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The New Normal: Adapting to a Changed Reality

By
Clark Twiddy
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As the professional community begins to work its way through the COVID-19 curve and the associated rolling economic calamity induced by the virus, we all begin to wonder what our lives and livelihoods might look like in what will inevitably be a changed reality.

With all the changes we’ve seen in the past few weeks, what might we not be able to put back in the bottle?

 

Arm’s Length

No matter the interest or industry along our streets, social distancing will be here to stay for the foreseeable future. This will impact us directly anywhere we’re used to encountering other people— stores, restaurants, schools, churches, medical care and so on. At some point, we’ll have to rely less on government regulations to enforce this restriction and take more individual responsibility to protect the health of ourselves and those around us.

 

Commercial Spaces

Office space will become less appealing and in less demand. With so many workers seeing firsthand the effectiveness of their efforts from home, we’ll see a sustained evaluation of who has to leave their home to go to work. On a related note, if the digital development of any organization wasn’t a top-three priority, it soon will be, and the faster the better.

 

Larger Government

We’ll expect more from government than we ever have before. There can be no return to smaller governments in the near future, and although this comes as no surprise, the tensions around how to pay for it sustainably are where the real conversations will arise.

 

Necessary Involvement

In this new world, any organization that relies even in part on regulatory authority or government support to operate now includes in its core mission involvement with each—known by a variety of terms, such as external communications or stakeholder engagement, the bottom line is that a seat at the table has never been more important to the very survival of your organization. In other words, if your organization doesn’t have a seat at the table, you will very likely find it on the menu.

 

Selective Inputs

We’ll have to monitor what we put in our minds with an equal diligence as what we put in our bodies. We may, through this crisis, move beyond the information age into the misinformation age. For example, social media reporting on the Outer Banks in the past few weeks has been corrosive, at best, to the public good.

 

Energy Management

The border between work and play will continue to blur as working from home or even on the go become more common. As a result of this, our ability to professionally manage our energy becomes a key driver in our ability to be effective. Conversely, we’ll also have to expect more social exhaustion as we all navigate, to the best extent we can, the new world.

 

Local/Tourist Relationships

In some cases, we’ll have to work on repairing our reputation as welcoming places. While the tensions around health care and the economy will linger for many months, the reputational damage will take years to repair; for example, as Amy Hinote pointed out in “10-year anniversary of the BP-Deep Horizon Oil Spill brings comparisons to COVID-19,” the BP oil spill along the Gulf Coast of 2010 saw many of the same tensions arise, and it took two years for those on-the-ground tensions to abate.

 

But Most of All . . .

Of all the changes we’d like to see and will need to see in order to continue our pursuit of happiness, one thing will remain certain— we will, as Mahatma Gandhi told us, all have to be the change we want to see in the world.

Practicing Conflict Transformation

By
Ali Cammelletti
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A couple of summers ago I was reading a book called The Whole-Brain Child by Daniel J. Siegel. I found it interesting that when children are acting out emotionally it is crucial that we hang out in the right side of the brain with them, empathizing and validating their feelings before bridging to the left side of the brain where we talk about the “why” and use logic. Totally easier said than done.

All I could think of was, “I wonder how this applies to adults?”

A few months later, I was camping with friends, and the book was on the table. One friend saw the book and said, “Oh, you’re reading a Daniel J. Siegel book—that man is brilliant!” I responded thinking she also read the book because her child was only four years older than our little girl.

That wasn’t it, though: she had produced a course for the author as part of the production work she does for her career. She had to read several of his books to understand what he was talking about in his course.

That conversation was the beginning of the path I went down to understanding more about Siegel’s findings and how we actually should be communicating in the same way with adults by hanging out in the right brain before bridging to the left. It follows the same concept I talk about with empathizing before educating, yet it explains more of the “why” behind it.

As humans, we cannot hear or grasp left-brain thinking until we feel heard, validated, and empathized with. Once we have this type of connection, our brains can relax and hear the next steps for resolving the issue or situation at hand. Siegel says that communicating in this way will help us live balanced, meaningful, and creative lives full of connected relationships.

Sometimes I feel like adults can be like a bunch of children running around on a playground lashing out at one another in frustration. I am not convinced that a high population of parents in the 50s–70s were reading books like Siegel’s, but here we are as leaders seeing we must change how we communicate with our team members and in turn coach them on how to communicate with guests.

As I read more of Siegel’s books, I dug into his research about the prefrontal cortex. I learned the nine functions it encompasses: empathy, insight, response flexibility, emotional regulation, body regulation, morality, intuition, attuned communication, and fear modulation. These functions make me think of multiple challenging customer situations I have worked with over the years where these functions were affected.

Siegel shared a story of the son and husband of a woman who was in an accident where her prefrontal cortex was affected and would never be the same. I learned that the prefrontal cortex is compromised by repeated stressors, daily substance abuse, being incarcerated, criminal behavior, sociopathy, and lead poisoning. I also learned that in our state of Oregon, they only started testing for lead paint 15 years ago. What does this mean? I believe there are more people in our world suffering from prefrontal cortex challenges than we realize.

This is where emotional intelligence comes in. Emotional intelligence is defined as the capacity to be aware of, control, and express one’s emotions and to handle interpersonal relationships judiciously and empathetically. Often when I am coaching the root cause of a conflict, I hear that emotional intelligence isn’t being practiced. I feel that this leads to what Brené Brown refers to as compromising dignity, or dehumanization. Dehumanization involves depriving others of human qualities and is the opposite of connection, one of the top three needs in Maslow’s hierarchy of needs. The next time you hear team members verbally tearing apart a guest or coworker, what is your responsibility? We don’t know what people are going through or what they have been through.

As leaders, it is our responsibility to educate team members on how to look at situations through different lenses and look at team members through these same lenses, giving them the tools to connect with others, give people the benefit of the doubt, and build them up.

Another part of the brain is the limbic system, which houses the fight, flight, or freeze stress response. I was told during our adoption process that my numbers showed I was in this state constantly, which I think was due to the amount of times we said yes and were still not picked by a birth mother. The limbic system also houses our emotional processing centers where we ask the questions, “Am I safe? Do people want me?”

I like to share the stages of grief with teams: bargaining, denial, depression, anger, and acceptance. We go through grief during any type of change, not just the loss of a loved one. Change is the loss of what used to be. This looks like welcoming a new family member, moving to a new home or city, changing in a jobs or careers, changing technology, facing the pandemic—the list can go on and on.

We are living in a time of extreme and constant change. When you experience someone throwing an emotional volleyball at you, because all humans do it at one point or often, don’t react by throwing it back, yet put it down and hang out in the right side of the brain. Change your vocal tone and facial expressions, eliminate judgements, and put your ego aside so you can really hear what is happening with the person. They may act like they are mad about the door code not working, for example, yet it might really be their anxiety from driving for five hours with a screaming child and a frustrated spouse.

We don’t know people’s triggers, either. If someone is upset about a sliding door not locking or not having window treatments in a room, it might be because they have experienced house robberies. We just don’t know, and the best thing we can do is believe that people are doing the best they can at that moment. I was coaching a person who was frustrated with another team member for not carrying their weight in the job, which was causing this person frustration and creating challenges with their job responsibilities. The easy reaction is frustration. The mindful and emotionally intelligent response is to approach the team member and ask how they are doing and if there is anything they can do to support them. This is connection, and connection is what dissolves conflict and builds strong teams.

A simple way to keep ourselves in check is to remember The Three Ps by Lise D’Andrea, president and CEO of Customer Service Experts:

Be pleasant
Present a calm demeanor through body language, tone of voice, and words.

Be patient
Let them vent, and don’t give a solution too quickly. This is where empathy comes into play.

Be professional
Give two options when possible for the consumer to feel like they are making the best decision. 

For ‘full’ emotional communication, one person needs to allow his state of mind to be influenced by that of the other.  —Daniel J. Siegel

Airlines Are Not Waiting for a Vaccine. Why are we?

By
Robin Craigen
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As states are buckling under the economic damage of stay-at-home orders, no industry has felt the effects of this order more than travel. The very nature of travel is the opposite of staying at home.

Many states are desperate to reopen; yet, fears of a second wave of infections are legitimate. To combat this, major behavioral changes are needed from the entire travel industry. Beyond new safety and cleaning protocols to be implemented in transportation, lodging, and hospitality, it has to feel safe to leave home if travel is to begin again, restarting this sector of the economy.

The airlines have been first to seize the initiative, and as of early May, most major carriers, including American Airlines, Delta, United, Southwest, Frontier, Alaska, and Jet Blue have mandated face masks be worn by passengers and staff on flights. Several have extended this to cover check-in areas, premium lounges, and boarding areas.

 

OUR NEW HOUSEKEEPING STANDARDS AND CANCELLATION POLICIES ARE NOT ENOUGH

VRMs have also responded quickly to the COVID-19 pandemic. Enhanced housekeeping protocols have been established to neutralize any trace of the virus, and most vacation homes will be cleaner than ever, which we can shout from the rooftops. Many VRMs are making cancellation policies more flexible so people will not be afraid to book. But this is not going to be enough. This is only the beginning of the changes that need to happen.

 

THE VIRUS IS STILL HERE

Incredible gains toward reducing the growth of infections by “flattening the curve” have come from social distancing and a multitude of stay-at-home orders. But the US is still reporting between 20,000–30,000 new cases per day, as it has for the entire month of April. COVID-19 infections have stabilized through social distancing, but they have not gone away. Simple logic tells us that opening for business without keeping some strict social distancing measures in place will be risky, and right now the travel industry cannot afford to be blamed for a new surge in infections, which are likely with or without tourism.

 

SOCIAL DISTANCING—THE NEW NORMAL

Social distancing measures are going to be necessary until a vaccine is available. Few medical experts dispute this, so we better get used to it. We can sit at home and wait for a vaccine (call me in two years), or we can be proactive and outline measures to be taken seriously by all to allow tourism to return to our communities without risk of rejection and shut down again.

 

IT’S NOT ABOUT POLITICS—IT’S ABOUT DOING SOMETHING

Despite the political chaos of experiencing a pandemic in an election year and the information overload that has resulted, we cannot afford to get distracted from our mission—that is, doing what we can to reduce the spread of the virus. The virus spreading is what is hurting us. That is what we must fix. If we fail, we can expect a return to the economically brutal stay-at-home orders as quickly as the multimillion-dollar US ski industry was halted (in about 30 minutes on March 15).

 

GETTING R0 BELOW 1—AND KEEPING IT THERE

For the travel and tourism industry to regain any momentum in the next 18 months, we must succeed at reducing the R<sub”>0 factor to less than 1. The infection rate of a virus is known as the basic reproduction number, or R0 (“R naught”), and represents the number of infections caused by a single contagious individual. If one person develops the infection and passes it on to two others, the R0 is 2. When this number remains above 1, virus cases in the population increase, as has been seen with COVID-19. The Centers for Disease Control and Prevention (CDC) reported the reproduction number to be as high as 6.49 before social distancing was widely implemented in the US in March.

The actual R0 number depends not only on the biology of the disease but also on the actions people take. All indications are that this number is falling, and if new cases are not growing it is possible that the number has fallen to a value of 1 or even less. So how do we keep it there or reduce it further? We cannot survive under stay-at-home orders until an effective vaccine arrives; therefore, our behavior must change so that we can take control of the R0. Mask-wearing, hand hygiene, extensive cleaning measures, and adapting our operational procedures are all worth looking at if we are serious about cutting potential exposure to the virus at every level.

 

WHAT DOES THIS LOOK LIKE?

FACE MASKS: Face masks covering our mouth and nose prevent the dispersal of water droplets that could be carrying the virus. You might think you are healthy, but the contagious asymptomatic carriers are now identified as the cause of the rapid spread of the virus in March. It has taken over six weeks of lockdowns and social distancing to slow the spread, and over 70,000 have died in that time.

Face masks have other benefits beyond reducing your droplet spray. Once you get used to wearing them (and we can all agree it feels weird and uncomfortable at first), mask-wearing shows others that they should be doing the same. So masks visibly encourage good behavior by others for reducing the spread of the virus. They remind us not to touch our faces. They remind us to wash our hands, and they remind us that there is a highly contagious virus waiting to infect us if we let our guard down.

It is going to take time to adapt to face masks. Eventually, we will get more used to them and adjust them less often. If infection numbers stay low, they may not be needed for more than a few months.

 

SANITIZERS AND CLEANING CHEMICALS: Having hand sanitizer and wipes at your fingertips is another new norm. No longer is it just the parents of toddlers who accessorize this way. We are all now germaphobes, or should be, and keeping our hands clean is simply the responsible thing to do.

Cleaning homes to a high standard has always been important to VRMs. Enhanced cleaning with CDC-approved chemicals is no longer above and beyond—it is going to be expected, or you will be rejected by travelers who care about their health.

 

VIRTUAL CHECK-INS: Video technology has become part of everyday business life, and now it could take an important role in social distancing by allowing check-in procedures and personal property tours to happen by Zoom, FaceTime, or Skype calls, rather than in-person. Verified guests can be guided through their home check-in without the need for face-to-face contact with staff. Minor problems can also be troubleshot this way before sending a staff member into the field.

 

This is a shortlist. It is by no means all that we can do. But we need to start somewhere and be sure that we are getting this right to reduce the possibility of transmitting the virus to others.

The list goes on. Additional measures worthy of consideration include the following:

Commercial laundry of all bedding

Removal of non-laundered items like decorative pillows and blankets

Fogging homes with approved chemicals between stays to cover all touchable surfaces

Insertion of 24- to 72-hour rest gaps between stays to allow any potential virus to become inactive

PPE for housekeeping staff

Additional signage at the front and back of house to reinforce policy

Daily staff symptom and temperature checking and reporting

Remote working and reduced staffing at central offices

Additional PTO for staff with COVID diagnoses.

 
Disclaimer: VRM Intel currently doesn’t support 24- to 72- hour buffer times between stays as a solution for the professionally managed vacation rental industry.

 

THINGS ARE CHANGING FAST—KEEP UP!

Everything about the COVID-19 pandemic is unprecedented: the tragic impact on the lives of those infected and their families, the devastating economic impact on businesses, the lightning speed of response required by our medical community, and the decisive actions required by our government.

We could quickly get sidetracked on the politics of how the response to the pandemic could and should have been better, but in this moment, we need to look forward rather than backward to find solutions.

The vacation rental industry now needs to respond in a unified way on a scale that is unprecedented. If we are to guide our guests through the experience of visiting our destinations without infecting our communities, we are going to have to be educators, facilitators, implementors, and ultimately enforcers of social distancing in every part of what we do.

