The Short-Term Rental Battle: The VRMA Develops Tools Needed to Combat Proposed Regulations

Having spent my career with one foot in the hotel side of the lodging industry and the other in the vacation rental management space, it has been quite interesting to see how each sector has evolved its processes and practices over the years. One such example is the process of revenue management.

In the Beginning

When I started my first hotel training company in 1989, the process of managing revenues was a core function of hotel marketing and the director was responsible for setting rates and restrictions, such as minimum stays and “closed to arrivals.”

These executives had limited data points from which to set future pricing strategies. They performed competitive rate shopping by spot checking to see what other nearby hotels were charging and how often they were sold out of rooms, and they looked closely at historical booking pace trends for their own hotels.

Their ability to use what little data they had was limited by the bias of their paradigm. While some executives focused mostly on building occupancy with a “heads in the beds” paradigm, others wanted to be leaders in room rates, therefore gambling on filling up rooms when last-minute travelers grew desperate. Either way, pricing decisions were made on gut-level intuition.

Does this sound familiar my vacation rental friends?

Uniform Metrics

Coincidentally, around the same time I started my training business, the entire industry started to look at a new metric, popularized by Eric Orkin, the founder of the early revenue management automation system called OPUS 2 Revenue Technologies. This metric became known as RevPAR, which was short for Revenue Per Available Room. This system truly revolutionized hotel pricing because now there was one metric that showed how to optimize profits by focusing on both rate and occupancy.

Competitive Intel

Almost simultaneously, another business was launched by Randy Smith, founder of Smith Travel Research (now known as STR Global). His company started a subscription service called the “STAR” Report. Having previously worked at a top-tier financial consulting company for the hotel industry, Smith had enough credibility and C-suite level contacts to do something that had never been done before: convince most of the major hotel brands to report their Average Daily Rate (ADR) and Occupancy Rate on a monthly basis, thus enabling calculation of their RevPAR.

For each subscribing hotel, Smith combined the results from a self-selected list of competitors in the subscriber’s area or region and reported the performance data as a blended number. Put simply, if you were Holiday Inn and your main competitors were Sheraton, Hilton, Marriott, Hyatt, and Radisson, the report showed how you performed against the combined numbers of all five of the “comp set,” with STR maintaining confidentiality on the performance of any single competitor.

The Birth of Revenue Management

Next, a whole new profession took off. Marriott, and later several other hotel brands, had their Reservations Managers apply for a new position called Revenue Manager, and soon upgraded this position to an Executive Committee level option parallel to the Director of Marketing.

Not long after, technology systems started to evolve, using algorithms to determine the best rate to charge based on predicted demand. This is when the training company I co-owned at the time began offering revenue management training as a public venue training course throughout North America. When I sold that company, I helped Bob Gilbert and the HSMAI (Hospitality Sales and Marketing Association International) found the Revenue Management Advisory Group, which is now the largest group within the eighty-year-old HSMAI association.

It has been interesting to see the once rudimentary methodologies of hotel pricing evolve into a new hotel career path and simultaneously a whole new industry of revenue management automation companies, all of which run parallel to my own evolution as an entrepreneur in the training business.

The Path to Revenue Management for VRMs

I have often dreamed of offering a revenue management training program for the Vacation Rental (VR) side of the lodging industry, just as I have successfully transferred other topics, such as reservation sales and guest service excellence, from hotels to VRMs. However, I have never been able to do much to train VRMs on revenue management because this area of the VR space has been stuck in its infancy.

The foremost factor holding back revenue management in the VR space is a lack of trend reporting on occupancy, rate, and revenues of the “comp set” needed to advance its processes. Although there have been attempts by both associations and private companies, there has not yet been a report available on a large enough scale for the majority of VR companies to benefit.

Without this information, most VRMs are stuck (like hotels were in the 1980s) in trying to determine trends by a patchwork of processes, such as spot-checking availability at a competitor and benchmarking against themselves.

Why has no one succeeded in offering this type of report?

One factor is that in many markets there are simply not enough VRM companies to allow for blended data: you cannot have a blended “comp set” report if there are only two competitors. However, in these instances, this is solved by offering data on a larger, regional scale. For example, in a small market such as Crystal River, Florida, there may be only two participating rental companies, so their data could be reported with a larger region, such as Florida’s Nature Coast instead.
A second factor has been that those who have tried to offer trend reporting services to the VR industry have, for the most part, been doing so as a side business; maybe they were just not focused enough.
A third factor may simply be trust. To provide important confidential performance data for one’s own company requires a great deal of trust in the integrity of how that data is to be used. This is something that Randy Smith was able to uniquely accomplish due to his connections from the 1980s.

So What Can We Do?

When the right organization that offers data privacy and an unbiased approach comes along and offers the VR segment of the lodging industry trend reporting similar to STR, embrace it fully. It is way past the time to add this to your tool kit.

Important Note from VRM Intel: At VRM Intel, we have begun building the type of reporting that Doug Kennedy describes.

While there have been attempts in the past to provide competitive market reporting to the vacation rental industry, the providers (1) have not been objective, (2) have not found a way to pull together uniform data and metrics, and/or (3) have been offered by technology companies looking to use the data to sell other products.

We believe that VRM Intel can provide an unbiased data source that seeks to provide VRMs with the quality competitive market intel necessary to make fact-based revenue management and marketing decisions.

The Coming Wave in Vacation Rentals: HomeAway Evangelist John Suzuki Talks 2017 Trends, Service Fee, Best Match, and More.

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March 21, 2017

We had an opportunity to chat with John Suzuki, who gave the closing presentation at VRM Intel Live! in Destin, Florida, last month. Suzuki is HomeAway Software’s former vice president of sales and has recently moved into a new role as HomeAway’s “Evangelist” for property managers in North America.

AH: We are all curious about your new role. What exactly is a HomeAway Evangelist, and what about the role has you so excited?

JS: My job is to inform our property manager clients about the great things that are happening and how they can take their businesses to the next level of success with HomeAway. Most of my time is spent sharing the latest products, news, and developments from HomeAway and learning about what’s important to our clients. I spend the rest of my time communicating back to the senior leadership team at HomeAway. So I get to evangelize HomeAway with our clients and advocate for those clients with HomeAway all at the same time. While it is a new role for HomeAway and me, so far it’s the best job I’ve ever had, next to selling butter toffee peanuts for the YMCA when I was ten years old.

AH: In Destin, you talked about the coming wave of vacation rentals. What are the new trends that contribute to this “coming wave”?

JS: We expect some really great developments coming in 2017. One such wave we are looking forward to involves a jump in demand and traveler awareness of the vacation rental category. Today, HomeAway receives about 110 million visits to its websites every month. And that’s the reason many of our customers like us so much. Now imagine that number going up dramatically in a very short period of time. So check this out: while HomeAway receives 110 million visits a month, Expedia sites receive about 450 million, and we believe that half (or more) of those visits are guests new to vacation rentals. When our clients’ vacation rentals get listed on Expedia, we expect the results to be pretty exciting.

AH: You also spoke about HomeAway’s new service fee to travelers and the new Best Match algorithm. What has HomeAway learned from those experiences?

JS: First and foremost, it’s all about providing the best experience for travelers booking their vacation rentals and giving our property managers the best services in the industry. Our PM clients have asked us for three things consistently: (1) keep me competitive in my market, (2) broaden the global awareness of vacation rentals and open new markets for me, and (3) generate more bookings for me.

All of these things cost money, and we could have simply raised our prices. However, we knew our customers would not be happy with higher pricing because we know they are constantly under pressure to lower their costs of doing business. So instead of raising our prices, HomeAway decided to reduce commissions on our pay-per-booking program, and simplify our subscription offering with significantly lower costs to our clients, which pleased a lot of our clients. The other big change on the Internet was Google, which changed its algorithm to reward paid advertising. We now have to pay for the highest placement, which is no longer based solely on free organic search results. The result of all this was for HomeAway to implement a service fee to travelers, which helps to fund many things, including the efforts to broaden the vacation rental category and the exposure, drive more bookings for our clients, and enable our transition to eCommerce.

AH: There were a lot of folks upset about the service fee. What do you tell them?

JS: When I explain the service fee and why we did it in terms of meeting our clients’ needs, investing in the future, and enabling more eCommerce bookings, virtually everyone understands and appreciates the explanation. A handful are still not necessarily happy but appreciate the reasoning behind the change. I’ve also been told that we have a lot of room for improvement in communicating these kinds of changes, which we are working on actively to improve every day.

AH: What about HomeAway’s change in the sort algorithm from subscription levels to Best Match?

JS: That is another big change we are making as we transition from a listing site to an eCommerce marketplace. Until September 2016, our clients were able to buy their way to the top of sort with subscription levels, which often led to bad traveler experiences because we were not able to surface the most relevant results. Moving forward, our goal is for vacation rentals to be booked with the best possible traveler experience based on expectations shaped by other great eCommerce sites such as eBay, Amazon, and others. The good news is that unlike Google (that doesn’t tell you how to optimize your results), we have a specific playbook that we share with our clients that they can get by calling HomeAway.

AH: You also gave us some very interesting highlights on HomeAway’s plans for data-based recommendations. What’s that all about?

JS: We are hard at work ironing out this feature at this time, but we plan to bring a lot of travel data to our clients to help them manage and maximize their revenue—information and recommendations based on actual HomeAway data that have never been made available before. I believe this alone will catapult property managers to levels of success they’ve not experienced before. But there is much more to come on that, perhaps in a future issue of VRM Intel!

AH: What do you see as being some of the biggest challenges for VRMs in 2017?

JS: Off the top of my head, I see two. The first is the spread of burdensome government regulations. We continue to see threats of vacation rental restrictions across the US and around the world. As an industry, we must all get involved and support our regional communities where these restrictions are being proposed. We see the same playbook happening all the time: somebody falls in love with an area after renting a vacation rental, decides to buy a place there to retire, does retire, and then takes exception to vacation rentals in that neighborhood and takes NIMBY (Not In My Backyard) action with the local legislators to prohibit vacation rentals in the neighborhood. This action can happen in an instant, and we must all do our best to stay informed and educate those property managers, owners, employees, etc. to get ahead of these discussions. Again, everyone needs to get involved somehow—form a local association, collect information on the positive contributions vacation rentals make in the community, and meet with city council members.

The other big challenge for the industry is to keep up with accelerating change. Admittedly, we at HomeAway will be driving some of that change, so our charge will be to communicate effectively with everyone on a very timely basis, and we are working hard to put those processes and tools in place.

AH: You seem really excited for what’s happening. Any closing comments on your view of what’s coming?

JS: Oh my gosh, I am so excited for the new year! There is so much going on, and as excited as I am for our clients with the waves of business opportunities that lie ahead, I am mostly excited for all of us to make a difference in the lives of millions of vacationers around the world in helping them connect and reconnect with their families and friends.

I personally have my own stories of my last vacations with my mom and mother-in-law (who are both no longer with us) that involve vacation rentals. It’s those precious moments, memories, and experiences that we in this industry can help enable for people all over the world. After all, we’re in the vacation business, right? So yes, we all have opportunities to help make life-changing differences in the lives of so, so many people. By that definition, don’t you think the world needs all of us? In the final analysis, we can all enrich the lives of others through vacations. How cool is that?

Smart Host Shuts Down Operations

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March 21, 2017

The graveyard of technology startups in the vacation rental industry continues to expand as New York-based Smart Host announced that it is ceasing operations, effective March 31, 2017.

Smart Host was founded in 2014 by Evan Hammer, David Redding and Nick Persico and was described as a “pricing engine” service that helps vacation rental owners and managers make more money from sites like Airbnb, HomeAway, FlipKey and others.

After raising $100k from Right Side Capital, Smart Host went on to join the second class of TechStars Austin’s accelerator program.

“We did everything we could to find a way to keep Smart Host alive. But we failed,” said the message on their website. “We couldn’t close enough sales to reach profitability before running out of cash. We reasoned that if we lowered price below short-term profitability, producing better sales numbers, we could raise more money. But we still couldn’t close enough sales.”

