The big deal in Vacation Rentals: Booking’s new Quality Ratings

October 13, 2019

Throwing the gauntlet: dead in five years?

Three years ago, Maninder Gulati of OYO predicted at Phocuswright India that “plain aggregators” will be dead in five years. For Gulati and OYO, the future belongs to “controlled marketplaces”—those that offer predictable experiences to their customers. OYO was once a fledgling India-based hotel chain with an ambition to be “the world’s largest real estate network and brand”; today, it covers one million hotel rooms across more than a dozen countries and just added 125,000 vacation rentals and a few billion dollars in funding.

Booking.com’s sweeping ambition: Quality ratings for millions of homes.

Arguably, Booking.com is (or was) one such “plain aggregator” in OYO’s crosshairs, but the company just responded with an equally ambitious initiative. At last weekend’s Vacation Rental World Summit (VRWS) in Como, Italy, Booking.com’s Alessandro Pacilio announced that it had introduced quality ratings for all of its vacation rental units globally, modeled on the 5-star quality classification. Quality ratings set a guest’s expectation (as opposed to reviews, which confirm whether the expectation was met).

This is a big deal. First, because no rating system for vacation rentals currently exists, Booking.com had to create one. By using artificial intelligence and Booking.com’s repository of data, the company proceeded to assign relative value to location, property size, reviews (if they existed), and amenities by market, based on what guests search and filter for. This would allow Booking.com to assign a quality category to both a historic villa in Tuscany and to a minimalist urban flat in Tokyo, no matter how distinct the property. Second, it marks a clear departure from “plain aggregation”: the quality rating is Booking.com’s, so the company “owns” the ratings and is putting its own brand behind it. This means Booking.com will have to defend the rating to both owners/managers and guests.

Third, Pacilio hinted strongly that more is to come soon: Booking.com will soon provide actionable suggestions to owners and property managers (PMs) on how to improve one’s rating, thus allowing them take a clear stake in the “offline” experience of their customers. This is sweepingly ambitious and perhaps recognizes that Booking.com takes OYO’s prediction seriously. Shortly after Booking.com’s announcement on this “first,” Tammi Sims and I moderated a panel on “The Rise of Quality and Brands” with Booking.com’s Thibault Masson, Marriott’s Chris Stephenson, Vacasa’s Michele Diamantini, and StayAlfred’s Richard Vaughton. Masson explained why Booking.com took such a big step: in our fast growing industry, many listings are so new that they don’t have reviews yet; for those, ratings can help solve the cold-start problem. Second, convergence is real, and with 27 million hotel room listings, many of which are searched for by star rating, Booking.com needed a way to serve up equivalent vacation rentals to guests filtering by a specific star rating. While neither Pacilio nor Masson provided details, both made it eminently clear that it just works: Booking.com has been backtesting ratings for months, and the improvements in conversion were compelling—witness the global launch.

High stakes

Marriott’s Chris Stephenson eloquently explained why the stakes are high: premium channels, such as Marriott, are working to deliver higher average daily room rates (ADRs), access new customer segments, give property managers an advantage with owners (versus those who don’t have access to such channels), and even help with loans and investors when quality is vetted. Of course, Booking.com might well play a similar game: if its ratings take hold and it underwrites ratings with its own brand, then ratings (powered by a strong brand) may become a substitute for brands. If anyone should know, it’s Booking.com: after all, it built a massive business in the European long tail of hotels, where global brands are largely absent, but where local brands and ratings help match properties with guest expectations.

But it’s far too early for Booking.com to declare victory. First and foremost, in typical Booking.com fashion, it appears the company has been testing ratings for months—so even with this big innovation under everyone’s nose, it has gone unnoticed—which means much consumer education and marketing remains to be done. Presumably, as confidence grows, Booking.com will start promoting its ratings, and explaining the critical difference between ratings and reviews.

Second, there are well-documented bumps on the road to quality and branding in alternative accommodation; for example, few would call Airbnb’s Plus a success, even after several reboots. While Airbnb Plus was arguably ill conceived from the start, with its operational complexity, one size fits all, and early focus on designing spaces rather than focusing on achieving operational consistency, it remains a warning as a very difficult subject to tackle.

Third, as owners and PMs review how Booking.com views their properties, we’ll soon see how closely aligned their views are with Booking.com’s and whether Booking.com’s AI magic got it (mostly) right.

Fourth, we’ll see how actionable the suggestions for improvements will be and what an “appeals process” might look like—this promises to become a high-stakes game for all involved.

Fifth, in a way, this development heralds our collective failure as an industry to write our own destiny: Masson made it clear that this scheme would be proprietary to Booking.com. This means PMs and owners might soon find themselves catering to differing requirements for each platform or channel.

Sixth, this could further tilt the balance of power toward the OTAs if they now own ratings, and as they invest into building a ratings brand, we should expect commissions to increase. On our panel, we briefly broached the topic of franchising: after all, franchising is distribution with a brand and an agreement to follow brand standards. Developments like Booking.com’s may put them and others into a position to establish and enforce standards, guarantee them with their brand, and extract commensurate rents. Last, as Amy Hinote rightly notes, it’s still unclear whether VR ratings will favor hotels. I’d think that as far as Booking.com is concerned, there’s much more search volume on the hotel side, so convergence is more likely to drive traffic from hotels to VRs than the other way round.

A brave new world

Brands, and the predictable quality they should represent, have clearly arrived in vacation rentals: highlights at the VRWS were the keynotes by OYO and Marriott, unthinkable just a few years ago when hotels were the enemy and no one had heard of OYO. Sykes’ Graham Donoghue delivered a session on how PMs can preserve independence and build their own brand while driving 85 percent of direct bookings, and Google showcased its new VR search that showed in part where the pressure is coming from, to which Booking.com is responding.

Predictability and quality standards are great for our industry: they should be major drivers of growth. As an industry, we have to cater to the guest, and Booking.com made it crystal clear that quality ratings were created first and foremost for guests.

Properly’s Tammi Sims hit the nail on the head when she said that as an industry, we have a collective reputation and therefore a collective responsibility toward each other. Hopefully, each of the initiatives mentioned above increased the predictability of what our guests buy, while preserving the uniqueness of the properties we deliver. If we succeed, we should see continuing strong growth, as alternative accommodation succeeds in delivering unique experiences for ever larger segments of mainstream travelers with predictable quality and peace of mind.

At this week’s VRMA International Conference, we should hear answers to some of the questions raised above. Simon Lehmann will surely cover this topic in his fireside chat with Booking.com’s Olivier Gremillion, Vrbo’s Jeff Hurst, and Airbnb’s Clara Liang, and we should hear interesting perspectives from PMs on the receiving side of Booking.com’s new quality ratings in their Hospitality Masterclass panel.

We will be watching this closely—I’ll probe for PM reactions on Wednesday’s VRMA Urban Manager panel and for a strategic perspective from investors at VRMA’s Investor Panel. And we won’t stay on the sidelines; Properly was conceived as a quality management platform for the backbone of our industry, the small and medium-sized property managers. They are the ones who strive to deliver consistent quality on a daily basis and will soon have to navigate the quality standards of increasingly branded distribution.

In closing, first movers have arguably been a poor predictor of success in our industry: this was certainly true for Airbnb’s Plus and the hotel industry’s first foray into vacation rentals. It appears that Marriott and Booking.com’s second act promises to be much more promising. My bet would be that quality, and the rise of brands, will continue to play center stage, and I’m very much looking forward to the third act.

Matt Landau’s “The Vacation Rental Show” spans continents and makes the jump to primetime TV in Middle East and North Africa

Amy Hinote

October 12, 2019

Last year, Matt Landau partnered with Booking.com to produce he second season of the web series, The Vacation Rental Show, in which Landau travels the globe to meet the world’s best vacation rental businesses. And now, OSN, the leading cable TV provider in the Middle East and North Africa has picked up the show and can now be seen on prime time on the OSN’s streaming platform.

The collaboration is the first time a content creator and travel tech brand have reached broadcast television, and the show serves to increase category awareness for vacation rental sector.

According to the show’s producer, Stuart Hooper, the deal is one of the first in what will be a growing trend of travel tech brand partnerships with content creators and broadcast or streaming networks.

Airbnb was said to have agreed to a deal with Netflix but that show has yet to materialize, according to Skift.

“Seeing our cottage industry on international TV is a little surreal to be honest,” says Landau. “It’s one of those things that steps far beyond my comfort zone but at the same time so in our wheelhouse because we’re highlighting what we know best—the magic of what our industry has to offer the world.”

The Vacation Rental Show has proven that well-produced shows can capture levels of attention previously unattainable in today’s frenetic internet landscape.

VRMA breaks ties with LSI Tools as comparative data provider for vacation rental manager members

Amy Hinote

October 10, 2019

Days ahead of the Vacation Rental Management Association (VRMA) International Conference—and with data and revenue management at the forefront of discussions—the industry’s trade association announced it has cancelled its VRMA Insights data offering for members.

The VRMA Insights data platform was provided free to members through a commercial partnership with LSI Tools, and the tool allowed VRMA members to compare their businesses’ KPIs against the market in destinations where LSI had enough aggregated data to ensure anonymity.

In its announcement, VRMA cited Inhabit IQ’s recent investment in LSI as the primary reason for cutting ties.

According to the VRMA website, “Based on recent developments—specifically the announcement of LSI Tools becoming part of Vacation Brands/Inhabit IQ, an entity comprised of multiple technology organizations in this space including a property management company—VRMA feels it is in the best interest of all parties to end the partnership that is VRMA Insights powered by LSI Tools. We want to thank LSI Tools for helping to launch this innovative product, as well as the many property management software companies who supported VRMA by working with LSI Tools to make this program possible.”

The post continued, “When the VRMA Board of Directors started talking about what became VRMA Insights back in March 2016, there weren’t any products on the market that could do what VRMA Insights currently does. VRMA—along with our partners at LSI—is pleased that we could be at the forefront of providing actionable data that was previously unavailable to professional property managers.”

In 2016, the VRMA launched a task force led by board member Scott Leggat to research the data options for the association. According to VRMA executive chairman, Mike Copps, “The task force was launched around looking at—and expanding the functionality of—the Geoanalytics tool, which had been in existence for years and was driven by VRMA in partnership with NAVIS.” By 2017, the company now known as Key Data Dashboard (then VRM Dashboard) had developed technology and integrations that launched on the same schedule as the LSI/VRMA Insights platform. That product was presented to the board of directors in April 2017.

Edited to correct dates. The VRM Dashboard presentation to VRMA was in 2017, not 2016, and the RFP and subsequent selection also occurred in 2017.

After that meeting, the VRMA’s task force sent out a request for proposals (RFP) to industry technology companies. The board selected LSI’s proposal in late 2017; and as part of the agreement, VRMA paid $75,000 to LSI, and LSI provided the tool to VRMA members for free.

Over the last three years, comparative data products have been widely adopted in the industry, with companies like Key Data, LSI, Transparent, AirDNA, Destimetrics and STR Global gaining market share and developing new products and deeper integrations throughout the industry. Key Data alone is now providing market data to over 600 vacation rental managers and DMOs in the US and is expanding into Europe.

“VRMA is still committed to the original intentions of the program,” the website post continued. “We were—and are—committed to thought leadership in this space, and having access to industry data that will further our efforts around education and advocacy, the pillars of our great organization. We are also committed building and driving value for our members. We will continue to explore the best avenues to accomplish these goals.”

The Insights project will continue to grow and add property managers under the LSI Tools banner and will continue to be offered at no charge to VRMA members. According to LSI Tools president Lynell Eaddy, “LSI will continue to stay on the cutting edge of new functionality and grow Insights. We stand behind our commitment to bring the Insight analytics and tools to VRMA membership. We’re excited to introduce new features for Insights during the next year and are grateful for the enthusiastic adoption of Insights by the vacation rental community.”

Leaders from LSI, Key Data, AirDNA, Transparent and Destimetrics will be speaking at the upcoming VRMA International Conference next week in New Orleans.

Delivering and Communicating Deep Service Value to Homeowners

Jeremiah Gall

October 9, 2019

The past decade in hospitality has been a whirlwind, and short-term rentals have (and are still having) an incredible run. Every aspect of the industry is growing quickly, from rental supply to technology to consumer expectations to municipal regulations.

One thing that hasn’t changed is that vacation rental managers still have two distinct customers: guests and homeowners. The identity of a manager continues to evolve into that of a hospitality provider, and the industry is adapting to the idea that professionals don’t just manage properties but also shape the guest experience.

I’ve spent 15 years examining the interplay of marketing, operations, and software in the vacation rental industry. We’ve built our business on the premise that elevating the brand experience is the future of the industry, and I’m confident that more attention will be devoted to the owner portion of this experience. In this article, I discuss the importance of delivering deeper service and suggest ways to effectively communicate this value to property owners.

The True Significance of Deep Service Value

For homeowners, there are many options for facilitating the rental process. To start, you can manage the entire process on your own: list the property on platforms such as Airbnb and Vrbo and hire cleaners and contractors to handle turnovers and maintenance repairs. A second option is to use an agency model—for example, Evolve —where owners receive marketing and OTA assistance but rely on a network of their own for cleaning, maintenance, and guest services. Finally, there is the full-service option of hiring a vacation rental property manager. This is particularly attractive for the top end of the market—when the owner is time constrained or doesn’t live locally—and nearly 44 percent of owners select this option.

As platforms such as Airbnb lower the barriers for owners to choose self-management and more professionals compete in vacation rental markets, owner expectations have risen. Homeowners are looking for top-to-bottom asset management, which includes preventative maintenance, clear communication on services delivered, time spent caring for properties, VIP concierge service, and guest communication. Managers who don’t deliver hospitality-like service will lose their clients to alternative management options or other property managers in their markets.

Showcasing the Full Value of Your Work

When an owner makes the purposeful decision to employ a manager, he or she expects that manager to deliver value commensurate to the management fee (which is typically around 25 percent but depends on the market and on services provided). The manager takes on the responsibility of effectively communicating with the homeowner, which is instrumental in building trust and transparency in the relationship.

Of course, the idea of owner relations is not a novel one. As the industry has matured, however, owners are demanding greater detail and more frequent reports. Property management has evolved into a much more service-oriented business (i.e., it’s no longer just about maintaining property but also about maintaining guests), and managers have become saddled with heavier workloads. The increased owner-facing responsibility comes second to that of meeting guests’ service and quality expectations, but it is still critical.