 

A MASSIVE SHIFT JUST HAPPENED

The actions of our national airlines to require face masks for travel is also unprecedented. In less than a week, they have mandated a massive shift in travel consumer behavior that will be more visibly impactful than all the post-9/11 security regulations that morphed into everyday travel protocols. VRMs need to get on that bandwagon fast and be sure this is quickly part of our DNA. If we do not, we risk being marginalized as risky, unprofessional, and unworthy of the trust of our communities and the elected officials who govern them.

 

FIGHT TRAVEL SHAMING AT THE LOCAL LEVEL

In small communities like Steamboat where we are based, the vocal and visible travel shaming that has come from a legitimate fear of infection from the outside world highlights how tenuous our return to “normal” could be. Citizens empowered by local health orders have taken it upon themselves to post notices on vehicles with out-of-state license plates telling them to go home. The local Police Blotter, a daily diary of law enforcement actions published in the local paper, is peppered with complaints about failures to adhere to social distancing. The locals are watching the numbers and are being vigilant.

These same concerned local citizens have the ear of elected officials who want to be seen to be doing the right thing, while allowing businesses a chance to get back on their feet. When restrictions are relaxed, if there is an increase in local cases—or worse, a surge—it takes little imagination to know what will be shut down first: lodging and tourism. The multimillion-dollar ski industry was shuttered statewide in March as cases surged in Eagle County. We have no doubt this could happen again if we let the spread of infections get out of control as we try to start up again.

 

GET ORGANIZED, AND BE PART OF THE SOLUTION

To get out in front of this, VRMs will need to organize with other local lodging entities. Together they must present a united front to work with their Chamber, local DMO and local government to establish mitigation protocols that support social distancing but still allow their businesses to function and welcome people from outside. It will be more work and more expensive to operate and might involve uncomfortable compromises on occupancy, but if your focus is on partnership and being part of the solution, you will have a chance at being part of the future too.

 

EDUCATE AND ENFORCE PROACTIVELY

To change the behavior of employees, owners, and guests on a large scale is no small task. Clear and proactive communication is key. If you expect social distancing to be the new norm, you will have to explain and define what this means and then communicate this early, often, and at every level of your organization. If you have a team of staff, make sure they all understand the need for and the goals of these measures. Leverage your personal relationships with homeowners to get buy-in and support. Let your guests know in booking confirmations, terms and conditions, website content, social media, and blogs that it is safe to travel, and inform them what behavior is expected of them to keep it that way.

Remember, this may not be the norm where your guests and owners live. To avoid an uncomfortable start to their visit, setting expectations before arrival will be super important. Make sure you have masks on hand in case they arrive without their own.

 

THE LIGHT AT THE END OF THE TUNNEL?

It is a cold hard fact that the end of the pandemic is not in our near future.

But that does not mean we should give up. Six weeks of significant social distancing cut the rate of infection in the US dramatically. The next move is on us. We have gained control in many areas of the country, but an erratic return to what was previously normal without strictly maintaining social distancing protocols until the vaccine gets here risks everything we’ve gained. We cannot wait that long, so we must do more and now.

 

VacationRentPayment/Yapstone’s New Policy Delays Payments to Vacation Rental Managers by 30 days

By
Amy Hinote
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VacationRentPayment, a Yapstone payment processing facilitator widely used by vacation rental managers and homeowners, is notifying its property management (PM) customers that it will be holding funds for 30 days from the time of booking.

VacationRentPayment Yapstone Holding Funds for 30 daysAccording to a company email to PMs, “We want to inform you of a change to your current payment funding timing. All reservations will be paid approximately 30 days from the time of booking rather than at the time of booking until further notice. This change will go into effect immediately.”

PMs are reporting that funds ceased to be deposited into their accounts the following day after receiving the email, including revenue from all credit cards, debit cards, and echecks.

Yapstone’s representatives are telling clients that, while some PMs have not yet been notified, the new 30-day policy will apply to all vacation rental management accounts.

According to one longtime Yapstone PM client, “I’ve never seen a vendor operate in such a unilateral, heavy-handed manner. This obtuse and short-sighted decision underscores the ineptitude of its senior management team, lack of fundamental business decorum and calls to question why anyone would partner with such a blundering business within an industry that is predicated on relationships.”

 

Ramifications for Vacation Rental Management Companies

The issue of delayed payments is quickly becoming the greatest COVID-related financial challenge facing vacation rental providers.

Each day we receive multiple emails from PMs about delayed payments for reservations booked through Airbnb, Vrbo, and merchant-of-record channel managers (e.g., VacayHome and RedAwning). However, delayed payments from credit card processors have extensive and far-reaching consequences for PMs, impacting nearly all booking revenue. 

According to PMs who have reported the policy change, below are some of the difficulties resulting from Yapstone’s 30-day delay in payments:

  1. Yapstone’s new policy creates significant hardship in managing cash flow during a time when cash is critical to maintain operations.
  2. With an increase in last-minute bookings caused by COVID-19, many stays are occurring within 30 days. This means the management company must confirm, service and complete stays for guests without receiving any of the funds due to them.
  3. Necessary disbursements from rental revenue for occupancy taxes, travel insurance, and ancillary services cannot be remitted. 
  4. The new policy violates many PM’s agreements/contracts with homeowners.
  5. If a guest wants to cancel or change a reservation during the 30-day window, the PM is unable to do so. The only recourse is telling the guest to initiate a chargeback which has additional negative consequences for the PM.
  6. PMs using Yapstone/VacationRentPayment are at a competitive disadvantage compared to other PMs who are receiving funds as usual, putting their inventory and financial health at risk.
  7. Many PMs earn interest on escrow accounts, and the policy change negatively impacts this revenue stream.

Yapstone’s website says the company manages payments for 400,000 vacation rental properties. If true, the company could be holding over $2.5 billion in rental revenue owed to vacation rental operators during a 30-day window, creating enormous exposure for an industry working to recoup losses related to COVID-19.

Additionally, in states that require escrow accounting reconciliation, the new policy threatens the ability for vacation rental operators to remain compliant. We spoke to Jeff Malarney, chairman of the North Carolina Real Estate Commission (NCREC) who said they are attempting to reach out to Yapstone to discuss potential compliance issues regarding the state’s Trust Accounting regulations.

 

Why is Yapstone making this change?

While we have not yet spoken directly to Yapstone, the core reason for the change appears to be risk management. 

VacationRentPayment/Yapstone is a Payment Facilitator (PayFac), which is a sub-merchant account used to provide payment processing services to their own merchant clients. “A payments facilitator (or PayFac) allows anyone who wants to offer merchant services on a sub-merchant platform. Those sub-merchants then no longer have to get their own MID and can instead be boarded under the master MID of the PayFac who is sponsored by a bank,” Roy Banks, CEO of NMI, told PYMNTS.com. “The PayFac does not have to underwrite all merchants upfront — they are instead, underwriting the merchants essentially as they continue to process transactions for them on an ongoing basis.”

As a result, if a PayFac is not diligent about vetting its customers’ financial stability, a company like Yapstone can end up with a portfolio that includes high-risk clients. While Yapstone services many large, well-funded PMs, it also provides services for less sophisticated PMs who struggle to operate year-round without dipping into advance deposit funds.

When a situation—like a pandemic, for example—occurs (causing numerous refunds, reservation changes, cancellations and chargebacks), less responsible PM companies that have have borrowed from advance deposits don’t have the funds to return to the guests; and Yapstone is left holding the bag and is required to refund the guests themselves. It is likely that Yapstone is hedging against potential losses by holding on to 30 days worth of transactions before distributing them to the merchants. 

In short, financially healthy professional VRMs are paying the price for Yapstone’s decision to do business with less responsible and less credit-worthy companies. 

“VRP’s growth at any cost and lack of basic financial oversight when onboarding new clients has created a business that is heavily invested in unsustainable vacation rental management companies,” said one PM whose company has been working with Yapstone/VRP for a number of years. “Why would [Yapstone] agree to provide merchant services to a company that doesn’t have reconciled accounts and unfunded liabilities? This drunken management style inevitably creates a collection problem, but instead of culling out the bad apples, they crack down on those of management companies that have been trusted partners to bail them out?”

“It’s unfair that when you do everything right, you’re the one that gets penalized for other people’s mistakes!” said another long-time VRP client. “How do you manage cash flow when your partners aren’t paying you?”

Another PM called it “classic embezzler’s logic.”

While Yapstone attempts to decrease its exposure, this new policy substantially increases exposure for vacation rental providers. 

The numbers are not small.

Concerns about COVID-19 are causing many travelers to book last minute. For example, a company with 500 properties receiving hundreds of reservations for peak summer stays, will be waiting for Yapstone to pay over $10 million for stays that are occurring within the 30-day window. 

Yapstone may not be the only payment processing company making changes to its policy. We have received unconfirmed reports that Lynnbrook is also making changes. We reached out to Lynnbook and have not yet received a response.

We also reached out to Ascent Processing who said that it is “business as usual” for its clients, and Ascent will not be delaying payments.

 

Yapstone and Vrbo

Until recently, Yapstone was the payment facilitator for Vrbo/HomeAway, and there are hundreds of comments on social media demonstrating homeowners’ frustration with the Yapstone’s policy changes which included a 3 percent surcharge for timely payment disbursement.

In April, Vrbo moved away from Yapstone to an in-house payment platform. 

“For partners who process payments through Vrbo’s platform, we recently completed the migration of all partners from Yapstone to our in-house payment platform,” said Lisa Chen, Vrbo’svice president of global business for property managers. “We built our payment platform on three principles: security, reliability and choice. These are foundational, no matter the situation, and will guide our actions and policies ongoing. Property managers can continue using software to process their payments as we continue to work with Yapstone.”

However, homeowners have also reported delayed payments from Vrbo.

“As it did for many other operations, COVID-19 created unprecedented disruptions to payment flows, prompting Vrbo to temporarily delay refunds and payouts,” said Chen. “These delays enable the teams to accurately process refunds by sending the correct dollar amount to the correct place and helps avoid scenarios where payouts are sent to partners only to turn around and have their account debited because a traveler quickly cancelled.”

 

What to do?

According to PMs who recently have spoken with Yapstone representatives, the company appears resolute in its decision and may be considering additional delays.

One PM told us her Yapstone account rep said the company is considering further delaying payments to 30 days after the reservation—a move that would be devastating for vacation rental management companies.

In the past, the vacation rental industry has seen vendor companies reverse heavy-handed policies when public backlash from its clients is severe. In this case, though, it is hard for a PM to take a hard, public stance out of fear that payment services could be turned off before the PM is able to find an alternative. 

Even in normal times, anytime a private company is holding billions of dollars that are not FDIC-insured, the risk for default is significant. But in a volatile market environment like the one PMs are currently in, the risk is unacceptable.

The Great Talent Shift

By
Steve Trover
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0

“In the middle of difficulty lies opportunity.”

—Albert Einstein

In these uncertain times, there is one thing the vacation rental management (VRM) industry can count on: We are on the brink of the greatest talent shift in modern history. This presents an incredible opportunity for vacation rental companies to identify and hire the best talent using the right strategy and plan of action.

For industry professionals who are now on the hunt for a new employer, this shift provides an opportunity to work with a strong company that has made it through what may just be the biggest challenge to date.

A short time ago, the single biggest challenge our firm identified for this industry was an unprecedented talent shortage. In an industry that is completely reliant on people to provide exceptional service, this talent shortage was a significant problem for most VRMs. We constantly heard that applicant flow was anemic, with those applying for the many open positions lacking the experience and capabilities to properly fill the roles. With unemployment recently at a record low, managers were forced in many cases to hire individuals to be placed in the wrong seats. In most cases, there were no measures taken to validate that these candidates were a good fit for the roles.

What a difference a couple of months can make.

At the time of this writing, it is clear that an unemployment rate of 20 percent or more is in the cards in the COVID-19 era. While many expect this to be short-lived relative to previous recessions, the sheer scope of this increase in unemployment is without comparison.

consensus that as this crisis passes, vacation rentals will be one of, if not the most, attractive travel option. Before we had significant competition from cruise lines and large hotels. However, as the new normal unfolds, the privacy, security, and safety a vacation rental offers will be more desired than ever before. After being cooped up for what feels like forever, families will look to get away with these assurances in place. Consequently, the combination of the return of rental demand and the talent shift will open up a significant opportunity for both businesses and individuals.

Where before it was exceptionally challenging to identify and hire top talent, there are more qualified people in play than ever before. For talented and passionate professionals, this is an opportunity to find a position with an organization that has weathered the greatest storm of our lifetime and is ready to take advantage of a period of growth like we have never seen before.

To take advantage of this opportunity, organizations need a talent acquisition plan.

Most vacation rental companies have a multifaceted rental marketing plan. They have allocated a budget and have a well thought-out document compiled of tried-and-true marketing practices, along with new concepts used to attract new customers and retain existing ones.

What we find with most companies in our space is that their talent acquisition plans consist of online ads and postings of open positions on their websites. The selection process focuses on the resume, and the interviews are typically unstructured. In many cases, the person or persons responsible for hiring juggle this role along with many other competing responsibilities. This creates a lack of focus and allows for other distractions to deter them from allocating the right time to the process. Therefore, the hiring manager will hire who they think will be the right fit based on subjectivity and their own biases. In some cases, the hiring manager himself may be in the wrong seat.

Companies must move swiftly to create comprehensive talent acquisition plans, leverage people analytics, and assign a point person to ensure consistency and effectiveness. These three steps coupled with a structured interview process will ensure a strong fit for your team.

 

Increasing the talent pool through people marketing

In rental marketing, we typically see a multifaceted strategy that includes a mix of search engine optimization, search engine marketing, social marketing, distribution, and more. People marketing should be done in a similar fashion.

One job posting is not enough. Put together a plan to distribute your job ads across multiple ad platforms such as LinkedIn, Indeed, ZipRecruiter, and CareerBuilder. Consider having a professional and polished looking career page on your website where all open positions are posted and include an email sign-up for job alerts.

Utilizing your team to get the word out is also an effective strategy. Incentivize this by paying a referral bonus to those who refer candidates that you successfully hire. Be sure to post any job openings on your social media outlets, paying special attention to LinkedIn, which according to Social Media Today, is the fastest growing social network. The ultimate goal of your people marketing plan should be to significantly boost applicant flow, so you have a strong candidate pool to select from.

 

Narrowing the applicant pool using people analytics

With an effective marketing campaign and increased applicant flow, narrowing the candidate pool down to the best potential hires is key. As Predictive Index certified partners, our firm utilizes behavioral profiling in the hiring process, for example. Leveraging a highly accurate, but simple and quick-to-administer behavioral survey gives you the ability to understand the job applicant’s behavioral traits. Prior to collecting these surveys, a job target is set by internal stakeholders based on the role. For example, are you looking for a reservations agent? What traits lend themselves to success for the role, according to those who interact most with that position? From this quick analysis, a behavioral target is set. Then all candidates are filtered through the process with the intent of identifying the applicants who closest match the desired behavioral profile.

