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Positive Employee Experiences Start with Your Culture

By
Sue Jones
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1

Providing great experiences for your guests and homeowners is key to the success of your property management business. But what about your employees? How would you rate their experience? Just as marketing has moved beyond looking at guest satisfaction to looking at the total guest experience, it is now time for businesses to refocus their efforts on strategies that build on and continuously improve their employees’ experiences.

Understanding your employees’ experiences, what they encounter, what they observe, and how they feel on their path in your business is a vital trend for 2018. Employees’ experiences begin with their first touch point and carry through to their last—recruitment, onboarding, daily activities, ongoing education and training, career opportunities, succession planning, and termination. The experience is more than what annual employee surveys or performance evaluations reveal. It is the employees’ daily journey and whether they like it or not.

Providing an engaging employee experience is a differentiator for you and your business. Strong employee experiences drive employee engagement, which in turn helps you attract and retain a skilled workforce.

 

Culture

Culture is what we call the office vibe. Once thought to be a fluffy idea, creating the culture you want has become a business priority. It plays a significant role in how your employees feel and whether they enjoy or hate coming to work each day. Culture includes organizational structure, leadership style, compensation and benefits, conflict and resolution management—anything that impacts your employees and their interactions in the workplace.

Your objective is to create a road map that people can follow. Organizational culture plays a key role in your success. What do you value in a leader? What do you value in the people who work for you? What are the most important characteristics you want to embed in your business to create a culture for success?

A great culture is aligned with your company’s business goals and is well communicated. A few warning signs that might indicate of lack of alignment include the following:

  • People make excuses and blame others for lack of progress.
  • If you ask for opinions on a business decision, people don’t speak up.
  • In meetings, people bring up issues that you thought were resolved.

From a cultural viewpoint, one of the greatest challenges is to unite employees from diverse backgrounds and experiences to work together to achieve the desired results. Creating a positive and productive culture gives you a competitive advantage.

 

Step 1: Define Core Competencies

Do you know which key competencies are required for success in your business? For example, success might look like an employee who delivers on commitments to goals and results consistently. These employees take risks when appropriate and persevere through daunting obstacles. Ultimately, these employees are intrinsically motivated to work long and hard to achieve the needed results.

What other competencies are required to create a positive and productive culture in your business? Take time to identify what is most important to you, your business, and the culture you want to create to determine which competencies are core to your business. Core competencies such as business ethics, integrity, innovation, problem-solving, and customer service typically rise to the top of the list. What’s at the top of your list?

 

Step 2: Assess Your Current Employees

Do they have what it takes? What are your nonnegotiables? Remember, you are seeking the right people with the right competencies in the right place at the right time. There are many personas in the workplace—underachievers, good performers, strong managers, and high-potential leaders, to name a few. Developing an evaluation form to assist you with assessing your talent is a great place to start. The objective is to measure their success based on core competencies: how they perform, their areas to strengthen, and their potential for future growth.

Another approach to consider when assessing your employees’ performance is to think about it from a succession planning perspective. Do you have the people you need to move into other positions, or do you need to look externally? You can assess your employees’ potential for future growth in the company by identifying their performance as one of the following: too new to assess, fits best in position, promotable to a new position, or replaceable. This information will provide you with a road map for succession, identifying if you have the skill sets and talent in house to develop or if you need to look externally for certain positions.

 

Step 3: Find the Right Fit

Good training will not make up for bad selection. A key motto in the small business world is to hire like your life depends on it—because it does. Tim Ferriss, author of The 4-Hour Workweek, says that hiring the right people can make or break a company. Hiring is a time-consuming process, one that pays dividends when done right. Be patient. Even though you need to hire quickly, don’t be hasty.

One of the most important decisions you make is who to hire. Your new hire represents you and your company. Defining company core values in advance of designing your hiring plan is a critical component for success. Start interviewing for core values and not just the essential functions of the position and the experience of the candidate. Create a realistic hiring timeline that plans for being patient; it takes time to find the right person.

Don’t be afraid to hire someone who knows more and has more experience than you. Often, we think of employment diversity as those employees who are of a different race, sex, or age. Diversity can also mean differences in thinking, ideas, perspectives, and personalities.

Having diversity in the workplace has benefits. Incorporating diversity into your daily operations broadens your thinking, generating different ideas and perspectives. Each employee’s perception, approach, ideas, capabilities, and resolutions will be varied. These differences will produce an outcome that is more likely to reach a broader audience and capture new customers than one or two employees who think similarly.

 

 

Step 4: Manage Performance

Hold employees accountable. Identify expected performance levels, and encourage high levels of performance. Measure individual performance, evaluate, and provide meaningful and timely feedback. Provide employees with assistance, and reward or discipline when necessary. Holding employees accountable is essential to managing performance.

What is accountability? Accountability is delivering on commitment. It is the result of responsibility for an outcome beyond tasks. And it is necessary in all roles within the organizational structure. How do you create a culture of accountability? Harvard Business Review published “The Right Way to Hold People Accountable” by Peter Bregman, who states that there are five “clear areas” to hold people accountable the right way—expectations, capability, measurement, feedback, and consequences—and often these areas lack clarity in the workplace.

Begin with clear expectations. Be clear about the outcome you want, how you’ll measure success, and how people will achieve the outcome. Have a conversation, and plan for your people to be a part of it. Great employees will offer ideas and strategies to achieve. After talking about it, write it down and share it.

Have a clear set of capabilities. What skills do people need to meet expectations? Do they need resources? Do they have the skills? If not, can you provide or teach them? If they don’t have the capacity, find someone else. Set your people up to succeed, not fail.

Create clear measurements. Failure is preventable. During the clear expectations part of this process, agree on weekly milestones meetings to monitor progress. If they are not meeting their targets, then act immediately. Brainstorm a solution, then respond to get each employee back on track.

Give clear feedback. Provide timely and honest feedback. With clearly defined expectations, capabilities, and measurements, feedback is factual and easy to deliver. Are employees delivering on their commitments? Are they working effectively with other people? Do they need to increase their capabilities? Provide feedback weekly. Helpful feedback is more useful than being nice.

Share clear consequences. If you have been clear in these areas, then you have reasonable cause to act. You have three actions: repeat, reward, or release. If you do not feel confident in your leadership, repeat the five clear areas to clarify. Reward people if they succeed. If you are certain you have followed the five clear areas, and the person has not been accountable, then he or she is not fit for the role, and it’s time to release (change roles, termination, etc.).

Focusing on improving accountability will increase your employees’ performance and productivity.

 

Step 5: Train and Retrain the Right People

Foster a culture of training and development. Create and maintain a culture that values and respects individuals. Identify future needs and how to develop individuals to fill these needs. (This is succession planning at its finest.) Providing ongoing training and development opportunities is a key strategy to grow and retain your talent.

 

Key Takeaways

The power of employee experience shows that its return on investment may be more than you think. Employee experience programs must directly link to your business’s mission, core values, and goals and objectives. Finding ways to continually engage employees in your business has a direct return on investment on the loyalty, productivity, profitability, and retention of your guests, homeowners, and employees.

Make your employees’ experiences a priority, and watch magic happen.

Long Live the OTA! 5 Major Issues Marketplaces Solve for You by David Angotti

By
David Angotti
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22

It’s time to have a difficult conversation: listing sites are not the enemy. If we choose to form an alliance rather than complain, online travel agencies (OTAs) can be one of our strongest allies. The return on investment (ROI) these channels produce is nothing short of amazing.

The OTAs and listing sites are a huge part of our success. In fact, many of us would not have successful businesses without them. Let’s explore a few of the many ways OTAs contribute to our ongoing success in this always-changing industry.

1: Brand Discovery and Web Standardization Issues

In a world without HomeAway or Airbnb, how would a potential guest efficiently find your brand or a vacation rental? Although I’m familiar with the industry, I still turn to listing sites to find rentals for personal and business travel. Why? When I’m shopping for a vacation rental, airfare, or a hotel, I don’t want to go through the hassle of visiting dozens of sites to compare my options. Instead, I want to quickly find an upscale property with a specific number of bedrooms, a private pool, and a great location.

Even if I wanted to book direct, the lack of usability on many websites is a major deterrent. How quickly can I quote and book a property on your site? When I start on the homepage of VRBO, I am less than thirty seconds away from a huge list of properties that are organized with the most relevant listings first. In addition, I can see transparent and full pricing as soon as I click each listing.

The entire checkout process, if fully optimized, can be completed in two to three minutes. VRBO, Airbnb, and the other major listing sites employ the best machine learning and conversion optimization minds in the business to maximize the chance of converting a website visitor into a sale.

2: Effortlessly Solve Confidence Challenges

Even if a potential visitor finds your site and usability great, there is a brand confidence challenge that must be overcome to produce a booking. People inherently distrust reviews displayed on a brand’s own products for good reason; those reviews are often cherry-picked or manipulated.

As most property managers know, removing a negative review from a listing site is nearly impossible. But removing a review on our own website can be as simple as clicking a “hide review” button. When guests land on a highly-trusted brand like Airbnb, they assume the reviews they see are authentic and representative of the property.

In addition to the problems with reviews, consumers are understandably uncomfortable entering credit cards online with brands they have never used. The advertising campaigns and branding efforts of companies including Airbnb, HomeAway, and Booking inspire confidence with consumers and add legitimacy to our entire industry.

3: Benefit from Big Brand SEO

If you believe you can easily outperform an OTA’s search engine optimization (SEO), you are dead wrong. As an SEO expert with over a decade of experience, I assure you that this is a complex lead channel that is more about branding than just paying a few thousand bucks for an “SEO-friendly website.”

In 2018 and beyond, building a sustainable brand must be the foundational element of your SEO campaign. Don’t believe me? Ask any small e-commerce brand that competes with Amazon how those meta descriptions are working out. Google understands that consumers’ needs are much deeper than title tags, meta descriptions, or alt attributes.

Today’s online shopper wants quality reviews, a great selection of products, fair prices, and fast shipping. When a consumer shops for a television, Google’s data, machine learning models, and algorithms all know that the consumer would rather see Amazon than a small company.

By design, Google and the other search engines want to serve the absolute best content for a given query based on the user’s intent. If a user searches “vacation rentals in Destin,” the likely intent is to find a vacation rental that perfectly meets the user’s needs at the best price.

No matter how big your brand is, it pales in comparison to the 5,000 listings that VRBO offers in Destin. VRBO is the Amazon in Destin. At the aggregate level, users strongly prefer the predictable inventory quality and shopping experience of VRBO over smaller brands.

Search is a zero-sum game, which means there are an extremely limited number of winners. For your brand to win, another brand must lose. There are over 200 factors that determine a ranking on Google, and the listing sites have whole teams with one job—ranking for the best terms that produce bookings.

The huge success that listing sites inevitably log due to budget, skill, and brand experience will definitely benefit each property manager who chooses to list properties.

4: Leverage Economies of Scale for Growth

The average vacation rental manager fails to utilize dynamic retargeting, triggered emails, email remarketing, and psychographic targeting. Why? Most companies do not have the budget to hire in-house talent for those roles or to hire qualified consultants. Listing sites use all of those tactics and then some.

With pay-per-click (PPC), the more properties you have, the higher your chances of conversion success. The property manager who only offers twenty-five properties may only have five with availability and none that are pet-friendly for a given set of dates. Because the appropriate inventory is 100 percent booked, that property manager has zero chance of converting the pet-lover into a paying reservation.

On the other hand, a site like Booking.com may have hundreds of pet-friendly properties available for the same dates. That economy of scale nearly guarantees that the large listing sites will be able to drive more bookings using PPC at a lower cost than smaller companies can.

With economies of scale, television advertisements on the biggest stage become a reality. Super Bowl ads cost more than five million dollars each for a thirty-second spot, a staggering amount. But thanks to economies of scale, each of our businesses can benefit when a company like Airbnb runs an advertisement that paints the entire industry in a positive light during the big game.

The larger a listing site becomes, the more powerful the brand can become and, ultimately, the whole industry benefits. Today, search engines report that the term “Airbnb” far outpaces the term “vacation rentals.” The economies of scale are bringing additional awareness for our industry and shifting the supply and demand curve in a way that benefits us all.

5: Enjoy Stabilized Growth and Lead Diversification

As our brands grow, we need to ensure they can survive and thrive independent of any one lead channel. We must learn to focus simultaneously on direct bookings, phone bookings, distribution strategies, repeat bookings, guest experience, and anything else that can contribute to our long-term success.

At a recent VRM Intel Live event in Florida, VTrips founder Steve Milo said the following regarding diversification:

“What are you doing to diversify? If you don’t have a good marketing director, [it’s] time for a new one.”

When we inappropriately depend too much on any one demand channel (listing sites included), we place our brands at significant risk.

Unfortunately, too much reliance on a direct channel that we own also can be dangerous. For example, owning a website that drives 60 percent of your demand is incredible, but what happens when the Google algorithm shifts and your visitor volume is instantly cut in half? The brand could be instantly crippled.

By utilizing multiple listing sites and constantly trying new niche sites, you are protecting your brand long term. Including listing sites as part of your strategy does not mean that you get a free pass on delivering exceptional experiences and marketing effectively to past guests. The most successful property managers use listing sites to drive initial bookings, and then they deliver exceptional vacations that drive repeat bookings.

 

Property Managers Are Like Owners

During my time as a property manager I had many conversations with property owners who thought the commission we charged was ridiculous. Why did we need to charge them such a large percentage merely to manage their property? All we did was answer some phone calls and send a few emails, right?

Why did owners feel that way? In their opinion, owners were contributing more to the relationship than I was. Rather than appropriately analyzing the decision to list with my company based solely on profitability or opportunity cost, they looked at only one line item on the sample statement and felt the relationship was one-sided.

I intimately understood my fixed and variable costs at the unit level, and those costs ultimately supported our commission. It was fair to all parties. Those potential owners did not intimately understand my vacation rental business, but they allowed their desire for higher income to influence their analyses.

The reality was that our fees were worth every penny. Every single owner on our program, even those who had previously self-managed, reported higher net income with us than with their previous arrangement.

Even though they had never seen my profit-and-loss statements, worked late nights, or dealt with the operational challenges of the business, property owners were motivated to believe that my split was unfair. Their disillusion was primarily based on greed; they wanted higher income for themselves, even if it prevented my company from earning a reasonable profit.

Unfortunately, many property managers lack a proper understanding of the business model, and that lack of understanding leads them to falsely assume that listing sites fail to provide value or that they result in obscene fees.

 

Combat Entitlement with Action and Understanding

According to Brian Sharples’ 2016 letter to owners and managers, the average owner or manager generated a whopping and unsustainable 3,300 percent ROI. Even though direct competitor Airbnb also charges a 6–12 percent booking fee, HomeAway users immediately and vehemently resisted the idea of a similar traveler fee. Why? The property managers were used to spending $1 and producing $33, and the resulting sense of entitlement has proven difficult to overcome.

When guest fees and property manager fees are combined, Airbnb and HomeAway produce an equivalent revenue-per-listing with similar total cuts. So why does HomeAway receive the majority of the negative attention? Entitlement.

The owners and managers were not concerned with HomeAway’s ability to compete with Airbnb. Instead, the fear of a reduced ROI drove a severe backlash against an equivalent fee. Similar to the owner in the example above, property managers were financially motivated to revolt rather than consider the big picture.

Instead of focusing on the fees listing sites charge or complaining incessantly, focus that energy on growing your own brand into a powerful force. It is much easier to adopt the herd mentality, feel victimized, and complain than to build a brand. But spending time on diversifying lead channels and building a sustainable brand that you own is the only way to reduce your long-term dependency.

 

Proper Perspective Moving Forward

Without a proper understanding of the business model, it’s easy to point fingers at “ridiculous fees” that the listing sites charge. Listing sites, guests, property owners, and property managers all benefit from healthy relationships with each other. For our industry to continue its enormous growth, all of us must contribute in meaningful ways to its long-term success.

 

Engaging Prospective Web-Surfing Guests Via Chat: Offer to Call If It Gets Complicated

By
Doug Kennedy
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0

 

Now that so many technology companies have provided the means to chat online with customers, an ever-increasing number of vacation rental companies have yet another way, beyond email and phone, to engage both prospective and existing guests. Maybe this is a new medium for your lodging company or perhaps you are well into the process. Either way, it is important to recognize what a fantastic tool this is for reaching out and connecting with those web-surfing guests who might otherwise book with another hotel, resort, or vacation rental company—or book via an expensive third-party travel agency.