With 76 percent of guests expecting a personalized rental experience, property managers are forced to do a significant amount of behind-the-scenes work during each reservation. This work extends well beyond property care and readiness prior to each check-in (e.g., cleanings, inspections, and maintenance repairs) and includes both reactive and proactive guest attention.

In fact, managers are spending an average of 200 hours of work at each unit per year, but owners are aware of approximately 20 percent of it.

Demonstrating service level takes time and resources, which is why many managers don’t consistently relay information regarding level of service to property owners. It’s not enough to simply say your team is accomplishing X, Y, and Z on a daily basis. Managers need compelling data to convey value, and they need to showcase the data to owners. This is where some of the disconnect lies. Managers often lack the time and software resources needed to meticulously track the frequency, details, and results of their work; and manual tracking activity takes time that managers simply don’t have.

Despite their best intentions, managers often fall prey to reactively relaying information to homeowners. However, this makes it all the more important to have a positive working relationship with homeowners so that when there is an emergency, or when a costly repair arises, owners are more receptive because trust has already been established.

Actionable Methods to Convey Service

Making a good first impression is the foundation of a robust owner relationship. Building strong rapport leads to a better understanding of owners’ idiosyncrasies related to the items in their rentals, their styles of communication, and the overarching goals of your service. Building trust from day one sets the tone for a positive relationship, which often affords you more flexibility when it comes to maximizing rental income.

There are many ways to foster owner relationships, from personalized preventative maintenance plans to consistent and reliable communication.

By leveraging data, managers can easily provide concrete evidence of work completed at the home (e.g., the number of visits made to the property; the amount of time spent on cleanings, inspections, and maintenance repairs; the frequency of performance for each task; the length of time required to complete various tasks; the number of service calls made to the property; and the frequency of guest communication). Consider how these metrics would easily translate into a comprehensive view for owners that could be shared on a weekly, monthly, or quarterly basis and could supplement existing meetings by phone or in person.

Although many owners expect to be kept in the loop regarding the above metrics, not many understand the full value of preventative maintenance and asset management.

Tracking and reporting information such as appliance downtime, number of repairs per appliance, running age of each appliance, and quarterly inspection reports will impress many owners and prove that you can quickly diagnose issues, prevent emergency repairs, extend appliance lifespans, and drive more predictive property management—all of which demonstrates how indispensable you are to the homeowner.

Another best practice when conveying value is outlining service standards that are tailored to each property. No two properties are exactly the same, and each therefore requires a specific level of service. This fact may require you to implement different service measures that contribute to the success of each rental property (e.g., more than one property manager to oversee the property, thoroughly customized checklists, and preventative maintenance plans). Making homeowners aware of the extra (and customized) measures taken to make sure their properties are well maintained will go a long way toward ensuring you retain your owners for years to come.

Benefits of More Service Offerings and Effective Communication

Embracing the service side of the business and constantly looking for growth opportunities is the future of property management. Managers who deliver quality services will be given more work and responsibility. (Note: increased operational load can be offset through smart partnerships and adding service staff.) Upselling owners with added services such as landscaping, mildew removal, snow cleanup, and pest control increases your owners’ lifetime value by helping you generate more revenue in the short term, as well as develop longer-lasting relationships.

Today’s consumers hold fellow consumers’ reviews in high regard. Homeowners researching property management companies in their markets want reassurance that the services they receive will be top notch. Happy owners who feel they are getting more value than the fees they’ve paid are much more inclined to refer your services to others. As we know, the best form of marketing in this industry is word-of-mouth referral.

Conclusion

Providing hospitality-level service for both guests and owners is one of the strongest trends in today’s vacation rental market. Delivering on this service isn’t quite enough, though, and managers are now expected to take the necessary steps to effectively communicate all the work they do. Those who are able to leverage deep property data to execute on prescriptive service plans will be able to adapt to this new service-provider role and will more quickly differentiate themselves from the growing number of managers in the market.

Catching up with the FOCKers. Latest from OTA leaders: Fogel, Okerstrom, Chesky, and Kaufer

Amy Hinote

October 6, 2019

Over the last several years, four CEOs have led online travel agencies (OTAs) in feeding the top of the consumer funnel for alternative accommodations (a.k.a., vacation rentals, short-term rentals, private accommodations): Glenn Fogel, president and CEO, Booking Holdings, Mark Okerstrom, president and CEO, Expedia Group, Brian Chesky, cofounder and CEO, Airbnb, and Steve Kaufer, president and CEO, TripAdvisor.

As the third quarter came to an end—and Airbnb announced its intentions to go public in 2020—the recognition that short-term rentals are now a permanent, and still fast-growing, sector of travel has set in.

The market shift has put a spotlight on the four companies that have been most instrumental in aggregating home and apartment-type accommodations at a global scale.

In early results from a PM survey, the most utilized booking channels among vacation rental managers are—in order—Airbnb, Vrbo, Booking.com, and TripAdvisor.

One of the questions we will be looking to answer as move into 2020: Are these OTA CEOs the future of the industry or the past?

Glenn Fogel, President and CEO, Booking Holdings, and CEO, Booking.com

Glenn Fogel, president and CEO at Booking Holdings, took on the additional role of CEO at Booking.com, previously held by Gillian Tans, on July 1, saying that he had been with the company for 20 years and stepped into the position to “be more closely aligned” across brands.

At the recent Skift Global Forum, senior editor Dennis Schaal addressed Booking’s recent decision to charge commissions on resort fees, and Fogel tied the decision to the way the company is handing its “alternative homes” business.

Fogel defended the decision to charge commissions of resort fees as the “right thing to do,” saying, “One of the things that we think is a very bad customer experience is—when you go to buy something—and you think you know what the price is because [the site] tells you the price upfront, and you go all the way through all the effort to buy, and then—at the very end—when you are just ready to finish the transaction, you find out—oh—there is one more charge. And it is mandatory.”

Fogel continued, “And this is one of the things that differentiates us from Airbnb—because when we do our alternative homes business, we always make sure the all-inclusive price is upfront, whereas Airbnb is putting in the back that fee at the end—the traveler fee. We thought that was a terrible way. Transparency is the way to do it . . . It’s about the fundamental fairness of how you treat a customer in terms of what you are telling them about what it is going to cost and not hitting someone in the backside.”

As Schaal asked about Airbnb’s growth leaping over revenue pace at Booking, Fogel said, “Airbnb is a good company. We differ in how we do things. I mentioned the [traveler] fee at the end. Certainly, we believe it is better to have everything instantly bookable, they do not. I don’t like to go back and forth with a host—back and forth—and when we are all done, I find out that the person doesn’t want to actually rent it to me.”

“I like our side, the Booking.com way, every single alternative accommodation that is on our site—every home, condo, treehouse, everything—[is] instantly bookable,”Fogel said. “When you press ‘I want it,’ you’re done, all done. Go get your thing. That is the difference.”

“We like the fact that on our site (Booking.com), you have all the different ways you can stay—you can stay in an alternative accommodation, you can stay in a hotel. The way we are displaying it, [they are] on the same page [with customers] being able to see them all together, being able to see the prices and the reviews. We think that makes is a better way to do alternative accommodations. That being said, Airbnb is a fine company. They are growing very rapidly. And more power to them for having built a-whole-nother industry for us.”

Schaal pressed Fogel on the lower margins of alternative homes vs hotels, considering regulatory issues, lower commissions, and supply acquisition costs. Fogel responded, “The cost of dealing with it is significantly higher on both sides (supplier and guests). It is a less profitable business. The fact is people want to use it. That is why we are in it. It is growing faster than our standard hotel business. There is significant future ramp for this sector, and it is going to continue to grow.”

Mark Okerstrom, president and CEO, Expedia Group

News from Vrbo has been rapid and disruptive for its suppliers. The Expedia-held company has sunset its enterprise PMS V12 for property managers, it changed its payment policy with Yapstone, a large number of its homes suppliers are reporting a decrease in booking coming from Vrbo’s sites, and PMs are finding alternative sources for bookings in Airbnb and Booking.com.

In early results from a recent VRM Intel survey, 72 percent of respondents believe bookings from Vrbo will either stagnate or drop over the next three years.

Expedia president and CEO Mark Okerstrom, however, is focusing on the bottom line. Wearing a Vrbo t-shirt at Skift’s Global Forum, Okerstrom fielded questions from Dennis Schaal about the obstacles the company has faced, including rebranding issues with platform integrations, SEO setbacks, and challenges with international and urban growth.

“We have to look at this in the broader context,” Okerstrom responded. “We acquired HomeAway/Vrbo in late 2015. At the time it was doing about $3 billion in online booking, about $500 million in revenue, and $120 million in EBITDA and profit. And trailing twelve months (TTM), those numbers are approaching $12 billion in [online bookings], over $1 billion in revenue, and close to $300 million in adjusted EBITDA. And if you look at where the product has come, the traveler experience is infinitely better than it was before; the partner-facing experience is infinitely better than it was before; we’ve integrated a lot of this inventory onto Expedia and Hotels.com; and the progress has been phenomenal.”

Okerstrom added, “As we rebranded Vrbo, and as we consolidated platforms, there were some bumps in the road in terms of the SEO volume, a shifting marketing spend away from some of these legacy or regional brands towards Vrbo that did put some pressure on bookings growth across the whole portfolio. But the Vrbo brand is growing nicely in the double digits, and if we look back five years from now—and we say what was that—I think we will say it was a bump in the road—a blip—and Vrbo is continuing to thrive.”

Schaal asked Okerstrom about Google’s move into vacation rentals.

“As it relates to a certain aspect of our business—helping shoppers choose where they want to go—Google is competitive with us in that respect,” Okerstrom explained. “As it relates to completing the booking and then helping customers with their trip along the way, that is what we do uniquely well; and that is not a space that Google is really participating. We are not a search engine in total. We are an online travel agent, and we are very focused on putting the A (agent) back in online travel agency, really helping travelers with their journey. But, yes, as it relates to search, Google is a competitor with us. And it is a call to arms to our team to make sure we can get out there and help customers find their perfect trip.”

Brian Chesky, co-founder and CEO, Airbnb

The biggest story about Brian Chesky is not what he has said recently, but what he hasn’t said. In all of the news announcements coming from Airbnb about its future plans to take the company public, we’ve heard little about the company’s trajectory directly from its CEO since his infinity memo in early 2018 in which he said:

“People are increasingly living in digital bubbles, trust in institutions is at a record low, and companies realize they have a greater responsibility to society. It’s clear that our responsibility isn’t just to our employees, our shareholders, or even to our community – it’s also to the next generation. Companies have a responsibility to improve society, and the problems Airbnb can have a role in solving are so vast that we need to operate on a longer time horizon.”

Last month, the Wall Street Journal reported, “Airbnb Inc. expects to go public next year, the company said Thursday, the latest multibillion-dollar startup seeking to widen its investor base. The home-sharing giant offered no other details about its plans to become publicly traded.”

Earlier in the year, Airbnb disclosed financial activity for the first time, again with no comment from Chesky.

According to the New York Times article, Inside Airbnb, Employees Eager for Big Payouts Pushed It to Go Public, “Last summer, several Airbnb employees wrote a letter to the online room-rental start-up’s founders. On behalf of more than a dozen employees, they pleaded to be able to sell their Airbnb stock options. Because Airbnb is privately held, its shares cannot be easily traded or cashed in. So the employees also asked that the company go public, a move that would let them freely sell their shares, said five people who saw or were briefed on the document and were not authorized to speak publicly.”

The article continued, “To try to keep employees happy, Brian Chesky, Airbnb’s chief executive, and other top executives have made some adjustments, the people said. They began offering sabbaticals to longtime employees, extended Airbnb’s parental leave policy and increased the retirement matching program. They also created a program to provide low-interest general-purpose loans of hundreds of thousands of dollars to employees. In performance reviews this spring, the start-up issued higher bonuses and raises, one of the people said.”

Chesky broke his silence this week in an interview with Fortune to discuss the company’s announcement that it is launching Animal Experiences, “a new marketplace that will connect travelers to some 1,000 animal-related tours and activities—urban beekeeping, arctic fox photography, and corgi paddleboarding, to name a few. The service represents a new category in Airbnb’s growing Experiences platform—a business, CEO Brian Chesky told Fortune in an exclusive interview, that will be ‘very central to Airbnb’s story.'”

In the interview, Chesky said, “It (Animal Experiences) is a very large addressable market, there’s very few people that are uninterested in animals. There are only so many zoos, and zoos are obviously a different kind of experience than what we’re offering.”

In a recent article, Skift’s Dennis Schaal predicted that Airbnb would skip a traditional IPO road show in favor of moving toward a direct listing. “Airbnb, if it deems market conditions are ripe, will likely go for a direct listing instead,” wrote Schaal. “At least one major investor will advocate internally for such an outcome, a source told Skift. In a direct listing, Airbnb would issue no new shares, could avoid massive fees to bank underwriters like Goldman Sachs or Morgan Stanley, and would receive no new funding, but would start trading as a public company nonetheless.”

Steve Kaufer, president and CEO, TripAdvisor

TripAdvisor reported in Q2 it now has 900,000 short-term rentals on its platform, down from 914,000 in Q1 (compared to 7 million on Airbnb). Vacation rental managers remember all too well when TripAdvisor/FlipKey was a significant source of bookings. In 2015, managers came together to write an open letter to Kaufer pleading with the company to address technology challenges and a waning interest in the sector. The effort received no response from the company, and TripAdvisor as a major contributor to the vacation rental industry began to fall out of the spotlight.

However, in our recent survey, over 40 percent of vacation rental managers who responded said they are still using TripAdvisor as a booking channel.

Kaufer has not specifically addressed this sector in earnings calls in a while. With the AHLA advancing its anti-short-term-rental initiative, is TripAdvisor preparing to side with the hotel industry over the rental industry in upcoming legislative challenges?