As a next step, we recommend a cognitive test. Cognitive tests have been shown to be a high predictor of job success and are simple to administer. A cognitive test tells you how quickly this person will get up to speed with new concepts and necessary training. In most cases, the new hire will need to learn software platforms and systems they are not familiar with. It is crucial that they have the ability to ramp up quickly. The more technical the role the higher the cognitive requirements become. In the vacation rental industry, we often find ourselves interviewing applicants with little or no industry experience. Applicants with a higher cognitive score have a shortened learning curve and become more productive faster.

The combination of having a candidate with the right behavioral drives and cognitive abilities has been shown to be a collective 51 percent predictor of job performance.

 

Reducing subjectivity through the use of structured interviews

Another helpful predictor of job performance (26 percent) is a structured interview. A structured interview is a standardized way of interviewing candidates based on the specific needs of the role they are applying for. Candidates are asked the same questions in the same order and responses are compared on the same scale. The key is to take the job description and build a group of interview questions that can properly access whether a candidate has what it takes to execute the job functions. This enables you to rate each candidate objectively and can greatly reduce hiring misfires.

 

The accountability chart

Hiring the right person and placing them in the right seat feels like quite an achievement at this point; however, do not overlook the foundation of defining roles for your entire team. Organizational charts should be deleted and replaced with accountability charts. This reporting structure is said to be an organizational chart on steroids because it takes problem-solving and production to a higher level of performance. When employees know exactly what is expected of them and there is transparency within an organization, the business plan is carried out in a much more effective way than simply showing employees a chart of titles and direct reports.

 

Onboarding is more than paperwork

Once you do the hard work of identifying the best players for your team, it is critical to set new hires on the right track. Research by Glassdoor found that organizations with a strong onboarding process improve new hire retention by 82 percent and productivity by over 70 percent. On top of that, Gallup found that only 12 percent of employees strongly agree their organizations do a great job of onboarding new employees.

Most organizations stop the onboarding process after one week. But the best onboarding processes are no less than 90 days with some extending a full year, depending on the nature of the role. It is critical that the talent acquisition plan encompasses a structured process that ensures the new hire feels welcome, receives a proper introduction to the culture, and has access to the tools and knowledge they will need for long-term success at the company.

 

In closing

In the vacation rental industry, the best teams win. It’s not the company with the best marketing person or housekeeping manager. It’s the company that has a cohesive group of professionals all rowing in the same direction to lead the team and the company to success.

The Great Talent Shift is an opportunity like no other to identify, hire, and retain the very best team. You may be simply missing a few pieces or need to build an entire leadership team as we come out of this challenging time. I would encourage you to focus on the talent acquisition strategy of your company and take advantage of the greatest pool of available talent in our lifetimes.

Recession-Proof Your Brand: Key Strategies to Boost Revenues During Recovery

By
VRM Intel Staff
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0

Build loyalty, leads, and a resilient brand with these revenue management and marketing strategies.

 

As travel restrictions and social distancing jolt vacation rentals, savvy leaders should ready their technology and data strategies for an inevitable market recovery. Now is the time to focus on ways to attract new guests and rebook existing reservations.

While COVID-19 reactions are challenging, recessionary periods are nothing new for our industry. Downturns are part of the travel industry rhythm-and they can be weathered.

In times like these, it’s natural for VRMs to get defensive; but wholesale cuts in promotions, pricing, and staff may have more far-reaching consequences than a recession itself. Instead of engaging in a price war, consider tactics for optimizing systems, building relationships, boosting loyalty, and preserving long-term guest value. As you face the tough times ahead, consider proven strategies employed by NAVIS customers.

 

Turn to technology

With the right technology, companies can grow lead numbers (guests who have previously enquired but do not have an existing reservation), add efficiency, support a remote workforce, and create future direct booking opportunities. They can also reduce knee-jerk pricing strategies with data-driven decisions.

Here are five ways to harness and nurture direct demand to improve operations.

1) Reach out to past guests.

Understand what drives loyalty in repeat guests. Brand and property differentiators need to be emphasized during a slowdown. Appeal to your most loyal segments through the experiences guests love about your property, and leave rates out of the conversation. Kick off the conversation by speaking to their hearts, not their wallets.

2) Make policies “people first”.

Rigid policy enforcement sets the wrong tone, especially in a downturn set off by illness and CDC recommendations. Ideally, vacation rentals accommodate cancellation requests while securing future bookings. In response to COVID-19, one NAVIS client allows for cancellations with a held deposit toward a future stay. Another now holds funds for a calendar year and encourages travelers to rebook. Your company can also consider backfilling cancellations with outreach to past Not Booked, No Availability leads.

Forbes reports that 62 percent of guests are more bothered by unfriendly staff than subpar amenities. Stressful times exacerbate sensitivities for both guests and staff. Adopting “more human” policies can ease tensions and create goodwill. Remember: Your biggest asset in the future is the relationships you develop today.

3) Give attention to your local market.

Yes, travelers are canceling flights and travel. But weary prospects and cooped-up families will need a break, especially after travel restrictions and illness concerns pass. Consider ways to leverage your “drive-market” and close feeder markets to stimulate local leisure business and energize demand once things clear.

4) Grow-don’t shrink – your marketing investment.

A popular adage says, “When times are good you should advertise. When times are bad you must advertise.”

Studies show the advantage of maintaining or increasing marketing budgets in weak economies. The reasons: competitive noise drops, cost of advertising declines, and mind share for future sales is up for grabs. Don’t miss this opportunity to rise above the noise and position your brand for future success.

5) Avoid an ADR plunge.

Whatever marketing or loyalty call-to-action you choose, avoid reliance on price cuts. Published discounts may displace years of competitive positioning and erode brand equity. Instead, compete on quality of service or other incentives that resonate with specific segments. Resist the urge to reduce rates and continue to tell your brand story.

Times are tough – and they may get tougher. But when the outbreak ends, consumers will regain confidence. As VRMs anticipate this recovery, creating and converting demand with technology, service, and brand improvements is vital. For more resources to help aid in your recovery, visit naviscrm.com/recovery.

Lasting Impact: Leveraging Professionalism to Meet the New Traveler Persona

By
Justin Ford
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0

I’m writing this from quarantine in Pawleys Island, South Carolina, a market where vacation rentals have been on hold this spring and where the industry’s summer season also faces uncertainty. We are still deep in the COVID-19 storm, and many people around the world are hurting from the economic and social effects of the pandemic. Yet, we still have to plan for the future and believe we will travel again.

When we started Breezeway in 2016 and began speaking with industry leaders about operations, we often got a sideways look. The editor of this publication wanted to understand, “Of all the areas that you could focus on, why pick service and operations?” Over the past three years, we have written a handful of articles in these pages discussing parts of this story, including the following: the push for quality in traveler experience, the shifting identity of vacation rental operators, and communicating the full value of property care and service to homeowners. The theme is consistent: increased attention to the preparation of and service at properties is the critical point determining success or failure of professional hospitality providers. In fact, this is the overwhelming factor that identifies a “professional” operator.

Now more than ever, as we open our homes again in a world that has been so severely impacted by the COVID-19 pandemic, professional managers have a unique opportunity to meet the demands of a new traveler persona. They must drive a wedge between their product and the “hobby vacation rental owner” and restart their gains in market share.

 

The New Traveler Persona Emerges

Travel will resume at some point this year. People will emerge from shelter-in-place orders with an itch to move around, explore, and reconnect. According to a March 18 article in Forbes, 58 percent of Americans are planning to travel between May and September, provided their destinations are not still subject to restrictions. Data from companies like Key Data Dashboard support this trend and suggest a steadying of cancellation rates and a healthy number of reservations through the summer.

As bookings return, they will come with an altered guest psyche. Guests will have a heightened sensitivity to hygiene and safety, changing how they interact with physical space.

Guests have assumed that the property was prepared and cleaned. Now, this assumption will be tested, and the property will be scrutinized on arrival with increased concern for health and hypervigilance about property preparation and maintenance. This includes, during check-in, familiarizing themselves with the layout, ensuring that every high-touch surface is clean, identifying how to communicate with the property manager, and accessing amenities. Travelers will be more detail-oriented than ever, pushing already elevated expectations even higher.

We soon will see the lines between safety, cleanliness, and quality blur.

Before, the concept of “quality space” centered around the property’s brand—how guests felt when they entered the property. A property’s character encompassed aspects such as predictable amenities and services, artwork, décor, and thoughtfully arranged furniture and lighting. Our current climate gives “quality space” a new meaning. Managers will need to help guests feel more confident about their stay, taking every precaution to ensure that hygiene and safety have been accounted for.

These new expectations will shape travel’s “new normal” over the next year and beyond. According to Phocuswright, the growth of vacation rental market share and awareness ceased in 2019 for the first time since they began tracking this aspect. Now we have the opportunity to push that awareness and regain more of the travel market.

The cruise industry is in trouble, and ships will not be sailing at capacity for some time. Tightened borders, travel restrictions, and expensive ticket prices will curtail international travel. As social distancing continues, leisure travel to many urban markets will be less desirable. The majority of us will have been cooped up for two to three months and will be eager—bordering on desperate—for a change of scenery. Plunging oil and gas prices have prepared people for a summer season wherein they are open to hit the road. Consumers will be more comfortable traveling in their own cars than alongside large groups in airports or mass transportation. All of this should set the stage for a summer travel season dominated by trips to lower-density locations like beaches, lakes, and mountains in drive-to markets.

 

Vacation Rentals Are Well-Positioned for Changing Demand

Shifting travel expectations and behaviors present an opportunity for professional managers to acquire market share. When stacked up against hotels, professionally managed vacation rentals often win out in cost, size, amenities, and quality. These advantages are historically amplified during economic downturns, making vacation rentals the most attractive travel option over the next year.

The factors mentioned above are all considerations we’ve seen in the past, but none are more important now than the expectation of quality space.

Vacation homes offer guests an entire single-family home or condo, promoting social distancing with decreased proximity to other guests. Furthermore, the self-check-in process for vacation rentals often involves the use of smart locks, lockboxes, and key drops.

Another advantage is that vacation rentals have a longer average length of stay than that of hotels. In fact, 67 percent of travelers stay at least a week at a vacation rental, compared to an average of just 1.83 days in a hotel. This difference translates to significantly fewer reservations per unit in a vacation rental, and subsequently fewer guests, property managers, and service partners entering and exiting the premises. Less foot traffic helps guests feel more confident that their rental is clean and that they will remain safe and healthy to fully enjoy their vacations. These market dynamics have left many operators optimistic about activity in drive-to-market destinations.

 

Leaning into Professionalism to Take Action Now

When travel resumes, guests will favor trusted vacation rental brands over hosts renting spare rooms with shared areas. Guests have always wanted professional, predictable, and safe places for travel.

This means now is the time for managers to audit property operations, review internal protocols, and brand standards and reconsider how they coordinate remote staff. “Today’s climate serves as an opportunity for us to rededicate ourselves to best practices,” says Ashley Hamm, President of 360 Blue. “Our property care is foundational to the guest experience, so we’re spending extra time educating our teams so that everyone understands exactly how to perform their work at each property.”

For managers who already leverage “professionalized” housekeeping programs for different event types (e.g., back-to-backs, owner stays, and standard departure), there are still calibrations that can be made to ensure an airtight process. For example, providers could increase the frequency at which they “deep clean” a property (although our clients average 2.4 deep cleans per year, many are considering performing these more regularly going forward).

Professionals could also consider taking extra precautions to supplement housekeeping checklists and protocols (e.g., wiping down high-touch surfaces, swapping in CDC-recommended cleaning products, replacing reusable supplies). This decision might add to the operational burden, but doing so will give brands an advantage and build more confidence that guests will experience a sanitized, clean, and disinfected space when they walk through the front door.

Professional managers have been stringently cleaning their units for some time now, but communicating this level of comprehensive service to guests and owners is more important than ever. Customer service is a core competency in the vacation rental business, and the expectations for proactive client communication become heightened in times of uncertainty. What guests and owners really care about is what has been done to ensure the property’s quality, safety, and cleanliness.

The programmatic communication of cleaning procedures reassures guests and helps demonstrate the full value of the services provided to them. Strategic client communication separates professional managers from the rest of the pack and is critical to reinforcing a trustworthy brand.

 

Expectation for Professional Management Demands Tighter Processes

Traveler needs are changing, and that is nothing new to the vacation rental industry. Although COVID-19 has created extraordinary circumstances, hospitality providers have always demonstrated the ability to adapt and meet guest expectations. Professional managers should use the coming months to audit their operational processes, housekeeping protocols, and remote work coordination because doing so will enable them to accommodate the “new normal” and gain market share.

Be a Contrarian: Now Is the Best Time to Grow Your Inventory

By
Brooke Pfautz
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0

Great things can come out of a plague.

In 1606, a plague swept England, quarantining Shakespeare at his home. During that time, he wrote Macbeth, King Lear, and Antony and Cleopatra. Later that century, Cambridge University closed for a year because of the Great Plague of London. One of its students, a young chap named Isaac Newton, was sent home, where he discovered calculus and refined the ideas that later became his theory of gravity. The proverbial apple that fell onto his head did so under the restriction of isolation, not the familiar comfort of continuity. What many would have seen as a great inconvenience was the spark that inspired Newton to formulate one of the greatest theories of all time.

It makes me wonder . . . what great opportunities will come out of this crisis?

 

BEING A CONTRARIAN CAN PAY OFF

“Be fearful when others are greedy. Be greedy when others are fearful.” —Warren Buffett

Making strategic decisions that defy conventional wisdom can often pay large dividends. Earlier this year, hedge fund manager Bill Ackman believed the coronavirus pandemic was a massive risk for the United States, its economy, and global financial markets. He invested $27 million in hedges, which turned into $2.6 billion in less than a month. He then took most of those gains and bought the beaten down stocks of companies like Starbucks, Berkshire Hathaway, Hilton, and Lowe’s—stocks that were available at “fire sale” prices, yet they will most certainly go up in the long run. Some people have already called this the greatest trade of all time! He was a contrarian and saw the opportunity: This is why he is a billionaire.

At the absolute height of the 2008 financial crisis, when markets were tumbling amid a wave of bankruptcy filings, Warren Buffett penned an op-ed in The New York Times urging investors that it was the right time to buy American stocks. He followed through on his own recommendations and purchased equities in many American companies, including Goldman Sachs. Ten years later, his advice proved to be correct. The S&P 500 was up 130 percent, and Goldman’s stock had jumped by approximately 196 percent. Both Buffett and Ackman demonstrate the immense benefits of going against the grain.

