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Building A National Brand

By
VRM Intel Staff
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0

By Amy Hinote

At the same time Airbnb, Expedia, TripAdvisor and Priceline battle for market share in the vacation rental online marketplace, the industry itself is experiencing a transformation among its professionally managed vacation rental companies. Currently several existing companies are emerging, consolidating and competing. Their common goal: building a national brand in vacation rental management.

TurnKey Vacation Rentals, Vacasa, Vacation Rental Pros and Wyndham Vacation Rentals are a few of the U.S. companies striving to create a sustainable national brand in vacation rental management. To attain the goal, each of these companies has a different strategic approach and is employing a variety of methods.

As we look to the future of professionally managed vacation rentals, it can be a valuable exercise to take time to examine the history of the industry, to discover potential pitfalls and to identify lessons that can be learned and applied as we step into the next generation of vacation rental management.

Last year VRM Intel conducted an in-depth study into the rise and fall of ResortQuest International, Inc. Our objective was twofold. We sought a thorough documentation of the company’s journey, and we were eager to learn more about the obstacles and market environment facing the professionally managed vacation rental industry today.

The resulting study is detailed. Thanks to required reporting of a publicly traded company, much of the history has been preserved. In addition, the majority of ResortQuest’s original board members, and many of its executives, remain active in the industry. They were able to provide insight and color into the challenges faced by the company. The whitepaper in its entirety can be found on VRM Intel at www.vrmintel.com, but in this article we summarize the study and many of our findings.

Summary

ResortQuest International, Inc. was formed in 1998 through the acquisition of 13 companies, including 12 vacation rental management companies and one software company, representing approximately 10,000 vacation rental units and creating the first national brand in the U.S. vacation rental industry.

After going public in May of 1998, ResortQuest International grew quickly with 28 subsequent acquisitions adding approximately 10,000 vacation rental units between 1998 and 2001. The company’s inventory peaked in mid-2001 with over 20,000 reported units before hitting its decline. In 2002, with falling stock prices, management discord and the aftermath of 9/11, ResortQuest International began to lose revenue and investor confidence.

In 2003, ResortQuest (15,784 units) sold to Gaylord Entertainment on hopes of bringing new management, more customers and necessary resources to the company.  Unfortunately, the challenges also proved to be insurmountable for Gaylord. In the end of 2004, Gaylord sold First Resort Software to Instant Software. By 2007, Gaylord split ResortQuest International in two and sold the Hawaii property management (4,500 units) to Interval Leisure Group, Inc. (NASDAQ: IILG) and the remaining ResortQuest Mainland management to Leucadia National (NYSE: LUK) (9,300 units).

After Leucadia’s attempts to change management, attract and retain owners and reduce expenses, ResortQuest was still operating at a loss. Leucadia found a buyer for ResortQuest Mainland in Wyndham Worldwide Corp. (NYSE: WYN). In September 2010, Wyndham purchased ResortQuest Mainland, whose inventory had decreased to 6,000 units.

To further punctuate the decline of ResortQuest, Interval retired the ResortQuest name of the Hawaii properties and returned to the original Aston brand in 2009, and Wyndham began rebranding the ResortQuest trade name to the Wyndham Vacation Rentals brand in 2012.

All predictors pointed to success in building a national brand for the fast-growing vacation rental segment, so why did ResortQuest fail? And is the idea of building a national brand still achievable in the vacation rental industry?

The study examined the history of ResortQuest in the following sections:

  1. May 1998-December 1999 (David Sullivan, CEO)
  2. December 1999-October 2002 (David Levine, CEO)
  3. October 2002-August 2003, (Jim Olin, CEO)
  4. August 2003-July 2007, Gaylord Entertainment
  5. July 2007-September 2010, Leucadia
  6. September 2010-2014, Wyndham Worldwide

Throughout the history of ResortQuest and its varied management, ten identifiable key factors contributed to the ongoing struggles.

  1. Hotel-based executive leadership

Both the founding leadership of ResortQuest and the management team at Gaylord approached building the company with a hotel-based archetype.

