Keys to Successful Content Marketing for Vacation Rentals

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October 29, 2017

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Vacation rental owners and managers are preparing to fight back against the changes imposed on them over the past two years. The Association of Vacation Rental Owners and Affiliates (AVROA) is being reimagined and reinvigorated, and 2018 will be the year vacation rental owners begin to have a strong voice, active education, and participation in the vacation industry.

On September 8, in offices located on the thirty-first floor of the Chicago Board of Trade Building, a group of owners, managers, and vacation rental (VR) industry companies from the United States, Canada, and Europe met to take the first step toward creating AVROA 2.0. All had a shared purpose: to discuss how AVROA could do more to create value for its members and support the industry. Here are a summary of what happened in that meeting and a peek at what you can expect in 2018.

Effective January 1, 2018, AVROA will formally become a nonprofit agency. The association has created a fifteen-person board comprised of VR owners, managers, and affiliated companies. April Salter, founder of the Just Say No to VRBO Service Fees movement, will be AVROA’s chair; Rod Fitts, founder of AVROA, will be vice chair; and Ralph Moorhouse, a VR owner, will be treasurer. Five subcommittees, each chaired by AVROA board members, also were created.

These subcommittees will focus the association’s efforts in five key areas: education, member engagement, marketing, advocacy, and listing services relations. After laying some of the initial groundwork, these committees will expand to include others who have volunteered to help. To give you a glimpse of the future, the chairs of the education, marketing, and advocacy subcommittees have written summaries of their objectives for 2018.

AVROA’s Education Priorities

Our task in Chicago with the education subcommittee was to work out how we could create value for AVROA members by first researching what is already being offered and then committing to create a library of materials for members.

Over the past few years, many new providers have launched training products that advertise how owners and managers can increase income and occupancy while significantly reducing workload. Although this material is what owners and managers are looking for, sifting through courses, downloads, and webinars is time-consuming at best, and figuring out which courses are worth the investment can be frustrating and confusing.

Initially, we believed the best course of action was to find all available content and establish some form of evaluation process. As time went on, our thoughts turned to how we could help launch AVROA in January and provide some real value. We all knew of courses and training programs being delivered by prominent industry players with vast experience, so we decided to offer an evaluation of these programs at the outset and use this evaluation to create a set of standards as a benchmark. Thus, our work begins.

The goal for 2018 is to create a solid education hub through which AVROA members can search a database of books, training programs, and short courses while also having access to a library of downloadable resources. We also turned our attention to the different types of members who would benefit from these materials, from the new, independent owner needing basic but thorough information to the professional owner or manager seeking listing site independence. Collating all these resources is going to be a challenge, but we are an enthusiastic and motivated team committed to bringing the best to this new venture.

Heather Bayer (chair), Trevor Wiesnewski, Ryan Liebentritt, Ralph Moorehouse, and Maria Rekrut, AVROA Education Committee

AVROA’s Membership and Marketing Priorities

The year 2018 will be a leap forward in AVROA member involvement. We want our members to be engaged in AVROA, not just standing on the sidelines. We are assembling an all-star cast to train our members on best practices in areas such as guest relations, operations, marketing, and investments. AVROA will be the hub for members to gain elite training for the VR industry.

Our industry needs a place to meet, connect, and share wins and losses. We are excited to create this place with our AVROA Members Community. Not only will this group serve as the ultimate FAQ sounding board, but members will have a place to network with each other. The AVROA Members Community also will help unite owners and managers under a common mission and with a common voice. Industry news will be aggregated into this community, consolidating the many sources owners and managers use today.

AVROA’s new website will help members identify why they are joining AVROA, and it will deliver a best practice guide for our trainings. This guide can be customized to members’ needs. Thus, whether members are just getting started with their first rental, already own and manage a handful of rentals, or have a property management company, they can rest assured that the recommended training will be on point, meet them at their level, and help their business grow.

The best training programs in the world fail, however, if nobody knows they exist. Our marketing committee is here to make sure members are in the loop as each training tool or resource is announced. We also are tasked with spreading the AVROA mission and bringing in new members to help strengthen the community.

Jason Beaton (co-chair), Annie Switzer (co-chair), Barbara Wilde, Erin Sandoval, April Salter, AVROA Education and Marketing Committee

AVROA’s Advocacy Priorities

The best way to begin a discussion of our plans is to state who we are and what we stand for: We are property owners and managers. We are small business owners, kitchen-table businesses, and sometimes mom-and-pop businesses. We are the boots on the ground, the ones responsible for paying bank loans and property taxes, for keeping the paint fresh and creating amazing vacation environments. We are the ones who, in all likelihood, bought our properties because we love being there. We are passionate about them. Arguably, we are an odd bunch, and we get really excited about participating in the human interaction of helping the traveler plan that most precious event—a vacation.

We are small businesses, but there are tens of thousands of us. Over the past eighteen months, it has become clear that VR owners and managers need a stronger voice in the industry. Working together, we can have a greater impact. We seek to earn your trust as an organization. We seek to be your voice, your advocate for change, your mouthpiece, and your warrior.

AVROA’s advocacy roles will be as follows:

We will be spokespersons for VR owners and managers when issues concerning our industry arise. We will issue press releases and statements and speak with a unified voice to online travel agents, media, and policy makers about issues that are common to our members.
We will provide resources to help members battle unreasonable local ordinances and harmful zoning proposals. These tools will include sample letters, tips to organize opposition, and advice about how to talk to elected officials.
We will monitor and report on issues that could affect large segments of our membership.
We will develop partnerships with organizations and companies that support our policy positions.

We will focus on shaping our advocacy positions and launching tools for our members in the second quarter of 2018.

The time is here. We need a voice. We need education. We need advocacy. We need a way to network with each other and provide leadership for our industry. If you are interested in advocacy or know someone who is, contact Byron Ackerman at byron@ackerman5.net.

Byron Ackerman (chair), Erin Sandoval, April Salter, AVROA Advocacy Committee

By the end of the Chicago meeting, there was a growing feeling among VR owners and managers, one that many had not felt in a while. It was a feeling of hope and a belief that real tools may have emerged from this meeting and that owners and managers will be able to have a voice in the market and re-establish those values that many see slipping away.

Setting Managers up for Success in the Vacation Rental Industry

By

Sue Jones

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October 29, 2017

At a time when unemployment rates are at their lowest in decades and talent is harder to find, it is now more important than ever to focus on growing and developing management talent within your company. Both new and experienced managers require ongoing coaching, development, and support to strengthen their knowledge and management skills. Your managers have the greatest impact on retaining and engaging your workforce. Let’s make sure they are successful.

When it comes time to promote someone from your team to a management position, ask yourself the following questions, “How have I set my employees up for success? And are they prepared to step into a management role?” Based on my experience, the answer to these questions usually falls somewhere in between “kind of” and “sort of.” We naturally assume that when employees are good at what they do they will be great managers.

We all know that managers are key to employee engagement and retention, yet we often find that they are not equipped with the knowledge and tools they need to successfully lead people. A recent study by Gallup found that up to 70 percent of the variance in employee performance can be attributed to the quality of their managers.

Managing others successfully requires more than just technical experience. Developing your manager’s confidence to select, hire, and retain the right team; evaluate and manage the teams’ performance; and the manager’s ability to provide ongoing feedback is key to ensuring his or her success. Listed below are five critical skills managers need to develop and become adept to ensure their success as leaders in your business.

The ability to identify skills and to make good hiring decisions.

I think a lot of us naturally assume that managers are skilled at selecting, interviewing, and making good hiring decisions just because they are “managers.” Given that most businesses spend a significant amount of their operating budgets on workforce expenses, it is interesting to note that very few measure the success of hiring managers in their ability to select the right candidates.

Managers need coaching and training on interviewing, what to ask, and more important, what not to ask. They also need tools and resources to assist them with the process. Creating an interview evaluation guide or score card, and training your managers on how to use these resources, can help level the playing field and create an objective basis for comparison of the candidates, which can lead to better hiring decisions over time.

Having the right people in the right place at the right time starts with your manager’s ability to assess his or her team’s knowledge, skills, and abilities.

Delegating to Others

Have you ever heard of the seagull management style? Ken Blanchard, coauthor of The One Minute Manager says, “The most common management style is seagull management. A manager gives you a task, disappears, and then only returns when you make a mistake—they fly in, make a lot of noise, dump on you, then fly out.” Providing work assignments and delegating to employees is integral to getting things done efficiently and effectively. Managers do too much themselves stating:

It is quicker to just do it myself than to take the time to train someone else right now.
My team is too busy; I can do the work myself.
I want it done right, so I will do it myself.

These are all common reactions when it comes to delegating. One thing I often share with managers is to focus on doing only the work that you can do to focus on doing the work that only you can do.” Effective delegation skills provide managers with more time to focus on high-payoff activities, things that are important to work on, and result in revenue for the business and impact the bottom line.

Time is a precious commodity. Developing your manager’s ability to delegate is key to his or her success.

Managing Performance, Coaching, and Providing Feedback

Managing performance is more than just a once-a-year performance review. It is an everyday activity that managers need to embrace. Employees want clarity about what is expected of them. They want goals and feedback about their performance, and they want recognition when they achieve those goals.

In a recent study by Mercerii the authors reported that only 12 percent of employees rank their managers as excellent at helping staff improve performance, and just 11 percent reported that their managers excel at coaching, supporting, and developing staff. How well do you think your employees would rate your managers on this skill set?

In a recent article in the Spring 2017 issue of VRM Intel Magazine, which focuses on managing employee performance, I provide several tools and resources to assist managers with managing performance. Introducing practices such as coaching journals, one-to-one meetings, competency anchoring, and “Keep, Start, Stop” techniques into your managers’ tool kit is a great start toward developing their self-confidence with coaching and providing feedback.

Decision-Making Skills

New managers rarely come to the table with “honed” decision-making skills. We are asking more of our managers. We want our managers to be good at motivating, engaging, and retaining employees, and we want them to make informed decisions. A manager’s indecisiveness and inability to make a timely decision can create chaos and confusion, greatly impeding the productivity and efficiency of the staff.

Most people acquire good decision-making skills through trial and error. This is often accomplished by providing your managers with decision-making opportunities. Whether it is selecting new software, making a hiring decision, or something as simple as approving schedule changes, they are all opportunities for managers to practice and improve their decision-making capabilities.

Clearly defining the level of decision-making for your managers is key. Managers must be capable, and they also need to feel confident in their ability to make decisions quickly within the guidelines of your company policies and structure. Letting your managers know what kinds of decisions they can make and the types of decisions they need to run up the flagpole is a great place to start to ensure your managers’ decision-making success.

Emotional Intelligence

The ability to understand and manage one’s own emotions and the emotions of others is something your managers need to develop. The importance of emotional intelligence (EQ) is now being recognized as an important leadership skill for managers, even more so than their IQ.

Unfortunately, far too many people lack basic emotional intelligence. They simply don’t have enough self-awareness or the social skills necessary to work in fast-paced, constantly changing environments. Your managers need to become adept at recognizing their emotions, understanding what their emotions are telling them, and noticing how their emotions affect employees around them. On the flip side, managers also need to understand their perceptions of others and how others may feel to be able to manage work relationships more effectively. Without an ability to see other points of view, managers will struggle to pull a team together to produce the results you desire.

The good news is EQ, unlike IQ, can be improved upon. Developing your employees’ competence with self-awareness, self-regulation, motivation, empathy, and social skills is a worthy investment to ensure their success as managers.

Training, developing, and growing your internal management team is a competitive business advantage and well worth the investment of your time and resources.

Branding Your Vacation Rental Company with a Customer Focus

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October 29, 2017

Online bookings in the vacation rental industry have been on the rise for a while. We are hearing from clients that anywhere from 50 to 85 percent of their bookings have been online this year. What that tells me is that when people call in to book over the phone, they require and expect more from their service providers. Long gone are the days of easy bookings where the caller calls and says, “I want to book this home.” Instead I hear that people are calling about pricing and availability. Their minds have not been made up already that they are going to book at all.

Recently during a secret shopping project that I conducted, I found that in three out of five calls, the agents never asked what brought me to the area or what I was looking to do. They gave me “canned” information on the amenities of the resort or gave me a price and then asked me if I wanted to make a reservation and what credit card I wanted to use. I have to admit, I felt a little violated. They didn’t take an interest in what was important to me or even earn the right to ask for a reservation. In other calls, the phone routing disconnected or delivered to dead air where I waited for two minutes saying, “Hello . . . hello,” before eventually hanging up.

If your company is going to thrive and grow with the times, I encourage you to implement the following helpful tips for exceeding increasing customer expectations.

The Platinum Rule

We all know the golden rule of treating others how you would want to be treated. Let’s take it to the next level with the platinum rule and treat others how they want to be treated. We do this by asking questions and listening to hear.

Listen to Hear, Not to Respond

It is our natural human instinct to think about how we are going to respond when we are listening to callers or guests. It takes concentrated effort to overcome our natural instincts and really listen. This could require pausing after hearing an objection or concern and sharing that you are taking notes and want to understand the issue fully before coming up with a solution. The customer will respect this because who wants a quick answer that feels “canned” and not thought through? It is OK to say that you want to research what happened and follow up with the customer later that day. You could also make a comment on partnering with the client on the issue at hand and being his or her advocate in coming up with a fair resolution.

Empathize before Educating

Customers want to feel heard, understood, and related to. Often our natural instinct is to fix the problem before fixing the person. If we go straight into educating the customer about the “why” or the solution, we miss the opportunity to connect with the caller and build a long-lasting relationship. I have even heard customers, after being given a solution that is fair, say something like, “You didn’t even say you were sorry.”

Acknowledge Their Vulnerability

Often customers will share something vulnerable—maybe they are going through a divorce or have just lost a family member. Take the time to acknowledge the situation. You don’t have to relate to them by sharing a story of yours that is more devastating. Please don’t do this as it discounts their pain and does not create a connection. Instead say something like, “I am so sorry you are going through that.” Then gear your tone and focus on their needs for relaxation and rejuvenation.

Put the Caller in the Moment

Often customers are completing a responsibility by reserving a home. Get them emotionally connected to the experience they will have when staying with your company. You can do this by using the word “you” or “you and your family.” An example would be, “You and your family are going to love this home. It has a nice patio that overlooks the ocean. In the morning, you can enjoy coffee and breakfast as you watch the waves, or you can enjoy wine in the evenings while watching the sunset.” I have heard customers actually say that they are ready to be there now when employees have been successful at emotionally connecting them to the experience.

Build Relationships

Often employees, during a busy season, are what I call “burning through calls.” When answering the phone, they make a quick assessment of whether the caller is a potential guest or not and then move on to the next call. Take the extra two minutes to ask what is bringing the caller to the area and what experience he or she is looking to have while visiting. Make the caller feel like you care. Even if the caller can’t do the minimum night stay or the price is too much, the caller will remember how you made him or her feel and will want to tell other people or come stay with you at another time. Every interaction we have is an opportunity to brand our company.