Travelers Expect Transparency

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Vince Perez

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March 16, 2017

The title above seems obvious to travelers and owner/managers in this great industry. As traveler ourselves, transparency is the minimum expectation we have when planning our family travel. So why do many business models in our industry depend on the lack of transparency?

As visibility in our industry continues to grow, it is the responsibility of every owner/manager to be transparent with the traveler. Many of you have experienced the traveler outrage when they discover they have been “had” by fees added to their bookings by the listing sites. Much like the weary traveler checking in to a hotel only to find out the guy next to him is paying much less for the same room.

Travelers are getting wise and they are finding our Brands despite the obstacles put in place. The greater concern for every owner/manager is the damage this is doing to our industry. Here is a clear example of how the lack of transparency negatively impacts our industry.

An Inside Look at Streamline Vacation Rental Software

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March 7, 2017

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The professionally managed vacation rental industry has witnessed the fast growth of Streamline Vacation Rental Software over the last few years, and we are currently seeing several of the industry’s largest companies begin to use their software. At VRM Intel, we reached out to Streamline’s founder and CEO Carlos Corzo to learn more about their growth, their development goals, and the direction they are moving in the coming year.

Below, Corzo shared exclusively with VRM Intel, the story of how he got started in the vacation rental technology sector and how Streamline came to be.

The Birth of Streamline Vacation Rental Software

By Carlos Corzo

Everything started in my senior year of college at Arizona State University when I ran into an old high school friend. After reliving our high school years, he suggested that I purchase a condo in Rocky Point, Mexico (Puerto Penasco, Mexico), a location often referred to as Arizona’s beach due to its proximity to the US-Mexico border. At that time, condos were 89 thousand dollars, and the thought of risking my life savings was not an option, but I kept thinking about the possibilities. A few years later, I went back to ASU for my MBA, and after working on a project about real estate investments in Mexico, I felt more comfortable investing and decided to take the leap and buy a condo.

After purchasing the condo, we built a website to try to get bookings. Suddenly, we started to get email requests, and as time went on, we just kept getting more and more. We had so many excess leads that the resort’s property manager allowed us to book other units at the resort for a ten percent commission.

From there, things started to grow exponentially and we were advised to become an official travel agency. This was a scary thought at the time. We pulled the trigger and signed up with a credit card processor, purchased a virtual phone system and eventually added real-time bookings on our site. Rocky Point was well behind the times, allowing us to be one of the pioneers with online bookings. As time went on, we became a travel agent for all of the condos in town—then hotels—and finally homes. I also worked at Motorola at the time, but would also have to send faxes, emails, and field non-stop phone calls to get confirmations in my spare time. Finally, it became too much to handle with a full-time job, so we hired our first part-time employee.

As we continued to grow, we built our first system that helped reduce the number of mistakes made by our phone agents. This was the start of a great adventure. Every few minutes, we would log in to see leads, bookings, nearly everything—it was so exciting!

I became great friends with local property managers, and we would discuss our frustrations as owners, travel agents, housekeepers, maintenance workers, website developers, and property managers. And it soon became clear that it was time to build a larger, more comprehensive vacation rental system. Then, Steve Schwabb, a large area property manager, approached me to build such a system; his vision was ahead of its time—when you speak of pioneers in this industry, Steve is your man.

As times became tougher in Mexico, the competitive market began to get aggressive, and Steve decided to scrap the project. I was about 50 percent of the way through. Suddenly, we got hit by the four-headed monster: the swine flu, media hype of the dangers of travel to Mexico, an economic collapse in the US, and a new requirement for passports to visit Rocky Point.

Times were tough!

Fortunately, I met Loren Worthington, a marketing expert and consultant to a local property manager. He felt that good things were coming for the area and he was looking for a customized software system. Since I already had the foundation of a property management software system and Loren knew exactly what was lacking in the industry, we worked (countless hours) to design the perfect system, which we named ResortPRO. (Little did I know that this would be the launching pad to where we are now.)

After a year of building ResortPRO, Loren started using our software, but as hard times continued and we had more financial difficulty, I began to feel that it was time to close shop and focus on my family and full-time career. At the last minute, Betty Majors at RPR Mexico asked for a demo. She already had a software solution, but had heard through the grapevine that I had built something. I reached out to Brett Parry. He was a young man that I coached in soccer from the age of 11 years old. He had recently graduated college, and I knew he had the personality and perseverance to make things happen. I decided to include Brett on the demo to see if it would generate a spark, passion, or vision in him. On our drive back, Brett begged me to give him the opportunity to keep ResortPRO alive and Betty felt it was time for a change, so we decided to pull the trigger.

Talk about times being tough. I financed everything myself. Life at ResortPRO was month-to-month, but I took a huge leap and decided to hire Brett full time.

At that time, my salary consisted of nothing because Brett and our programmer had to get paid. I even remember getting Brett a job as a soccer coach to help subsidize his income. I wanted to dig into the industry and learn about our competition, so we visited a VRMA conference. I then realized the easiest market to penetrate was private home property management, but we were referring to ourselves as “Resort”PRO. So, after much deliberation, we chose Streamline as our new name.

We continued to improve our system and kept growing. As money became available, we hired more employees. I had to learn more about the property management industry, and through a series of crazy events, I met Jim who would become my business partner in Park City. With his marketing acumen and property management experience and with my knowledge of wholesaling, we quickly grew to over 1,000 properties that were available for online booking—suddenly we were a business.

Now fast forward to 2017—we have continued to grow leaps and bounds over what we were when we began. Our strength lies in our ingenuity and our great relationships with clients. Ground-breaking ideas are constantly being created and adapted to this ever-changing industry. We are even in the process of building a 10,000 square foot facility to accommodate this tremendous growth.

Interview with Carlos Corzo by Amy Hinote

AH: In building out the system over the last several years, what has been your greatest challenge?

CC: Money, money, money. Having surrounded myself with experts in every component of property management, the knowledge was there. It was a matter of money, patience, and time. The stress of payroll took its toll. Once I had people relying on me to care for their families, the pressure was on.

AH: The industry is currently seeing a number of large companies making the decision to change software systems, and many are choosing Streamline. What are the primary reasons large companies are making the decision to switch? Are there any market conditions that are contributing to their decision?

CC: I have learned that these large Vacation Rental Management (VRM) companies are extremely unique. Using outdated software, they ended up building components around their existing software. After getting to know them and sharing my personal struggles in the industry, the synergy has been very powerful. Almost every challenge I have faced over the years resonates with them. I think the most important reason is that we are truly a custom software solution. We have a very powerful core, with the help of our amazing clients, but more importantly, we made our system flexible enough to adapt to the larger companies. By maximizing Amazon web services and a team of extremely talented programmers, we continue to break barriers. Our system is fast, reliable, and rich in features.

The fear in changing software systems is the loss of historical data and existing connections to third-party vendors. With hundreds of API connections available, we have been able to make these transitions easy. I am a big believer in the power behind data. To be successful in this industry, you cannot afford to lose historical information. Everyone always asks how far back to go when importing data. but it never seems to fail that as soon as you don’t keep something, you will need it. At the end of the day, it is your data—so keep it.

AH: What new functionality are you adding to Streamline in 2017?

CC: A lot! We are launching a new and improved skin to make the user experience better. We are also adding a more intelligent marketing methodology and reporting for leads. As we introduced gap logic, I realized it was important to browse through existing warm, cold, or dead leads to see if converting these leads would ever help close gaps in our clients’ availability calendars. Our system will always look to see if an existing lead falls into a certain criteria or revenue opportunity, and if so, the system will automatically send a follow up with new pricing.

We released our first yield management solution in 2016 and are adding advanced yielding and rate management methodologies. These include the ability to yield by channel partner, season of the year, revenue pacing, revenue comparison, and much more. We are even adding intelligence to our logic that will notify you when there are sudden changes in price fluctuation. This often refers to the velocity of your changes in rates. Big jumps up or down indicate something unique is happening.

In addition, we will continue to release great features to our guest mobile app. This quarter, we are launching a tool that gives customers the ability to pay and add activities and offerings directly through the mobile portal.

We are also launching StreamShare, which has generated a lot of excitement among our clients. This feature allows property managers to share inventory at the click of a button. Companies can go from one hundred units in one location to thousands of units in multiple locations. Everything syncs automatically (unit details, pricing, availability, and taxes and fees). It is ahead of its time, but more importantly, it is giving control back to the property manager.

Other developments include international capabilities (multiple currencies and multi-lingual websites), crystal reports integration, and the continued improvement of our phone system that allows clients to see caller info before answering, save all calls, listen in and coach employees, keep accurate tracking information, and route a call to the assigned agent automatically. This system even allows you to manage texts and chats. Our clients will see any lead details, booking information, guest traits, owner details, owner traits, open owner work orders, and owner revenue numbers prior to taking the call. To make life easier, for existing guests, we will be adding the ability to identify a guest who is in-house and route that call to guest services. The same concept works with homeowners.

The list goes on and on, including additional channel partners, a traveler rewards program, a university, cutting edge website technology, the streamline marketplace (clients can add their own creations to share with other property managers), capability for background checks, and much, much more.

AH: Streamline currently has an “Open API” policy that gives VRMs the ability to use any technology supplier they choose for business needs such as websites, lead management, smart home, business intelligence, revenue management, etc. (including VRM Intel’s new competitive reporting). Other software providers have chosen to limit integration options for VRMs. Why did you decide to adopt an Open API policy at Streamline?

CC: We offer an Open API, and we find ourselves constantly building API functionality to support many of our third-party integrations. We share this with our clients to give them maximum flexibility because we know that the data belongs to the client, and our online marketplace is driven by our clients’ ability to access their data to take advantage of any technology they choose. The more successful Streamline’s users become, the more successful Streamline will be, so we have no need to hoard their data.

The most exciting API development has been our advanced import REST API. Larger companies have been able to transfer nearly all of the data from their existing system without a problem. These import APIs allow property managers to enter user info, owner details, owner statements, seasons, pricing, taxes and fees, work orders, reservations, payments—everything!

With yielding becoming a trend, many of these large companies have built their very own yielding systems. We also provide a very simple API that allows them to change pricing for individual nights at any time while using their proprietary techniques.

AH: Looking forward, what technology trends do you see having the largest impact on the way Property Managers (PMs) do business?

CC: I would have to say the trend towards guest retention will have the largest impact. As a property manager, after being victim to the many changes at HomeAway over the past few years, we changed our entire culture in Park City to cater to every need of the guest. My advice is to be unique. Owners and guest are going to expect “cool” technology. A new property manager pops up every day. You will always lose a few owners to empty promises from competitors, but as long as you provide value, owners will not leave, so focus on the owners who stand behind you.

I am also seeing a big shift and demand for API access to data. As the vacation rental industry evolves, companies want the ability to access their data, build proprietary solutions, and have freedom to get creative with their websites. Honesty, I am not sure how property managers can survive under a locked environment without a strong library of APIs.

I would also advise VRMs to test out channel partners. A booking is a booking. If your margins are very low, increase the price that you pass to a channel partner, but don’t avoid advertising and exposure. Don’t think of it as giving away money, look at how much a new booking costs for you marketing wise. Keep that in mind when determining how much commission you are willing to give. In addition, Google is going to continue to chomp down on organic results. Their shift is to promoting big brands to make sure the user experience is good. This leaves the smaller guys on the outside looking in. Focus on Google Local and optimize your AdWords campaign.

Finally, this will be a big year for yield management and rate management. This is a trend that is growing rapidly. Most VRMs have realized that by using predictive occupancy and revenues, you can manage your base price to make more money.

Sloane Realty Vacations Founder Rae Sloane Cox: Vacation Rental Pioneer

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March 6, 2017

Rae thought her husband George Sloane, Jr. had lost his mind when, in 1955, he asked her to move with their two young children to live as the only residents on a small island off North Carolina’s mainland. After all, George had steady work in Columbus, South Carolina, and the thought of picking up everything to move to an island that was accessible only by ferry and had no power and no family or friends was a lot to ask of any young wife.

Rae’s uncle, Odell Williamson, had been buying tracts of land on the island since 1947, and he was in need of someone to sell lots for development. In 1950, Williamson partnered with Mannon Gore to launch and run a four-car ferry from the mainland to Ocean Isle Beach. Three years later, Williamson bought most of the island for $218,000.