 

ONCE-IN-A-LIFETIME OPPORTUNITY

“Whenever there is change, whenever there is uncertainty, there is opportunity.” —Mark Cuban

I believe we are at the beginning of a once-in-a-lifetime opportunity in our industry. More vacation rental inventory will be spawned out of this crisis, and during the next 6–12 months, we will see more management contracts change hands than we’ve seen over the past decade. Second homes that have never rented before will begin renting. “Rent by owners” who were frustrated by cancellations and dealing with irate guests will be happy to turn their properties over to professional management companies.

Unfortunately, some management companies will not be able to make it through this crisis. Vacation rental managers who seize the opportunity of this inevitable wave will be poised to grow exponentially and will be well positioned on the other side of this pandemic.

A study by management consulting company McKinsey & Company found that when the economy took a downturn, as it inevitably does, the most successful companies looked for opportunities to expand. These companies increased their valuations by more than 38 percent over those companies that simply battened down the hatches.

The most successful companies found opportunities and pressed their advantages. As companies today look to weather this storm, they should consider that managing risk does not mean avoiding it altogether. Echoing this sentiment, a 2008 article from the Harvard Business Review talks about Steve Jobs’ strategy around capitalizing on the opportunity of doubling down during recessions: “. . . We would be ahead of our competitors when the downturn was over. And that’s exactly what we did. And it worked. And that’s exactly what we’ll do this time.”

 

WHERE WILL ALL THIS INVENTORY COME FROM?

Our agency Vintory specializes in helping vacation rental managers grow their inventory. One of the steps in our sales and marketing strategy is to create and define personas of potential inventory targets. There are several personas that I feel will be changing hands in the current state of affairs:

  • First-Time Frank
  • Home-Watch Hannah
  • RBO Ruby
  • Upset Ulysses
  • Venture-Backed Victor
  • Shut-Down Sheldon

I will go into more detail on each persona below.

 

First-Time Frank

During the Great Recession of 2007/2008, my business partner at Vantage Resort Realty and I were targeting just about every property owner in Ocean City, Maryland. As we started signing up new properties, we found an interesting phenomenon: about 25 percent of the owners we were signing up were “First-Time Franks,” second home owners who had never rented out their homes before. They were forced to begin renting their personal vacation homes, their prized possessions, due to their personal financial situation related to the downturn in the economy. Given the deep financial impact the coronavirus has already had in just a short period, I am predicting we will see a similar situation to the Great Recession in which countless homeowners will be forced to rent out their homes, whereas previously they would never have considered it.

 

Home-Watch Hannah

With many markets completely shut down and lack of oversight within most vacation properties, there has never been a better opportunity to expand into home watch services. This is a great supplementary business model where you can generate predictable, recurring revenue that can cover much of your overhead, especially during these low or non-existent rental periods. In addition, by leveraging the principle of “small incremental commitments” highlighted in Dr. Robert Cialdini’s book Influence: The Psychology of Persuasion, these low-risk, high-conversion sales will be a great farm system of future leads for your vacation rental program in the upcoming months.

 

RBO Ruby

RBO Ruby has been self-managing for several years now. She lists her home on Vrbo and Airbnb, and times have been good to RBO Ruby. She casually does this on the side while taking care of her two school-age children. However, recent events have changed how Ruby feels. The wave of cancellations, wrestling and arguing with guests over refund policies, and the loss of thousands of dollars pulled directly from her account have all left a bad taste in her mouth. Now, Ruby’s cleaner has stopped cleaning, leaving her in a pinch. She desperately seeks reliable, professional management. Ruby will be a prime candidate for your services.

 

Upset Ulysses

Justified or not, Upset Ulysses has been extremely frustrated with his current management company. He feels that they have given “his money” back to guests. He does not understand that, in some cases, it was out of the company’s control and dictated by the online travel agency (OTA). Ulysses is also upset over the lack of communication from his current management company. Ulysses has already started calling other management companies looking to make a move.

 

Venture-Backed Victor

Venture-Backed Victor is listed with a large, venture-backed, national conglomerate. He was impressed with their slick marketing and claims of technology. However, Victor’s management company has experienced sweeping layoffs and furloughs, leaving Victor unable to communicate with anyone. He has called and emailed dozens of times with zero response. His primary contact is no longer there. Even his secondary contact has been laid off. He feels vulnerable about the status of his home. He just wants answers; therefore, Victor will most certainly be looking for new local management.

 

Shut-Down Sheldon

There is a new persona that we have never defined previously, but he will most certainly come into play in the near future: “Shut- Down Sheldon.” Shut-Down Sheldon is a homeowner who is left without a manager after his management company has stopped paying homeowners, faltered, and gone under. This is an unfortunate consequence of our current situation. I feel great sorrow and pain for the companies that inevitably will have to close their doors due to this black swan event. Nonetheless, it is inevitable, and as a result there will be many Shut-Down Sheldons looking for new management.

A well laid-out plan to get in front of these personas is essential right now; time is of the essence. Clearly defining each profile and segmenting your data by persona will make your marketing much more effective. Ideally, you can customize your messaging based on each persona’s pain points and show how each of your unique selling propositions solves those pain points.

 

CONCLUSION

There has never been a better time to step on the gas and grow. As counterintuitive as it seems, do not hunker down. If the forward-thinking manner of Bill Ackman, Warren Buffet, Steve Jobs, and even Sir Isaac Newton can teach us anything, it is that great results can come out of a time of chaos and uncertainty. By using the unique circumstances we are all facing to your advantage, you can come out the other side in a fantastic position that could even set you up for years to come. This is a once-in-a-lifetime opportunity—don’t miss out!

You can find us (and a bunch of free advice) at Comparent.com or Vintory.com 

Brooke@Vintory.com

 

Australia, New Zealand, and Southeast Asia: How are vacation rental managers in Oceania and Southeast Asia adapting to COVID-19?

By
Amy Hinote
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0

This week, Rental Scale-Up founder Thibault Masson is taking a deep dive into how COVID-19 is affecting holiday home rentals in Southeast Asia and Oceania, including Australia and New Zealand. 

On May 28 and 29, Masson is hosting a free online conference, gathering 15 short-term rental managers and industry leaders to discuss market conditions, marketing strategies, cleaning protocols, and preparations for recovery.

One of the few positives we are experiencing from COVID-19 is an expansion in online learning, and Masson’s event provides short-term rental managers across the globe an inside look into how Southeast Asia and Oceania markets are performing, what property managers are thinking, and new strategies they are implementing.

During this online conference, attendees will view new data reports and discuss changes in booking patterns, marketing initiatives, and operational changes. 

Regardless of where you call home, this chance to take in a broader view of the global short-term rental industry is an opportunity not to be missed. 

Here is a partial list of presenters:

Click here to register for Rental Scale-Up’s Southeast Asia and Oceania COVID-19 Impact Online Event

What the Data Shows: Crafting digital strategies for COVID-19 and beyond

By
Jennifer Perez
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3

For many vacation rental companies, stability and routine flew out the window in mid-March—along with a significant portion of their income. Proven digital marketing strategies became obsolete in just days.

In the wake of these dramatic changes in the industry, data analysts like Jack Scherrer, Bluetent’s analytics manager, began tracking traveler behavior. Scherrer’s findings show that a travel rebound is underway. This data and other valuable insights can provide vacation rental managers with a basis for adjusting their digital marketing strategies both now and in the future.

Scherrer’s analysis includes data aggregated from 400 direct-booking vacation rental websites. In the first graphic below, you can see that 2020 bookings hit a low point on April 5. After an upward trend, 2020 bookings actually began to surpass those of 2019 on April 27—illustrating the pent-up demand for travel after the recent COVID-19 lockdowns.

In the second graphic, Scherrer tracks arrival dates for bookings made in the last two weeks of April. Surprisingly, the largest spike in arrival dates is on May 1, showing that many travelers are ready for vacation immediately. Another worthwhile note: these bookings were made by travelers from every one of the 50 states. 

The data reinforces Bluetent’s belief that our industry is uniquely positioned to capture travelers before other tourism industries see a rebound. “Travelers still want to preserve a certain amount of social distance, even though stay-at-home orders and distancing requirements are relaxed. They’re going to want drive-to vacations where they can spend time with family in a private space, cook meals in their own kitchen, and stay apart from the masses,” asserts Bluetent’s president, Peter Scott.

To address this new traveler persona, Brynn Flaherty, Bluetent’s director of marketing services, says, “Of course, targeting drive-to markets is essential right now. But you should also consider loosening cancellation policies and accommodating longer stays in order to keep your brand in the running for bookings.”

Flaherty and her team are helping vacation rental brands adjust their messaging to focus on a continued concern for safety. “Travelers are looking for places where they can vacation responsibly. Creating and sharing content that addresses your cleaning policies, lists local restaurants offering take-out, or highlights socially distant recreation options can go a long way toward building trust—not only with potential guests but also within your community.”

Scherrer’s data even has encouraging news for those vacation rental companies not yet experiencing a rebound: travelers are researching future vacation dates in all markets. “We see this as evidence that travelers are still hopeful—and so are we,” Flaherty states. “Our advice to clients still waiting for bookings to restart is: Don’t completely pull the plug on your digital marketing efforts. Keeping your brand in front of potential travelers and giving them the confidence to book with you when the time is right is incredibly important. Once restrictions are lifted, travelers will be very ready to take a vacation. It’s just a matter of time.”

 

Want more data? The digital version of this article on VRMIntel.com will include a link to updated, interactive booking data provided by Bluetent. Looking for help crafting a digital strategy designed to set your vacation rental company up for success after COVID-19? Our experts are here to help. Contact Bluetent at 970.704.3240.

This article is not intended to be a substitute for professional medical advice. We expressly disclaim, and you acknowledge and agree, that we and our affiliates will have no liabilities or obligations to you in any way in connection with this information.

Q&A with Vrbo’s Lisa Chen: “We’ve started seeing encouraging improvement in U.S. traveler demand.”

By
Amy Hinote
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1

While the vacation rental industry faces challenges related to COVID-19, property managers and homeowners are having to work directly with third-party booking providers—including Vrbo and Airbnb—to meet their mutual customers’ needs. 

Between these companies, responses to pandemic-related challenges could not have been more different. In short, with its inventory based in traditional vacation rental markets, Vrbo made the decision to place significant trust in its second-home owners and managers; in contrast, Airbnb demonstrated it did not trust its “host” community and stepped in and make decisions for them.

Although Airbnb’s actions have grabbed media headlines over the last two months, Vrbo remains the primary third-party channel utilized by US leisure-based vacation rental management companies. Consequently, we reached out to Vrbo’s Lisa Chen, vice president of global business for property managers, to ask the most pressing questions we’ve received about the company’s actions related to COVID-19.

 

Q&A with Vrbo’s Lisa Chen

How did Vrbo decide to handle COVID-19-related cancellations and concerns from travelers?

Our policy was driven by an effort to do what was right by everyone involved and by our trust that property managers would find the best solution—and so many did! It was important to us to try to balance partner and traveler needs to find the fairest way to handle a nearly impossible situation. By rewarding those who went above and beyond their cancellation policies to offer refunds or to provide a travel credit, we are encouraging property managers and owners to take care of travelers while giving them the agency to do what is needed. 

A couple years ago, we created a team dedicated to property managers and their needs to continually learn and consider the nuances of how their business operates. By understanding things like legal obligations to homeowners; the need to pay contractors, vendors, and employees at various times; and accounting requirements, we made the decision to give managers the flexibility to do what is necessary based on their business processes, realizing there are likely many other things we’re unaware of or didn’t consider.

Most important, the relationships we’ve developed with so many property managers over the years gave us confidence that their kindness and hospitality would lead them to go above and beyond for travelers whenever possible. We’re incredibly thankful that the vast majority of owners and managers went outside of their policies to reach a resolution.

 

What has been the reaction from the homeowners and property managers (PMs)?

Goodness, it has been (and will continue to be) a journey. I’ve observed property managers handle the situation much as I and our teams would have: At first, it’s a shock to the system with maybe a little bit of denial. Then we take stock and move to action. And we probably shed some tears along the way—I know I have. The whole experience has been humbling.

Despite the hardship the pandemic has brought, it’s been heartwarming to see so many in the vacation rental industry come together and help. For example, we are inspired by Danielle Dirks, a Vrbo partner in Detroit who has opened her vacation homes to medical personnel working long shifts at the local hospital. In addition to giving these hardworking heroes a place to relax and recharge, she’s been able to keep her housekeeping and cleaning staff employed and help local businesses in her community. And there are so many other property managers and owners who are doing similar things.

We also have heard about acts of kindness from travelers—for example, when one Vrbo partner reached out to their guest to assure them that they’d receive a full refund without penalty, the traveler’s response moved them to tears:

“My husband and I could do nothing but cry in emotional gratitude. While we thought we were doing our best in the interest of our guests, our guests had a plan of their own to donate to our cause when we needed it most.”

 I’m proud of how the vacation rental community has responded and honored to be part of it all.

 

How has Vrbo’s years of experience given the company a competitive advantage during this time?

We call property managers “partners” for a reason. Only by working together and understanding their needs can we continue to help families everywhere take the best vacations of their lives.

Despite social distancing, our team is still carrying on with feedback forums in virtual settings, like Rise and Shines and Customer Advisory Board meetings. From our front line agents, to myself and Jeff Hurst, president of Vrbo, everyone at Vrbo is prioritizing ongoing, open, and honest conversations.

Historically, we’ve used feedback from partners to build tools like MarketMaker and Win/Loss Cards that provide actionable insights on destination trends and competition. Meanwhile, we’ve configured our team to more rapidly provide tips and resources in different formats that help partners be more successful. We anticipate these product features and resources will prove even more valuable as we navigate the uncertainties of recovering from a pandemic. 

 

Are there any new features you’ve added directly as a result of COVID-19?

Many of the features mentioned previously, which were already on our roadmap and have begun rolling out, should prove helpful as travelers and property managers navigate COVID-19. Importantly, we are seeing travelers have higher expectations for flexible cancellation policies. Vrbo is launching new ways for partners to merchandise their flexible policies and giving them tools to process cancellations and modifications more easily and efficiently.

Travelers are also concerned about cleaning procedures, and this is an area where we are focusing sharply on education. Many vacation rentals are already professionally cleaned, and we believe property managers have an opportunity to highlight this value to travelers.

 

What features and functionality has Vrbo added that may have gone under the radar with the current events?

One of our main areas of focus continues to be price consistency and the features it unlocks (and don’t forget that managers see an average of 10 percent improvement in conversion after upgrading). For property managers who integrate through software, we’ve introduced the ability to include fees in the total nightly rate that travelers see, so that a consistent price is shown from search to the property page to checkout. When travelers select dates and search for a property, they will see the total price for the stay in addition to the average nightly rate.

We’ve also introduced the ability for property managers to accept bookings with a length of stay longer than 32 days, up to 180 days, as well as more flexible cancellation policies and the ability for travelers to initiate a cancellation or change request, streamlining communication efforts and resolution.

