How Did the Outer Banks Get So Famous, Anyway?

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January 3, 2019

A federal judge awarded Airbnb and HomeAway today with a preliminary injunction to stop a New York City’s short-term rental law from going into effect. The law would have required the platforms to provide property owner data to the city to aid in the enforcement of its ban of non-owner occupied short-term rentals in most apartment buildings, regardless of whether a property is suspected of illegal activity. The data sharing ordinance would have gone into effect on February 2.

“Today’s ruling is a victory for HomeAway and our customers and sends a strong signal to other cities looking to emulate New York City’s misguided law,” said Philip Minardi, director of policy communications for Expedia Group, which owns HomeAway. “We applaud today’s decision, in which the court recognized the constitutional deficiencies in the city’s new short-term rental law and agreed that cities cannot demand private user information from HomeAway without following the proper legal process. HomeAway remains committed to protecting the privacy of our local homeowners.”

“The decision today is a huge win for Airbnb and its users, including the thousands of New Yorkers at risk of illegal surveillance who use Airbnb to help make ends meet,” said a spokesperson for Airbnb. “The court today recognized the fundamental importance of New Yorkers’ constitutional rights to privacy and the sanctity of their own homes.”

In their motions to block the ordinance, Airbnb and HomeAway argued that the data sharing ordinance violates the Fourth Amendment and Article I, Section 12 of the New York constitution, which guarantee the right to be free from unreasonable searches, seizures, and interceptions; violates the Stored Communications Act, which prohibits providers of remote computing services or electronic communication services from knowingly divulging subscriber or customer information to any government entity without user consent or other legal processes; and violates their First Amendment rights by forcing them to communicate a message they don’t want to in telling users they must consent to the sharing of their data.

Though the injunction is temporary, the win is a reason for optimism for the industry in the largest regulatory battle in the country. To win a preliminary injunction, the plaintiffs had to demonstrate a threat of irreparable harm from the ordinance, a likelihood of success in overturning the ordinance, and that the public’s interest weighs in favor of granting an injunction. The court held that Airbnb and HomeAway met these requirements and are likely to succeed on their claim that the ordinance violates the Fourth Amendment. The full decision can be read here.

According to AlltheRooms.com, there are more than 58,000 vacation and short-term rentals in New York City. (Update: an earlier version of this article reported a count of 19,000 listings.)

Unlocking Travel for All: How VillaKey is Making Vacations Accessible for Families with Autism

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January 1, 2019

“I got an opportunity just a couple weeks ago to spend some time with one of our families in Orlando,” said Alice Horn, founder and CEO of Miami-based VillaKey. “It was really kind of emotional for me. The mom was walking around telling me how much it had meant to her son and her whole family to have a vacation experience and make vacation memories just like any other family. The little boy was over-the-moon excited that there was a Mickey-themed room and a movie theater.”

While this may seem like an average vacation rental guest story, this experience was special: the little boy, Jason Lanza, has autism spectrum disorder (ASD). ASD is a developmental disability that encompasses a range of conditions that can cause behavioral, social, and communication challenges. A report published last year by the Centers for Disease Control found that the prevalence of autism in children is about one in 59.

According to the Autism Society, more than 3.5 million Americans live with an autism spectrum disorder. Travel is particularly difficult for many families with autistic children because they may have trouble adapting to change in their surroundings and routines, can become quickly overwhelmed by sensory input, can wander off in an unfamiliar location, and experience other issues.

Lanza and his family stayed in one of VillaKey’s Orlando homes specially designed to help address these challenges and to make travel easier for families like his. The home is a part of VillaKey’s autism-friendly collection, a selection of 200 properties and growing.

The company works with homeowners and property managers to identify and upgrade homes with the following criteria:

Quiet location
Soft lighting, soft or neutral colors, soft sheets, and fragrance-free cleaning products to minimize stimulation
Pet friendly is strongly recommended because many kids with ASD have service pets
Alarms on exit doors to alert caregivers if a family member with ASD wanders off
Security fence around a pool
Full kitchens so parents can cook specialized meals because kids with ASD often have allergies and other dietary sensitivities

Although it manages a small number of properties, VillaKey is primarily a marketing platform and currently lists about 1,000 total properties across Orlando, Miami, and Colorado. The company is working with professional property managers to expand its autism-friendly collection and its wider portfolio in clusters around attractions and destinations that are appealing to families with ASD, including additional Florida beach communities, San Diego, Pigeon Forge, and Myrtle Beach.

Vacation rentals, private homes by nature, also add a layer of comfort for guests. “In the vacation rental industry, we have the opportunity to control the environment for a family much more so than in a hotel,” Horn said. “When you walk into a crowded hotel lobby, there’s a lot of people, noise, stimulation, and sensory input for a family and a child, and that can be a tough start to a vacation,” she said. “But when you walk into a home, its welcoming, calm, and familiar. A lot of kids have trouble with change, but a home environment makes it much easier for the whole family.”

Many of the families who VillaKey staff members speak with have never traveled before because of how difficult travel can be, and one of the biggest challenges is trust. “It’s really important for them to know that this is a solid opportunity and that the team behind VillaKey cares enough to learn about their needs, and part of that means certification,” Horn said.

Last fall, VillaKey became the first vacation rental company to become certified in autism travel by the International Board of Credentialing and Continuing Education Standards (IBCCES). The company is now a Certified Autism Center (CAC), and its staff are Certified Autism Travel Professionals (CATP), both of which enable the company to adequately serve the needs of families with autistic travelers young and old.

“Our program competencies are based on the training content as it relates to various settings, so applicants have a broad-based view of not only what autism is, some common signs or needs individuals on the spectrum have, and ways they can enhance the travel experience,” said Meredith Tekin, president of IBCCES. “We want our professionals to understand their clients’ needs and follow an evidence-based program so that they can use their existing knowledge of the travel industry along with their new autism-specific training to ensure an amazing experience for all families.”

IBCCES helps promote its Certified Autism Centers to a market it values at $262 billion. Certified companies receive badges, press releases, and listings on IBCCES’s online directory and AutismTravel.com, which reaches 5.6 million parents, therapists, and teachers globally. VillaKey is now featured among 36 certified autism centers around the world, including zoos, resorts, schools, hair salons, and other businesses.

Additionally, VillaKey helps extend a comfort level and trust well before guests arrive. The company partnered with the University of Miami – Nova Southeastern University Center for Autism and Related Disabilities, to develop pre-arrival materials to help educate parents and children. One is a checklist with things such as test runs to practice what it will be like to stay in a vacation rental and packing reminders for autism-specific items, including sensory-friendly toys and the child’s favorite sheets. Another is an e-book about going on a trip and staying in a vacation home that parents and kids can read together to familiarize themselves with the journey.

Another barrier to travel for autism families is cost. According to Autism Speaks, care for a child with autism costs an estimated $60,000 per year through childhood. Care for a person with an intellectual disability costs on average $2.3 million over a lifetime, compared to $1.4 million for someone without an intellectual disability. Vacations aren’t always in the financial cards.

VillaKey embraced this market by helping to break down this barrier too. Last April, it launched VillaKey Cares, a program that donates 10 percent of net profits from every reservation to help support travel expenses for families affected by autism who have limited resources. The Lanzas were the first family hosted through this program.

“As a team, we all believe that it’s important for any business to have a social component and a mission beyond the bottom line,” Horn said. Because the number of kids with ASD is growing so rapidly, “It’s going to be incredibly important, not just for the travel industry but for all industries and business, to adapt and think about how to take care of the needs of this population,” she said.

Beyond all the social good VillaKey is doing for an underserved traveler segment, pursuing niche markets is simply savvy business. “We all need to find some way to set ourselves apart with the commodification of the industry . . . Having some kind of uniqueness is incredibly important,” Horn said. “To be able to do that in a way that’s benefiting families and society is an added bonus.”

8 Most Surprising Vacation Rental Industry Developments in 2018

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The most important podcast of the year is Sarah and T’s interview with Meyer’s Michelle Hodges, as she explains the “why” behind its decision to remove 1,150 Gulf Coast listings from Expedia’s sites.

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December 30, 2018

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2018 was a whirlwind for those of us who cover the vacation rental industry. The pace of news about funding, acquisitions, regulation changes, and tech developments was startling; and several of these stories made our jaw drop. As we launch into 2019, let’s take a look back at the most surprising events and activity in the vacation rental industry in 2018. While it was hard to narrow down, here are our top 8.

1. Wyndham Vacation Rentals: Corporate Split and Sale of European Vacation Rental Business for $1.3 Billion

In February 2018, Wyndham announced that it had sold its market-leading European vacation rental businesses for $1.3 billion to an affiliate of private equity firm Platinum Equity. The news came on the heels of Wyndham Worldwide’s split into two publicly-traded companies: Wyndham Hotel and Resorts (NYSE: WH) and Wyndham Destinations (NYSE: WYND) which includes the timeshare business and North America’s vacation rentals.

There were two things that made Wyndham’s activities surprising. First, while looking for a buyer for Wyndham’s European vacation rental businesses, there were at least two other qualified buyers at the table who had performed extensive due diligence and had put together comprehensive plans for the transition and long-term success. According to multiple sources, Airbnb was a part of one bid for the company, while another included an impressive team of seasoned vacation rental operators, experts and analysts. In spite of the experienced options, in the end, Wyndham selected a last-minute Platinum bid, which felt to many industry observers like a short-sighted move to take the highest bidder, regardless of downward adjustments that would inevitably have to made as the deal moved forward toward closing.

Second, the decision to put the North America vacation rental business under the timeshare business instead of the hotel business was, according to inside sources, an eleventh-hour decision—and one that many believe will haunt the company as more hoteliers move into private home accommodations. Wyndham’s vacation rental business was the largest in North America until Vacasa took the lead in 2018. And speaking of Vacasa . . .

2. Big Moves at Vacasa: $207+ million in Funding, Co-founder Leaves, Oasis Purchase, IPO, and More

The developments at Vacasa have been dramatic and fast-moving. In February 2018, co-founder Cliff Johnson exited Vacasa, a move that shocked the entire vacation rental industry. In October 2018, Vacasa announced it had raised an additional $64 million Series B-2 round from existing investors, bringing Vacasa’s funding total to $207.5 million (Almost four times the amount raised in ResortQuest’s IPO).

Also in October, Vacasa announced that it had purchased Oasis, an urban short-term rental provider that has quite a history. According to insiders, Vacasa got an amazing deal on the company, in spite of significant investments in the company from AccorHotels and Hyatt. In 2016, AccorHotels acquired a 30 percent stake in Oasis, as it grew to list more than 2,000 non-exclusive properties in 22 cities worldwide and developed a strong B2B element, marketing its urban properties to business travelers. In August 2017, Hyatt injected a “significant investment” into the company, and AccorHotels took the opportunity to exit. However, after working with Hyatt, Oasis lost inventory. By the time Oasis sold to Vacasa, the company displayed only 826 listings—over 80 percent nonexclusive—in 17 markets, a 59 percent decline in inventory in 18 months. At Skift Global Forum, Hyatt CEO Mark Hoplamazian discussed Hyatt’s investment in Oasis and what the company has learned about vacation rentals from these businesses. “We are high on companies that have control over the inventory,” he said.

In 2018, Vacasa also launched a real estate referral program and entered into homeowner association (HOA) management, and the company has been moving toward a potential IPO. However, at Phocuswright in November, CEO Eric Breon seemed to be cooling on the idea of going public in 2019 saying, “It’s not an end goal. It’s not like my life gets better once that happens.”

3. HomeAway Announces—and Later Walks Back—Online Attribution and Auditing for Vacation Rental Managers

In early 2018, HomeAway made a series of announcements that rocked the vacation rental management world, including a 25 percent increase in the cost of listing subscriptions, new auditing requirements, rate-parity language in its premier partner pledge, and a new fee assessment for property management which became known as “match back.”

With the addition of a variable fee for travelers, HomeAway eliminated tiers and increased its subscription fee from $399 to $499. But that wasn’t the decision that disturbed managers. HomeAway also announced it will invoice an additional 10 percent fee for direct bookings made that HomeAway can attribute back to inquiries on their websites using its integrations with PM software systems. The policy was based on an assumption by HomeAway that any revenue derived from a guest who booked directly with a vacation rental company—and who had previously inquired on a HomeAway site—should be attributed to HomeAway, and HomeAway is entitled to ten percent of that revenue.

“. . . subject to review and audit, (and) if the Company (HomeAway) finds that a certain booking of a Listing originated on the HomeAway Network but was not properly reported as attributable to a HomeAway Lead under the above analysis, then the Company will notify PM of such discrepancy, and will be entitled to assess a commission or Off-Platform Booking fee on the amount charged for such stay unless PM provides reasonable evidence to the contrary.

After substantial push back from property managers, HomeAway later walked back the initiatives saying that attribution is now voluntary for PMs and the auditing requirements would be removed. CCO Jeff Hurst said, “In the case of audit rights, we listened to the feedback of property managers and have removed audit rights from our terms and conditions.”