In its Q2 10-K SEC filing, TRIP expanded its views on vacation rental regulations, adding to its previous language:

Further, Rentals has been and continues to be subject to regulatory developments globally that affect the rental industry and the ability of companies like us to list those rentals online. For example, some states and local jurisdictions, both domestically and internationally, have adopted, or are considering adopting, statutes or ordinances that prohibit property owners and managers from renting certain properties on a short-term basis or otherwise limit their ability to do so, and other states and local jurisdictions may introduce similar regulations. Some states and local jurisdictions also have fair housing or other laws governing whether and how properties may be rented, which they assert apply to vacation rentals. In addition, many homeowners, condominium and neighborhood associations have adopted or are considering adopting rules that prohibit or restrict property owners and managers from short-term rentals. Many of the fundamental statutes and ordinances that impose taxes or other obligations on travel and lodging companies were established before the growth of the internet and e-commerce, which creates a risk of these laws being used in ways not originally intended that could burden property owners and managers or otherwise harm our business. Operating in this dynamic regulatory environment requires significant management attention and financial resources. We cannot assure that our efforts will be successful, and the investment and additional resources required to manage growth will produce the desired levels of revenue or profitability. We also have been subject, and we will likely be subject in the future, to inquiries from time to time from regulatory bodies concerning compliance with consumer protection, competition, tax and travel industry-specific laws and regulations. The failure of our businesses to comply with these laws and regulations could result in fines and/or proceedings against us by governmental agencies and/or consumers, which if material, could adversely affect our business, financial condition and results of operations. Further, if such laws and regulations are not enforced equally against other competitors in a particular market, our compliance with such laws may put us at a competitive disadvantage vis-à-vis competitors who do not comply with such requirements.

At the Skift Forum, Skift founder Rafat Ali interviewed Kaufer about his views on overtourism and sharholder vs stakeholder capitalism. Kaufer did not address the company’s trajectory regarding the vacation rental industry.

How did Booking.com rate your properties? New classification system gives vacation rentals a star rating

Amy Hinote

October 6, 2019

Property managers and homeowners using Booking.com who haven’t checked the site lately might be surprised to find a star rating on their property listings.

Booking.com has been slowly rolling out a global rating system for vacation homes—or an AI-powered classification system—as the company described it today at the Vacation Rental World Summit in Lake Como, where Booking.com’s Alessandro Pacilio took the stage to show attendees around its latest product announcement.

Pacilio explained that there is still some work to be done and A/B testing is in progress. When we tested, the star ratings were displaying on mobile, but not on desktop. However, you can sort and filter by the new star-rating system using all devices.

Booking.com describes ratings as follows: “Awarded to home and apartment-like properties by Booking.com. These represent quality ratings based on factors like facilities, size, location, and service” (see photo below).

The classification system is algorithmic and utilizes AI to further examine local property standards and adjust the star rating to more closely align to the local area.

This example shows a search flow for 3+-star vacation homes in Maine (note: there was only one 5-star home in Maine). In our search we found a range of property types, including the cottage and mobile home seen below.

We followed the cottage listing which is managed by TurnKey Vacation Rentals (here is the link to the same home on TurnKey’s site). The 3-star TurnKey home is also listed on Marriott’s Homes and Villas site.

The second photo gives a little more info about the rating, and the third photo above displays the differences between “Quality ratings” for homes and hotels.

An initial concern is that the rating system is designed to drive more bookings to hotels. At the recent Skift Global Forum, Dennis Schaal pressed Booking.com CEO Glenn Fogel on the lower margins of alternative homes vs hotels, considering regulatory issues, lower commissions, and supply acquisition costs.

Fogel responded, “The cost of dealing with it [alternative accommodations] is significantly higher on both sides [supplier and guests]. It is a less profitable business. The fact is people want to use it.”

For property managers, if you want to check your properties’ ratings, the info was more easily obtained on the mobile site, as the star ratings were not displaying on desktop in our research. However, PMs (and consumers) can filter by property type and star rating across devices.

If you have questions or concerns about the Quality ratings, Booking.com will be demonstrating the new global classification system at the upcoming Vacation Rental Management Association’s International Conference next week in New Orleans.

20-question survey for vacation rental managers. We need your input.

Amy Hinote

October 3, 2019

For vacation rental professionals, we need your help!

Will you help us by taking a 20-question survey about your thoughts about the future of the vacation rental industry? The deadline for responding is October 10.

Like you, we’ve been thinking a lot about where the traditional-leisure vacation rental industry is heading. As a result, we’ve gathered former co-founders of HomeAway (Carl Shepherd), Vacasa (Cliff Johnson), and FlipKey (Jeremiah Gall), along with Meyer Vacations COO Michelle Hodges, OYO Vacation Homes CEO Tobias Wann, and stars of the podcast Sarah and T, Sarah Bradford (Winter Park Lodging Company and Steamboat Lodging Company) and Tim Cafferty (Outer Banks Blue and Sandbridge Blue) to discuss this topic on the main stage at the VRMA International Conference, October 14, at 4;45 pm CT.

The objective of this session is to examine factors that will affect the future on the vacation rental industry, including distribution, technology, consolidation, homeowner services, and guest services.

And we need your input.

Please help us by taking this 8-minute survey that gauges PM sentiment about the future.

We will not share your individual responses, but we will share all of our aggregated findings with respondents. We will also compare your aggregated and anonymized responses with the live reponses from our panel.

Please help us bring your best insight to to this discussion!

https://www.surveymonkey.com/r/please-help-VRMintel

Beyond Pricing Raises $42.5M to Expand Pricing Tool Technology for Vacation Rental Managers

Amy Hinote

September 26, 2019

Beyond Pricing, the vacation rental industry’s largest provider of revenue management tools, announced today that it has raised $42.5 million to execute on a long-term strategy to provide a fully integrated solution for property managers to manage revenue and optimize demand across sales and marketing channels, and to expand its sales efforts in Europe, Australia and Asia. The Series A Round was led by Bessemer Venture Partners and follows early stage seed rounds totaling $3.5 million in 2016. According to Beyond Pricing founder and CEO Ian McHenry, the company has been operating at break-even, has proven the model in the United States, and is now primed to expand both its geographical footprint and depth of product.

“We’ve proven our model in the US, but we are just at the tip of the iceberg in Europe, as there are twice as many vacation rentals in Europe as there are in the US,” said McHenry. “We also have plans to grow in Australia and Asia, and are looking to become more integrated in the way we manage revenue across channels—including distribution and website platforms—in a more automated way that pulls all levers that contribute to demand.”

McHenry also said the company is not looking at major acquisitions at this time, but is instead interested in building out the product “in a holistic manner to help property managers drive more demand and overall revenue.”

As part of its growth strategy, Beyond Pricing has established an engineering office in Portugal and will be building sales and marketing hubs in London and Barcelona.

“We would love to build more data partnerships,” McHenry added. “Having more data sources that we can inject in an automated way—whether aggregated, anonymized source data or website and demand data—helps us create better pricing recommendations [for property managers].”

According to the company’s release about the funding, “Beyond Pricing currently dynamically prices 150,000+ listings in more than 7,000 cities worldwide, and has priced more than $2 billion in bookings. The company, which last raised post-seed funding in 2016, plans to use the infusion of capital to maintain their leadership in the space and develop an expanded suite of products to further support their core customer base. The company also plans to expand its presence in Europe, starting with their office in Portugal.”

“At Bessemer, we love investing in founders that are transforming industries that have been historically underserved by software. While hotels have fully embraced technology and dynamic pricing, the short term rental industry is still underpenetrated. We were impressed with the Beyond Pricing team’s ability to consistently deliver revenue growth for their customers and think they are positioned to become the market leader in short term rental software. We’re excited about partnering with them in the next chapter of the company’s growth,” said Brian Feinstein, Partner at Bessemer Venture Partners.

Northwest Vacation Rental Professionals Expands Vacation Rental Marketplace to Hawaii

Vince Perez

September 23, 2019

greathawaiistays — vacation rentals hawaii

“We are very excited for our NWVRP Hawaiian professional managers joining our marketplace network of professionally managed vacation homes. GreatHawaiiStays.com will provide even more options to book direct for travelers looking to get the best rate guarantee,”said Blake MacKenzie, Vice President of the Northwest Vacation Rental Professionals association.

We are just beginning to really see our marketplace network of professional managers grow. The vision is catching on fast as our vacation rental manager community understands the importance of working together will provide the best value and service for our guests, something the OTAs cannot provide” concluded MacKenzie.

GreatHawaiistays is currently onboarding properties. Joining the marketplace is limited to NWVRP members and costs $66 per property per year.

NWVRP partner Fetch My Guest will operate the marketplace as it expands the network of independent vacation rental professionals to include the Northwest, Northeast and California, with new regions coming online soon.

“We are pleased to see the continued growth of the NWVRP network. The addition of GreatHawaiistays.com will not only provide strength to our nationwide network of independent vacation rental professionals, it will also provide a valuable alternative to the vacation rental traveler community that we serve by booking direct!”said Vince Perez, CEO of Fetch My Guest. “

Vacation rental managers in Hawaii may contact GreatHawaiistays@gmail.com for details or sign up for the webinar here

Key Data Dashboard partners with PriceLabs

Amy Hinote

September 19, 2019

Today Key Data Dashboard announced the first partnership of its kind with PriceLabs, integrating comparative source data for vacation rental professionals with pricing technology to allow property managers to use benchmark data to adust pricing on demand. The partnership agreement pairs two complementary technologies—one offering insights and the other the ability to update pricing quickly and easily.

“We’ve given revenue managers the insights and ability to make their own decisions when it comes to pricing their inventory,” says Key Data CEO Jason Sprenkle. “With this new partnership, we are now able to offer customers the ability to seamlessly change prices from within the Key Data dashboard. You can determine what changes need to be made, and then execute on those changes immediately, in one click.”

“Changing prices in your property management system is a massive headache for far too many customers. It’s tedious and incredibly time-consuming – which makes it expensive. This partnership fixes that,” added Sprenkle.

“Our customers prefer an automated dynamic pricing solution. That remains our core platform,” said Anurag Verma, co-founder of PriceLabs. “But we also realize that many property managers prefer to analyze their data using Key Data and make rate changes themselves. Those managers needed a better solution for changing prices, and this partnership gives them the option to choose either path and have a best-in-class solution!”

As a result of the integration behind the scenes, customers who sign up for the On-Demand Pricing with Key Data, will be able to simply change prices directly from their dashboard.

GSV-led technology rollup in vacation rental industry rebrands and names new leadership team

Amy Hinote

September 13, 2019

This week, Knoxville-based Greater Sum Ventures (GSV) announced to its Vacation Brands and Property Brands teams that it has combined its short-term and long-term property management companies into a new brand—Inhabit IQ.

According to an internal announcement, “Inhabit IQ is a unique collective of tech-forward software companies, formerly Vacation Brands and Property Brands, serving the residential, commercial and vacation rental industries.”

Over the last year, GSV led a private-equity-funded rollup, acquiring majority stakes in large technology companies and service providers in the professionally managed vacation rental industry (including Streamline Vacation Rental Software, Bizcor, Bluetent (which purchased Visual Data Systems), Rental Guardian, Virtual Resort Manager (VRM), iTrip Vacations, and LiveRez).

Initially, GSV aggregated these companies under a short-term rental umbrella known as Vacation Brands. GSV led a similar initiative in the long-term rental management industry under the Property Brands label.

According to the email, “Vacation Brands and Property Brands have come together to form a new entity doing business as Inhabit IQ,”

The announcement named a new leadership team:

Lisa Stinnett, CEO
John Vingia, COO
Chad Scott, CRO
Bill Roselli, CFO
Kristoph Gustovich, CTO

According to its email, this team “will lead Inhabit IQ, providing insight and tenured management expertise to companies across the platform through extensive operational, financial, and strategic go-to-market experience.”

The announcement added, “In many ways, you won’t experience any noticeable changes. Your company’s platforms are still sold to the market individually, as Inhabit IQ does not offer any solutions itself to the market. Rather, the companies under the Inhabit IQ umbrella manage unique and independent go-to-market strategies with the operational oversight of Inhabit IQ leadership. Now, you have a wider network of partnerships supporting the momentum of the market.

“Some of the near-term benefits you can expect from the combination support operational efficiencies, such as Vacation Brands companies benefiting from an established Property Brands infrastructure and experienced corporate executive team. We also anticipate additional opportunities for employees in this structure as we continue to move forward.”

The email added, “The positive effects that were expected from the Vacation Brands formation will continue on with Inhabit IQ as we work to identify valuable integrations, cross-sell opportunities and innovation strategies that offer more to our customers than ever before.”

Return on Experience (ROE): The Future of Vacation Rental Marketing

Tyann Marcink

September 11, 2019

As entrepreneurs in the small accommodations business, you’re likely well-versed in ROI. That’s Return on Investment, of course, and it’s a mindset that can be applied to everything from the mortgage on your property to the towels you stock in your bathrooms.

ROI But what about ROE?

I would like to introduce you to a new take on the concept. One that isn’t about tangible stuff, but something a little more abstract. And, we’d argue, even more powerful.

That’s ROE. “Return On Experience.”

Article originally posted on TouchStay.

You know the travel landscape is changing. That’s in part because of the ever-buzzed-about millennials, whose pockets are getting deeper as they get older, while their priorities remain the same. Put simply, they want to have experiences that will enrich their lives. Experiences are still more important than material goods and (seemingly) always will be. The next generation, the tech-savvy Gen Z, is following suit.

So, to put it bluntly, if you aren’t thinking about the overall experience that guests are having at your accommodation, then you are at risk of getting left behind.

Not to mention the fact that booking platforms are taking a larger and larger chunk of your profits—and are poised to continue doing so. You can’t control the OTA business decisions, but there’s something you can control…and that’s the guest experience. The ROE.

“Investing in the guest experience is not just recommended, it is critical for the company’s sustainability,” advises Amy Hinote of VRM Intel. “Marketing costs are rising for property managers as channels like Vrbo, Airbnb, Booking—and now Google—expect to receive 10 to 20 percent of the booking total. The only way this cost per acquisition (CPA) makes sense is if vacation rental managers convert a high percentage of these customers into repeat guests.”

In the years ahead, successful vacation rentalists, innkeepers, holiday rental managers, and short-term rental hosts will actively search for ways to meet the wants and needs of experience-driven travelers. In other words, they will always be looking to improve their ROE—Return on Experience.

What does a healthy ROE look like? It’s a business with plenty of word-of-mouth referrals, repeat guests, and an overall more sustainable business model that doesn’t rely quite so much on the booking sites.

Let’s define ROE.

It’s a tough endeavor, because ROE means a lot of things and encompasses the entire traveler journey—starting from the moment they discover your property, whether digitally or through a friend.