While conducting reservations sales training for all types of lodging operations, I frequently get to peek behind the scenes and see firsthand the live chat exchanges popping up in real time. Most of the time, I see guests who have already committed to a booking sending over basic questions such as, “The reservation is in my name, but my spouse is arriving early, can he check-in?” or “Do you have a crib and high chair for my baby?” Other times I see those who are ready to book, but who still have simple questions such as, “How many parking spaces are included?” or “Besides the rental fee, how much money will you be holding on my credit card?” Occasionally, the questions are a bit more complicated but still pretty easy to answer via chat such as, “Hello, I already booked a reservation, and I know you don’t take pets, but can I bring my dog? He never barks, doesn’t shed, and has no fleas.” Of course that’s “Unfortunately, no!”

However, what always surprises me is how many times prospective guests send us complex questions that potentially take up a great deal of time (and a lot of typing) to fully respond to. For example, “Which accommodation would you recommend for honeymooners?,” or “What’s the difference between the standard and premium category homes?,” or “Is this one a good choice for families?”

In my training programs, I always advocate for a phone call in these situations. Participants resist at first, and the most common response is, “If they wanted to talk on the phone, they would have called us! These are ‘chat’ people, Doug!” Managers seem to be biased towards using pre-written templates to respond quickly by simply answering the question rather than personalizing the messaging to push for a sale. Yet, once they give my ideas a try, they find that some guests are very open to talking. It’s just that, for whatever reason, they started out on chat. Hey, it’s worth a try, right? Isn’t it better to engage an undecided guest via phone so we can share our enthusiasm and show empathy for their travel plans or circumstances? Can’t we read the guest better when we can hear their reactions, vocalizations, and inflections?

So when you find yourself fielding complex questions that make it obvious that the sender has not yet decided to book, try replying, “That’s a great question! Are you by chance near a phone so I can give you a quick call to help you plan?” Indeed, some might respond back by saying, “No, I’m in a waiting room,” or “No, I’m at my kid’s piano school,” or “No, I’m supposed to be working and my boss is in the next cubicle!” However you will also find that a good percentage of them say, “Sure! Call me at . . .” and your chances of converting the inquiry into a sale have just increased many times over.

RedAwning.com purchases Blizzard Internet Marketing and rebrands to Red Awning Group

By
Amy Hinote
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0

Today RedAwning.com announced it has acquired Colorado-based Blizzard Internet Marketing.

“By joining forces with Blizzard, RedAwning strengthens its position as a global marketing engine supporting local property management brands,” said a RedAwning spokesperson. “For the past year, RedAwning has been working on marketing solutions that will further support our managers’ marketing efforts. We are about to unroll a few new website and marketing services of our own—watch this space—and Blizzard’s established expertise and services in internet marketing expand our end-to end marketing solutions even further, faster.”

Blizzard Internet Marketing, led by president Susan Blizzard, has been one of the vacation rental industry’s leading website development and internet marketing firms for 21 years. Blizzard Internet Marketing will operate as a wholly owned subsidiary of RedAwning. All employees of Blizzard are staying with the company, and Susan Blizzard will continue to serve as president.

Related: RedAwning CEO Tim Choate Discusses $40 Million Funding

“Blizzard has always been focused on high ROI solutions for lodging companies. When I heard RedAwning’s plans to allow our clients to remain independent while also benefiting from high-level technology support and cutting-edge services, I knew that joining them would take us exactly where we’ve always wanted to go.” said Susan Blizzard. “New technology, distribution, and optimization opportunities that other companies in this industry talk about were often invented by RedAwning, and they have deep partnerships with everyone that counts. They have even more coming soon, and we have some great things to build together, making this an incredibly exciting opportunity for me and my team who have worked hard to build Blizzard over the last 21 years.”

Blizzard’s services include SEO, PPC, social media, email marketing, local search, analytics, website design, booking engines, and hosting. The Blizzard team will continue to service their current clients in all the ways that they already do and will make their services available to RedAwning’s clients.

This acquisition gives Blizzard’s clients access to the complete RedAwning Network and RedAwning’s other value-added services, including reservations processing, customer service, credit card processing, declined card handling, chargeback management, accidental damage protection, and a free mobile app for guests.

“With the acquisition of Blizzard, we now have the opportunity to offer a full range of ground level marketing support for clients, along with the clout of the largest global network. We are truly a complete one-stop marketing solution that will deliver everything a vacation rental company needs to increase its direct bookings, while also bolstering bookings from global channels,” said RedAwning CEO Tim Choate. “We’ve been very impressed with Blizzard’s leadership and expertise in the industry and we see enormous potential for our clients in adding cutting-edge internet marketing expertise to RedAwning’s suite of services.”

With this acquisition, RedAwning.com also announced it is rebranding as RedAwning Group,

The Blizzard purchase price was not disclosed.

The Top Five Mistakes People Make When Selling A Business

By
Ben Edwards
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0

The purchase and sale of vacation rental companies continues to be the most effective way to increase inventory and grow the value of an existing operation. If you are a vacation rental manager considering purchasing or selling an existing operation, we have several recommendations to help you get the most out of this time-consuming and difficult process. Fundamentally, the purchase or sale of vacation rental companies requires a process that involves careful planning, preparation, professional financial reporting, proper understanding of market-rate terms, and negotiation expertise. Company owners and senior management personnel who are unfamiliar with purchasing and selling can make common mistakes that result in less favorable deal terms, lost purchase price value, or an unsuccessful transaction altogether.

  1. Not having a professional non-disclosure agreement—or not having one at all. Often, company owners engage in conversations about or entertain offers to purchase their business without the use of a non-disclosure agreement. Do not engage in any conversation without utilizing a professional non-disclosure agreement. If you are asked about the prospect of selling, it is reasonable for you to mandate the use of a non-disclosure agreement before moving forward. Professional non-disclosure agreements include a term, non-solicitation provision, and clear legal terms surrounding confidentiality to help protect all parties involved.
  2. Not having professional financial reporting. Financial reporting continues to be the Achilles’ heel of most vacation rental operations. Not having an accurate or consistent property management system and/or financial accounting reports indicates an unorganized business and will often lead to a lower purchase price or value of the operation. In many cases, a purchase price dramatically decreases if the business is not clearly articulated through the financial reporting process. Use of well-constructed, clear, and correct reporting underscores the worth of an operation and helps to ensure the maximum purchase price is realized.
  3. Not hiring a transaction consultant. If you are relying on the buyer to provide a fair price and deal terms, expect to be disappointed. In numerous cases, a transaction consultant with vacation rental-specific experience can generate tremendous value. A qualified vacation-rental transaction consultant can drive the deal process, provide access to market-rate terms, and ensure that all points of the deal are fair and reasonable. Transaction consultants will do the following:
    • Prepare a confidential offering memorandum that conveys the qualitative and quantitative attributes of the business and serves as a foundation for value.
    • Present the opportunity to qualified buyers and provide a keen understanding of prospective buyers who have the wherewithal to close a transaction.
    • Showcase a wealth of knowledge, hold extensive industry contacts, and assist in negotiations.
    • Present comfort for buyers who might otherwise hesitate to pursue the purchase of an unknown entity.
  4. Not hiring the right legal counsel. A general business attorney is not typically familiar with the nuances of a vacation rental company. Further, the vacation rental industry is unique as a buyer does not typically purchase assets. Legal counsel should understand the legal terms associated with these types of transactions and hold experience with earned revenue, advanced deposits, and business operations. Lack of expertise in these areas creates significant issues when negotiating a successful transaction. Lastly, having a well-drafted purchase agreement reduces risk and ensures expectations are met on both sides of the transaction.
  5. Not having patience. In certain cases, buyers or sellers get emotional during the transaction process. Emotional outbursts, heavy-handed dealing, or the need to over-negotiate deal terms increases the likelihood that a transaction will be unsuccessful. Buyers and sellers are used to calling the shots in their day-to-day operations, and it is tough to trust the process. Patience is the key, but diligence and focus are also paramount for transaction success.

 

 

Blurring the Line Between Marketing and Public Relations

By
Alexa Nota
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1

Depending on whom you ask, marketing and public relations (PR) are either two distinct functions that don’t have much to do with one another, or they go hand in hand. The traditional view separates them. Marketing is strictly focused on the promotion of goods with the goal of earning revenue. PR is focused on the controlled and strategic sharing of public-interest and news information with various stakeholders (most often staff, owners, and guests), building and maintaining a positive brand reputation, and earning media exposure. Marketing sells the product; PR sells the company.

But as technology has connected not only us much more deeply with each department’s previously distinct audiences but also those audiences with each other, the line between marketing and PR has blurred. This is especially true in the vacation rental industry where the company is the product when you are recruiting new owners to your program. As a marketing professional served every day by my degree in journalism and PR, I could not be more excited for this increased intermingling that generates results greater than the sum of its parts. And at least anecdotally speaking, I have found the more integrated marketing teams are with PR and vice versa, the more success they find in their respective areas.

The benefits of having your marketing and PR efforts working in tandem crystallize once we dig in to see how this plays out on a daily basis in property management. For example, consider the case of a recent partnership with a new vendor to offer your guests a new amenity. You must tell your owners about the benefits of having the amenity. If it’s their choice whether to offer it, this campaign will take a promotional approach (internal marketing); if it’s required or automatically offered to your entire inventory, this campaign will be more educational (internal PR). You’ll educate your reservationists and customer service agents about the feature (internal PR) so they can answer questions and talk it up to potential guests (marketing). Maybe you will distribute a press release or publish a blog post announcing the new feature to inform your stakeholders and drum up excitement for its release (PR and marketing). Then, of course, you will need to teach your guests what it is and sell it to them across your website, social media, email, OTA listings, and advertising to encourage them to book your homes (marketing). Through this entire process, potential owners may take note as they research and ultimately choose a future property manager (marketing).

Now, multiply that scenario by every new feature or program, every social media video, every newsletter, and every evacuation notice, and the need for marketing and PR’s teamwork becomes clearer (or blurrier?) Whether you decide to keep these functions separate or more mindfully integrate them, there’s a great deal to be learned and gained from how each can be used to amplify the other.

 

Social Media

One of the biggest areas of overlap is social media, where we build and maintain relationships with guests long before and after their stays. Here, we keep our properties and destinations at the front of guests’ minds, stirring up memories of their vacations and creating positive associations between them and our brand, distributing blog posts, announcing new products and flash sales, or sharing critical information about evacuations or other urgent situations, among many other activities.

Social media often falls under the purview of a marketing specialist or department, but in many ways it is closely tied to PR. We are creating a community—a captive audience—around our brand, and with the exception of private messages, the public can view interactions with fans and followers. Even when you are talking one-on-one with someone, such as a potential guest asking for fishing information, think of this interaction as a Q and A with a journalist that will be broadcast on TV.

Your social channels also provide a huge opportunity to project your company as the thought leader in your market, and some companies miss this opportunity for owner recruitment. Now, sharing owner-focused content in a guest community won’t do much good and could backfire, but there are other ways to leverage your social presence. You could create a Facebook group for owners in your area to serve as a forum, host live chats about industry news such as OTA policy changes, or join vacation property owner groups on LinkedIn and offer your insight in their discussions.

 

Review Responses

Responding well to positive and negative reviews is both a PR effort on the edge of customer service and a marketing opportunity. A tenet of both marketing and PR is to listen to your audience, and when we respond to reviews we say to the reviewer, “We hear you.” The content of our responses should be like the elements of a press conference: state the facts, correct any misinformation without placing blame, acknowledge and apologize for ways you may have let the guest down, state how you’re correcting the situation now to prevent it in the future, and then speak to what future guests can expect with your company. (Don’t stick around to field questions from the crowd—get that conversation offline as soon as possible afterward.)

 

Emergencies and Business Interruptions

Informing your stakeholders about critical situations, such as natural disasters or other emergencies that interrupt business and vacations, is a delicate balance. It’s a tightrope of expressing urgency, firm direction, concern for safety, and protection of property with a carefulness not to turn guests off to your destination entirely or offend those seriously affected by the situation, such as owners who lost their homes. Every property management company should be prepared for this scenario—consider creating a designated PR professional or team or taking a crisis communications course and running periodic drills to make sure you can distribute the right message in the heat of the moment.

As a silver lining to these situations that we hope we and our peers never have to face, the situations also offer hidden gems of marketing opportunities. Throughout your communications, you can address future guests about what to expect or not expect during their upcoming stays. You can also highlight how expertly your staff responds to these situations for both owners and guests, rally your troops and the local community in spearheading recovery efforts, and celebrate the reopening of your location with a special campaign or offer. Just remain mindful of the long-term stress and grief that your stakeholders and neighbors may be experiencing.

 

Owner Communications

In a single conversation with an owner, you can switch between being a marketer and PR specialist—not to mention customer service rep, crisis responder, therapist, salesperson, sounding board, best friend, and many other roles—all within a matter of sentences. To share policies and procedures effectively, help owners make the best decisions for their properties, introduce new programs for their buy-ins, and bear good and bad news, you should do so with PR delicacy through a marketing lens. Everything you say and do in those conversations or newsletters should be an extension of positive brand management, but as soon as that information or action spreads outside your company (which it will), it becomes a reflection of your products and services to others.

 

Employee Communications

The benefits of combining marketing and PR are two-fold. First, if you approach employee communications with the same thoughtfulness that you would a press release or marketing campaign, you will help ensure that your team receives the right information at the right time in the right way, no matter its content. Striking the right balance is particularly helpful with news that could be perceived negatively and take a toll on morale. Good PR and marketing-driven messaging that illuminate the reasons for and implications of an announcement soften the blow of bad news and generate excitement about good news. Consult your marketing and PR staff when you need to make internal announcements regarding sensitive subjects, whether they are positive or negative.

For example, let’s say the Townville City Council passes regulations to ban vacation rentals, so all property management companies in the area will lose their inventories there and be forced to lay off staff. Company A sends out an email memo stating, “Following the vacation rental ban in Townville, we will lay off thirteen staff members effective this Friday.” Company B sends a video message from its founder stating, “With the new regulations in Townville banning vacation rentals and our subsequent loss of 128 homes there, I am saddened to share that we can no longer support the employment of our thirteen colleagues in this area. This was an incredibly difficult decision we hoped we would never have to make. We did not want to lose these valued team members, and we are working with each of them personally to do everything we can to help them find new employment opportunities. I apologize that we lost our fight against this ban—we know we let you all down. Employees in other areas should not worry about further staffing changes, and we hope you will join us in our continued efforts to overturn these regulations and prevent similar bans from being passed in the other areas we serve.”

Which company would you rather work for? Furthermore, which company would you rather represent on the front lines? By communicating negative news to your employees compassionately, you can amplify your results because each staff member can become a more effective brand ambassador. Communicating well with your team demonstrates your respect for them and earns their respect for you, and this is a critical foundation in making your employees intrinsically want to be positive marketing and PR reps of your company, on and off the clock.

There are, of course, many other functions in which teaming up your marketing and PR practices can benefit your company. No matter where you are in your rental season, now is a good time to take a close look at how you can create your own marketing-PR symbiosis.

How Amazon, Google, and Apple Will Revolutionize Vacation Rentals

By
Alex Nigg
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Adoption of voice-enabled smart speakers with artificial intelligence (AI) assistants have seen a rapid increase in popularity. Led by Amazon and Google, according to CIRP, the number of units installed in the United States reached forty-five million by the end of last year, with almost twenty million devices sold in the fourth quarter of 2017. The interest in these devices—Amazon’s Echo line, Google’s Home products, and Apple’s Homebot, in particular—is driven by the voice-powered AI assistants and the increasingly broad array of services they deliver.

Whether that means calling an Uber, getting a weather forecast, ordering a meal from a restaurant, ordering groceries from Whole Foods, listening to the news, being guided through a seven-minute workout, or setting an egg timer, Alexa, Google Assistant, Siri, and their cousins, Cortana and Bixby, deliver.

Amazon’s Alexa has captured the lion’s share of the smart speaker market (70 percent by many estimates), but Google and Apple have been acquainting the masses with this new technology: Today, Siri and Google Assistant have been installed on almost half a billion devices each and are being used by hundreds of millions of people. According to Google, up to 30 percent of searches are initiated by voice.