“In 1955, when we came down to the island for a family get together, Uncle Odell talked my husband into moving to Ocean Isle Beach to sell real estate,” said Rae Sloane Cox, founder of Sloane Realty Vacations. “George had a great job in Columbus, South Carolina, and we had two babies in diapers. I thought he had lost his mind, but when your husband is taking care of you, you follow him wherever he goes. George had always wanted to live on the beach, and I loved him so much that I would have followed him to the moon.”

On June 8, 1955, Rae and George Sloane packed up their children, drove onto the ferry with what little they had, and never looked back. “We had the whole sky and the whole ocean. We had it all,” said Rae.

The Sloanes used money they had gotten after George’s mother’s death to build a house on the island. “When we started, we were selling ocean front lots for $500,” said Rae. “Odell paid us two percent, and we sold hundreds of them. If people knew what we lived on they wouldn’t believe it. We ate a lot of fish, oysters, and crabs. We were so monetary poor, you wouldn’t believe it, but we were young and in love and were very wealthy in every way that mattered.”

“The only way we survived was that my mother lived out in the country and had a big garden,” said Rae. “She would gather food and had peas fixed, and she would bring us cornmeal and grits. Way back then, there were also groups of men who fished with nets, and they would give us so much fish.”

After realizing there was a need to have a place for guests to stay when on the island, Rae and George enclosed the downstairs of their home and the next summer began renting the space to out-of-towners. They also rented the one house on the island that was still standing after Hurricane Hazel.

“In 1956, we had the two rentals, and we ran an ad in the Charlotte newspaper,” recalled Rae. “We only got one postcard back that said, ‘Where is Ocean Isle Beach?’”

However, it wasn’t long before travelers discovered Ocean Isle Beach and began spending their vacations along the peaceful sandy shore fishing, walking the beach, crabbing, oystering, and lying in the sun. With more and more visitors coming to the island, the couple decided it was time to build a place for the visitors to stay. According to Rae, “In 1957, we started building a small motel. We had six units and we lived in one of the apartments.”

Slowly, George and Rae took on the newly built homes to manage as vacation rentals, and they booked their rentals using mainly postcard communications. “Most of it was word of mouth,” said Rae. “They would send us a postcard and tell us when they wanted to come down, and we would send a postcard back and tell them to come on down. There was one phone on the island four miles away. It was an old crank phone. We would have to get in a car, go back over there, and return any phone calls.”

The business required hard work. “We had a well with a pump in the backyard. I did all the laundry, and I would fold the sheets when they were still a little damp so they would look like they were ironed. You learn to do whatever you can to make it work. I primed many water pumps and scrubbed many bathrooms.”

“As we grew, our biggest work was on the weekends and on the holidays. At that time, the turn day was on Sunday, and it was such a burden on me because you couldn’t get any help on Sunday. I worked myself to death. I’m the one that changed the turn day to Saturday, and pretty soon, everyone followed suit.”

By 1965, the Sloanes were managing 25 vacation rentals in addition to the inn. In the late 1960s, lots were selling for $4,000, and the island saw significant development which brought much needed infrastructure including streets, water lines, sewer, and the Ocean Isle swing bridge.

Tragedy Strikes

George and Rae’s hard-working, yet idyllic, life together came to an abrupt end in 1971 when George Sloane, Jr. was killed in a car accident while returning home from Shallotte. A heartbroken Rae was now facing life on the island as a single mother of three, burdened with multiple mortgage payments, and facing the unfathomable workload required to keep up with their business.

“If I had not had three children to consider, I would have tried to work out some way to go with him,” Rae said as she recalled those dark days. “But I told myself a thousand times a day, I have got to think about these children, not me. My youngest had just turned eleven. I had to think of them.”

In addition to her grief, Rae had to face the bank and their mounting mortgage payments. “My husband had bought so many pieces of property that he believed he could buy with a little down and make payments, so we had a whole lot of debt. We had so many mortgages at the bank, I just told him I can’t pay any more. Our banker said, ‘Rae, you sign it because I know you are going to try.’”

Almost immediately, Rae was tempted with an offer to sell their properties and rental business.

“I had some men that brought me a contract for $1.5 million,” said Rae. “I looked at it, and to me it looked like $100 million. I had grown up in the country very poor. I asked them to let me think about it. I figured out what I would have to pay off to the bank and what I would have to pay in taxes, and I realized I would have so little left after it was all said and done that I would still have to get a job. So I decided not to take it, and it is a miracle that I didn’t.”

But soon after, her local bank president was killed, and a new bank manager took over. Rae said, “He and two men in suits from the bank came over, and they wanted to know what I was going to pay. I looked straight at them and said I can’t pay you a thing because I don’t have anything. But if I can make the money, you will be paid on time.”

The bank president told Rae, “I pulled all the files, carried them to the big home office, and they said we are going to have to take all these mortgages back because there is no way a woman can pay all of this.”

However, the bankers eventually decided to give Rae a few months to see if she would be able to make the payments, and from that point on, every one of her payments were made at least two days in advance.

“My Lord was really good to me. After George was killed, for the next two to three years everything was selling like crazy, and I was paying off the mortgages. They didn’t think a woman could handle the business.”

Building the Destination

Throughout the 1970s, Sloane Realty Vacations exploded, and Rae’s sister Sonya came to the island to help her with the business. Rae recalled, “I remember during that booming time, four men came in from Lake City, South Carolina, and I showed them the eleven lots I had. They came back to the office and wanted to buy all eleven lots. As they were signing the contracts, one of the men said, ‘I thought I’d be on damned fire before I did business like this with a woman.’”

In 1978, Rae married Connor Cox, a retired high school principal from Tabor City, North Carolina, who had purchased a house from Rae and put the house into her rental program before losing his wife to cancer. Rae recalled, “Our children joked that I was marrying him so I could get the rent, and he was marrying me to get the commission.”

The country experienced a recession in the 1980s, but people were still buying property on Ocean Isle. “We were so established by that time that it didn’t kill us,” said Rae. “I found out that people will go on vacation when they don’t do anything else. And if I believe in it, I can sell anything. The prices for several years were going up too fast. I’ve never had anyone fuss at me for selling them something, but I’ve had dozens of people mad at me for not making them buy more.”

In the late 1980s, the family expanded the Ocean Isle Inn to seventy rooms. All three of her children, Tripp, Debbie, and Pam got their real estate licenses and joined the business. “My family members have been the ones I depended on to help run my business.”

Eventually, Rae and Connor Cox wanted to travel, so Rae turned over the business to her children. “I ran that rental business. I was the boss until everything went on computers. Then my husband wanted to retire and travel, so I did.”

Rae’s Legacy

Rae Sloane Cox was a true pioneer in the vacation rental industry, and her legacy is found in the close ties within her family, the building of a successful real estate and rental business, and the shaping of a destination. The island’s population has grown from four people in 1955 to approximately 600 current permanent residents including a seasonal population of 25,000, and Rae and her family have been instrumental in molding the entire island community.

Today, Sloane Realty Vacations has 35 year-round employees and manages over 150 long-term rentals and 375 vacation rental properties from Ocean Isle Beach to Sunset Beach. The company is co-owned by Rae’s children, Tripp Sloane and Debbie Sloane Smith. Debbie is also now serving in her fourteenth year as mayor of Ocean Isle Beach. Pam, the youngest of the siblings, no longer works with the company, but still lives locally and is married to Robert Yoho, Ocean Isle’s fire chief, and most of Rae’s fifteen grandchildren and fourteen great-grandchildren still live in the area. Three of her grandchildren are also working in the business: Whitney Sauls (General Manager), Chris Bryan (Sales Manager), and Leah Peterson (Accounting).

“Everywhere I go, someone is hugging me. I just love people,” explained Rae. “I’ve always just loved people. I worked hard, but I enjoyed what I did. I’ve had a good life.”

VRHP Housekeeping Seminar in Outer Banks Addresses Bed Bugs, Safety and Owning the PM Brand

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March 4, 2017

On February 23, The Vacation Rental Housekeeping Professionals (VRHP) held their fourteenth annual regional seminar on the northern Outer Banks of North Carolina in Kill Devil Hills. Hosted by Durk Johnson of Meredith Lodging and Joe Refosco, owner at Taylor-Made Deep Creek Vacation Rentals and president of VRHP, the day followed a particular theme: Housekeeping—owning the brand.

During the first half of the seminar, Johnson taught attendees about bed bugs and the multiple viruses and bacteria that can be easily spread through vacation rentals, all while passing around stuffed toys that represented each subject. He then went on to discuss the ways in which cleaning processes should take place. This included techniques like “Follow the Wall” in which someone who is inspecting a rental would begin on one side of the unit and guide along each wall of the house, creating invisible walls as well, in order to properly inspect an entire unit for cleanliness. Johnson also talked about the importance of using black lights and personal protective equipment, as well as having a bloodborne pathogen policy set in place.

“You never want to lose a house because of housekeeping.” This was the main focus for Refosco. He stressed that housekeeping is critical in order to run a successful vacation rental business. Often, the cleanliness of a vacation rental is the first opportunity a guest can have to be displeased. If a guest or owner is unhappy with the cleanliness of the unit when he first arrives, then a tone of unhappiness is set for the remainder of his stay. Rofosco reminisced on losing a contract with a vacation rental owner in the past because the owner’s rental was not properly cleaned. That is one mistake that Refosco stressed he would never make again.

As Refosco spoke of the importance of properly cleaned units, he also said that in order to be confident in knowing that properties are being cleaned appropriately as a vacation rental management company owner, you have to take care of your staff. Refosco has found that by paying his housekeeping staff higher wages than some other companies, and by rewarding them periodically, he has been able to retain a better quality of staff members.

Throughout the seminar, Johnson incorporated several group activities including an interactive activity where people answered a few questions about themselves and shared their answers with someone that they didn’t know previously. He also chose seven volunteers to stand in front of the group, each playing a different role in the vacation rental industry, in order to simulate “The Big Picture” of how housekeeping affects every part of a company from the reservationist to the owner relations specialist, etc. Johnson also had all of the attendees perform a team building activity where teams were formed and each was given spaghetti, string, masking tape, and a marshmallow. Then the teams were allotted eighteen minutes to build the tallest, free-standing, marshmallow-supporting tower that they could build.

The vendors of the seminar also introduced their companies to the group. They included Jeremiah Gall and Koryn Okey of Breezeway, Michael Leary and LeTroy Holley of CleanConnect, and Olivia Becilla of LSI.

Timothy Sweeney, dean of College of the Albemarle, Dare County Campus, spoke about the career pathway to Hospitality & Tourism that the college now offers. This includes several certification courses, ambassador and computer skills classes, and Sweeney even discussed the ability to receive a four-year degree on the Dare County Campus without ever leaving the Outer Banks. College of the Albemarle has teamed up with North Carolina Wesleyan College to provide courses to complete a bachelor’s degree following the completion of an associate’s degree on the College of the Albemarle campus. For more information on the College of the Albemarle, visit www.albemarle.edu.

Afterwards, Johnson gave several product demonstrations including one item that turned a quart of water into gel in less than a minute! Then he read a heart-warming story to the group symbolizing how every step taken, no matter how small, makes a difference to somebody or something. He continued with an uplifting speech reminding everyone in the room of how integral housekeeping is to the vacation rental industry and how they should take pride in their jobs because without housekeepers, the vacation rental industry couldn’t exist in the capacity that it does now. Finally, he ended the seminar by drawing names for prizes including gift cards, a vacation from Taylor-Made Deep Creek Vacation Rentals, and two TVs—which was definitely a crowd-pleaser.

For more information regarding the VRHP or to register for future VRHP events, please visit www.vrhp.org.