“The main paradigm difference was that successful hotel industry managers are more authoritarian and ‘take ownership’ of their properties,” said Jim Olin. “It works for that industry. Hotel managers control the interior, the marketing, and the overall operations. Vacation rental operators have to persuade, convince and work with homeowner associations, homeowners, and others to get everything accomplished. Many of the initial marketing efforts, interior unit grading and other initiatives were from a ‘top down’ approach, where corporate dictated what the field was doing.”

The friction between the hotel leadership and the vacation rental operators led to crippling discord at the board level. Tom Leddy, co-founder at First Resort Software said, “This attitude led to a sometimes subtle, sometimes not subtle, pushing out of the founders of each acquired company and did not encourage any kind of ‘best practice’ concept across some really sharp people.”

Balancing hotel-like standardization and local-operator relational needs was a challenge the hotel leadership inevitably could not overcome.

  1. Financial and reporting requirements associated with being a publicly traded company

As a new publicly traded company, ResortQuest had a critical need to accurately forecast earnings and provide transparent reporting, and in its infancy, the company was hit with additional corporate accounting regulations and requirements.

“ResortQuest was a relatively small public company in the midst of the nation’s reactions to the Enron debacle,” said Olin. “All of the new laws, Sarbanes Oxley for example, caused our ‘little’ company to have to comply with very difficult and expensive new accounting procedures. Additional expensive resources were required, which shifted much of our top-tier management focus inward instead of outward.”

The investment community had been historically uncomfortable with seasonal revenues, but the lack of being able to accurately project earnings was notably detrimental when earnings were erroneously calculated in 1999, resulting in ResortQuest’s failed secondary offering, a stock price free-fall and an unconstructive shift in management.

“The transition of these acquired companies was much more extensive and complicated than what was first thought, causing a great deal more time and expense and lessening the ability to clearly project both cash flow and growth metrics,” said Olin.

  1. High acquisition costs and the need to accumulate and restructure debt

Pressures from Wall Street drove ResortQuest to close many acquisitions at high multiples in order to boost short term earnings.  The excessive cost of acquisitions coupled with the increasing costs of integrating new companies into the ResortQuest system proved to be a contributing factor in its downfall.

“It was seen as easier to impact EBITDA through acquisition than by operations, except 48 hours before quarter-end when major pressure was put on local teams to bring the numbers in,” said Leddy. “New companies were left to their own devices until the quarter-end financial crunch hit.”

The high costs of acquisition resulted in the need to assume substantial debt which further increased the net cost per unit, in some cases significantly.

  1. Difficult centralization of vacation rental management operations

With the initial roll-up of 12 vacation rental companies along with the addition of 18 companies within 18 months, ResortQuest had a pressing need to quickly and efficiently integrate these companies under centralized management, which proved to be more difficult and expensive than expected.

Each company had its own marketing initiatives, housekeeping and maintenance operations (both local and outsourced), accounting systems, government regulations, owner-based communications and commission structures. The centralization of operations across destinations was a complex undertaking which was alien to a hotel-based leadership team.

  1. Distracted with attempts to be a marketing technology company

The initial purchase of First Resort Software along with the urgent need to centralize operations, accounting and marketing led to an unbalanced focus on technology and a subsequent desire to be the number one online marketing portal for vacation rentals in the world, especially under Levine’s leadership.

The need to utilize centralized technology was crucial in accurately projecting earnings, onboarding new operators under the ResortQuest umbrella and creating a one-stop marketing website with real-time online booking and remarketing tools.

However, once the idea took hold Levine became fixated on building a global web portal for vacation rentals, partnering with AOL and CompuServe who proved to be unfortunate allies.

  1. Insufficient management experience

Although the founding management team had meaningful experience in the hotel space, most of the leaders had never previously held the positions to which they named themselves.

David C. Sullivan had not served as a CEO, CFO Jeff Jarvis had previously been a controller, CIO Fred Farmer had never been a CIO and so forth.

The lack of management skills at the top was compounded by extremely difficult and complex management challenges, along with the unprecedented attempt to bring vacation rental operators under one umbrella.

  1. Vacation rental guests did not associate with a national brand

Throughout the ResortQuest history, management believed consumers would eventually associate positively with the brand, which would lead to profitable synergy between destinations. In the vacation rental industry, critical mass was both necessary and unachievable based on the cost of acquiring inventory under the existing model.