“My biggest surprise of the year was HomeAway’s roll back on their match back program,” said Tim Cafferty, president and CEO of Outer Banks Blue and Sandbridge Blue. “It was a rare instance of strength of the property manager going against corporate greed and actually winning.”

4. Several Market-Leading Property Managers Remove Listings from HomeAway, TripAdvisor, Airbnb, and Booking.com as #BookDirect Message Grows

With all of the changes at Expedia’s network (including HomeAway and VRBO), Airbnb, Booking.com, and TripAdvisor, dozens of large, market-leading property management companies have decided not to list their inventory on these mammoth marketplaces. The decision is not only based on cost, but on their companies’ inability to adequately communicate with consumers, set expectations, and manage the end-to-end guest experience for bookings coming from these channels.

“We just didn’t want to be a victim of short-term thinking,” said Michelle Hodges, CEO of Meyer Vacation Rentals, a leading vacation rental company managing over 1,100 homes on Alabama’s Gulf Coast, who joined dozens of large, market-leading property management companies that have decided to remove listings from HomeAway.

While many newer companies are solely reliant on these sites for bookings, established management companies and owners are not—especially in markets that have strong drive-to feeder markets and a high percentage of repeat guests.

North Carolina’s Twiddy & Co. is also not listing its 500+ luxury homes on the big marketplaces, joining other NC property managers who manage over 7,000 listings. “I think in terms of partnering with listing sites our philosophy has been pretty straightforward over the years. We like to stay independent and agile, and we believe that people still do business with people,” said Clark Twiddy, who manages over 500 homes in North Carolina’s Outer Banks. “When we enter into a partnership there is a risk that our competitive advantage—our hospitality—gets diluted by things outside our control. We might lose a few bookings, but we’re unwilling to take the reputational risk for someone else to get in between us and our customers.”

Many large property management companies in established vacation rental destinations never listed their inventory on HomeAway or the other channels, a fact that will surprise analysts. “Over the years we sometimes agonized, and always analyzed, our decision, and we debated joining the many companies who were doing it,” said Claire Reiswerg, owner at Sand ‘N Sea Properties, which manages over 200 homes in Galveston, TX.. “Instead, we stuck with direct bookings. In the end, our business model has saved untold amounts of technological and policy headaches and of course, it has saved us lots of money. It also made us better at our primary job: keeping guests happy and coming back to Sand ‘N Sea.”

The non-branded Second Annual #BookDirect Guest Education Day is set for February 6, 2019, to let travelers know that there are many advantages to bypassing third-party channels to book directly with management companies and homeowners. Last year, property managers and homeowners came together to reach over 4 million guests with direct emails and over 25 million on social media platforms.

For analysts who might be counting, we’ve identified over 250,000 professionally-managed, high-producing luxury home rentals in the US in large vacation rental markets that are not listed on the channels.

5. PM Software Shakeup

Changes at leading software companies triggered hundreds of calls and emails to VRM Intel in 2018. While it is true that HomeAway’s PropertyPlus system support is coming to an end, and the announcement of the shutdown of Escapia websites affects hundreds of property managers, the largest reason for reaching out was news of a private-equity-funded rollup of technology providers in the vacation rental industry.

According to multiple sources, private equity firm Greater Sum Ventures (GSV) began rolling up existing technology companies by initiating the purchase of majority stakes in Streamline Vacation Rental Software, Virtual Resort Manager, Rental Guardian, Bluetent, BizCor and several other industry tech providers that include website development companies, payment processors, and more. Headquartered in Knoxville, Tennessee, GSV is a long-term equity investor that provides capital to growth-oriented software/SaaS, and technology-enabled business services companies.

GSV declined to comment.

How will service at these companies change? We don’t know. And GSV isn’t talking, even though they have been present and vocal at industry conferences in sourcing acquisitions. We have seen three companies purchase multiple software providers in the vacation rental industry (HomeAway, RealPage, and Airbnb), and we’ve had the chance to observe how those acquisitions were handled. However, as a private equity company, GSV may take a different approach. While we have had reports that GSV has been contacting ancillary service providers to renegotiate partnership contracts and is actively seeking additional companies to add to the mix (including a channel manager), GSV has yet to communicate with us or any other media source about its vision or plans.

In addition to this rollup, HomeAway’s Cliff Vars stepped down as HomeAway Software’s General Manager to take on a new role at Expedia, and HomeAway named Ryan Hutchings as interim GM. In December, LiveRez let go key members of its leadership and sales teams.

As we are seeing in the global economy, uncertainty causes angst in the markets. In vacation rental technology, it is also true as vacation rental managers attempt to make critical decisions in choosing software without having access to the information they need to make the decision that is right for their businesses.

If all of the leading US vacation rental software companies are in a state of transition, the industry is likely to see little innovation from these providers in 2019. And it appears they are all in the same boat. As a result, PMs are expected to look more to plug-and-play solutions to meet their needs for property care, data/reporting, channel management and merchandising, revenue management, and customer relationship management (CRM).

In his article Vacation Rental Software: The Good, the Bad, and the Ugly, Simon Lehmann said, “The incumbents (several of whose tech platforms are between 6 and 10+ years old) aren’t easy to use and simply aren’t innovating—not technologically, commercially, or in terms of customer success . . . Furthermore, the systems—even the leading ‘all-in-ones’—are disconnected, often leaving managers with no choice but to pay for, and sign into, 5 to 10+ separate providers.”

6. Massive Investment in Urban Multi-Family, Short-Term Rental Companies

The world of short-term rentals in urban, multi-family housing developments became a power-play arena in 2018.

The numbers are shocking—$135 million to Sonder, $62 million for Stay Alfred, reports of a $75 million investment from Airbnb in Lyric, Vacasa’s purchase of Oasis, Expedia’s purchase of Pillow and ApartmentJet, and Airbnb’s acquisition of urban PM Luckey Homes.

Will we see a Hilton or Marriott—or even an Airbnb—Apartment Collection? Big bets are being placed on the affirmative, and there is a current and highly competitive race to the front.

The increase in consumers’ desire to stay in short-term rentals, along with potential high occupancy rates in city centers, makes this an attractive growth opportunity. However, there are risks. The industry has yet to see an urban rental model that truly delivers hotel-level quality and services in multi-family housing developments; and with a population shift to city centers, increased regulation of urban housing is expected. In addition, the margins and retention rates are higher for whole-home vacation rental inventory.

Not everyone is bullish on this sector. In a panel at Phocuswright, we asked Vacasa CEO Eric Breon, in light of his purchase of Oasis, if we could expect to see a Vacasa/Sonder or Vacasa/Stay Alfred acquisition or partnership.

“The space scares me a lot right now,” Breon answered. “There’s a lot of bidding. They’re trying to get growth by buying market share by outbidding each other on spaces. I think that’s an unhealthy climate for the long term. When you look at individual homes, it’s ridiculously sticky. We have an owner on a home—one owner, one contract, a commission rate. That’s very, very sticky. When you think about leasing a multi-family building on a two-year lease, what comes up in two years? It’s going to be up for bid again. So I think it’s important for us to be a part of it just because we have guests looking for that accommodation, but it’s also going to be a small play for us.”

Solidifying a hotel-like brand in urban multi-family units will take time, and any hotel that leaps into this space is willing to accept significant losses in both money and resources in order to take the lead. The competition and funding activity in this sector is going to be interesting to watch in 2019.

7. Immediacy in Customer Service and Text Adoption

Immediate gratification is the new normal, as near-real-time responsiveness to guests and owners became an expectation in 2018. According to Clark Twiddy, CAO of Twiddy and Company in North Carolina’s Outer Banks, “We’ve noticed that guests and owners are less and less patient with an inefficient or clunky process—they simply will not wait through it. They will seek faster workarounds . . . With the enormous shift to online and digital engagement, we’re still learning that online engagement does not lead to less phone volume–in fact, it may even increase it.”

Vacation rental management companies rapidly adopted mobile text-based customer service and communications in 2018. “Even though we knew it was coming, the adoption of text-driven engagement has been much faster than we anticipated,” said Twiddy. “Guests seem to prefer to communicate that way more frequently than any other option.”

The shift to 24-7 support has been challenging. For in-market companies, the challenge is in staffing qualified on-site staff. For multi-destination managers, national call centers do not have in-market knowledge. In the article Instant Gratification and the Five-Minute Golden Window Alexa Nota writes, “Expediency is a nonnegotiable, especially for pre-booking questions—but also the in-home (I-can’t-work-the-toaster) as guests’ experiences during their stay are part of the sales process for future reservations. Property managers have no choice but to keep up on both sides to compete with each other and maintain a huge upper hand against the OTAs.”

8. Google

Google’s Richard Holden, vice president of product management, and Rob Torres, managing director of advertising and marketing for Google’s travel sector, spoke with Sean O’Neill at Skift Global Forum in New York and confirmed its intentions to add vacation rentals in the same way they display hotels.

To be fair, Holden indicated that adding alternative accommodations has not been easy and admitted it had been spending more time on hotel-like inventory than single homes. “We’ve struggled with what is the right way to integrate those offerings,” said Holden. “We’ve added it as a filter . . . We will be—in the near future—moving into offering [alternative accommodations] as well. We feel it’s huge.”

RedAwning CEO Tim Choate has been working directly with Google to test its vacation rental booking platform. “We are now live with Google Hotel Ads,” Choate said. “There is no doubt their movement into the vacation rental space will change the way travelers search for and book vacation homes, and we will be part of it from the ground up. So much to look forward to there.”

In the Phocuswright panel with VRM Intel, John Banczak, co-founder and chairman at Turnkey Vacation Rentals, said, “We’re looking forward to what Google has to offer . . . If you think about how Google operates, it is very clear how to work with Google. If anyone’s ever managed any type of Google campaign, you really know how to manage it. You know what you get, you know why you’re positioned in a certain area, you know why it costs what it does. You don’t get that from the HomeAways or the Airbnbs of the world . . . For us, to the degree a channel makes it hard for us to understand how to drive revenue through it, then you naturally have to look for another channel.”

Banczak continued, “And I think that’s what’s happening right now with the HomeAways of the world—if you don’t know how to manage a channel—then you either just stare at the screen and then hope for the best or you go find an alternative. We’ve been doing a lot of finding alternatives so our direct traffic is way up. I think our brand is obviously starting to catch on. We have got more repeat visitors now. But once the Google ads launch in the way we expect them to, I expect that to be a sizable dent into what we get from HomeAway.”

However, David Angotti, co-founder at SmokyMountains.com warns vacation rental managers in Google Hotels: Not the Magic Bullet, “Even if your local brand overcomes the brand favoritism that Google typically defaults to, consumer confidence is inevitably higher with Booking or HomeAway as opposed to a local brand. Complicating matters further, additional fees (including the traveler fee) are not passed into the [Google] card rates, which creates the illusion of price parity until deep in the booking process.”

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

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

And that may make all the difference.

Wyndham, TurnKey, VTrips, Vacasa Discuss HomeAway, Google, and What OTAs Can Do Better

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December 30, 2018

Watch the entire interview.

We had the chance host a panel of executives at Phocuswright’s conference in Los Angeles, with the largest vacation rental companies in the US and talk to them about several issues facing short-term rental companies, including third-party marketplaces.

One interesting topic discussed among these leaders was Google’s entry into vacation rentals, HomeAway’s performance, and what OTAs can do better in distributing vacation rentals.

AH: What could OTA’s do better?

Steve Milo (CEO, VTrips): Execute. You left off one of the OTAs, TripAdvisor Vacation Rentals. Four years ago, they were number two in terms of driving revenue and traffic to a lot of the companies up here. TripAdvisor Vacation Rentals did not execute. And the lesson right now, when we have more demand than supply, is that people in lodging have the power to pick and choose which places we want to distribute our inventory. So that means we need an OTA that can—not just talk, not just try to sign us up to a contract—but actually execute in the category in a way that is sustainable and bookable. Some of the companies have done very good job, some have done a not-so-good job.

Expedia, right now, is less than 1 percent of our revenue. They have not executed on this category. On the other hand, Google, which I would say is an OTA, continues to be a bigger and bigger component of our ad spend and our revenue because they are executing and we are looking at them and working with them and they will eventually start doing CPA directly to our site where we can have customized landing pages, particularly set up on a dynamic pattern with conversions. Remember, there is no rate parity requirement for alternative accommodations. We can always have the lowest price on our website. Google is going to be the equalizer here. The OTAs have to start to execute or they are going to be the rear view mirror for Google.

AH: Eric, Do you agree? Do you feel like Google is a game changer for you from a customer acquisition standpoint?

Eric Breon (CEO, Vacasa): Not from our perspective. I think we were built on the OTAs and I think, we’ll continue to be on the OTAs. I think we’ll have the ability to be [on Google] . . . I would say it’s not a game changer for us.

AH: Lino, you’ve been working on your brand [at Wyndham]. Where are you on direct booking now?