Make It Easy on the Customer

This might be an offer of an e-mail with links to send to the group that is traveling with the caller and taking an active role in deciding the home the group will stay in. Offer to call back instead of saying, “Call me when you have decided.” I heard an employee share that the employee’s company lets multiple people pay for a stay so that one person doesn’t have to pay the total and then collects funds from everyone in the group. I love that! I hear customers feel so relieved and grateful because of this offer.

As Maya Angelou put it, “At the end of the day people won’t remember what you said or did; they will remember how you made them feel.”

Wyndham CEO on EU Vacation Rentals: “We received considerable interest in this business from potential buyers”

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October 29, 2017

In August, Wyndham Worldwide announced plans to spin off its hotel business from its ownership business to allow the two separate companies to focus on their strengths and find more financing opportunities. The company also announced it will explore “strategic alternatives” for the European vacation rental businesses, which CEO Steve Holmes said “aren’t a natural fit under either the hotel or timeshare umbrellas.”

In the vacation rental industry, the announcement triggered interest from buyers for the European vacation rental brands, but it also led to questions. Most notably, why would Wyndham, a company that is the world leader in vacation rentals—a sector of travel that is currently red hot—want to fully exit its market-leading position? And will Wyndham also be seeking a buyer for its North American vacation rental businesses?

Last week’s earnings call did little to answer these questions as the company pointed to solid performance by its vacation rental brands with reported net revenues generated from rental transactions and related services increasing $23 million.

Within WDN, vacation rentals grew 8%, transaction volume increased 4% including two points from tuck-in acquisitions, and average price per rental rose 3% partly due to currency movements.

Holmes did offer an update on Wyndham’s progress in finding a home for its European vacation rental businesses.

“As part of the separation, we announced that we will explore strategic alternatives for our European Vacation Rentals organization,” said Holmes. “This business operates leading brands in the European Vacation rental space, generates about $750 million of revenue at attractive margins, and are somewhat underappreciated by a largely U.S. investor base. Since our announcement, we received considerable interest in this business from potential buyers and we are responding to that interest.”

Holmes added, “As a result, we are optimistic about this process. With that being said, you should expect that it will take several months before we have something more definitive to say about the outcome of these efforts.”

Timing for Selling EU Vacation Rental Business

“[The European vacation rental] businesses are fantastic businesses and they have great management over there. So the amount of interest in those businesses is reflective of how strong the businesses are,” said Holmes. “So we’re very proud of those businesses.”

Homes continued, “As to timing a normal M&A process like this, which we kicked off once we saw the level of interest that existed, would probably take us to completing it before the spin. That is our hope. The hope is not being a good plan, of course, but we would hope to be able to get it done, it all depends on how quickly things move. But we have we’ve done everything we can to keep the process running slightly ahead of the spin, and we’ve got a great team working on it. So I’m sorry I can’t give you any more detail but M&A deals are always a little difficult to put a specific timeframe to.”

Time to Overshare Your Property Care

By

Jeremiah Gall

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October 29, 2017

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We all have that friend—everyone has one or two—who loves to overshare. You know the type. Maybe they post too many Facebook updates or include too many details in that story from last summer told over dinner. Oversharing is a thing, and it’s easy to do.

Unfortunately, when it comes to property management and care, the norm has been the opposite. Managers fail to build and organize robust property information, and not enough information is shared with property owners. Owners have come to expect more transparency and detail about how their home is being maintained, so now is the time to improve your property-care program and start oversharing by communicating the details of your service to your clients.

We live in the information age. We have the ability to create and digest an incredible amount of information, hampered only by our access to Wi-Fi (which is a challenge at the moment while I write this from a rustic vacation rental on Squam Lake, New Hampshire). This digitizing, cataloging, and organizing of information has opened access to data on a granular level. We can get the status of a flight down to the minute of departure and progress en route, track the delivery of a package from the distribution center to the local warehouse and down to the truck it’s riding on to your front door, or check real-time updates on investment portfolios. We’ve come to expect this level of detail, access, and transparency.

Vacation rental homeowners are beginning to expect this level of detail, access, and information about their property as well. They want to know how their most valuable asset is being cared for and maintained. Monthly income and owner statements cover the accounting details, but they don’t provide a full picture of the asset protection and care that owners are increasingly demanding from their property managers.

Creating and transparently sharing the details of comprehensive property-care programs with their owners is a growing trend for progressive property managers like Paso Robles Vacation Rentals in California and 360 Blue in Destin. By collecting, tracking, and sharing more information with owners, they are strengthening their relationships with their clients.

This article provides specific reporting which serves to communicate your property-care program to owners and capture the full value of property management and asset protection services.

The best part is that it’s simple to add better reporting to the workflow that managers are already using. In the services industry there is nothing better than receiving additional credit and potentially charging more while providing the same service.

Frequent Property–Condition Reports

The first step in a comprehensive property-care program is frequent, quick inspections of the condition of the property. This is the best way to demonstrate continued property care and attention for absent homeowners concerned about the state of their home. Managers are interacting with their owners’ homes multiple times a week, including cleanings, post-departure inspections, and routine maintenance repairs. Each interaction is an opportunity to demonstrate to the property owner the time that is being dedicated to their property.

These reports can be as simple as quick condition reports or as thorough as a fifty-point housekeeping inspection report, as long as they are consistent, professional, and transparent. In addition to the efficiency gains the reports drive internally, property managers build trust with the owner and increase the owner’s positive interaction with the brand by sharing the reports externally with clients.

Frequent condition reports are the appropriate place for demonstrating property care and introducing any necessary improvements and repairs; it is not a monthly owner statement. Monthly statements should be used for accounting purposes, not to showcase how well the property is being maintained and cared for. Too often, these monthly statements include surprise maintenance charges, which clients may be seeing for the first time and long after the necessary services have been provided.

Additionally, these reports provide a history of property care. Condition reporting builds over time, adding multiple data points for each element of the property on each inspection. In the aggregate, this demonstrates the type of consistent asset protection and management that is so valuable to property owners.

Capture All the Details

Communicating the full value of property management requires tracking and sharing more details about the exact services you provide. There are so many little tasks and details that go into keeping vacation rental property maintained and ready for guests. Property managers change filters, light bulbs, fix running toilets, and any number of small repairs in the course of the weekly turnover process.

Much of this work may not require an individual service charge, meaning it doesn’t show up on the monthly statement and is never shared with property owners. Start using smart technology to capture and organize every touch point with each property and automatically add them to the property profile. Operational costs are too high to perform services without receiving credit.

Take advantage of all the detailed work that goes into vacation rental management and share it with owners. It has never been easier to be a “rent by owner,” with the growth of listing sites and online tools. If property managers are going to stay competitive, they need to show owners exactly how they are maintaining the property and all of the hard work that goes into it. Don’t worry about oversharing, and don’t be discouraged if owners ignore your updates. Every touch adds confidence in the management service, particularly in an industry that hasn’t shared much in the past.

Seasonal Inspection Reports

Part of a thorough property-care program is a seasonal inspection. This provides owners with comprehensive insight into the condition of their property, should highlight maintenance issues that were completed during the inspection, and introduces any suggested future repairs or maintenance that the property owner should be aware of and approve.

An end-of-season property review and inventory has been the standard procedure for vacation rental managers for many years. However, most managers still complete this by hand using paper checklists or a generic digital checklist. Consider interviewing owners and including customized programs for each owner based on their specific concerns for the property. Impress clients with a seasonal inspection that is tailored to their property and highlights the special attention that staff paid to checking each bedroom and bathroom and each unique feature of the property.

By using a platform like Breezeway, managers can complete their entire seasonal inspection and automatically add the details to the inventory. This creates an excellent history of the condition of the property to be used for future reports, maintenance, and operations.

Inventory and Property History Reports

With the number of vacation rental investment properties growing, asset protection and maintenance are critical considerations for owners. Managers should leverage their frequent interaction with the property to build a deep property profile, complete inventory, and maintenance history. Operationally, this helps managers ensure that all necessary preventative maintenance is being completed and documented.

Sharing this information on an annual basis provides an opportunity to help owners track contents; budget maintenance expenses for the following year; and feel confident that their property manager is keeping a full record of their property maintenance for insurance renewals, claims, or to demonstrate excellent asset preservation for a future property sale.

Leveraging all the information from routine condition reports and seasonal inspections, managers can easily create a full property inventory report for clients. At the end of the year when clients are reviewing annual statements and taking stock of their rental income, it’s powerful to remind them of all the work that was done to carefully maintain their home throughout the year and how well their property manager knows their property and is best qualified to continue to care for it in the future.

New report shines light on concerns of hotel room attendants in certain Toronto hotels

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October 29, 2017

This article, “Precarious work takes toll on hotel housekeepers,” was written by Rebecca Melnyk of the REMI Network. While the article focuses on the hotel industry, the study is significant for vacation rental operators and managers.

The moment Grace became a room attendant in a downtown Toronto hotel, she was happy to find steadier work after immigrating to Canada from the Philippines on a contract nanny job. But she soon became aware of the strenuous tasks her role as a housekeeper entailed: cleaning 16 rooms in an eight-hour shift and the pressure to maintain a high-quality level of cleanliness for every room, some untidy, others left in disarray.

As a single mother, she’d rush to meet her room quota in order to arrive at her son’s daycare on time, and in this rush to balance work and family, her physical well being became less important than completing hours of tedious and repetitive tasks: cleaning shower tiles from top to bottom, removing stains, polishing toilets, vacuuming carpets, scrubbing coffee pots, lifting heavy mattresses—the reason for one of her injuries.

“Housekeeping is the most demanding, physical job in an entire hotel,” says Grace, who prefers not to share her last name. “You’re in the same positions all day long, every day. Bending, reaching, walking, twisting, squatting.”

Her twenty-three year career as a room attendant reflects that of many hotel housekeepers, the majority of whom are immigrant women of visible minorities. The housekeeping industry has a 40 percent higher injury rate than all service sector workers in Canada. According to the Canadian Centre for Occupational Health & Safety (CCOHS), a housekeeper is estimated to assume 8,000 different body postures every shift. Repetitive motion injuries to the back, neck, shoulders and arms are common.

Added onto this workload is the pressure to appease monthly cleaning audits, which measure how effectively a room is cleaned. Maintaining this level of quality both increases the work and hinders the amount of time a housekeeper needs to complete quotas.

“There’s a certain average for the audit you have to meet,” says Grace. “If you fail, you get stressed.”

Grace and her co-workers have better conditions than most. Their union contract under UNITE HERE Local 75 now limits the workload to 15 rooms and provides better benefits. She can relinquish two to three rooms a day, depending on the situation. At other Toronto hotels, room attendants don’t have these rights and their benefits vary. One of Grace’s friends must clean 19 rooms a day and cannot leave until her quota is fulfilled. Many workers routinely skip breaks, stay late to finish the job and endure physical strain in fear of being replaced.

Current trends in Toronto have also heightened housekeepers’ fears about job security, no matter what hotel they work for. Several hotels are converting into condos, costing thousands of hospitality jobs, while sustainability programs encourage guests to conserve water and energy by forgoing housekeeping, leaving workers without rooms to clean. Many women in the industry see their jobs as disposable. Some are wary to speak up about body strain or anything that could make them appear weak or unable to work.

Those who do are either supported by management or sometimes discounted. According to a recent Oxfam Canada report, which underlined the precarious work of housekeepers at several major hotel chains in Toronto, the workload of room attendants is growing and so are injury rates. As one general manager in Toronto noted in the report, hotel rooms require much more cleaning than they did years ago, while guest expectations have increased. Despite injuries, many continue working in the same job.

“Housekeeping is the heartbeat of the hotel and usually the most underappreciated function.”

One case highlighted in the study is that of Kerry Ann Palmer, a Jamaican immigrant who has been working in a downtown Toronto hotel for four years. Three years ago, she reported a wrist injury to her supervisor who made her continue working without any modifications to her job, despite a doctor’s note in her favour. She now requires a brace at all times.

“These women feel stuck; they’d like to leave, but this is the only experience they have,” says report author Diana Sarosi. “The work is too exhausting and demanding for them to take any courses or additional training. They are so enwrapped in survival, getting enough hours, getting things done. If they don’t have enough hours, then it’s about finding another job for extra income.”

A room attendant’s well being largely depends on the culture of the hotel management, along with the type of programs that are implemented.

Amrita Bhalla, senior HR executive with more than 10 years of experience in the luxury hospitality industry, lecturer at the Ted Rogers School of Hospitality and Tourism at Ryerson University and currently managing director of A.B. Consulting, says the way housekeepers are treated can depend on the management philosophy in a particular hotel.

“The leadership style of the general manager can really set the tone for how they want all their employees to be treated,” says Bhalla. “Housekeepers have such an important job and it’s really important to recognize and celebrate them.”

She says “housekeeping is the heartbeat of the hotel and usually the most underappreciated function.” Room managers should have a close link to their staff and “make sure leadership is quite present” at staff lunches or events. This is one way to help facilitate communication between departments.

“You’re in the same positions all day long, every day. Bending, reaching, walking, twisting, squatting.”

When it comes to occupational health and safety, hotels between six to 12 employees must have a health and safety representative, while hotels above 20 employees are required to have a joint health and safety committee. Many establishments implement programs and even focus groups designed to find ways to avoid injury. But from Grace’s experience, these programs aren’t taught on an ongoing basis, even as new employees come and go. If a housekeeper has an injury, it is communicated to management, but there needs to be more intervention ahead of time.

“Be consistent and educate the workers on how to better use body positions to complete duties,” she suggests. “Because we have a quantity of rooms that have to be finished, the workers rush. They don’t care about the movements and positions, and at the end of the day, there is a lot of pain in their bodies.”

Programs to help housekeepers relieve body strain should include the use of visuals and videos, something Bhalla strongly believes in. She suggests companies get staff involved in the videos, while showing them how to use proper positions. Translating health and safety materials into the top three languages spoken among housekeeping staff is also key. It’s a diverse workforce comprised often of visible minorities where the first language may not be English. Overall, cutting training tends to happen in the short term, but will eventually catch up with managers.

“If you don’t do the right kind of onboarding and orientation for new hires in housekeeping, then it just becomes harder to correct it,” Bhalla cautions. “You’ll possibly have to deal with performance issues that aren’t the fault of new employees because they were never trained.”

Besides improving body postures and using lighter equipment, CCOHS suggests hotels find new approaches, other than strictly ergonomic ones. Options include job rotation where workers move between different tasks, at fixed or irregular periods, and team work to provide greater variety and more evenly distributed muscular work. The whole team is involved in the planning of the work and each team member carries out a set of operations to complete the whole product, allowing the worker to alternate between tasks. It is also important that housekeeping staff be informed about hazards in the workplace, including the risk of injuries to the musculoskeletal system.

Proper training shapes lifting habits, so workers need to adopt practices that reduce fatigue. CCOHS advises doing heavier tasks at the beginning of a work shift, rather than at the end when fatigue is at its maximum. When a person is tired, the risk of injuring a muscle is higher.