Also, Gaylord had performed extensive marketing research and was quantifiably convinced that, with their Country Lifestyle demographic along with synergy from the brand equity in Grand Ole Opry and Bass Pro Shops, they could be successful in creating a viable national brand.

The complete abandonment of their focus on this target market demonstrated their failure to capitalize on brand identification.

  1. Organic growth in inventory

Building successful, ongoing relationships with homeowners is a key component in any vacation rental business, and ResortQuest’s hotel-based leadership struggled to successfully manage this piece.

Being a part of a corporate entity did not hold perceived value or appeal for homeowners, who base their choices about property management on trust, accountability, relationships and ethics, as much as the stability of rental income. Owners were not properly incentivized to connect with the ResortQuest culture. Increased corporate attention to standardization and multi-destination marketing, along with decreased owner buy-in, created a lack of loyalty to the ResortQuest brand.

  1. Rent-by-owner movement

Before online marketing channels became common, vacation rental owners relied on professional property managers to reach consumers through signage, brick and mortar locations, direct mail and rental catalogs. The emergence of online marketing channels, in addition to increased self-management education, precipitated a movement towards owner management.

By 2006, HomeAway bought VRBO.com making it possible to easily access renters, and within two years, a recession made it necessary for owners to look for ways to cut costs. The self-management trend spread quickly, and many property managers experienced debilitating losses in inventory as a result. ResortQuest was no exception.

  1. External Factors

In each stage of ownership, external forces contributed to ResortQuest’s demise.

  • 2001: September 11

The events associated with the 9/11 attacks negatively affected the entire travel industry. In mid-2001 ResortQuest was already suffering with yet another adjustment to earnings resulting from decentralized accounting, and with the events of 9/11, the stock price fell to an all-time low of $3.95 per share resulting in wage freezes and layoffs.

  • 2003-2006: Disease and weather and related incidents

In 2003, the SARS outbreak stalled international air travel which damaged the Hawaii operation, one of the two “bookends” of the company. For Florida, (the other “bookend”), from 2004-2006, a series of hurricanes resulted in decreased occupancy, cancellations and the need to adjust advance deposit and travel insurance policies.

  • 2007-2012: Real estate market meltdown and recession

While Gaylord’s shareholders were relieved to have unloaded the ResortQuest division before the real estate market collapsed, new owner Leucadia and ResortQuest President Park Brady were left to experience the fallout.

Is Building a National Brand Possible?

Is the idea of building a national brand viable in the U.S.? Industry insiders unanimously say “yes.”

With advancement in technology, the ability to mass market, improved abilities to centralize operations and a more thorough understanding of the vacation rental industry, several innovative business models have recently sprouted with the goal of being a leading national multi-destination vacation rental provider.

By examining the lessons learned from ResortQuest’s history, there are key strategic considerations for achieving a successful national brand in the vacation rental management industry.

  1. Pitfalls of a publicly traded environment

The need to accurately project earnings, successfully manage debt and effectively communicate seasonal volatility makes working in a publicly traded environment challenging.

A company looking to build a profitable national brand will likely find it beneficial to:

  • Avoid being publicly traded until all systems and operations are fully centralized, accounting procedures are accurate and seasonal gains and losses are properly communicated, or
  • Be a part of a publicly traded company who can bury volatility within divisions which are less likely to cause alarm among the investment community.
  1. Demonstrated organic growth

In several cases, companies which were acquired at high multiples also had a recent, relevant history of losing inventory and market share.

With all of the existing challenges involved in rolling up vacation rental operators under one umbrella, attempting to roll up and grow companies which are already underperforming exponentially increases the difficulty and burden on the company.

Demonstrated organic growth is a factor to consider in expanding in new markets.

  1. Owner buy-in

Communicating the value proposition to homeowners while simultaneously preserving personalized, consistent relationships at the local level helps to ensure success in developing a national multi-destination presence.

This includes incentivizing owners in a post-acquisition environment, demonstrating the advantages of being a part of a larger company in acquiring new homeowners, having consistent local on-the-ground relationships, setting clear expectations and over-delivering on services. 