Aloha Spirit: In Memory of Mary Margaret “Penny” Wallis Bennington, Founder, Bennington Properties in Sunriver, Oregon

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March 1, 2017

“We use the word ‘hug’ or ‘hugging’ to refer to the role we play in our relationships with our community and our customers. In the simplest sense, a hug is anything that expresses sincere care for another and has a positive impact on our relationships. A hug can be as commonplace as a smile or eye contact. It could be a firm handshake. It could be remembering someone’s name even though it’s only the second time you’ve seen him. It could be asking about a person’s children and knowing their names and ages even though there are five of them. It’s remembering where they work, their dog’s name, where they are from, or what they love about Sunriver. It is knowing who THEY are and what is unique about them. Hugging is a way of thinking about people, not as a job to get done, but as people, real people who at their core are just like us.”

This philosophy is the foundation upon which Mary Margaret “Penny” Wallis Bennington and her family built Bennington Properties in Sunriver, Oregon.

“Penny grew up in Hawaii, and she exuded the aloha spirit of love and kindness,” said Michelle Marquis, vice president of sales and marketing at NAVIS. Penny’s “aloha spirit” is a characteristic she was known for throughout the vacation rental industry.

According to her son Robert Bennington, CEO at Bennington Properties, “My mom was raised in a culture and family that loved to show hospitality to others. Her father was a prominent doctor on the island of Kauai and was known for the warmth he and his wife showed to others. It was in her nature. They started Bennington Properties as a real estate company, but it quickly became a vacation rental company as well. We were all surprised about how passionate we were for hospitality, and it was as much a part of my nature as it was my parents’.”

Like most property managers, Penny did not begin her career in the vacation rental industry. Penny was born and raised in Lihue, Hawaii, on the island of Kauai. After graduating from the University of Hawaii, she married Marine and fellow student, Gene Bennington, and joined the medical field as a technologist. In 1978, Penny gave birth to her only son, Robert, and in 1981, the family moved to Tualatin, Oregon.

“My parents fell in love with Sunriver when they first visited Oregon in 1980,” said Robert. “It was actually the reason they chose to move from Hawaii to Oregon. [However,] jobs were scarce in Sunriver, so they moved to the Portland area instead. Eventually they were able to buy a second home in Sunriver.”

After their move, Gene and Penny spent the next 15 years in Tualatin where Gene worked in real estate and Penny worked as a medical administrator for Kaiser Permanente until she obtained a master’s degree in business from the University of Oregon. She then joined Gene as a licensed realtor.

In 1997, after Robert went off to college, Gene and Penny decided it was finally time to move to beautiful Sunriver, and one year later, Gene and Penny founded Bennington Properties, LLC with only one vacation home.

With the Bennington’s attention to community and service, the company grew quickly—they currently manage 160 vacation homes in the area.

“I had the great pleasure of working closely with Penny, her son Robert, and the employees of Bennington Properties,” said Shannon Roberts-Magenheimer, client advocate at NAVIS. “I got to see, firsthand, the legacy that she created in her business and the vision that surrounded her.”

Magenheimer continued, “Bennington Properties doesn’t only have employees, but a family of associates that has a passion for the success of an exceptional product and happy guests—all built on Penny and Gene’s vison and guidance. The office is focused on a warm welcome, family, and even the family pets. Her heart and love shows in all that is touched, and the business flourishes as a result.”

Penny became a recognized pioneer and leader in the vacation rental industry and in the community. She was extremely active in local organizations and served as president of the Sunriver Women’s Club, treasurer at their local church, and elected board member of the Sunriver Owners Association, the Sunriver Service District, and the Central Oregon Visitors Association.

“Penny was an inspirational leader and business owner in Sunriver and Central Oregon, and well respected by colleagues and peers alike,” said Sherri Niemeyer. “Practical, direct, analytical, and strategic, Penny loved a business challenge and approached obstacles from a positive, anything is possible, let’s do this position. I loved her collaborative nature and could spend hours talking with her about all facets of her business.”

Robert added, “She loved owning and running a business and leading the way, trying new things, [and] never saying, ‘never’ or ‘impossible.’ She believed success came when you took care of others and treated them with kindness, honestly, and fairness.”

According to Betsy LaBarge, president and CEO at Mt Hood Vacation Rentals, “Penny was a treasured business friend to me for at least a dozen years. Even though we work in similar and sometimes competing markets in Oregon, she was always open to talking shop with me and sharing ideas and best practices.”

Penny was also known for her analytical acumen. “Penny never saw a spreadsheet she didn’t love,” said Marquis.

“She was a savvy mathematician who loved data and really enjoyed analyzing the numbers to guarantee that no opportunity was overlooked,” added Magenheimer.

But as Penny’s illness progressed, she turned over more and more of the business to her son Robert. “Penny was winding down professionally as she was handing over the reins to son Robert and spending more time with her five grandchildren,” said Betsy LaBarge. “As passionate as she was about her business and the vacation rental industry, she was more passionate about her family and grandkids.”

Robert agreed, “More than anything, her most important legacy she wanted to be known for was as a wife, mom, and grandmother—my kids called her Tutu, which is the Hawaiian word for grandmother. She loved her grandkids.”

“The grace and grit with which Penny faced her illness was admirable,” said Niemeyer. “I will forever remember Penny’s vast and unlimited love for her husband, son, daughter-in-law, and grandchildren. They were her pride and joy, and we can all learn so much about the importance of family from the Benningtons.”

The large church in which Penny’s memorial was held overflowed with many friends and family who held amazing stories of her power,” said Magenheimer. “We were very blessed to have known and worked with her.”

“The love for God and others is what defines the Bennington family today,” said Robert. “It is our family purpose. In the Hawaiian language, the way we show our love for others is through what we call Ho’okipa. Ho‘okipa means to welcome all with unconditional love—aloha. It is the complete giving of oneself—unselfishly extending to others the best that we have to give.”

Penny’s aloha spirit lives on in her family and the business she worked so hard to build, and like so many, according to Marquis, “I will think sweet thoughts about Penny each and every time I see or smell a plumeria flower.”

VRMs Give Back: North Carolina Vacation Rental Managers Band Together to Fight Hunger

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March 1, 2017

The professional vacation rental industry is unique in that vacation rental managers (VRMs) all over the world are heavily invested in their communities and work tirelessly to improve the destinations in which they reside. In the new series “VRMs Give Back,” we will be sharing stories of programs that vacation rental managers have created to help others in their communities.

One of these programs is the Feed NC Project, started last year by Mike and Holly Harrington of Topsail Realty Vacation Rentals in Surf City, North Carolina.

“The Feed NC Project started as an in-house idea with me and my wife, Holly, at our company, Topsail Realty Vacations,” said Harrington. “A local food bank group called Share the Table has been around for years and lives off of turnover-day food donations from vacationers staying in vacation rentals. While it has been successful, there really wasn’t a great way to logistically maximize donations. Our experience is that guests are very thoughtful and absolutely willing to help if they can, but we needed to find a way to make it easier for them to do so.”

The Harringtons reached out to their good friends, Jim Wallace of Intracoastal Realty and Tim Cafferty of Outer Banks Blue. Like others, Intracoastal Realty and Outer Banks Blue had been asking guests to donate unused food over the years in a similar fashion but had been challenged by logistics, processes, and reporting.

According to Harrington , “We thought a cohesive brand and communication strategy might help boost the visibility and importance of the real issue of lack of food for folks in our areas. We wanted to show the big hearts of the North Carolina Vacation Rental Management industry with something we all could get behind.”

With Wallace and Cafferty on board, Harrington reached out to other colleagues, including Stuart Pack at Resort Realty, Jim Kitts at Carolina Beach Realty, Whitney Sauls at Sloane Realty, and Kevin Futral at Bluewater Real Estate.

“This group is a real force of professional managers representing over 1,700 properties. As we continue to fine-tune our efforts and put our logistical expertise behind [the project], we feel good that we can really make a difference in our areas,” said Harrington.

Through the initiative, each company determines how food is collected and donated, and the Feed NC Project acts as the collective brand and mouthpiece for the group to promote their efforts and provide education and awareness of the hunger issues facing their communities. The participating VRMs are all committed to the Feed NC Project and are making concentrated efforts to improve it each year.

“We really hope to see more professional NC VRMs get involved and participate. We know everyone kind of does their own thing now, but just like the vacation rental industry, it is very fragmented and hard to really gauge how much we all do for our local communities and North Carolina as a whole,” said Harrington. “Because we are still feeling out how we want to proceed, we’ve been a little slow to really approach everyone, but we are certainly open to anyone interested!”

Harrington added, “Ultimately, we’d like to show the public how big of a force for good our industry is within North Carolina.”

The Feed NC Project serves as an inspiration to other VRM companies that are looking for new ways to give back to their communities. Is your VRM giving back? We would love to hear about it at amy.hinote@vrmintel.com.

HomeAway is trying to remove your property name. Here’s why you can’t let them.

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March 1, 2017

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“Listing Title; can you omit the name of the villa?”

The quote above is part of a recent email correspondence from HomeAway. The full transcription is further down the page.

Over the last few years, millions of words, literally, have been spoken about your “own brand.” Take “control of your business,” “rental independence” and more. Hotels have been shouting it from their rooftops more recently, and the VR market started on day one.

What is “no name branding”?

Imagine a strong brand without a name: “The smartphone, you know the one, it’s expensive white and has a shiny screen”, or “just order it from that big online shop that sells everything”. Even at this level, you may guess correctly who they are, because they are global and have a vast reach.

However, imagine this question between friends:

Question: “Where did you eat last night? “

Answer: “You know the restaurant around the corner from the hotel, with a poster of Italy in the window”. I found it on the internet but it has no name. I wanted to check out the full menu and talk to them about my son’s allergies. I couldn’t as the site didn’t have any contact details and I couldn’t find it as it had no name. Foolishly I booked it, but we retired to the hotel early as my son had stomach pains”.

Question: “Where did you stay?”

Answer: “At that hotel with no name, just around the corner from the restaurant with no name!”

It’s ok for hotels and restaurants to have a name.

Check out the hotel and restaurant websites such OpenTable or Expedia. Search for a restaurant or a hotel to stay at and you will see the names immediately. This is an unspoken rule that needs no enforcing or debate. If you don’t know where you are going, if it cannot be researched further due to lack of identity, you may well move on. It’s deeply suspicious if the name is hidden!

Vacation rentals are different (apparently)

The following is the actual text from HomeAway to a management client concerning the use of brand/property names.

Actual correspondence from HomeAway:

Listing Title; can you omit the name of the villa?

I also like to request you to omit the villa name for all of your listings, the reason is that we are trying to make the listing unique. Addressing the villa name will be risk for us if travellers do search and end up booking with other platform, rather than with HomeAway.

We have seen that there are number of listings that have many page view but not converted into inquires and most of the listings are addressed the name of the property. This is just one of factors that prevent our host to get business from HomeAway network and we are now trying to build up the unique contents.

The impact of “no name branding” on bookings

It’s obvious why they hide the name, the email address and insist on payment and communication via the system. “Financial Leakage”. TripAdvisor and its network have been doing it for ages.

Airbnb purchases Luxury Retreats

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February 17, 2017

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Airbnb moved into the luxury vacation realm Thursday, saying it’s acquired high-end vacation rental company Luxury Retreats. Airbnb declined to disclose the financial terms of the deal, but according to Bloomberg, Canada-based Luxury Retreats is said to be worth about $300 million in cash and stock.

Airbnb has gone from a website for couch surfers to having a massive online presence in the just under a decade. It lists roughly 3 million homes for rent in more than 50,000 cities. Over the past year, the company has started expanding from being solely a home-rental service into a full travel agency by letting travelers book day trips and excursions through its site.

“From airbeds in an apartment to castles to villas, Airbnb has always been focused on providing a broad range of amazing experiences and trips,” Airbnb co-founder and CEO Brian Chesky said in a statement. “I’m excited to work with the Luxury Retreats team to serve more travelers.”

Luxury Retreats, headquartered in Montreal, has more than 4,000 homes in 100 locations worldwide, such as Tuscany and Paris. It caters to the affluent crowd, with upscale villas and a concierge service.

“Brian’s vision, values and approach mirror what Luxury Retreats has been focused on in the luxury market since 1999,” Joe Poulin, Luxury Retreats founder and CEO, said of Chesky. “Airbnb has revolutionized global hospitality, connecting a vibrant community of hosts and guests to deliver a tremendous amount of unique travel experiences.”