In the race to capture market share, Amazon and Google have focused on offering smart speakers at very accessible price points, often significantly below fifty dollars in the United States. Voice technology and AI, packaged with a broad bundle of local services, are clearly a major technology wave. The question is, how will this wave affect the vacation rental (VR) industry?

Convergence, Delivered

If convergence with the traditional lodging industry is the engine driving the growth of private accommodation, then the services delivered by Alexa and her AI peers could well become key drivers of this convergence. Who needs room service when Alexa can deliver meals from dozens or hundreds of local restaurants? Who needs a front desk when Alexa is the hub that controls smart locks, and guests can access their rentals with their phone? Who needs a minibar with overpriced items when Alexa can organize two-hour deliveries from Whole Foods? Who needs archaic hotel in-room entertainment networks when Google, Apple, and Amazon can deliver massive libraries of movies and music? Furthermore, who needs a concierge when Alexa can deliver up-to-date information on local events and activities; book trips and activities; and provide restaurant menus, traffic updates, and notices of flight delays. Who needs a concierge when Google Assistant can help translate, find local movie times, and uncover virtually any tidbit of information available on the internet?

Of course, guests may have their own Alexa/Cortana/Siri/Google Assistant traveling with them on their phone or device; but the advantage of a smart speaker installed at the rental is that services can be set up to be locally relevant. For example, how does a traveler know to choose Whole Foods in San Francisco, Uber in LA, MyTaxi in Milan, Ocado in London, Countdown in Wellington, and Amazon Prime Now in New York City? And have accounts with all of these providers to boot?

More intriguingly, AI assistants might someday soon deliver the holy grail of guest experience and personalization. Imagine checking into a place saying “Hi, Alexa, it’s me” and, based on your voiceprint, being logged into your Amazon/Google account and having all your Spotify stations loaded, your calendar and reminders set up, your movie watch lists preconfigured, your Audible books queued to where you left off, the temperature set to your preference, and all your accounts connected, including your Uber account, your Prime Now grocery shopping lists, and your favorite news sources lined up for your morning news radio. Imagine.

Not only could this brave new world allow VRs to catch up with many of the services delivered today by hotels; it could allow our industry to leapfrog the traditional lodging providers. Of course, this technology is available to hotels, too; and indeed, one of Amazon’s first reported hospitality trials was at the Wynn Hotel in Las Vegas. Even so, it may not have been lost on Google and Amazon that VRs might make for much better partners: while a hotel may not be too keen to find alternatives to room service, the activities desk in the lobby, the minibar, or the gift shop, our industry may be much better prepared and incentivized to leave these in the past.

The Anatomy of a Smart Speaker

Amazon’s Echo, Google Home products, and other smart speakers are really eight to nine products in one. They include an array of microphones and speakers; voice recognition and an AI assistant delivered from the cloud; account and payment mechanisms; an ecosystem of third-party apps or “skills” (and an environment to build, deliver, and provide custom skills); digital entertainment services such as music and movies; physical services such as the delivery of goods; smart home integration either in the cloud (by linking accounts) or as a physical hub connecting locks, thermostats, and lights locally; and, last but not least, an enterprise platform to configure, provision, and remotely manage multiple devices at the same time.

The different providers each have their strengths and weaknesses. As one would expect, Google is most focused on its search engine, Apple on entertainment, and Amazon on shopping. Only Amazon currently delivers an enterprise device management platform, Alexa for Business. It is important to recognize that smart speakers were originally conceived for individual consumers. As a result, deploying them in a VR context leads to complications. It is one thing to configure one device, but how about configuring one hundred? How does one clear the settings from the previous guest for the next one (in particular, that pesky 4 a.m. wake-up alarm)? How does one restore each device to its original state after a guest has added his or her own preferences? Having an enterprise management platform is a requirement for use in a commercial setting, and only Alexa for Business currently delivers that functionality, allowing the VR manager to automate certain actions, such as a complete “reset and restore” after each guest checks out.

Rose-Colored Glasses . . .

Voice-powered assistants might indeed make for a bright future for VR managers. They could provide an opportunity to establish a direct relationship with guests, even when guests book through a listing site, because the bundle of on-site services may require them to give the VR manager their payment and contact information. An on-premise presence can also serve as an antidote to the increasing disintermediation by apps provided by the listing platforms. As a versatile communication device (some devices even have screens), a voice-powered assistant can even serve as a platform for delivering concierge services.

These assistants may also unlock new revenue streams. VR managers should be able to participate in their guests’ on-premise revenue streams, whether this means a commission on the sale of a local experience or on the delivery of a restaurant meal or a power adapter. Amazon, Google, and others could also create subsidized device packages for VR managers, as VRs are arguably the perfect showcase to introduce this new technology and its associated services to new customers. Amazon and Google are both assembling portfolios of smart home solutions, from Google’s Nest thermostats and cameras to the Amazon Keys access and home security packages. Signing new customers up for service offerings such as Google Shopping Express, Amazon Prime, Prime Now, or Fresh could also generate attractive commission payments.

These devices are already becoming natural hubs for smart home and home automation. The adoption of smart home components in VR has generally been slower than expected, but this new push by technology titans may significantly accelerate adoption, improve interconnectivity, reduce costs, and—as discussed above—create new funding models.

Lastly, Alexa and company can help with significant operational improvements. They can provide smart lock access to cleaners, report arrival and departure, report on-site problems, act as an intercom connecting each unit with the VR manager’s office, and even allow for preconfigured restocking lists, allowing cleaners to simply order what is missing on site.

A Dystopian Vision: The Devil and the Details

Unfortunately, the devil is in the details, and there will be bumps along the path to a future like the one described above. Having said that, the future is not far off; all of the elements described above already exist today.

The first bump, though, is that these devices were designed for consumers, not for commercial use. There are some serious privacy issues raised with a device that always listens, and can even “drop in” (including with video). Consequently, receiving opt-in, explicit, and informed consent is critical. In a consumer context, where device owners install the device in their own homes, obtaining informed consent is straightforward, but a VR context is quite different. A great deal of work will need to be done to establish the legal and privacy framework regarding using these powerful devices. For example, most providers give the account owner access to the usage history. This is straightforward if the account owner and device user are one and the same but not if the account owner is the VR manager and the user a guest. Only Amazon has started to address these issues with Alexa for Business.

The second bump also relates to account ownership. In theory, a VR manager could today set up a “house account” with each of the major service providers (Amazon, Uber, and Google Shopping Express), let guests order services, and then bill them back. But this would be a crude approach indeed. For starters, it would probably violate the providers’ terms of service. Second, it would expose the manager to risk: What if the guest orders a diamond ring on the house account, and his or her credit card is bad? Third, today it would be a labor-intensive and highly manual exercise to track each transaction back to the right person and bill accurately. This is just the tip of the iceberg. The conclusion here is that these are still the early days of this technology and that scalable solutions and frameworks will need to be found, but Alexa for Business demonstrates that at least one of the major platforms is working on those solutions.

Third, it’s quite likely that the platforms’ preferred long-term solution to managing access to services is to allow users to log into a smart speaker with their own (Amazon, Google, Apple) accounts. A voice signature can be used to authenticate the user; “Alexa, it’s me” may not be far off. But this raises a different set of questions. If users log in with their Amazon or Google accounts, once again VR managers are cut out of the transaction and disintermediated. In other words, they are no better off than if the guest relationship were directly with Airbnb, Expedia, or Booking.

Lastly, Google and Amazon have made great strides in creating interconnectivity among the thousands of different devices that make up the smart home. With the battle for dominance heating up, Apple, Google, and Amazon are starting to build their own ecosystems. Google’s acquisition of Nest and Amazon’s recent acquisition of Ring are examples demonstrating that the future will probably be less interoperable—which is not in the interest of VR managers.

What’s Next, and What to Do?

In summary, the rapid evolution of AI and voice recognition combined with aggressive investment by the technology titans Amazon, Google, and Apple has led to a perfect storm: consumers are adopting voice-powered services in unprecedented numbers, creating a technology wave that cannot be ignored.

There is much to like about voice services in a VR context: it is an intuitive way of interacting with technology, hundreds of millions of customers are already accustomed to it, and it provides a technology platform to leapfrog hotels and deliver a highly innovative guest experience on the premises. As such, it can be a major factor in driving convergence and hence be a major growth driver for our industry.

It also has strategic implications. On-premise service offerings can help stem the disintermediation VR managers are experiencing from the listing sites. Also, in the face of likely margin compression in the future, it can open new, meaningful sources of revenue.

We are at the beginning of this revolution, and there are many tricky questions that have not been resolved yet. This technology wave will not go away, however, so the time for experimentation is now. Experimentation today is cheap; device costs have plummeted, and because the vast majority of device value resides in the cloud, there is a low risk of obsolescence: the core hardware components (speakers and microphones) are basic and are on a relatively flat development curve.

The real cost is thus not the hardware but rather the teething pains of implementing these solutions with scalable processes against the background of an enterprise framework that is either nascent (Amazon) or missing altogether (everyone else). But that is also where the value in early experimentation lies. Ultimately, a successful implementation of the world of opportunity ahead relies on a robust framework of great processes, and the VR managers who excel in process management will be well positioned to capture that opportunity.

We also need to become more active as an industry to shape the future, rather than just being spectators on the sidelines. Our industry is arguably an ideal showcase for this new technology wave, and if convergence with traditional lodging is driving our growth, then opportunities to reshape the guest experience will be critical to our future. But while maneuvering our path between eight hundred-pound gorillas (the listing platforms) and the technology titans, we need to participate in setting the rules of engagement. The future will be bright, but only if we take an active role in shaping it.

 

Alex Nigg is the founder and CEO of Properly, the operations platform for the short-term vacation rental (VR) industry. Properly is the first platform in the VR industry to support Alexa for Business, allowing automated management of Amazon’s Echo devices based on guest check-in and checkout dates.

Alex and his partner Tammi are frequent speakers and panel moderators at VR conferences in North America and Europe; their sessions have been attended by thousands of property managers and owners.

Alex is a self-proclaimed geek and the proud owner of over a dozen Alexa, Google Assistant, and Siri-enabled devices used in Alex and Tammi’s rentals and homes in Seattle, San Francisco, and New Zealand.

 

A Learning Experience: Urban Short-Term Rentals and Traditional Vacation Rentals

By
Amiad Soto
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The Growth of Urban Short-Term Rentals

Over the last few years we have seen a significant rise in the number of property management businesses operating in urban global business and tourism hubs and coming into existence solely because of Airbnb. In cities like London, Paris, and Hong Kong, entrepreneurial businesses, often run by young millennials, saw an opportunity to take the pain out of hosting by individuals and began offering combined professional hosting and management.

Airbnb hosts started many of these businesses themselves and quickly saw that other hosts were struggling to make sense of earning income through the platform, understand how to professionalize and scale a business, and meet both guest and owner needs.

Urban hot spots such as Paris and London have been thriving over the last few years. France alone has 400,000 Airbnb listings. Offering a professional service to manage and maintain bookings with such a large number of properties clearly offers opportunities. Airbnb’s recent announcement of a cap on listings in central Paris to 120 nights has meant that competition for maximizing revenue from each property has increased.

Many urban short-term rental businesses have evolved to both help professionalize and secure the relationship between guest and host within the Airbnb space.

But what has been the secret to success for these up-and-coming urban entrepreneurs? What can the wider vacation rental industry learn from this growth? And, just as importantly, what might be missing from these urban property management businesses that the established and more mature vacation rental property management businesses have? In this article I hope to answer these important questions and show what each can learn from the other.

 

Being Totally Tech-Enabled

First, it is clear that it is because of the advent and rise of Airbnb that these urban short-term rental businesses have been made possible. Without Airbnb, the rapid expansion we are witnessing just would not have happened. But clearly there has been both a need and an opportunity for providing more variety of relevant accommodations in the world’s urban hot spots.

However, one of the real driving forces and key secrets to the success of urban vacation rentals has been the natural predisposition toward, and the rapid take-up of, technology as a (the) key tool for scale, operations, and growth.

Successful urban short-term rental businesses are truly tech-enabled, 24/7, 365-day-a-year property managers. Technology drives each business and enables everything—owner relations, inventory management, guest communications, reporting, review collection, staff management, and marketing—to work effectively, efficiently, and profitably.

Many of these urban property managers are our clients and use our software to manage their businesses. We know and understand the challenges faced in the urban markets, and our solution has also grown and developed to meet their needs.

Without proven technology at the heart of urban property managers’ businesses, the scale and growth we have seen would not be possible. The urban market can be tough. Lengths of overnight stays can be short, cleaning turnarounds are tight, properties are often geographically spread out with plenty of traffic in between, and expectations from sophisticated travellers can be high. Value-adding technology is the core of the solution to meet these challenges.

Many of the more traditional vacation rental property managers in nonurban locations are using technology to improve their management and communication functions, but how many can truly say that they are fully tech-enabled and that robust technology is at the heart of their business and drives their operations? A few certainly can but not all yet.

 

Bringing Innovation to the Marketplace

Another key aspect to the success of fledgling urban property managers has been their ability to be agile and transform their businesses to meet the changing opportunities of a market that is itself going through rapid change and disruption. Maybe it is because many of these businesses are still so young and not yet entrenched in their ways. Or maybe it is an innovative mind-set. Either way, this ability to adapt and bring agility to the market is something urban property managers have embraced.

In fact, we started out life as a hosting management business in San Francisco until we quickly saw that there was a need for a fully integrated, cloud-based, forward-thinking, all-in-one software solution to make property managers’ working lives both more manageable and more profitable. We used our strengths and findings to adapt to market conditions and successfully pivot.

 

Industry Experience and Longevity Matter

I’ve talked at length about the strengths of the new breed of urban property managers, but what can these businesses learn from their more mature, experienced, and established traditional counterparts—the businesses that have been in operation for sometimes decades?

First, what more traditional property managers have over their “younger” urban cousins is in fact age and experience. A property manager that has been around for many years, and even through a couple of generations, has seen so much! Trends and phases have come and gone, and these established businesses have weathered the relative storms of economic downtowns, changes in legislation, and consolidation in the industry. Many have come out if not stronger then certainly still standing.

Time and experience also bring with them both an established and trustworthy reputation and a solid customer base. A business providing guests with, let’s say, a vacation home in South Carolina may have been doing so every year for many years. Repeat guests and a solid database of customers are gold for any business. This kind of established baseline only comes with time.

Longer-standing vacation rental businesses also know (or at least should) that it is never wise to put all your eggs in one marketing basket. Relying on one marketing channel might work in the short term, but it is rarely sustainable for the long haul.

 

Understanding Hospitality

All of the property managers that have grown from the Airbnb sub-economy are by their nature new. They are also often new to hospitality and the tourism industry. Truly looking after guests—from inquiry to post stay—is something that requires certain skill and needs to be imbedded in a company culture. Most vacation rental companies that have been around the block a bit have come to learn a thing or two about the importance of both the guest experience and old-fashioned hospitality.

The success of a property management and guest-facing business is dependent on both longevity and sustainability. The vacation rental industry has valuable experience to offer tech-enabled urbanites. Technology and automation need to be balanced with a human touch and top-notch service. Making sure that needs are met and exceeded consistently, and knowing how to manage a more challenging guest, are matters that many vacation rental property managers are skilled at.

There is clearly much knowledge to share between urban short-term rentals and the more traditional vacation rental businesses that would benefit both markets. It was great to see so many of the newer urban-based businesses attending the VRMA National this year and witnessing perhaps the beginnings of a merging of knowledge and sharing best practice experience.

 

Amiad Soto is the cofounder and CEO of Guesty, a cloud-based SaaS platform established in 2013 and designed to simplify property management businesses. With Guesty’s all-in-one solution, managers can operate listings from multiple accounts including Airbnb, Booking.com, and other vacation rental booking channels.

Let’s Get Hygge! Sarah Bradford Discusses Vacation Rental Interior Improvements

By
Sarah Bradford
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Let’s face it. I bet 99 percent of all vacation rental companies of any size out there have at least a few properties that they turn a blind eye to when it comes to how the home is decorated. We all know which ones they are—the home with the old oily couch, too many bears and moose on the walls, furniture, and curtains, or outdated 80’s pastel fish on the thin, worn out bedding. But, you’re stuck. The home performs “good enough” and guests don’t leave horrific reviews, they just don’t leave glowing ones. You don’t get a lot of return guests to that home, but you’re still filling it, albeit at lower rates than your HGTV home. And, you’re afraid to broach the subject with your homeowners because what if they walk and sign on with one of the new virtual managers who will take anything?