While every new feature is not yet available through all our software partners, our team is working with everyone to accelerate availability. 

  

Are there changes to your payments policy and/or relationship with Yapstone?

For partners who process payments through Vrbo’s platform, we recently completed the migration of all partners from Yapstone to our in-house payment platform. We built our payment platform on three principles: security, reliability and choice. These are foundational, no matter the situation, and will guide our actions and policies ongoing. Property managers can continue using software to process their payments as we continue to work with Yapstone.

As it did for many other operations, COVID-19 created unprecedented disruptions to payment flows, prompting Vrbo to temporarily delay refunds and payouts. These delays enable the teams to accurately process refunds by sending the correct dollar amount to the correct place and helps avoid scenarios where payouts are sent to partners only to turn around and have their account debited because a traveler quickly cancelled.

We continuously monitor and analyze booking and payments data, which informs how we evolve our processes and policies—not only to address the current situation, but also to adapt to future needs.

 

Are there actions Vrbo has taken to support PMs in this time?

Yes, the first action our team took was to reach out to property managers—to see how they were doing personally and to understand how their business has been impacted. I’ve noticed the pandemic is bringing everyone closer together, both professionally and personally. We are talking to even more property managers these days in a desire to connect, commiserate, share ideas, and just be there for one another.

These conversations have reinforced the rationale behind our COVID-19 policy and underscored the importance of continuing to give property managers the flexibility and agency needed to operate their businesses in this challenging environment.

In addition to casual conversations, we’ve simultaneously increased the formal ways in which we gather feedback and investments through more educational resources and content.

Specifically, we’ve continuously updated our COVID-19 resource page on Discovery Hub, created a resource center for Escapia customers, and launched educational webinars for topics like applying for economic relief. We’ll continue to add resources on topics like cleaning guidelines, with webinars and updates from leaders throughout Vrbo and Expedia Group.

The Expedia Group government relations team also helped vacation rental managers and owners share their stories through more than 25,000 emails, calls and tweets that were shared into Congressional offices, highlighting the challenges property managers face and emphasizing their need to access economic relief programs. Days later Congress passed the CARES Act providing relief for managers across the nation.

Property managers should continue to check Vrbo’s Discovery Hub for ongoing updates.

 

What features have been added to Escapia that will help PMs navigate this situation?

In response to previous natural disasters, Escapia has always prioritized tracking and reporting. To provide even more tools and data during the pandemic, we will soon be releasing custom cancellation policies. We have already introduced automated email communications with travelers, the ability to customize fees by channel, and expanded length-of-stay options that will help Escapia partners adapt more easily to traveler needs, keeping pace with a rapidly changing environment as travel begins to recover.

In an effort to save partners countless hours or even days when tracking how COVID-19 is impacting their business, the Escapia team quickly launched a comprehensive cancellation report that includes all important data, such as associated revenue and guest information. The cancellation report may also prove helpful as property managers apply for loan forgiveness and other government relief programs.

Escapia customers can also use the Performance Dashboard to stay up to date with real-time pacing for bookings compared to previous time periods. The dashboard also includes a new option to see the number of cancellations via the bookings tab. Some property managers have already used the custom cancellation reports and Performance Dashboard data to justify business losses and apply for the Paycheck Protection Program and SBA loans. We’re grateful for the partnership and feedback from Escapia customers, and we look forward to continuing to work with them as we make even more investments to build the best platform for property managers.

 

Looking at booking activity, what are you seeing in traveler behavior or intent? What are your predictions for travel this summer in drive-to leisure destinations? Do you think the industry will see more aggressive pricing this summer?

Beginning in mid-April we started seeing encouraging improvement in U.S. traveler demand, especially for longer trips during the end of summer. Google search data also support these trends, revealing that interest in vacation rentals and Vrbo are beginning to increase from their lows.

Meanwhile, almost three-fourths of travelers we surveyed indicated they are willing to stay in a vacation rental this year. As social distancing becomes the new norm (in the near term, at least), travelers may be more attracted to private vacation rentals with the space and amenities that allow them to take extra precautions.

The data also show that travelers who are dreaming about vacations are interested in traveling close to home, are curious about local recommendations for grocery pick-up and restaurant delivery options, and are seeking out listings with flexible and clearly stated cancellation policies. Specifically,

  • Over three-fourths of travelers are more likely to book a rental with flexible cancellation policies
  • Almost half of travelers consider a flexible cancellation policy extremely important
  • Travelers are filtering out less flexible policies (i.e., using the “free cancellation” filter)
  • Listings with relaxed cancellation policies see more bookings
  • 31 percent of travelers expect to book closer to their travel date

None of us know exactly what the near future holds, as health experts debate possible scenarios that are dependent on governments, consumers, treatments and that will vary by region. In the face of uncertainty, the one thing we are certain about is that flexibility and real-time information will be more important than ever. This has certainly been true for my husband and I as we—counter to our usual last-minute travel habits—are planning vacations far into the future, focusing on vacation rentals with flexible policies.

But the skies will clear and families will want to travel again. Vrbo will do everything possible to help property managers be there with open arms to provide spaces to reconnect and recharge.

Florida opens panhandle’s vacation rentals 72 hours before Memorial Day Weekend kick off. See approved short-term rental plans.

By
Amy Hinote
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3

Today, Florida Governor Ron DeSantis’ office approved the reopening of vacation rentals in panhandle counties: Escambia, Santa Rosa, Okaloosa, Walton, Bay, Gulf, Franklin, and Wakulla (county plans below).

“We are happy to see county approvals coming through to reopen vacation rentals,” said Dennis Hanks, executive director, Florida Vacation Rental Management Association (FVRMA). “The panhandle openings are a great start. We are continuing to work with local governments statewide on plans and procedures to get state approvals. With dozens still pending on the governors desk we are hopeful for a pre-holiday announcement of more county reopen plans.”
 

Each of these counties submitted plans that met Florida’s Department of Business and Professional Regulatons (DBPR) guidelines. These plans included a variety of restrictions and guidelines. For example, Escambia County’s plan says, “Reservations and stays will be allowed from U.S. states with a COVID-19 Case Rate less than 700cases/100K residents as of May 15.”

These restricted states include, Louisiana, Connecticut, Illinois, Massachusetts, Michigan, New Jersey, New York. 

Other restrictions in county plans prohibit international visitors, and “reservations from COVID-19 hot spots identified by the Governor are to be avoided for the next 30-45 days.”

Additional cleaning and safety guidelines were included. Here are links to the approved short-term rental plans submitted by Florida counties:

Vacation rental companies along the northern Gulf Coast are currently taking reservations. 

On the Gulf Coast, Alabama gained a first-mover advantage for first part of the summer while Florida’s vacation rentals were closed. 

Alabama’s tourism economy benefits from Florida Governor DeSantis’ shutdown of vacation rentals

By
Amy Hinote
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0

Alabama’s tourism economy is getting a boost from Florida’s continued shutdown of vacation rentals as travelers who are unable to stay in vacation homes in the Florida Panhandle cross the state line for their beach vacations. 

Last week, adjusted paid occupancy on the Alabama Gulf Coast increased 54 percent year over year, while Florida vacation rental businesses lost almost 80 percent of their bookings due to continued government restrictions on leisure travel in short-term rentals, according to data provided by Key Data.

May 2020 Adjusted Occupancy Year Over Year for Vacation Rentals in the Florida Panhandle and AL Gulf Coast, as of May 15

“We are seeing short stays and last minute bookings,” Alabama-based Meyer Vacation Rentals president Michelle Hodges said during the recent Skift Forum on Short-term Rentals, “For us the (Alabama/Florida) state line is almost seamless, so it’s an interesting dynamic . . . we are picking up people who don’t want to give up their vacation and can’t get into their Florida property.”

Jason Sprenkle, cofounder of Florida-based 360 Blue Vacation Rentals and CEO at Key Data Dashboard, “We were in this ‘we’re all in this together’ phase, and now we are in the ‘haves and have nots’ phase.”

“You see some states that are making a full recovery while others are left out, and the recovery is not being driven by demand; it’s being driven by government regulation,” Sprenkle continued. “For example, the demand in the (FL) panhandle has been at least as strong as the demand in Alabama, but they were able to experience the recovery, and in Florida, we were not.”

Here is a look at how reservation activity was affected from March 1 through May 15. 

Vacation rental companies in Florida have been reaching out to Governor Ron DeSantis with pleas to reopen vacation rentals. DeSantis shut down short-term rentals in an executive order in March while keeping B&Bs, timeshares, motels, resorts, and hotels open. On Friday, the governor provided his reasoning for the first time, saying, “Some of them (vacation rental companies) are upset because we never shut down hotels in Florida. But part of the thing is I’ve got all these national guard that I have to put up— I’ve got other people I’ve got to put up. So we needed to have an ability to have hotels–it’s a little bit different situation.”

Watch DeSantis Answer Question on Short-term Rentals at Friday’s Press Conference (1:04 minute mark)

Looking forward, Alabama’s early-mover advantage lasts through the latter half of June as the average booking window has decreased significantly due to COVID-19’s impact on traveler behavior. 

Data provided by Key Data. The spike in October reflects Alabama’s popular Annual Shrimp Festival. 

 

Alabama’s vacation rentals are not the only beneficiary of DeSantis’ short-term rental shutdown. Florida’s hotels in the panhandle are also benefiting. As of May 16, only one Panama City Beach 2.5-star hotel showed availability for the weekend, and this non-beachfront budget hotel was priced at $359 per night. 

Vacation rental professionals expected DeSantis to open vacation rentals on Friday. Instead the governor said counties could submit plans for reopening, saying, “What we are doing is telling counties, if you want short-term rentals, you request it to be authorized through the state and provide your safety plan. If you tell me you’re going to rent ’em out to people from NYC, I’m probably not going to approve that, okay? If you’re saying that you are going to rent it out to people in other parts of FL or something that would be manageable, or if there are ways in there that clearly you have an eye on safety, then I’m fine.”

Some counties have already submitted their plans to the state while others are expected to send theirs on Monday. All counties are hoping to be open in time to take bookings for Memorial Day Weekend which kicks off in less than a week.

Sprenkle added, “People are sitting outside waiting come in, but the destinations that unlock the doors first are reaping the benefits.” 

Florida Governor to Counties: Submit a plan for short-term rentals

By
Amy Hinote
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42

Today Florida Governor Ron DeSantis announced, beginning Monday, the state would move into a “full Phase One,” and short-term rentals can reopen if counties submit a plan for opening safely. DeSantis added, “If your plan says you’re going to accept guests from New York City, I’m probably not going to accept that.”

Throughout Florida’s shutdown, DeSantis has kept timeshares, resorts, hotels, motels, and inns open. He gave his reason for that today saying that he needed to have places to “put up” national guard if needed. 

DeSantis’ message to counties: “For the vacation rentals, what we’re doing is telling counties, if you want short-term rentals—if you want them to be open—you submit your plan and you can show how they are going to be safe.”

Bars and movie theaters also remain closed, but like vacation rentals, amusement parks can submit plans to the state show they plan to reopen safely. 

In addition, DeSantis further opened restaurants and retail, effective Monday to 50 percent.

Airbnb reaches out to city officials to influence “transitional travel reopening plans”

By
Amy Hinote
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3

Airbnb’s Chris Lehane, vice president of global policy and communications, is reaching out to city officials to influence COVID-19-related reopening policies to “work together to restore safety and rebuild our local economies in the smartest, most sustainable, and healthy way possible.”

In a letter obtained by VRM Intel to municipal officials on April 29, Airbnb’s Lehane suggests that the company is currently and actively working with governments to address pandemic-related issues, stating, “Our priority during this crisis continues to be working with cities across the country to make sure we are helping to slow the spread of this virus, while also thinking about what we need to do to start recovering in a way that minimizes the risk of a second or third wave of infections.”

Read the entire letter. 

Airbnb’s letter seeks to influence short-term rental regulations during “transitional travel reopening plans.”

In a recent address to its host community,  CEO Brian Chesky said, “Government officials and policy makers are also focused on our cleaning practices, and we anticipate more regulation,” so this initiative comes with little surprise. However, Lehane’s letter provides more insight into how Airbnb intends to use this crisis in discussions with policymakers. Here are key points from Airbnb’s letter to governments, municipal officials, and city managers:

1. Refund Policy

“When the World Health Organization declared a global pandemic in mid-March, Airbnb clarified that its existing Extenuating Circumstances policy allowed travelers around the world to cancel eligible reservations for a full refund so they would not be in a position of choosing between money and safety. By allowing travelers impacted by COVID-19 to cancel for a refund, Airbnb’s Extenuating Circumstances policy prioritizes public health and avoids spread. We continue to work with local governments to make hosts and guests aware of local policies- including through platform notifications–emphasizing that staying put is in the best interest of communities as we restrict movement as a nation to minimize the impact on our most vulnerable fellow citizens.”

2. Announcement of Enhanced Cleaning Initiative (ECI)

“Today we are announcing our Enhanced Cleaning Initiative, which will launch on the Airbnb website in early May and designates a specific category of spaces listed on Airbnb that meet rigorous cleanliness standards and protocols, as advised by these experts.”

3. Call to Action: Airbnb Asks City Officials to Integrate its ECI into their “transitional travel reopening plans”

“As part of this launch, we hope to continue collaborating with governments on health and risk mitigation, including working together to integrate Enhanced Cleaning Initiative standards and inventory into transitional travel reopening plans.”

“. . . The Cleaning Protocol will also include specific information on COVID-19 prevention, like a wait period before entering, use of personal protective equipment, like masks and gloves, as well as disinfectants and sanitizers that are approved by regulatory authorities.”

4. Promotion to City Officials of a 72-hour “Waiting” or “Buffer” Period as Part of Plan

“. . . hosts will be able to opt into a new feature called Booking Buffer, to create a vacancy period between stays. Through an easy tool on the platform, hosts can commit to keeping their home empty for a set period in between stays, with no activity other than cleaning. Reservations will be automatically blocked during that time frame, currently set at 72 hours.”

 

Regulatory Influence 

Lehane’s letter demonstrates that Airbnb is proactively reaching out to government officials and city managers to:

  1. Boast that Airbnb fully refunded travelers;
  2. Persuade officials to include Airbnb’s new Enhanced Cleaning protocols into government transitional travel reopening plans; and
  3. Promote a 72-hour buffer/waiting period between stays as a regulatory solution. 

Airbnb’s strategy of influencing government policy to promote its agenda is not new. One of the company’s primary hurdles on its road to an IPO was getting its listings legalized in municipalities. To meet this objective, Airbnb caused significant industry disruption in many vacation rental communities by pushing for legalization in homes/apartments in which the primary resident is present while promoting a ban and/or 30-day rental restrictions for traditional second-home/whole-home vacation rentals.