Jane Sleeth, senior national consultant at Optimal Performance Consultants says ergonomics training is usually a case by case basis with hotels, but there is a big need for them to become proactive.

“Some hotels have great human resources in place and they regularly ask us to provide training with updates and new topics,” she says. “Others have had our team train, but haven’t followed up. Others ask us for quotes and nothing further occurs.”

Education should be focused on proper body mechanics, work/rest/break schedules and stretches prior to certain tasks, she says. Housekeepers should learn how to self-treat musculoskeletal injuries and know when to visit a physiotherapist or chiropractor. There should also be training on actual case scenarios with feedback on body mechanics and the proper use of equipment to avoid ergonomic exposures.

Many hotel owners embrace employee concerns. Many truly care about the well being of their housekeepers and strive to implement programs that will support their work. They understand that housekeepers are frontline staff who have the power to alter the reputation of a hotel. After the Oxfam report was released, Susie Grynol, president of the Hotel Association of Canada, stated that the study doesn’t “paint an accurate or balanced picture” of the industry in Toronto, and that its members have a number of compliance measures in place to ensure not only high health and safety standards, but also employee satisfaction. Many hotels, she notes, have acquired ergonomically-friendly tools to assist with cleaning.

“Just because rights exist in a jurisdiction, doesn’t mean that everybody in that jurisdiction is treated with all the fairness and dignity that one should expect at work.”

Despite these efforts, the most calls the United Food and Commercial Workers (UFCW Canada) receives are from women working in the hotel industry who feel they need added protection to better negotiate fairer workplace standards. More often than not, the women are new to Canada and come from marginalized communities within large urban centres like Toronto and Vancouver.

“Having rights on the books and being treated fairly at work are not always the same thing,” says Derek Johnstone, special assistant to the national president of UFCW Canada. “Just because rights exist in a jurisdiction, doesn’t mean that everybody in that jurisdiction is treated with all the fairness and dignity that one should expect at work.”

Many operations are franchised, he points out. Owners may operate according to standards, but will run their businesses the way they believe a business should be run, with their values dictating how to communicate with staff.

“Some franchises are, without a doubt, good employers, but you have a lot who are not responsible employers,” he says. “This is the reality — provincial ministries of labour just don’t have the resources to ensure that every employer out there is acting responsibly.”

It’s Time to Ask More from VR Revenue Management Tools

By

Cliff Vars

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October 29, 2017

When it comes to managing your portfolio of vacation rentals, no one knows your strategy better than you do. Working in conjunction with your owners, you’ve established an end goal, and you know you need to adjust your rates, minimum night stays, and marketing tactics to get there. So perhaps, like many VR property managers who want to keep up with the latest tech, you’ve invested in a few software tools to help you out. There are several new tools in market that focus on revenue management—specifically rate adjustments. These tools claim that they can do all the work for you, and if you just listen to their recommendations and don’t ask too many questions, your business will grow exponentially.

But to ensure you’re making the right decisions to reach your strategic goals, you need data you can trust. And to trust data, you need three things: to know where it’s coming from, to have enough of it, and to be able to interpret it to derive meaningful insights.

Get access to the right data—and a lot of it

Many revenue management tools available today have great aspirations but can’t deliver on their promises because they just don’t have access to the data. They may have some information about the larger market, but they don’t have visibility into traveler search traffic or market occupancy—data points that reveal actual supply and demand. (Which, when you’re in the business of economics, you definitely need.)

Without some of those key data points, these tools may not even be able to identify a true competitive set for your portfolio of rentals. And if the comp set’s wrong, you won’t get the guidance you need to set your rates appropriately no matter how much data there is.

You have to see data to believe it

Of course, the companies large enough to have a lot of data often aren’t willing to share it—certainly not all of it. But you can’t trust a tool that’s a black box. When it comes to making decisions that are going to impact your business, you shouldn’t be expected to blindly accept what a piece of software tells you to do.

Many tools acquire their data by scraping it from online travel agencies and other sites, which means it could be incomplete or inaccurate. Any leading revenue management tool of the future needs to provide real-time, proprietary data to its users—and it needs to be transparent.

Data is science. Interpretation is a fine art.

But ultimately, transparent access to all the data in the world won’t get you anywhere unless you can interpret it to find meaningful, actionable insights. That’s where expertise comes in. Startups may have a scrappy team of data scientists and software developers, but you want a tool that’s built by a team with years of real-world, first-hand experience in delivering solutions for property managers and in revenue management solutions. You want the right data at the right time, presented in the right way for your business. And only someone who’s been in both industries can deliver that.

It’s time for a new kind of revenue management tool

Revenue management for the VR industry isn’t a new concept. It requires some adaptation from the world of hotels, but the fundamental principles remain the same. You set your business goals, establish a strategy, and make tactical decisions to move forward. If those decisions aren’t based on data you can trust, you can’t be confident that you’ll reach those goals.

It’s time to start looking for a revenue management tool that understands your business, gets you the data you need, and gives you insights to succeed.

3 Big Myths About Direct Bookings

By

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October 29, 2017

“One would think that given all of the industry attention on direct booking, there would be a more uniform way of looking at what it actually is. The most obvious type of purchase that all hotels clearly count as direct is the booking that occurs on the brand.com website or app where there is no third party involved in facilitating the transaction.” (Skift, May 2017)

Yes, after so many years of debating the booking issue—an argument that has resulted in the “direct booking wars,” a phrase even consumers now recognize—we should all be agreeing about the definition of a direct booking. However, we are still far from a robust (or profitable) understanding of website direct bookings. Out of the many myths about direct bookings, let’s break down a few.

Big Myth #1:

A direct booking is a website booking.

Direct bookings existed long before OTAs came along, even before websites existed. While they include bookings on brand.com, the most obvious direct booking is the one that happens when a guest either dials those ten digits or uses click-to-call to reach a reservations agent. Aside from old-fashioned walk-ins, phone calls are the oldest form of direct booking, and contrary to popular belief, they still matter—quite a lot.

While supplier websites yielded 27 percent of bookings in 2015, calls to hotels were at a valuable 17 percent (much higher for private accommodations). Combined with bookings at the property and metasearches, non-brand.com direct bookings were 31 percent of all bookings, outpacing website bookings (U.S. Consumer Travel Report Eighth Edition, Phocuswright, 2016). We can debate the inclusion of metasearch as a direct booking; however, we’re inclined to include it because it’s closely related to pay-per-click or click-to-call.

While we can argue about what to consider as direct bookings, the category comprises far more than brand.com. Imagine what these percentages might be if we cast the direct booking net wider than just websites and included those third-party numbers?

Big Myth #2:

Online bookings are profit engines; everything else is a profit drain.

This might be true if the guest went straight to your website and booked without ever seeing your property via Google pay-per-click or on a metasearch site or an OTA—or without a quick phone call to verify something about the property, which happens 71 percent of the time, according to HomeAway. These views have a price, but few properties are tracking the full path to purchase and attributing their earnings appropriately. Most managers just assume that, if the booking came through the website, it had some vague website marketing costs attached to it but that it’s cheaper than an OTA or paying the overhead on a reservations agent. Not true. Every online booking has costs attached, and understanding those costs is essential to understanding how to spend dollars on visibility and training. NAVIS tracks the entire path to purchase so managers can trace exactly how many dollars were spent and which dollars spent were most profitable.

Regarding direct booking via a website or the voice channel, note that:

Direct bookings via phone have a higher value, generating $3 for every $1 generated online.

Reservations agents convert at an impressive 42.5 percent when they are properly trained in the art of sales.

Agents can add another 10 percent to that if they are trained to handle outbound calls in their downtime.

Not performing at these levels means you’re losing significant revenue every day.

Big Myth #3:

If you build a website, direct bookings will come.

Here is the notion about direct bookings that can be their biggest drawback. A website neither creates nor converts demand. Desktop and mobile websites can be frequent parts of today’s complicated path to purchase; however, as Google notes, to “earn (and re-earn) each person’s consideration . . . you’ll need to do more than just show up” (Think with Google, July 2016).

Capturing and converting guests requires giving them all the information and tools they need across all available channels and devices, including voice. Expedia’s The American Traveler’s Path to Purchase notes that travelers use online resources 20 times per week in the 45 days prior to booking and, on average, three resource types. Notably, these resources are both online and off-line. Think of the path to purchase as a zigzag from online to off-line and back. Keeping travelers on the channels you own, rather than letting them wander off to OTAs or metasearch sites, is essential. If you prominently include a clickable phone number and chat options on your mobile website, you can steer customers toward your most profitable voice channel.

Looking clearly at direct bookings opens up more opportunities. As a hotel or vacation rental owner, when you embrace the off-line channel and tune in to the evolving habits of travelers, you can increase demand as well as increase conversions with your existing demand.

Get downloadable worksheets, webinar recordings, and e-books on this topic and on the latest vacation rental industry trends at Learn.TheNavisway.com.

It’s All About Experiences

By

Andy Gaylord

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October 29, 2017

Vacations, at their essence, are experiences. Your guests come to you in search of fun and excitement. When they return home, what they will remember most is how they felt and the things they did with their friends and family. To succeed as vacation rental managers, you must create complete experiences, full of activities, personal service, and great value. Guests expect more, so you must give them more.

This, however, is easier said than done. Activity providers remain separate, guests’ expectations are higher than ever, and everyone is offering discounted rates. Giving your guests everything they want isn’t easy. To do so, you must value experiences first and foremost.

In this article, we’ll examine how successful vacation rental companies are adopting an experience-first mentality. We’ll then determine how you can take immediate actions to embrace what matters most—your guests’ experiences.

What the Big Dogs Are Doing

The big dogs in the travel and hospitality industry have realized that experiences come first. In this integrated digital world, consumers are accustomed to purchasing complete vacations with the touch of a button. Over the past year, both Expedia and Airbnb have invested a great deal in creating complete guest experiences.

When you visit Expedia.com, “Bundle Deals” and “Things to Do” are both featured prominently in the main navigation bar. Bundle Deals, which had previously included just flights and hotels, now also include special offers that highlight activities, such as free tickets to the local waterpark. Within Bundle Deals, there are clear links to area activities as well as opportunities to add specific activities to your package.

On Expedia’s homepage, there’s also a section titled, “Today’s Popular Destinations.” When you choose a destination, you’re directed to a travel guide page that doesn’t even mention accommodations or flights. It simply highlights the area’s attractions and provides guests with great information for planning their vacation.

This is clearly intentional. Expedia understands that when guests are booking accommodations and flights, they aren’t just thinking about those two items. Instead, they’re thinking about all the things they are going to do on their vacation. By allowing guests to imagine experiences, Expedia is tapping into their emotions, which can build tremendous loyalty when done effectively.

Airbnb, one of the most disruptive companies of the past ten years, now features experiences, not rentals, at the top of their homepage. Their tagline is, “Book unique homes and experience a city like a local.” Also, under the “Places” tab, they’ve created personally curated guides to cool places all over the world. Some of these guides even highlight famous actors, such as Ashton Kutcher’s go-to spot for family fun. When you book on Airbnb, you understand you’re getting a distinct experience. Guests who book with Airbnb are very loyal, and much of this is because booking with Airbnb gives them something different from a traditional hotel or vacation rental.

Be the Local Expert

I know what you’re thinking: This is overwhelming! Both Expedia and Airbnb have huge budgets and endless resources. How am I supposed to compete? The truth is, however, as local property managers, you have the advantage. You know your destination better than these big brands, and your connections with local businesses and activity providers are authentic and personal. Use your local knowledge to help your guests create memorable experiences.

Display Vivid Content

One easy place to encourage experiences is on your website. When guests are planning a trip to Destin, Florida, for example, they’re dreaming about dolphin cruises and snorkeling in the crystal-clear water. If they see images of dolphins or people snorkeling with sea turtles on your website, they will immediately imagine themselves on vacation.

Reveal Knowledge

Images are just the beginning. Writing unique content on your website that highlights area activities and events not only broadens your ability to attract search engine traffic, it also builds trust and loyalty. Display your local expertise and provide your guests with information that only a local would know.

Make Connections

Even though activities make up a significant portion of the travel industry, very few vacation rental managers have fully integrated activities into their businesses. Every destination is known for specific activities. Identify your area’s top activities, and tie your business to them closely. Offer guests discounted passes to popular activities and provide recommendations for local shops and restaurants to visit. Better yet, partner with companies such as Xplorie, a business that connects property managers with activity providers. Working with Xplorie allows you to offer free activities to your guests. There are tons of ways to give your guests better experiences.

Provide Superior Guest Service

Superior guest service builds loyalty. Today, many companies get so tied up in trying to drive bookings that they overlook the importance of personalized guest services. Invest in good housekeeping, be proactive in responding to guests’ needs, and most important, show your guests that you care. When you go above and beyond to ensure that your guests are taken care of, they will remember you and book with you again and again.

Quality Experiences Last Forever

Taking an experience-first mentality has many lasting benefits. It will help you define your brand and allow you to connect with your guests emotionally. You will also give your guests more value and establish lasting relationships. Vacations are experiences. If you create them, your guests will come.

About Bluetent

Bluetent believes that all vacation rental managers, no matter the size of their business, should have the tools to succeed in the modern digital landscape. In 2017, Rezfusion, Bluetent’s proprietary platform, will process over $300 million in direct online bookings. Bluetent’s products and services reach travelers, inspire guests, and attract owners.

OTAs Are Not the Problem—Dependency Is

By

Heather Weiermann

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October 29, 2017

One of the more popular sports in the vacation rental industry today seems to be bashing listing sites and OTAs (online travel agencies). The likes of HomeAway, Expedia, Airbnb, and—don’t forget—TripAdvisor are being blamed for commoditizing vacation homes, for diminishing rates, and for training guests to expect deep discounts or refunds. If we put a little effort into it, we can probably also find some way to blame them for the earthquakes and hurricanes we’ve seen of late.

OTAs don’t need me to defend them. But the reality is that we, as vacation rental managers, share the blame. It’s our signature on those OTA agreements. We give these services access to inventory, booking pace, rate data, and all sorts of other proprietary information. We let the fox in the henhouse ourselves. We’ve even allowed our guests to believe they are better protected and told them they will get the best rate when they book via OTA sites. Case in point: While reserving a vacation home in Austin earlier this year, I found four different rates for the same property. The lowest came from the property manager’s own website—but I had to work really hard to find a way to contact them directly; it took multiple calls and emails for me to get what I needed to reserve my dates. Such rate disparities are rampant, and the difficulty of booking directly is often not worth the savings or the possibility of losing the dates a guest wants to reserve.

For many of us, what started as an exciting new way to get more exposure for our vacation home inventory has become an unhealthy reliance on a single source of rental demand.

Meanwhile, those who have held off are starting to feel like they are missing out and want to get into the game. And, all the while, the OTAs are reporting immense growth and market dominance. It’s time to take back some of the control before it is too late. To get started, here are five steps vacation rental managers should consider when working to ease their dependency on OTAs:

1) OTAs are not the problem.