Lino Maldonado (VP, Wyndham Vacation Rentals): So it depends largely on the market. Some of our ski resorts are much more heavily dependent on the OTAs. We look at OTAs as very strategic partners. We don’t have inventory distributed on every channel every day. We’re very selective. Some channels are much better for larger homes. Others are perfect for condominium-type product that’s more similar to hotels. So I don’t see Google putting everybody out to pasture, but I do feel like that many of the channels can do a much better job at showcasing our inventory . . . To this day, I think it’s been a hodgepodge. Some partners we have done extremely well with. HomeAway was one of those partners that we started with back in 2007, and we did an extraordinary amount of business with them. And then they sold to Expedia, and things have slowed down a little bit and now it feels like we are being stuffed in a box.

AH: Have you seen your percentage of bookings coming from HomeAway decline since Expedia purchased the company?

Lino Maldonado: Yeah, we have. And we also have some information that was flowing through us directly. Like the guest email address [and] the guest phone number where we would do a retargeting for those guests, if they didn’t commit on the first visit. That has gone away since. That was a pretty big initial hit. And actually that same year we had a tremendous uptick in [vacation rental home] owners coming directly with us for full-service management because they lost their only marketing channel that they had. Many of them were only distributing on HomeAway at that time. And that change really negatively impacted the individual owners and chased them our way.

Amy Hinote: And John, most of your bookings are coming from HomeAway, right?

John Banczak (Co-founder and Chairman, Turnkey Vacation Rentals): They’re our largest distribution channel. For sure, it has gone down over the past year. But they don’t generate over half of our bookings.

We’re looking forward to what Google has to offer. HomeAway has made it harder over the past year. What would I like to see from them? Well, if you think about how Google operates, it is very clear how to work with Google. If anyone’s ever managed any type of Google campaign, you really know how to manage it. You know what you get, you know why you’re positioned in a certain area, you know why it costs what it does. You don’t get that from the HomeAways or the Airbnbs of the world. It’s hard to manage. You put a home on there one day, it may have a great ranking; and the next day, they do some bookings and then it falls in ranking. For us, to the degree a channel makes it hard for us to understand how to drive revenue through it, then you naturally have to look for another channel.

And I think that’s what’s happening right now with the HomeAways of the world. If you don’t know how to manage a channel and then you either just stare at the screen and then hope for the best or you go find an alternative. We’ve been doing a lot of finding alternatives so our direct traffic is way up. I think our brand is obviously starting to catch on. We have got more repeat visitors now. But once the Google ads launch in the way we expect them to, I expect that to be a sizable dent into what we get from HomeAway.

Is There a Generational Shift in Traveler Behavior?

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December 28, 2018

Summer vacations - Girls taking selfie on the beach

In traditional vacation markets, the vacation rental industry has enjoyed a 30-year trend of multigenerational family trips. However, changes in millennial behavior are creating disruption in the traditional family vacation.

Historically, the large, multigenerational family vacation consisted of a matriarch/patriarch who footed most of the bill for a large vacation home for the children and grandchildren to gather every year. The ultimate score for a vacation rental manager was to capture and retain the same family for multiple years of annual vacations in large rental homes.

Recent data in some conventional vacation rental markets, however, is beginning to indicate a shift in family travel behavior as millennials are experiencing a late start to “adulting,” demonstrated by living at home longer and delaying marriage and parenting.

The reasons for the changing behavior are becoming more validated. The millennial generation is the first since the Great Depression to grow up in a recession—one that peaked in 2008. According to Jeff Fromm, author of Millennials with Kids (a must-read for vacation rental marketers looking to reach millennials), this generation has not experienced the economic prosperity enjoyed by previous generations, and this has shaped how and when they form their families and raise their children. So far, only 26 percent of millennials are married, compared to 36 percent of Gen Xers and 48 percent of baby boomers when they were the same age.

Although societal shifts, a changing workforce, and the economic landscape contribute to this change, low wages, student loan debt, and exponentially increasing rents are also factors. Analysts no longer blame millennials for being lazy or unambitious but attribute the shift to these macro-conditions, which have encouraged the most tech-savvy and educated workforce in history to live at home, take underpaying jobs, and feel disenfranchised from the American dream they were promised.

More than a Third of Millennials Live at Home

The Pew Research Center reported 35.5 percent of 18- to 34-year-olds in the U.S. live with their parents, compared to 26 percent in 1990. And according to Trulia, that number increased to almost 40 percent when adding those living with stepparents, grandparents, and other relatives and is at its highest point in 75 years.

“This number exceeded the 31.6 percent of young adults who were married or living with a partner in their own household,” Aimee Picchi wrote in the CBS News article, “\Young Adults Living with Their Parents Hits a 75-Year High.”\ “That marked a tipping point for the first time in modern history, since the norm for decades was for young adults to push out on their own after high school or college.”

For parents who support these adult children, it is less appealing to initiate and pay for a special family vacation when they still see one another for breakfast and dinner every day.

Millennials Are Delaying Marriage and Parenting

Delays in the traditional transition into adulthood among millennials carry over to having children. The share of households between the ages of 18 and 34 who had never been married or had children was 40.1 percent, compared to 27.6 percent in 1990.

“Even though unemployment rates have decreased and the economy is picking up, we know wages are stagnant, so this will impact this generation of homebuyers,” making it more challenging to save for a down payment, said Cheryl Young, senior economist at Trulia. “The millennials are getting married later and having fewer children, and that’s particular to this generation.”

As adult children put off having children and buying a home, it is taking longer for parents to become grandparents, which contributes to a reported decrease in the number of large family vacations in some key rental destinations. The Family Travel Association found in its annual Family Travel Surveys (2015–2017) that the number of families who were “very likely” or “likely” to travel with their child or children in the coming 12 months fell to 88 percent in 2017 from 95 percent in 2016.

Delayed Behavior, Not Changing Behavior

There is good news, however. Research is showing that millennials are following the same overall trend in home ownership, having families, and travel . . . they are just getting a later start. The Pew Research Center reported that in 2019 there will be 73 million millennials, followed by 72 million baby boomers. And the upcoming family vacation unit will be led by baby boomer grandparents with millennial children—and their children/grandchildren.

As we have reported in previous issues, millennials value travel, treasure local experiences, are tech savvy, are more brand loyal than Gen Z coming behind them and Gen X that preceded them, are more educated, are less likely to live alone, and have a strong desire to be married and have a family one day. Although their timeline is a little longer than previous generations, their trajectory is on par to catch up to their predecessors in coming years. As a result, for vacation rental marketers, finding ways to reach millennials with aspirational messaging is expected to pay significant dividends.

The Push for Quality: How Hotel Convergence is Affecting Vacation Rentals

By

Jeremiah Gall

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December 28, 2018

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push quality hotel convergence affecting vacation rentals jeremiah gall breezeway

A dozen years ago, before HomeAway acquired VRBO and before vacation rentals had any presence with major online travel agencies (OTAs), rental managers were busy adjusting to the new world of online marketing and discussing how to raise awareness of the vacation rental industry. At the same time that Expedia and TripAdvisor were dipping their toes into vacation rentals, Airbnb began its incredible story. First, Airbnb formalized couch surfing and then redefined the private accommodation landscape, which helped push vacation rentals to the forefront of the hospitality industry.

Fast forward ten years.

The business of vacation rentals evolved, and the short-term rental landscape looks very different today. Vacation rentals have the attention of travelers and the major travel and hospitality brands and investors. Alternative accommodations are the new normal, and unique travel experiences are the new standard. There’s never been more choice, an overwhelming choice, of accommodations to choose from.

The average traveler and rental guest look a lot younger, too. Millennials are traveling more frequently than the generations before them, averaging almost four vacations per year. These young, technology-centric guests expect the perfect rental experience: the uniqueness of a vacation rental with VIP-level amenities.

This article discusses how players in the hospitality industry—long-established hotel brands, short-term rental marketplaces, and luxury residential buildings—are evolving to meet the rising demands of rental guests.

Hotel Invasion in the Short-Term Rental Market

The line between vacation rentals and hotels is fading. Vacation rental inventory can now be found side-by-side with hotel rooms through online travel agencies such as Expedia, Booking.com, and TripAdvisor. Similarly, hotels can be found on major vacation rental marketplaces such as HomeAway and Airbnb. For hotel brands, this strategy is a no-brainer. More impressions lead to more bookings, and hotel executives feel their brand, and their ability to provide quality listings and concierge services, stands out among the sea of rental home listings. “As some of these platforms have grown into millions and millions of units, there is an almost paralyzing array of choices and a lack of branding,” said Marriott CEO Arne Sorenson. “The lack of real attributes of quality around service and product makes this an area where we think we can deliver something which is simply better.”

However, Airbnb doesn’t perceive hotel inventory on its platform as a threat. In fact, according to its policy, Airbnb “welcomes listings hosted by professional hospitality providers if they offer unique spaces and personal hospitality to the community.” These “personal qualities” can include access to common gathering spaces and rooms that incorporate local influences. As long as the listings contribute to Airbnb’s authentic and communal brand, the company will expand its listings and offer additional options to consumers.

Hotels haven’t stopped at cross-listing though. Major brands have witnessed the rampant growth of short-term rentals, and they do not want to sit idly by, so they are developing private accommodation strategies to grow with the evolving travel landscape.

For example, Marriott is currently testing a six-month short-term rental pilot in partnership with London-based home rental management company Hostmaker. Each of the pilot’s 200 homes is handpicked to adhere to Marriott’s standards and consists of one or more bedrooms, a full kitchen, and laundry facilities. Marriott expects to capitalize on a gap in the vacation rental market between easily accessible quality rentals with customized services and high consumer expectations. This is where hotel chains plan to grab market share—at the top end of the market, which is the most lucrative to vacation rental managers.

AccorHotels shares a similar thesis on the opportunity for hotels within the vacation rental market. The French hospitality company, with more than 4,200 hotels in over one hundred countries, wants to leverage its expertise and infrastructure to accommodate the rising consumer demand for quality and concierge services. The company jumped at the opportunity to enter this new market and acquired short-term rental operators Squarebreak, Travel Keys, and Onefinestay and consolidated them under the Onefinestay luxury brand. AccorHotels promotes the work it does to vet each home for comfort and uniqueness and has standardized amenities to ensure rental guests enjoy a consistent brand experience across properties. In fact, Onefinestay goes to great lengths to create a luxurious end-to-end service and offers amenities such as twenty-four-hour guest support, personalized check-in, and professional cleaning throughout the stay.

Airbnb’s Push for Hotel-Like Quality

Thanks to its meteoric rise over the last decade, Airbnb has felt significant and understandable growing pains. With so many diverse listings and the largest number of individual hosts and managers, Airbnb faces new challenges to identify listings that align with consumers’ growing interest in quality. In fact, Airbnb recently made global changes to its basic requirements for hosts and its review system. The new standards outline clear expectations for every host to follow, with specific guidance and instruction on cleanliness, amenities, and check-in. Keenly aware of this push for quality, the policy intends to create a more reliable and predictable stay for guests.

Additionally, Airbnb updated its review system to better facilitate honest feedback about the rental experience. According to Airbnb’s blog, “Hosts and guests can only see reviews from a completed trip after both participants have completed their assessment of the experience.” The blog post added, “We believe members of the Airbnb community want to ensure that their profile is an accurate representation of the way they approach hosting and traveling. We are committed to finding new, personalized ways to help our community share honest feedback and trust.”

Yet, a bigger indication of the massive push for quality came in February’s announcement of Airbnb Plus. Leveraging a segment of “Superhosts” with stellar reviews and service, the new program creates a collection of high-quality and well-equipped homes. In practice, this means predictable amenities and services that move the private accommodation experience closer to that of a hotel travel experience but with the charm and uniqueness of a vacation rental. A collective of this type of inventory would be a massive differentiator in a travel landscape that has seen commoditized inventory on all the major online travel websites.

However, the real difference is in the property itself. Every Airbnb Plus property is visited in person to ensure hotel-like conditions and amenities and is inspected with a one hundred-point quality checklist that includes things like fully stocked cooking equipment, fast Wi-Fi, filtered water, and quality toiletries. The inspection goes beyond cleanliness and amenities, incorporating the property’s intangibles of character and thoughtfully arranged decor. Attention to detail like this demonstrates Airbnb’s push for hotel-like quality and indicates a significant maturation of the product compared to Airbnb’s early days of air mattresses on the floor and leftovers in the fridge.

Emphasis on Concierge, Amenities, and Services

The elevated quality and concierge services within hospitality isn’t isolated to hotels and Airbnb. In fact, vacation rental marketplaces and managers have caught on to consumer demands for extraordinary experiences and have positioned their businesses accordingly.

This is changing the way vacation rental managers approach their own marketing. For example, look at the landing pages for TurnKey. Contrary to the traditional approach of immediately showcasing their listing inventory, the emphasis is first on the unique experience that each property provides. The message to the consumer has shifted from quantity to quality and features terms like “exceptional vacation rentals,” and “one-of-a-kind vacation rentals offering the experience of a fine hotel.”