However, both travelers and city officials are learning that Airbnb is a only a website that lists short-term rentals. Airbnb does not own vacation rentals, does not manage these rentals, does not clean these rentals, and does not service these rentals. It is more like a Craigslist with a great brand image and a payment processor. 

Although the policies Airbnb is promoting to governments are designed to promote Airbnb as a friend to the city, these policies are being offered on the backs of its rental providers. For example, Airbnb refunded hosts’ money with no notice and by overriding their existing cancellation policies. 

And the 72-hour “buffer” time?

Currently, there is no evidence that a 72-hour waiting period (or even a 24-hour period) between bookings provides additional safety for guests; and at this time, Airbnb does not have a way to enforce this policy. Many of its listings’ booking calendars are fed to Airbnb via connections with external software systems, and Airbnb has no control over these. Its only recourse is to 1) penalize noncompliant listings with a lower rank in search on the site, or 2) prohibit noncompliant rentals from listing on the site.

Related: How 72-hour waiting periods between stays affect revenue for hosts

Airbnb demonstrates lack of strategic thinking in response to COVID-19

By
Amber Carpenter
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12

Only time will tell how the industry will assimilate the behavior of Airbnb during the COVID-19 pandemic. As the youngest major OTA at the table, Airbnb has proven it is prepubescent at best. Emotionally reactive, inexperienced, and proud, Airbnb turned the volatile COVID-19 pandemic into a deceitful public relations game that ensured no winners.

Mercurial strategies litter the timeline of communications and policy announcements from early March to date. As the timeline suggests, the initial pro-guest policy of offering 100 percent cash refunds quickly deteriorated into a convoluted maze of qualifications a guest had to navigate to seek relief.

“Hosts” have consistently been left out to dry, as Airbnb quickly tried to quell the onslaught of cash refunds and overnight began pushing travel credits.

Related: Amber Carpenter joins VRM Intel’s Amy Hinote to discuss Airbnb’s coronavirus-related decisions over the last 60 days on Wed, May 13, 3:00 pm ET / 11:00 pm PT 

Timeline (Not exhaustive, but here are the highlights)

  • March 11: Airbnb updates the original Extenuating Circumstances Policy, changing vague wording from “endemic” to “epidemic” reasons for canceling.  
  • March 13: Airbnb updates its Extenuating Circumstances Policy to indicate that guests could cancel reservations without penalty due to COVID-19 for arrivals between March 14 and April 13, 2020.
  • March 14: After pushback, Airbnb announces this new policy with additional language that states that the refund will also cover all service fees in addition to the standard rent amounts.
  • March 30: Airbnb updates the COVID-19 policy, again, to include the option for guests to receive either a travel credit or a full refund.
  • March 30: Airbnb extends the eligible cancellation window to include arrival dates through May 31 and adds “proof” verbiage to its COVID-19 refund policy, stating the following: “In order to cancel under the policy, you will be required to attest to the facts of and/or provide supporting documentation for your extenuating circumstance.”
  • March 30: Airbnb announces the $250 Million Host Fund on a live webinar for Hosts with Brian Chesky. Verbiage regarding the 25 percent payout for cancellations is vague during the webinar, and Hosts (and homeowners who were listening) leave the webinar thinking Airbnb will pay 25 percent of the full reservation amount. The Airbnb web page for the Host Fund clarifies that Airbnb is only going to pay out 25 percent of what should have been paid under the original cancellation policy.
  • March 31: Airbnb, again, changes its policy, adding a new clause to its COVID-19 cancellation policy that states the following: “Cancellations will be handled according to the extenuating circumstances coverage in effect at the time of submission.” Guests have no reasonable way to know which policy was in place when they originally requested the refund unless they had a screen capture of the Extenuating Circumstances COVID-19 page from Airbnb.com on the day of their original request.
  • April 9: Airbnb updates a clause in the COVID-19 cancellation policy to read, “Cancellations will be handled according to the extenuating circumstances coverage in effect at the time of submission, and reservations that were already canceled will not be reconsidered.”
  • April 27: Airbnb announces its “opt-in” Enhanced Cleaning Initiative for the Future of Travel via press release, which offers an option to “buffer” arrivals and departures, either by a 24-hour period if Hosts adhere to Airbnb’s suggested cleaning protocol or by a 72- hour period if the Host cannot meet those standards. Professional hosts scramble to figure out how to operationalize these new requirements and evaluate their revenue impact.
  • April 29: Airbnb starts sending letters from Chris Lehane, VP of Global Policy and Communications, to community leaders around the country outlining their cleanliness suggestions for Hosts.
  • April 30: Eligible hosts are finally notified of their pending 25 percent payment under the $250 Million Host Fund.
  • May 1: Airbnb extends the COVID-19 cancellation window for arrivals through June 15, 2020, although Airbnb also announced it will not be paying 25 percent of those cancellations under the $250 Million Host Fund.
  • May 4: Airbnb still has not operationalized the new Enhanced Cleaning Initiative. An account representative at Airbnb states that the ability to opt in to one of the two programs should be available within the next two weeks.

The irony is that experienced hosts around the world were offering travel credits from the beginning, only to be blindsided by Airbnb’s heavy-handed and short-lived campaign to win the hearts of guests with 100 percent cash refunds. This initial move by Airbnb turned property managers’ gracious offers of travel credits into heated debates with guests who claimed that the “right thing to do would be to give a full refund.”

Confused guests who could not get through to Airbnb were attacking property managers through any means possible and demanding the full refund that Airbnb promised, although the hosts did not have any of their funds. Guests who had cancellation requests that did not meet the constantly evolving Airbnb criteria were left in limbo, trying to navigate the complex process of initiating a special refund request on the Airbnb platform. Property managers who dared to try to intervene on their guests’ behalf were turned away and told that only guests could initiate a special refund request. 

Travel Credit Applies to Any Airbnb-Listed Property

But the true atrocity against hosts is buried in the details. When Airbnb cancels a reservation with the host and issues a travel credit to the guest, the guest is able to use that travel credit for any property or experience on the Airbnb platform. So the original host is left with $0, and Airbnb is able to book the transaction as 100 percent deferred, or unearned, revenue until a new reservation occurs or until the travel credit expires. 

Why is this egregious?

Because in the history of gift cards and credits, there have never been 100 percent redemption rates. There has always been what is known as “breakage,” which is part of what creates profitability for businesses dealing in prepaid gift cards, casino games, lottery games, etc. A certain percentage of customers will never redeem their credit. On the date that the travel credit expires, Airbnb gets to convert the unearned revenue to earned revenue on its P&L, thereby adding to its profits without ever paying the host.  

The FAQ on Airbnb’s site explaining why it is issuing generic travel credits for the Airbnb platform instead of for the specific host who lost the revenue reads as follows:

FAQ: Why aren’t you providing Guests with credit toward a future booking specifically for one of my listings?

We considered this, but there are several scenarios where it might not work for you or your Guests. For instance, a Guest may not be able to book when you can host or may not be returning to your area. This credit provides added flexibility for both of you.

 

Sigh. Airbnb thinks it is doing us a favor.

Enhanced Cleaning Initiative and 24-hour Buffer Time

If the offenses detailed above were not enough to solidify Airbnb’s place as COVID-19’s most tone-deaf travel organization so far, it had the audacity to announce to the world that it was rolling out the most comprehensive housekeeping program for short-term rentals. And yet, Airbnb has never checked in a guest, let alone cleaned a short-term rental. As a consolation prize for Hosts, compliant partners will be rewarded with a new badge on their listing and better rankings for future bookings (that may or may not get cancelled, regardless of your cancellation policy).

As VRM Intel has previously reported, these new policies that Airbnb proposed will cost the individual host thousands of dollars a year in revenue opportunity, not to mention operational costs because property management software systems (PMSs) do not come with a “buffer” setting. How this new 24- to 72-hour “buffer” setting will work is not yet clear. As of the writing of this article, there is no way to select either option, and no one knows how the reservation will be entered into the PMS software. Will the “buffer” book a five-day reservation in the PMS as a seven-day reservation with only five days of revenue? Will we all be scrambling to figure out the actual arrival and departure dates versus the day we can go in and clean? How will this “buffered” reservation show up in confirmation emails and other automated communications? Will our homeowners expect and understand that only five days of revenue will be paid out?  

Maybe Brian Chesky and his team could follow through with their promise to collaborate more with their partners, the “hosts,” to create actionable plans that are mutually beneficial. Until then, remember that working with Airbnb—or any other partner that is the merchant of record—is a risk, and the revenue associated with the reservation is not guaranteed until the money is in the bank.  

Related Links

What is the cost of Airbnb’s recommended 24- to 72-hour “buffer” time between stays?

By
Amy Hinote
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14

Across the vacation rental industry, companies, associations, governments, and destination marketing organizations are proactively assessing new standards and augmented cleaning protocols to ensure guest safety and build consumer confidence in short-term rentals. Some of these changes include new safety procedures and personal protective equipment (PPE) for cleaners and inspectors, disinfecting products, new kitchen packages, professionally laundered linens, the elimination of bedspreads in favor of hospitality blankets/duvets/top covers, and new messaging for guests.

Airbnb announced its Enhanced Cleaning Initiative on April 28, 2020.

More controversially, the industry is discussing the addition of a 24- to 72- hour “buffer” or “safe time” between stays.

Last week, Airbnb introduced its Enhanced Cleaning Initiative. As part of this opt-in program, “hosts will commit to a 24-hour window between bookings,” and Airbnb is expected to add acceptance of this new program to its ranking algorithm, rewarding compliant managers and homeowners with higher placement in search. For hosts who do not want to adhere to the new cleaning protocol, Airbnb has created a tool that automatically blocks three days after each booking. According the website, “Simply opt in to the tool and we’ll automatically create a 72-hour booking buffer between each stay.”

In addition, Florida’s Reopen Florida Task Force is recommending in Phase 2 that vacation rental operators should “Maintain 72 hours between guest check-ins to allow for effective cleaning and disinfecting of the rental unit.” And the Vacation Rental Management Association said that “24 hours between the last exit and next entry is reasonable.”

 

Potential Cost of a 24- to 72-hour “buffer” between stays

What could the mass adoption of a 24- to 72-hour window between reservations cost vacation rental managers and homeowners? Using 2019 data provided by Key Data and published in January’s VRM Intel Magazine, we calculated the potential impact on revenue.  

The following chart demonstrates the average value of days lost per property with a 24- and 72-hour “buffer” between stays.

When we apply the Adjusted Paid Occupancy rate for each destination to the total number days that would be blocked off in the recommended buffer periods, the chart below demonstrates the projected loss in revenue for a company managing 100, 250, and 500 units.

The potential loss of revenue for a vacation rental management company is significant, and explaining this adjustment in income to homeowners could prove to be difficult if expectations are not properly set.

 

Regulatory Consequences

Besides the potential loss in revenue, there are serious concerns that future regulations will mandate a buffer between bookings. On April 28, as Airbnb announced the Enhanced Cleaning Initiative, CEO Brian Chesky said, “Government officials and policy makers are also focused on our cleaning practices, and we anticipate more regulation in different parts of the world.”

Airbnb has considerable power to influence local policy—as witnessed in many destinations where Airbnb worked with city officials to legalize rentals in primary residences while banning rentals in second homes.

If Airbnb decides that a 24- to 72-hour buffer between stays helps meet its IPO-driven objectives in municipalities, vacation rental management companies and homeowners may be negatively impacted. With additional support from associations (VRMA and FVRMA)—and adoption from large companies (TurnKey, Acme, Carolina Mornings, Moving Mountains, etc.)—this recommendation gain momentum and turn into a requirement very quickly as local and state governments seek ways to show they are “doing something” to make guests safer. In this reactive time we are in, this 24- to 72-hour buffer time has the potential to become a self-inflicted wound for the vacation rental sector—one that comes at a high cost. 

 

Additional considerations in leaving a home unchecked for 24 to 72 hours

There are additional considerations for vacation rental managers and homeowners when waiting 24+ hours before entering the property after a departure. Did the guest leave any entry points to the home unlocked? Was a grill, oven, or appliance left on? Were heating or cooling thermostats set to non-optimal temperatures? Did the guest leave a kitchen full of unwashed pots, pans, and dishes attracting ants or animals? Or as many on the coast have experienced, was a pile of seafood left on the counter leaving a stench that is difficult to remove? Was garbage left in the property or on porches/patios? If the guest knows that no one is entering the property for one to three days, do they really need to leave at checkout time? Is this waiting period going to be upheld after owner stays, as well?

Smart home technology can help address many of these issues, and further investment in these systems will become even more critical with the adoption of Airbnb’s Enhanced Cleaning Protocol or similar recommendations.

 

Are these 24- and 72-hour recommended “buffer” days necessary?

The real question is: Will a waiting period between stays make guests safer?

According to World Health Organization (WHO), “The virus that causes COVID-19 is mainly transmitted through droplets generated when an infected person coughs, sneezes, or speaks. These droplets are too heavy to hang in the air. They quickly fall on floors or surfaces.”

There is still substantial uncertainty about how long COVID-19 remains on surfaces. WHO’s website states, “The most important thing to know about coronavirus on surfaces is that they can easily be cleaned with common household disinfectants that will kill the virus.”

The American Hotel and Lodging Association (AHLA) is expected to launch its guidelines this week.

To date, the 24- to 72-hour recommendations are not requirements for any government or platform, and we currently do not have any evidence that shows guests need this buffer to be in place in order to feel comfortable booking.

However, as Airbnb and other companies implement these recommendations and advertise the practice, guests and municipalities may be prompted to consider it. The cost for vacation rental providers is high, so we expect to see managers invest in products and processes that eliminate the need for the “buffer” time.

Jeff Paglialonga on FL Vacation Rental COVID-related ban: “We need your support to rectify what I believe is to be the illegal taking of property from Florida vacation rental owners.”

By
Jeff Paglialonga
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3

This letter was sent to Florida Governor Ron DeSantis and Attorney General Ashley Moody and arrived at their office April 29, 2020.

On that same day, Governor DeSantis issued Executive Order 20-112, which continues the prohibition of vacation rentals in perpetuity.

There is no set duration, end date, or object standard for expiration. Our property rights are conditioned on the subjective whims of one man. As a vacation rental manager managing over 360 properties and an owner of eight short term rental units ourselves, I was appalled at the singling out of our industry in the Executive Order.

What reasoning did DeSantis use to shut down vacation rentals and allow hotels and timeshares to continue to operate–while at the same time FEMA, along with other state agencies and counties, were contacting vacation rental managers to place COVID-19 positive guests in our units?

We need your support to rectify what I believe is to be the illegal taking of property from Florida vacation rental owners.