We feel your pain. That’s why Tim and I did a two-part podcast on this very dilemma. You can listen to us debate this in two thirty-minute segments on our “Sea to Ski with Sarah and T” weekly podcast for the vacation rental manager. I have also summed up our points here, so you will hopefully be inspired to make that phone call and set your standards higher. Here’s why and how you can make it happen.

 

The Why

You want more bookings and revenue. Property photos have become your ticket to get there, and HGTV has changed everything. For those reasons, décor matters. And not just whatever décor your owners fancy. A certain “look” is booking better than others. Guests have come to expect that their vacation home will be as nice—or nicer—than their homes. They come from larger cities where every restaurant worth visiting is hip, cool, and very 2018, not 1998. And they choose where they will stay from thousands of vacation rentals based entirely on the photos. If your 1999 pastel fish house is listed next to the cool West Elm one, you know who is going to get the booking. Or, you’ll have to lower rates significantly to get the booking but will still have the same costs to clean, host guests, and maintain the home.

 

The Dilemma

How do you explain that to owners and convince them to spend money to make money? How do you protect your brand by enforcing a look without turning away lucrative properties? And, when you do convince them to go for that Joanna Gaines redo, how do you manage making it happen?

 

Four Steps to Achieving Hygge over Ho-Hum.

1: First, convince yourself and your team.

This is easier for some than others. Not to stereotype, but a thirty-year-old woman usually gets it right away, but she’s not the typical VR company owner or homeowner. The sixty-year-old man is closer to our demographic, and usually the toughest sell. He thinks it’s just a fad and it doesn’t matter to him, so it doesn’t matter to guests. In that case, show him the numbers and do actual studies to show the revenue difference. At our company, we have two properties that are identical— same layout, same complex—all but the décor. Over the past twelve months, the one that is decorated in an updated, clean, and fun way has been garnering over 35 percent more in revenue.

I also recommend that the unconvinced person look at the magazines in stores and tune in to the ever-popular HGTV channel. There has been a “design awakening” in the past five years, and it is shifting at the speed of iPhone technology, so we all need to keep up.

Still not convinced? Here’s the fact that can’t be disputed (just ask a guest): Guests want to feel they are in a comfortable, new, clean, and FUN place. New and updated décor tells the guest that this place is more luxurious than the one decorated in 1999, and that equals “special,” which is what travelers want now.

And, perhaps the most important point to convince that design curmudgeon: Your company’s brand needs to be as consistent as possible. This is tough to do in our industry. If guests stay at a circa-1999 property once, they rightly assume all of your homes are the same. They’re not coming back. How about them apples?

 

2: Now that YOU are convinced, it’s time to convince your homeowners.

For existing owners, you first need to internally meet with your team and identify the biggest offenders. Tackle them first. Be willing to lose the property. It is a lot easier to approach the issue when you have that mind-set. Go back to Step 1 if you are struggling with this reality. Remember, having a tired, poorly decorated property hurts your brand, which hurts your return guest rate and your long-term profitability as a company.

I think the best first step is to include a direct article in your owner newsletter or even a mass email on this topic to all owners, so when you call offenders, it doesn’t feel like you’re targeting them. Then take a deep breath (5, 4, 3, 2, 1) and make the phone call. This cannot be done with a direct email to the owner. This subject can be sensitive, so do not start with an impersonal medium such as email that could be misinterpreted. Plus, you then have to hope they read it and respond. Make the call.

What to say? Keep it simple and don’t apologize. Here are three ideas of how to approach the conversation:

  1. Technology has changed everything. Photos are all that matter and online bookings have skyrocketed to 60 percent of our bookings. The Instagram moment is what we are trained to look for, the brag factor. True for dating, true for restaurants, and especially for vacation rentals.
  2. It’s a competitive market. If you want to get the highest rate possible, or even get the actual booking, you have to stand out from the crowd. In our market alone, there are more than 1,600 VRBOs, not to mention those not on VRBO. In Steamboat, it’s over 2,000. Your worn-out, bear-patterned chair ain’t gonna cut it.
  3. Give examples. This is where revenue studies help (see Part 1 above). Share with them how much more you think they would make if they upgraded. Many owners will be persuaded by the ROI.

 

A few reminders when you are taking that deep breath before calling the owner. Most owners want to “keep up with the Joneses” even if they say they don’t. I recommend not talking cost at first, otherwise you’re stuck. Let the twenty-four-hour phenomenon kick in. I have seen this time and again when I broach the topic with owners. Owners can be defensive and resistant at first, but by the next day, they are at the local furniture store buying more furniture than they have in years! Give owners time to accept and dwell on what you’ve suggested to them. Also, explain to owners that you don’t mass order. Our goal is not to have every place look the same, unlike what some more condo-tel operators have gone for. We want each place to look unique and fit the space. Finally, it’s important to remember that many owners have not even been to their own properties in years. They bought the unit as an investment years ago and kind of forgot about it. It’s your responsibility to bring up the fact that they have to continually invest in it. If you don’t remind them, they’ll keep chugging along thinking everything is hunky-dory.

If you are signing a new owner, it is vital to clearly explain the “Upgrade Every Year Philosophy” before they sign on the dotted line. Make sure every owner—even if their place is decked to the nines—clearly understands that they will have to upgrade and invest in their home every year. Share with them that the style that’s there now will not be the selling style in ten years, much less the wear and tear that will inevitably happen. I would recommend to them that mattresses be replaced every five to seven years and sleeping pillows every three years.

We also feel strongly that quality vacation rental companies should not take on properties that aren’t decorated to their standards. Ever. Here’s why: in two years, when it’s not booking well, the conversation blaming the décor becomes a much harder conversation to have. Create a Décor Requirement document that you can share with the new owner so it doesn’t seem like a personal attack. Be sure to include before-and-after photos in that handout so owners can understand what you are looking for, and what you’re hoping to avoid. Nine times out of ten, owners will respect you more for speaking the truth rather than being the vacation rental manager who is desperate and just says, “Oh yes, this is ready to go!” In fact, by your being picky, the homeowner often will want to work with you over the non-picky company.

 

3: What should you be recommending? What décor sells?

What has the biggest bang for the buck, and which style should you choose?

The simple rule is that if the upgrade will significantly affect photos of the property in a positive way, give it a thumbs-up. If it will significantly improve the guest reviews, then it also gets a thumbs-up. If it does both, it’s a double thumbs-up.

The upgrades that have the best ROI are usually new bedding, art, and new living room furniture with fresh, updated throw pillows that are not from Walmart. For art, try to find items that have visual impact (usually with color).

Here’s an idea: At both of our locations, Winter Park and Steamboat, we purchased $2K worth of art (the wrapped canvas kind, no frames) and decorated our Winter Park and Steamboat offices with it. All for sale to owners. Average price is $125. We have already sold a lot of it and had to make another bulk purchase.

For furniture, it’s important to choose durable, yet comfortable fabrics that are treated with stain protection. I agree with others in the industry who have suggested you avoid Ikea or other cheap alternatives. Their items look cheap, won’t last long, and you’ll soon be picking up the phone to ask the owner to redecorate when the trends change. Simple, clean lines are what will look good in photographs.

Another tip to give owners is to invest in game tables. A foosball table, or at least a card/poker table, makes for a great photo and tells a potential guest that fun will be had here. It is also important to offer plenty of seating and bedding options. The largest dining table possible is a must, along with plenty of seating in the living room. Remind owners that this isn’t just a family of four living in a four-bedroom home —it’s often eight to ten adults!

Other big-bang-for-the-buck items are EZ Beds (from Frontgate) for additional beds that are not uncomfortable pullout sofas, and of course, anything technology related—larger flat screen TVs, charging stations, multi-plugs, and an easy way to play music in the common areas. Remind owners that these folks are on vacation and want to have a good time together.

And by all means, get rid of the big fake plants and the knickknacks that make the home look cluttered. Replace with fake succulents if you must, and a cute gold orb from West Elm.

 

As far as what trends are selling best, I have seen anything that embraces “hygge” (hue-gah) to be a winner. That’sthe Danish word for expressing the feeling of cozy intimacy and simple pleasures (think large-scale knitted blankets) because Americans are looking for a simple, quiet, disconnected break, especially on vacation. It’s all the rage.

Rattan is so popular again that my decorator jokes that it will soon be an endangered species. Metallic is the new neutral and yes, wallpaper is cool, but not the kind you had in 1967. A gallery wall is a fun way to hang photos versus the one picture on one wall. Keep walls white or neutral and drop the beige and browns. Those colors do not photograph well and look drab. My knowledge ends there. Educate yourself or hire a decorator. Walk through a West Elm or Restoration Hardware store, or watch a few HGTV shows to get your hipster-self inspired.

 

4: Ok, the owner is ready to upgrade. Now what?

The Process

For those owners who live far away, lead busy lives, or—maybe most important— those for whom “décor” isn’t their thing, the task of updating is daunting. They can’t even imagine how to proceed. Unless you have found more hours in the day than I have, I strongly recommend that vacation rental companies not put themselves in the position of doing the upgrading themselves. Find a decorator with style and VR know-how you can trust and who won’t break the bank. We work with Dori Weiss, a decorator from Steamboat, and she knows smart buys for a vacation rental property—plus we love her style. She deals with having the tough conversations with owners about why the brown antique couch from their aging mother’s home is not the best choice, and she handles the details of shipping, delays, and billing. I highly recommend finding someone like Dori!

Idea: Offer up moving and assembly labor for free if it’s worth it. In some cases, you can consider going in on the cost if the owner commits to an acceptable level of contract years. Or you can go with a partnership deal such as the owner buys the table/chairs, beds, and side tables, and the vacation rental company foots the bill for the new bedding.

 

Three Steps in the Process:

  • Set Clear Expectations: Agree in advance how it will all work. The best arrangement is an owner who just says, “Here’s $10K, buy the biggest bang for the buck and you pick everything.” It’s rare. So, you have to clearly set up the rules of the game up front:
    1. Who handles ordering/approving? A decorator/owner/you?
    2. What is the budget?
    3. Who is paying/reimbursing?
    4. Have the decorator do the work, not your company.
  • Delivery/Setup/Removal: How will deliveries work? Who will pay to let the delivery service in? Is there furniture setup and unpacking involved? Who is responsible for removing the old furniture? What is the plan when furniture shows up while the property is booked? (Hint: You need a storage facility that can hold large bulky furniture, and you’d better not damage it when moving it in and out.)
  • Photography: The fun part—taking pictures! Be sure to stage the home so it shines, but don’t add too many elements that don’t belong at the home. Get those photos out there as soon as you can, and start watching the revenue skyrocket.

 

About Sarah Bradford

Sarah Bradford owns Winter Park Lodging Company and Steamboat Lodging Company with her husband, Chris. Both companies focus on higher-end luxury vacation rentals, and they are currently updating several to bring them out of 1999.

Sarah also is the cohost of the popular professional vacation rental podcast, “Sea to Ski with Sarah and T,” along with Tim Cafferty, owner of Outer Banks Blue and Sandbridge Blue.

The Rise of the Instant Satisfaction Guest and How It Is Transforming Operations

By
Jeremiah Gall
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0

Remember when providing linens or cleaning the property post-stay entailed additional charges to the customer? And renting linens didn’t mean the beds would be made when you got there? In many markets, this was common even within the last ten years.

This is an industry in the midst of rapid evolution. Much like the way marketing shifted away from brochures, which were once the property manager’s most important marketing tool, to more comprehensive and detailed marketing programs, the operational role of a property manager, for both the guest and owner, has expanded dramatically in the last decade.

In this article, we take a brief glimpse into the expansion of property management operations and service over the last decade and discuss why the trend to “do more” is here to stay.

 

A Cottage Industry

Vacation rentals were a cottage industry, pun intended. Booking wasn’t online; a friend would recommend a house or a number to call and inquire which homes and times were available for the coming vacation season. It was common to scout properties for the next year, simply writing down the address and even stopping in to have a look inside. Often when looking at a new vacation spot, customers would have to pick a home only having seen an exterior picture of the property and would either be delightfully surprised or a little depressed by the interior.

As for pre-arrival interactions, that typically meant guests packed up their own linens and towels from home, went shopping to purchase groceries for the week, and then met the manager to pick up the keys. During the stay, all the small quirks of the home were considered as part of the charm. Often the cleaning was left to the guest, and if the property was not left in the same condition as when they arrived, an extra charge might be incurred. According to Tim Cafferty, president of Outer Banks Blue and Sandbridge Blue Realty Services, “When thinking of vacation rentals in the past, there was almost a feeling of waxing eloquent when thinking of how homey and simple accommodations were. People actually never complained about crate furniture, or if something broke, they would do without it or fix it themselves many times.”

 

Adapt or Fail

If you are one of the many new managers who have started in the past few years or became aware of the business through the rise of Airbnb, the above scenario may sound completely foreign. You may even believe that the “sharing economy” is something new.

Many new managers became aware of the business only through the rise of Airbnb and the “sharing economy.” However, the vacation rental business is not newly invented, and the vast majority of rental management operators have existed for decades, growing their businesses, changing with the times, and adapting to market conditions.

And yet, despite many changes to the vacation rental market, this time the change feels a bit more extreme. As consumer awareness has grown, vacation rental inventory can be found side by side with hotel inventory on TripAdvisor, Expedia, and Booking.com. At the same time, Airbnb is opening their own hotel in Florida—further blurring the boundaries between vacation rental supply and hotel supply.

With greater consumer exposure and convergence with hotel inventory comes a brand-new wave of rental guests of the instant-satisfaction variety. These consumers come preloaded with a set of high expectations, which force managers to expand their services.

Welcoming a traveler into a property that is not guest-ready not only opens the door to a subpar guest experience (often resulting in refunds or a negative review) but offers unnecessary distraction and headaches for your team as they work to turn the guest experience around while they are still in house. The old adage “we have always done it this way” no longer applies.

 

Embracing Efficiency 

To improve operational efficiency, property managers needed to solve a common but serious issue: a lack of efficiency and accountability in the field. On a busy turnover day, back-of-the-house teams have a six-hour window to complete the cleaning and inspection of a property while also reporting and repairing any issues found in the property. A significant void in communication exists, which often results in an inability to correct the issue prior to a guest’s arrival. The solution to this common issue rests on the adoption of technology. Having insight into what and where your team is throughout the day affords a manager the opportunity to make quick scheduling adjustments and reprioritize tasks and shift responsibilities. The addition of real-time scheduling and communication software creates a massive change in management, improving both the efficiency and accountability of your team.

Although technology has always been prevalent in the vacation rental industry and companies have been able to vastly improve their businesses as a result, the options for operations lagged behind the adoption of technology, which focuses on marketing, distribution, and accounting solutions. The evolution of vacation rentals and increased guest expectations has required managers to come together to address the ever-changing needs of the industry and has resulted in the creation of purpose-built software and technology that improves efficiency. New policies and practices required adjusting expectations for both guests and owners while helping owners understand the need to update their rental properties to meet the demand of instant-satisfaction guests.

Commenting on this topic, we invited Michelle Williams, director of Marketing at Atlantic Vacation Homes, to offer her insight. “From a guest perspective, managing a change in services or process is relatively straightforward, especially if we are delivering something that they have been asking for. On our end, we look at cost-benefit and what are the implications of not providing XYZ amenity or service. As guest needs and wants have changed over the decades, so have those of the homeowners and their properties. Homes now have more amenities, and more gadgets and electronics to keep up. And homeowners also want more options for communication, whether it be by text, owner portals, email, etc.”

“When it comes to homeowners, one of our big responsibilities is communicating with them when changes are being made and educating them on why we think they are necessary. Years ago, it was requiring a TV, then changing to flat screens, requiring wireless Internet, etc. How is it that something ‘small,’ like the type or size of the TV, can affect the bottom line? Another example was instituting shorter stays (less than a week). Some owners who have been with us for decades were resistant at first to the idea of moving away from a strict Sat–Sat rental schedule. It’s on us to communicate the benefits of a change like that as well as the impacts and how Atlantic Vacation Homes is going to successfully manage the new process and keep owners in the loop.”

 

The Complexity Continuum

There is an ever-increasing need to evolve, to stay on top of rising technology offerings to compete in the vacation industry, and to meet the demand of the ever-increasing instant-satisfaction guest. Property managers must be outfitted with a wide range of skills and initiatives: hospitality provider, social marketer, asset manager, trust accountant, maintenance department, and more. Whereas property managers are responsible for preparing individual homes and delivering a guest experience that competes with hotels, they must also know how to expertly manage homeowner relationships.