But to simplify, we’ve picked out four elements that really get at the heart of the ROE philosophy. These are:

Reviews
Activities
Local area
Feelings

1. Reviews

Here is where your past guests become your greatest asset. Because they value experiences so much, today’s guests are often compelled to share details of those experiences with others.

We talk a lot about the reviews and star-ratings guests leave on the platforms they used to book your property, because those reviews are marketing gold. But don’t forget: a shared photo with a brief caption, or a lengthy commentary on social media is its own kind of review. Spinning a tale with animated hand gestures in the break room is—you guessed it—a review.

Reviews inspire people to act, whether it is to propel them to dream about a destination, to actively seek out a similar experience, or to aggressively avoid that experience at all costs.

More than ever, travelers base their buying decisions on the experiences and interactions that others have with a brand, company, property, or product. So, even though a review may seem like the end of the guest journey, it’s more than that. It’s the beginning of the journey for the next guests, too.

The data bears this out. Reviews are not only desired, but critical for converting travelers to guests—including those tech-savvy Gen Z folks we talked about earlier.

Pete Comeau of Phocuswright recently shared (at the VRMA Regional, Colorado) that the Gen Z traveler is most concerned with the property’s rating when making a decision on where to stay. For this reason, Comeau advises vacation rental managers to shift their marketing to heavily promote the value and location of their properties.

To get those strong reviews and build your personal army of delighted guests, you must, of course, focus on giving excellent experiences to the guests. But even more than that, you have to figure out the guests who are perfect for your properties and make sure they find you.

“You need to determine who your ideal guest is, what she values, and how you can best position yourself to provide that value in a way that delights her, and in a way that works for your business,” says Andrew McConnell, CEO at Rented. “You don’t need tens of thousands of people who think you are fine. You may [need] just tens of people who are raving fans because you delivered something different and better than anyone else.”

McConnell continues: “Increase the right things for your guests and your business. To make that work, decrease and/or compromise in other parts. You don’t have to compete on every dimension. You simply have to be the best on those parts that truly matter.”

Leslie Preston, founder of Bachcare, adds, “Some companies may choose not to invest in the guest experience, and they are just order-takers reliant upon OTAs to bring in commodity bookings. There is no sustainable future in that.”

According to Preston, those who overlook the guest experience are missing out on opportunities for repeat business, brand loyalty, glowing reviews and word-of-mouth referrals.

Says Preston: “[Some companies] may decide to invest for the long term and have a defensible advantage in delivering great customer experiences.” Bachcare is one of those. She adds: “I prefer to operate a business with a clear competitive advantage, one that delivers amazingness, and one that has a future.”

It’s simple logic: Amazing guest experience = Better Business Performance = Rave Reviews = Amazing Return On Experience (ROE)

2. Activities

No longer is it enough to just give people a comfy bed and a Keurig. Guests are also looking to leverage your insight to improve the hours they spend outside your property, as well.

Especially if you host families. According to a recent study by Expedia Group Media Solutions, 95% of families make vacation-related decisions based on the needs and wants of their kids. That includes, of course, finding activities and experiences the whole family can enjoy.

“Providing experiences, or being the number one reference for recommending experiences, is vital in an age where travelers don’t just look for accommodation anymore,” states Vanessa de Souza Lage, CMO at Rentals United.

To that end, consider connecting with affiliate programs and receive a commission on the activities that guests are purchasing when staying in your area. This makes guests smile and generates extra income for you.

“This is a real opportunity for owners and property managers to make an extra income,” de Souza Lage adds, and shares a story that drives the point home:

“I recently booked an apartment for a short getaway with my kids on Booking.com. I was delighted when Booking.com sent me experiences in the area, and I immediately booked two activities to do with my kids. On the other hand, the owner of the apartment never sent me anything. If he had, that commission would have gone to him.”

Partnering with local businesses who provide activities for guests—or even going a step further to curate VIP experiences, as Matt Landau suggests with his Theory of Limited Edition—ensures that guests associate you and your business with all of the fun memories they create on their trip. Not just the memories made inside your property.

This happy association leads to referrals, reviews, and all the other markers of a healthy ROE.

“Vacation rental managers that understand this and put time and effort into building relationships and making sure guests feel special will have to spend less and have to work less hard to fill the calendar the following year,” adds Hinote.

3. Local area

Experiencing a surrounding area and learning about another culture is an important lure of travel. There’s a reason Airbnb chose the tagline Live like a local. They smartly targeted the craving of travelers for authentic, insider experiences that clearly differentiate them from tourists, who all flock to the same cliche attractions (and chain hotels).

“Vacation rentals offer a much more intimate experience than hotels. The experience our guests have outside our homes are equally important to us,” says Vince Perez, Beach House Rentals and Fetch My Guest. “As the experts in our communities, we invest in the guest experience as a proven way to drive our repeat guests.”

As such, property managers and accommodation providers who market their extensive knowledge about the area to guests—and provide the information to guide them during their stay—will have an edge over their competitors.

“Put your local area guides front and center when marketing to travelers,” stresses Susan Blizzard of Blizzard Internet Marketing by RedAwning in her talk at VRMA Regional in Colorado.

“The phrase live like a local is nonsense when taken literally,” says Andy McNulty, CEO of Touch Stay. “No guest is ever going to truly live like a local. But the intent of the phrase is to conjure up the feeling that I just experienced something I couldn’t easily have found via Google or TripAdvisor.”

McNulty continues: “For this reason, truly great local area guides have a section that focus on a small list of gems. Not the local Starbucks, but the independent coffee cart. Not the crowded view of a tourist spot, but the hidden one. Be your guest’s fast-pass to the best of the area. That investment in experience will produce returns.”

Case in point, an email received by a guest staying with Airbnb host Scott Rasmussen:

“And just wanted to say that the communication with you and the guidebook to the house have been fantastic. We have stayed in a lot of rental properties not just Airbnb and the guidebook is exactly what I would love in every property but that hardly ever happens. So thank you!”

ROE at work

4. Feelings

As Maya Angelou said in her classic quote, “People will never forget how you made them feel.”

Guests may forget the exact thread count of your sheets, the number of parking spots you had, or how well your WiFi could handle streaming their favorite show. But they will certainly remember how these amenities made them feel, in the end.

Speaking a guest’s love language is crucial to create a good feeling. Often, it’s difficult to put into words what creates a sense of welcome. It’s an abstract, intangible feeling that you are cared for.

Gary Chapman, author of The 5 Love Languages, recognizes these love languages as Acts of Service, Quality Time, Words of Affirmation, Receiving Gifts, and Physical Touch.

If you’ve attended Touch Stay’s “Love Languages” talk at various industry conferences, you know that weaving these love languages into your guests’ journey can have a big impact on their overall experience.

(By the way, you can take our Love Language Quiz here to find out what your love language is when you are traveling as a guest.)

The investment in creating a welcoming feeling for your guests can be drilled down to even the smallest details:

Handwriting a welcome note with their names
Dishing out the secret parking area for a local hot spot
Supplying sharp kitchen knives

You can also show your love through amenities like blazing WiFi and ultra-soft sheets, of course.

“All too often short-term rentalists underestimate the power of a well-made bed with quality linens,” says Alanna Schroeder of The Distinguished Guest in her Modern Hospitality Guide. “If there is one space in your rental that should take heavy inspiration from hotels, it’s your bedrooms. Hotels know that without a good nights sleep, they can say goodbye to that 5-star guest review.”

But keep in mind, it’s not just about the softness of those sheets, but about what those sheets say to the guest: that you care enough to put time, money and care into going above and beyond for them. That’s what they’ll remember.

Conclusion

Just like ROI, there’s only a return on experience when you put something in. And, the smarter you are about what you put in, the higher your return becomes.

As Andrew McConnell said:

“You don’t have to compete on every dimension. You simply have to be the best on those parts that truly matter.”

Which is to say that investing in an experience that matters only to your specific target guest types will generate the highest returns.

Hinote adds, “The reason for using Vrbo, Airbnb, and other sites is to get new customers in your door, and then investing in the guest experience gets them back.”

And, of course, even if you’re not a host or business in a high repeat/return location, the strong reviews your guests will leave on those platforms is a competitive advantage.

And thus, the cycle of experiences begins again—and the Return On Experience is found.

North Carolina’s Ocracoke and Hatteras Islands take brunt of US impact from Hurricane Dorian

Amy Hinote

September 6, 2019

Vacation rental managers from Miami northward up the Atlantic Coast to Delaware worked to prepare for slow-moving Hurricane Dorian. However, few believed that North Carolina’s Ocracoke and Hatteras Islands would take the US’s brunt of the highly publicized storm.

Around 10:00 am, NC Gov. Roy Cooper said flooding on Ocracoke Island is catastrophic and there are possibly hundreds trapped. At 7:48 pm Friday night, WTKR reported: “Due to the hazardous conditions on Ocracoke Island from Hurricane Dorian, Hyde County officials are dispatching air transportation units to help evacuate people who need to leave. There is a shelter in Washington County that has food, medical supplies and power. Air units will take residents to Dare County, where a vehicle will then take them to the shelter location.”

At this time, reportedly, all residents of Ocracoke and Hatteras are without power. According to the area’s Island Free Press, “Storm surge reached record levels on Ocracoke and Hatteras islands on Friday morning, with soundside surge of approximately 7 feet in Ocracoke, and roughly 6 feet on southern Hatteras Island, within a maximum time frame of two hours. Water levels have diminished drastically as Dorian moves away from our area, but standing water remains a concern for multiple sections of N.C. Highway 12. The eye of Dorian made landfall over Cape Hatteras at 8:35 a.m. on Friday. There have been no fatalities reported so far, however, property damage is extensive throughout the islands.”

Dare County established a curfew for Hatteras Island (all areas south of Oregon Inlet) from 8:00 p.m. Friday through 8:00 a.m. Saturday.

https://www.facebook.com/IslandFreePress/videos/380245195999938/

https://www.facebook.com/joel.jimenez.3726613/videos/2145617405738487/?t=38

The Dare County website added, “Roadways on Hatteras Island are covered with sand and water making travel extremely hazardous. NCDOT is working to assess damage along NC 12. All of Hatteras Island is without power. Cape Hatteras Electric Cooperative crews are out in the field working on restoration efforts. Water service to Hatteras Village has been turned off due to a leak that cannot be found and repaired due to flooding. Crews are standing by and once the water recedes, repairs will be made and a water pressure advisory will be issued with a recommendation to boil water.”

Pending the successful test run of the ferry tomorrow morning, we have additional personnel and trucks carrying a generator for the watertower, water, and MREs staged in Swan Quarter to deliver to Ocracoke. There will be enough food and water to last 3 days for 1100 people.

— County of Hyde, NC (@HydeNC) September 7, 2019

A Basic Primer on Short-term Rentals with a Cheat Sheet and Checklist of Considerations for City Officials

Amy Hinote

August 28, 2019

An increasing number of municipalities are looking for the best way to regulate short-term rental regulations, and elected officials are understandably confused about how to work with short-term rentals in their communities.

While we wish it was possible, there is not a one-size-fits-all strategy for regulating rental activity. Each state, region, destination, municipality, and neighborhood faces its own unique challenges and has varying resident sentiment about short-term rentals.

Noise, parking, trash, taxes, and affordable housing top the list of concerns resulting from short-term rental activity. However, the first challenge city officials encounter is simply understanding the broad scope short-term rental industry. For city council members—or anyone looking to have a discussion about the short-term rental industry—here is a simplified breakdown of the industry with definitions and a basic background of rental types that have found themselves lumped into the short-term rental category, along with a checklist of considerations for city officials.

Short-term rentals, private accommodations, alternative accommodations, Airbnbs . . . What are they?

The short-term rental industry is a broad heading for a multitude of non-hotel lodging options.

Generally, there are four types of rentals that fall under the short-term rental umbrella:

Traditional leisure vacation rentals
Short-term urban rentals
Primary residential and shared home rentals
Other: houseboats, campers, tree houses, RVs, etc.

But first, as city officials, you are not regulating “Airbnbs”

Airbnb is a company, not a type. Airbnb is a website that lists short-term rentals—and now hotels. But the company is a marketing site, not a rental provider . . . yet.

We get it. We all “Uber” instead of “ride share” when we actually might be using Lyft—in the same way that we reach for a Kleenex, bandage a cut with a Band-Aid, and make notes on Post-Its using Sharpies.

Calling a short-term rental “an Airbnb” helps consumers simplify the activity in conversation, as the user doesn’t have to explain if it is an apartment, a house, a guest room, a condo, or a camper. And for some travelers, it just sounds cooler.

However, for city officials and regulators, labeling the entire short-term rental industry as “Airbnbs” is dangerously inaccurate.

Without getting too deep into the “other” category (houseboats, campers, tree houses, RVs), here is a better explanation of the top three types of short-term rentals:

1. Traditional Leisure Vacation Rentals

Rental Types: Whole-home lodging options in tourist areas, such as beach houses, condos, cabins, chalets, condo-hotels located in leisure—and often seasonal—destinations

Suppliers: Traditional leisure vacation rentals are typically individually-owned vacation homes (a.k.a., second homes), and are either professionally managed (rented through a property management company) or owner managed (rented directly from the second home owner). Traditional vacation rentals are rented on a short-term basis in destinations that attract leisure travelers (i.e., beaches, mountains, lakes, or near national parks/theme parks).

Background: In Europe, these vacation (or “holiday”) home rentals have been popular for centuries. In the US, vacation rentals date back over 100 years and became popular in vacation markets 1) in which families look for multi-bedroom lodging options, and 2) in seasonal markets where hotels could not achieve the 65% occupancy requirements needed to be profitable.

Vacation rentals provide whole-home lodging options with kitchens, separate living areas, and washers/dryers for families and groups in vacation areas. In traditional vacation rental destinations, vacation rentals are more popular than hotels—as there are not enough hotels to accommodate seasonal travelers visiting the area; and hotels require occupancy for over two-thirds of the year in order to meet profitability margin requirements. In many of these markets, vacation rentals are the largest driver of revenue and jobs, and the vacation rental industry enables these destinations to support a year-round population.

Looking at the downside—with the transient nature of seasonal destinations—condominium complexes and developments have “busy seasons” that can make it annoying for long-term residents to deal with the large number of travelers during peak seasons. However, in these seasonal markets, there likely was never a reasonable expectation that tourism would cease.