We estimate we will need $100,000 to pay a deposit to a law firm to file a lawsuit. The minimum for those owners who wish to join us is $500. This would mean we need 200 owners participating to raise the $100,000. Our ideal Plaintiff would be an investor vacation rental owner who has more than one property and lost considerable income during the taking period. We have set up a gofundmepage to facilitate the raising of the capital for the initial deposit we believe is needed to initiate a lawsuit.

We do not know where the venue would be for a lawsuit. We believe the case would need to be brought in a county with a history of protecting property owner rights. This will need to be researched. If the court decides in our favor the State would most likely appeal. The case would likely move to the State or Federal Appellate Court, and then on to the Florida Supreme Court or U.S. Supreme Court.

We would most likely plan on asking the Coalition for Property Rights and the National Association of Independent Businesses (NFIB)  to write Amicus Brief. Amicus briefs are legal documents filed in appellate court cases by non-litigants with a strong interest in the subject matter. The briefs advise the court of relevant, additional information or arguments that the court might wish to consider on our behalf.

To be transparent, the Florida Vacation Rental Management Association (FVRMA), is not supportive of our actions. To our dismay, they even suggested to the state that STR’s have a mandatory 3 day waiting period between reservations (email attached)! I am not sure who the FVRMA thinks they are representing, but they certainly are not representing my business interests.

This email is coming from me and there is no agreement in place from any attorney other than to evaluate our options. I am now just trying to gauge interest and whether we have enough support to raise at least $100,000 as the legal fees and expenses will be a lot to handle a case of this magnitude and I realize there is no way to predict how the case will turn out at this point.

The $500 payment towards the litigation would be 100% refundable if we do not get to our goal of $100,000 or if you decide you do not want to move forward under whatever engagement agreement is proposed when we get to that point. 

To engage an attorney, we would have to comply with all Florida Bar ethical rules which is why I am sending this on my own to gauge interest. To start the process please visit our page on https://www.gofundme.com/florida-vacation-rental-owners-illegal-taking-fl a $500 payment towards the goal.

Contact Jeff Paglialonga at jeff@teemingvr.com.

FL Governor DeSantis Receives Demand Letter in Response to Decision to Prohibit Vacation Rentals While Keeping Hotels, Resorts, Timeshares Open

By
Amy Hinote
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94

As President Trump continues to hand over decision-making power to individual states during the COVID-19 crisis, US governors find themselves with more executive control than they anticipated. And, as the saying goes, with great power comes great responsibility—along with a healthy dose of feedback, criticism, and protests from both residents and business owners. Consequently, governors are facing significant backlash for executive orders to open—or not open—parts of the economy.

For example, Florida Governor Ron DeSantis grabbed national headlines on April 14 after he declared professional wrestling an essential service, saying people are “starved” for new entertainment, and “we are watching reruns from like the early 2000s.”

But greenlighting WWE wasn’t DeSantis’ only recent head-shaking executive action. When considering the travel industry’s lodging sector, as the governor weighed opening/closing hotels, B&Bs, vacation rentals, and timeshares, DeSantis crafted an executive order (20-87) to prohibit stays in vacation rentals while keeping hotels, motels, inns, resorts, and timeshares open for business.

The order now has been twice extended, and the vacation rental industry is reacting with a spectrum of activity that, as of yesterday, escalated to vacation rental managers issuing a Demand Letter to the governor, a necessary first step toward a widespread legal challenge to the orders. 

 

Timeline: DeSantis’ Anti-Vacation Rental Actions

  • March 27: Florida Governor Ron DeSantis issued Executive Order Number 20-87. This order suspended vacation rental operations for 14 days and prohibited vacation rentals from making new reservations or checking in new guests for the duration of the order. Hotels, motels, inns, resorts, and timeshares were allowed to remain open. 
  • April 10: Governor DeSantis issued Executive Order Number 20-103, extending the vacation rental ban until April 30, 2020. The ban on vacation rentals was later extended through May 4, when the next directive goes into effect. 
  • April 29: Governor DeSantis issued Executive Order 20-112 outlining “Phase 1: Safe. Smart. Step-by-Step. Plan for Florida’s Recovery.” which opens restaurants, retail, museums, libraries, and elective procedures (with limitations), but keeps vacation rentals closed for the duration of the order–which begins May 4 and is open-ended. As in previous orders, hotels, motels, inns, resorts, and timeshares remain open.
  • According to Florida’s FAQ page about the duration of the order, Phase 2 will begin “Once the Governor determines it is suitable to continue re-opening and after fully considering medical data in consultation with state health officials.” 

Governor DeSantis provided no explanation for the continued closure of vacation rentals, even though—as lodging options—vacation homes are more conducive to the state’s social distancing recommendations than the other lodging types he has allowed to remain open, including hotels, inns, and timeshares. 

 

Reaction from the vacation rental industry

Vacation rental managers have expressed anger and frustration about DeSantis’ decision to keep vacation rentals closed while allowing every other lodging type to remain open. With news of beach openings in neighboring states, Georgia and Alabama, pressure is mounting. 

Yesterday, Orlando-based law firm Fasset, Anthony, and Taylor sent a Demand Letter to Governor DeSantis on behalf of Florida vacation rental property owners, saying, “The purpose of this letter is to protest any extension of the Governor’s ban on vacation rentals and formally demand just compensation for property destroyed and taken by the state under Executive Order Numbers 20-87 and 20-103.”

The letter, initiated by Jeff and Gina Paglialonga, vacation home owners and founders of Teeming Vacation Rentals, states: “These executive orders have forced vacation rental owners to refund all guests scheduled to check in during the banned period under the threat of vacation rental license forfeiture. The executive orders also require vacation rental owners to let their properties sit idle during the peak of the rental season in Florida. Together, these state actions constitute unprecedented and historic destruction and taking of private property held by vacation rental owners. The state’s destruction and taking of private property necessitate just compensation under the Fifth Amendment to the U.S. Constitution (applied to the states through the Fourteenth Amendment), Article X, Section 6(a) of the Florida Constitution, and Section 252.43, Florida Statutes.”

VRM Intel also obtained a brief on legal precendent and analysis related to moving forward with a legal challenge to DeSantis’ order, which recommends, “To streamline the takings on behalf of all vacation rental owners in Florida, a representing entity, such as the VRMA should pursue a class action claim against the state on behalf of all vacation rental owners.”

While some vacation rental managers are exploring legal options, the Florida Vacation Rental Management Association (FVRMA) and Florida Realtors joined forces to try to negotiate with the governor’s office to open vacation rentals by proposing a three-day “safe time” between stays, a move that would reduce overall occupancy for Florida vacation rentals by 25 to 30 percent during the affected time period. To date there is no evidence that a three-day waiting period between stays leads to a lower rate of COVID-19 transmission. 

In addition, there are other dangers in letting a rental property sit empty after a stay for three days before a cleaner, inspector, or manager enters the home (i.e. unlocked entry points, appliances left on, fireplaces or grills left on, spoiled food, mildewed towels, doors left open, unreported property damage, etc). 

 

What is DeSantis’ Motivation?

Why is DeSantis discriminating against vacation rental lodging while continuing to prop up hotels, inns, resorts, and timeshares? In talking to several vacation rental managers, no one seems to have a definitive answer. Most professional vacation rental companies believed DeSantis was reasonable in his approach to vacation rentals before COVID-19.

Some of the guesses about the “why” behind the governor’s actions include:

  • Influence from the state’s powerful hotel lobbying arm;
  • Embarrassment and negative feedback over images appearing in national media of overcrowded Florida beaches during shelter-in-place orders;
  • Lingering animosity with rental listing site Airbnb over the company’s removal of listings on the West Bank and after DeSantis ordered state officials to refrain from using Airbnb when conducting state business (an order that was later rescinded);
  • A belief that local residents are more comfortable with travelers staying in hotels instead of vacation rentals;
  • Unsubstantiated fear that vacation rentals will be populated with “diseased New Yorkers” (which wouldn’t explain why timeshares are still open);
  • Or simply that DeSantis is in over his head with the magnitude of reopening decisions.

According to Jeff Paglialonga, vacation home owner and founder of Teeming Vacation Rentals, “As a vacation rental manager managing hundreds of rental lodging options, I was appalled at the singling out of our industry for personal retribution by an Executive Order of Governor DeSantis.”

In Florida, vacation rentals have been an established and popular lodging type in the state for a century.

As DeSantis knows, according to a recent UCF research study, “The 2018 economic impact of Florida’s vacation home rental industry represents $16.6 billion in direct spending and $10.8 billion in indirect spending, totaling $27.4 billion.”

In 2018, the total amount of tourists staying in vacation rental homes in Florida was 14,233,274, which equates to 11.2 percent of the total 127 million tourists that came to Florida in 2018.

The report adds that “The direct spending amounts to nearly $46 million a day and approximately $1.9 million every hour . . . and the direct spending supports roughly 115,000 jobs.”

According to Palm Beach’s WPTV, on April 20, “New numbers Monday show Florida has paid out only about 6.2 percent of the 1.5 million unemployment claims submitted since March 15.”

The state’s Department of Economic Opportunity dashboard says they have processed 162,039 of the claims but only 40,193 have been paid so far.

Related: Phase 2 Plan for Florida Recovery

Florida’s Phase 2 of reopening adds cumbersome regulations for vacation rentals.

The Professional Vacation Rental Manager’s Crisis Playbook

By
Clark Twiddy
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0

An emerging piece of any professional rental manager’s value proposition is the professional organization’s ability to operate in an environment with a high degree of uncertainty. Coupled with the many other layered demands of successful rental management, this crisis component can be physically daunting and emotionally exhausting. The character of our organizations is revealed more rapidly in a crisis than at any other time, and as such, the stakes are high.  

While each crisis is unique, there are a few principles in an ambiguous environment that can be the bedrocks of a path forward for your stakeholders. In a situation where so much is unknown—whether that’s a natural disaster, global contagion, financial conflagration, or simply man-made problems—it’s useful to have a simple, understandable, and uncomplicated group of guideposts to help move the team forward together.

Trust

In any crisis, trust is the coin of the realm—to be heard, you must first be trusted. Research by the Kellogg School of Management suggests that to build trust organizations need to relentlessly share four main attributes; experience, expertise, empathy, and consistency. Check your content in every direction—internal and external—for each of these things. Make it personal to your team as well in every interaction they have with a stakeholder.

Communication

Sharing just a few principles within your organization and with your customers is key; sharing more than a few becomes tedious to execute and confusing to communicate. For example, during our recent series of named storms our team worked to simply be three things both to each other and our customers—quickly accessible, consistent across platforms, and candid in our guidance.  

  • We share status updates across media platforms at regular planned intervals.  
  • We work to be clear and simple in our challenges within our office teams.
  • We do not propose, in a crisis, to always agree with our customers; we do, however, as a core belief, propose to make every last effort to understand their perspective.  
  • We focus on what we are and don’t try to be things we are not; we aren’t a law firm, a medical provider, or elected officials. We can guide you to those things, of course, but we are a hospitality company–that’s what we do best.
  • It is the role of senior leadership, in a time when many concerns are uniquely personal, to ensure that each and every voice is heard across the organization. Take some extra time in all communications and forums to make these avenues clear. Doing so builds trust.

Leadership

As a leader within an organization, there will always be hunger for clarity where none exists–that vacuum is why leadership prevails. In these moments of self-doubt, it’s useful just to have a bedrock compass of action; for example, in our current COVID challenges we simply say to ourselves that 1) we’re going to do what’s right and 2) we’re going to do the best we can.

That’s all we can do, if we’re honest, but it’s enough to get through the day.

Forecasting

Managing time horizons is also key–the higher the uncertainty, the closer at hand the time horizons that can be managed. It’s key to have a destination–a planted flag in the future–but to be credible that flag has to be both achievable and realistic and that means sometimes it’s enough to have it planted next week, rather than six months out. If nothing else, move to a future goal and share that goal in every direction. Military professionals call this commander’s intent.

Management

Make sure you have a team (better yet a nerve center) that is empowered to make day-to-day decisions and make sure they understand the *small* number of decisions that senior leadership reserves the right to make. This team will make mistakes; watch how well the team surfaces and corrects them. Monitoring this ability is a key job of leadership. Resist entirely the urge to make the majority of decisions. Make sure the credit goes to the front-line and the blame goes to the top.

In any crisis, anything that’s longer than one page is too long and this article is no different–work the goals and processes, empower your team, believe in your people, and lead yourself as you would your team. Work fast, work honest, and maintain your perspective–fast forward in your mind by one year and ask yourself how well you did. 

Slow is smooth and smooth is fast.

Hosts launch legal fund for collective action against Airbnb for unilateral refunds and inciting travelers to cancel reservations

By
Amy Hinote
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10

Airbnb’s home suppliers, or “hosts” using the Airbnb label, are beginning to use legal channels to hold Airbnb accountable for “unilaterally, and in violation of hosts cancellation policies, refunding guests who booked reservations” and for inciting travelers to cancel their reservations.

On March 13, Airbnb announced the company would be overriding its hosts’ cancellation policies by adjusting the terms of its Extenuating Circumstances policy and by issuing full refunds to guests for stays between March 14 and March 31. While the company refunded the cost of the rental, Airbnb did not initially refund its service fee. However, on March 14, after significant push back from its suppliers, Airbnb decided to also refund its service fee. Later, Airbnb extended the dates for refunds through May 31. The series of events led to significant hardship for its home suppliers who were working with guests directly to change stay dates before Airbnb stepped in an overturned their efforts. 

As a result, hosts began discussing whether Airbnb had the legal right to take this action launching forums and groups such as Twitter’s Airbnb Host Class Action. 

This week, Traverse Legal, led by managing partner, litigation attorney and Airbnb host, Enrico Schaefer, is taking things a step further by launching a fundraising campaign to pursue a collective action against the company, saying “collective action by Airbnb hosts is critical to effect change.”

“This fund is about bringing fragmented voices together,” Schaefer wrote. “It is about creating leverage and sending a collective message demanding change. Our attorneys are already working on the right legal strategy for group action. Our attorneys have dug deep into the terms of service, the extenuating circumstances policy, the arbitration mandate, the class action waiver and other contract issues.”

According to Shaefer, “There are hundreds of thousands of Airbnb hosts globally asking Airbnb to uphold their end of the bargain. Airbnb’s lack of transparency and lack of accountability are breaches of their contractual obligations to hosts. Now is a time for collective action.   Hosts are making substantial capital investments directly tied to the Airbnb platform. They require predictability, follow through by Airbnb, transparency and accountability.”