The importance of relationship building with our owners, guests, and staff is more important now than ever. There are simply too many options available today for our customers. As keyless entry continues to become the norm, the back-of-the-house staff is front of the house and is often the only company representative that interacts with a guest. Every single member of a vacation rental company should be trained in customer service. As an industry, we have a responsibility to continuously adapt, to improve, and to adopt creative technology to be a formidable competitor to OTAs, Airbnb, and hotels.

According to Tim Cafferty, “Today, I find the vacation rental industry’s pursuit of competition with the hotel industry has brought us hotel industry expectations. It is simply no longer acceptable not to have the house in top condition with trendy décor and maintenance services on call virtually at all times. Treating customers like you did a decade ago in this business will put you out of business today.”

To continue to be successful, property managers need to focus their marketing efforts toward the guest experience and adopt new, focused technology to improve the pace of operations. One thing we can be sure of is that the tasks of cleaning, inspecting, and maintaining a property will always require hands-on attention. It is our job as professionals to ensure that attention is focused on doing the daily job duties as well as delivering exceptional customer service. And we simply cannot afford to outfit our operational staff with anything less than the best technology.

 

Jeremiah Gall is the founder and CEO of Breezeway and former founder of FlipKey. Together with the team that grew vacation rentals into a world-class product at TripAdvisor, Gall is currently building technology tools that will define the future of how property managers interact with the property. Backed by leading investors in the real estate space, Breezeway makes it simple to manage property care and maintenance operations. Their mobile solutions are designed to help property managers and owners coordinate cleaning and maintenance tasks, improving quality and ensuring the job gets done right the first time.

 

Defining brand and expectations with guest communications

By
VRM Intel Staff
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Guest Communications

As I listened to Simon Lehmann at the European VRMA Conference explain why he always brings a set of sharp knives when staying at a vacation rental, I turned to Jessica Gillingham of Abode PR and asked:  

“Are we really still talking about poorly equipped kitchens?” 

She nodded. 

I was reminded of an earlier session at the same conference when a panelist said, “The number one requirement for everyone should be great content, which means photos and descriptions,” to which Simon Lehmann responded: 

“Are we really still talking about photos and descriptions?” 

Sadly, it seems that in-property amenities and poor content are still very real issues. (I’d also add that writing property descriptions is still the most frequently requested service we see at Guest Hook.) 

Consider this finding from Google: 

“Only 9 percent of travelers have a brand in mind before they start researching.” (Source: Google’s Javier Delgado Muerza at the European VRMA)  

Here’s my point: sharpen your knives, communicate your value proposition clearly and quickly, and deliver on excellent service throughout the guest stay cycle. Grab the 91 percent of guests who are clearly open-minded and looking for a brand that resonates with them. And then retain them. 

It’s time to double-down on the guest experience. 

 

Pre-booking Experience

“Never has there been a time in our industry when your content needs to count more.” – Wes Melton, smokymountains.com 

Consider the 91 percent of guests looking to be inspired by a vacation rental brand. If they find you on HomeAway, will they be served a headline that screams or seduces? Will they see photos that depress or energize? Have you clearly explained your value proposition? 

And what about your website? PhocusWright predicts that 72 percent of online bookings will be from the OTAs by 2020. Does that mean you should abandon your website? Absolutely not. 

Instead, be ultra-picky about where you invest your time and money. Focus on content that counts. Ask yourself the same question before updating anything on your website: will this photo/video/text/graphic reflect my brand as well as be helpful and/or inspiring for my guests? 

We know many businesses, just like our friends at Beside the Sea Holidays, who consistently achieve more than 50 percent of bookings directly on their websites. It’s no coincidence that they have identified what they stand for, have embedded that into everything they do, and have committed to brand-relevant content that helps or inspires. 

 

Define Your Brand and Stay Consistent

“Vacation rentals are just places to sleep.” 

I’ve heard that said more than once recently. Take that stance at your peril. Booking a vacation isn’t the same as buying paper towels or ordering a quick lunch—it’s intensely personal.  

In an industry that’s expected to grow to $170 billion by 2019 with millennials unleashing part of their estimated $1.4 trillion travel spend, you can no longer afford to blend into the crowd if you want to thrive. 

Capture that 91 percent by standing for something. Define your true identity. What are your genuinely unique selling points? How do you communicate those through your content? What brand voice do you use in your property descriptions and website content? When there are dozens, hundreds, or even thousands of rentals in your destination, it’s not enough to be a comfortable, cared-for accommodation. Decide what sets you apart, and then embed it in all your marketing. 

That includes both the OTAs and your website. A guest who finds you on VRBO should discover the same brand on your website. VRBO is simply an entry point to your brand. So when you write your property description for the listing sites, use the same brand voice—and explain the same selling points—as you do on your website.  

And don’t forget the valuable opportunity that still exists to promote your business in the “Property Manager” section of your HomeAway listings. Who knows how long that brand potential will remain? 

Steve Milo of VTrips makes the undeniable business case of using OTAs to your advantage: 

“In 2014, only $500,000 of our revenue was generated by instant booking on OTAs. In 2018, over $36 million of our revenue will be generated by OTA Instant Booking. We spend a lot of money working directly with OTAs to bring in new guests.” 

And my pet-peeve: enticing people and then failing to deliver. Take the website newsletter process. There is nothing more value-destroying than gaining an opt-in—someone who has signaled strong interest in your offer—who you then serve dreadful information to or ignore.  

The same holds true for social channels that are often seen as box-ticking activities. If you offer potential guests the opportunity to interact with you and consume your content, then make the entire process a joy—inspire your guests with content that is true to your brand. 

 

Post-booking Communications

 “Leading the guest through a mapped-out process from booking to arrival ensures a win-win for both the guest and owner. The guest feels cared for, and the owner/manager frees up mental energy knowing that there is a process in play.” – Elaine Watt, holidayletsuccess.com 

 Booking secured. Now comes another complex task: figuring out what, how, and when to communicate with your guest.  

 As a guest, here’s where I consistently see things unravel. Not because the owner/manager lacks professionalism or doesn’t care, but because it’s a bloody complex process.  

 What’s the first communication you have with your guest post-booking? Is it an automated email from your PMS? Is it an Airbnb message? An SMS? Perhaps it’s even a phone call. Regardless of the mode of communication you use, it’s what you communicate that counts. That first impression the guest has needs to be consistent with their pre-booking experience. 

 Video can be a perfect complement to your written communication. It’s not simply about engaging guests who don’t read; it’s also a moment to share your brand in a typically faceless, email-driven, pre-stay experience. Try a 90-second video overview that welcomes your guests and explains what you’ll be sending them and when. No need to personalize each one—a canned video that pairs with your first written communication will do. 

 And in your first email, don’t merely stick to the formula of pushing information. Try a little pull as well. For example, pose a question in the first sentence: “What brings you to X?” or “What are you most looking forward to during your stay at Y?” Of course, not all guests will reply, but for those who do, you will have built a foundation to provide a great guest experience. 

Finally, write that process down and make it available for any new person who joins your organization. Documenting is tedious, but it’s the basis of every excellent and consistently repeatable process. Think of the opportunity cost of your own time or a member of your team’s time that would be required to train someone new. 

 

Pre-arrival Communications

“The ongoing provision of information/advice/insider knowledge to bring the guest as close to us and, importantly, to raise their level of anticipated gratification, is key (i.e., ‘This is going to be a brilliant holiday!’)” – Bob Garner, casaldeifichi.com 

Don’t burden yourself or your guest with six attachments, twelve paragraphs of email text, and complex pre-arrival forms. Your only goal in this regard should be to ensure your guest has received—and knows how to access—the important pre-arrival information: address, access instructions, check-in time, contact details, and similar items.  

Don’t forget your brand at this stage—the way you send the information, the format of that information, the tone of voice you use. Those are all absolutely necessary factors in maintaining brand consistency and keeping that guest experience on brand.  

If tech is a part of your brand, then a guest welcome app is probably the right choice. We have thousands of properties using Touch Stay to manage that process, but there are many alternatives including Hostfully and YourWelcome. Alternatively, you may have a high-open-rate email series in your PMS that delivers the important information in a pre-branded way. 

 

During Stay

Not every guest wants communication with you during their stay. And not every business has the resources, or even the desire, to open a dialogue with its guests. Nonetheless, there needs to be a way for communication to take place. What’s worse than a negative review that could have been avoided by a simple conversation during that guest’s stay? 

There’s a lovely anecdote that a client recently relayed to me that illustrates that point perfectly. A guest had sent a text message to Richard of Beside the Sea Holidays at 11 p.m. on the day of check-in: 

“I can’t make the sofa bed work; can you please come and help?” 

Richard’s wife went around, was invited in, and went upstairs to set up the sofa bed. All was well—until Richard received another text at midnight: 

“When are you coming round to fix the sofa bed?” 

Two sets of guests had a nearly identical phone number, and the wrong house had been attended. What makes that anecdote so wonderful is what happened the next day. Not only was the guest with the real sofa bed issue delighted at having had things fixed within an hour so late at night, but the wrong sofa bed guest left a five-star review as follows:

 

How did that happen? Richard and Sophie visited them the next morning, apologized, explained the situation, and left a bottle of prosecco. But that wasn’t the reason for the five stars. Beside the Sea’s brand, aside from offering properties “beside the sea,” is rooted in personal service at every stage of the guest journey. The guest subliminally understood that the prosecco and apology were genuine rather than hastily concocted ideas. Just look at the review title: “Service.” 

Richard explained to me that they don’t directly engage guests during stays. Instead, they give guests their own space but make it clear how they can be contacted—text message, email, phone, or even a knock at the door. And because the guest understands this is a personal business, they treat the offer of communicating as genuine (welcomed, in fact) rather than throwaway. 

Beside the Sea manages forty-four properties. Like most PMs of such size, balancing personal connection with efficiency is a challenging task, yet they prove that being personal doesn’t have to mean physically talking to each guest at each stage of their journey. It’s about fostering the relationship through their website, their auto-emails, their sense of family, and their passion. 

 

Post-stay

How do you maintain a relationship with the guest after they’ve left so that they book with you again or recommend you?  

The first step is to ensure you have collected your guest’s email address and have the required approval to add them to your newsletter list. Don’t destroy the brand equity you’ve accumulated by letting them disappear or run afoul of anti-spam regulations. A list of emails is great, but if you’re able to tag each email with some simple additional information about the guest, it’s worth multiplies. 

Jeanette Lawson of Kiawah Island Getaways illustrates that perfectly. Prior to confirming a reservation, Jeanette’s guests are required to fill out a simple online form. Names of guests staying, reason for visit, options to purchase add-ons like bike rentals, and so on. That simple form has an obvious advantage in the guests’ minds, and it ensures that Jeanette gathers some powerful data to help her create valuable content for her email list. 

Perhaps a guest is celebrating a birthday or enjoying a honeymoon. Perhaps they are taking part in a local marathon or annual convention. This information allows you to communicate with guests prior to the anniversary date, tailoring emails to specific groups of guests. With the right email platform and templated messages, none of this has to be time consuming. 

As Bob Garner explains, “Through social media, blogs, and email/newsletters, we ensure guests are kept aware of our ongoing interest in their lives and how we would like to once again have a chance to help them have another brilliant stay.” 

It is worth noting that Bob has a repeat rate of 55 percent and a referral rate of 20 percent. In his words, “We certainly have our ‘skin in the game’ in doubling-down on the guest experience, which makes the work of finding those remaining 25 percent of new guests each year less arduous.” 

 

Don’t Cherry-Pick 

Doubling-down on the guest experience isn’t about mastering the one week they are physically with you. It’s about their entire journey. Steve Milo puts it like this: 

“Our goal is to pay only one time for the acquisition of the guest. After that, our goal is to communicate to them the value of booking directly with VTrips for the best information, the best selection, the best reservation staff, and the best pricing.” 

That clear business goal—pay only one time for the acquisition of the guest—depends entirely on excelling at every stage of the guest journey. Reflect your brand with every guest interaction in a genuine and natural way. The prize is repeat and referral guests.  

Help shift your guests away from the 9 percent crowd who don’t have a brand in mind the next time they are considering a stay in your area. And let’s not talk about blunt knives, dull photos, and flat copy ever again. 

Technology-enabled Property Management Lodging Platforms

By
Steve Milo
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2

The vacation rental industry is undergoing a rapid transformation in terms of both market growth and in the operational and lodging side. With the fast-paced changes, the market is ripe for disruption and for a new breed of technology-enabled property management lodging platforms to bridge the gap between online rental marketplaces and traditional vacation rental management companies.

 

The real cost of working with OTAs

Vacation Rental Pros Steve Milo Raises 27 millionIn the light of the significant changes taking place, the greatest challenge for property managers has been the lack of standardization in the industry for dealing with third-party booking sites, and that challenge creates issues for when property managers attempt to distribute their inventory. The difficulties predominantly lie in the rules and configurations required to list properties, which vary from channel to channel.

In many cases, those challenges have been compounded by the employees working for OTAs who aren’t experienced in dealing with the vacation rental product or the requirements to properly deploy them on their sites.

When it comes to the real cost for property managers working with OTAs, there are two areas to consider.

First is the amount managers need to outlay for distribution, which varies depending on the OTA third-party booking site, but it is typically a percentage of the booking to the OTA, a cost that is fairly well quantified.

Second is the additional layer of outlay involved and the resources it takes to create the connection with the OTA as well as monitoring the bookings to make certain they don’t violate booking rules, length of stay, or pet fees, and that they match your approved rates. Additionally, there are channels like Airbnb that are pro-guest and whose company’s Terms of Service supersede any agreed to House Rules or Guest Contracts. Here are some examples:

  • Guests can use “extenuating” circumstances to cancel up to the last minute without penalty. That means you lose all revenue and all cancellation fees.
  • Guests can ask for a refund up to sixty days after their departure. That is long after the property manager has dispersed funds to the owner of the property.
  • Airbnb is not collecting Sales Tax and Bed Tax uniformly, and Airbnb does not support “other” fees, except cleaning.

In the case of HomeAway, additional complexity results from its obsession to “match back” offline bookings. That attempt to monetize offline leakage is flawed because it lacks the tools to properly and fairly track true leakage, and it arbitrarily creates capricious rules to match back offline revenue, even if it was your own repeat guest or the guest booked on another channel like Airbnb or Booking.com. HomeAway also created disparate treatment for its best HomeAway Software customers in the form of automated offline attribution of revenue.

Match back is neither new nor unusual in the travel industry; there are plenty of examples of it, but the percentages are typically much lower than HomeAway’s published attempt of 10 percent of the gross. In addition, there is usually a mutually agreed upon hold-out percentage with fees capped and both parties sharing in the making of the rules and qualifications. For match back to work, the first end dates are usually taken into consideration. Repeat guests are often taken out of the equation, and if a guest books on another channel, they are also excluded.

But HomeAway’s recent match back policy created terms that were unacceptable to the vast majority of professional managers. Only after a huge protest by property managers who threatened to delist their exclusive inventory over match backs did HomeAway retreat from its policy. In late January, HomeAway published a memo saying that offline match backs would be made by property managers on the honor system. It is unlikely that other OTAs will be following HomeAway in that fiasco because their roots have never been in the subscription model, and their monetization was never about offline bookings.

The other online travel booking platforms that are entering the vacation rental space such as Airbnb, Booking.com, Ctrips, Expedia, and mega sites like Tripping.com, are pure play online transactional models. That is the direction of travel that these leading OTAs excel at. It’s all about instant booking—especially with mobile—and HomeAway is still trapped in the past due to its legacy system and customer base built on a classified listing model.

 

The opportunity of technical disruption

In today’s vacation rental property management space we have what is considered classic disruption. We have new technology that has entered on the distribution side in the form of transactional third-party sites. That technology is a dramatically different model from the old classified listing sites such as VRBO and HomeAway of three years ago when guests could use phone numbers and email addresses to communicate with the property managers and their reservation staffs.

That technical disruption of instant bookings on the distribution side has effectively changed the paradigm of how property management companies need to market themselves and the level of expertise required within companies to succeed in the marketplace.