NIMBY (not in my backyard): In traditional vacation rental markets, vacation home guests become vacation home owners. In some cases, these new owners want to shut the door behind them. For example, a couple will vacation in a destination for years and then decide to buy a second home in which they intend to retire. Once they retire and move to the destination, they no longer want tourism there and begin to complain to city officials about tourism activity. As this homeowner is now a resident—who votes—this dynamic puts pressure on elected city officials.

2. Short-Term Urban Rentals

Rental Types: Apartment-style short-term rentals in cities (i.e. New York, San Francisco, Seattle, Miami, Chicago, etc.)

Suppliers: Often rented under long-term leases by management companies, these apartment-style rentals are subleased as short-term rentals and booked via online marketplaces, such as Airbnb, Booking.com, and Expedia. In many cases, a group of apartments or even an entire apartment building is leased by a management company and subsequently designed, marketed, and operated as a short-term rental operation. When you hear the term “illegal hotel,” these short-term urban apartment-style rentals are what people are referring to.

Background: Short-term urban rentals became popular as a direct result of Airbnb. Airbnb provided an online marketplace for these lodging options, and they initially became popular among millennials who wanted to “live like a local” in city centers. However, in recent years, short-term urban rentals have become mainstream among business travelers and guests who seek apartment-type lodging with kitchens, separate living areas, and washers/dryers.

Disadvantage: These short-term urban rentals are often in buildings that might otherwise have been available to long-term renters. Some residents and city planners claim that the existence of these short-term urban rentals contributes to housing shortages in popular downtown areas.

3. Primary Residential and Shared Short-term Rentals

Rental Types: Short-term rentals in residential areas; short-term rentals that are primary residences; room rentals (extra bedrooms/guest houses) in which the primary resident is present; and homes that are available for rent during special events (sporting events, music festivals, political conventions, etc.), These rentals could be anywhere, and as a result of the Airbnb marketplace, they have sprouted all over the world.

Suppliers: These rentals are supplied by hosts, a term coined by Airbnb instead of homeowner because a significant number of these residential rental providers are not homeowners, but are actually long-term renters themselves. The rental provider could be a long-term renter or a homeowner. In many cases, the host rents out part of the home as a rental or moves out of the home during the rental period. These rentals generally are not second home rentals; they are primary residences available—in part or in whole—based on demand.

Background: Like short-term urban apartment-style rentals, residential short-term rentals are relatively new lodging options made possible by Airbnb. Airbnb created a marketplace for primary residents to supplement their income by renting out their homes on a short-term basis, and these residential short-term rentals are now available anywhere and everywhere.

Advantages: Gives consumers affordable lodging options, lets travelers experience a town “like a local,” and opens up primary residences as lodging alternatives during peak periods (i.e. music festivals, sporting events, or political conventions) or for specialized lodging needs (i.e. weddings, graduations, funerals, etc.).

Disadvantages: Brings short-term rental guests into residential areas not accustomed to the in-and-out activity of rental guests. Criticisms also include noise, trash, and parking complaints from neighbors. However, the complaints often stem from neighbors who do not like having a stream of short-term visitors in their residential sphere.

Before You Regulate: Checklist for City Officials before passing new short-term rental regulations

Making the decision to create and enforce new regulations and requirements is a difficult undertaking and one that can have far-reaching consequences. We’ve seen a number of legal challenges, lawsuits against cities, and statewide legislation overriding municipal regulations that legislators deem harmful to the state’s overall economy.

Here is a checklist for city officials as they consider regulations:

1. All short-term rental activity is not the same. What kind of rental activity do you have in your municipality? How many units/homes/properties by rental type are in your city?

Traditional vacation rentals (second homes/vacation homes in tourist areas)
Short-term urban apartment rentals
Primary residential and/or shared rentals (rentals in residential areas)

2. If there are complaints from residents, which type of short-term rental is causing the most issues or complaints? And what types of complaints are you receiving? How many?

3. Can any of the identified problems be resolved by working directly with Home Owners Associations (HOAs), Condo Owners Associations (COAs), or Property Owner Associations (POAs) without writing new legislation?

In many municipalities, complaints are isolated to handful of residential neighborhoods and/or subdivisions. If officials can resolve issues and complaints by working hand-in-hand with HOAs, COAs, or POAs, it will save an enormous amount of hardship down the road.

4. If facing complaints from constituents, how many formal complaints are there? Have you engaged the police department in identifying responses to complaints about short-term renters vs long-term renters?

Having actionable data from the police department has been helpful for other city officials in examining regulations and in talking to residents about the actual vs perceived issues. In addition, documenting police responses to activity that results from short-term renters vs responses to activity that results from long-term renters can shed some light into where problems are actually occurring.

5. What is the economic impact to the municipality from rental activity (lodging tax revenue, rental and restaurant activity, attractions, direct jobs, related service jobs (home service providers, landscapers, Realtors, professional services)?

If the economic impact from rental activity in your city has not been measured, this is the most responsible place to start. Regulating activity without understanding the adverse consequences has put more than one city council in a difficult position that resulted in legal challenges, lawsuits, and involvement on the state level. Studies can be commissioned using companies such as Smart City Policy Group.

6. Has your city tried implementing solutions that do not overly regulate businesses? Are you enforcing laws already on the books?

For example, when addressing noise complaints, requiring local 24/7-on-call staff/contacts for rentals or implementing noise monitoring systems could solve most issues. For parking, increasing parking ticket fines from $38 to $200 can offer a huge incentive for owners and rental management companies to notify guests of penalties. Have you required that property management companies and owners post and have guests sign off on “good neighbor” requirements in rental contracts? While trying to find a quick fix may seem attractive, exploring some business-friendly solutions can help your city avoid in costly legal challenges.

7. Examine your city planning strategy.

If the problem is with traditional vacation rentals, the culprit may not be the vacation rentals themselves, but the city’s development strategy. If the city is seeking to limit rental activity while simultaneously passing out new building permits like Halloween candy to developers, the current nuisances likely will not be solved by passing more rental regulations.

Just another note about Airbnb, Vrbo, and other websites

Websites like Airbnb, Vrbo, Booking.com, TripAdvisor, HomeAway, etc. are online aggregators who only list short-term rentals for consumers (like Zillow in the real estate sector). They do not currently manage these rentals. These websites operate largely on a commission model which “takes” a percentage of the booking total. This percentage is referred to as their “take rate,” and is now totaling between 10 to 20 percent depending on the website and agreement with the supplier (management company, homeowner, primary renter, host).

Example: Mary is planning a beach vacation for her family. She searches on Airbnb and Vrbo to find a condo to rent. She books the condo on Airbnb, pays on Airbnb, but the reservation is actually passed to XYZ Vacation Rentals who manages the home for a John and Ann, who live in Atlanta and who bought the condo as a vacation spot for their families. If there are noise or parking issues, Airbnb will not be the one to respond to a call from the city. Airbnb, Vrbo, Booking.com, TripAdvisor, HomeAway, etc. do not own or manage the condo. They are simply websites that list available rentals.

Note: Airbnb has made several acquisitions indicating a couple of moves into managing short-term rentals. However, Airbnb is still primarily an online marketplace. When city officials attempt to regulate “Airbnbs,” it is important to know that Airbnb is not the provider of the rental, they simply advertise and facilitate the transaction.

When Airbnb lobbies city officials to influence regulatory activity, city officials will find it useful to recognize that Airbnb’s primary goal is legalizing its core business, and in many areas that translates to working to promote the short-term urban rental and the primary/shared residential rental types. Discerning these sites’ motivations will help in weeding out potential conflicts of interests.

A “Speedometer” for Housekeeping Performance

Durk Johnson

August 19, 2019

Last fall I spent some quality daddy–daughter time with my daughter driving her back to college for her junior year. It was a long trip, and I was constantly looking at the speedometer to know how fast I was going. My speed depended on the traffic, weather, and how anxious we were to arrive at our next stop.

We were on the last leg of our journey and within 120 miles of our destination. We were tired of being in the car and ready to walk on land. Because of this, the needle on the speedometer occasionally read more than the speed limit sign—oops! I would notice this and slow down. Later, down the road, I would check again and realize that I had unconsciously increased the speed again. This yo-yo effect continued for the next 90 miles. As we came over a tall hill (on the high end of the yo-yo speed cycle), we spotted a patrol car in the median. Just then I checked my speed and saw I was going too fast. I slowed down, but alas, it was too late. The officer had clocked my speed at 12 mph over the speed limit. He happily wrote me a ticket, and 45 days later I paid the fine and was $260 poorer. Ugh! (Insert unhappy wife scowl right here—I enjoyed my few days in the doghouse.)

When we drive, the speedometer’s only job in the vehicle is to provide continuous feedback. It doesn’t factor in rain, school zones, or the officer on the other side of the hill. It simply states how fast the vehicle is going. It is up to the driver to look at the road conditions, follow the speed limit, and monitor traffic congestion to decide when to adjust speed.

Housekeepers and cleaning professionals need continuous feedback to know how they are performing. They need a “speedometer” of sorts to provide information. If you think about it, the cleaning staff, for the most part, usually receives only negative feedback. What is the ratio of negative comments to positive—1 to 1, 5 to 1, or 30 to 1? This is tough on housekeepers! Their day is full of cleaning up other people’s messes, which may include pee, poop, or vomit. Fun!

All cleaning professionals need to have scoreboards or scorecards that show how they are performing. The scorecard items might include the following:

Punch-in and punch-out times compared to the schedule
Actual clean time compared to the projected clean time
Number of back-to-backs started on time
Guest comment card scores for the properties they’ve cleaned
Inspector evaluations of cleanings the housekeeper’s performed

The scorecard can be old-school pen and paper or compiled in the latest and greatest app. It does not matter how it is done as long as it shows how the individuals and departments are doing.

For many staff members and departments, this is going to be a huge cultural shift. There will be anxiety, fear, and tears as they encounter feedback (positive and negative) on a more frequent basis.

Remember, just as the speedometer provides information about a vehicle’s speed, the scorecard or scoreboard will do the same for your staff. Knowing their work performance scores will help them be able to make adjustments successfully to meet the standards the company has set. When staff anxiety and stress subside over this new system, they will begin to understand and appreciate its great value, and you will hit another level of success in your business.

Vacation Rental Software Advisory Group (VSAG) Addresses Technology Needs for Enterprise-Level Property Management Companies

Amy Hinote

August 16, 2019

Recently, dozens of large vacation rental managers and technology providers gathered before the second day of the Data and Revenue Management Conference for an early morning technology discussion and presentation from the recently formed Vacation Rental Software Advisory Group (VSAG).

The VSAG originated as a collective effort among property managers and technology providers to examine the need for API standards and open connectivity and to address the diminishing number of viable enterprise software options available to large vacation rental management companies.

While the VSAG formed before the announcement that HomeAway Software will be shutting down V12, one of the most widely used enterprise-level property management software solutions, the VSAG meeting saw increased interest and attendance as a result of the news.

VSAG’s membership contracted with Tom Leddy and Lynn Thurston to gather and analyze the technology needs of its membership and began to lay out a road map for technology providers outlining enterprise-level software requirements. During the morning meeting, they presented findings and discussed how best to move forward.

In case you missed it, here is the video from the VSAG meeting.

Vacation Rental Software Advisory Group Meeting from VRM Intel Live on Vimeo.

For more information about the VSAG, contant Lynn Thurston at lynnmthurston@gmail.com.

2019 Vacation Rental Data and Revenue Management Conference Photos and Videos

Amy Hinote

August 16, 2019

The first Vacation Rental Data and Revenue Management Conference is in the books, and we wanted to share some photos from the event along with an opportunity for those who missed itt to purchase the videos.

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Throughout the two days—we were hoping to find out where our industry stands regarding data and revenue management, and to be able to differentiate between the offerings of new and established tech providers. I think by the end of the show, we were able to accomplish these objectives. We also wanted to get on the same page with the metric definitions and KPI labels, and I think we are getting closer there, too.

Click here to purchase the video package ($450), which includes the following sessions:

Welcome and Introductions with Emcee Simon Lehmann
Mapping the State of Data-driven Tools and Technologies in Today’s Vacation Rental Industry with Ralf Garrison
Getting on the Same Page: Data and revenue management terminology, KPIs, and data types for vacation rental managers with Cliff Johnson (Rented) and Jason Sprenkle (Key Data)
Revenue Management Principles: Theories, practices and applications in the vacation rental industry panel Panelists: Chad Blankenship (General Manager of Revenue and Business Intelligence, Southern Vacation Rentals), Scott Breon (Chief Analytics Officer & Head of Revenue, Vacasa), Josh Marquis (President, Retreatia and Great Western Lodging), John DeRoulet, (Senior Director of M&A, Stay Alfred) moderated by Ben Edwards(Weatherby),
VRMs Review Data Comparative Data Tools, Q&A by: Mike Harrington (Carolina Retreats Vacation Rentals), C.j. Stam III (Southern Comfort Cabin Rentals), Travis Wilburn (Stay Charlottesville)
The Pricing Technology Process: How hoteliers combine internal, external, and market data with pricing tools, PM software and revenue management services and where how this works currently in the vacation rental industry with Ryan Saylor (Beyond Pricing)
Smoke and Mirrors: Removing bias from data analysis with Lynell Eaddy (LSI) and Jack Newkirk (NAVIS)
Advanced Revenue Management: Putting the “how-to” after the “why” with Anurag Verma (PriceLabs)
Smarter Pricing with Human and Artificial Intelligence with Tom Caton (AirDNA)
Comparing and Contrasting Vacation Rental Revenue Management with Other Industries with Mike Bohmer (TurnKey)
Turning Data into Insights: Examining the wider accommodations landscape with data from hotels and short-term rentals as well as consumer trends in leisure and urban markets with Lyse Perrigo and Jessica Haywood (STR)
How Revenue Management Strategies in Other Industries Translate to the VR Industry: Panel to discuss the reality of hands-on data management and revenue management in vacation rentals: Cameron Felton (Director of Revenue Management, Evolve), Sarah Franzen (Director of Revenue Management, Natural Retreats), Sam Makaryan, (Cofounder and CEO, Hosteeva), Yohannes Semere (Vice President Revenue Management & Analytics, BookingPal), moderated by Andrew Mcconnell (Rented)
VRMs Review Pricing and Revenue Management Tools/Services Q&A by Mike Harrington (Carolina Retreats Vacation Rentals), CJ Stam (Southern Comfort Cabin Rentals), Travis Wilburn (Stay Charlottesville)
Completing the Story with Other Data Sources: Demand data, property data, website and analytics data, and OTA data with Jeremiah Gall(Breezeway), Paul Hanak (ICND), Ned Lucks (Bluetent), and Matthew David Renner (TRACK)
Vacation Rental Software: How consolidation and innovation are changing VR software, and a look at integrations with pricing tools in systems with Jim Olin (C2G), Brett Parry (Streamline), Matt Renner (TRACK), Lynn Thurston (VSAG)

The Evolution of Property Management Software by Amber Leto

Amber Carpenter

August 15, 2019

I’m ashamed (or maybe proud?) to admit it, but I’ve been around the property management industry long enough to remember the magic of “ONLV”—the keyboard shortcut to the change log in First Resort Software (FRS), a DOS-based program that was so reliable, so useful, and so extensive that it spent 30 years dominating the marketplace and had to be pried out of the hands of most property managers by the time HomeAway Software stopped supporting it a few years ago.