 

The following text is taken from Traverse Legal’s website:

Airbnb unilaterally, and in violation of hosts cancellation policies, refunded guests who booked reservations between the dates March 14th and May 31st. Our analysis of the contract terms, relevant law and facts has led to the conclusion that Airbnb hosts have a viable breach of contract case against Airbnb:

  • Why did Airbnb refund guests? Airbnb recently relied on the “extenuating circumstances clause” of its standard terms / agreement with property owners and guests to justify its first and second round of guest cancellations and refunds due. Airbnb concluded that the Covid-19 / coronavirus was an extenuating circumstance.
  • Key Issue: Does a pandemic fall within the language of Airbnb’s extenuating circumstances clause?
  • Do hosts have legal claims against Airbnb? As you will read below, our attorneys represent Airbnb hosts and have determined that Airbnb may be in breach of its platform agreement with hosts as a result of providing traveler refunds in response to coronavirus. Stated another way, guests were arguably NOT entitled to refunds under the rental agreement and Airbnb’s standard terms and policies.
  • What can hosts do about the forced refund? Airbnb could be liable for money damages to hosts for allowing booking cancellations and providing refunds. The terms of service contain a mandated arbitration clause for all disputes. This arbitration clause may, or may not, be enforceable. A possible class action is being analyzed as the class action waiver clause could also be considered unreasonable under California law or if the class action waiver is determined a violation of public policy.
  • What should you do if you are a Airbnb Host who was affected by the cancellation and refund decision? Contact one of our litigation attorneys representing hosts. We are on the front line of the factual and complicated legal analysis for hosts. While this virus has taken the world by surprise, unexpected circumstances are drafted into your hosting agreement with Airbnb. In short, a pandemic is one of the contingencies which was foreseen and the risk that was adjusted under the extenuating circumstances policy. Airbnb should follow those policies and terms. Instead, Airbnb has diverted what appears to be one billion dollars in host revenue by allowing cancellations for traveler reservations between April 1 and May 31. While Airbnb has pledged 250 million to hosts, that leaves hundreds of millions in damages to be pursued by property owners. As any hosts point out, travelers have the option of buying insurance against these types of events. Hosts do not.

Learn more about the legal fund. 

10-year anniversary of the BP-Deep Horizon Oil Spill brings comparisons to COVID-19

By
Amy Hinote
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3

As the vacation rental industry faces challenges related to the spread of COVID-19, managers on the Gulf Coast are remembering another unanticipated, debilitating event that began 10 years ago today — the BP-Deep Horizon Oil Spill. 

On April 20, 2010, high-pressure methane gas ignited and exploded on the Deep Water Horizon drilling rig, engulfing the platform. Eleven missing workers were never found and are believed to have died in the explosion. 94 crew members were rescued by lifeboat or helicopter, and the Deepwater Horizon sank on April 22.

The oil leak was discovered on the afternoon of April 22, when a large oil slick began to spread at the Deepwater Horizon site. For months, CNN displayed ongoing footage from an underwater camera showing oil gushing into the Gulf waters (in the same way the network is now showing coronavirus cases and deaths).

The oil flowed for 87 days, leaking approximately 4.9 million barrels of oil directly into the Gulf of Mexico, until the well was capped on July 15 and was finally declared sealed on September 19, 2010. BP promised to make individuals and businesses “whole” and created processes through which businesses and individuals applied for and received money from the company for lost revenue and wages. 

Estimates of lost tourism dollars were projected to cost the Gulf coastal economy up to 22.7 billion.

As we seek to learn from the past, there are a few parallels between 2010’s BP Oil Spill and the current pandemic crisis as it affects leisure vacation rental destinations. 

 

1. Unanticipated Shock

In 2010, travel was rebounding from the 2008 recession, and vacation rental managers located in Gulf states were anticipating their strongest summer on record. In the same way, in 2020, booking activity was up approximately 15 percent, and the vacation rental industry was looking forward to an exceptional year before shutdowns related to the spread of COVID-19 began. And, like the 2010 BP Oil Spill, no vacation rental business had listed “global pandemic” on their 2020 SWOT analysis. 

“They were both unexpected,” said Michelle Hodges, COO, Meyer Vacation Rentals. “We, being on the coast, were accustomed to handing emergencies; and our definition of that, up until 2010, was a tropical event. We had become experts in these. You know when they are coming, You can anticipate how strong they are going to be, and you know about what your recovery time is going to be. But in 2010, we were taken aback by the first man-made disaster we had to get through. It was frustrating . . . I don’t think six months or even six weeks ago, we could have anticipated something so unknown disrupting our businesses to this degree, In terms of shock factor, they are similar.”

An unanticipated event, such as the oil spill or this coronavirus, is not easily or quickly processed.

 

2. Public Health vs Economic Interests

Oil from the BP-Deepwater Horizon oil spill approaches the coast of Mobile, Alabama, May 6, 2010

Another parallel between the BP Oil Spill and COVID-19 is the difficulty in reconciling responses to a health crisis with responses to an economic crisis. 

While full-time residents along the Gulf Coast were concerned about the health issues, businesses — epecially vacation rental companies — were focused on preserving summer revenue. The inaugural Hangout Beach Festival was held directly on the beach on May 14–16, 2010, with headliners John Legend and Zac Brown, but health concerns were mounting. 

By July 2010, symptoms were being reported, primarily by those involved in the cleanup effort, as chemicals from the oil and dispersants were believed to be the cause, a claim that proved to be true years after the event. 

Two years after the spill, a 2012 survey of the health effects of the spill on cleanup workers reported “eye, nose and throat irritation; respiratory problems; blood in urine, vomit and rectal bleeding; seizures; nausea and violent vomiting episodes that last for hours; skin irritation, burning and lesions; short-term memory loss and confusion; liver and kidney damage; central nervous system effects and nervous system damage; hypertension; and miscarriages.” Dr. James Diaz, writing for the American Journal of Disaster Medicine, said these ailments appearing in the Gulf reflected those reported after previous oil spills, like the Exxon Valdez. Diaz warned that “chronic adverse health effects, including cancers, liver and kidney disease, mental health disorders, birth defects and developmental disorders should be anticipated among sensitive populations and those most heavily exposed”. Diaz also believed neurological disorders should be expected.

 

3. The locals weren’t having it

While vacation rental companies and destination marketers were trying to keep guests coming, the locals protested that conditions were not safe and states were not doing enough to protect the beaches, seafood, ecology, and the environment. 

In 2010, social networks were not as prevalent as they are today, but they did exist, And these platforms were widely used, as full-time residents took to forums on Facebook, LinkedIn, Reddit, Twitter, and even TripAdvisor to alert potential guests about health and safety and to raise awareness among politicians.

Simultaneously, tourism promoters stepped up efforts to keep guests coming, even as officials prohibited people from entering the Gulf of Mexico to swim, surf, or fish. Alabama Gulf Coast destination marketers placed anchor Rebecca Wilson front and center. Wilson walked the beach every day telling guests that beaches were open (even though the water was not), and the daily videos outraged locals.

 

 
One Gulf Shores resident, David Crosby, began creating spoofs of the CVB videos, mocking the area’s attempts to bring visitors into a situation that many felt was unhealthy. 


 

The animosity between the locals and destination promoters lasted through 2011, although long-lasting consequences to residents’ health and to the environment remained a concern through 2013.  


 

4. Financial Assistance

For both the oil spill and COVID, travel insurance did not pay out for cancellations. However, during the oil spill, BP eventually took responsibility for the situation, and on June 16, BP established the Gulf Coast Claims Facility (GCCF), a $20 billion fund to settle claims for “natural resource damages, state and local response costs, and individual compensation.” The GCCF was administrated by attorney Ken Feinberg. The facility began accepting claims on August 23, and a new profession was born on the Gulf Coast: getting money from BP. More than one million claims of 220,000 individual and business claimants were processed and more than $6.2 billion was paid out from the fund. The GCCF and Feinberg were heavily criticized about the amount and speed of payments as well as a lack of transparency. Eric Holder announced an independent audit of the GCCF, which found that 7,300 claimants were wrongly denied or underpaid. As a result, about $64 million of additional payments was made.

Comparing the event to today’s COVID-related economic response, the US government is in the early stages of compensating individuals and small business owners for lost wages and revenue, as it took four months for individuals and businesses to receive cash to help offset losses due to the oil spill. 

 

5. Heavy Discounting

If there is a prediction about future pricing, we are likely to see vacation rental managers and owners get aggressive on pricing. Through the remainder of 2010 and in 2011, vacation rentals on the Gulf Coast were heavily discounted for guests. Development of new condominium complexes came to a halt, and many planned building developments never came to be. Others took years to break ground and be completed. 

BP-funded PR campaigns and events were created in additional efforts to bring guests back including concerts performed by Jimmy Buffet, Brad Paisley and Bon Jovi. The following video was released by BP in December 2011, sixteen months after the oil spill began. 

 

 

6. The vacation rental industry will survive

As we take a moment to look back ten years to the BP Oil Spill, we know the vacation rental industry will survive this pandemic and will eventually thrive. People will travel again; and today, few remember (or have chosen to block out) how difficult this time was along the Gulf Coast. Today’s anniversary provides a brief reminder of the devastation from the oil spill and the challenges our destinations faced. People have short memories, and by 2012, vacation rental activity began to rebound and then began to exceed tourism levels pre-oil spill.

With Hurricane Ivan in 2004, Hurricane Katrina in 2005, the recession in 2008, and the oil spill of 2010, things were not easy for Gulf Coast vacation rental managers.

However, the companies and small business owners who were committed to their businesses and to the destination found a way to make it through, and they were rewarded for their perseverance.

This too shall pass . . . eventually. 

VRM Intel Live Online 2-Day Conference for Vacation Rental Managers, April 16 – 17

By
Amy Hinote
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0

VRM Intel Live Online, a virtual conference for vacation rental managers, is being held April 16 -17, 2020 with 14 live sessions over the two days, along with 40 prerecorded sessions to which attendees will have ongoing access.

With COVID-19 disruption, we had to stop our in-person regional VRM Intel Live conferences, so we decided to bring this content to vacation rental managers in an online format. 

We also reduced the price for this to $48 from $198. Use the promo code VIP to get this price while seats are available.

With your registration, you will get:

  • 2-day LIVE Conference, April 16 – 17
  • Ongoing access to all session videos and presentations (50+ sessions and panel discussions)
  • *Plus, 2019 Data and Revenue Management Conference Sessions

Throughout this conference, we will discuss current events including executive strategy, performance data, demand marketing, pricing & revenue management, Airbnb & Vrbo, Google, cancellations, risk management, property care, owner communications, and much more.

Here is a look at the live sessions on April 16 – 17:

April 16 VRM Intel Live Online Sessions

A Macro View of the Impact of COVID-19 on the Vacation Rental Industry with Simon Lehmann, CEO AJL Consulting; Cliff Johnson, COO, Rented; Thibault Masson, founder Rental Scale-Up (formerly RentalPreneurs; Jason Sprenkle, CEO Key Data

How Multi-Destination Vacation Rental Management Companies are Handling the Impact from Coronavirus and How They are Looking at the Future with John Banczak, Chairman, TurnKey Vacation Rentals; Bob Milne, COO, Vacasa; Tobias Wann, Global CEO, OYO Vacation Homes

Selling Your Business in a Post-Pandemic World with Ben Edwards, CEO, Weatherby Consulting

The Near-Term Future of Consolidation in the Vacation Rental Industry: Mergers and Acquisitions with Kevin Groff, Senior Vice President, U.S. Bank; J.R. Matthews, Managing Director Tregaron Capital Co.; Jim Olin, CEO, C2G Advisors

Crisis Management vs Opportunity Magagement with Clark Twiddy, president, Twiddy and Co., Josh Marquis, president, Retreatia; Scott Bunce, COO, Cabins for YOU

Answering Your Questions: Employees, Cancellations, Trust Accounts, Assistance, and More with Sarah Bradford, CEO, Winter Park and Steamboat Lodging Company, Tim Cafferty, CEO, Outer Banks Blue and Sandbridge Blue, Michelle Hodges, President, Meyer Vacation Rentals

COVID-19 and Australia and New Zealand Holiday Rental Markets with Rebecca Cribbin, founder and owner, Holiday Rental Specialists; Leslie Preston, founder and former CEO, Bachcare; Pete Smith, founder and CEO, Weekenda Holiday Properties

 

April 17 VRM Intel Live Online Sessions

How to Grow and Retain Inventory through Owner Marketing and Communications with David Angotti, co-founder at StaySense, Brooke Pfautz, founder & CEO of Vintory, CJ Stam, Managing Partner, Southern Comfort Cabins

A Hard Reset for the Vacation Rental Industry: What PMs Aren’t Saying Out Loud with Matt Landau, VRMB and the Vacation Rental Show; Heather Bayer, founder, CottageLINK Rental Management and host Vacation Rental Success Podcast, and Amy Hinote, VRM Intel

How Destination Marketing Organizations (DMOs) are Looking to Generate Demand and How PMs Can Work with DMOs to Bring Guests Back with Herb Malone, President and CEO, Alabama Gulf Coast Convention and Visitors Bureau Joanie Flynn, Vice President Marketing at Gulf Shores & Orange Beach Tourism; Kelly de Schaun, Executive Director, Galveston Island Park Board of Trustees; Mark Adams, president and CEO, Gatlinburg Convention & Visitors Bureau

When, Where and How to Reboot the Marketing Machine with Amber Carpenter, founder, ProTravelTech

From Riches to Rags: Navigating Your Online Presence Both Now & Later with What You Have with Brandon Sauls, CEO, ICND; and Vanessa Humes, ICND

Key Recovery Indicators: Finding Insights in the Data with Jennifer Mucham, founder and president, Arrived Now; Jim DeVos, president, Best Beach Getaways; Julie Brinkman, COO, Beyond Pricing.

Using Forward-Looking KPIs to Measure Future Demand and Make Pricing Adjustments with Scott Shatford, CEO, AirDNA

 

. . . Plus over 50 sessions recorded over the last two weeks, from VRM Intel Live Sandestin and Gatlinburg, and the Data and Revenue Management Conference. 

To register, use promo code VIP at https://vrmintellive.com/

Vacation Rental Occupancy Drops for Summer as Coronavirus-Related Shut Down Continues

By
Amy Hinote
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0

The economic effects of COVID-19 on vacation rental bookings are being felt across key leisure destinations as shelter-in-place orders, travel restrictions, and beach/ski closings continue across the US. As of April 7, according to market data provided by Key Data, year-over-year (YOY) adjusted occupancy declined as much as 79 pecent for April and 57 percent for May in Hawaii alone.

The table below demonstrates YOY booking pace activity for Hawaii, Oregon, California, Colorado, the Gulf Coast, and the SE Atlantic Beaches.

Each region is followed by an “as of” date (for example, “Hawaii: As of April 7”). This means the Adjusted Occupancy rate represents reservations on the books as of April 7, 2020, compared to reservations on the books as of April 7, 2019. Adjusted Occupancy measures paid occupancy (or nights available to rent) and excludes owner stays and maintenance holds.

The data sets compare booking pace for 2019 and 2020 as of March 5, March 13, March 23, and April 7. 

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