builds a close relationship based on guest history so that communications from LaBarge and her team always reflect 1-to-1 messaging based on each person’s preferences.
Tracking guest preferences is especially important when a VR’s “season” is scattered throughout the year. That’s the challenge for Joyce Warwick, reservation manager for Georgia Mountain Rentals, north of Atlanta. She handles 90 privately held homes and has been a NAVIS customer since August 2014.
“Summer is high season,” Warwick says. “We’re also busy in October and early November during the local Oktoberfest. Our larger homes fill during winter holidays and the 1-2 bedroom units are popular for Valentine’s Day. Although some units are good year round, we have a very slow winter period.” Under those circumstances, guest preferences and loyalty are crucial. “We have lots of repeat business,” she says. “Creating a personal, local guest experience sets us apart. Even if guests find us through an OTA, they enjoy their stay and often book directly with us for the following year while they are here.”
Mt. Hood’s LaBarge says that “NAVIS Reach helps us gather guest data so we can track why they came to us. When a guest calls, we can see that person’s lead form with information about past stays. We understand a guest’s needs based on what they did their last time with us. This strengthens the relationship. People want to be recognized and valued.”
Waddell at Intracoastal Rentals agrees, “We rely on NAVIS’ systems to help us recognize our repeat guests the moment they call in to ask about availability. Our inventory is unique, each unit is different. The NAVIS system communicates with our phone system to recognize a caller’s phone number and instantly display their stay history, preferences, and units. Our agents are well trained and coached by NAVIS, but having caller information in front of our staff establishes instant recognition and makes their contact with us more personal. NAVIS is important to our high conversion rate.”
NAVIS Reach boosts VR’s conversion rate to 25-60%
NAVIS’ Reach CRM also supercharges Mt. Hood Vacation Rentals’ marketing operations. “We used to use Excel and crunch the past stay data and numbers ourselves,” says LaBarge. “Now we store guest attributes in our NAVIS Reach database. We know what our guests like.” She and her team fine-tune email marketing to touch each guest based on factors such as special events, leisure activities, or favorite season.
“We have 150 campaigns, each with a unique toll-free number generated by Narrowcast to track reservations and the revenue they generate,” explains LaBarge. “That includes specific numbers on Facebook to track social media promotions. Imagine knowing how much a Facebook posting is worth. These leads are recorded in NAVIS Reach to measure each campaign’s success, and for future marketing.” NAVIS Reach makes small, targeted campaigns an efficient marketing option. “I may have emails going to only 100 people,” she says, “but my campaign makes them think of us and they do come back.”
This type of revenue measurement is key to guest-centric email marketing, according to Jason Ring, NAVIS Data Marketing System Consultant. “Old email functionality does not trace money,” he explains. “Today we measure each campaign’s revenue, open rates, and click-throughs. Operators can invest their marketing budget in the most profitable channels.”
Mt. Hood Vacation Rentals also learned from NAVIS, and internally trains new hires and coaches its reservation team on best practices to book prospects. Again, conversion numbers tell the story. “Most team members start out with a 25-30% conversion rate,” according to LaBarge. “But since March 2015, April inbound conversion for the team through today is 47.9%. I can tell you our average is 46.7%. One team member converted at 70% and paid her entire rent with her bonus. The NAVIS system absolutely works for us.”
With an effective strategy and the tools to implement it, vacation rental operators are making the most of their right place/right time advantage in the evolving travel market. They prove the adage that the difference between challenge and opportunity is a shift in perception.
Mike Harrington worked with Stewart Couch at Hatteras Realty before joining Resort Realty of the Outer Banks in 2007. At Resort Realty he oversaw over 600 vacation rental homes and led daily operations and strategic growth initiatives for the company. Harrington currently serves as the President of the North Carolina Vacation Rental Managers Association (NCVRMA), sits on the Board of Directors as Treasurer for the national Vacation Rental Managers Association (VRMA), and is a member of East Carolina’s University’s School of Hospitality’s Advisory Board.
In addition, security breaches affecting businesses with an online presence or actively involved in ecommerce have become commonplace and well publicized.
Pack has more than 13 years in the Outer Banks property management and real estate sales industry.