Airbnb has been on a buying spree over the past few weeks. It bought a stake in restaurant reservation startup Resy in January and it’s said to be in buyout talks for the payment app Tilt. Airbnb will continue to engage in these types of investments, a source close to the company told CNET last month.

Investors have been impressed with Airbnb’s potential. The company has raised a total of $3.1 billion in venture backing, which makes it the fourth highest-valued venture-backed company in the world, with an estimated valuation of $30 billion.

Currently, Luxury Retreats will remain in Montreal and continue to act as a standalone brand, Airbnb said. But over time the luxury company’s listings will be integrated and highlighted on Airbnb’s platform.

Creating Repeat Business: What Really Drives Guests to Want to Vacation with Your Company Annually?

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Ali Cammelletti

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February 16, 2017

The Enjoyable Experience

My husband and I found a vacation rental on the McKenzie River in Oregon that we have been enjoying for six years now. We love it because of the rushing water that you can hear at all times of the day, the outside lounging area where we watch and listen to the river, and the large stone fireplace inside that we sit by and play games. We have taken friends and family there over the years and always look forward to our next visit. However, a large part of the reason we continue to frequent this rental is the caretaker Randy Morrow. He has a way about him that makes us feel relaxed and comfortable, like when he tells us stories about the home, about his mother’s antique collection stored there, or about how the home offers a retreat for him whenever he needs a fishing fix. Each time we visit, I am amazed by his demeanor, and I always tried to pinpoint what it is about him that just makes us feel so “at home.”

Finally, after a few visits, I came to realize that what keeps us coming back year after year is his soft tone and his choice of words that makes him so authentic. Each time we arrive for a visit, Randy welcomes us with open arms (despite his hour commute, he always insists on being there for our arrival) and a warm fire. When we go through the initial walk-through, he reminds us of the quirks of the 1924 home. When he talks to us, he uses phrases such as, “If you choose to enjoy the hot tub, the temperature stays warmest when the cover is on during times that it isn’t in use.” He doesn’t use phrases like “you must,” “you need to,” or “you have to.” His tone is gentle and his words are calming and respectful. He also extends our check-in and checkout time if no other vacationers have reserved the home on our arrival and departure days.

The Underwhelming Experience

The vacation rental experience that we had in New Orleans, however, was a stark contrast to our experiences with the home in Oregon. We rented a nice apartment on the edge of the French Quarter with easy access to the attractions we wanted to experience. Here, we had spotty Wi-Fi and multiple hardline policies. We were told (yes, told) about the policies and about what we could and could not do; nothing was suggested to us in the manner that Randy uses. We did not have any parking options, we could not check in earlier than 4:00 p.m., we had to arrive at 4:00 p.m. sharp to meet the housekeeper (who didn’t speak any English, so we weren’t able to ask questions we had regarding the apartment), and we had to be out of the property by 10:00 a.m. sharp. These firm policies were communicated at the time of booking, a week prior to our arrival, and on the days of check-in and check-out. Although the apartment itself was nice, the repeated mentioning of the policies and the lack of hospitality was not nice at all. Since then, we have not gone out of our way to suggest this place to friends and family, and if we return to New Orleans, we won’t go out of our way to rent from this particular vacation homeowner again. The firm policies set in place and reinforced time and time again affected our vacation as well as our overall experience in New Orleans.

Little Things Make a Big Difference

For both guests and employees, little nuisances make a big difference in perceptions of and experience with a company or organization. It is important to pay attention to the words you choose. You can either use warm words or cold words. Randy doesn’t use cold words such as “you must,” “you need to,” or “you have to.” Instead, he uses warm words such as “if you choose,” “if you’d like,” and “would you please.” After all, no one really likes to be told what to do.

I have noticed that when employees are new, they tend to focus on making sure they know the company policies and are quick to state and reinforce them. After employees learn these policies, the next level of their education and training should be to outline the gray areas of the policies and to refer to them as guidelines, using soft and gentle tones, when speaking to guests. When can guidelines be bent or broken? How can you turn someone’s bad experience into a good experience with the little things that make people smile? The gray area in customer service is very large.

Another cold word I hear often is “property.” This word is like nails on a chalkboard. Going on vacation is supposed to be an enjoyable experience. Vacation rental managers are selling private home accommodation to people for a couple of days and even up to a couple of months, and guests want it to feel like it is their home for that time period.

The tips in Start Your Own Business, a book where the staff of Entrepreneur Media Inc. outlines the importance of focusing on repeat business, tell how to keep your business at the top of the customer’s mind by doing the following:

Ø Let customers know what you are doing for them to ease their worries.

Ø Write personal, handwritten notes—frequently—to stay in contact.

Ø Keep it personal by picking up the phone to talk instead of relying on email.

Ø Send cards for special occasions such as birthdays, anniversaries, or other holidays.

Ø Pass on the information you think they will value, such as an interesting article or book.

Ø Consider follow-up calls to be business development calls for leads on new business.

Notice that of these six points, half are personal touches. We are in changing times with a new generation that is quicker to text rather than pick up a phone and struggle with relationship building, as pointed out by Simon Sinek in his video Millennials in the Workplace. That is why it is important to educate this generation on the importance of customer service and relationship building. And although millennials are the up-and-coming generation of customers, there are still multiple generations of consumers who want the personal touch and prefer to do business with people, not companies.

The main challenge for front-line service staff is making an emotional connection with potential guests. Having been in customer service for over 28 years, I was raised with the mindset of relationship building and emotionally connecting with customers to build trust and long-term relationships. I use different techniques to impart my knowledge to my employees, educating them on why it is important and what emotionally connecting with a consumer sounds and looks like. It can be as simple as bonding over owning the same breed of dog or growing up in the same small town.

Technology has made it easy for us to track customer preferences and their rental history. But it’s so much more important to simply slow down, take time with customers, and genuinely care about their needs and desires. This is an important tool to build successful businesses as well as to make positive connections and feel good about experiences with people. A good interview question for your front-line service staff is, “Describe a customer service experience where you feel you really connected with a customer and created loyalty?” If you hear and see them get excited when they share their story with you, it’s a good indication that they understand the value of great customer service and should be your newest employee.

Here is an example of eight positive reviews an owner of a small vacation rental company shared with me where her staff was highlighted:

Dream come true! A special thank you to Faye. She went above and beyond all expectations. Thanks to Faye, we will have a memory that will always be cherished, recommended, and told to friend’s future kids.J Love the beautiful Sandy River home and plan on going back once a year!

Notice the customer didn’t mention the company name; she used the employee’s name and referred to the home, not the property. This is what real customer loyalty sounds and looks like. After all, people enjoy doing business with actual people and want to feel special. Imagine what your company would look like if a high percentage of your customers who rent from you year after year received the same personal touches and attention.

Ali Cammelletti of Cammelletti Consulting has more than twenty-eight years of experience in the hospitality industry. She has served in many capacities within the industry, from the front-lines in restaurant and lodging services to the creation and management of a successful event planning business to, now, running a consulting company. She currently coaches and trains front-line staff as well as managers to grow their leadership skills. Visit www.cammelletticonsulting.com for more details.

RedAwning Upgrades Vacation Rentals with 24/7 Hotel-Like Guest Support

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February 15, 2017

Today, RedAwning announced “RedAwning Complete Reservations & Marketing,” a service for helping Property Managers of all sizes to better manage their entire rental booking businesses. The new service provides continuously updated distribution and technical integration across the largest network of leading Online Travel Agencies (OTAs), vacation rental booking websites, metasearch channels and exclusive RedAwning owned channels; complete 24/7 customer service and management throughout the entire rental experience; and the industry’s most robust data analytics platform for optimizing rental listings.

“Our goal is to take the hassle out of renting a vacation rental property – and elevate the entire experience to that of a hotel-booking. Property Managers can now offer hotel-like service to their customers at no extra cost to them. And they can now achieve the greatest results from online marketing without having to understand all of the new algorithms and requirements of every online channel. We’ve centralized the entire rental process for them so they can better compete in what has quickly become a much more complex, global travel marketplace,” stated Tim Choate, CEO for RedAwning.

“Guests often expect a hotel-like experience when they book an online property rental. If the pool is cold, the A/C isn’t working, or your guests are locked out, who are you going to call in the middle of the night? RedAwning enables us to provide a level of customer service on par with a high-end hotel booking – so that we can consistently exceed the expectations of our guests,” stated, Melissa Gade, Property Manager for Big Bear Vacations.

“Our bookings literally doubled in 2016 to over $500K in revenue after participating in RedAwning’s beta service. Typically, more bookings require proportionally more work, but that has not been the case – thanks to RedAwning’s help across the board,” stated Jill Huschke, Reservations Manager, at Chasen Rainbows in Hawaii.

RedAwning’s new service enables Property Managers of all sizes to centrally manage all of the details for their property listings and rentals, including:

Centralized customer support
- 24/7 guest support by phone, email, live chat, and text messaging
- Instant bookings for all properties on all channels
- Complete payment processing and contracts management
- Accidental property damage coverage up to $3,000 included with every stay
Marketing across the largest global network for private property rentals
- Automatically list and maintain properties on all the major travel websites with just one contract; efficient publishing of property information, calendars, and rates; automatic delivery of reservations
- Expert channel marketing with unparalleled access to performance data across 100,000 properties
- Exclusive distribution channels reaching 100,000s of thousands of vacation rental guests, travel agents and tour operators.
Integration with all leading OTAs
- Industry’s largest data analytics engine deployed to competitively rank properties on major travel sites
- Dynamic and seamless integration with PMS systems; speeds updates and eliminates double bookings

For more details about RedAwning’s new service, please visit: https://www.redawning.com/complete-Reservation-and-Marketing-Service

NAVIS Sets Record in 2016: $138M in Client Booked Revenue through RezForce®

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February 15, 2017

NAVIS today announced that 2016 was a record-breaking year in direct-booked revenue for their RezForce clients.

A call-center service exclusively for the hotel and vacation rental industry, RezForce generated $138 million in client bookings and an additional $34 million in sales through outbound lead follow-up campaigns. More than $1 million came through the service on Cyber Monday alone, a single-day sales record for the company.

“Knowing that the market was trending more toward phone calls and that our clients were likely to require more overflow and after-hours support than ever before, we strategically positioned the operation to capture the opportunity,” said Matt Juarez, NAVIS’ vice president of operations. “As a result, conversions are up, and revenue per call is being maximized.”

According to NAVIS, an increasing number of mobile users opt to call directly from a mobile search, contributing significantly to growing call volume. Travelers interested in high-consideration stays tend to call when booking. Many properties, knowing that phone reservations typically bring in more revenue than digital, successfully drive prospective guests to pick up the phone through targeted promotions.

“The past year has again validated the RezForce sales-driven approach to converting existing levels of phone inquiries into whole new levels of revenue,” said NAVIS CEO Kyle Buehner. “We’ve long known that covering the phones 24/7 with sales-focused professionals is a necessity for clients committed to maximizing revenue from the direct channel.”

To learn why leading lodging companies trust NAVIS to help them take full advantage of sales and marketing opportunities that lead to more business, please visit TheNavisWay.com or call 866-712-3439.

Market Your Secret Weapon: Your Vacation Rental Housekeeping Department

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Steve Craig

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February 14, 2017

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The performance of a vacation rental manager’s (VRM’s) housekeeping department is more important to vacation home owners and guests than ever before. Owners and guests are on the two sides of your business model equation, so for both of these customer groups, trusting in your commitment to housekeeping excellence is a key factor in their decisions to choose to work with your company.

On the owner side, vacation home owners want and need to know about the quality of your housekeeping department, and they want to believe their big real estate investment is being cared for by the best.

On the guest side, according to a research study carried out by Emprise, 97 percent of guests agreed that a clean establishment was the most important booking factor, and a negative online review lost the business of 30 customers on average. With increased competition in the industry, guests are looking for ways to differentiate between properties when making their vacation rental booking decisions. The more assurance VRMs provide about the level of cleanliness guests can expect in the homes, the more comfortable guests will be in making reservations.

VRM marketers are beginning to realize that by tweaking their marketing content to promote housekeeping excellence, they can yield an enormous boost in customer acquisition and retention.