They are, however, enablers—and the competitors in your market may be codependents. If you rely on OTAs for a majority of your rental demand, you have likely become dependent on these sites for your company’s overall performance. What will you do when they increase their commission rates or limit the ways you can communicate with potential guests? If you are not marketing your homes via multiple channels, you are no longer in control—and the OTAs will be able to dictate to you how you run the reservation side of your business, as well as the costs.

2) Math it out.

Yes, OTAs can fill your calendar with what feels like less work for you. But at what cost? The terms of OTA agreements will vary, but typical commissions range between 3 and 25 percent. Vacation rental managers with lots of inventory pay the least, whereas smaller, boutique companies pay the most. For those paying top dollar in commissions, the cost will be 25 percent in commissions for a three-night stay at $300 per night, or $225. Take a look at your last year’s profit and loss statement. How much did you pay out in commissions last year? Imagine if you had used even half of that toward marketing your own brand to drive more direct bookings and put the other half in your pocket.

3) Make booking directly the best option.

Guests should get the best rates and benefits by booking directly, period. If you’ve already signed your rate parity agreements, honor them—but implement a best-rate guarantee and clearly state the advantages of booking directly, as Hilton does in its “Stop Clicking Around” ad campaign. As an added incentive, offer value-adds not available via non-direct booking methods.

4) OTAs can be partners and competitors.

OTAs have made it clear they don’t care whether a guest books with a property manager or with an owner, as long as they book through the OTA site. How can OTAs command their high commissions, and just where does the money go? Have you seen the television commercials, the pay-per-click ads, the print ads, and banners? They’re competing with you and driving up your advertising costs, all while luring travelers from booking via direct channels.

5) Make it easy to book with you.

OTAs are expert marketers—in fact, that’s really all they do! Improving the consumer experience is one of the easiest ways for these sites to build a loyal brand following. How does the booking experience on your site compare? Is your website mobile phone-compatible? How easy is it for a guest to call you from your site if they have a question or need assistance before booking? Does your website interface with your property management software to reduce the time you spend managing availability and rates and give you back time that can be spent strategizing?

As for that vacation home in Austin, I was lucky enough to finally secure my booking at the lower rate before someone else booked my dates; however, I was worried it would not happen, and I would need to start my search all over again. Please don’t make your guests jump through the same hoops.

Public Relations and the Sales Funnel: How PR Can Support the Journey from Awareness to Guest Loyalty

By

Jessica Gillingham

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October 29, 2017

First, public relations is not just about press releases. It’s also not even about securing coverage. Public relations is a management function that is concerned with strategic communications to build mutually beneficial relationships between an organization and its audiences, or “publics.” It’s also about increasing visibility, developing a reputation, building trust, and engaging in helpful conversation. But where exactly does PR sit within the marketing and sales funnel for a vacation rental management business? What impact can PR have on the guest journey from pre-prospect to lead, to guest, to happy and loyal brand advocate?

Good PR shouldn’t exist in a vacuum. A PR campaign that is successful helps create new leads, but it also moves prospects down the sales funnel to vacation rental purchase, then develops them into vocal brand advocates ready to support the feeding into the top of the funnel again. A strategic PR campaign can (and often does) support the entire guest journey to purchase and beyond by influencing, to a greater or lesser degree, each of the key stages a potential guest will move through.

Creating Awareness

PR is typically best known for generating positive awareness about an organization. PR is often seen as a “top-of-the-funnel” exercise that creates interest in a consumer (guest) by helping to identify either a challenge or a need. A well-placed editorial, a targeted blog post, or a social media campaign can all help generate a “need” for what your vacation rental management business offers. PR also plays an important role in the discovery phase of future guests starting to think about where they want to go on vacation or on their next business trip.

Consideration and Preference

According to Expedia, travel consumers visit up to thirty-eight websites before making a booking. Other evidence shows that a customer will typically experience twenty-three touch points before they act. In today’s digital age, consumers are savvy, and they do their research. In the consideration and preference phase of the sales funnel, your next potential guests are weighing the pros and cons of the different travel options they have for their stays. They are investing their time on the various booking sites, reviewing accommodations and travel blogs, and visiting the sites of other vacation rental businesses and accommodation suppliers.

PR is essentially about getting earned, not paid for, exposure of your content. One of the key reasons generating “earned” content is so powerful is because what other people or organizations say about you has far more influence on opinion and behavior change than what you say about you. Just ask Google. That’s why online coverage has such a positive impact on search rankings.

Search marketing, search engine optimization, and pay-per-click ads are all essential to ensuring your offering is visible in the research phase of purchase; however, online coverage in the shape of an accommodation review, inclusion in a “Listicle,” a well-placed thought leadership article, a third-party review site, or a friend’s social media page may be just the nudge needed to move a prospect down the funnel toward purchase.

The Purchase Decision

What makes a prospect take the leap, part with their hard-earned cash, and choose one vacation rental business, property, or listing over another? The fact that the product or experience is expected to meet their needs and expectations is obvious. However, customers will do business only with a business they trust, and often one with which they have built some kind of emotional connection. This is where the PR skills of storytelling and building communities can be most powerful.

Consumers are often distracted, difficult to reach, and fickle. A good PR strategy helps to build social communities around a product or experience that fosters emotional connection and feeling “part of.” Developing messages and stories that resonate with your audiences and distributing this through content that educates, delights, and influences can be powerful.

Also, it is in this purchase phase (where timing is everything) that “earned” media can blend with paid media to edge a prospect into becoming a guest. When an editorial review is linked with a promotional offer, the proposition may be hard to resist.

Developing Loyalty

As we all know, the customer journey doesn’t end with purchase. Purchase is just the beginning of the next phase. There is typically a waiting period between purchase and experience, especially when purchasing a travel experience. Your future guests will be continuing their research, getting a feel for you, and anticipating their intended stay for weeks or even months before they actually walk through the door of your property. PR can support positive anticipation and help continue to foster the good feeling that your customer has made the right decision. This can be encouraged through social communities and dialogue. At this stage, your future guests may even start to join the conversation by expressing their excitement about their upcoming trip. Your customers will also be looking to you to ensure they have made the right decision by further researching the experience they can expect to have during their stay.

Encouraging Advocacy

Customer advocacy is essential for supporting lead generation and input for the top of the sales funnel. This is especially true for travel experiences. Happy customers make the best PR advocates. In today’s digital and social age, the power of customer advocacy can be a force in its own right. This is, as anyone who has had a bad TripAdvisor review knows, also very true for negative feedback. People are highly influenced by what their friends and family think and say, even if these “friends” are tenuous relationships via social media. Each individual’s social platform has become his or her own mini-blog and review site. Happy guests can also become excellent customer-centric case studies that encourage fostering the emotional connection often needed to encourage prospects down the funnel through consideration and purchase.

The Cycle Continues

Again, good PR doesn’t exist in a vacuum—or at least, it shouldn’t. PR works alongside all aspects of the sales and marketing funnel to support the guest journey from awareness to advocate and back again.

When It’s Time to Sell Your Business, Who’s Looking Out for You?

By

Ben Edwards

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October 29, 2017

As the industry continues to change, vacation rental company owners are increasingly considering an exit or preparing their businesses for sale. While many owners are struggling with the numerous technology changes facing the industry or the disintermediation of the sales process, other owners are being solicited and are interested in selling or simply want to learn what their businesses are worth. Being solicited should not be a driver in pursuing the sale of your business because every company in the industry has been solicited for sale. I wish I could tell you that each business is special or that a prospective buyer has been eyeing your company because of its progressive operation. More likely, though, your business is on a list and is being solicited along with hundreds or even thousands of other vacation rental companies.

So you’re considering a sale of the business, or you’ve been approached to sell the business. In either case, the following points should be useful in preparing for a sale or be helpful as a more formal process regardless of the motivation for selling. As a fundamental principle, keep your best interests in mind and ask this question: “Who’s looking out for me?”

1) NDA

Do not pass go, and do not collect $200 without executing a nondisclosure agreement (NDA) first. Anyone who calls and wants to discuss whether you’re open to selling your business will expect to sign an NDA. Anytime I receive one of those calls, I let the caller know that everything I have is for sale, including my children, and that if he or she wants to talk more seriously, we need to execute an NDA. Anyone who continues to poke and prod after you’ve requested an NDA may not be the right partner.

2) Letter of Intent

Once you have a fully executed NDA, feel free to disseminate high-level information about the business. Your goal at this stage is to convey enough information to entice an offer. Be careful not to communicate detailed data or proprietary information at this stage; that information can be shared after an executed letter of intent (LOI).

3) Due Diligence

Once a fully executed LOI has been completed, you’re ready to begin the due diligence phase of the process. Due diligence is the buyer’s opportunity to “pop the hood on the vehicle” and review every facet of the business, but they should be efficient and organized in the process. The idea is to prevent fishing expeditions.

4) Purchase Agreement

As diligence continues, a legal purchase agreement should be created, using the key points of the LOI and market-rate terms. It is important at this point to engage legal counsel. Legal counsel can make or break a vacation rental transaction. Often, local real estate attorneys may not fully understand the interworking of a vacation rental operation. It is advisable to find a law firm that understands the idiosyncratic nature of the business and can represent your interests in an experienced manner. It is important to note that there are acceptable levels of risk in a transaction; however, when risk hits an unreasonable level, it is time to pull back. Engaging in a transaction in which the purchase price is contingent on future unit count presents entirely too much risk and does not produce an optimal outcome. It is advisable to avoid these contingencies because the risk often outweighs the reward.

5) Transitioning the Business

As diligence is being finalized and the purchase agreement has been approved and executed, transitioning the business is paramount. A well-organized, thoughtful, and efficient plan will create a smooth transition and ensure that it stays on track.

As you contemplate the sale of your business, know that there are more buyers than sellers. There is no reason to move forward with unreasonable deal terms or to incur too much risk. It is simply not worth it. Following a formal process and using a transaction adviser will help ensure that your business is sold for maximum value and the sale is successful. An engaged transaction adviser is the entity looking out for you by providing the following services:

Position and present the business for maximum value

Identify qualified buyers and initiate NDAs

Ensure qualified buyers receive the appropriate reports and amount of information

Keep the process organized and moving forward efficiently by soliciting offers with sound market-rate terms that do not present an adverse amount of risk

Leverage industry and market experience for offer-acceptance guidance

Close successfully

Provide transition assistance and guidance

An experienced transaction adviser is intent on maximizing the value of your business and ensuring that deal terms are fair and reasonable and the transaction closes efficiently and successfully. One wrong turn could adversely affect the entire transaction. Leveraging industry knowledge and experience in markets throughout the industry can mean the difference between a well-executed and profitable exit strategy or regret.

Top-Down Leadership Insights for Vacation Rental Managers

By

Clark Twiddy

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October 29, 2017

Senior Leadership: The Difference between Well Managed and Well Led

It makes sense that part of the reason we’re seeing so much interest in our industry on the part of venture capital and private equity is the fact that so many of our traditional businesses have been well managed and well-led for long periods of time. That stability—as an alternative investment—is attractive on its own.

One challenge among many others for hospitality business executives is not only to manage well but to lead well. Are you a senior staff manager or a leader—and what’s the difference between the two? It makes sense that how the senior group defines themselves reflects the priorities of the senior executive. Here’s a simple clue to what I think will lead us to larger areas of focus: if a person is a manager, he or she is focused on day-to-day and operational challenges. This is a great thing. A relentless focus on fundamentals is a business foundation. If someone is a senior leader, he or she will be focused on future problems, growth opportunities, risk, and people. The difference between the two is important both in terms of time horizon focus and business challenge. The simple analogy here is of an airplane cockpit: The view from the cockpit doesn’t show what is below the aircraft because you’re there already. The view from the cockpit looks out on both what’s around you and where you’re going.

I’d argue that leadership—good, solid, predictable leadership—is a long-term advantage for companies both in the face of well-funded venture capital and private equity (VC/PE) firms and for attaining the best possible long-term results. It’s fair to say that like most investors, the VC/PE teams will be looking for short-term returns on investment. The best way to achieve those kinds of things in the short term are through new access channels on the revenue side with operational efficiencies, functional symmetries, and workforce optimization on the efficiency side. Those are properly management functions. However, a well-led company may choose to focus on long-term growth over short-term investor return. As a differentiator, that means investment in staff with training or quality-of-life improvements. It may mean a deliberate focus on customer relations that will prove costly up front but return handsome dividends on a longer timeline. It may mean infrastructure that in a digital age becomes more and more controversial.

As we search for antidotes to the perceived digital restructuring of our industry, I believe a focus on good leadership is a great place to start if you’re thinking long term. By leadership, I mean an ability to deeply think about future opportunities, the importance of surrounding your business with bright, well-trained, and potential-reaching staff members, the energy it takes to believe in your company’s vision, and ultimately the selflessness to sacrifice short-term gains for long-term results. As an example of questions you should be asking yourself is: is it in your power to make sure that your company is the best employer in your area?

Leadership, since the days of Alexander the Great, means taking care of your team. Great leadership—pick whomever you choose as an example here—usually means sharing opportunities and challenges with and alongside your team. It means setting an example—are you out front greeting your guests? Walking through your properties with your cleaners? Talking on the phone with your homeowners?

Interestingly these kinds of behaviors are what become irreplaceable in a digital age. There is simply no app for that. Good leadership will translate well—something digital can manage, to a degree, but digital will never lead. There’s the advantage right there. It might be worth thinking about great leadership in addition to great management as we collectively seek to differentiate ourselves in the digital landscape.

Developing Mid-Level Managers as a Competitive Advantage

What’s your value as a company? When we think of value, we usually think in specific and measurable dollar amounts, but price and value are distinctly different things. While pricing reflects a temporary present condition, value, I believe, includes some of those things that are tough to measure on a day-to-day basis: management strength, brand promise, industry credibility, level of risk, long-term viability, and so on.

In North Carolina, we’ve seen a large number of mergers and acquisitions in the banking industry lately that in many ways parallels the unprecedented level of outside investment activity in the vacation rental sector. When we consider value, here’s a great facet to include in that conversation: management-in-place. As for the banking comparison, I think it’s useful on occasion to look at other industries to compare acquisition valuation with our own industry, and it’s clear in banking that strong management-in-place is a top challenge when change becomes rapid.

To start with a definition, management is the function of deciding priorities, driving implementation, measuring results, and regularly assessing feedback. If you’ve been successful in growing your business, you know that this function can be a critical growth driver or growth dragger, depending on circumstances and the approach taken.

From an acquisition perspective, management-in-place is a question of several factors: management development within an organization, talent retention, unique operations experience, in-depth local relationships, and future leadership potential, to list a few. Those areas operationally reside in mid-level management; members of that key group translate vision into execution and form the front lines of your guest and owner experiences. Mid-level managers are also the ones who can truly drive (or stall) innovation. These individuals carry with them not only a commitment to the company but also a good deal of future capability for the company. In other words, they’re a key to the future.

Members of that group are also the key to a major growth challenge: the dread of a bureaucracy. Few business owners would describe their own organizations as bureaucracies unless reminded of the old Lyndon Johnson definition: “If the person who answers the phone can’t answer the question, it’s a bureaucracy.” To a great many people, bureaucracy has become a synonym for something slow or devoid of humanity, and that’s the last thing that a company wants if it aims to achieve success.