That said, the quality experience goes beyond the comfort and condition of each property. TurnKey has recognized the demand for VIP-customized service and promotes amenities like keyless entry, a concierge app with local entertainment and restaurant suggestions, and boots-on-the-ground staff to answers questions 24/7. Yes, we all know these are the same services that many rental managers have provided for years, but many managers have yet to adjust their marketing to fully highlight this part of their business.

The types of hotel-like concierge services that are becoming the new norm for short-term rentals are permeating other living styles. Residential renters are starting to demand more in-apartment amenities, and luxury buildings are in a full-fledged “amenities arms race” to outdo each other. “We raised renters’ expectations and now have to provide this huge array of amenities just to get their attention,” said Daniel Geham, studio director for Humphreys and Partners Architects. “What was once a luxury is now an entry-level amenity.” Amenities like laundry rooms and fitness centers are practically mandatory these days, while items like Wi-Fi lounges and yoga rooms, which were once cutting edge, are now commonplace.

As the lines blur between hotels and private accommodations, convergence is bleeding into the long-term residential living experience. In the case of “Niido Powered by Airbnb,” the two are one and the same. The development firm Newgard has teamed up with Airbnb to build fourteen Airbnb-branded complexes by the end of 2019. The apartments are leased on an annual basis, but tenants can rent out their units for up to 180 days a year (tenants keep 75 percent of the profit and Niido takes 25 percent). Airbnb guests who rent a unit will have access to hotel-style amenities, which include on-demand concierge services and luggage storage.

What Does This Mean for Property Managers?

The operational role of a property manager, for the guest and the owner, is rapidly changing. Consumer expectations for quality and concierge services are growing, and managers must adapt to meet these elevated standards. With property management commissions getting squeezed by new managers in every market, a refocus on delivering excellent property care services is a key differentiator. Companies that leverage intelligent property care programs will rise above their competitors and capitalize on the continued growth of the vacation rental industry.

Even if you can’t upgrade your tech stack today, setting brand standards can help you meet guest expectations. Brand standards are the guidelines that define the personality of your vacation rentals, for example how you want guests to feel when they enter your property and interact with your business. Brand standards are a staple of most hospitality providers and help ensure a quality and consistent guest experience.

Deciding how all the small details should be handled builds a cohesive program that can be followed by staff and cleaning contractors to ensure consistency. Remember, this is how hotels and new tech-enabled operators are planning to gain market share. Brand standards will be a key differentiating factor as private accommodations and vacation rentals enter the next phase of maturity within hospitality.

Leading Economic Indicators: Are Predictive Indicators Holding?

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December 28, 2018

leading economic indicators vacation rentals

Over the last two decades, experienced vacation rental professionals have predicted market performance using a set of economic indicators, including real estate activity, consumer confidence, unemployment, hotel performance, gas prices, international travel behavior, and vacation rental awareness.

The effect of these indicators differs across destinations. What is a positive sign for ski markets can be a negative predictor for southeast beach destinations, and metrics that are positive indicators for destinations reliant on airline traffic can negatively affect drive-to markets. Additionally, in destinations with a major metropolitan market as the top feeder market, indicators perform differently than in drive-to markets whose major feeder markets are more heavily composed of mid-size cities and rural areas.

In the vacation rental industry, we are just beginning to establish definitive correlations between economic conditions and realized performance, but as the vacation rental industry matures, analysts are taking more time to research and create new sets of destination-based predictive economic indicators to adjust pricing and more adequately prepare for the future.

Now that the industry is starting to participate in and utilize integrated comparative data tools, vacation rental managers are beginning to get actual, real-time performance metrics, and several destinations are finding that realized performance during the 2018 summer months didn’t follow predicted trends. Although some vacation rental destinations saw record-breaking performance, other markets, most notably along the Gulf Coast, experienced a disappointing season—leaving destination analysts to wonder: Are predictive indicators holding, or is there a shift in consumer behavior?

For new vacation rental managers, the idea of monitoring economic indicators may also be new, so let’s look at an overview of common predictive sets widely used in the vacation rental sector.

Real Estate Market

Vacation rental performance has been closely tied to real estate performance because, historically, destinations go in and out of favor among vacation renters and second-home buyers in parallel fashion. Approaching the 2018 summer season, the real estate boom was in full swing.

However, real estate analysts are already seeing signs that the peak of this cycle occurred in August, as early economic indicators are beginning to show a slowdown:

The number of new construction permits declined 5.5 percent in August from last year. (U.S. Census Bureau and the U.S. Department of Housing and Urban Development)
Mortgage rates are on the rise. The 30-year fixed-rate mortgage rate averaged 4.65 percent in late September, according to Freddie Mac, marking the fourth straight weekly gain.
Sales of previously owned homes, as of August 2018, are 1.5 percent lower year to date than in the same period last year, just months after finally regaining a post-crisis high. The decline in home sales occurred despite a shortage of supply, which has pushed housing prices to record highs in many major markets across the country. (National Association of Realtors)
The median existing-home price for all housing types in August was $264,800, up 4.6 percent from August 2017 ($253,100). August’s price increase marks the 78th straight month of year-over-year gains. (National Association of Realtors)
For millennials aged 25 to 34, homeownership is eight percentage points lower than baby boomers at that age and 8.4 points lower than Generation X. (The Urban Institute)

Pro Tip: The conditions in your market can differ greatly from the macro conditions in the United States. Professional markets will find it beneficial to compare their individual market(s) to overall performance in establishing an optimal set of indicators.

Consumer Confidence and Unemployment

According to the Conference Board Consumer Confidence Index®, U.S. consumer confidence surged to 133.4 in August, a near 18-year high, as households remained upbeat on the labor market, pointing to strong consumer spending that should help to sustain the economy for the remainder of the year.

For many vacation rental managers, performance over the summer paralleled the index with small declines in June and July, followed by an upswing in August.

“Consumer confidence increased to its highest level since October 2000 (Index, 135.8), following a modest improvement in July,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions improved further. Expectations, which had declined in June and July, bounced back in August and continue to suggest solid economic growth for the remainder of 2018. Overall, these historically high confidence levels should continue to support healthy consumer spending in the near term.”

Unemployment in the United States fell to 3.9 percent in August 2018, down from 4.4 percent in 2017, 4.9 percent in 2016, and 5.1 percent in 2015, according to the U.S. Bureau of Labor Statistics.

Hotel Performance

The value for vacation rental managers in looking at hotel data is the age-old question: “Is it travel, or is it us?”

STR Global reported that the U.S. hotel industry showed mixed results in the three key performance metrics during July 2018. In year-over-year comparison with July 2017, the industry posted the following:

Occupancy fell .2 percent to 73.6 percent.
Average daily rate (ADR) increased 2 percent to 133.44.
Revenue per available room (RevPAR) increased 1.8 percent to $98.17.

According to STR, U.S. hotels have now posted 101 consecutive months of year-over-year RevPAR growth. “The heart of the summer vacation season helped the industry establish an all-time record in demand, which topped 120 million room nights sold for the first time in history,” said Jan Freitag, STR’s senior VP of lodging insights. “However, there was enough supply growth (+2.1%) to outpace the year-over-year increase in demand (+1.9%), and that led to the first monthly occupancy decrease in the U.S. since last July. That, combined with just a 2% lift in ADR, produced our lowest RevPAR increase since April 2017 . . . As we noted in our revised forecast released last week at the Hotel Data Conference, we expect the industry to continue breaking demand records through 2019.”

Pro Tip: Experienced vacation rental revenue managers take a deeper dive into leisure travel versus business travel and into related individual markets.

Gas Prices

Gas prices barely budged through the 2018 summer, with the national average for regular gasoline hovering around $2.85 a gallon since mid-June. That’s down slightly from a high of nearly $3.00 at the end of May, but it’s still about 43 cents a gallon more than drivers paid at this time last year.

However, compared to the 2014 summer when gas prices averaged $3.70, most vacation rental industry analysts looking at drive-to markets do not believe that changes in gas prices had a significant impact on consumer traveler behavior in 2018.

International Travel

The 2018 impact from changing international travel behavior has two faces: Inbound travel to the U.S., and outbound travel from the U.S.

For destinations reliant on inbound travelers, incoming international arrivals to the U.S. were down 4 percent in the first three quarters of 2017. By comparison, international tourism arrivals worldwide in 2017 were up 7 percent, representing the strongest result in seven years, figures from the United Nations World Tourism Organization (UNWTO) show. In addition, the UNWTO says Spain is about to replace the United States as the world’s second most popular tourist destination, after France. And according to surveys conducted for the 2018 U.S. News Best Countries Rankings, the United States fell from the fourth best country in the world in 2016, to No. 7 in 2017, and down to No. 8 in 2018.

As a result, in 2018, the U.S. Travel Association launched a “Visit US” coalition with other U.S. industries to reverse declining U.S. competitiveness for international travel dollars.

However, many destinations have few non-U.S. travelers. For these markets, a decrease in international travel is a positive indicator as more U.S. travelers vacation domestically.

Nevertheless, despite a decrease in international travel to the U.S., American travelers are taking more vacations outside of the U.S. According to the U.S. Department of Commerce, National Travel and Tourism Office (NTTO), the number of U.S. citizens traveling to international regions increased 9.3 percent from 2016 to 2017. The NTTO reported the top two destinations for U.S. international travelers were Mexico and Canada. Travel to Mexico (31.2 million) was up 9 percent, marking a new record for the fourth straight year. Mexico now holds a 39 percent market share of all U.S. outbound travel. U.S. travel to Canada (13.9 million) was up 10 percent.

Vacation Rental Awareness

The awareness of vacation rentals as a lodging alternative has increased among consumers. According to Phocuswright’s 2017 study, “A Market Transformed: Private Accommodation in the U.S.,” “In 2015, nearly half of U.S. travelers either rented or considered renting private accommodation, compared to just 35 percent in 2014.”

A recent Booking.com survey showed, “One in three travelers (33 percent) say they’d prefer to stay in a holiday rental (a holiday home or apartment) over a hotel.”

Proponents of OTAs, including Booking, Airbnb, Expedia, and TripAdvisor, often point to the increase in awareness for vacation rentals as their biggest contribution to the industry. David Angotti, in his article, “Long Live the OTAs!” in the spring issue of VRM Intel Magazine, wrote: “The larger a listing site becomes, the more powerful the brand can become and, ultimately, the whole industry benefits . . . The economies of scale are bringing additional awareness for our industry and shifting the supply and demand curve in a way that benefits us all.”

The Future of Economic Indicators for the Vacation Rental Industry

Consumer behavior in the U.S. is quickly becoming a tale of two worlds, with economic conditions for inhabitants in major U.S. cities differing greatly from rural residents. In looking at these indicators, professionals in the vacation rental industry will find it increasingly beneficial to analyze economic and behavioral conditions in their feeder markets, rather than relying on macro-U.S. data.

Moreover, a positive indicator for urban markets might be a negative indicator in traditional, drive-to vacation rental markets.

Thankfully, the era of self-reported comparative data is coming to an end and is being replaced with real-time data that is integrated with property management software systems for apples-to-apples comparison. As the vacation rental industry matures, and comparative market data is available on a market basis, the correlation between economic conditions and actual performance will become rapidly clearer. And the best news is that professional managers will not have to wait as new market data platforms are able to pull in data from previous years.

Comparing monthly vacation rental comparative performance metrics for the last three to five years to destination and feeder markets—such as new construction permits, single and multi-family real estate performance, the Consumer Confidence Index, unemployment rates, in-market hotel performance, international travel behavior, and sector awareness—is likely to yield a strong trend pattern for a professional manager that will help to establish a strong set of predictive indicators.

As the vacation rental industry becomes more professionalized and comparative market data is more trusted and utilized, property managers will evolve in measuring how leading economic indicators aid in predicting performance for each individual destination and for specific traveler demographics.

In analyzing trends in the economy and in consumer behavior, the vacation rental industry is maturing rapidly. The most exciting part of being in this industry, at this time and place, is the opportunity as vacation rental professionals—including technology providers, marketers, and property managers—to be the first to identify and measure correlations between these shifts and company performance.

Agoda Outside Publishes Vacation Rental Handbook

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December 27, 2018

at home around the world vacation rental handbook agoda outside

Agoda Outside recently released At Home Around the World: The Short-Term Rentals Handbook for Guests, Hosts, Neighbors and Governments, a compilation of research and guidance on the value and benefits of home-sharing. Agoda Outside is the outreach and public affairs arm of Agoda, a Southeast Asia-based subsidiary of Booking Holdings and a booking platform for accommodations, flights, and airport transfers.

“This handbook is written for all the stakeholders in the short-term rental community: guests, hosts, communities, and governments,” said Peter L. Allen, managing director of Agoda Outside. “We strongly believe that everyone needs to work together to maximize the benefits of the growing home-sharing economy.”

Allen wrote the book together with Robert Rosenstein, co-founder and chairman of Agoda. Topics range from the economic benefits home-sharing provides to communities to practical tips for first-time hosts and guests, but a primary mission of the handbook is to help governments create effective short-term rental legislation.