Steve Craig, founder and president at Pro Resort Housekeeping, has compiled a list of ideas to promote the quality of your housekeeping quality to your customers.

Marketing Housekeeping Excellence to Owners

When Owners Shop for a VRM

Create and send press releases to your local media that show off your housekeeping department. Here are a few examples:
- “Meyer Vacation Rentals Employee Gwen Polk Receives National Vacation Rental Housekeeping Professionals Award”
- “Mountain Vacation Rentals Housekeepers Receive National Certifications”
- “Lakefront Vacation Homes Gets Top Marks for Housekeeping Excellence from Spring Break Families”
Use blogs and social media to promote housekeeping awards, certifications (e.g., training, accolades, etc.), and key stats that show excellence in performance.
Use search engine optimization (SEO) techniques to optimize your website for prospective owners who are searching for VRMs focused on housekeeping quality.
Provide uniforms. Your housekeepers in the field are more of a marketing tool for your business than you realize; their appearance and behavior are direct reflections of your company’s commitment to quality. Your prospective homeowners will notice.

In Marketing Materials for Owners

Include the Vacation Rental Housekeeping Professionals (VRHP) membership logo (if applicable) on your site and include additional writing, e.g., “XYZ Vacation Rentals is a proud member of VRHP, and we follow strict standards to ensure a clean and safe environment for your family.”
Add materials in owner acquisition packets that outline your excellent departure cleaning standards and training programs.
Promote your process for screening housekeeping staff, including background checks, if applicable.
Add testimonials about housekeeping from other homeowners to your website and printed marketing materials.

To Retain Owners

Send results from guest surveys, comment cards, and reviews to homeowners.
Use emails and newsletters to communicate both positive news about and achievements of your housekeeping team. Consider including information about training completion, attendance at conferences/seminars, improvement in performance, relationships with new vendors, switches to supplies that are more safe and green, etc.
Send each property owner an email with a picture and short bio of your housekeeping manager and/or the assigned housekeeper and inspector.
Show before and after photos of deep cleans (annual cleans).
People are less likely to criticize other people when they know them personally. Find ways to personalize the relationship between homeowners and your housekeeping team (e.g., notes from the housekeeping manager left in the home for owner stays or personal meetings before or after deep cleans).

Marketing Housekeeping Excellence to Guests

When Guests are Shopping Online for a Vacation Rental

Provide language in your property listing descriptions that promotes your housekeeping guarantee(s) or commitment to excellence. Here are two examples:
- “We are committed to housekeeping excellence and provide you our Island Housekeeping Guarantee so you can rest assured that your vacation rental will be clean and safe upon your arrival.”
- “Our professionally trained and certified housekeeping team and inspectors are dedicated to making sure your stay is comfortable and stress-free.”
Add a photo and/or photo caption to listings to depict your commitment to providing clean and safe accommodations.
Use social media to promote your housekeeping team’s achievements, high ratings, and exceptional guest reviews.

On Your Website and in Email Marketing to Guests

Provide statistics from your guest surveys (e.g., 98 percent of guests rated our properties as “very clean” or “exceptionally clean”).
Communicate your use of safe and environmentally-friendly (and pet-friendly, if applicable) chemicals and supplies.
Promote that each vacation rental is cleaned with a strict set of standards and inspected for cleaning quality before each arrival.
If you have staff on call 24/7, make sure your prospective guests know that.
In the same way that you market to owners, include the VRHP membership logo (if applicable) on your site and include additional writing, e.g., “XYZ Vacation Rentals is a proud member of VRHP, and we follow strict standards to ensure a clean and safe environment for your family.”

To Improve Guest Retention

The number one thing you can do to encourage guest retention is to provide a safe, clean rental that meets or exceeds your guests’ expectations, but there are a few extra measures that can help create a good first impression. Here are a few examples:

Open the toilet paper, fold it to a point, and put on a sticker with the company logo. This adds a touch of class and style.
Put cards on beds promoting your laundry commitment.
If your guest is arriving after dark, leave a couple of lights on. No guest likes walking into a strange, dark house at night.
If you are on the water, leave window treatments open so that guests focus on the view before the cleanliness of the room.
Leave a note upon each arrival, including housekeeper and inspector names, a phone number, and a generic email address to the housekeeping department.
Call guests after arrival to make sure they are happy with the cleanliness of their vacation rental. You want them to tell you before they tell the world online.

Cleanliness is very important to your customers, so it only makes sense to promote your housekeeping team’s performance in your marketing efforts. Focus on your team’s strengths and get creative. A little housekeeping promotion will go a long way toward acquiring and retaining owners and guests.

Airbnb’s Lack of Safety Concern is a Danger to All

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February 14, 2017

On January 22, Airbnb posted a photo on its internationally viewed Facebook page showing a large stone staircase with no railings and a child relaxing with his dad underneath. Even though the property is located in Es Llombards, Illes Balears, Spain, the message comes into the international vacation rental industry like a flaming torch. The property is being touted by Airbnb as a great home to stay in when traveling with families and little ones. While it isn’t known what the local building codes are in Es Llombards, the fact that without railings, this house, by anyone’s common sense, isn’t safe for a child to stay in is problem enough. One of the world’s largest OTAs has chosen to use this property and photo to illustrate a good travel destination which is disturbing.

Airbnb, like other OTAs, claims that they are concerned about safety. They have posted on their website:

Your Airbnb experience begins the moment you embrace adventure. That’s only possible when you trust this community and feel safe. As a result, safety is our first priority—we require that you refrain from endangering or threatening anyone.

However, this statement falls incredibly short. On their safety page for property owners, Airbnb makes no mention of making sure local building codes are addressed. Not one comment is made about common sense safety items like making sure that stairs have railings or that there are working smoke detectors in the homes. Airbnb’s own Preparing Your Home for Guests checklist makes no mention of safety items at all.

Unsafe properties in Spain aren’t the only ones that Airbnb’s sharing with the traveling public. Here in the US, it only takes seconds of browsing through their properties to find others that aren’t up to basic building codes. One property in Maine has a lead photo that shows its deck (which is three steps high) with no railing around the deck or on the steps. Yet another rental, an apartment in Oregon, shows the same thing: a deck, not up to code, overlooking the ocean. Within minutes, I was able to find 20 properties on Airbnb that are being advertised and aren’t up to national building code standards.

People are, indeed, getting hurt in Airbnb vacation rentals that are not up to building codes. Last month, Michael Venci filed suit against Airbnb in New Orleans for alleged spine injuries he incurred after falling down stairs that didn’t meeting building code. Both Airbnb and the property owner are being accused of failing to maintain proper lighting, failing to provide a guardrail, and failing to use reasonable care in the vacation rental. Venci is seeking $75,000 in compensation.

So what? Why are properties that aren’t up to building code standards advertised on Airbnb or other OTAs like HomeAway, VRBO, and FlipKey?

This is a serious problem for the vacation rental industry.

A quick Google search reveals that hundreds of towns and cities around the US are cracking down on vacation rentals. The number one focus of most local governments is on basic home safety. The most recent locality to put forth a referendum is the City of Palm Springs, California. Officials in Palm Springs said, ”the proposed safety initiative would require short-term vacation rentals to comply with similar health, safety, accessibility, building, and insurance requirements that small motels and hotels are required to follow in the event the new ordinance is overturned.”

The key points of this statement are highly common. The hotel industry is aggressively pushing for the vacation rental industry to be required to follow the same safety standards that they are required to follow. This is their most useful tool to combat the potential takeover of the lodging industry by vacation rentals.

In order for Airbnb and the rest of the vacation rental industry to move forward successfully, it must embrace safety. Cool houses like one on Airbnb’s website located in Yucca Valley, California may be what’s helping attract new vacation renters to our industry. But if someone walks off of the concrete patio that is over three feet high, we will all end up paying for increased oversight and regulations. Airbnb, other OTAs, professional vacation managers, and RBOs need to set a standard that, unless their rentals meet national building code standards, they shouldn’t be offered as vacation rentals.

I reached out to Airbnb and asked them to remove their post. Despite replying to others who commented on the post, and despite many others pointing out the irony of the property being advertised as a good property for children, the post remained “live” for at least 24 hours past post time.

Justin Ford is the owner of On the Water in Maine vacation rentals in Maine. He has a background in safety that goes back to a four-year tour in the US Coast Guard where he participated in fishing vessel safety enforcement in Alaska. Later, he joined his local fire department where he is the training officer. Justin is also the Vice President of the Vacation Rental Professionals of Maine and presents regularly on safety for the VRMA. Justin also produces a Facebook community page on Vacation Rental Safety at https://www.facebook.com/Vacation-Rental-Safety-811465988927504.

Setting up an in-house laundry facility with Joe Refosco

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February 14, 2017

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Setting up an in-house laundry facility is a big commitment in terms of finances, resources, and management. And it can be a daunting task, but in the long run, it is worth every penny. An in-house laundry facility can reduce your costs by 50 percent or more per pound, and it gives you control over the quality of linens you provide.

It All Starts with Research

Connect with fellow Vacation Rental Managers (VRMs) who already have in-house laundry facilities and attend industry events to learn about best practices. You will find that many VRMs are happy to share what they have learned about managing laundry in-house laundry and will even let you and your team train with them. I cannot stress that enough. I spent time with five different vacation rental companies and spent over a year researching linens and chemical suppliers before I started my first facility.

What You Will Need

Not only do you need to learn how facilities are run in the industry and how equipment works, but you also need to have an itemized breakdown of equipment you will need. From washers and dryers to totes and carts, there are numerous items that are necessary to get the job done.

At Taylor-Made Deep Creek Vacations, we started our laundry facility with one 70-pound capacity washer and one 125-pound capacity dryer to service up to 70 properties. We then expanded our operation into a larger space. The equipment listed below is what we currently use and is adequate for servicing about 300 homes:

Three 60-pound capacity washers
Three 75-pound capacity dryers
One commercial ironer
One commercial laundry shrink wrapping machine
Instant hot water
One 1,000-gallon storage tank

As our company has recently grown to manage over 350 properties, we have plans to replace some of our current equipment with three 100-pound washers and three 175-pound dryers.

I suggest investing in a commercial ironer when purchasing equipment. It reduces drying time, requires only two staff members for operation, and creates that crisp, clean look that guests love. We also chose to invest in a shrink wrap machine that keeps sheet sets together and free of dust while easing transport.

Also, keep in mind that this list does not include other costly items like office furniture, signage, tile work, wiring, computers, phones, etc. And, if you are not on city water, you may also need to budget for water treatment equipment and service. Water that has too much iron can discolor your linens. So be sure to consider all of this in your budget as well.

The Right Location

Finding the right space to house your facility is a critical piece of the puzzle. Your warehouse space needs to include an area that can act as a dedicated folding room and storage room for clean linens. You never know when you might go from managing 250 homes to 350 homes overnight like we did this year. I suggest about 1,200–1,500 square feet for a facility that services approximately 350 homes.

Hindsight is twenty-twenty, and looking back, there are some things I would have definitely done differently. While our warehouse space has plenty of room throughout most of the year, during the busy summer season, when we have a lot of back-to-back reservations, I have to rent a storage space for dirty linens. Don’t underestimate how much space you will need just for linen storage—both clean and dirty.

At Taylor-Made, our laundry facility meshes well with our housekeeping department. To help keep costs low, our housekeepers transport linens back and forth from our laundry facility. Everything is bagged and wrapped, and linens and towels are packaged separately so that they can be efficiently distributed throughout a home.

When housekeepers are doing deep cleans, they are able to bring comforters and blankets back to our laundry facility instead of taking them to a laundromat. This is a big timesaver that aids in completing a thorough cleaning of a home more efficiently.

While this may seem like a lot of information, I have barely scratched the surface of all of the detail involved in an endeavor as large as adding an in-house laundry facility. But, I can tell you that what may seem like a major investment can quickly become a profit center for your company. For example, the current industry average cost per pound is about 55 cents, but by optimizing our in-house laundry facility, we are able to operate at an average of 6 cents below that.