The basis of FRS—and the loyalty from decades-old customers—did not come from blazing fast innovation and shiny new features but rather from a consistent and reliable software platform that provided reporting that could be trusted and peace of mind to accountants. Over the years, online booking and other functionality were added, but the platform lasted well beyond anyone’s expectation.

Although the needs of property managers have changed drastically since FRS was launched in 1984, there are always lessons from history that, if embraced, become a hallmark for greater success. Today’s property managers still need accounting functionality and data they can trust, and most of them are not willing to forgo those two pillars of doing business for new shiny features.

In the last decade, a plethora of companies calling themselves property management software (PMS) providers have entered the market. Yet, if you were to compare them side by side, you would notice that many of them have more in common with web marketing agencies and channel managers than with traditional PMS systems.

Almost every PMS uses a version of a tagline that reads “All-In-One Vacation Rental Software,” but there are basically two categories of PMS systems: traditional (PMS), and a new breed more accurately defined as property management marketing systems (PMMS). Ironically, both categories will check many of the same features boxes—but they diverge greatly in terms of how they started, how data is treated, and how their product road maps continue to evolve.

It is important to evaluate more than just the cost of the property management software and consider the costs of the additional platforms you will need to run your business. Both PMS and PMMS systems require integration with third parties to solve different, specialized problems as the needs of your business grow or the competition in your market tightens.

Traditional PMS platforms began as operationally centric software systems and provide extensive native functionality to run the day-to-day vacation rental business. Property setup, traditional booking flows, accounting, housekeeping, and maintenance were the core functionality at launch, with smaller feature sets in regard to guests and marketing tools. These systems are incredible at handling booking details, cash flow, and room-cleaning prioritization without third-party integration. The APIs for these systems typically are tightly held and available only to carefully chosen strategic partners.

Traditional PMS platforms have been around longer than PMMS systems and are generally stable technology, with fewer bugs and headaches. But because they focus on building everything natively, their development and support costs are higher and they are slower to innovate.

Using a traditional PMS system means you have to clean up your guest data, find a solution for lead management and marketing automation, and choose a channel manager to automate bookings from different online travel agencies like HomeAway, Airbnb, and Booking.com, and you need a web agency to build your website to drive direct bookings.

There are many options in the marketplace to solve for the lack of direct channel integrations, and there are many different flavors in that space as well.

“Channel management requires significant continuous investments to keep up with all the ongoing channel innovations. It is very synergistic for PMS providers to leverage the investments and development that channel managers are making in supporting the major players as well as the long tail of distribution channels,” said Alex Aydin, CEO and founder of BookingPal.

Marketing automation and website development have stagnated over the past few years because of consolidation or a lack of clear opportunity for new players in the space, but there are established companies that can help. As more property managers recognize the value of their guest databases and direct marketing channel opportunities, this space will flourish again.

PMMS turned this software category on its head. It started with a marketing-first approach, and natively included robust and modern booking flows, lead management systems, CRM functionality, marketing automation, integrated channel management, modern website development tools, and an open API to connect to third-party marketing channels, as well as specialized operations applications to solve accounting, housekeeping, maintenance, home automation, and revenue management. These software companies have product road maps that focus on features that drive additional revenue and enable more sophisticated marketing strategies while leveraging integration with best-in-class technology partners for back-of-the-house needs.

PMMS systems are generally newer platforms that offer a more modern user experience that resembles online booking engines rather than the tape charts of the past, minimizing the learning curve for new staff. However, new functionality breeds new bugs, and these systems are in the early stages of evolution. Finding the right balance of innovation and bringing new features to market while spending the right amount of time getting a feature to completion is a constant battle for any company trying to win market share.

Amiad Soto, co-founder and CEO of the short-term rental property management platform Guesty, said, “The fast-moving short-term rental ecosystem is incredibly fragmented, which makes it harder to be efficient and grow. This is why we’ll see increased consolidation of software tools into platforms in the next year. Many platforms are trying to be the jack-of-all-trades, which requires a lot of capital in order to successfully create an end-to-end solution where property managers can manage all aspects of their business in one environment.”

Jonathan Murray, CEO and co-founder of MyVR, believes that a sales- and marketing-centric PMS solution is the wave of the future for the short-term rental space. “Property managers want to grow, and that starts with being incredible marketers with powerful websites and direct booking strategies as well as a balanced and integrated approach to leveraging the OTAs and booking channels to gain market share. In order to do that effectively, the PMS needs to be the source of truth for prospect, guest, and booking data.”

Of course, there are a few hybrids in the marketplace that are trying to do it all. It’s an aggressive approach to the market that has had growing pains but has pushed providers in all categories to play at the top of their game.

“It is very exciting to see how much automation remains to be done in the vacation rental industry. We will see more intelligent revenue management techniques built into the PMS, automated occupancy maximizing techniques, faster mobile websites, and more focus on accounting. Home automation will be taken to a whole new level,” said Carlos Corzo, founder and CEO of Streamline Software.

Choosing the right solution for your company really depends on your pain points. If your primary goal is to grow and drive more revenue, a PMMS might be the right place to start. If your marketing and channel management strategy is solid but you are struggling operationally, then a traditional PMS might be your best solution.

Remember, there is no such thing as bug-free software, so before you choose a new platform for your business, make sure you are setting realistic expectations and clear goals. Software transitions are disruptive regardless of which platform you choose, so take your time and evaluate each vendor for features and cost as well as for reputation and support. Ask to speak with both happy and less-than-thrilled current clients, or use social media to talk to former clients before you are wooed by flashy marketing and stellar sales techniques. Almost every company will check off all the features on your requirements list, either natively or via integration. It is the context in which the features work (or whether they only work in certain scenarios) that will be the key to choosing the right partner.

Takeaways from the 2019 Vacation Rental Data and Revenue Management Conference

Amy Hinote

August 11, 2019

Last week’s inaugural Vacation Rental Data and Revenue Management Conference provided a giant first step for the industry in utilizing comparative data, discussing optimal pricing strategies, and looking at new technology for this emerging discipline for vacation rental managers.

First, I want to say thank you to the conference sponsors for making this happen, to the speakers for bringing their A game, to the VRM Intel team (Kelly Mutual, Connie Carlisle, and Rebecca Chapman, you rock!), and to the attendees for showing up ready to share their experiences and engage with others to grow the industry. The event had an energy I wish I could bottle, and everyone there contributed to the dynamic.

If you were not able to attend the conference, we are offering a video package that includes all sessions.

The objective of this conference was to bring together the smartest minds in the vacation rental industry to 1) determine where we are as an industry regarding data and revenue/yield management, 2) differentiate technology offerings, 3) try to find common ground with KPI calculations and labels, and 4) discover opportunities for vacation rental managers to move the needle by using comparative data, pricing tools, and revenue management strategies.

Andrew McConnell did a great job of sharing his takeaways, and I would like to build on what he wrote.

Here are my additional takeaways from the conference:

Early Innings

We are clearly in early innings in implementing tried-and-true pricing and revenue management strategies, and we are even earlier in creating yield management strategies. We learned hoteliers have property-specific revenue managers who combine internal data with comparative data sources and established competitive (comp) sets to determine pricing strategies. These hotel revenue managers analyze third-party channels (i.e. OTAs), create yield rules, and utilize pricing tools in combination with their reservation software to implement these strategies. They evaluate performance and market conditions and adjust regularly. There is human touch required, and they do not rely solely on algorithms to meet objectives.

We learned that there will be no silver bullet for vacation rental managers.

Dynamic pricing and revenue management strategies are still in their infancy in the vacation rental industry, but tools and strategies are evolving at a more rapid pace than in the hotel industry. With Wyndham’s sale of its vacation rental operations, all the companies in the industry are currently privately held. The vacation rental industry has a unique ability to pivot on a dime, while publicly-traded hotel companies move more slowly; and the vacation rental industry’s relationship with OTAs is evolving. It was apparent at this conference that—even though the vacation rental industry may have been “behind” the hotel industry—technology and data sources are new-gen and adapting quickly. However, human guidance will continue to be necessary.

OTA Bookings vs Direct Bookings

There are marked differences between the strategies implemented by companies/destinations that are heavily (if not solely) reliant on OTAs and companies/destinations whose reservation activity is not dependent on OTAs. For vacation rental companies dependent on OTAs, price is everything, as they operate on an assumption that occupancy is the primary driver. For independent companies, preserving the value of the home, mitigating risk, controlling operational costs, and allowing for varying homeowner objectives are also factors that require consideration.

RevPAR and other KPIs

While we came to the conclusion that the popular hotel metric RevPAR (revenue per available room) can be translated to revenue per available unit/home, technology providers all offer additional variations of this metric.

Andrew McConnell, CEO at Rented.com, wrote, “The nuances of these KPIs are also important to recognize. Is it pure occupancy that matters, or ‘normalized’ occupancy, meaning only the occupancy rate for those nights that are truly rentable (e.g., excluding unbookable owner holds). Is it really RevPAR that is important for our industry, or rather than room should we be thinking about Revenue per Available Night (RevPAN) for that property and similar properties? And when you bring these together, is it pure RevPAN/RevPAR or ‘normalized’ RevPAN/RevPAR we should be tracking?”

As an industry, we took baby steps forward in establishing common KPIs, but we still have yards to go before getting to uniformity.

Peaks and Valleys

As we looked at hotel performance against vacation rental performance, it was startling to see the peaks and valleys in occupancy in the vacation rental industry versus the more rounded-out reservation performance of hotels. There will be more to come on this, but the all-or-nothing approach of realizing 100 percent occupancy for 2 to 4 weeks out of the year—compared to under 10 percent occupancy in other weeks—is unique to our industry.

Ralf Garrison, Destimetrics founder and godfather of comparative data in our industry, introduced a philosophical discussion that is likely to gain attention in the coming years, if not months: Is 100 percent occupancy a good thing?

While many property managers in traditional leisure destinations feel the need to book all homes in peak periods, what are the consequences? For example, does 100 percent occupancy during a handful of weeks each year contribute to over-tourism, traffic difficulties, and hard-to-find temporary staff/contractor needs? Would owners, property managers, and destinations be better served pricing to reduce occupancy in peak weeks while working collectively to create more stays in off-peak times? This discussion led many attendees to initiate a broader conversation around the idea of pricing for profitability, a topic I’m not going to pretend to have my head around yet.

Technology for Comparative Data and Pricing Tools

This conference was a who’s who in data and pricing technology. It is safe to say that every company committed to providing solid data and pricing tools for US vacation rentals was represented here. These companies demonstrated to attendees how they are approaching solutions, and they were candid in discussing their business models, their strengths, and their limitations.

Property managers were able to look at all the leading tools available today and see what they do. While there is some overlap, each of these companies have a competitive advantage. On the data side, we were able to differentiate between source (or authoritative) data and scraped data. (Note: Source/authoritative data comes directly from actual reservation activity from property management software [PMS] systems. In contrast, “scraped” data is aggregated using tools that “scrape” data from OTAs such as Airbnb, Vrbo, and Booking.com.)

For pricing tools, we saw how PMs can use DIY tools or work with full-service providers.

Third-party predictive pricing recommendations (Airbnb’s Smart Pricing, HomeAway’s MarketMaker, etc.)

In looking at predictive rate suggestions from Airbnb’s Smart Pricing, HomeAway’s Market Maker, and others, there was discussion about how these tools are moving past human interaction using machine learning to provide better pricing recommendations. While there may be some useful information in these predictive tools, it is apparent that vacation rental revenue managers are not currently using these tools as guides for pricing. As Sarah Franzen from Natural Retreats summarized, “Anyone who is trying to tell me how to price my home—who has an interest elsewhere—I’m probably not going to take that recommendation.”

There is Much More to Learn for Vacation Rental Professionals

To say we learned a lot last week is an understatement. The clouds cleared, and we now know the basic strategies PMs are using for pricing. In addition, we heard from the leading data and pricing technology providers and what their expertise is in the industry; we learned the differences between authoritative/source data and scraped data; and now we know the difference between a pricing tool and a revenue management service. But it was apparent that we still have a lot to learn. Here are some of the areas that are still murky for me:

End-User Pricing

One thing I hoped to learn—that we did not discuss—was how to optimize for the end price that the guest sees. As mentioned above, we finally got to a place that we can agree what RevPAR is for our industry (with variations specific to property managers in leisure markets), but we did not talk about how the vacation rental industry differs from the hotel industry in weighing the gap between rental rates and the end-user price. With the sliding scale of guest fees on Airbnb, Vrbo, and TripAdvisor, I still do not fully understand how property managers create solid pricing strategies when they don’t know what price the end user is seeing.

In addition, rate parity requirements currently are unenforceable in the vacation rental industry. Should the end-user price be optimized on a “per channel” basis? If so, how?

Booking Window

At the conference, we took a deep dive into how other industries are accomplishing revenue management. In particular, we learned how hoteliers are integrating comparative data and pricing tools with their PMS, and how revenue managers are using the combination of the tools available. However, we did not discuss how the booking window influences these strategies. In markets that have a large booking window, how do these strategies apply?

For example, in the chart below, in destinations whose booking window in 90+ days, does adjusting pricing 7 to 14 days out move the needle?

How-to?