“Through our conversations with regulators and neighborhood advocates around the world, we realized that governments are struggling with how to understand and anticipate the role that home sharing plays in their cities. As this relatively new industry has emerged, a patchwork of regulations has been created,” Rosenstein said in a release. “We wanted to collect the lessons from these natural experiments and start to showcase how the successful approaches work.”

“One of the biggest takeaways from At Home Around the World is a broader perspective: Property managers will see their business from the point of view of other people involved in the local host rental ecosystem,” Allen said. The book is also a reminder that property managers should understand their customers, keep a sharp eye on the competition, comply with regulations and tax requirements, and continue to innovate, he said. The book includes a list of new businesses to help property managers be successful, as well as important perspectives from guests, neighbors, and government officials.

The book can be downloaded from its accompanying site, VacationRentalHandbook.com.

The Theory of Limited Edition: Are your homes commodities or limited edition offerings?

By

Matt Landau

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December 22, 2018

the theory of limited edition by matt landau

I would like to share what I feel is the most radical concept in the vacation rental industry today—the theory of limited edition—which argues that, contrary to large OTAs and corporate growth, focusing on the elements of a business that do not scale is the most viable (and enjoyable) path for independent vacation rental success. Formulated over the past two years with the help of our Inner Circle Community, the theory of limited edition reminds us that we have everything we need to succeed. 

Commodity versus Limited Edition

The theory first began with a very serious realization. As the vacation rental industry grows, independent owners and managers are being forced to choose between two polar opposite business models: the commodity vacation rental and the limited edition. There is increasingly less opportunity for success anywhere in between. 

Commodity vacation rental businesses should not be looked upon negatively because they are the standardized businesses—the completely stocked kitchens, the online booking functionality, the hotel-level cleanliness—mainstream travelers want and need. Let’s face it, until a new industry has baseline standards, first-time vacation rental travelers won’t know what to expect (as a consequence, we will almost inevitably let them down). The biggest caveat (for homeowners) with the commodity model is that it plays into the hands of big business wealth and strength—the proverbial Goliath. The game of standardization is one in which big hotel chains or even companies like Vacasa or TurnKey are poised to conquer with only small tweaks to their already well-oiled systems and processes. It’s a game in which independent owners and managers will have a tough time competing because it’s all about scale. In a match of strength versus strength, Goliath wins almost every time. 

However, the opposite of the commodity vacation rental business model is the limited edition. The limited-edition business does all of the things a commodity business does but with an additional layer of personality, style, and differentiation. Fortunately, these are the things small business owners already possess, so crafting a limited edition business model is more about discipline and deliberate choices than it is rocket science. Limited edition means going against the grain and building yourself a business that is protected and whose success is defined on your own terms. It is the case in which David changes the terms of the playing field and pulls out his slingshot—and his chances at success increase dramatically. Let’s dive into how this theory was born as well as some of the factors that contribute to its success. 

The Wonderful World of Collector’s Items

When I first visited the neighborhood of Casco Viejo in Panama (a neighborhood I would go on to call home for twelve years), I walked around with a real estate agent named Patrizia, who explained there were strict preservation laws in place because the historic district was a UNESCO World Heritage Site. Developers could not build up or out in Casco Viejo, and they had to stick with the original, historic facades. This meant there would only be a fixed number of properties on the market in the entire neighborhood. Buying real estate in Casco Viejo was, as Patrizia said, “a limited-edition investment.” 

I really enjoyed this concept and began to explore what it meant in other areas of business and pleasure when I discovered Antiques Roadshow, a television show on PBS in which people submit antiques for appraisal by experts. What I noticed about one-of-a-kind antiques (as they related to real estate in Casco Viejo) was that limited supply preserved the value of the items. With this in mind, I focused on the elements of our businesses that cannot be replicated or mass-produced, and I began to look at the independent vacation rental niche. How could independent owners and managers use this idea of limited edition to harness what makes them so special and use that to change the terms of the playing field against the bigger, richer OTAs?

Supply-Limiting Factors 

When it comes to vacation rentals, I began to notice there were two kinds of “supply-limiting” factors worth considering. The first is external factors that are outside of our control, such as beachfront properties, of which there are only so many. The penthouse is another nice example because there’s typically only one per building. Architectural homes, mountain-top properties, and one-of-a-kind views are all hard factors that contribute to a limited supply—thus, an irreplaceable vacation rental experience. These factors are worth considering when you acquire your next property or plan your next remodel. 

Because so many of these external factors are outside of our full control and are expensive to obtain, the theory of limited edition chooses to focus on the second type of supply-limiting factor, the internal factors within us. These factors include style, tastes, preferences, and stories that are unique to each and every one of us. These internal factors are essentially free and accessible to all. So, I decided to dig deeper into how these natural strengths could be channeled and packaged into a marketing portfolio to stave off bigger, richer competition.

I began to interview limited edition entrepreneurs around the world—in the vacation rental industry and in small businesses in general—and eventually distilled their innovations into eight common factors that make up the prototypical limited edition vacation rental. They are, in no particular order, distinction, personality, names, surprises, customer zero, help don’t sell, parting thought, and landmarking (or anchoring). You can sign up for the complete limited edition workshop (www.vrmb.com/Ltd/) to learn more about these factors and how to boost your overall limited edition score. 

Why Limited Edition? 

This question is incredibly important because it is directly connected with our desired outcome. The more limited edition your business is, the less you have to worry about industry shifts or market corrections. The more limited edition your business is, the less you have to play by the commodity rules. The soft way of presenting this is that the factors involved with limited edition can help independent owners or managers carve out their own definition of success. The stronger way of presenting it—the method to which I subscribe—is that an independent owner or manager in our industry cannot succeed without it. Sway too far to the side of commodity and you’re in a race to the bottom. Meander too much in the middle and you’re swallowed whole. 

Because this is still a working theory, limited edition comes with some asterisks. For instance, it’s worth noting that just because we say we are limited edition does not mean we actually are. If you’ve seen the “limited edition collectors coin” on infomercials late at night (it’s yours for just $19.99!), you catch my drift. You really need to demonstrate the factors. You can’t fake them.  

Additionally, it’s important to remember that limited edition is not synonymous with price. Many limited-edition businesses are composed of less expensive materials than their commodity counterparts. Some limited edition efforts actually subtract value in the eyes of the general public (Google the phrase “Mario Balotelli camouflage car” and you’d argue that limited edition has made this item less desirable on the open market). In short, it’s not the price but the collection of eight factors that makes the limited-edition business more valuable and protected over the long haul.

Conclusion

As the theory of limited edition evolves, we’re left with what I like to refer to as “the million dollar” question. Once independent vacation rental owners or managers have figured out their limited edition profile, how do they scale? We understand limited edition as it relates to single use cases, but is it prohibitively small scale? This is a question we haven’t learned the answer to yet. This is a question that may remain unanswered for years to come. My hope is that publications like this one, aimed at documenting the strengths of independent owners and managers and the truest stakeholders in this industry—the pioneering homeowners who paved the way for the greatest travel trend of our lifetime—can help guide the way.

Massachusetts Lawmakers Approve Revised Short-Term Rental Bill

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December 21, 2018

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boston massachusetts short-term vacation rental regulations

Yesterday, Massachusetts lawmakers agreed on amendments to Bill H.4841 regulating short-term rentals throughout the state. If signed by Governor Charlie Baker, the bill will go into effect July 1, 2019 and require short-term rental operators to register with the state and pay state excise tax in addition to local taxes and fees, among other regulations. Licensed properties will be listed in a public, searchable online registry.

A previous version of the bill passed the legislature on July 30 the day before the regular session ended, but Baker returned it on August 1 with two proposed amendments: to exempt homeowners from paying taxes if they rent the property 14 days or less per year, and to limit the information available in the new registry to only the street name and the city or town where the property is located to protect residents’ personally identifiable information.

Through an informal session, legislators agreed to these changes with the modification that operators who plan to rent their property for 14 days or less sign a declaration of such with the commissioner. An additional amendment delays the inclusion of short-term rentals in the 2.75 percent hotel tax in Boston and surrounding areas to fund the Boston Convention and Exhibition Center until the bonds are paid (about 10 years).

Taxes that remain in the bill include a 5 percent state excise tax on all short-term rentals and the option for municipalities to impose a local excise tax of up to 6 percent (6.5 percent in Boston). Cities that impose the optional local excise tax must direct at least 35 percent of revenues from the tax toward affordable housing or local infrastructure projects.

Municipal legislatures will also be allowed to vote on the following in their jurisdictions:

Require additional local licenses or permits and cap the number of licenses allowed
Ban or limit the type of short-term rentals allowed
Limit the number of days an owner can rent his or her property in a year
Require building or zoning codes
Maintain health and safety standards
Issue penalties for violations
Charge a 3 percent community impact fee on professionally managed units, defined in the bill as “1 of 2 or more short-term rental units that are located in the same city or town, operated by the same operator and are not located within a single-family, two-family, or three-family dwelling that includes the operator’s primary residence.”

A spokesperson for Airbnb said in a statement that the bill would impose significant burdens on hosts. “What’s worse, just as the legislature passed a complicated bill at the tail end of regular session in July, it is now once again attempting to get a more complicated bill through in a lame-duck session. We urge the governor to veto this latest 11th-hour effort so that the incoming legislature can take the time necessary to deliberately address all of the issues and achieve common sense home sharing policy that keeps Massachusetts a leader in the new economy.”

Baker has 10 days to sign the bill into law.

South Lake Tahoe Property Owners File Lawsuit Against City Over Measure T

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December 21, 2018

short-term vacation rental regulation ban lawsuit south lake tahoe measure t

Update 12/24/18: El Dorado County superior court judge Thomas A. Smith issued a temporary restraining order to prohibit the city from enforcing the occupancy limits of Measure T until the case can be heard on January 24, 2019.

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On December 18^th, a group of South Lake Tahoe property and business owners filed a lawsuit against the city claiming Measure T is unconstitutional and unenforceable. Measure T, a ballot initiative to eliminate most vacation rentals in the city by 2021, passed by a margin of just 58 votes in November. No recount was requested.

The lawsuit, filed by Pierce & Shearer LLP, argues:

“The ordinance is unconstitutional and unenforceable because (1) it discriminates against property owners who are not “permanent residents” while allowing “permanent residents” to continue renting their properties to visitors as short-term rentals; (2) the initiative imposes occupancy limits without regard to size of the property; (3) the initiative conflicts with state and county law regarding land use regulation in the Lake Tahoe Region; (4) the initiative impermissibly intrudes into administrative matters rather than legislative issues; (5) the initiative interferes with vested rights; (6) the initiative contains numerous vague and ambiguous terms; (7) the initiative violates the privileges and immunities clause of the U.S. Constitution; and (8) the initiative impairs the obligations of contracts.”

The group, named the South Lake Tahoe Property Owners Group in the lawsuit, is requesting a preliminary and permanent injunction barring the enforcement of Measure T.

The initial court hearing to hear the case was set for Wednesday night but has been delayed as Superior Court Judge Michael McLaughlin recused himself. The announcement in the courtroom did not specify why, but local publications have reported that McLaughlin once owned a vacation rental home and used to practice real estate law in the area. A new court date has not yet been scheduled.

Meanwhile, one of the restrictions of Measure T, the occupancy limit of two per bedroom and a maximum of 12 no matter the number of bedrooms or location, is already in effect and causing problems for property managers and hosts in the city.

“The occupancy levels obviously pose a significant burden on those with reservations for the holidays,” said Stu Roberson, a member of the plaintiff group and partner at RnR Vacation Rentals. Now through January 5 is his company’s busiest time of the year. But from what he has heard, very few people are being turned away because of the new limit. These guests have contracts they’ve signed and plane trips from all over the world, it would be just inhumane to turn them away, he said. “Imagine a hotel doing that.”

“The City understands that many VHR reservations were made under the old maximum occupancy limits, and is attempting to be reasonable during the initial Measure T implementation period,” the city’s communications department said in a press release yesterday. “In an effort to accommodate previous VHR reservations, City staff will initially use discretion in enforcing the new maximum occupancy limits if VHR guests are responsible visitors and do not violate other VHR regulations by causing neighborhood disturbances.”

Although Roberson is confident in the lawsuit and optimistic that they will win the injunction, he is concerned about the damage to South Lake Tahoe’s reputation as a tourist destination, just as it took a hit when it became known as the “land of $1,000 parking violations” earlier this year.

“People will hear South Lake Tahoe is unwelcoming, that’s what they’ll hear in the news,” he said. Business travelers will stay in whatever housing is available, but with pleasure travel, people have options, and they will stay elsewhere. With 30 percent of the accommodations (vacation rentals) removed from the area, 30 percent of the tourists won’t return. “That’s my biggest fear,” he said, “It’s not that we’ll have fewer tourists, it’s that we’ll have a lot fewer tourists.”