 

Bridging the gap between OTAs and traditional management companies

For many smaller property management companies, it is simply not viable to attempt to work with all the different OTA systems. From a transactional standpoint, a lack of standardization means that the property management company needs to spend a large amount of resources to configure the database and build an application program interface (API) that can port to transactional players. That simply isn’t a viable option for smaller companies with limited resources and nontechnical skill sets.

With that in mind, smaller property management companies have no choice but to work with their property management system (PMS) or with an OTA middleman. But the problem with that approach as a model is that it is inherently inefficient, expensive and, in many cases we’ve seen, causes more trouble. For example, Airbnb and HomeAway do not play well together, so it is no surprise that there is no direct API connection between HomeAway Software (HASP) and Airbnb. And several other PMS systems have severely limited their API options to third-party sites.

 

The importance of exclusivity of contracts—the supply and demand dilemma

It’s worth remembering when discussing OTAs and third-party booking sites that those portals are simply marketplaces; they are not boots on the ground property managers. They don’t clean properties; they don’t service properties; and they don’t provide guest check-ins or the ability to manage large numbers of owners.

The OTAs are simply third-party intermediaries between travelers and the boots on the ground management companies. Unlike the OTAs, tech-enabled property management lodging platforms like VTrips are, at their cores, still traditional property management companies in that they deliver operational services including housekeeping, maintenance, and guest services in labor-challenging resort locations as well as all the managing of owner statements, tax distribution, and income distribution. That operational competency is what creates the stickiness for companies, and that’s what creates exclusivity of contracts with owners. It’s that exclusivity of the inventory that gives the lodging property manager ultimate leverage and power. It gives us the power to leverage the OTAs and, ultimately, the power to pick and choose where the inventory is distributed as well as—to a large extent—leverage OTAs against each other.

There is still plenty of room on the property management side for consolidation, and I believe we are only in the early stages of a pendulum swing toward the lodging side in terms of financial capital and investment pouring in.

Over the past ten years we’ve seen a three-fold increase in category awareness for vacation rentals, thanks, in part, to the OTAs, but at the same time, the supply has not increased. In many cases, the supply is also managed by operators who lack the ability to distribute the inventory to the OTAs and third parties because of the challenges of standardization and API issues that result in even more issues in the supply-demand dilemma.

As a result, there is an opportunity for new players in the vacation rental industry to enter the lodging side. We already have seen that happen in the urban markets, and it will happen in the traditional core resort vacation rental market as well.

 

Is there a future for property managers?

There is always a future for companies that can run their businesses in a cost-efficient manner. When we talk about disruption, we also have to remember that margins—commission rates—are shrinking. When commission rates drop, it means you have less and less margin to operate effectively. For the smaller property manager who is good at controlling costs, including those related to salary, marketing, and IT, there will be a future.

Smaller vacation rental management companies also will be able to compete in a similar way that boutique hotels are competing against large brand hotels. If the smaller vacation rental management companies can embrace distinctive marketing, personalized service, and unique attributes such as luxury, pet friendly, or alternative lifestyle, then they will be able to compete and grow strong businesses. Unfortunately, the majority of the existing smaller firms in the vacation rental industry have not yet made that transformation. Instead, they tend to be offshoots of real estate companies, in house condo association rental agencies, or have principals who developed business models in previous decades. Ironically, the smaller property managers of the future may not be the smaller companies of today.

 

The next 10 years—a wave of new inventory

Currently, we are in the initial stages of the next wave of vacation rental inventory that will revolutionize the product as we know it and will attempt to fill the scarcity of supply.

Over the next ten years we will see a sweeping change as investment capital creates hundreds of thousands of new vacation rental properties, overhauling decades-old and worn vacation rentals with new, purpose-built inventory that will allow the category to sustain its growth.

That situation results in a win for developers, property managers, and OTAs who can partner together to create what the consumer demands. The North American market is wide open for resort development after well over a decade of supply retraction during the housing recession. An even greater opportunity may be Southeast Asia, which is untapped for purpose-built vacation rental development.

VTrips is working with a large international resort developer on new, purpose-built vacation rentals that would be surrounded by world-class amenities. We also have partnered with an international OTA to examine consumer demand data and then take that data to the design board. We will soon be the exclusive property management company for thousands of new vacation rentals—all purpose-built to meet consumer demands.

Partnering with developers for the new creation of inventory requires significant front-end business development and legal contractual resources. Those developers also will expect property managers to assist in the sales cycle and new unit set ups with potential new buyers. Those new development projects can take years before rental income is generated.

The once sleepy vacation rental industry is rapidly transforming. It is an exciting time for firms that can embrace and leverage change. Technology-enabled property management lodging platforms—including VTrips with our centralized resources, operational efficiencies, and core technical competency—are uniquely positioned to transform the supply and demand of private accommodations as we know them.

 

About Steve Milo

Steve Milo is the founder and CEO of VTrips, a growing and innovative property management and rental reservation platform that leverages a proprietary technology system to maximize occupancy, revenue growth, and profitability.

VTrips manages 2,000 exclusive vacation rental properties in traditional resort destinations ranging from Florida to Hawaii. Steve is a recognized thought leader regarding the evolution of the highly fragmented vacation rental industry, and he is a regular keynote speaker at leading conferences in North America and Europe.

TurnKey Raises $31 Million: Founder John Banczak Discusses Funding and Future Plans

By
Amy Hinote
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Last month, TurnKey Vacation Rentals announced it had secured $31 million in Series D funding led by current investor Adams Street Partners, with participation from existing investor Altos Ventures and two new institutional investors. This financing round brings Austin-based TurnKey’s total capital raised since 2013 to $72 million.

With just under 400 employees, TurnKey, led by former executives from Hotwire and HomeAway, now manages approximately 3,500 vacation rentals in 52 markets in the United States. We had the opportunity to catch up with TurnKey cofounder and executive chairman John Banczak to gain more insight into the company’s strategy, outlook, and opportunities for growth.

Amy Hinote (AH): What are your key objectives with this injection of capital?

John Banczak (JB): The capital is going to be used for two main purposes. The first is expansion—it costs money to add markets and local teams. TurnKey hires the local team before a single property is added, and if we plan to grow at a fast pace, additional capital comes in handy. The second purpose is to improve our technology. We’ve been the most technologically advanced property manager (PM) for years now, but that doesn’t mean we can’t improve. We’ve had products built for years such as our noise monitors, in-home tablets, captive portal, housekeeping and inspection apps, our TurnKey FieldSync system and the proprietary digital locks we have developed, but there is more to come.

AH: You raised money from existing investors instead of going outside. Do you see that as a testament to the trajectory of the company or a reflection of slowed interest from outside investment in the vacation rental industry?

JB: We raised money from existing investors and two new investors this time around. That is a great testament to the trajectory of the company. Insiders know it better than anyone. It always makes sense to work with existing investors first if they have the funds available and further investment is even possible. In many cases, outside investors are needed as the size and stage of the company changes. We think we have a great mix of investors who are early-stage-growth-focused, along with some who start to look at later-stage businesses.

AH: Will TurnKey be looking to grow internationally in 2018?

JB: This is probably the most popular cocktail question I get. I think most casual observers love the idea of TurnKey having properties in exotic locations around the world. At this point, we have no plans to do so. Our organic growth in the United States has continued, and with such a large market, our priority is to stick to what we know well.

AH: In what markets are you seeing the most inventory growth opportunity?

JB: We are seeing incredibly consistent growth across most of our markets. There really isn’t much of a difference between beach, ski, or metro for us. The real difference we see is when we have a great local team. Even though we are a technology-driven company, hospitality is won or lost based on people, and we have great people. I think our folks can succeed just about anywhere.

AH: Are you investing in revenue management (RM)? With this discipline still in its infancy, has TurnKey been able to significantly move the needle for bookings using RM strategies?

JB: As you know, revenue management is near and dear to my heart. I started my career at Northwest Airlines doing RM. The team I joined at Northwest are some of the smartest people I’ve ever worked with. Countless people from that group have gone on to incredible careers. I was the junior guy there and was lucky to get that role. Not only did I learn how important RM was, but I also saw it in action from some of the brightest airline folks ever. So RM was an enormous factor at TurnKey from the start.

We don’t talk about our exact strategies, but we have a large RM and business intelligence team here that have built an array of demand forecasting and decision support tools. The head of our RM group came from Zilliant and is one of the most respected pricing and decision support consultants worldwide. We are constantly improving how we manage our data science and our pricing, and I believe we are the most advanced in the industry.

AH: Late last year, you appointed Jen Ford, former senior director of investor relations at HomeAway, to the CFO role. What kind of impact has Ford made on the company, and besides Ford, have there been any other key additions to your executive team or board?

JB: Jen has been an immediate difference-maker at TurnKey. We had been recruiting her for over a year. I don’t think there is anyone in the country who is more qualified or a better fit for the team here, and we are very fortunate it worked out for us. The board has remained the same since the addition of Jeff Diehl (managing partner at Adams Street Partners). Little known fact—Jen, Jeff, and I are all from Wisconsin, so the board meetings usually start with a serious discussion of the Packers.

AH: As you know, Wyndham agreed to sell its European vacation rental division for a reported $1.3 billion and change. Does this valuation have an impact on how TurnKey is looking at the future?

JB: Not really, other than it is a positive sign for the industry overall. I’m not sure what the underlying metrics were, so it is hard to read too far into it. I think the main impact is the awareness it has brought. Five years ago, it was tough to explain the business to the investment community. Now folks understand just how appealing the business is. There is far more money running through the PM space than there is through the consumer websites themselves. The Wyndham deal is just another sign that folks are starting to wake up to this.

AH: Are there any emerging listing channels you are using to market your properties that are starting to show promise? And do you believe Google or Amazon will disrupt the vacation rental funnel?

JB: The big players are still the big players. We’ve really only added Booking.com and Expedia in the past couple of years, and both are performing well. I think Google will have a meaningful impact on the business, particularly on the consumer websites. With vacation rentals slowly being integrated into maps, consumers will have another option to find them. I don’t believe they will have an impact on the service side of things. Amazon has the potential to have an impact on fulfillment, but we believe a positive impact. I don’t think owners who use managers are going to stop doing that because of Amazon’s new technology, but it may make it more practical to manage homes over a wider geographic range with some of the tools they are releasing.

AH: At the VRM Intel Live London event, there was a lot of talk about professionalism and standardization in the industry. How is TurnKey looking at creating standards and leveraging trust in a brand?

JB: We’d like to think that TurnKey actually created the standards. From day one, we’ve always said that homes need to be consistent—that is our brand promise—and that is what enables us to have guest NPS (Net Promoter Scores) over 50, and in some recent months in the 60s. We believe that guests must have homes with digital locks, accurate photos, floorplans and tours, fully vetted and rated housekeepers, easy payment and cancellation policies, worry-free damage, and immediate 24/7 support. We’ve created those standards and stick to them, and we are the only national player to do so.

AH: In a Skift article about your latest funding, TurnKey cofounder T. J. Clark said that he anticipates the rise of “micro-hoteliers” or homeowners who choose different “flags” or brand promises to fly just like hotel owners choose among franchises to affiliate with today. What types of brand promises is TurnKey looking to create?

JB: We are starting to see this already. As we grow, our direct and repeat bookings increase and so has our NPS. While we are not exclusively a luxury manager, we focus on the upper-half of the market. We manage units that have at least some kind of unique feature, whether it be a perfect location, incredible amenities, or a luxury finish-out, or other desirable attribute. We recognize that our guests’ travel purpose often changes, and the units that appeal to them change as well. If they are traveling with a couple of friends in a metro market like Austin, a smaller downtown location might be the most appealing. If they travel to Breckenridge with two other families, a larger home is what they have in mind.

They are going to be able to find them both with TurnKey—and what really appeals to them is that in both situations, they are going to have the same seamless experience. We truly provide unique homes in unique locations, all with the same reliable expectations and experience. This is what matters to guests—knowing that they are going to get exactly what they expect across a wide range of locations and home types.

AH: Are there new technologies that you’ve added in the past year that you believe will become standard for the industry?

JB: There are a few about to launch that I’m not going to talk about, but yes, we’ve made some progress in the past year. Recall that we were the first in the business to build noise monitors back in 2013. We followed that quickly with photo inspections in early 2014 (we’ve now reviewed and verified more than 1.9 million photos). We were the first to launch a Wi-Fi captive portal and the first to make widespread use of SMS for both vendor management and guest support. While we were not the first to develop digital locks, we certainly were the first and only company to use them nationally.

Last year, we were the first company that I know of to make an unprecedented offer to homeowners—we guarantee against fraud now, while maintaining credit card processing rates at or below HomeAway, PayPal, and Stripe. Our identity verification and fraud prevention has gotten that good. I believe that needs to become the standard for the industry. Fraudsters need to know they are not welcome—not just at TurnKey homes, but at any vacation rental.

AH: TurnKey has grown organically instead of through acquisitions. To what do you attribute your success in organic growth? With this funding, has TurnKey identified any key acquisitions?

JB: To grow organically, you need a product that can stand on its own with industry-leading merits at a fair price. TurnKey has this. We truly manage homes better than others in the industry. We drive the revenue, and we do it with a better guest experience at a lower cost. Homeowners are smart—they have a choice, and when they are making that choice, TurnKey stands out among the crowd. When they choose you, they choose your business, your processes, and your people. We think this makes the best fit.

We’ve actually done several acquisitions, though, and when the fit is right, we are very competitive. Scott Gerber, a long-time industry veteran, runs our acquisition program now. Acquisitions have worked pretty well at TurnKey when we emphasize the fit. If a PM is simply looking to get out of the business for the absolute highest dollar value without a lot of concern for who is taking over their owners, then we may not be the best fit. For PMs who are interested in becoming a part of a winning team and sticking with TurnKey, we are a great fit. We’ve kept virtually everyone who has ever worked with any PM we have acquired.

PMs who are looking to exit the business but have deep ties to owners and want them to have the best management going forward at a reasonable cost also do well with TurnKey. We just recently completed an acquisition where the owner of the business was not looking to squeeze out a couple of extra bucks from their owners because this person was going to continue to be in real estate and part of the community. They were interested in balancing the monetization of the business with the long-term impact on their clients. In situations like this, we are a great fit.

Overall, we are active in the market. If a PM is looking at exiting the business, they really need to give us a call. If nothing else, we will make it a much more competitive market for them. If you are looking to sell your home, would you rather have one buyer or three or four? TurnKey is definitely an active buyer, and we have the resources we need to compete with anyone.

AH: Where do you expect TurnKey will be by the end of 2020?

JB: Probably not international yet! We think we will easily move up from the No. 3 provider in the United States to No. 2 and, if our organic growth continues the way we have planned, possibly up to the largest in the United States. We also hope to open our platform up in ways we had never thought of before. We expect to offer services in a number of different ways than we are doing now. That is a discussion for later this year!

Google Hotels: Not The Magic Bullet

By
David Angotti
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1

Are Google Hotel Ads the best way to grow your brand? Is this the answer to the ongoing issues with OTAs? This is a complex, multi-faceted question with an equally complex answer. However, for most vacation rental companies, the brief answer to both questions is no.

Why am I qualified to answer this question?

I launched my first AdWords campaign over fifteen years ago in 2003, covered this topic extensively for Search Engine Journal, grew my EdTech startup leveraging AdWords, and managed well over $30 million in annual spend across thousands of campaigns for an ecommerce conglomerate. Heck, in the day of nickel-clicks, I used Google AdWords to sell an airplane in 2004 – at a total campaign cost of $20!

To better understand Google Hotel Ads, let’s take a walk down memory lane together. Here is a visualization of the increasing revenues that Google has experienced every single year.

Data Source: Statista

Those revenue and growth numbers are staggering for a company as mature as Google! We must understand that we are not dealing with a benevolent company that wants us to succeed. We are dealing with a company that charges a staggering $900+ for a simple intent-based click for its top keyword with zero guarantees on performance. In fact, $213.95 is the cheapest click you can find in the top 100 most expensive keywords! Remember those $0.05 clicks for money-terms? Those are now a distant memory…

What is Google’s motivation for rolling out Google Hotel Ads for vacation rentals? Clearly, we are not dealing with an altruistic brand that is looking after our best interests. Ultimately, Google’s goal is to increase the ad spend for one of their revenue machines – Google Travel.

 

Exclusive Inventory Advantage?

Unfortunately, 99% of property management companies that have exclusive contracts will not have exclusive marketing rights. The company may hold exclusive contracts to manage the properties, but the exclusive marketing rights have likely been forfeited when the property manager listed on Booking.com, HomeAway, and Airbnb. In essence, this will drive down both the ROI and effectiveness of Google Hotel Ads.