We knew that this first Data and Revenue Management Conference would be an important first step in discussing the KPIs, looking at base strategies, comparing our industry to others, and finding some commonality. In early feedback, some property managers were hoping for more how-to instructions. The truth is that we don’t have a how-to curriculum yet; and after this conference, I can say with confidence that it does not exist yet. There are a lot of theories, and a lot of strategies being vetted—but I would be very cautious of any company who says that that they fully understand revenue/yield management in traditional leisure markets. It was clear that we are in a test-and-learn phase in the vacation rental industry. The tech providers at this conference are actively and admittedly working hand-in-hand with property managers to build these algorithms; but even in the hotel space, human interaction is still necessary to optimize pricing strategies.

Summary

This event was an amazing learning experience, and being a part of the groundbreaking discussions that happened here was exciting. We wanted to get the smartest minds in VR data and revenue management together, and I think we came really close to having all of the best of the best.

If you were not able to make it, definitely get the videos.

The foundation was laid here, and it will be fascinating to see how quickly this discipline evolves.

For property managers, the vacation rental industry is in a unique place in time that we must come together in a few meaningful ways to preserve it for decades to come. Having accurate and collective benchmarking data is critical to the industry’s growth, and your participation is important.

I need to give Simon Lehmann, founder at AJL Consulting, a huge shout out! As emcee of this conference, his knowledge and passion for the vacation rental industry carried us through, and he made the whole event more fun for all of us. Simon, this event wouldn’t have been the same without you, and we are all grateful.

10 Inexpensive Vacation Rental Upgrades Under $100

Heather Bayer

August 11, 2019

We used to talk about the “wow” factor and what we could do to elicit that superlative response. That may have been fresh flowers, music playing softly in the background, a personalized greeting, and maybe the offer of some type of concierge service. It wasn’t difficult to surprise and delight because few owners and managers were doing it.

It worked for a long time in those early days of reviews.

Then expectations began to rise, and it seemed the more we worked at making the vacation memorable, the harder it became. Guests were sharing all the special touches and what they loved most about a property, and in readers’ eyes, those qualities made up the norm. In our mission to be the best, we’ve been educating guests to expect the highest standards, and yet we still anticipate they will see the hard work as something extra to be applauded.

As this has happened, margins have become tighter, and it’s challenging to provide those extras without hitting the bottom financially.

So is it possible to still make guests happy without breaking the bank?

Yes.

It may not be the one-off event that captures their hearts and their iPhone cameras—instead, today’s methods of keeping the five-star reviews coming tend to involve consistency of service, alleviating frustrations, staying up to date with the basic needs guests have, and anticipating what drives people’s contentment on vacation.

The following list is drawn from guest experiences and reviews in which they’ve mentioned little things that made their vacations enjoyable and trouble-free. Mostly they’re simple additions, all priced under $100.

1. USB chargers

Picture the family arriving to a property after a long journey. They’ve realized halfway that they forgot to bring any chargers (unlikely, maybe, but not outside the realm of possibility). Not to worry, they assure the kids—there will be at least one or two USB chargers at the vacation home.

The last thing they want to do is to kick off their stay by searching for somewhere to plug in their devices. The outlet should be simple enough to locate, but it also should not be placed so that the guest has to crawl under a bed to find it.

The argument that these chargers are the most likely item to disappear is valid, and the expenses add up if they have to be replaced on each changeover. The simple solution is to create a permanent charging station—a space where all devices go to be juiced up.

Then the answer is to ditch the old clock radios—yes, there are still a lot of them out there—and replace them with bedside clocks/USB chargers, making sure there is one for each bedroom, too.

Here’s a bonus tip. Put the Wi-Fi user details in a PERSPEX® card holder on a bedside table in each bedroom—your guests will love that too.

2. Motion sensing night-lights

Most accidents happen in vacation rentals in the first 24 hours of a stay, and it’s often due to unfamiliarity with the space. Guests often arrive late in the day—they are tired, hungry, and in need of a first cold drink. It’s unlikely they will spend much time getting the family oriented to the layout of the home before they all fall into bed for a welcome sleep.

Naturally, someone is going to get up in the night for a comfort break. They fumble around in the dark, trying to find a light switch, and then they stumble, half-asleep, down a dark hallway. It’s an accident waiting to happen that could be easily prevented with the use of mobile motion-sensing night-lights. Whether using a battery powered stick plugged in or holding it in your hand, this simple and effective remedy will show you are thoughtful and have your guests’ safety in mind.

3. Hairdryer in every bathroom

Inequality in sleeping accommodations is one area that gives hotels an edge over vacation rentals. Unless they are custom-built, most homes will have just one master bedroom with an en-suite bathroom, creating that “who gets the best room” decision when guests have arrived.

Knowing there are already mildly dissatisfied guests who are in the queen (not king) room and have to share a bathroom, you have to do your utmost to build up their satisfaction. The simple act of supplying a hairdryer in all bathrooms in the home may not propel them into the super-fulfilled category, but at least it won’t add to the “and another thing” list.

4. Instant pot

For those who remember Grandma’s old pressure cooker, you’ll recall the loud hissing, the wobbling weight valve that sat on the top, and the fear it was going to blow up at any moment. The thought of having one of those in a vacation rental might be enough to make an owner revisit the liability clause on an insurance policy and create a plan for reinforcing the kitchen ceiling!

Like everything else, however, the pressure cooker has seen monumental changes, and the current popularity of the Instant Pot is a testament to its quiet performance and amazingly quick results. It’s no wonder it holds positions #1, #2, and #3 in the “Most Gifted Small Appliances” list on Amazon with three of its top-selling models.

A ranking as one of the most popular small appliances across the US means that the majority of homes will probably have one. Because we strive to deliver a property that is as good as or better than a guest’s home, this is a great addition to the kitchen set-up. Give your property a gift, and your guests will love you.

The basic model does just what the more costly models do, but without Bluetooth. Come on . . . who needs Bluetooth on a pressure cooker anyway?!

5. Portable Bluetooth speaker

The days of the boom box are over. Guests are bringing music on their devices and a Spotify account, not on CDs. Many people will pack their own Bluetooth speaker, but to be on the safe side and happify the ones who forget, providing this small extra shows you have gone the extra mile.

6. Plug adaptors

Most guests traveling internationally will think ahead and bring their own adapters to convert the power from UK/European voltage to US voltage. Providing a couple of these will endear you to those who haven’t.

7. Hey Google!

Earlier this year, Amazon revealed that more than 100 million devices with Alexa on board have been sold. This figure includes more than 150 products with Alexa built in, more than 28,000 smart home devices that work with Alexa made by more than 4,500 different manufacturers, and over 70,000 Alexa skills. And that’s just Amazon’s figure for their Alexa brand.

Google is likely to have equally impressive numbers.

Why is that important to us? Because our guests are used to talking to voice-activated devices. They want a recipe, a reminder of the internal temperature of a roasted chicken, a weather check, and some suggestions for local restaurants. They are on vacation and quite rightly lazy, so if you can make it better for them by delivering what they are used to at home, they will reward you with a great review.

8. Large bath towels

Setting your properties apart from hotels means doing what they don’t do. Easy, right? Doing this means investing a little more in the amenities understood to be standard in a hotel, like towels. You have to be quite close to the luxury brand of hotel to get a bath towel that will wrap an ample rump and come together at the front. That should not hold true in any self-respecting vacation rental. Costco regularly has sales of bath towels that are generous enough to cover the modesty of the majority of guests, so give them a treat that will make them say, “This is why I don’t stay in hotels.”

9. Plentiful ice trays

This sounds like a no-brainer, but it’s a common complaint that there was no ice available when a group arrived at a property.

In a hotel, the ice maker is down the hallway—just fill the bucket, and you’re on the way to having a cold drink. Now imagine arriving at a rental home to find there’s either no ice at all or two tiny ice trays that came with the fridge that will serve up enough ice for a couple of drinks but will also melt in minutes.

Perhaps you have ice-makers and that’s great. Problem solved. Otherwise you will need to make sure ice is in plentiful supply—at least one tray per person. Add a task to your turnover list: the trays need to be emptied into a freezer box and refilled. Just one minor addition that will ensure a satisfied customer!

10. Emergency supplies box

There’s been a theme to much of this list. Guests forget things. With the best will in the world and great organizational skills, something will still get left behind. You can send them a packing list, which is a nice touch, but that won’t guarantee they’ll remember the one thing that will make their stay problem free.

Using a tackle box, fill it with travel-sized and single-use items—anything your guests might forget. Include an inventory with a pen and checklist, and ask guests to check off any items they have used. Use a zip tie to lock the box, and let guests know they can only access the box by clipping the zip tie. That means your cleaner will be able to do a quick check to see if anything has been used.

Here’s some ideas of what you could put in the box.

Band-aids
Toothpaste
Disposable razors
Toothbrushes
Tampons
Hair mousse
Hair spray
Condoms
Hair elastics
Mouthwash
Chapstick
Lint roller

This is not an exhaustive list. There’s probably many other things you can think of to make your guests’ stay smooth and trouble-free. And while each of these on their own might not solicit a “wow” reaction, the combined outcome of a memorable vacation with nothing missing could be just what is needed for that five-star review.

Five Keys to Responding to a Negative Online Review

Clark Twiddy

August 11, 2019

In a time where social media has given us all a channel to be heard, the tone of our digital engagements seems to also be deteriorating. Negative online reviews can run the spectrum from perfectly valid and well-considered to more harm-focused and frankly caustic. In responding to each, here are a few keys we’ve found over the years to try to make some progress for each and every review.

Make it Prompt

This principle is very important with the idea being that progress and speed beat perfection. A short and prompt response beats a delayed but flawless one. A prompt response also does not allow a potential fiction to become a potential fact in that it was responded to and discussed quickly.

Make it Personal

As the review was written by a person, it’s important that it’s responded to by a person. I’d suggest a person and place (for example, Mary J. in Corolla) and a picture, if possible, of the responder. I’d also suggest personal ownership. For example:

Instead of this: Someone in our guest services team will reach out to you. (Good if prompt, too mechanical if late.)

Try this: I’ll walk over to our leadership group this morning and either Jim H. or a member of his team will reach out to you. (Key words: I/walk/leader/reach/you).

Make it Audience Focused

Remember, you have two important audiences here—the most obvious (but I would argue potentially less important depending on the tone of the review) is the author of the review. The second and more important is the reading/learning public looking for trust-building and credible customer engagement.

Build trust by doing four things in every response—show expertise, commitment, transparency, and empathy.

Don’t get bogged down (and lose time) in the details of the first audience—readers don’t have those details either and can’t make a judgment (think of it as an inside joke—you can’t laugh if you don’t know the story). Stay focused on trust and promptness.

Mirror

Repeat their specific words to prove in the response a personal connection and find, in every response, at least one area of agreement. For example:

Review: I’ve been staying with X for 10 years and this home was disgusting. I loved being on the oceanfront, but this home was disappointing.

Reply: I would like to thank you for choosing us to host your vacation for those ten years, and while I’m happy to hear about the great location of your home, I’m sorry to hear about the condition of your home. On occasion, despite our best practices, we do get things wrong and it sounds like we did here. I’ll walk over to our leadership group in just a moment and ask Jill or a member of her team to reach out to you about how we can make this right and earn your business for another ten years. (Note as well the repeated theme of the response is the key words I/you.)

Mirroring is a Jedi mind trick—don’t lose an opportunity to prove to a guest that we are actively listening.

Avoid Being Polarized

Don’t let a review polarize (create a separation between what we say and what we do) our values to customers—meaning don’t let a “gotcha” moment happen around the business and its customers. Work to close the gap with the reviewer and the reading public by finding agreement on principles—the more disagreement there is, the more important highlighting even small agreements becomes. For example:

Review: While all the Company X staff members I met were professional, the Company X has gotten too big to care about people. My house was late to check-in and dirty when I walked in. I called and no one responded. Managers haven’t called me back either—I would never recommend them again. (Note: There are multiple disagreements here and only one agreement—highlight the agreement in the response.)

Reply: I (not we . . . take ownership) want to respond to you quickly on your comments. While I am happy to hear about our professionalism in person, I share (no polarization) your disappointment about your stay. For 22 years, any success we’ve had has only been a reflection of your personal experience and it sounds like we got it wrong this time. I’ve worked full-time here for several years now, and after I write this I’m going to walk over to our leadership team and share your thoughts with them. Bonnie or a member of her team will reach out to you and we look forward to learning what we can do to make this right for you quickly.

Summary

The above isn’t perfect by any means, but it’s a starting spot. In the end, 1) speed beats perfection and 2) mirror the guest. If just those two things are done consistently, the business will be ahead of the game. On a personal note, I always treat the review/reply interaction as a chess or poker game as a way to not take it personally—we each have cards and simply have to play them in the right order.

Revenue Management Glossary for Vacation Rentals

Amy Hinote

August 11, 2019

Learn the key terms of revenue management in the vacation rental industry

Revenue Management in the vacation rental industry is a discipline that is growing and developing at a fast pace. At VRM Intel, we collaborated with industry leaders, including Jason Sprenkle and Cliff Johnson, to identify key terms and metrics utilized in the vacation rental industry. As comparative data and revenue management tools continue to mature, establishing a base line of vocabulary will help us advance as an industry. The following glossary is a first step at establishing a common understanding of the terminology necessary for successful revenue management for vacation rentals.

Download the VR Acronym Cheat Sheet

Advertised Price

The nightly price that a vacation rental manager (VRM) is presenting to the consumer.

Algorithm

A series of repeatable steps for carrying out a certain type of task with data. As with data structures, people studying computer science learn about different algorithms and their suitability for various tasks. Specific data structures often play a role in how certain algorithms get implemented.

Application Programming Interface (API)

API is the acronym for Application Programming Interface, which is a software intermediary that allows two applications to talk to each other. Each time you use an app like Facebook, send an instant message, or check the weather on your phone, you’re using an API.

Artificial Intelligence (AI)

Refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. The term may also be applied to any machine that exhibits traits associated with a human mind such as learning and problem-solving.

Availability, Rates & Inventory (ARI)

The minimum data set that is required to be synchronized between a VRM and a distribution channel to enable online booking (a.k.a. ARRI, which also includes restrictions).

Available Nights

Also known as Room Supply or Nights Available. The total number of nights that the VRM is authorized to rent out. Typically, this is the total number of nights less owner reservations and maintenance-related down-time.

Available Occupancy

Calculates the percentage of guest nights out of the total nights available for guests to book. By comparison, occupancy, the traditional hospitality KPI, calculates the percentage of guest nights out of the total nights in the period, without considering the owner nights and hold nights. Because owner reservations and hold nights take up some of the nights typically, Available Occupancy is helpful to how well you’ve filled up the properties from the nights that were available for you to fill with guests.