AvantStay Raises $5 Million Series A

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December 20, 2018

group travel wine vacation rental short-term rental

Property management company AvantStay announced yesterday it has raised $5 million in a Series A funding round led by Bullpen Capital, bringing their total funding to $6 million. AvantStay manages 60 short-term rentals that cater to groups, particularly Millennials, and specializes in offering local experiences with each stay. The company is currently operating in the Coachella Valley, Paso Robles, Scottsdale, Temecula, San Diego, and Tahoe markets.

Founded in 2016, AvantStay manages operations from its offices in San Francisco and Los Angeles through tech automation to communicate with guests, manage maintenance and cleaning, and provide customer service. The company also works closely with Airbnb on technology initiatives, policy updates, and market demands.

The latest funding will help AvantStay further invest in its operational technology infrastructure, expand to new markets, and grow its inventory to more than 200 homes by the end of 2019.

“For 2019, our focus is on beach towns, deserts oases, mountain areas, and national parks on the west coast,” said Reuben Doetsch, co-founder of AvantStay. “We’re looking for truly experiential locations with unique properties for groups that want to get away and enjoy time together.” On the technology side, the company is working on improving its operational technology to manage hundreds of properties across multiple regions, as well as enhancing the group-focused customer experience, Doetsch said.

Other investors in the round include F-Prime Capital, Zeno Ventures, and Convivialité Ventures, with continued participation from existing investors Abstract Ventures and Presidio Bay Ventures.

Community-Centered Booking Platform Fairbnb Gearing Up for 2019 Launch

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December 19, 2018

tourists crowding venice italy burano island residential area

Tourist crowds wandering Burano, a quiet residential island off of Venice

Billed as an “ethical alternative to Airbnb,” Fairbnb is gearing up for its 2019 launch. The Bologna-based organization is a “community-centered alternative that prioritizes people over profit and facilitates authentic, sustainable and intimate travel experiences,” its manifesto states.

The idea arose out of the conflict around short-term rentals in today’s marketplace, including what the co-founders view as a lack of transparency and accountability from platforms and negative impacts on some communities. Fairbnb aims to correct these issues.

“Fairbnb is based on a cooperative mindset, where we all – hosts and property managers, travelers, neighbors, concierge services, housekeepers, decision makers – are working together to address and solve the issues and create a better vacation rental experience together,” said Indrė Leonavičiūtė, co-founder and product owner.

The organization is based on cooperative ownership by impacted stakeholders, including hosts, guests, local business owners, and members of the neighborhoods where short-term rentals operate. Those community members will work together on how short-term rentals coexist with the locality, including working with their municipal governments on regulations that foster sustainable tourism. They will also work with Fairbnb to reinvest profits from the platform back into social projects of their choice that counter the negative effects of tourism in their areas. Additionally, Fairbnb promises to operate with transparency and accountability to both local legislation and its members, including keeping staff salaries modest and making them public.

While the organization endorses the one-host, one-home philosophy, it will not prohibit for-profit rentals on its platform. When asked how these two often conflicting policies can work together, Leonavičiūtė said “The biggest problem in the vacation rental platforms is the grey area in which [particular hosts] start operating several listings, becoming actually a professional operator without paying taxes… What our platform will do is really differentiate between professional and non-professional users, helping them to comply with the existing rules.”

Today, the organization announced its latest go-to-market timeline. Between now and March, the coop will finalize friends and family funding, complete its development team, begin onboarding hosts (“fair-hosts,” as the organization calls them) and social projects, start alpha testing, and launch a crowdfunding campaign. Its beta version is expected to go live in April with expansion throughout the European Union and global markets through September.

Its first five test cities are Amsterdam, Barcelona, Bologna, Valencia, and Venice, chosen in part because they are home to the organization’s co-founders. “Fairbnb was born organically, too. It started to pulse from European cities that were affected by mass tourism, encouraging activists and professionals like us to do something about it,” said Leonavičiūtė. “Amsterdam, Barcelona, and Venice are on top of this list. The cities are extremely affected by mass tourism, and we see significant issues there, such as very high rent prices, crowded central areas, and the dominance of businesses focused only on tourists.”

Fairbnb will evaluate the pilots on several factors, the first and foremost being that they send a message to the world, said Leonavičiūtė, and their success is the communities they empower.

Of course, success is also based on the numbers of hosts, travelers, and partners signed up, as well as the number of completed transactions and funded social projects, she said, but it is also about the learning process. “Fairbnb is a tool that will be given to everyone in these cities, and we will figure the proper techniques together.”

Fairbnb did not share how many fair-hosts and social projects had pre-registered, but Leonavičiūtė said the group is happy with the amount of interest they’ve received. “Usually the hosts share a similar mindset: They want to contribute to bringing a change to their city. As we know, hosts can have intense relationships with their neighbors [when they have short-term rentals]. Neighbors can be frustrated with the amounts of tourists walking through their apartment buildings, creating noise or causing other issues. But if the neighbors see that the host brings added value to their neighborhood – community places are built, attractions are renovated, or even more affordable housing for the locals is constructed – the relation will improve significantly.”

Leonavičiūtė said they receive messages daily from travelers and hosts asking when Fairbnb will be available in their areas. They’ve received several requests from North America, as well as some from Malaysia, India, Australia, and New Zealand. “Our vision is to have Fairbnb everywhere, not only in cities but in rural areas where we can increase tourism and give back to the social projects that preserve the beauty of nature and local culture.” She acknowledged, though, that this won’t be easy as they strive to be fair and make real change. They will launch in new cities only once they have insights on locals’ concerns, taxes, policies on short-term rentals, and a community of what they call “fair starters” in place.

In the US, part of their insight-gathering comes from its partnership with Inside Airbnb, a relationship some short-term rental advocates may find controversial as the company has often supported anti-short-term rental legislation. When asked about this partnership, Leonavičiūtė said they have common interests and support each other. “Fairbnb believes that awareness is where it all starts. We have to celebrate the freedom of sharing economy but also be aware of the effects that short-term vacation rental can bring to city housing and communities,” she said. “And this is where the role of data comes to the debate. Having a user-centered approach, Fairbnb is analyzing quite a lot with the help of strong research-based institutions in Amsterdam and elsewhere. We try to understand the cities, their people, travelers and what could be done differently.”

In its efforts to understand each community, Fairbnb encourages feedback from all stakeholders. It launched a social network component to its site for hosts and other community members to collaborate in forums. Leonavičiūtė also said they are also looking for input from property managers about their current short-term and vacation rental experiences and how they want them to change. “Fairbnb is unique because you actually can become part of the cooperative.”

Los Angeles City Council Bans Traditional Vacation Rentals

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December 15, 2018

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los angeles homes short-term vacation rental house

On Tuesday, Los Angeles city council voted 12 – 0 to limit short-term rentals to primary residences for a maximum of 120 days per year, termed “home-sharing” by the city. Homes under the rent stabilization ordinance may not qualify for home-sharing. The ordinance will go into effect July 1, 2019.

Home-sharers must register with the city for $89 annually and display their city registration number in all advertisements. Home-sharers who have been registered for six months or hosted for at least 60 days may apply for extended home-sharing, an exception to allow them to rent their home for an unlimited number of days per year, for a fee of $850 per year. Fees for violations run as high as $2,000 per day.

Hosts must adhere to other rules around building codes, parking, and guest conduct. The city will also collect a per night fee on rentals to support enforcement.

“This outcome is the result of a lack of understanding of short-term rentals and series of disconnected efforts by industry stakeholders,” said Matt Curtis, founder of Smart City Policy Group. “The regulations strip the compliance that comes from professional property managers… In every studied market that bans professional property managers, we see compliance drop and individual owners operate second homes under the radar, without paying taxes.”

The vote comes after more than three years of debate between affordable housing advocates and the hotel industry lobby on one side and short-term rental advocates on the other.

“As we went through this process we have tried to find a way to make a distinction between good short-term rentals and bad short-term rentals,” said councilmember Mike Bonin, who co-introduced the bill, “Good short-term rentals being genuine home-sharing, people sharing their home to make their ends meet, bad short-term rentals being the rogue hotel operators who are robbing the residents of this city of rental housing and making gentrification worse and making the affordable housing crisis worse.”

“We full-heartedly endorse this ordinance,” Charlie Carnow, research analyst for hospitality labor union UNITE HERE Local 11, said in his testimony on Tuesday. “LA has lost over 10,000 units to short-term rentals, worsening our affordable housing crisis, which threatens to push even more people into homelessness.”

“Short-term rentals make up only 1 percent of the rental market,” said Heather Carson, a short-term rental host in the city. “If you eliminated every single one right now and turned it into long-term housing, it would be, by definition, unaffordable because it would be at market rate. You will not be solving anything. In fact, you would put more of your constituents into freefall and housing insecurity.”

According to AlltheRooms.com, there are as many as 16,000 whole-home short-term rentals in the city. According to Discover Los Angeles, 48.3 million travelers visited the city in 2017.

GoLocal Suites Turns VRs into Immersive Shop for American-Made Products

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December 14, 2018

golocal suites northeast suites boston short-term vacation corporate rentals all-american us-made products

In June, vacation and short-term rental provider Northeast Suites launched GoLocal Suites, a line of properties in which every single item is made in America – and made available for sale. Guests can scan the products’ QR codes or browse the SkyMall-like GoLocal Magazine, read about the manufacturer, and purchase of anything from the dinnerware to the mattresses.

“We think there are so many marketing opportunities that haven’t been explored within the vacation rental industry, with unused square footage that was previously a sunk cost,” said Patrick Flynn, CEO of Northeast Suites. The Boston company has monetized that square footage, generating $10,000 in product sales from guests who have stayed in the suites since this summer.

Most products are sold through affiliation programs, and GoLocal earns between 4 and 7 percent in commissions. One product they were not able to find made in the US was a paper towel holder, so they make their own.

The 20 properties in the collection are currently a proof of concept for something much larger: GoLocal’s patent-pending technology that allows the demo and resale of items from rental spaces. One way the company plans to scale the concept is to partner with an e-commerce company to fulfill the orders and provide the products to properties. (Flynn’s four-person team currently fulfills the orders from their Boston office.)

GoLocal has been in discussion with Walmart and designed the concept in part to align with the retail giant’s initiatives to support American jobs and manufacturing. Its product selection includes some familiar names, like Libman and Walmart’s own Mainstays brand. The company also sources from smaller providers, and dozens more have applied to be supplier partners, including local artists.

“At the heart of it, that’s what our initial main goal was, to bring attention to local manufacturers because we think that can be replicated in hospitality sectors throughout the world,” Flynn said. He envisions packages of items curated specifically for vacation rental hosts, such as a set of small items for the kitchen – like a “big Birchbox,” as he calls it.

Right now, anyone can purchase single goods (including the paper towel holder) through GoLocal’s website or app. Among several standard product categories, one selection jumps out: the “Endangered List.” Items in this category had only a single manufacturer in the US, making them in danger of being outsourced should domestic demand decline, Flynn said. “We think people will buy these more consistently and the impact is greater.”

At least two of the products on the endangered list are some of the most popular sold: Bunn coffee makers and a flatware set from Liberty Tabletop. Other best-sellers include blankets, candles, pots and pans, and mattresses. Flynn said the suites acting as a showroom is a great way for guests to try out products in a way they might not otherwise be able to, like actually sleep on a mattress they may want to buy. Most guest purchases are made on the last day of their stay.

Beyond the competitive advantages and additional revenue, stocking its properties with American-made goods yields a significant operational benefit: fewer calls for repairs and item turnover. “These are much higher quality for sure,” Flynn said. “You can feel it as soon as you pick them up.”

Even more so, GoLocal has indirectly created a bigger sense of pride in the office. “Everyone here more and more feels that American pride and wants to build the company up for that reason.”

New Orleans Councilmember Palmer Proposes Vacation Rental Ban

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December 13, 2018

NOLA Short-Term Rental Study Proposes Severe Restrictions

new orleans short-term vacation rental regulations

Update 12/18/18: Councilmember Palmer has delayed the preliminary vote on this measure to January.

Today, New Orleans city councilmember Kristin Gisleson Palmer released details of her proposal to ban non owner-occupied short-term rentals outside of commercial zones, among other restrictions. The city council will hold a preliminary vote on the draft in their December 20 council meeting. If passed, the ordinance could wipe out nearly half of the existing permitted rentals in the city.

The following is the licensing structure detailed in the city council’s post on nola.gov:

Residential License Requirements:

– Homestead Exemption

– Owner must be on property during duration of STR rental

– Three license limit per property

Commercial Single Unit:

– Homestead Exemption

– One license per unit

Commercial Small Scale: (commercially zoned property with fewer than 5 residential units)

– Must reserve first floor for commercial use

– One license per residential unit

Commercial Large Scale: (commercially zoned property with 5 or more residential units)

– Must reserve first floor for commercial use

– 1 license per residential unit

– STRs cannot exceed 30 percent of residential units.

– Each STR unit must be matched with an affordable housing unit.