To see this in action, visit the hotel card for the Hyatt Regency in Miami and you may notice that the Official Site for the Hyatt Regency is nowhere to be found. The potential guest is only presented with OTA options!

How is this possible? The Hyatt Regency in Miami clearly has exclusive rights to the brand. However, once the exclusive marketing rights have been surrendered, consumers are then able to see all available options on the lodging card. The only way the consumer is even presented with the primary brand is by clicking the ‘View more rates’ option.

 

Even if your local brand overcomes the brand favoritism that Google typically defaults to, consumer confidence is inevitably higher with Booking or HomeAway as opposed to a local brand.  Complicating matters further, additional fees (including the traveler fee) are not passed into the card rates, which creates the illusion of price parity until deep in the booking process!

 

The New OTA?

In an effort to increase the search engine’s profits from Google Hotel transactions, Google introduced the Google Hotels Ad Commission Program (GHACP) in 2015. This relatively new program analyzes your commission bid, brand’s projected conversion rate, and reservation’s rental value with fees excluded. Now, this information is converted to a bid that can compete with other commission bids and cost-per-click (CPC) bids in the ad auction.

Since the cost-per-acquisition (CPA) should be similar with both bid types, the majority of entrepreneurs that I have spoken to prefer the predictability and guaranteed returns of the commission-based bidding.

Depending on the competition in your rental market, a bid between 10% and 15% (rent line-item only) will be the norm. In addition to Google’s commision, you can expect an additional 2%+ in technology costs that will be charged by the authorized Google Hotels Integration Partner. The aggregate commission is similar to the typical 15% Booking.com commission or the 12% Airbnb program that eliminates guest fees.

However, it is worth noting that unlike a traditional OTA, the Google Hotels transaction will take place on your website and you will own the guest record.

 

Next Iteration of OTA Middlemen

Even large technology brands are having problems with their GHACP feed. While Booking.com was able to produce pre-populated dates and only display available units, HomeAway had issues with nearly 50% of their Rome listings recently. In a second-price ad auction, every wasted click drives cost up and ROI down.

At the 2017 VRMA National conference, Steve Milo referred to channel managers as OTA middlemen and coined a new term. Why do property management companies need these OTA middlemen? First, the vast majority of property management firms do not or cannot employ web development talent. Secondly, there is a deficiency of features in nearly every property management software today.

To roll out Google Hotels beyond select big brands, I suspect Google will require using a third-party data solution for smooth integrations and accurate pricing. The channel managers (Integration Partners) will undoubtedly be willing to provide a Google Hotels technology solution, but will keep an additional 2-4% for the service.

 

Big Brand Preference

As we look at the test markets that are currently live, it is apparent that Google has a desire to work directly with traditional OTAs such as Booking.com and HomeAway instead of small, local property managers. In fact, I could not even find a local company listed in any of the test markets!

Skift estimated that Google Travel generated approximately 14 billion in revenue in 2017 and will continue to grow at 20% annually for the foreseeable future! Where is all of this revenue coming from? Primarily from big brands. Even though Google AdWords has well over one million businesses paying for ads, Expedia and Priceline alone are responsible for over 5% of Google’s total ad revenue. Now, the reason behind the big brand preference is crystal clear and we know it can’t be easily overcome.

 

Off-Platform Booking Fees Evolve

If you aren’t a fan of the optional HomeAway Off-Platform Booking fee, you will likely hate the GHACP cookie that track users and automatically charges a non-optional commission up to 30 days later.

Once a potential guest clicks on a link that belongs to GHACP, Google cookies the user. If the user were then to come back to your website via pay-per-click, social media, organic rankings, or any other method and converts, the commission belongs to Google.

 

Small Hilton Hotel Success = Failure for Vacation Rentals?

After Hilton worldwide implemented hotel ads at all 4,200 global properties in early 2011, they saw a 12% increase in ROI compared to traditional PPC ads. Since Google published this case study and regularly mentions it, we can assume this is one of the more successful customers in the program.

Although the Hilton statistic sounds great at surface-level, we must consider whether or not a modest 12% increase in PPC effectiveness makes this a great marketing channel. If your current ads performed an anemic 12% better, would this solve any critical issues for your brand? Would this allow you to be less reliant on the listing sites in a meaningful way?

Also, we must recognize that Hilton was an early adopter (began this campaign in 2011) and benefited from lower competition during this timeframe. The 12% increase in ROI is a lofty target with the increased competition. Finally, if we are wanting to achieve similar results, it is important to honestly assess whether Hilton’s agency/in-house team is similarly skilled at marketing and technology implementations when compared to the average vacation rental management firm.

 

Closing Thoughts

Although the excitement surrounding Google Hotels can be intoxicating and lead diversification is always great for business, resist the urge to respond emotionally to this new ad channel. Instead, commit to analyze this marketing decision (and all others!) on the basis of data and revisit profitability regularly.

Based on Google’s history and other ad products, we can be confident that the search giant will figure out a way to increase their profits and squeeze more money out of each advertiser. Google doesn’t believe in charity and doesn’t care about the vacation rental niche. On a brighter note, Google’s stock was $50 when AdWords was in its infancy and it closed at $1,035.49 last Friday.

Key Data Dashboard Raises $2.4M

By
VRM Intel Staff
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0

Key Data Dashboard, formerly known as VRM Dashboard, a leading developer of data visualization and comparison software for vacation rental managers, today announced a $2.4 million Series A round led by vacation rental companies and investors specializing in early stage ventures. Participating investors include many of the initial investors in Glad to Have You, including property management and vacation rental company 360 Blue.

The funding will be used to invest in significant market expansion and coincides with the release of the company’s new Dashboard interface and data visualization product for vacation rental managers.

“We are excited to partner with this group of investors to accelerate our vision of becoming the premier provider of data visualization and comparison software for the vacation rental industry,” said Jason Sprenkle, co-CEO of Key Data Dashboard. “Vacation rental managers are using our software to spend less time pulling reports and more time making informed revenue decisions.”

Concurrent with the Series A round, founder Amy Hinote is stepping down to focus on expanding VRM Intel.

Condo-World emerges as new booking marketplace for resort condominium lodging alternatives in major US destinations

By
Amy Hinote
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0

Initially flying under the radar, Condo-World has rapidly expanded its reach and is now aggregating resort condominium vacation rentals in multiple destinations on its platform to make finding this lodging alternative easier for consumers. Its proprietary online booking site, call center, and chat service handle the search and booking processes for their partners, including resorts and rental companies.

“We’ve basically put the T-A back in OTA,” said Alex Husner, chief marketing officer at Condo-World. “For a commission lower than that of the major OTAs, this new Resort Collection program allows guests to easily call and ask questions without being burdened by the restriction of not being able to talk to a live person who is knowledgeable about the property. For our partners, it streamlines the reservation process and reduces the time spent on inquiry calls.”

Condo-World created this program in response to a growing demand from its customer base for rentals in other areas, and it realized an opportunity to create a booking platform based on its experience in property management.

“Our understanding of the industry has allowed us to develop a platform that helps our partners increase visibility and drive revenue, while not taking away from their own marketing efforts,” Husner said. “We provide immediate access to the guests’ information once the reservation is booked, and we prefer that our partners be the merchants of record.”

When the technology partnership launched three years ago, it started with nine partners. “We had a soft launch at the end of 2014 prior to having our website fully integrated, and we booked $300,000 in this time period,” Husner said. “The following year this amount grew to $3,000,000, and it has continued to grow 25 percent YOY.”

Today, the Resort Collection includes twenty-one partners in the Myrtle Beach area. “Many of the properties we work with have been able to significantly reduce their reliance on higher commission OTAs because of the bookings we generate for them at a lower cost,” Husner added.

“Condo-World has been the most mutually beneficial OTA partnership we have formed,” said Matt Raab, director of eCommerce and marketing for Sterling Resorts on the Gulf Coast of northwest Florida. “This is because being an OTA is not in its DNA; it is a rental management company that has found growth through an OTAesque partnership.”

Following the success in its own backyard and its new partnership with HomeAway Software, Condo-World is expanding the collection platform to Destin, Panama City Beach, South Walton Beaches, Orlando, Hilton Head, Pigeon Forge, Gatlinburg, and Gulf Shores, and has plans to expand into other parts of Florida, Hawaii, and West Coast ski destinations. In addition to HomeAway, Condo-World is also actively working on integrations with other software partners and channel managers and has plans to license its proprietary software in the marketplace.

“When we named the business ‘Condo-World’ thirty-three years ago, I knew we were setting ourselves up for future growth that would take us far beyond North Myrtle Beach,” said Condo-World founder and CEO, Roy Clyburn.

On its own, Condo-World manages four hundred condos, houses, and villas in North Myrtle Beach and taps the rest of the area through its Resort Collection partners, so expanding outside the area posed its challenges. “We had to make sure our expansion didn’t erode our core business in North Myrtle Beach,” Husner added. “There were difficult hurdles the first year, but we quickly adjusted to eliminate any leakage of business. We needed to be able to offer the same high level of customer service that our brand is known for.”

To be competitive in these new markets, Condo-World needs to reach the right partners and guests. It has developed a comprehensive marketing strategy that includes its more than 250,000-member email database, plus social media, PPC, content, and OTT advertising. “Condo-World has spent large amounts of time and effort to promote our region,” said Raab of Sterling Resorts. “The results have been the bookings of guests who have a very similar level of engagement and excitement as guests that book directly with us.”

Although its existing broad reach already includes a range of guests and budgets, Condo-World ultimately looks for partner resorts and property managers that “value business integrity and providing guests with an excellent experience,” Husner said.

Each new partner has brought challenges, with different booking rules and processes, so they have all played a role in the growth of the program.

“Together with its Resort Collection partners, Condo-World has created a unique way for our guests to visit these new destinations with a brand they know and trust,” Husner said. “By offering exceptional customer experience that begins during the booking process and continues with its partners at check-in, we value the importance of establishing collaborative relationships with the resorts and rental companies that entrust us to promote their properties.”

VRM Intel Magazine Spring 2018 is here!

By
Amy Hinote
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0

Welcome to the spring issue of VRM Intel Magazine. The pace at which business conditions are changing in the vacation rental industry is staggering. As you may have read, I published an editorial, “My Jerry Maguire Moment,” so I won’t rehash those dramatic sentiments here, but the overall point remains true. The demand for vacation homes is healthy. The enormous advantages of staying in a home instead of a hotel resonate with consumers. Margin compression, consolidation, business model shifts, the wave of regulations, and plenty of investment-propped-up noise are making things seem chaotic; but ultimately, the industry is still about providing safe, welcoming, privately owned accommodations and services for travelers. 

As a result, much of this spring issue is dedicated to the core day-to-day operational and marketing challenges vacation rental managers face. From taxes to company culture to data protection to guest relations to taking responsibility for standards and inventory, the following pages contain valuable insights from industry leaders about building and sustaining a successful vacation rental management company.  

One interesting piece of news from the first quarter of 2018 was Wyndham’s announcement that it is selling its European vacation rental business for $1.3 billion, and industry experts will be combing through the details to determine how the valuation affects the industry. According to John Banczak in the article on page 66 about TurnKey’s recent $31 million funding round, “It is a positive sign for the industry overall . . . Five years ago, it was tough to explain the business to the investment community. Now folks understand just how appealing the business is. There is far more money running through the PM space than there is through the consumer websites themselves. The Wyndham deal is just another sign that folks are starting to wake up to this.” 

With increasing investor interest in the industry, new platforms and models are emerging that challenge the traditional ways of doing business. For example, the online travel agency (OTA) business models are evolving in front of our eyes. We’ve seen listing fees and pay-per-lead models shift to transactional fees, and now we’re seeing the introduction of charges for off-platform bookings. This type of charge is unparalleled in modern ecommerce marketplaces, and it will be fascinating to watch how the experiment evolves.  

On page 62, David Angotti provides a different perspective, outlining how OTAs are positively affecting the vacation rental sector. Also in this issue, Jeremiah Gall talks about how guests demand instant gratification, and Steve Milo lays out his vision for the new technology-enabled vacation rental manager. 

In addition, Sarah Bradford’s article on talking to owners about updating properties is a must-read. And if you haven’t listened to her podcast with Tim Cafferty, Sea to Ski with Sarah and T, check it out. They are unafraid to talk about the current issues facing vacation rental managers, and they provide empowering ways to leverage changes to grow your business.  

Also, mark your calendars for the inaugural Vacation Rental Women’s Summit on February 19–20, 2019, at The Ritz-Carlton in New Orleans. This is going to be a special industry event designed to celebrate the many women who have built the industry and to discuss topics of particular concern to this group.  

Thank you again for your continued support of this magazine. I hope you enjoy this issue, and as always, I look forward to your feedback and to seeing you this spring at one of the upcoming industry conferences.  

Northwest Vacation Rental Professionals Selects Fetch My Guest to Power NorthwestStays.com in Landmark #BookDirect Initiative

By
Vince Perez
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4

Fetch My Guest and the Northwest Vacation Rental Professionals partnership addresses the concerns of many in the vacation rental industry. Vacation rental travelers are underserved by not having access to premium listings, the ability to communicate directly with the professional hosts and charged “fees” that increase vacation costs by hundreds to thousands of  dollars. The Northwest Vacation Rental Professionals represents members in Washington State, Oregon, Nevada, Idaho, Montana, Alaska, British Columbia, California and Hawaii.

The Northwest Vacation Rental Professionals leadership team has long recognized the need to create a marketplace that would serve their rapidly growing membership outside of major listing sites who hide information from the traveler.   For years, travelers have built relationships with these well recognized vacation rental member brands who distinguish themselves on delivering service excellence to the vacation rental travel community.  

NorthwestStays.com will seamlessly and efficiently direct travelers to premium vacation rental brands in complete transparency.  No hidden fees, direct communications and a guarantee that they will always receive the best price when they #BookDirect.  NorthwestStays.com will be introduced to the membership at their annual conference at the Semiahmoo Resort in Blaine, Washington on April 23rd.

“Building a community of professional managers, advocating for our industry and promoting our member brands is the three-fold mission of the NWVRP and the new NorthwestStays marketplace, powered by Fetch My Guest, helps to meet our goal of promoting our individual vacation rental brands. It’s about trust, and professionals working together to exceed the expectations of our guests!

Creating and operating an exclusive vacation rental marketplace for our membership will give all of us the opportunity to promote our vacation rental brands and showcase our premium properties, which, in turn, will allow vacation rental travelers to #BookDirect and to be free from the excessive booking fees and controls coming from companies such as HomeAway, VRBO and Airbnb.With this effort, the independent vacation rental professional and the traveler can once again reconnect.

The NorthwestStays marketplace offers us the opportunity to regain lost ground, recapture the data that we own and become the leader in professionally managed premium homes in the Pacific Northwest,” said Daniel Eby, President of the Northwest Vacation Rental Professionals.

“Fetch My Guest is pleased to be partnering with the Northwest Vacation Rental Professionals at this exciting time in their history.  The leadership team is comprised of dedicated volunteers in creating the blueprint for how our industry groups can come together for a common cause.  The past few years, vacation rental professionals have had to withstand constant policy changes from large listing sites that have no vested interest in their success, and only a monetary interest in the travelers we proudly serve and respect.  

For years, many have talked about creating a community of vacation rental brands that would bring back transparency between the vacation rental traveler and the professional vacation rental hosts.  We are excited to take this landmark step with the NWVRP in creating the first of it’s kind marketplace that is focused on serving the members interest first. As vacation rental professionals, we share that passion and look forward to working with many more communities that face the same challenges and want to distinguish themselves from the big box listing sites” said Vince Perez, CEO of Fetch My Guest.

Converging Verticals: From Serviced Apartments to Short-term Rentals

By
Amy Hinote
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1

For travelers, investors, and online marketplaces, the lines are blurring that divide extended stay hotels, apartment hotels (apartotels), condo hotels (condotels), corporate housing, serviced apartments, vacation rentals, and short-term rentals.

At today’s Serviced Apartment Summit in New York, executives from the serviced apartment and extended stay industries discussed their expanding and overlapping verticals with attendees from the vacation rental and corporate housing sectors.

Currently, the verticals are largely differentiated by location (metro vs. beach/mountain/lake) and reason for travel (business vs leisure).