We all interact with bureaucracies on a daily basis, yet few of their employees come to work each day excited to make other people’s lives miserable. Again, it’s those mid-level managers who can make or break an organization, and they’re the first group to address when changing a culture that has become stifled or slow.

To wrap up, as our industry wrestles with valuing monetarily what we do as independent organizations, it’s important to remember that although price might reflect a moment in time, value carries with it the likelihood of long-term success—and with that comes financial strength, stability, less risk, and a solid future foundation. It’s these kinds of things that attract outside investors. People place money only where it feels safe to do so, and a strong team of mid-level decision makers goes a long way toward investor confidence.

How to Make Your Vacation Rental Business a Success

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Danielle Moses

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October 29, 2017

Welcome to a New World of Travel

The travel industry has hit a new level in the past few years. Travelers are not just visiting your average urban cities around the world, they are exploring everything from the countryside to the jungle. Always connected and constantly looking for an adventure, today’s travelers want it all—from the most exotic to the most centrally located. Travel is no longer a seasonal industry, it is a year-round business. When the opportunity arises, seize it.

Being a modern-day traveler is about more than seeing new places around the world; it’s also about gaining new experiences. Most young travelers seek unique travel opportunities and want to connect to the places they visit and be more like locals than tourists.

Travelers no longer need or want to pay for overpriced hotels and unnecessary amenities. For these reasons, they flock to the world of short-term and vacation rentals. According to the Smarthosts Vacation Rental Forum, in 2016, the vacation rental market was valued at $100 billion dollars and is predicted to reach $167.9 billion by 2019. This industry just keeps growing and is taking over the travel industry. This takeover is forcing businesses to market in an entirely new fashion.

What You Need to Make It Big

Short-term and vacation rentals fulfill travelers’ desires to experience local life. With a booming industry, the business opportunities are endless. As the industry continues to grow and become more competitive, it is important for property managers to have the smartest technology available to organize their companies’ activities and help them reach their maximum potential.

Guesty makes all of this possible. With an end-to-end solution for short-term property managers, the platform works to centralize businesses’ activities in one place.

Guesty’s robust yet simple platform allows property managers to control their listings as they wish. With features such as channel management, you can sync all listings with each other and list them with the correct availability while maximizing your revenue and increasing bookings on empty nights. Guesty also offers property managers the opportunity to control the data and information shared through an owner’s portal. This provides homeowners with transparency, so they can view the revenue and bookings in a report while letting the property manager handle everything else.

Guesty is here to ensure that operations stay manageable and organized. Seamless automation tools allow property managers to automate emails to guests regarding events and customize content. These automation tools assure that guests receive responses to their questions in a timely fashion as well as any information they need before, upon, or after check-in and check-out. In addition to the operation tools that Guesty offers is another favorite: the Staff Management App. This feature gives your staff members easy access to all their assigned tasks along with any listing information needed to get the job done. Managers can track statuses and completion of assignments, monitor work duration, and see the tasks remaining on the Guesty dashboard.

Keeping a business organized is the key to helping it grow. With the reporting and analytics features offered on Guesty’s platform, every property manager has the tools he or she needs to see where the business is growing and where it can improve. Companies can use this data to more than double their business revenue and increase bookings and guests. This information can even lead to an increase in listings. The Guesty Integration Marketplace allows managers to use their preferred apps and operate as they choose with all its integration options.

Guesty supports property management companies of any size— from those with a few listings to those with hundreds of properties—while improving their management performance and demonstrating automation and consolidation. Guesty’s seamless cloud-based property management solution will increase conversions and profits by reducing time spent on tedious tasks and investing it in creating additional streams to maximize revenue.

The Takeaway

Guesty is recognized as the one unifying solution for property managers and has implemented tremendous ability for short-term property managers to scale their businesses. “Guesty’s features will generate more direct revenue together with the ability to increase awareness and distribution of listings,” said Amiad Soto, CEO and cofounder of Guesty. “Our company has been growing tremendously in order to continue producing outstanding new features and open up endless opportunities within the industry.”

As the travel industry changes, Guesty continues to provide property managers with state-of-the-art smart technology in one seamless end-to-end platform.

10 Tried and True Ways to Attract and Retain Home Owners

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Jodi Refosco

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October 29, 2017

Growing your portfolio of homes while retaining your existing owners can be a bit of a juggling act for busy vacation rental (VR) managers. Reaching either goal requires you to be a savvy marketer and a strategic planner with strong brand recognition and a robust online presence. That is the basis for positioning yourself as an expert in order to build the required trust for successful partnerships.

Having built a company from the ground up, I have a lot of experience with the peaks and pitfalls of growth. We started with just one home in 2008. By July of last year, we had 239 properties—all of which were acquired organically. The following month, we finalized the purchase of a competitor that increased our inventory by 100, and we currently manage more than 380 vacation rentals.

I put together a list of ten tools that are essentials for your “owner acquisition toolbox.” They can help you stand out from your competition as you nurture new and existing relationships.

1) Email Marketing

Whether you have access to public email lists in your area or build a database of prospective owners from scratch, email marketing is an inexpensive and efficient way to keep your brand in front of your target audience.

2) Messaging with a “Wow!” Factor

Think outside the box to attract owners. Everyone likes getting a surprise package in the mail—think promotional items that really pop! Send owners an item that is both fun and useful, and not only will they think you are clever, but items that are used daily will keep your company top-of-mind.

3) Postcards—The Old Standby

While much of our marketing efforts have moved online, don’t discount traditional methods such as postcards. In some areas, getting mailing addresses through tax lists may be faster and easier than building an email database.

4) Triggered Emails

After that first conversation, a hot lead can quickly turn cold if you do not continue the interaction. Triggered emails allow you to send follow-up messages that are both personal and informational with a frequency that you define. It is a “set it and forget it” way to keep the discussion going.

5) Turn Existing Owners into Brand Advocates

Word of mouth carries a lot of weight when choosing a management company. Showcase short videos or written testimonials on your website, and let existing owners share their experiences.

6) Connect in Person

A big step toward retaining an owner includes personal connections. Host a coffee hour or luncheon to provide an opportunity to connect with your team and to share company updates, milestones, or highlights.

7) Stay in Touch

When you are not connecting with owners in person, keep them engaged with a newsletter or dedicated owner blog.

8) Educate to Inform and Set Expectations

This one applies to both acquisition and retention. Take the guesswork out of owning a vacation rental home by answering FAQs, providing valuable tips, or sharing data on how to make the owner’s home more marketable.

9) Social Media Is Essential

An owner who is researching your company will more than likely check out your social media profiles. Posting with consistent frequency, having a large following, and promoting both your area and your homes tells owners that you are on top of your marketing efforts.

10) Make Your Website a Valuable Resource

Craft content for your website that offers value, and make it easy to find. Whether it is suggestions for popular amenities or conveying the importance of a deep clean, equipping your owners for success creates a win-win situation.

There is no simple way to secure and retain owners, but you can significantly improve your odds by including these methods in your overall strategy.

What’s Happening to Your Profit?

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October 29, 2017

There’s a leak somewhere. You can hear it. Drip. Drip. Drip. If this keeps up, your whole house will be flooded. Naturally, you will find the source of the leak and either fix it yourself or hire a professional to do it for you. We don’t leave leaks unaddressed in our homes, so why do we allow our profits to continually leak out of our businesses?

As small business owners, we’ve got a simple decision to make: Will we continue to exhaust ourselves, working to just get by and maintain the status quo, or will we decide to stop the leak and begin to enjoy the potential profits in our businesses? Thousands of businesses, both big and small, are just barely getting by. They make it month to month, surviving with “on paper” profit but with little to no real cash flow. If this sounds like you, how can you find a solution for your business?

We have all been there: chasing the mighty promise of profits, only to end the year with nothing to show for it. I made a number of mistakes and finally decided that I’d had enough. The perpetual hamster wheel was getting me nowhere. That’s when I decided to dig into my numbers. I pored over the financials trying to simplify the rows and columns of numbers and figures on my P&L and balance sheet. The business seemed to be running well, except for the glaring fact that I had very little cash profit to show for all my effort.

That’s when it hit me, like someone was banging a huge gong inside my head. I was overcomplicating the whole thing. Keep it simple, stupid. What’s the one thing that defines your business? How do you get paid? For the vacation rental business, it’s a reservation, a turnover, a guest departure, or a checkout.

I realized that I didn’t need to have fifty different line items in my P&L, and I decided to simplify the financials to its most basic form. Profit is traditionally calculated by subtracting your expenses from your revenue (Revenue − Expenses = Profit). This is not rocket science. What I saw was that I was looking at my financials too broadly. As I drilled down and looked a little closer, I began to find the leaks. They weren’t just small leaks, either. It wasn’t just a drip. There was a steady flow of money leaking out of the business. I felt sick to my stomach. I had fought tirelessly to grow my business, thinking that growth would result in higher profits. I was wrong. My mind raced back, and I quickly calculated what I had lost due to my inability to see this in the past. It was several hundred thousand dollars. I needed a drink.

The night of this realization, I couldn’t sleep; it was like I was haunted by little personified dollar bills. They were chasing me around in my dreams. I kept waking up, thinking about all the money I could have made, thinking about how different the business could have been if I’d seen this earlier.

Then it came to me—the reason for my leaking profits. I shared the reason with a good friend of mine (we’ll call him Teddy), who had asked me to help him with his business. When I first shared my idea with him, he looked at me blankly and then he said, “There’s no way I can do that. I want to grow my business. If I do what you say, I won’t be able to support my growth.” I tried to explain my idea to him, but he didn’t get it. I wanted to shake him and yell, “Dude, listen to me!” I didn’t. I just shrugged it off and helped him focus on his challenge at the time. It turns out that there are often several issues affecting profitability, but for him, there was one glaring issue.

A couple of months later Teddy called me, frantic. He said, “You were right. You were right! I just checked my expenses per property. I average $125 per turnover. That includes the cost of marketing, reservations, guest relations, accounting, and administration [his total cost per turn]. On some of my properties, I only make $120 per turnover. I’m losing money by managing these properties. Holy crap, you were right! I need to cut some of these properties. I’m making no profit on any of these properties!”

What I had discovered, and what Teddy eventually discovered as well, may seem counterintuitive at first. Decreasing the number of properties in your inventory (or clients you serve) can in fact improve your bottom line. You try to rationalize it; “Self, they are covering my overhead. My gross sales are off the charts. I am crushing it! If I cut them, then I’m not growing.”

If you are honest with yourself, though, you know that they are the reason for your ridiculous overhead costs. You’ve hired more personnel just to cover the day-to-day activities required to service those clients. You don’t have time to train all those employees, so frustrated employees leave to find greener pastures, or, worse, they stay and bog down your inefficient machine. Nevertheless, you had this grand vision that you needed to be the biggest and baddest [insert your title and dream jobs here] on the planet. You thought that by growing your business as large as you could, you would naturally reap higher profits. Unfortunately for you, and for most businesses in the world, high gross sales do not necessarily mean higher profits.

Someone once told me, “Volume fixes all your revenue problems.” I couldn’t disagree more. Gross sales and volume do not fix all your problems. They can actually exacerbate your problems. Do you have poor profit margins on a specific client? Do you think it’s a great idea to pick up one hundred of those clients before you know that you have poor margins? In this case, two negatives do not make a positive. It makes one huge problem.

I’m no accountant, but I think somewhere along the way, we overcomplicated the way we manage the financials of our businesses.

Granted, maintaining accurate financial statements is imperative if you ever want to sell your business or if you want to keep Uncle Sam off your back. There are great accountants out there for that. As a busy manager of a thriving small business, you don’t have time for that. You need to focus on your business and to focus on your profit above expenses and gross sales. Growing sales tends to boost our egos, which subsequently fuels an expense-driven fire that eventually burns down our businesses. And we wonder why so many businesses fail! There’s a beautiful mix between gross sales and minimal expenses that will make you profitable. I’d encourage you to simplify your business financials as much as possible; in fact, try to find the simplest metric in your business that will help you easily identify your profit potential (think like Teddy did). I don’t know your magic number, but I’m certain we could figure it out.

Below are simple steps to help you push your business toward profitability and sustainability. It would be silly to think that these would fix every problem in your business. They won’t necessarily make your business run like a well-oiled machine, but you should no longer be driving a Ford Pinto.

7 Ways to Foolproof Your Business

1) Define Your Vision.

Focus, focus, focus. Stop acting like a squirrel, chasing every distraction under the sun. Focus on the verticals with the most opportunity. While you’re at it, mathematically define what that opportunity looks like. Does it meet your profit requirements in the next step?

2) Simplify Your Financials.

Revenue − Expenses = Profit. I like to know the conclusion first. If I know where I’m going, I can get there faster: Profit = Revenue − Expenses. There we go. I feel better now. Profit! Set your profit margin. Be realistic. Adjust your profit margin. Try to focus on transactions that will meet your profit requirements. There will be times when you negotiate and reduce your profit, but don’t sacrifice too much.

Simplify your financials. For each client and each widget, do you meet your required profit margin? If not, what’s going on, and can you adjust the variables?

3) Standardize Your Business.

Create standard operating procedures (SOPs). What makes your business run smoothly? How can you re-create that process? Test it. Test it again. Write it down. Now you have your standard operating process. Repeat those steps until you have documented all the day-to-day routines in your business.

Create HR manuals. Vacations, sick days, payroll, benefits—all these policies need to be documented. You also need to comply with state and federal regulations for how to treat your employees. Your goal is to keep from having any lawsuits and to make sure everyone is treated fairly.

Articulate Job Descriptions. You can’t manage what you can’t measure. You can’t measure what you haven’t defined. You need to be sure to document your expectations for all the roles within your business. There are a plethora of job descriptions online for almost any position you envision.

4) Train, train, train.

You have to replicate yourself and all your best employees. Here’s the truth: you are going to burn out. OK, maybe not tomorrow or next week, but soon. Then again, maybe you won’t burn out, but you will want to enjoy your life outside of work. Life is too short to work all the time. Create your clones and encourage them to create theirs.

5) Find a mentor.

There are lots of experienced guys and gals who have already gone through what you’re going through. Their experiences have given them wisdom that you could use. My wife would laugh at that previous sentence. It has taken me a long time and a lot of mistakes to begin admitting that I need help, but I do. I don’t know everything, and I need help. There’s no need to reinvent the wheel. Find someone who’s been where you want to go and ask that person for advice. If he or she won’t give it to you, annoy him or her until he or she concedes to your nagging. Once you find a mentor, go ahead and lose your pride. He or she will bust your chops. It’s good for you, and you need to be humble enough to listen to his or her advice.

6) Marry your people with technology.

Utilize your people for what they were intended to do: have and develop relationships. Use technology to manage the portion of your business that computers can handle. Computers weren’t created to build relationships, and people weren’t built to be logic-driven, data-crunching machines. Leverage the strengths of each and see your business take off.

7) Put your people before your business.