Philip Minardi, HomeAway’s director of policy communications, said in a statement that New Orleanians want a holistic approach that addresses community concerns and protects locals’ right to earn income through their vacation rentals. “Unfortunately, the extreme proposal released today does not reflect that widespread desire and takes the conversation around fair and effective policies in the wrong direction.”

“The Palmer Ban, if passed, would place New Orleans on a list of cities that have missed the mark when it comes to short-term rental rules,” he continued. “San Diego’s primary-only law was recently repealed following an outcry from local residents, and Palm Springs voters voted down their draconian primary-only law this summer. Palmer’s plan would place New Orleans at odds with forward-looking cities—like Seattle and San Antonio—that have recognized successful policies must include a legal pathway for all types of responsible short-term rentals to operate.”

Palmer’s proposal follows the September recommendation by the city planning commission based on a short-term rental study. The city council ordered the study in May and at the same time issued a moratorium on accepting new short-term rental permits to most non-owner-occupied properties in an “Interim Zoning District” for nine months. During that time, 471 permit applications have remained in limbo.

Under the current ordinance passed in April of 2017, short-term rentals with approved permits can operate in certain city zones based on rental type. Accessory short-term rentals in which the owner remains on site can operate in every zone (except the French Quarter) with no limit on the number of nights available to rent. Temporary short-term rentals in which the owner is not present may be rented for a total of 90 nights per year, can operate in most zones, and must have an in-town property manager available at all times. Commercial short-term rentals are allowed in nonresidential zones even if their owners are not present, and there is no limit to the number of nights that can be rented.

Of the 3,708 active permits listed in the city’s database, 1,217 are for accessory rentals, 1,087 are for commercial rentals, and 1,400 are for temporary rentals.

A Case for Vacation Rental Advocacy: The direct impact of local regulations

Airbnb’s acquisition of a property management company leads to concerns among property managers and hosts about Airbnb’s intentions

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December 12, 2018

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This week, Airbnb announced its acquisition of Luckey Homes, a property management company based in France. The news comes on the heels of Airbnb’s announcement a few weeks ago that it is looking at the home-building business through a new initiative called Backyard. Airbnb’s Backyard plans detail a specific intent to build “fully prefabricated homes.” The combination of announcements is causing both property managers and hosts who list their homes on Airbnb to question the company’s direction and motives.

Update: Airbnb clarified, “Backyard isn’t a home or a house, it’s an initiative from Samara to rethink the home from a systemic perspective. It’s in the prototyping and design phase, and the output or model is not yet confirmed. It is not confirmed if Airbnb will eventually sell homes or to whom they might be sold.”

As Airbnb moves toward an IPO in 2019, acquisitions are expected. However, acquisitions designed to compete directly with its core base of owners and property managers (PMs), whose home listings built the marketplace, are seemingly out-of-character for the company that touts its dedication to its community.

“As an Airbnb host, I think that’s crazy,” said one European Airbnb superhost. “I already feel there’s not much love left [from Airbnb], but once Airbnb starts buying PMs, good luck.”

Update: An Airbnb spokesperson provided the following statement about its acquisition of Luckey Homes:

“Property managers are an important part of our host community, and we’ll continue to invest in partnering with them to help grow their businesses. We’re working to build the right tools for the concierge services and property management ecosystems—to operate seamlessly through Airbnb and to provide the best experience to guests. Bringing in Luckey, and their expertise, as part of the Airbnb team increases our ability to test, learn more quickly, and build capabilities hosts need.”

According to Simon Lehmann, vacation rental industry expert, founder of AJL Consulting, and former president at Phocuswright, “This acquisition raises several questions. Urban PMs that depend on Airbnb-generated demand have to ask [themselves] the question about the future of their partnership. Does this acquisition cannibalize the marketplace, and if so, how? If I were an urban PM solely dependent on Airbnb for bookings, this would give me sleepless nights.”

Skift’s Deanna Ting reported on the acquisition, “Until now, Airbnb has largely acted as more of a platform by which professional property management companies and managers can market and distribute their listings . . . However, buying a concierge services provider/property management company like Luckey Homes suggests that, perhaps, Airbnb is considering a role that extends the company beyond simply being a marketplace, and more of an active provider of private accommodations.”

Turnkey’s John Banczak on Airbnb’s acquisition of Luckey Homes

We reached out to John Banczak, Turnkey Vacation Rentals co-founder and chairman, for his insight into Airbnb’s acquisition.

Are you surprised by this move?

John Banczak (JB): No, there is more money flowing through management companies than distributors like Airbnb or HomeAway. Management makes 2X the take rate of OTAs on 100 percent of the bookings. OTAs make half the take rate, only on the share they generate. To the degree “management” fits a certain mold, it was a matter of time before OTAs jumped in. What’s the mold? No inventory risk, management through technology (vs. armies of headcount), high take rate, scalable costs . . . Asset-light to use the over-used phrase. If it is no “harder” to provide management than just distribute, why not do both?

There are added benefits—by controlling the entire system, no one part is as likely to leave. You can deliver consistent hospitality without hoping someone else does it for you. The big question for your readers is likely what does this mean for small PMs around the world? Is Airbnb going to steal your business out from under you? If other OTAs follow suit, are the days of the small local PM over? I don’t think so. If I was a small PM providing bad service or charging a high commission I’d be nervous, but they should be already. It will always benefit OTAs to have a broad property selection, and local PMs with loyal owners will still get valuable distribution from these sites.

Will this make other PMs less likely to use OTAs to get business?

JB: Everyone wants more traffic to their own website. That won’t change. Dropping a distribution channel because they offer a service? It doesn’t make financial sense on either side. The fastest way for a PM to lose home owners is drop distribution channels. I would not want to be anywhere near Steve Milo right now, but I don’t expect any real fallout or loss of inventory for Airbnb.

OTAs have been providing more “management” style services for years, whether it is consumer awareness and marketing, payment processing, online reservation tools, tax remittance, damage policies, etc. Now they will schedule a housekeeper—why not?

Does it make Turnkey nervous?

JB: Not at all. We’ve built the better mousetrap. We’ve learned a lot and are years ahead with our platform. We’re fine-tuning an engine, not duct-taping wheels onto a prototype.

Does Airbnb understand property management?

Banczak’s point about “building a better mousetrap” is important. Providing consistent quality and management services for owners and guests is a very different undertaking than building a marketplace. Property management is a hands-on, service-based industry, and one in which Airbnb has little experience.

Trust is a Critical Component for a Vacation Rental Marketplace

The world of vacation rental marketplaces has not been a stable one for homeowners and property managers. TripAdvisor purchased market leader FlipKey and subsequently lost focus on technology and service leading to a substantial decline in both revenue and trust from its suppliers, leaving a hole that benefited Airbnb.

VRBO.com, once the go-to source for vacation rental reservations, sold to HomeAway, and then to Expedia. Under the Expedia umbrella, both managers and owners are reporting a substantial drop off of booking activity that even HomeAway’s most avid supporters are now openly discussing. (Tune into 32:00 in this video from the Phocuswright conference.)

What TripAdvisor, HomeAway—and now Airbnb—do not seem to fully grasp is that success in distributing vacation rentals is based on both bookings and trust.

When vacation home owners and managers trust and benefit from a marketplace, they choose to list their homes on the platform. And these listings are the sole reason that travelers use these sites . . . and the reason for the resulting high valuations of these companies. When a marketplace begins to erode that trust, inventory shifts to more trustworthy channels.

Takeaway and Beneficiaries

The overwhelming takeaway for managers and hosts? Do not put your eggs in one basket. Relying on one channel for bookings is both dangerous and irresponsible in a space that is rapidly changing.

The most likely beneficiaries of Airbnb’s move into property management and/or franchising of management services?

HomeAway: Even though managers and owners are reporting a decline in bookings from HomeAway’s sites, HomeAway can now make a strong argument that at least it is not competing directly with vacation rental managers and owners. HomeAway could enter 2019 with a strong claim as the most trusted, consistent marketplace for vacation homes.
Google: As Google is expected to launch the first iteration of its vacation rental booking platform in the first quarter of 2019, experts expect to see inventory move swiftly onto the Google marketplace, as managers already invest heavily in Google Adwords products. In addition, it’s price-compare feature will expose the guest fees being charged by other sites. Even though the take rate is expected to be high, Google has a history of transparency that resonates with inventory providers.
A TBD Disruptor: Eroded trust in TripAdvisor, decreasing trust in an Expedia-owned HomeAway/VRBO, and concerns about Airbnb’s future as a long-term marketing partner are paving the way for a transparent guest-and-supply-friendly marketplace.

Potential Technology Play

It is possible that the acquisition of Luckey Homes is a technology play for Airbnb rather than an entry into property management.

According to Lehmann, “Interestingly, Luckey Homes built a proprietary property management software, which could be valuable to other urban property managers who currently use third-party technology. So maybe the focus [of the acquisition] is on technology and not actually on the property management piece.”

Lehmann added, “Is Airbnb becoming a property management company? I doubt it. It could just be a technology play to bring further value to its partners.”

Update: See comments below.

As HomeAway evangelist, John Suzuki, famously preached: “Judge us not by our words, but our actions.”

As Airbnb moves toward its IPO, the vacation rental industry will be able to more adequately evaluate its intentions through its future acquisitions and new product launches than through its press releases.

Former Sabre CEO Sam Gilliland Joins BookingPal Board of Directors

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December 12, 2018

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sam gilliland former ceo sabre bookingpal board of directors

BookingPal is pleased to announce the addition of Sam Gilliland to its board of directors. Gilliland is the former chairman and CEO of travel industry technology giant Sabre Corporation and Travelocity.com, and currently the CEO of Colorado Springs-based IT service management company Cherwell Software.

While at the helm of Sabre, Gilliland led more than 10,000 employees in 60 countries, spanning all segments of the travel industry. In his decade-long service as the chief executive of Sabre, he pioneered the application of technology and customer service to help drive higher levels of productivity across organizations. Recently, Gilliland has served on several private and public company boards, including as lead director at Rackspace Hosting. He also served as an executive partner at Siris Capital, a technology-focused private equity firm. Gilliland was appointed by President Barack Obama to the President’s Management Advisory Board.

“Sam brings a deep industry experience of leading world-class travel technology organizations to BookingPal’s board of directors,” said Alex Aydin, BookingPal founder and CEO. “His leadership will add valuable expertise to the board and will help BookingPal drive innovation and continued growth as the vacation rental industry’s technology leader. I look forward to working with Sam to bring our visions to life.”

“BookingPal provides the most advanced and comprehensive vacation rental distribution technology in the industry to drive value and success for our customers,” said Gilliland. “I know first-hand the critical and growing role technology plays for our customers. It’s a critical solution for our property managers, and BookingPal certainly has un-matched capabilities.”

To find out more, please visit bookingpal.com.

About BookingPal: BookingPal is the leading provider of distribution technology solutions for the vacation rental industry. BookingPal helps property management companies increase revenue, occupancy, and efficiency through a fully managed distribution platform. The platform provides smooth, continuous, and real-time connectivity between the world’s leading property management software systems and consumer travel websites such as Airbnb, Booking.com, Expedia, Google, HomeAway/VRBO, and TripAdvisor.

VRMA: Working to Raise the Bar

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Mike Copps

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December 12, 2018

vrma working to raise the bar mike copps

It’s always great to have the opportunity to contribute to an issue of VRM Intel. The Vacation Rental Management Association (VRMA) is excited to be partnering with the VRM Intel team and serving as the presenting sponsor of the upcoming Vacation Rental Women’s Summit this coming February in New Orleans. Thanks to VRM Intel for this opportunity and for the continued support of VRMA. The more education we can help bring to the industry, the better. Education is the very foundation of VRMA.

We are, after all, a trade association built and governed by vacation rental managers for vacation rental managers. Since 1985, and now more than ever, VRMA has been focused on raising the level of professionalism in the industry and distinguishing our core members—traditional professional vacation rental managers—from the bad actors and outliers who are drawing so much negative attention to our industry. Our education and advocacy efforts, driven by our board of directors, all have in mind the goals of raising the bar, elevating the industry, and advancing the great work this industry has been doing for decades. That’s central to our role in the Women’s Summit and of all that VRMA does.

Another example of these efforts is our brand-new Vacation Rental Management Certificate program. Launched in July, this program provides vacation rental managers the opportunity to participate in a comprehensive online certificate program designed specifically to acknowledge and differentiate our professional membership.

This assessment-based program provides a complete view of the roles and responsibilities of a vacation rental manager working in the industry today and is intended for managers (or above) who are in charge of multiple departments in their companies.

This program is not a new concept; this version has been in development for some time. In 2016, the VRMA board of directors commissioned a study to perform research and analysis on implementing a professional certificate program in the vacation rental management industry. This research confirmed that there was and is a high demand for a professional program to designate vacation rental managers who have demonstrated a standard of industry expertise. The study found a high level of support for VRMA, as a nonprofit trade association, to provide this certificate program.

That last point was key; as the only nonprofit industry association focused solely on vacation rental management, VRMA’s motives are clear. It is not a for-profit entity; there are no shareholders or principals. All proceeds from VRMA programs go right back into VRMA and its members. We want to provide more value to our membership through best-in-class programs like this and increased educational offerings both in person and online.