According to Piers Brown, CEO of International Hospitality Media and founder of Serviced Apartment News, “Both [serviced apartments and vacation rentals] have leisure guests. Serviced apartments attract those looking for an urban experience and have a corporate guest to target (versus hotels), which is less prevalent in vacation rentals or holiday lets.”

While additional contrasts exist between the models (including zoning, on-site staff, hotel-like amenities, private outdoor spaces, and in-unit laundry), investors and accommodations platforms that serve non-hotel lodging options are quickly recognizing that the similarities in the booking path outweigh the differences for leisure, business, and medical travelers looking for lodging alternatives that offer more space than a hotel.

OBASA CEO, Gordon Doell, recognized convergence early in the company’s growth cycle, saying, “We started off in single-family residences and got involved in corporate housing as a mistake.”

Doell continued, “Our goal is to create healthy living environments where travelers can wake up and start their day as they would at home. We can help in that way and help them save some money.”

Two factors that are speeding up the convergence of these industries are the consolidation of online marketplace platforms and the new funding flowing into the sectors with the goal of “owning” the inventory. According to Larry Korman, president of AKA Hotel Residences, AKA is currently working with Airbnb on the new Airbnb Plus initiative designed to provide more standardized alternative lodging options to its guests and is investing heavily in the product.

In addition, the vacation rental and serviced apartment industries are both rapidly coming to the conclusion that inventory control is becoming more of a necessity in catering to guest expectations and providing a consistent experience. “People who own the inventory have the power,” said Jon Wohlfert, co-CEO, RESIDE Worldwide. “If you control the experience, then you can differentiate the product.”

As the industries continue to explore the opportunities and synergies that exist within the expanding vertical, the non-hotel accommodations sector appears to be consolidating and professionalizing rapidly.

Sea to Sky Rentals expands into Bellingham with One Suite Stay partnership

By
Amy Hinote
-
0

Sea to Sky Rentals announced an expansion of its luxury vacation rental inventory into North Puget Sound and Bellingham, Washington. adding 14 high-end vacation homes located in and around this idyllic waterfront college town and recreation hub. The expansion is the result of a partnership with Bellingham local operator Barbara Browne, founder and owner of One Suite Stay, who will be joining the Sea to Sky team as Bellingham’s owner sales and area manager.

“We are so pleased to be expanding into Bellingham,” says Sea to Sky owner and founder, Michelle Acquavella. “When researching where to expand, Bellingham was the clear choice with its natural beauty, hip culture, warm community, and access to water and the mountains. Having Barbara Browne already on the ground in Bellingham with her vast knowledge, established relationships with owners and loyal guests, and passion for Bellingham, was a huge bonus and made the decision and transition that much more attractive, and seamless, for everyone.”

Acquavella is co-founder and board member of the Northwest Vacation Rental Professionals, as well as the national Vacation Rental Managers Association, where she actively works to increase professionalism in the industry while promoting a partnership mindset within communities.

Acquavella added, “We look forward to bringing the Pacific Northwest’s finest Vacation Rentals to Bellingham and being positive, contributing members of the community.”

Strategic director, Heidi Stuber, sees significant opportunity with the expansion and said, “As Washinton’s leading homegrown vacation rental company, Sea to Sky is always looking for opportunities to expand our guests’ options for exploring our beautiful state. Bellingham is a vibrant community a stone’s throw from picturesque settings like Lake Whatcom, Chuckanut Drive and Mount Baker. Consistently named as one of the best places to live in the Pacific Northwest, Bellingham is the ideal location for our business to grow and for our guests to get away.”

Barbara Browne is equally excited about the partnership, adding, “I have long admired Sea to Sky Rentals and founder and owner, Michelle Acquavella. Sea to Sky Rentals shares the same values as One Suite Stay,  a strong commitment to the growth, a good reputation of the vacation rental industry in Washington state, and a high level of customer service to both our property owners and our guests. This exceeds my hopes for being able to offer my Owners and Guests, an even higher level of service and excellence.”

Sea to Sky Rentals was founded in Seattle, WA in 2003 as an innovative small business and has maintained a national presence as a leading vacation rental company. From humble beginnings with a single mother-in-law apartment in Phinney Ridge, Sea to Sky has grown to include a diverse inventory of over 100 vacation homes across the Greater Puget Sound and North Cascades.

Matt Landau’s Sense of Place Begins Season Two

By
Amy Hinote
-
0

Vacation rental professionals, rejoice!

Sense of Place, the quirky and avant-garde travel show that follows VRMB’s Matt Landau as he meets worldly destinations through the eyes of vacation rentals, has announced it will begin shooting a second season of the show this coming June.

The new travel show is a breath air for the vacation rental industry as it vividly demonstrates to consumers about the uniqueness of staying in privately-owned homes and reminds property managers about the importance of delivering special experiences to their guests. With a production team that should earn awards for their work on this series, Landau does a beautiful job of interacting with both the destination and the managers and giving us a glimpse into the passion behind the entrepreneurs who have chosen hospitality as a lifestyle.

See Season 1 Episodes of Sense of Place

This comes as exciting news to industry professionals who felt the first season of the show captured an essence of vacation rental hospitality that is subtle and difficult to put into words.

“Before this project began, we knew about the vacation rental movement but we had no idea about its many layers of personality and momentum and charm,” said Stuart Hooper, Principal of Asombro Media, the show’s production company. “In Season 2, we want to take a deeper dive into this X factor of hospitality and look at the world of opportunities that open…the experiences that can be unlocked, simply by choosing a vacation rental instead of a traditional hotel.”

Each of the featured hosts in Season 2 will continue to be esteemed members of VRMB’s Inner Circle (an online owner and manager community). And the season will include vacation rentals in Asia, South America, Europe, and North America as the show looks to double-down on its unique recipe of “education through entertainment.”

“Season 2 comes at the right time too,” Hooper said. “Having just launched our supplemental content campaign for Season 1 and seeing the extraordinary amount of enthusiasm that vacation rental owners and managers have to grow their businesses, I’m convinced that world is definitely ready to hear more of this story.”

Sense of Place provides a stunning, visually-captivating “sense” of how short-term rental managers work tirelessly to make vacation truly special for their guests.

Check out Landau’s “Behind the Scenes” video from Sense of Place with Nancy McAleer, founder of Anna Maria Island Home Rental which pulls back the curtain on the business-side of our industry.

HomeAway’s New Listing Agreement Leads to More Frustration Among Vacation Rental Managers

By
Amy Hinote
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9

Expedia-owned HomeAway recently released an updated Listing Agreement for Property Managers which includes language for integrated property managers (PMs) that is causing anxiety in the vacation rental management community.

Last month, HomeAway announced that it will be further monetizing its platform by assessing fees for off-platform bookings. According to HomeAway chief commercial officer, Jeff Hurst in a previous interview with VRM Intel, the commission would be equal to 10 percent of the pre-tax booking total. The new agreement, however, gives HomeAway more flexibility stating, “. . . such rates may change upon reasonable notice to PM.”

But that is not the change that is upsetting PMs.

While HomeAway maintains that the PM’s decision to attribute bookings that originate on HomeAway’s sites is completely voluntary, the new listing agreement sent to PMs last week sheds light on the processes HomeAway intends to utilize in holding PMs accountable for paying for off-platform bookings. Included in the agreement are expanded off-platform booking definitions, a new set of reporting requirements, and a mandatory submission to internal business audits conducted by HomeAway.

Read the entire updated Listing Agreement for Property Managers

“How disappointing it is to read this, and (it) goes directly to a lack of integrity at the highest levels of decision making at HomeAway,” said Tim Cafferty, president at Sandbridge Blue Realty Services in Virginia and Outer Banks Blue Realty Services in North Carolina. “In spite of assurances verbally of their honorable intentions they continue to act in a disingenuous manner. It reminds me of the saying by Ralph Waldo Emerson, ‘Your actions speak so loudly, I can not hear what you are saying.’”

 

Notable Additions to the updated Listing Agreement

HomeAway’s Listing Agreement for Property Managers includes fresh language related to off-platform bookings and the tools HomeAway can use to police voluntary attribution of off-platform bookings.

First, here’s a glossary for PMs:

  • Integrated Property Manager: Any PM who is integrated through software providers.
  • HomeAway Lead: According to HomeAway, “A booking will be regarded as having originated from the HomeAway Network where PM receives through the HomeAway Network an inquiry, booking request, or other contact from or on behalf of a traveler about a Listing (each, a “HomeAway Lead”).”
  • Off-Platform Booking: “A booking will be regarded as having originated from the HomeAway Network where PM receives through the HomeAway Network an inquiry, booking request, or other contact from or on behalf of a traveler about a Listing (each, a “HomeAway Lead”), and then, as a result of and within 30 days of the HomeAway Lead, PM completes a booking for that Listing directly with the traveler or traveler’s representative, e.g., by telephone or e-mail (each, an ‘Off-Platform Booking’).”

1. Expanded Off-Platform Booking Definition

The new agreement expands the definition of off-platform bookings. The agreement states, “should PM receive a HomeAway Lead about a Listing that is or becomes unavailable for the traveler’s requested dates, and then within 30 days of that HomeAway Lead executes a booking with the traveler for another PM property that comprises the same or similar dates and destination—regardless of whether PM advertises the substitute property on the HomeAway Network—the Company will be entitled to a commission or Off-Platform Booking fee on the total amount charged for the booking of the substitute property.”

2. Reporting Requirement

Additionally, the updated agreement includes new reporting requirements. The agreement states, “It is the sole responsibility of PM to ensure proper reporting of all Off-Platform Bookings to HomeAway, and to transmit such reporting through the Integration, via the Booking Update Service (“BUS”). However, such reporting is subject to review and audit, and if the Company (HomeAway) finds that a certain booking of a Listing originated on the HomeAway Network but was not properly reported as attributable to a HomeAway Lead under the above analysis, then the Company will notify PM of such discrepancy, and will be entitled to assess a commission or Off-Platform Booking fee on the amount charged for such stay unless PM provides reasonable evidence to the contrary.

3. Consent to HomeAway Audits

According to reports from PMs, HomeAway’s auditing requirement is particularly disturbing. The agreement says, “HomeAway may conduct an audit from time to time as it reasonably deems necessary to assess PM’s performance and fulfillment of its obligations under this Agreement. PM will cooperate with the Company (HomeAway) with respect to any such audit, and will provide the Company with access to books and records of accounts, PM Software and related system information, and other information associated with the Listings and the Performance & Activity Reports, as HomeAway may reasonably request for the purpose of verifying proper reporting and payment of commissions and fees.”

A HomeAway spokesperson verified that this new listing agreement is current and clarified, “These terms and conditions are not specific to subscriptions and/or off-platform bookings. They are general for all types of listings, all scenarios. The terms are therefore inclusive of integrated property managers who list via subscription and have off-platform bookings but not exclusive to them.”

He added, “HomeAway has always had the right to audit. It is not new with this agreement.”

 

The Impact to the Vacation Rental Industry

“The new listing agreement released this week reveals a continuing presumption by HomeAway leaders that they ‘own’ travelers, and therefore they do not have the responsibility to compete for the loyalty of those consumers perpetually,” said Randy Hall, founder and CEO of Liquid Life Vacation Rentals in Orange Beach, Alabama. “The word entitled is used repeatedly in the agreement describing HomeAway’s perspective about charging a match-back fee to property managers. The new agreement also included significant language describing HomeAway’s ‘rights’ to ‘audit’ and ‘authorization to charge’ the property manager’s credit card on file.”

Hall added, “Travelers will eventually agree with property managers that they have a choice, and they don’t really want to be ‘owned’ by an ‘entitled’ HomeAway.”

PMs who fall under the HomeAway-defined category of “integrated property managers” argue that the new policies demonstrate inequitable treatment by the company, asserting they they are being treated unfairly in comparison to other rental home suppliers using the HomeAway network.

However, Expedia executives know that, in the United States, a significant number of integrated property managers, including the new set of fast-growing multi-destination management companies, are undeniably reliant on the bookings that come from HomeAway.

In contrast, legacy property managers who built their businesses before the emergence of HomeAway are far less reliant on HomeAway for bookings. Industry observers are watching these legacy PMs closely to see if HomeAway’s new requirements will result in a material loss of inventory for the company. If legacy PMs agree to the new terms giving HomeAway this increased control over their businesses, it will indicate a considerable shift in the vacation rental marketplace, potentially giving OTAs a blank check as they move forward with their vacation rental road maps.

NAVIS adds former WayBlazer CEO and Sabre president to its Board

By
VRM Intel Staff
-
0

NAVIS announced travel industry veteran Felix Laboy has joined its board. Laboy joins an elite advisory team which includes Tom Gonser, founder of DocuSign, and Sanjay Dholakia, former Chief Marketing Officer of Marketo.

Felix Laboy has three decades of experience across a wide-ranging portfolio of leadership positions in the hotel, travel and technology industry. Most recently, he was CEO of WayBlazer, the world’s first artificial intelligence company for travel. Laboy also served as the first president and general manager of Sabre Hospitality Solutions, a leading Software as a Service technology company.

“Felix is a pioneer in the industry, and we are excited to welcome him to the NAVIS advisory board,” said NAVIS CEO Kyle Buehner. “Technology creates so many opportunities for hoteliers and vacation rental professionals to drive revenue while improving guest service. We’re excited to learn from Felix and benefit from his expertise, experience and global perspective as we continue to help our clients grow their businesses.”

Before leading Sabre Hospitality Solutions, Laboy was CEO and co-founder of E-site Marketing, one of the first hospitality Internet marketing companies in the world. He has advised many travel technology start-ups, consulted for private equity firms and taught at the School of Hotel Administration at Cornell University. Laboy also held numerous executive positions at leading hotel companies including The Ritz-Carlton Hotel Company, Westin Hotels and Resorts, ANA Hotels and Four Seasons Hotels. In addition, he served as executive vice president of the Puerto Rico Convention Bureau.

“I have always admired NAVIS for its innovative products and services, and I am honored to join their board,” said Laboy. “I have tremendous respect for Kyle, his leadership team, and the other board members, and I look forward to working with them.”

Laboy also serves as an advisor to ALICE and is a member of the Cornell University Council, having graduated from the prestigious School of Hotel Administration at Cornell.

Vacation Rental Booking Path 101: 2 Exercises for Training

By
VRM Intel Staff
-
0

Want to examine the booking path for vacation rentals? Try these exercises:

1. Your spouse/partner’s aunt is turning 80, and the whole family wants to take a special 6 night beach vacation for the occasion for the first week of August.

  • You, your spouse/partner, your three kids (Ages 1, 4, 7)
  • Your partner’s sister, her husband and their 4 grown and teen children (16, 18, 22, 24)
  • The grandparents (82, 84)
  • The aunt 

Since you work in vacation rentals, the family has turned to you to book this once-in-a-lifetime dream vacation for your spouse’s family. 

Your family lives in Atlanta. The sister’s family is in Washington DC, and the rest of the family is in Charlotte. Everyone wants to drive instead of fly. But they are open to any beach that has a beachfront house that they can afford. You think you can spend around $6,000.

Go. 

Document the following:

  • Which sites you visited, in order
  • How many properties you viewed
  • What questions you had on each property
  • How long it took to get answers to your questions
  • Why you eliminated certain properties
  • Why you chose a property

Then answer the questions:

  • How much time did it take you?
  • How many sites did you visit?
  • How many properties did you view?
  • How confident are you that the property will be as advertised and that everything will go smoothly on your special-occasion vacation? Why?
  • Do you feel like finding a vacation rental is an easy or difficult process? Why?
  • Was there a point that you almost gave up and looked for a hotel instead?
  • What did you learn about booking a vacation rental in this process?

2. Now imagine the family wants to go to Hawaii (they’ve never been to Hawaii, so they aren’t sure where in Hawaii). Same process.

Document the following:

  • Which sites you visited, in order
  • How many properties you viewed
  • What questions you had on each property
  • How long it took to get answers to your questions
  • Why you eliminated certain properties
  • Why you chose a property

Then answer the questions:

  • How much time did it take you?
  • How many sites did you visit?
  • How many properties did you view?
  • How confident are you that the property will be as advertised and that everything will go smoothly on your special-occasion vacation? Why?
  • Do you feel like finding a vacation rental is an easy or difficult process? Why?
  • Was there a point that you almost gave up and looked for a hotel instead?
  • What did you learn about booking a vacation rental in this process?

 

Send answers to info@vrmintel.com.

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