Average Booking Window

Represents the average number of days between when the reservation is made by the guest and the check-in date. Average Booking Window is calculated as the average number of days the property is booked in advance of arrival for the selected period. Understanding the expected booking window for a property or group of properties helps you know when to adjust pricing by demonstrating when you should expect the property to book for certain seasons. Larger properties that sleep more people may have longer booking windows since they take more planning. Smaller properties typically have shorter booking windows. Booking windows are also different for different times of the year, and differ between markets.

Average Daily Rate (ADR)

The calculated average nightly rate for a property or group of properties. Calculated by dividing the total rental revenue by total nights sold. It is one of the most common financial indicators to measure performance in the vacation rental industry.

Average Length of Stay (ALOS)

Calculated by dividing the total number of nights by the number of stays in a property or group of properties during a specified time period.

Average Rate Index (ARI)

A vacation rental KPI that measures the performance of a VRM’s ADR compared to a competitive set during a specified time period.

Best Available Rate (BAR)

The lowest available unqualified rate, representing the fair market value for a property for each day.

Best Rate Guarantee (BRG)

The promise that the unit price a consumer receives when booking directly with the VRM is the best rate offered in the marketplace. VRMs implement a Best Rate Guarantee (BRG) policy to drive consumers to book direct.

Billboard Effect

The theory that accommodations listed on third-party distribution sites gain a reservation benefit in addition to direct sales. That benefit, coined the “billboard effect,” claims a boost in reservations due to the property being listed on an OTA website. Would-be guests gain information about the property from its OTA listing, but then opt to book directly through a channel controlled by the VRM.

Booking Curve

A tool that visually displays bookings over a certain period of time (e.g. room pickup, bookings, and availability). Data is displayed in a graph which shows how bookings develop over time. The data needed to create a booking curve is usually taken from a Property Management System (PMS).

Booking Engine

An application which helps support an online reservation. For VRMs, the Booking Engine commonly refers to the application included on a VRM’s website which facilitates online booking through an API connection to the Property Management System (PMS).

Booking Pace

The rate at which reservations are made for a property or group of properties over a specified time period, usually compared to another specified time period. Many VRMs also collect competitive booking pace data for a set of like-type properties.

Booking Window

The number of days between when the reservation is made by the guest and the check-in date.

Cancellation Rate

The percentage of reservations that canceled during a period.

Canceled Stays

The number of guest stays for check-ins during a given period that canceled prior to arrival.

Channel Fee, or Channel Host Fee

Fee charged by a distribution channel, channel manager, or marketplace. Typically, this fee is deducted from the payment before the VRM collects it.

Channel Manager

An intermediator that provides connectivity between a VRM and third-party distribution channels. The channel manager keeps ARI in sync between the PMS and the third-party systems (a.k.a. Switch, Dumb Pipe, EDI).

Closed to Arrival (CTA)

A yield tool used to close days out from reservations arriving on a particular day. This yield practice originated from the airlines and is not considered a good practice in VR revenue management.

Competitive Set, or “Comps”

A defined group of competitive properties that have a similar type, target market, location, and/or concept.

Complex

A building or community with multiple units (e.g. Condo-hotel, Condominiums, or Townhomes) usually managed by a Home Owners Association (HOA). Individual units are often managed by multiple VRMs.

Condo-Hotel

Also known as a Hotel-condo or a Condotel. A building which is legally a condominium, but which is operated similar to a hotel with a front desk and onsite staff and services.

Confidence Interval

The probability that a value will fall between an upper and lower bound of a probability distribution. Data Scientists use confidence intervals to measure uncertainty. A higher probability associated with the confidence interval means that there is a greater degree of certainty that the parameter falls within the bounds of the interval. Therefore, a higher confidence level indicates that the parameters must be broader to ensure that level of confidence.

Conversion Rate

The percentage of users who take a desired action. Also known as the Look-to-Book Ratio.

Custom Fees

Additional fees unique to a property or a group of properties.

Data Integrity

The accuracy and consistency (validity) of data over its lifecycle.

Data Science

A multi-disciplinary field that uses scientific methods, processes, algorithms, and systems to extract knowledge and insights from structured and unstructured data.

Data Scraping

A technique in which a computer program extracts data from human-readable output coming from another program.

Data Warehouse

A system used to do quick analysis of business trends using data from many sources.

Depth of Inventory

The number of like-kind units available in a similar region or complex. Inventory can be rolled up onto Representative-Level channels or broken out for Key-Level channels. Example: There are 8 x 2BR/2BA Ocean View units (a.k.a., Key-Level w/Depth.)

Direct Booking

Direct bookings happen when a customer books directly through the VRM and not through a third-party channel.

Dynamic Pricing

Dynamic pricing is a customer or user billing mode in which the price for a product frequently rotates based on market demand, growth, and other trends.

Global Distribution System (GDS)

A network that enables automated transactions between VRMs and third-party distribution channels.

Gross Revenue, Gross Booking Revenue (GBR)

Total revenue the VRM collects, including Guest Fees.

Guest Fees

Fees that the VRM charges the guest and are not part of the Rental Revenue (e.g. Cleaning, Booking, Pet, Parking, and Pool).

Hold Nights

The number of nights unavailable for booking due to a hold (i.e. maintenance).

Key Performance Indicators (KPI)

A business metric used to evaluate factors crucial to the success of an organization (e.g. ADR, Occupancy Rate, Conversion Rate, and RevPAN).

Key-Level Listing, or Key-Level

A unit-specific listing that represents an exact vacation rental unit. Example: Emerald by the Sea—Unit 312. This is a corner unit on the third floor with a view of the ocean. Individual homes are merchandised as Key-Level Listings (a.k.a., By the Door, Unit Specific).

Machine Learning

Machine learning is an application of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. Machine learning focuses on the development of computer programs that can access data and use it to learn for themselves.

Managed Distribution

A service that helps VRMs optimize online distribution. This includes channel managers and additional service providers such as consolidated contracting, consolidated accounting and reporting, additional content syndication services, revenue and yield management tools with consulting, analytics, transaction processing, and payment services.

Merchant Channel

A distribution channel that charges the traveler’s credit card and sends the supplier a net rate (e.g. Expedia, Orbitz, Priceline).

Merchant of Record (MOR)

The party that charges the traveler’s credit card.

Minimum Length of Stay, Minimum Night Stay (MLOS)

A restriction dictating the lowest number of nights a guest can stay at a property.

Net Rate

The total amount received from a merchant distribution channel which is the amount the traveler paid minus the commissions and/or fees charged by the third-party distribution channel.

Occupancy Rate (OCC)

1) The percentage of total available nights that have been rented for a property or a group of properties over a specified time period. 2) The percentage of all rental units that are occupied or rented at a given time.

Open Nights

Nights that remain open for guest stays, that are not otherwise already booked by guests (Nights Sold), owners (Owner Nights), or blocked off. This is useful for quickly determining the opportunity remaining for a given period. When combined with ADR for a period of similar rates it can also be useful in calculating the revenue opportunity remaining, or money still “left on the table.”

OTA Search Ranking

The order in which your property is listed on the OTA channel search results page.

Owner Revenue

The revenue the property owner receives. Calculated by subtracting the VRM’s Commission from Rental Revenue.

Promotions, or Specials

A discounted rate or an extra bonus when booking, such as “4th Night Free.”

Property

In the vacation rental industry, a “property” refers to a vacation unit or home of any type.

Property Group

For revenue managers and channel managers, this is a group of similar properties in a VRM’s inventory that are priced together.

Rack Rate

The full price at which units are sold to customers before discounts.

Rate Parity

Defined as maintaining consistent rates for the same property across all channels.

Representative Style Listing, or Rep-Level

A listing that represents a certain lodging type in a multi-unit building or complex. This listing might have “Depth of Inventory” and different unit types. Example: 2BR/2BA Ocean View (a.k.a. Hotel Style Listings, By Unit Type, Allocate on Arrival).

Return on Investment (ROI)

The benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio. For VRMs, typically calculated by dividing the rental revenue generated from a source by the cost of the source.

Revenue Management

The application of disciplined analytics that predict consumer behavior at the micro-market level, optimize product availability, and price to maximize revenue growth.

Revenue Per Available Bedroom (RevPAB)

RevPAR broken down by bedroom, calculates the amount of Unit Revenue earned per bedroom per night. Because RevPAR offers diminishing value when comparing different property types, RevPAB normalizes the data to allow comparisons across properties with different numbers of bedrooms. This allows you to directly compare the rental revenue per bedroom over the number of available nights for 10-bedrooms vs 2-bedrooms. It also provides a more meaningful KPI for comparing the traditional RevPAR across all properties when benchmarking against other companies, as well as for comparing all your properties against one another.

Revenue per Available Night (RevPAN)

The revenue collected each night that a property is available to rent out. RevPAN is calculated by dividing rental revenue by the number of available nights for a property or group of properties.

Revenue per Available Room (RevPAR)

A performance metric in the hotel industry that is calculated by multiplying a hotel’s ADR by its occupancy rate. A critical KPI for measuring revenue performance, RevPAR takes into account both the ADR at which you booked the property and percentage of number of nights it was booked (Occupancy). This provides a better indicator of overall performance when compared to looking at the ADR or the Occupancy alone. Compared to ADR or Occupancy as stand-alone metrics, RevPAR provides a more complete measure of your company’s success by giving you an overall picture of both rental revenue and occupancy.

In a single figure, RevPAR helps you understand how well your company has filed its properties both in the off-season when demand is low even though rates are also low, and in the high-season when demand is high and rates are also high. Be mindful that in vacation rentals a 10-bedroom is likely to have a significantly higher ADR, and thus RevPAR, than a 2-bedroom property.

For this reason, VRMs are careful to use filters to draw appropriate conclusions when benchmarking RevPAR. For example, a comparison of RevPAR for 3-bedroom properties in a similar location vs other 3-bedroom properties in the same location may prove more insightful than a benchmarking of total RevPAR for a period inclusive of all property types.

Rent Per Available Sleeps (RevPAS)

RevPAR broken down by the number a property sleeps, calculates the amount of Unit Revenue per unit of sleeping capacity per night. Because RevPAR offers diminishing value when comparing different property types, RevPAS normalizes the data to allow comparisons across properties with different sleeping capacity. This allows you to directly compare the rental revenue per the sleeping occupancy over the number of available nights for properties that sleep 14 and properties that sleep 2.

System of Record (SOR)

A system of record (SOR) is an ISRS (information storage and retrieval system) that is the authoritative source for a particular data element in a system containing multiple sources of the same element. To ensure data integrity, there must be one—and only one—system of record for a given piece of information. This is typically a vacation rental manager’s PMS in the vacation rental industry.

Third-Party Distribution

External channels such as OTAs (e.g. Vrbo, Airbnb and Booking.com). Third-Party Distribution channels also include Tour Operators, Wholesalers, and GDS.

Total Revenue Per Available Rental Night (TrevPAR)

Total revenue by the amount of available nights for a selected time period. For hoteliers, this metric is referred to as Total Revenue Per Available “Room” (TrevPAR) and typically includes total revenue for the period included food and beverage and all other revenue. Because most vacation rentals do not have F&B revenue and concierge revenue is still not widespread, TrevPAR only includes unit revenue and other revenue over the total nights in a given period.

Total Revenue Per Occupied Rental Night (TrevPOR)

Total Revenue divided by the total guest nights for a selected time period.

Traveler Fee

The fee charged directly to the consumer by an OTA which raises the total rate paid above the rate charged by the VRM or homeowner. Also called the “Service Fee” by HomeAway, Airbnb, and TripAdvisor.

VRM Commission

A predetermined fee charged by the VRM to the homeowner, as a percentage of rental revenue.

Yield Management

See Revenue Management. The process and discipline of making frequent adjustments in the price of a property in response to certain market factors, such as demand or competition.

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Throwing the gauntlet: dead in five years?

High stakes

A brave new world

The True Significance of Deep Service Value

Showcasing the Full Value of Your Work

Actionable Methods to Convey Service

Benefits of More Service Offerings and Effective Communication

Conclusion

Glenn Fogel, President and CEO, Booking Holdings, and CEO, Booking.com

Mark Okerstrom, president and CEO, Expedia Group

Brian Chesky, co-founder and CEO, Airbnb

Steve Kaufer, president and CEO, TripAdvisor

How is it funded?

Who is using it?

How fast does it move and change?

ROI But what about ROE?

1. Reviews

2. Activities

3. Local area

4. Feelings

Conclusion

Short-term rentals, private accommodations, alternative accommodations, Airbnbs . . . What are they?

But first, as city officials, you are not regulating “Airbnbs”

1. Traditional Leisure Vacation Rentals

2. Short-Term Urban Rentals

3. Primary Residential and Shared Short-term Rentals

Before You Regulate: Checklist for City Officials before passing new short-term rental regulations

Just another note about Airbnb, Vrbo, and other websites

Early Innings

OTA Bookings vs Direct Bookings

RevPAR and other KPIs

Peaks and Valleys

Technology for Comparative Data and Pricing Tools

Third-party predictive pricing recommendations (Airbnb’s Smart Pricing, HomeAway’s MarketMaker, etc.)

There is Much More to Learn for Vacation Rental Professionals

End-User Pricing

Booking Window

How-to?

Summary

1. USB chargers

2. Motion sensing night-lights

3. Hairdryer in every bathroom

4. Instant pot

5. Portable Bluetooth speaker

6. Plug adaptors

7. Hey Google!

8. Large bath towels

9. Plentiful ice trays

10. Emergency supplies box

Make it Prompt

Make it Personal

Make it Audience Focused

Mirror

Avoid Being Polarized

Summary

Advertised Price

Algorithm

Application Programming Interface (API)

Artificial Intelligence (AI)

Availability, Rates & Inventory (ARI)

Available Nights

Available Occupancy

Average Booking Window

Average Daily Rate (ADR)

Average Length of Stay (ALOS)

Average Rate Index (ARI)

Best Available Rate (BAR)

Best Rate Guarantee (BRG)

Billboard Effect

Booking Curve

Booking Engine

Booking Pace

Booking Window

Cancellation Rate

Canceled Stays

Channel Fee, or Channel Host Fee

Channel Manager

Closed to Arrival (CTA)

Competitive Set, or “Comps”

Complex