Putting people first doesn’t mean hiring people who are unqualified. Your employees are the most important asset of your business. Cultivate and care for them, and they will help you achieve your vision.

I remember, when Pop, my step-grandfather passed away, how many people came to his funeral. I had only known him for a couple of years, but I was impressed with how loved he was. I didn’t realize the extent of that love until a couple years later. I was hanging out with one of Pop’s friends, William. We were chatting over a few cold beers, and I told him that I wanted to eventually run my own business, and impact people the way Pop had. He exploded! Think grizzly bear attacking a small child, except that I was a grown man and might have peed myself. I played dead. William screamed at me, “You’ll never be half the man Pop was. Your Pop saved the lives of half of the people in that town we live in. Don’t ever think that you’ll be even near what he was.” I thought about what he said later and continue to think about it every now and again. Life is built on relationships. Life excels on relationships. William wasn’t mad at me because I thought I could be Pop. William just wanted me to understand that Pop sacrificed so much for so many, thereby endearing himself to his employees. A leader must first serve; William taught me that was how Pop inspired him. I wanted to be like Pop.

Expedia CEO Discusses HomeAway’s Q3 Growth: “They are just pushing a ton of change.”

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October 26, 2017

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Despite an active hurricane season, strong third quarter performance by HomeAway provided Expedia with much needed positive talking points during today’s earnings call, as newly appointed CEO Mark Okerstrom announced that the company’s revenue of $2.97B (+15.1% Y/Y) missed by $10M, resulting in a 16% drop in stock price during after hours trading.

The highlights from HomeAway include:

HomeAway delivered $305 million of revenue, representing an increase of 45% year-over-year.
HomeAway room nights were up 36% year-over-year.
HomeAway offers nearly 1.5 million online bookable listings.
95,000 HomeAway listings are now on 28 Brand Expedia, Orbitz, Travelocity, CheapTickets and ebookers points of sale (up from 65,000 in Q2).
Over one-third of HomeAway’s nearly 1.5 million online bookable listings are now instantly bookable .
HomeAway continues to roll out updates of its secure messaging platform for its North American and European sites, with pre-booking communications now facilitated through the secure messaging system for over 65% of listings.

“Q3 marked another solid quarter of execution by the team as they continued to drive their transformation from a subscription business to a true online eCommerce business,” said Okerstrom. “For Q3, transactional revenue exceeded 75% of HomeAway’s total revenue for the first time ever. Conversion rates at HomeAway continue to steadily climb as they ramp up test and learn velocity on traveler facing experiences and introduce new features making it easier and more attractive for travelers, property owners, and managers to transact on the HomeAway platform.”

CFO Alan Pickerill added, “HomeAway gross bookings grew 44% while revenue grew 45% to $305 million. Stayed property night growth came in at 36% and would have been higher absent the hurricanes. Third quarter transactional revenue grew by 116% and peaked for the year at $236 million.”

Pickerill continued, “Subscription revenue declined, decreasing by 37% year-over-year, as HomeAway continued to gain momentum in their eCommerce transition. HomeAway reported the highest quarterly adjusted EBITDA in the company’s history of $126 million representing 63% growth year-over-year.”

Expedia to “Lean Into” Paid Marketing Channels

“Given solid progress at HomeAway, we plan to lean even more heavily than anticipated earlier this year into paid marketing channels, a trend we expect to continue through 2018,” said Okerstrom.

“For HomeAway, for example, they by the end of this year, we’ll be in a position where they have a true technology-driven performance, marketing platform in place. And with the increase in online bookable properties, they’ve got now up to 1.5 million [listings], with 1/3 of those now being instantly bookable with the platform in place. They’re just going to be in a better position to actually execute on performance marketing, make sure they’ve got coverage and actually track the results than they’ve ever been, and so that will enable them to step it up.”

“Listen, I think certainly HomeAway’s aspiration would be to accelerate online bookings. But remember that the historic portion of HomeAway’s bookings that came from performance marketing channels was pretty darn small and actually a lot of it comes direct. You know, a lot of it comes through other branded sources, you know, SEO is a source, and that’s been challenged, you know, across the whole industry. So the question is does the performance marketing, does that become big enough to move the overall number up or not. And we don’t really know the answer to that. I mean, what we do believe obviously is that the performance marketing based bookings are going to grow very quickly and will probably accelerate. But whether or not that can move the whole number, it’s hard to say at this point.”

Will “Elevated” Guest Fees Remain?

Deutsche Bank’s Lloyd Walmsley asked the team, “Can you kind of give us a sense for whether the fees that we’ve been seeing on the customer side of late are going to continue at these elevated levels into 2018, or if these are perhaps just tests?”

Okerstrom replied, “It’s hard to say with any precision whether looking forward fees are going to be at the level that they’re at right now. The team is really doing a ton of testing. So, you know, you may see something that other consumers don’t see. I mean, we will do things where we test things sequentially. So it’s hard to get a gauge or give you more guidance than sort of keep your eye on things.”

Is HomeAway Beating Its Competitors?

According to Okerstrom, “If they were sitting still and doing nothing, I could say that they’re just getting lifted by the rising tide, but they are just pushing a ton of change. It’s remarkable how much change that that team has accomplished in such a short period of time, and they’re not even nearly done. So I think that they’re winning in the market. Now, whether or not they’re winning from a like-for-like competitor, whether they are encouraging more people to travel than would otherwise travel, whether or not they’re taking from the traditional lodging market. It’s hard to say, but we do believe that they are growing significantly faster than the overall alternative accommodations market.”

Subscription vs. Pay Per Booking

Okerstrom said, “In terms of mix between subscription and PPB (pay per booking) on the host side of things, you know, I’d say generally the trend has been to shift to more PPB. It’s hard to say exactly where it will go. I mean, I think that all of the hosts are trying to figure out what’s the optimal break-even point for them. But I think increasingly as HomeAway transitions to, you know, a real marketplace model and starts introducing things like the Accelerator program which like we’ve got on the hotel side, I think it may be the case that PPB hosts just have a better ability to compete in that marketplace. But time will tell. But the trend is definitely towards more PPB.”

Hosts, not Homeowners

For the first time, Expedia executives began referring to vacation rental homeowners as “hosts” instead of homeowners or owners. The term “hosts” was made popular by its primary competitor Airbnb, and the change in terminology indicates an internal shift in how Expedia is thinking about the industry.

Integrating HomeAway Inventory onto Expedia Sites

Okerstrom: “In terms of integrating the inventory from HomeAway onto the Expedia, Inc. sites, I think the first pot of inventory to go after there is the 500,000 some-odd instantly bookable listings. We’ve got 95,000 of them now integrated into our core lodging stack. And really the goal right now is to get ourselves in a position where we have real property density across a number of popular destinations and we’ve got enough demand which we now are up to 28 different points of sale, that we can really start to get the statistical significance on tests that we’re running around how do you best present this inventory to ultimately deliver the most bookings by essentially matching that inventory with the demand or the customers who are actually looking for it.

“So that’s what it’s about. I think we will ramp it up even further here in the fourth quarter and into 2018. And our hope is that we do get better and better at matching the right customer to the right property. Our expectation is that we will. We do not have yet firm plans on integrating all of the other inventory yet, although it is, which is not instantly bookable, but is absolutely on our radar, and that is something that could come later on in 2018, but we have no definitive plans at this point.”

HomeAway’s Target Revised

Expedia also announced that it is revising targets for HomeAway downward. According to Pickerill, “We see great potential at HomeAway, given solid progress we have seen in the transition so far. As such, with our eye to the long-term opportunity, we are inclined to continue to invest in that business. Additionally, HomeAway is undertaking its own cloud migration, which we estimate will result in nearly $30 million of direct cloud expense next year. Given these factors, we now expect HomeAway’s 2018 EBITDA to be below the previous target of $350 million.”

Source: Seeking Alpha EXPE Q3 2017 Transcript

One Size Doesn’t Fit All in Vacation Rental Owner Acquisition

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October 26, 2017

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Great homeowners are the foundation of every vacation rental management business, and each year, attracting them becomes more of a challenge. As OTAs increasingly offer many benefits of a property manager, the task of owner acquisition grows harder every year.

The common question “What can you do that I can’t do myself on Airbnb, HomeAway, or VRBO?” is becoming tougher to answer because there are so many options for homeowners to manage their own rentals—even from a distance.

So, unless an owner is firmly committed to this path, managers need to become creative in convincing owners that choosing a property manager is the best decision for their rental business.

The first step is to appreciate that this is not a one-size-fits-all process. Owners have different goals, needs, motivations, and levels of interest/involvement. A simple web page with a list of features, an information sheet, and a single follow-up call might have been enough to capture a new owner in the past, but now we need a comprehensive strategy that considers a multitude of personas and how to reach them.

Owners come to a rental agency via a couple of paths. Some are completely new to rental and need guidance and education on the process. They aren’t confident enough to carve their own way as an RBO, although that may be a goal for them.

Others may have been managing their own rentals for a while and are ready for a third party to cut the stress and time-eating aspects of the business. They have experience with the operational side of the business and want to hand it over to someone else to manage.

A third group is the investors/owners who have thoroughly researched the market to look for the best location to purchase. They know what they want to achieve in terms of income and are looking to a property manager to bring that in.

Identifying different types of owners and uncovering their pain points and creating persona-based strategies for acquiring them will help property managers define the types of information they need to develop and how to approach each one individually.

These examples are some of the types of owner personas a management company might deal with, the relationships that work with them, and some ideas of the free information that would appeal to them. Different locations and regions tend to attract more of one type than another, so for those entering the business, it’s worthwhile to spend a good amount of time on research.

Absent Investor/Owner

Jeff is a millennial investor who has been attracted to short-term property rentals through seminars he’s attended. He knows there is significant growth potential in the market through what he has heard about Airbnb, and he has researched locations thoroughly. He wants to be completely hands off with the operational side of property management, but he’s interested in traffic to the listing, conversion rates, channels that are in use, and cash-flow forecasting. His goals are to buy additional properties and to build up a portfolio of units that rent consistently well, so he is interested in regular performance reports.

The relationship with Jeff is businesslike. He understands terms such as cash flow and dynamic pricing, and he wants frequent reports that show how his place is doing, where it is being advertised, and how seasonal rate changes impact his cash flow.

What Jeff Wants from a PM Company

Jeff wants efficiency, regular communication with an account executive, and updates on the performance of his properties. Although he’s hands off with the operational side of the business and doesn’t deal directly with his guests, he pays close attention to reviews and feedback.

The most effective lead magnets in attracting this persona would be

Financial forecasting tools
A Guide to Preparing a Home for the Millennial Market

Owner/User Family Home

Bill and Sheila inherited their vacation home and want it to remain in the family for future generations to enjoy. They see rental as a way to keep the home while allowing them to use it for family vacations once or twice a year. Because they’ve known the home for decades and their kids were brought up vacationing there, they value some of the traditional aspects that may not be desirable to their guest demographic. They know little about the rental market beyond what they’ve heard from neighbors, and although they know some updating is necessary, they are reluctant to make too many changes. Their primary concern is that guests will look after the property and not use it for parties and teen get-togethers.

The relationship with Bill and Sheila is nurturing. They want to feel confident that their home is being cared for and that guests respect it. It’s also important that they appreciate the changing nature of the guest demographic to help them understand the hospitality perspective of today’s rental industry.

What Bill and Sheila Want from a PM Company

Bill and Sheila need help building confidence that this is a good step for them, and they need to learn about their role as owners in the travel industry. They value a personal connection with an owner liaison/account manager who can explain in detail what they will need to do.

The most effective lead magnets in attracting this persona would be

A Guide to the Top 10 Features Families Look for in a Vacation Home
What to Expect When Renting Your Home (video series).

Involved, On-Target Owners

Joe and Mike have experienced many vacation homes around the world, and they want to buy their own. They may want to retire there eventually, but they see the home as an income generator in the meantime. They are busy with their own business, so they want an agent to manage marketing and reservations. But they want to be involved in the management of the property, including changeovers and maintenance. If the property is vacant at any time, they might want to use it, but their primary goal is for the property to pay for itself. They want to learn everything about the business and are open to all ideas for maximizing income.

What Joe and Mike Want from a PM Company

The relationship with Joe and Mike is more of a partnership given their desire to be involved in the operation of the rental. They want to share their ideas and get feedback on any improvements they make.

The most effective lead magnets in attracting this persona would be

How to Create a WOW Response and Get 5-Star Reviews
Checklist for Creating a Gourmet Kitchen for Your Guests

While creating these positive personas can help in a quest for great owners, it’s also a sound idea to look for the negative aspects that act as red flags. The potential of a successful property can be held back by an owner who is not fully invested in hospitality, has little concept of the cost of doing business, focuses on minor damage, or has listed with different agencies in the past. Here’s an example.

The RAM Owner

Gary has registered with several local agencies in the past and can list all the reasons he was unhappy with each one. He’s had some incidents of overcrowding, so he installed a security camera on the front door so he can check on arrivals and is very detailed in how often and how diligently he examines the footage. He’s looking for a property manager who takes a significant security deposit because, in his recent experience, his claims have not been fully met. He employs his own cleaning team, who report to him every week with their opinions on each rental group and whether they were suitable for the property.

The best recommendation for this type of owner is to run a mile.

Joking aside, this business is not for everyone, and some homeowners are looking for income without bearing the responsibility that comes with it. Understanding the different personas allows us to select the ones who are motivated to succeed and will work with their property manager in a relationship-based way.

About Heather Bayer

Heather Bayer is co-founder of The Vacation Rental Formula and host of the Vacation Rental Success podcast. She is also CEO of CottageLINK Rental Management, a property management company based in Ontario, Canada. She will be speaking at the VRMA National Conference in Orlando and at VRSS18 in San Antonio in May.

7 Trainer Tips on Using Technology for Authentic Guest Engagement

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Doug Kennedy

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October 26, 2017

When vacation rental (VR) managers walk down the aisles of industry trade shows, such as VRM Intel Live! or VRMA’s annual and regional conferences, they are sure to encounter vendor partners offering the very latest in innovative, technology-based tools that promise to improve and enhance guest experiences and, in most cases, reduce labor costs.

Certainly, smart VR managers will take the time to fully investigate all offerings—due diligence that is recommended by the providers themselves as well as by me. Long-established processes and procedures for the VR industry, as for virtually all others in today’s world, are being constantly disrupted. Therefore, embracing change is absolutely necessary for your company’s long-term viability.

However, simply using the latest technology-based tools in the same way your competitors are using them will not help you gain market share of either renters or owners. In fact, if not used correctly, many of these “solutions” may inadvertently degrade the relationship between the guest and the rental company by eliminating key touch points in the guest and owner experience. As a result, many of today’s VR guests don’t even know which company they actually rented from last time, and owners feel little if any connection to them.

Yes, to stay abreast of the competition one needs to embrace the latest technologies, but it’s more important to use these tools in different ways to stand out from competitors. When considering innovations, think about how each one can be used to personalize the sales and service experience, not just how the tool can reduce labor costs and increase staff efficiencies.