VRMA then began developing the program; key to this process and to the program’s success was the participation of over twenty subject-matter experts in developing the content and assessment. VRMA arranged focus groups of successful and experienced vacation rental managers and industry experts to articulate the subject areas and competencies that should be covered in this program. VRMA subsequently sent a survey to its membership to validate the work of these experts.

The industry experts worked closely with a VRMA staff certification specialist and an instructional design consultant to ensure that the content aligned with best practices in certificate development and principles of adult education. The VRMA board of directors reviewed the program’s content before finalizing it.

The result is what is available right now: a high-value program for all stakeholders that raises the standard of awareness and professionalism in the vacation rental industry, delivered in an accessible online format to maximize engagement.

The program contains five comprehensive online modules with information on topics ranging from accounting and finance to maintenance, marketing, and guest and owner relations. Critical components of the business, such as housekeeping safety standards, reservations and sales training best practices, compliance with employment laws and local and federal regulations, and management of dynamic relationships with owners and guests are just a few of the topics covered in this program.

To receive the certificate, an applicant must complete all five modules and achieve a passing score on the subsequent skill assessment. Those who achieve a passing score on the assessment can utilize the designation Vacation Rental Management Professional (VRMP) after their names and signature blocks to proudly display their accomplishment to colleagues, clients, and potential owners and guests.

Individuals don’t have to take the full exam to utilize these modules; they are also available for purchase on an individual module basis. Companies can also use these modules as part of their training and on-boarding.

Initial feedback has been very positive across the board. In addition to the high value that our educational content is bringing, many of our members have already taken and completed the assessment and earned their VRMP designation. These individuals will be recognized at our fall conference in Las Vegas and throughout the year.

We are very proud of this program and we are looking to use it as a building block for more to come. We’ll be announcing complementary educational offerings and programs in the very near future. Be sure to join VRMA if you haven’t already, or follow us on social media to stay up-to-date on our latest offerings.

We look forward to helping you continue to grow your association. For more information on the Vacation Rental Management Certificate program, visit www.vrma.org/certificate.

PointCentral Sponsors Season 2 of Matt Landau’s Unlocked Podcast

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December 12, 2018

unlocked podcast season 2 matt landau pointcentral

Matt Landau, vacation rental thought-leader and host of A Sense of Place, the world’s first vacation-rental themed travel show, today announced the launch of season two of his podcast series Unlocked. The 15-episode season, sponsored by PointCentral, takes listeners around the world, from hotel lobbies in Phoenix, Arizona to beachfront bungalows in Bali, Indonesia, to meet the minds of some of today’s most innovative vacation rental businesses.

Each episode introduces one vacation rental pioneer and aims to dive deep into one specific topic, best practice, or innovation that has altered their course for success, changing the playing field for listeners involved. Staying true to the diverse nature of the vacation rental movement, episode themes range from technology to regulation to marketing to cleaning, all structured around action items intended to be replicated by listeners and scaled.

“Since our inception over seven years ago, PointCentral has focused on how to bring IoT hardware and software together into a business-focused solution that allows vacation rental managers to both be more efficient and deliver the experience that guests want,” explains Sean Miller, president of PointCentral. “Matt has always been a champion of ‘collective wisdom’–that good information, when shared, creates better outcomes for us all–and we are excited to add our perspective to this collective wisdom in order to help vacation rental managers focus their limited resources on the high-value activities they need to do, and allowing automation to handle as many of the lower-value tasks as possible.”

According to Luis Gil, the podcast’s producer, season two of Unlocked builds on important lessons from season one. “When looking at our analytics, we noticed that the most popular episodes were shorter in length–likely because our listeners are busy running their small businesses. And when pouring over feedback and reviews, we observed that people loved actionable insight and things they could implement immediately. So together with Matt, we decided to double-down on both of those elements making for more pointed and impactful episodes. PointCentral is a company that unlocks things and makes vacation rental businesses better, so in this partnership, we are definitely both singing the same song.”

Unlocked season two episodes will be released weekly for 15 weeks. Below is a summary of the first two episodes this season.

Episode 1: Meet Bernardo Retana of Otium Residences in Marbella, Spain. With a background in hospitality and finance, Bernardo has impeccably high standards when it comes to customer service from the moment of contact through arrival, departure, and beyond. In this interview, Bernardo shares the powerful and perhaps limitless uses of a simple smartphone app his entire organization now uses to ensure every single guest has a VIP experience.

Episode 2: Lawrie Lawrence of Stay Lake Norman in North Carolina comes from the world of real estate, which explains why his vacation rentals are lake front and center. But everyone knows the value of location. In this episode, Lawrie shares a totally unexpected tactical investment in recreational amenities — one that floated his brand to the top of all lakefront competition.

To listen to Unlocked, simply subscribe or download on Apple Podcasts, or your favorite podcasting app. To learn more, please visit: vrmb.com/unlocked-podcast/ or pointcentral.com/vrmb/

About PointCentral

PointCentral, a subsidiary of Alarm.com (Nasdaq: ALRM), provides short and long-term property managers of single-family and multi-family assets with an enterprise-class solution that monitors and controls smart home technology across all properties in their inventory over a best-in-class secure and reliable cellular network – increasing property awareness, reducing operational costs and improving resident satisfaction. PointCentral’s solutions allow property managers to realize operational efficiencies, enhancing the asset for guests and residents. For more information, please visit PointCentral.com.

The Power of “I” in the Vacation Rental Industry

By

Brett Parry

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December 11, 2018

streamline vacation rental software power i

By Brett Parry, CMO, Streamline Vacation Rental Software–Many of us have heard “Do what you love” or “Follow your passion.” For most people, these remarks represent a fantasy that is not achievable. This sudden realization can turn a smile into sour disappointment. One of the most striking things I have experienced over the past thirteen years in the vacation rental industry is that we are here because the industry stole our hearts, and we love what we do. It is an industry packed with growth, innovation, exploration, independence, opportunity, community, and more. As our industry evolves, it is important that we fight to protect it. Entrepreneurial spirit has been the fire igniting our success, and the same fire and sense of community can ensure this industry thrives.

Inspire

Our ultimate mission is to inspire people to travel and to book vacation rentals. We are changing travel around the world. We offer a new and valuable travel experience for many people, especially families and groups. The traditional hotel stay is great, but it is limiting, and it’s only one possibility within the entire travel sector. Over the past several years, vacation rentals have become mainstream. Our actual market size is expanding, but we need to continue spreading the word while elevating the guest experience.

Infrastructure

As with any sector, quality infrastructure can mean the difference between success or failure. In our industry, we need to identify the most effective organizational and community structure to combat current and future challenges. There are powerful, large-scale forces aligned with local grassroots movements that threaten the very existence of vacation rentals. This is a fight we should all be in together. Reversing legislation is more difficult than establishing favorable legislation. We need to form and support the appropriate networks and associations to protect the industry and to win local battles. The best possible approach is to be proactive instead of reactive. We need organized, coordinated efforts—both internally and in our communities—to take on this issue.

Influencers

It is time for our people to step up and lead. It is critical that industry voices collaborate to refine messaging and organization. Our ability to react and adapt to any situation needs to become more sophisticated, and that will only happen through proper leadership. The influential companies in our industry must align for the greater good. We compete on many levels within the industry, but we also compete against other industries and agendas.

Innovation

As the world progresses technologically and customer expectations increase, the vacation rental space must innovate at a rapid pace. We are competing for a larger market share of the overall travel segment. Technology is at the forefront of helping property managers stay efficient and provide an optimal experience to travelers. We can elevate the overall quality of a vacation rental stay through innovation. We must be diligent because competing against traditional travel accommodations requires a reconditioning of the traveler’s mind. Beyond technology, property managers need to be innovative in their overall offering and traveler experience.

Independence

At the heart of our industry is the professional property manager, and it is important they diversify and stay independent. While the OTAs provide our industry with excellent value, it’s important that we all place emphasis on the local property manager. Local companies are essential to building relationships with travelers and delivering a special vacation rental experience. On top of the booking experience, guest services, and general stay, there is the daunting task of on-site operations. Providing optimal housekeeping and timely maintenance is especially important to travelers choosing vacation rentals for their travel experience. We need companies to be healthy, sturdy, and valued. We encourage property managers to build their brands, build their guest and owner relationships, and evolve their brands in every way.

Information

In our industry, we are gaining access to usable data for statistical analysis like we never have before. Converting this data into usable information will become more important as we make decisions on how to communicate and move forward. There are entire companies that utilize, distribute, and interpret data. We should leverage this data influx to optimize the direction of our space and our businesses. It’s important that we be responsible with data and protect it in every way we can.

International

Among the many remarkable elements of our industry, its vastness is possibly the most exciting. Most of us in the vacation rental space love to travel, explore, and experience new things. Connecting to the world through travel is really something special, and we have the privilege to do so. Beyond this, the opportunity to expand our market size is virtually limitless. The global nature of our industry offers spatial, product, and technology expansion because every market has different demands. We have become more sophisticated, but as we continue to evolve, it will be interesting to speculate on how international markets, processes, and technologies will collide.

Integration

Consumers, especially the millennial group, are looking for instant gratification. Delivering real-time responses to every consumer is paramount. Integrating technology, from property management systems to the OTAs, distribution channels, CRM systems, and any ancillary service, is a big part of what will make us successful. This integration will help us become more efficient and will help companies stay lean and face upcoming challenges.

Inventory

Vacation rentals as an accommodations alternative are one of the most impressive products sold in the worldwide economy, including cars, clothing, technology, art, food and beverage, movies and more. There is something special about a vacation home. Home is where the heart is, and unlike other travel and accommodation options, you really do get to experience a home away from home in a vacation rental. This is true for condos, villas, and cabins alike. Being in a property with your family that was individually decorated by a private homeowner is something unique. Remember, the true keeper of the inventory is either a direct property owner or a professional property manager. Our product is unique, dynamic, and versatile.

Inflate

At the recent 2018 Streamline Summit, we used the hot air balloon to symbolize “rising up” as a metaphor to represent our market size. Everybody knows the industry is growing, but it may fly under the radar that our balloon (market) has a ton of room for expansion. The major brands in our industry have done a great job of increasing awareness, but the expansion has only just started. We are taking market share from the general travel space, and we are growing the market by attracting new travelers. Branding our industry is key to accomplishing this.

Investment

The last topic in this article is investment, because the amount of money pouring into the space is astronomical. We have seen many acquisitions over the years, and the trend is not slowing. We see the acquisition of property management and technology companies and a general movement toward consolidation. With the influx of capital, the level of sophistication in vacation rentals has potential to rise. This is excellent for the overall vacation rental experience, but it’s essential that companies keep up with technology while evolving internal processes and procedures.

Brett Parry Streamline VRS Chief Marketing Officer — **Brett Parry, Streamline VRS chief marketing officer**

About Streamline and the Power of “I”

Streamline is a visionary technology company revolving around people and their talents, needs, and passions. The power of “I” is our culture that brings individual talents, knowledge, and brilliance to the forefront in a dynamic collective setting. Every individual, whether a Streamline team member or a valued Streamline customer, is empowered to contribute to the evolution of its solution-focused technology.

Baltimore City Council Issues Final Vote to Pass Strict Short-Term Rental Limits

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December 7, 2018

Baltimore city council voted 10 – 3 to issue final approval a bill limiting short-term rentals to primary residences. One additional dwelling unit per owner may be grandfathered under the new limitations only if it was purchased by December 31 and has successfully executed a booking transaction by the same date. Both will require licenses to operate.

The bill also includes the requirement that short-term rental operators and hosting platforms collect and remit the hotel room tax of 9.5 percent, which goes into effect on December 31, 2018.

All other license requirements will take effect on December 31, 2019. Licenses will cost $200 every two years and require that operators post their license numbers in advertisements, provide emergency contacts to guests, and other rules.

Hosting platforms must verify hosts have valid licenses before listing their properties on the platform and display the license numbers in listings.

Rachel Indek, owner of Bmore At Home Properties and founding member of the Baltimore Hosts Coalition, posted in the organization’s Facebook group after the vote, “It’s over… For now! We lost! It was a good run. We shall recoup and figure out our next step.”

“It’s disappointing that city council would pass legally unsound regulations that negatively impact Baltimore City residents,” an Airbnb representative said in a statement. “Home sharing is a financial lifeline that helps families pay their rent, mortgage, and other bills. This law will only take money out of the community and help hotel executives further take advantage of the city.”

Baltimore’s department of finance estimated that the primary plus one license limit would reduce short-term rentals in the city from 2,105 to 1,478 and that those remaining could generate between $587,000 and $1.01 million annually in hotel room tax revenue.

Council members Bill Henry, Zeke Cohen, and Isaac “Yitzy” Schleifer voted against the bill, and Shannon Sneed and Mary Pat Clarke abstained.

Las Vegas City Council Bans Vacation Rentals

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December 7, 2018