At the risk of repeating myself, I hope that if you take away any piece of advice from this article, it is that you should make sure to do your homework—and do it well—before you make any financial commitments. Utilize the experience that others have had in this same arena and take advantage of educational opportunities at industry events. Fellow vacation rental managers tend to be generous with sharing their experiences in order for you to learn the do’s and don’ts and pros and cons of bringing laundry in-house.

The 2017 Winter Issue of VRM Intel Magazine is Here

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February 14, 2017

As vacation rental managers, you have numerous hats to wear in order to be successful. Consequently, in this winter issue, we decided to shift the focus away from OTAs and towards the internal functions within vacation rental management companies. While there are still major changes occurring among the mammoth OTA booking channels, as industry veteran George Volsky is famous for saying, “This industry is still about cleaning toilets and taking care of the screaming guests.”

In the pages that follow, you will read about guest reviews, organizational structure, vacation rental safety, increasing repeat business, following up with leads, and building an in-house laundry facility. You will also find a series of website marketing articles to help increase your online visibility and convert more visits into bookings.

We had the privilege of interviewing one of the industry’s first vacation rental management company founders, Rae Sloane Cox, who started Sloane Realty Vacations in 1955, and is a true pioneer in the industry. We also sat down with Steve Milo, founder and managing director at Vacation Rental Pros, who has recently acquired several large property management companies and is rapidly extending his footprint across the US.

Additionally, there are some new things going on at VRM Intel. Here at VRM Intel, we launched a new website, created a job board for our industry, began hosting VRM Intel Live! events across the country, and started building a reporting tool called VI Reports which provides unbiased competitive market reports to help VRMs make fact-based revenue management and marketing decisions (You can read more about this tool on page 89).

While doing this, we observed a noteworthy shift in the way in which technology providers are internally viewing your data. While some are continuing to provide you with high levels of data protection and choice in whom you wish to work with, some large software providers (one in particular) are beginning to limit those options and start collecting your data within their larger platform to help homeowners and hotels compete with your properties. As we move forward in 2017, I believe we will see an important conversation arise about vacation rental software companies and their agendas regarding your customer and booking data. Stay tuned.

Jon Gray, Mariano Dima Leave HomeAway

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February 14, 2017

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As of Monday, HomeAway’s chief revenue officer Jon Gray and chief marketing officer Mariano Dima are no longer with the company, indicating a change by Expedia in the trajectory for HomeAway’s vacation rental marketplace.

Last week, during Expedia’s Q4 2016 earnings conference call, CEO Dara Khosrowshahi said, “We’ve actually brought in some excellent talent to really build up the [HomeAway] team, some talent from within the company.”

Khosrowshahi added, “And I think that HomeAway, as it’s transitioning from a business that whose economics were based on subscriptions and subscription renewals, and there is a certain marketing strategy to drive subscription renewals, to a business and strategy that’s based on driving transactions, that’s our bread and butter as it relates to our OTA brands.”

Jon Gray joined HomeAway in 2004 as the third employee at the company before its landmark purchase of VRBO.com in 2006. Gray served the company in many leadership capacities over the years, and in April of 2015, Gray was named as the company’s chief revenue officer. In this position, he was responsible for the delivery of global revenue and managed the business development, sales and regional business teams.

“After more than 12 years with HomeAway and starting his career as our third employee, Chief Revenue Officer Jon Gray decided it is time to pursue new opportunities,” said Jordan Hoefar, corporate communications manager at HomeAway. “We are incredibly thankful to Jon and all his contributions during his tremendous tenure.”

In July of 2014, former Visa Europe CMO Mariano Dima was named chief marketing officer for HomeAway.

In this position, London-based Dima oversaw all global marketing, corporate communications and brand initiatives and was responsible for the “Whole Vacation” marketing campaign that guided HomeAway’s messaging and simultaneously differentiated the company from both hotels and Airbnb. Mariano also spearheaded the Eiffel Tower vacation rental giveaway campaign about which Dima said, ““We had a big idea to create a HomeAway where no one would believed would be possible, and now it’s here.”

Hoefar added, “Similarly, Chief Marketing Officer Mariano Dima decided it is time to leave HomeAway to pursue new opportunities. We appreciate Mariano’s vision for the HomeAway brand and his leadership as the company invested in and grew the marketing organization.”

In addition, several organizational changes are being reported within HomeAway’s software division. However, HomeAway’s Hoefar said, “There aren’t any significant org changes in our HomeAway Software division to report.”

Updated 4:36 ET, Feb, 15, 2017 with comments from Jordan Hoefar, HomeAway’s corporate communications manager.

Vacation Rental Pros Steve Milo Talks Acquisitions and Growth Strategy

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February 13, 2017

In 2002, Steve Milo, founder and managing director of Vacation Rental Pros Property Management LLC, purchased his first vacation rental home in Venice, Florida, and struggled to find a competent property management company in the area. He decided to self-manage and explore the opportunity in the market. By 2006, with a background in eCommerce, Milo owned or co-owned ten vacation rentals and was having great success renting the properties on his website. Seeing the opportunity in the marketplace, he decided to launch Vacation Rental Pros. By the end of 2006, he was managing 25 properties.

Milo’s initial growth was organic. “I started the business in a recession. Many property managers had stopped taking new homes because they were having trouble getting bookings. In hindsight, the recession was an opportunity. It allowed us to take advantage of a tougher playing field. By running a lean organization, we were able to be profitable, and we used that profit for marketing. We ended up having more bookings than units.”

Only ten years later, Florida-based Vacation Rental Pros now employs 120 and manages over 2,200 properties in 17 markets in the US with plans to grow to more than 2,500 by the end of the quarter. Milo’s company is currently one of the largest vacation rental management companies in the US with no plans of slowing its growth trajectory in the near future.

“We run a tight G&A,” said Milo. “This doesn’t happen by accident. It happens because management buys into the philosophy of keeping expenses low and having productive employees.”

Armed with what Milo calls the “Vacation Rental Pros System,” the company has established a formula that provides a level of efficiency and profitability across multiple destinations on a large scale that the vacation rental industry has been slow to replicate.

Acquisitions

In the last two years, Vacation Rental Pros has acquired 15 companies, including Five Star Vacation Homes in Orlando, Hilton Head Rentals & Golf in South Carolina, Jackson Mountain Homes and the vacation rental contracts from SmokyMountains.com in Gatlinburg, Waterfront Vacation Rentals in St. Petersburg, Condotel and Kokopelli Property Management in New Mexico, and Maui Condo and Car in Hawaii.

With his experience in acquiring companies and bringing them into the Vacation Rental Pros platform, Milo has had the opportunity to learn some valuable lessons along the way including more closely examining the market potential and the company’s viability. “The first thing we’re looking for is the ability for the market to continue to grow,” said Milo. “So any time we look at the market or a company within the market, we’re looking at how much potential is there to grow beyond the book of business we acquired. After that we’re looking at the company itself, its adjusted income, its overall operational efficiency, and any areas where we can create efficiencies from the Vacation Rental Pros model, as well as where we can create a revenue.”

Milo also prefers to complete acquisitions at the end of a market’s season or before the beginning of the season so that they can move the acquired inventory into the Vacation Rental Pros platform. “Our platform is really the critical component of our success and its capability separates us from most of the other companies in the space as we are able to work from the centralized platform and being able to gain the efficiencies of our central office and our satellite offices working on the same platform, and leveraging the talent within the entire organization.”

When Milo acquires a new company, he generally expects to see a 10 to 15 percent attrition in the transition. “We are realistic with the fact that Vacation Rental Pros has a little bit of a different model, and that model may not work for every single property owner. Our model is much less touchy-feely than some companies provide, and there’s going to be an element of owners with—as important as revenue is—they also value this touchy-feely component of being able to talk to a principle that knows their life history.”

Milo added, “What we can do is provide a layer of professionalism to the organization that they may have previously not seen. We have a robust owner portal, detailed owner confirmations, and smart locks that we’re paying for as company. We have much more robust marketing and integration to OTAs that lends itself to drive to significant incremental revenue, and we have much more robust rate management. So we do expect some attrition, but in each market we’ve gained a significant number of new owners by the process of opening up solicitations to new property owners to offer our services, and we tend to believe that by having a local office and combining it with the items that Vacation Rental Pros does extraordinary well, we can be the best of breed in the market we enter.”

Vacation Rental Pros Secures $27 Million

To support its future growth, Vacation Rental Pros announced the completion of $27 million in bank debt. In late 2016, Fifth Third Bank approved $20 million in commercial bank debt for Vacation Rental Pros, and Gladstone Capital invested $7 million in the company through secured second lien debt to support the company’s continued growth and expansion into new markets.

According to Milo, the ability of the company to raise a large debt round shows the strength of his business model. “While several of our high profile competitors continue to raise equity, Vacation Rental Pros is able to raise market rate commercial debt based on the strength of our financial statements,” said Milo. “The strength of our business model is what separates us in the industry. We are able to achieve both growth and profitability at the same time. As a result, we have been able to avoid equity partners and warrants and have all the options open to us for future growth.”

Business Model

When examining the Vacation Rental Pros business model, the fact that Milo sought commercial financing, in an industry driven by equity funding, stands out. “The reason why Vacation Rental Pros business model is little different than some other high profile companies that are completing acquisitions is that we are inherently profitable,” said Milo. “And we’ve been inherently profitable from day one. When you make money—and you make money consistently—it allows you a lot of options in terms of how you grow your company. So, Vacation Rental Pros has not had to take on equity partners. We’ve been able to grow using our operating cash, and then we’ve also been able to get financing through commercial banks at commercial rates.

Milo continued, “In order to borrow money from commercial banks, it means that you have to have a balance sheet that works within leverage and ratios that commercial banks find acceptable to risk their capital. And that also mean that you typically have audited statements and quality earnings reports. The fact that Vacation Rental Pros has operated in a profitable manner, has avoided having to go after equity, and has been able to get bank financing, should tell owners and other potential companies out there that it is possible to run a profitable business of scale in this industry, if you do it the right way.”

As evidence of its lean organizational structure, Vacation Rental Pros has performed in an optimal manner of running profitable business while also growing 65 percent per a year, and that growth rate is increasing. Milo continues to invest money in technology that adds to the company’s efficiency and profitability margin.

“It takes a platform, management, discipline, and leadership to drive a profitable business, and management needs to be numbers oriented, performance driven, and have the ability to really think through problems as opposed to throwing bodies at that problem, said Milo.” We tend to be very methodical about thinking through challenges, options, and solutions, and we avoid simply hiring a massive amount of people to attempt to solve the issues we face in our business. It’s a culture that starts from the top, and then spreads throughout the organization. And it’s one of the reasons why it is tougher to be an employee at Vacation Rental Pros, because we have higher standards, and we have higher expectations. But it is also one of the reasons why the people that are at Vacation Rental Pros, are extraordinary in terms of its productivity because the employee culture itself is one of excelling and buying into standards and performance.”

Historically, Milo has not always retained all of the employees at the companies he has acquired. “When we get into a market where employees don’t feel that they have to work at the level and at the standards we expect, or simply do not want to align themselves with the Vacation Rental Pros process and procedures that we are expect from our employees, we make the decision to centralize the functions out of our corporate office,” explained Milo. “It is not the first option that we would prefer. We would prefer instead to continue to manage the properties with the local staff that is in place, but with our model, we have an option to simply reduce the local staff level. And we’ve done it at two locations, and it’s worked extraordinarily well.”

Milo continued, “The vacation rental industry is interesting in that it is so fragmented, with many different companies and many different ways that people operate. In some cases, there’s a lack of talent in the industry as a whole because, in resort markets, you have limited options for resources. What some companies have done is overcompensate either by hiring more people than they need or by retaining and overpaying individuals who have a lot of legacy knowledge in their head but are inefficient. We’ve been able to enter those resort markets and disrupt some of these G&A issues by being efficient.”

Milo attributes much of the company’s profitability to the creation of a hybrid model, “On one hand, we’re able to grow revenue by being smart about fees, smart about margin, really dialed into OTAs and online bookings, and all of that different technology that really can move the needle in terms of revenue management and yield management,” said Milo. “In addition, we’re extremely good at managing G&A. Not just employees, not just salary structures, but also really looking at the underlining aspects of the business including housekeeping, maintenance and even the process for how those services are delivered, and ultimately how they billed back to the unit owner. And so, by doing all of those things, and doing them well, and having a platform that truly can scale, we’re able to grow our profits in a way with that margins continue to increase.”