Here are some training tips for using high-tech solutions for old-school relationship building:

1. Use an auto-attendant to answer phone calls after hours and during peak times, but have sales calls answered by a live person whenever possible.

Cross-train all office staff to field incoming calls, answer basic questions, and properly transfer calls (using “call announce,” not “call screening”) when it’s necessary to send the caller to a rental agent.

2. Have an easy-to-use online booking tool on your website, but encourage phone calls by posting your number prominently on the home page and adding copy that says “Call our in-house reservations specialists right now.”

Let callers know they are not going to reach an untrained agent at some giant call center. Make sure the phone number is easy to find when searching on a mobile device. Update on-hold messaging to reinforce the point that callers are holding for a knowledgeable, in-house staffer. Update after-hours messaging to commit to a quick callback the next day.

3. Offer virtual and 3-D floor plans, but train agents to “narrate the pictures.”

Often, guests who are already looking at images online while on the phone will ask your agents for their opinions. Without training, most agents will simply restate facts about the accommodation, such as square footage, number of bedrooms, and a list of amenities. Instead, train them to endorse the options callers are inquiring about (assuming it matches their stated preferences) and/or to use needs-based recommendations and suggestions. When speaking with callers who have not yet viewed images of recommended options, agents often coach callers on how to find a home and view images at the website. Instead, train agents to use screen-sharing tools such as join.me (which is free to use), and then they can easily show callers the images they want to present.

4. Offer online chat, but when the chat is a booking inquiry, train agents to redirect guests to the voice channel if possible.

When conducting on-site training, I often observe agents who field sales inquiries solely via chat, which wastes time and is not personalized. Instead, train them to say, “That’s a great question. Are you by chance by a phone so I can give you a quick call?” Even better, be among the first to embrace video chat! (Skype and FaceTime already offer this option.)

5. For e-mail inquiries, use an auto-responder, but train your agents to follow up proactively with personalized responses.

If a phone number is provided, train them to call the prospective guest and say, “I just had a few questions to help you find the best options.” Otherwise, they should at minimum send a personalized e-mail response. Rather than just using a template, they should start with a few sentences to paraphrase and restate details regarding the sender’s plans if they are described in the inquiry. Even better, if you really want to stand out from all your competitors who may receive a similar inquiry from the same prospect, train your agents to respond with personalized video emails. (Email me to request a sample and link to the only vendor who provides this.)

6. Use a call- and lead-tracking tool, but train your agents to use an investigative sales process to uncover “the story” behind the caller’s vacation plans and to document these details in the comments field of the lead (if not booked) or in the PMS system if booked.

Then train agents to paraphrase and restate such details in their sales follow-up messages and when welcoming guests.

7. Use keyless entry and remote check-in if they fit your operational model, but welcome guests personally.

Make sure your staff members take the time before they call to read the guest history in the reservation and to note any details regarding the guest’s vacation. Then they can use what they know in a personalized greeting or at least leave a personalized voice mail. (Example: “Greetings, Mr. Rodriguez! Just wanted to call to make sure your kids’ first trip to the beach is off to a great start this summer!”) It’s always a good idea to send a locally themed, locally sourced welcome amenity, especially if you are using the remote check-in model to help guests connect with your brand.

Who Owns Your Data? Vacation Rental Technology Companies Weigh in on Renewed Concerns about Data Privacy and Usage.

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October 26, 2017

Last month, HomeAway reportedly contacted several software companies requesting “strategic partnerships” between HomeAway and software providers in which the software companies would share client data with HomeAway to be included in the pilot program for HomeAway’s new revenue management platform known as MarketMaker.

A few days later, at RezFest, HomeAway’s Cliff Vars announced the launch of MarketMaker, which offers users competitive reporting and pricing tools. He also thanked CiiRUS and Streamline for partnering with the company to make this a solution for the whole industry, not just HomeAway users.

As a result, Streamline CEO Carlos Corzo, wrote VRM Intel to emphatically clarify: “We don’t share data with other software providers or industry solutions without [our customers’] consent.”

The discussions between HomeAway and property management system (PMS) providers prompted a renewed interest in the question, “Who owns your data?”

We reached out to several PMS CEOs and company leaders to find out more about their policies and paradigms surrounding privacy and usage of the data being entrusted by vacation rental managers within the PMS. Although HomeAway Software and Kigo have not responded, Barefoot, CiiRUS, LiveRez, NAVIS, RealTimeRental, Streamline, and Virtual Resort Manager (VRM) shared their ideas surrounding data privacy.

We asked the following questions:

Should VRMs assume that their tech partners are protecting their data?
Should technology providers be required to disclose to clients all the ways in which their aggregated data is being used?
What are the potential implications of giving tech companies your data without understanding how they are using it? 
How important is it for VRMs to read and understand End User Agreements and Terms and Conditions?
Do you think we are beginning to or will see software companies seeking to monetize customer data?

Should VRMs assume that their tech partners are protecting their data?

Ed Ulmer, CEO, Barefoot: Yes. This is in our Barefoot Subscription License Agreement. It is the foundation of our partnership.

4.1 Customer Data/Customer may upload and publish its own content to the Service. The parties acknowledge that all Customer Data used with the Service and the Barefoot Software and all data derived from such Customer Data is and shall remain the property of Customer. Barefoot has no right to use the Customer Data without written permission by Customer.

Josh Parry, CiiRUS: Absolutely. The most crucial part of our service is providing a safe environment for our clients’ data. That means powerful servers, server redundancies, and confidentiality of the data.

Tina Upson, LiveRez: At a minimum, managers should expect that their tech partners are taking every reasonable measure to secure their data. This includes storing their data in high-security data centers with regular backups, ensuring PCI-compliance, securing system logins, having user rights management built into the system, providing an easy way for managers to revoke access to employees, etc.

Kyle Buehner, NAVIS: Yes. First, make sure it is clear in each of your contracts that you are the sole owner of the data, and that any use of your data by your tech partner is limited to noncompetitive purposes. Your data is highly valuable, and you should keep ownership of this asset very clear. Each VRM should also look to work with vendors who can clearly demonstrate their commitment to safeguarding your data from theft.

Joe Testa, RealTimeRental: Yes, vacation rental managers should expect that their tech partners are protecting their data. We make sure to keep up with industry security standards to keep our client’s data safe. RealTimeRental is PCI compliant and utilizes SSL encryption, as well as maintaining a 24/7 firewall protection on our server environment.

Carlos Corzo, Streamline: I would hope so. We spend a lot of resources and money to make sure that our VRMs are protected. To do this, we take advantage of external vaults that tokenize data and provide extra layers of protection. We also employ Amazon Web Services, which provides great tools for monitoring and identifying strange activity. Beyond that, to avoid potential problems from disgruntled employees sharing data with competitors, we keep logs of every single user transaction in our system, which allows us to define anyone who has run specific reports. This year, we started whitelisting IPs for system access and requiring tokens to connect through our API, while also employing a system configuration that puts critical data into servers that are not accessible without the proper access.

To add one final layer of security, we also enforce a strict password policy, where passwords cannot be seen. They can only be reset. What is most surprising to me is that companies are not taking advantage of our double OAuth (Open Authorization) capabilities. This is something that all employees at Streamline have to use, and it takes security beyond just the password. While it may be an inconvenience, it is your data. You need to do anything you can to keep it secure.

Pete Wenk, VRM: Absolutely.

Should technology providers be required to disclose to clients all the ways in which their aggregated data is being used?

Ed Ulmer, Barefoot: Barefoot has always been forthcoming in our agreements, and we have been clear since we started that your data belongs to you. We will always side with our clients about how and when they share their data. For example, we have an opportunity for our clients to share their information with the VRM Intel data analysis project. This will be shared on a by-client basis based on their interest. We strive to act only on our clients’ behalf.

Josh Parry, CiiRUS: Yes. The technology provider should have nothing to hide. If the provider intends to use the client’s data for anything but internal analytics, it should be proposed in the contract.

Tina Upson, LiveRez: All software companies should provide their users with guidelines about how their users’ aggregate data could be used. And, when they do use any aggregate data, these companies should be transparent about how they are using it. We use aggregate data for internal analytics to identify how we can better serve our partners, and even then it is accessible to only an extremely small group of team members. When an integration requires that we share a partner’s data, we’re extremely careful to limit that data to only what is needed to make the service function (and that data is only shared when the partner opts into using the service in question). We also carefully vet any and all integration partners, and for a variety of reasons we have decided to not work directly with certain companies.

Kyle Buehner, NAVIS: Your data is a highly valuable asset of your company. I believe it is imperative that you understand and agree with your technology vendor about its uses, ownership, and protections.

Joe Testa, RealTimeRental: Yes, it is very important for vacation rental managers to understand how their data is being used.

Carlos Corzo: Streamline: Yes. If I were going to store a valuable asset, I would want to know all security measures taken by the facility. If someone does not want to disclose how they protect client data, I would be concerned about the strategies they are using.

Pete Wenk, VRM: If I was a property manager, I would require that.

What are the potential implications of giving tech companies your data without understanding how they are using it? 

Ed Ulmer, Barefoot: We have always felt that our clients have absolute control for overseeing their data. We are deep supporters of understanding who, what, and when other entities are accessing your data. Without this, there can be no relationship between a customer and a provider without the trust that an open relationship provides.

Josh Parry, CiiRUS: The implications should be clear, provided you have read the agreement.

Tina Upson, LiveRez: There’s a long list of potential implications. The real questions professional managers should be asking themselves are “Who stands to benefit the most from my data?” and “What potential reward would my software company have for sharing that data?”

Kyle Buehner, NAVIS: The list of negative things that could happen is long and concerning (just talk to your insurance agent about a cybersecurity policy). The companies with which you choose to share your sensitive and valuable data should be companies you trust highly. It is also important to understand how your tech partner can contractually use your data. For example, no VRM would ever want to be surprised that the tech company they partner with actually competes with them and is using their data to market directly to guests or owners.

Joe Testa, RealTimeRental: It is very important to trust the companies you decide to work with. Tech partners should have proper security measures in place and not share or sell client data with third parties without your permission to do so.

Carlos Corzo, Streamline: This is an interesting question. I have learned over the years that companies retain the right to use your data and sometimes claim ownership to the data. Streamline does not believe in using your data without your consent. As most of us know, there is often a correlation between vacation rental software and online booking engines. This is no secret, and these companies legally have access to clients’ data. Property managers need to do their due diligence and understand how their data is being used. If they don’t, many tech partners may be taking your competitive advantage and giving it away. As a property manager in Park City, I don’t want anyone to see or use our data. It gives us the tools to analyze the market and identify strategies from year to year. If someone has the ability to aggregate all the actual data in a market, it makes them extremely powerful.

Pete Wenk, VRM: Loss of control of your inventory and the potential guest; potential for the VRM industry to relinquish booking to OTAs, as in the hotel experience of recent decades.

How important is it for VRMs to read and understand End User Agreements and Terms and Conditions?

Ed Ulmer, Barefoot: Vital to running a business.

Josh Parry, CiiRUS: Extremely, extremely important. For instance, the activation agreement for CiiRUS is five pages of information neatly organized in regular-sized font. It is the least intimidating document in existence, but it still does not get read by all users. It is important to understand your pricing, available features, and terms. You are doing your business a direct disservice by disregarding these agreements and potentially getting yourself in a situation to fall out with your provider very quickly over something that should have been clear via the agreement.

Tina Upson, LiveRez: It’s incredibly important for VRMs to not only read and understand their agreements but also seek clarification if they don’t understand something. That actually helps software companies better understand their customers’ concerns, resolve their issues, communicate more clearly, and sometimes even improve their agreements.

Joe Testa, RealTimeRental: Very important. We have had user agreements for nearly eighteen years. In the early days, every property manager had them reviewed by their council. Today, I believe very few do that.

Carlos Corzo, Streamline: This is becoming more and more crucial. I find myself signing contracts nearly every other day. Every contract goes through our Legal Department, and it is amazing what is discovered. I don’t know that anyone has malicious intent in this industry; however, we all know that data is power. At the end of the day, it is your data, and you need to be comfortable with who gets access to it.

Pete Wenk, VRM: Things can be obfuscated in legalese, so it is vital to read and understand EULAs in the context of what is happening in our industry today. When making a purchasing decision, VRMs should consider the future and how language in the EULA might adversely affect their ability to control their inventory and data down the road.

Do you think we are beginning to or will see software companies seeking to monetize customer data?

Ed Ulmer, Barefoot: Yes.

Josh Parry, CiiRUS: I really hope not. It is our job to sow as much trust as possible with our users, and monetizing their data flies directly in the face of that. I can’t think of any other major contemporary software platform that is currently doing this or would think of proposing this. I don’t think our property managers would let this happen!

Tina Upson, LiveRez: It’s already happening in the general tech space when you look at the ways some free online services leverage your data in selling advertisements on their platforms. In the vacation rental space, data is important for a lot of the same reasons. Your guest lists, owner lists, pricing data, etc. could all be misused by a company to either market directly to your customers (both guests and owners) or to use the aggregate data for a tool that they could then sell or use to influence market economics in their favor. It doesn’t matter if it’s the software company directly doing this, or if it’s the software company providing this data to a third-party it integrates with (or is associated with in any way). And while it’s important to read your agreements and contracts, it’s just as important to do business with companies you can trust. Because, who’s to say what really goes on behind closed doors?

Joe Testa, RealTimeRental: I think it is important for vacation rental managers to be aware of this trend in the industry. It is important that vacation rental managers use trustworthy tech partners. Beware of certain tech companies that offer free services, because often these free services are a way for companies to collect data to sell. We do not monetize customer data, and takes the proper security measures to keep that information safe.

Carlos Corzo, Streamline: This depends on the ultimate goal of a software company. There are many ways to get market data; however, it is no secret that software companies have access to the necessary data to make intelligent decisions. Our focus is on software and doing anything to help our PMs grow and be successful. If we were to use company data to our advantage, we would make sure to get approval from the customer. After all, it is your data!

Pete Wenk, VRM: Yes, particularly in the case of the larger software companies. In our case, we will not attempt to monetize customer data. The customers’ data is, in our concept, strictly controlled by them, and we do not have any claim on it.

Living in a World of 800 lb Gorillas: Convergence Drives Growth…and Opportunity

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October 26, 2017

4

By Alex Nigg, Founder and CEO, Properly — The short-term rental industry is expanding rapidly. As Douglas Quinby of Phocuswright reminds us, our industry is increasingly converging with the hotel industry, and what used to be called “alternative accommodation” is becoming mainstream.

Converging with an industry that’s seven times our size (as measured in available room nights) is great news and explains why our segment is expected to grow at 14 percent compared with traditional lodging, which is expected to grow in the low single digits. But it is also scary—our own industry had recently seen strong consolidation. As our industry converges with the traditional lodging industry, are we being catapulted into a world of 800-pound gorillas?

Different Expectations

Convergence means that our product is increasingly being compared with hotels. Guests expect the same level of quality—or more—than what they experience at hotels. While dynamic newcomers like Airbnb are selling new segments of guests on experiential travel, those guests expect unique accommodations and consistent quality. Heather Bayer, an experienced VRM and the writer behind Cottageblogger, tells readers that the days when guests bring their own sheets are long gone. As an informal show of hands at VRM Intel Live in Denver indicated, equally gone are the days when all guests arrive and leave on the same day of the week, adding complexity to the process.

Today’s guests expect hotel-like quality, smooth processes, and quality amenities, and they also expect that the Wi-Fi works well and that their experience is built around their specific requirements, such as a list of great fishing spots, a cot for the toddler, a doggie bowl and bed for four-legged companions, and referrals to a great dive bar.

An Impossible Task?

This becomes an operational nightmare. Hotels deal with rooms that have been built for easy cleaning and where every component is standardized, they employ housekeeping staff that go from room to room, each two yards from the next, and a concierge in the lobby is equipped to cater to the guests’ every wish and desire.

Meanwhile, what VRMs pull off every day is more akin to managing a hotel with 300 rooms where every room has a different owner, was built by a different architect, is cleaned by a different housekeeper, and is spread across the landscape. As the platforms (OTAs and distribution sites) continue to drive professionalization, growth, and traffic, the pressure mounts.

The Platforms: Drivers of Growth, Necessary Evil, or Upcoming Epic Battle?

As a key driver of both growth and professionalization, the platforms have done much good for our industry. But there are clouds on the horizon: as Steve Milo of Vacation Rental Pros has presented artfully and entertainingly at VRM Intel Live events, the platforms often fall short on accommodating a VRM’s day-to day needs or business model. Even if these “teething pains” can be worked out, it’s unclear whether a VRM’s interests are aligned with the platforms in the long term.

As the country manager of a major listing platform told me privately, “Just a few years ago, the property manager was responsible for both marketing and day-to-day operations. These days, [the platforms] take care of much of the marketing and pay for it dearly, yet the VRMs are still getting the same commission. A battle over margins is likely on the horizon.”

Also on the horizon is a battle over who owns the guest. As every platform has now adopted Airbnb’s per-transaction pricing, control of the guest relationship has become a more contentious topic.

The Big Squeeze

With the rise of the urban VRM, which typically prices at lower commission rates; Airbnb’s support of micro-VRMs; and emerging low-cost, unbundled models like Evolve, this is likely to increase competition for owners. And increased competition will result in lower prices and higher expectations.

Is a big squeeze on the horizon for property managers? It’s in everyone’s interest to leave enough—arguably, more—money on the table for the owner. After all, the industry is still supply constrained, so it behooves everyone to get more of the millions of second homes not currently listed available for rental. The platforms need to start recouping some of their multi-billion dollar investments that drove much of the industry growth.

Comparing Cottage Industries

Is the short-term rental property management industry well positioned to withstand that squeeze? It’s unclear. While the industry has seen a huge amount of consolidation, the consolidation has mostly been at the distribution level, where four players substantially control the global market (Priceline/Booking.com, Ctrip, Expedia/HomeAway, and Airbnb).

Meanwhile, property management remains a highly fragmented industry. By our count, enterprise VRMs (those with more than 1,000 listings) collectively manage under 30,000 listings in the United States—that’s only 1.5 percent of the US market.

We recently witnessed how much effort it took for a leading US VRM to schedule a meeting with a senior executive at one of the global listing platforms. For the listing platforms, the United States is today not the major battleground—Europe (the current market) and Asia (the future market) feature much more prominently.

Our industry is supported by 400+ VRM vendors, plus an emerging ecosystem of add-ons—a fragmentation that rivals that of our own industry. And we all rely on a network of service providers that is just as fragmented as our own industry. These cottage industries combined may make easy work for the global platforms if their interests no longer coincide with ours. So, where is the good news?

Finding a Competitive Advantage in Operations

VRMs have a competitive advantage: they manage day-to-day operations for the listing and, as opposed to the platforms, own an exclusive relationship. Operational management of the listing is the most difficult part of the VR equation. On the other side, Simon Lehmann, formerly of Phocuswright, at VRMA (Europe) in Amsterdam, said building a brand is an exercise in futility for a VRM. If he is correct, day-to-day operational management of properties will become the key competitive advantage of property managers.

The operational component is likely a key reason why this industry is dominated by local players: knowing the local ecosystem of suppliers has been a key factor in success, as is being close to the property and being able to locally manage the details.

The platforms realize just how important professional operations are. Witness Airbnb’s purchase of Luxury Retreats early this year as an example of exercising more control over the product. And rumors persist that Airbnb will soon launch a “Select” brand, covering a much larger segment of its inventory for exactly that reason—marrying the uniqueness of short term-rentals with the consistent operations expected at hotels. This has also been the theme for well-funded newcomers Stay Alfred and Sonder.

A Massive Greenfield Opportunity

With an emphasis on professionalizing property operations, the outlook for VRMs is promising, and the upcoming fight over margins and market share may be a temporary struggle. If convergence into an industry seven times our size is the theme, then the outlook for the industry on the demand side is extremely lucrative.

But for sustained industry growth, we need supply growth. And two key drivers of supply growth are intrinsically linked to operational excellence. The first driver is the millions of second homes that are not currently for rent. This is a massive greenfield opportunity. Those owners may be less focused on revenue and care more about the stewardship of their asset, their second home. If we can deliver peace of mind, operational excellence, and real-time visibility into how their property is being managed, we may unlock a significant portion of that latent supply.

The second driver is slowing down the regulatory onslaught our industry has recently suffered. While operational excellence is no panacea, it can reassure nervous city councils; the tighter we run the ship, the more accepted and acceptable we will be. Whether this is pre-stay (vetting guests), during the stay (noise and occupancy alerts), or post-stay (having effective, consistent and scalable processes to address any problems), we are better positioned to minimize regulations.

Combating the Bull in the China Shop

Given the rapid growth of our industry, regulatory resistance was all but inevitable. The writing has been on the wall for Airbnb in its urban core markets for a while, and it is now spilling into traditional vacation rental markets.

With its aggressive push into urban markets and awkward handling of the initial response, Airbnb attracted most of the early arrows. Not much love is lost in city councils around the world for a multi-billion California company that stepped into constrained urban housing markets like the bull in the proverbial china shop.

Local property managers present a much friendlier face as they are grounded in their communities. Even more importantly, property managers contract for billions of dollars of local services. And because these services are provided by local sole proprietorships and small businesses, they touch an important local constituency.

As an industry, it is critical for us to showcase the local impact we have. City councils won’t shed a tear for a billion-dollar, far-away corporation. But they will pay attention when they understand how STR regulation affects Jane the contractor, Bob the gardener, and Pat the housekeeper. Hotels spend 14–18 percent of their revenue on housekeeping. Assuming that our industry will spend 15 percent on local operational costs, that’s more than $2 billion in local spend per year.

A VRM’s Crown Jewels: Scalable Processes and Great People

To achieve operational excellence, which underpins our industry’s competitive advantage, we need consistent, replicable, and scalable processes. We may not be able to outcompete Booking.com or Expedia’s long-tail performance marketing, Airbnb’s brand marketing, or Ctrip’s access to new customer groups in the long run, but we can run circles around competitors by turning our local, on-the-ground operational experience into consistent, scalable, and replicable processes.

In other words, our processes are our crown jewels, the key to our competitive advantage (and if we so choose, to scale). Personally, I’m still learning something new every day: just last week, a guest managed to incinerate a bowl of rice in the microwave so effectively that two rooms in the house suffered smoke damage. Never having dealt with this problem before, it was a first-time adventure for me. I’ve turned the response into a process, which is ready for when I (or anyone else) needs it next.

Of course, processes are only as good as the people executing them. We need to spend just as much time on recruiting, training, motivating, monitoring, and delivering feedback to our partners on the ground.

Tech as the Enabler: The Forgotten Stack

Technology plays an important role as an enabler of processes and people. Our biggest investment needs to be in developing our people and fine-tuning and iterating on our processes. Technology is subordinated to that. Technology can help us capture processes and manage them deep into the field, and provide actionable feedback to our people—in that role, technology becomes core to our competitive advantage.

Walter Buschta of Phocuswright gave an excellent overview of the VR tech stack at VRM Intel Live in Denver recently. Quite tellingly, the tech stack he described focused almost exclusively on the marketing side. But this is only half the story: the other part of the story is the forgotten operations tech stack. As operational prowess becomes more critical to the success of VRMs, this will be the stack to focus on.

The key layer of the operational tech stack needs to enable process and people management—this is what VRMs spend 60 percent of their resources on, and it is key to their competitive advantage. But the operations tech stack shouldn’t and can’t live by itself: it needs to integrate with the core property management system (PMS).

Conversely, the core PMS is unlikely to cover this function well: PMSs are fundamentally delivered as cloud-based web software. The operational tech stack needs to connect myriad outside providers and devices with the processes of the VRM. The common denominators are native apps and mobile phones first, and APIs second. This requires scale, such as platform needs, to connect anyone from Jane the contractor, and Pat the housekeeper to the smart home thermostat, the NoiseAware noise monitor, the PartyCrasher occupancy monitor, and the grocery or restaurant delivery…everyone—and everything—into one common fabric.

Hardware and How To Make It All Scalable

The last twelve months have seen exciting developments in hardware that can support VRM operations. Connected smart locks are making inroads into the consumer side of the market. This will hopefully help drive expenses down and accelerate acceptance. Point solutions are being developed for VR industry-specific problems (e.g., NoiseAware as a noise monitor and PartyCrasher as an occupancy sensor).

But the problem with many of these solutions is that they are stand-alone solutions. VRMs must consider tying these solutions together into a common framework—a noise alert is of little use unless it attracts the attention of the on-call listing manager, and that listing manager knows what to do. Ultimately, process management and smart home device management must be tightly integrated into one infrastructure where all the pieces work seamlessly together.

Perhaps most interesting is the tech battle over who gets to sell add-on services to the guest: the property manager via an app, the platform via its guest app (e.g., Airbnb); or the PM with a partner via an in-home device (e.g., Amazon Echo powered by Alexa voice control).

The Tech-Enabled VRM: Developer or Integrator?

“The tech-enabled VRM” has developed much excitement. The debate whether the term is more substance or marketing speak is valid. But the outlines of the tech-enabled VRM are becoming clearer: increasingly, they are smart integrators, as opposed to developing technology in-house. This was one of the insights from VRM Intel Live in Denver—even the enterprise-scale VR managers are moving away from in-house technology development. This makes sense: with ever more complex integrations, scale is required in technology development. At the current scale, the largest US VRM would have about a 0.1 percent share of the global market—certainly not enough to get to a viable scale for sustainable technology development.

Software vs. Platform

A final consideration is the difference between software and a platform. Software is implemented inside a company; a platform connects many participants across a fragmented industry. Given the fragmentation at both the VRM and service supplier level, a platform approach seems ideally suited for the short-term rental industry. Imagine a future where the entire industry collaborates on training and rating its service providers; where VRMs can efficiently schedule service providers; and where the key differentiator becomes the quality, breadth, and scope of processes and the effective management of our human resources—all enabled by technology.

Conclusion: Industry in Rapid Transformation, Lots of Opportunity for the Well-Prepared

“Alternative accommodation” is certainly becoming mainstream. And with an increasing percentage of distribution handled by four large global platforms, VRMs will have to get used to living in a world of 800-pound gorillas.

It remains to be seen whether the gorillas will be friendly or threatening. There will likely be some skirmishes over margins and over who owns the guest. The current honeymoon where the platforms aggressively court VRMs in the battle for market share will end, at least in some geographies. Our urban colleagues in many cities are already seeing this.

But on balance, VRMs have not been dealt a bad deck of cards. Where there is rapid change, there is opportunity. Operational excellence is one likely area where VRMs have a competitive advantage. Ironically, operational complexity has resulted in keeping our industry fragmented. Building on this competitive advantage will require attention to processes and people management—underpinned by technology as an enabler—and a platform approach.

Technology platforms level the playing field for smaller participants. VRMs have the additional advantage of having an exclusive relationship with owners. In a world of increasingly professional managers who crosslist on many listing platforms, it makes sense for service providers to forge relationships with the exclusive manager of a property.

The more VRMs can showcase operational prowess, deliver peace of mind, and inject real-time visibility into property operations, the more likely they are to unlock the millions of second homes that are not currently available for rent and truly grow the market. This will make for a bright future for those VRMs who prepare for the coming changes.

About Alex Nigg

Alex Nigg is the founder and CEO of Properly, an operations platform for short-term rentals connecting thousands of properties across North America, Europe and Australasia with their service providers. Nigg is a frequent speaker at industry events in North America and Europe. With his partner Tammi, he also manages vacation rentals in San Francisco, Seattle, and New Zealand. Prior to finding his passion for the vacation rental industry, Alex was a management consultant at Bain & Company, an entrepreneur, and a venture capital investor in Silicon Valley.

Vacasa Raises $103.5M in Largest Funding Round in Vacation Rental Management History

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October 17, 2017

Vacasa announced today the company has raised $103.5 million in a Series B funding round led by Riverwood Capital, followed by New Spring Capital, along with past investors Level Equity and Assurant. This triple digit raise offers Vacasa a lengthy runway to test its model on a large scale.

The investment will be used for growth through acquisitions and organic market launches. according to CEO Eric Breon.

With 6,000 vacation homes under management and 1,600 full time employees, Vacasa is the second largest vacation rental management in the United States behind Wyndham Vacation Rentals. However, as Vacasa is expanding internationally, Wyndham is looking to unload its European vacation rental division.

Building a recognized brand in vacation rentals has proven to be difficult, and the industry has received recent criticism for not having brand standards. However, standardization will not be a focus for the new investment, as Breon is leading the company away from the idea of “brand.”

“A Hilton-branded vacation rental won’t mean anything to anyone,” said Breon. “It is all about brand standards, and brand standards are hard in this space. I don’t think brands are needed. [Guests] want to know what they are getting, but they are not looking for standardization. As long as everything functions as expected, it is clean, and it is what they thought, that’s all we need to do in this.”

Breon also indicated that the company will continue to utilize third party channels and OTAs as their primary source of bookings.

Looking to the future, Breon expects to see fast growth. “We are growing about 70 percent this year with a 50 percent growth in head count,” said Breon.

If Vacasa reaches their goal, within the year, it will become the largest North American vacation rental management company.

According to a press release, Ben Levin, co-founder and co-CEO of Level Equity, said, “It is exceptionally rare to see a business of this scale growing this quickly. Vacasa has almost tripled its revenue and unit count in the year and a half since we invested while significantly increasing their geographic and technology footprint, as well as growing their senior executive team and brand.”

Vacasa added Riverwood Capital’s Jeff Parks to its board. Eric Breon will remain CEO, and Bob Milne will continue to serve as COO. Co-founder Cliff Johnson will head up the international division, Colin Carvey was named Head of Growth, Tim Goodwin serves as CTO, and Christina Rosalie joined the team as Head of Brand.

OneRoofTop Founders Discuss Recent Acquisition by Cloudbeds

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