The Vacation Rental Pros Marketing Strategy

One of the unique aspects of Milo’s business plan is his approach to marketing. Milo uses a group of specialized freelancers to execute the Vacation Rental Pros marketing plan. These expert independent contractors have worked under the Vacation Rental Pros system for years and manage user interface, organic search, paid search, email marketing, CRM, and more. “Almost all of our marketing is actually external,” said Milo. “It’s a model we prefer as we think that the best specialized marketing talent are freelancers who have done this for a living in across multiple clients and across different industries.”

He has found that the most effective marketing channel is email marketing. “There are two aspects of email marketing. First, there is acquisition marketing which would be to induce people who haven’t booked with you. We continue to mail them in hopes that they will eventually book with you.”

He continued, “Then there are the guests who have previously booked with you. And that obviously produces the best ROI for marketing. Everything else is going to increase in cost from there. Some of channels are far more efficient than others.”

With third-party distribution channels, Milo tracks his performance closely. “I think HomeAway has publicly indicated that they believe their average advertising expense as a percentage of revenue is in the five percent range. We certainly have found that’s the case using a subscription model.”

“There are other companies out there like Airbnb that have a three percent fee, but there is a high manual component in operating on them,” Milo added. “Then, other distribution companies have a much higher fee. It requires discipline when building an OTA strategy.”

Milo also advises VRMs to closely monitor their spending on paid search strategies. “Paid search is really the area where companies have to be extremely careful because there are giant multibillion dollar companies that are competing in our markets,” he said. “HomeAway, Airbnb, Priceline, and even TripAdvisor are all spending money on AdWords in the vacation rental market. If you are not careful and smart, you could see your cost for distribution [reach] as high as 25 to 30 percent. You have to really be smart, you have to really target long-tail keywords and stay away from broader terms that are very expensive and provide low conversion rates.”

Milo also addressed Vacation Rental Pros’s SEO strategy: “We have spent lot of time and lot of money on content, photography, copy, and even captions for photos in an effort to better market our homes and provide better information to our guests about the properties they want to book. The additional benefit is that this content really helps with the search engines. We hope, at some point, that Google will start to recognize local and regional firms, as opposed to international OTAs, for some of these organic keywords.”

Revenue Management

Steve Milo has also developed an internal revenue management system that has helped Vacation Rental Pros out-perform the market in pricing. “I have not found an external solution that can replace what I do right now,” said Milo. “We have built a platform where we are able to manage a number of different regions. It is extremely powerful and gives us a competitive edge in every single market we enter because we can price per week, per day, and per weekend, in contrast to what we’ve seen in most platforms in our industry doing more flat pricing, low-level pricing, and less variable pricing.”

Milo added, “We typically excel in being able to outperform, or out-yield, our competitors during the season; and during the off-season, we typically come in a little lower than [our competitors] which allows us to drive high occupancy. This is an area of opportunity, and it’s really been an area where we excel.”

Growth

“We manage over 2,200 properties right now, and we’d like to be around 2,500 properties, by the end of the first quarter,” said Milo. “However, unit count is the least important metric of growth because I think it is a little misleading, but it is one that most property managers and owners can relate to. We have a number of deals under a letter of intent and contracts that should close at the beginning of 2017. We’re looking to integrate these companies quickly into Vacation Rental Pros and our platform, so that we can enjoy a full 2017 of revenue.”

According to Milo, the acquisition environment was buyer friendly from 2008 to 2013, and seller friendly from 2014 to 2016. Entering into 2017, he sees headwinds for sellers with an increased risk of natural disaster, the devaluation of currencies against the dollar, and the fact that there are some economic models that indicate the US may be headed into an economic slowdown.

“One thing that sellers need to think through is that it is not always a good idea to just wait and think that the market will continue to increase the valuation of their company. There is a cycle for everything,” said Milo. “That is one of the biggest things we see when we’re talking with potential seller. In some cases they think they can work another year or two and the value of the company will continue to increase. That is not always the case, and in the markets with the natural disasters, that will not be the case, and we’ll actually see the reduction of the revenue in 2017. So we think that 2017 will be a year where it will probably start to move more to buyer market than a seller market.”

Looking to the Future

Milo predicts that the industry will see more acceleration on the distribution level for the vacation rental industry as OTA companies open the vacation rental business up to more of the mass consumer.

“We believe that the OTA space is another area where Vacation Rental Pros is uniquely qualified to accelerate its revenue and its occupancy over competitors,” said Milo. “There is a large digital divide in terms of the OTAs because so many of the OTA aspects require advanced knowledge and expertise for configuration in database management. It is not as simple as turning on a feed. It requires a lot of set up, database structure, and then configuration. Vacation Rental Pros is really dialed in on these aspects.”

Milo has found when he acquires new companies that they often have not had the staff or resources to set up and manage OTA distribution well. “I don’t think it’s reasonable to expect your staff in your local office to be able to understand complex configuration, setup and database aspects to maximize yield management on the OTA channels. That is not a reasonable expectation,” said Milo. Because we’re in an immature environment for OTA setup, and one that’s extremely fluid, you need to have an advanced level of setup and configuration to be able to succeed.”

Milo also offered other VRMs some advice in understanding OTAs and how to best work with them. “I think any property manager who doesn’t believe [OTAs] have their own agenda should probably start to process of selling their business now. OTAs definitely have their own agenda, and they definitely are going to tell you what they think is in their best interest, which may or may not be in your best interest. You have to be careful, you have to be prudent, and you have to look at the data they provide you and really use common sense. Does it make sense to relax your booking rules for your primary season? The answer is no. Does it make sense to relax or test your booking rules, your cancelation policies, and your deposit policies for the off-season? The answer is yes.”

Milo added, “Doing business with OTAs is not as easy as everybody think it is because some of them are challenging to work with. Some have significant technical issues, some want to be the merchant of record, which causes tremendous heartburn because they control all the money, and some have policies that supersede your own policies, and may ultimately cause you to lose your entire revenue because you may have, for example, an Airbnb caseworker who provides a refund your guest at their sole discretion. Property managers really need to think through where and how they’re going to distribute their inventory.”

Over the next two years, we can expect to see Vacation Rental Pros begin to leverage its growth, scalability, and sustainability by entering into strategic partnerships. “Where we’re heading into the future is that we’re looking at a number different ways to continue to differentiate Vacation Rental Pros,” said Milo. “Part of that is looking at strategic partnerships. In 2017, I’m looking forward to a number of conversations with strategic partners, who now view Vacation Rental Pros as a national player and who are starting to hear about us from others within the industry as a company that has their act together and is going to be around for a long haul. Companies that are strategic want to do business with the companies that are going to be in business a long term, and those doors are starting to open to Vacation Rental Pros.”

We’ve kept all of our options open for how we will best move forward in 2017 and 2018, partly because we don’t answer to equity partners, we have a clean slate, and we have an ability to map out the paths that are in the best interests of the company and our guests and our owners.

Southwest Florida Man Accused of Vacation Rental Fraud Using VRBO.com

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February 13, 2017

BONITA SPRINGS, Fla. – The Collier County Sheriff’s Office arrested a man over the weekend who they say victimized three people in a rental fraud scheme.

57-year-old John Joseph Hayes of Bonita Springs faces fraud charges after the victims reported that they paid him thousands of dollars in advance for the same rental unit during the same time period, between January and April.

The three women, each from a different state, found a seasonal vacation condo at Glen Manor on Fourth Street in Bonita Springs on the web site VRBO.com. VRBO stands for Vacation Rentals By Owner.

In one case, the victim told investigators that Hayes didn’t tell her the unit would be unavailable until three days before her arrival date, after she emailed him about how to get the key.

The other women were told that the unit would be unavailable due to a dispute between Hayes and the HOA for Glen Manor. According to Hayes’ arrest report, the three women paid him a total of $26,649.

Realtor Todd Gridley of Naples said that sites like VRBO.com screen the rental owners who advertise with them, so he recommends calling their customer service and checking that the owners are who they say they are.

“Once you hand over the money, the fees could be gone,” Gridley said. “So it’s always better to do your due diligence, and deal with someone that knows that market.”

According to the arrest report, all three women want to press charges against Hayes. Attorney Mike Chionopoulos said victims in a case such as this have a better chance at recouping their money in a criminal case rather than filing civil suits.

“The victims have to ensure that by going to the state’s attorney…and saying ‘we want any (plea) deal to include restitution, and we want him to stay on probation until his restitution is complete,'” Chionopoulos said.

Hayes has been released from jail on a $10,000 bond.

VRM Intel Live! and VRHP Housekeeping Seminar Coming to Outer Banks, February 22 & 23

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February 10, 2017

VRM Intel Magazine is coming live to North Carolina’s Outer Banks with advanced level education and information for vacation rental managers.

register-now-for-vrm-intel-live VRM Intel Live! will be held on February 22 at the Hilton Garden Inn Outer Banks/Kitty Hawk with a powerful, high-level lineup of speakers that includes industry leaders, experts and many of your favorite VRM Intel Magazine writers. The early registration cost is $100 per person and increases to $130 per person after February 10. For registration information, go to vrmintellive.com. Join us for great education, intel, food, networking and fun!

Ascent Processing and VRM Intel are also sponsoring a reception for VRMs on February 21 at Kelly’s Restaurant and Tavern from 6-8, and VRHP is conducting their OBX Housekeeping Seminar on Feb 23 from 8-4:30.

Tickets are selling fast, and space is limited, so don’t delay. Hope to see you there!

VRM Meetup at Kelly’s Restaurant and Tavern, Feb 21, 6 pm – 8 pm, sponsored by Ascent Processing, The VRM Consultants and VRM Intel, (Hors d’oeuvres + Cash bar)
VRM Intel Live! OBX, Feb 22, 8 am – 5 pm, Hilton Garden Inn Kitty Hawk, $100 per person (Sold Out)
VRHP OBX Housekeeping Seminar, Feb 23, 9 am – 4 pm, Nags Head Ramada Inn, $70 per person (31 tickets remaining)

Here is the agenda for VRM Intel Live!:

GENERAL SESSIONS

2017 OTA Update – An unfiltered look at change in third party distribution with Steve Milo, founder, Vacation Rental Pros
Revenge of the Property Manager with Amy Hinote, Founder and Editor-in-Chief, VRM Intel
Forget Booking Channels. What are the Real Challenges and Opportunities for 2017? A Discussion with Steve Trover, CEO, All Star Vacation Homes

MANAGEMENT SESSIONS

2017 Guide to Mergers and Acquisition in Vacation Rentals with Ben Edwards, President, Weatherby Consulting, Past President, Vacation Rental Managers Association (VRMA)
Compliance Issues Facing Seasonal Employers presented by Sabrina Hanson, regional sales director, TASC
New Software: An Answer To Prayers Or Your Worst Nightmare? with Doug Macnaught, Founding Member, The VRM Consultants, Former President and Co-founder, Instant Software
Upper Level Housekeeping Management in 2017 with Joe Refosco, co-owner, Taylor-Made Deep Creek Vacations and president VRHP, and Durk Johnson, Meredith Hospitality and executive director, VRHP
Operational Updates: Smart Locks, Travel Insurance, Credit Card Processing, Technology, Panel

MARKETING SESSIONS

Get More Bookings – Website Design & Usability Tactics That Drive Conversions with Brandon Sauls, Founder and Owner, ICND
Using Online Marketing to Compete with the Big Dogs with Susan Blizzard, CEO, Blizzard Internet Marketing
Successful Niche Marketing – make your email campaigns profitable! with Lynell Eady and Scott Leggatt, LSI Tools
Taking Control Of Local And National SEO with Conrad O’Connell, founder, 91 Digital
5 Ways to Grow Revenue with Existing Demand and What You Think Is A Full Calendar with Heather Weiermann, NAVIS

Bluetent Hires HomeAway’s Tom Clark as Support Manager

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