  1. Effective marketing to new and past guests

A competitive advantage a national company has is the ability to utilize customer data on a large scale to more effectively attract, retain and intelligently cross-promote to guests.

Lifecycle analysis, customer relationship management, behavioral marketing and a centralized database structure allow a national company to better target and incentivize guests than local competitors.

Wyndham’s recent appointed of Marriott’s Mary Lynn Clark, who has substantial experience in points programs with Marriott Vacation Club, as president of North American Vacation Rentals indicates a strong strategic focus towards creating guest rewards programs to support cross-destination marketing efforts.

  1. Centralization of operations and technology

Not all departments in a vacation rental business can be fully scaled immediately, but reservations, accounting, marketing, IT and human resources are areas of methodical consideration.

A solid strategy in how to merge these functions without losing the quality of owner relations and guest services provides exponential dividends from economies of scale in a multi-destination company.

  1. Standardization

ResortQuest leadership aptly recognized early the need to create standardization to manage brand-related customer expectations. By establishing a rating system, they intended to create more consistency in inventory.

However, they failed to implement and communicate this effectively at the local level. A national company in today’s consumer environment has the opportunity to manage standardization through regulating laundry and linens, certifying housekeepers and inspectors and conforming to recognized, non-prohibitive lodging standards.

  1. Management who focuses on a relational, service-based culture

The vacation rental industry is built on personal relationships with both homeowners and guests, and consequently a successful national company’s management team will be laser-focused on providing the best relationships and service in the market.

Building a company culture with a high-quality service mindset, a national brand can build solid brand equity and circumvent objections at the local level.

  1. Cost of acquisition and onboarding operators

ResortQuest accomplished many acquisitions at high multiples and incurred excessive debt in the process.

Strategic determination of an acquisition model will include cost of acquisition, cost of debt, inventory analysis, varied commission structures, the competitive landscape, the onboarding/transition process, communications and a clear vision on how an acquired company fits into the overall structure.

  1. External Factors

In each stage of ResortQuest management, external factors negatively influenced their ability to grow.

Whether it is weather-related, political, economic or disease-related, the vacation rental industry is characterized by volatility. Managing and planning for inevitable downturns are necessary in building a stable national company.

In its history, ResortQuest International operated under very different strategic paradigms, all of which proved to be ineffective in accomplishing their ultimate goal.

Based on these case studies, the building of a successful national brand will continue to be out of reach for entrants who do not understand and overcome the unique obstacles inherent in the vacation rental industry along with the obstacles faced on the destination level.

New Entrants

Interestingly, among the companies seeking to build a multi-destination management company, each approaches the objective using very different strategies in financing, pricing, growth strategy (acquisition vs. organic), in-market team structure, property standards, marketing, technology, company culture and guest/owner service levels.

Which of these strategies will prove to be the winner? There are many types of vacation rentals, many types of property owners, many types of guests, and many differences between destinations. If we have learned anything in the last five years, it is that the vacation rental industry isn’t a zero-sum game.

However, long term success in vacation rental management will continue to require the ability to elicit trust and create lasting relationships, both with property owners and guests, a factor that is difficult to scale and standardize across multiple destinations. The company that can cost-effectively create in-market trust with a centralized structure will gain a major advantage in the race to the top.

Brand Marketing

By
VRM Intel Staff
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0

First of all, I’m not talking about your logo. Let’s get that out of the way up front. Your logo is simply an icon of your brand. It can certainly instill the image you want your brand to communicate, but your logo is NOT your brand.

Your brand is your promise to your customers. Deliver on that promise, or better yet over deliver on that promise, and your brand will soar. Don’t deliver on your promise, and your brand will suffer. A strong brand can give you a competitive advantage and drive customer loyalty – two things cherished by all companies. That’s why most strong brands command a premium price and enjoy higher profit margins. Their customers stick around longer, don’t demand discounts, and don’t require as much hand holding.

Bad Brands

We’ve all seen brands that haven’t survived. The list is long and new members join the club almost daily. In most cases, it took a long time for these brands to develop, but a much shorter time for them to crumble. Here are just a few failed brands, some of which are totally dead while others are on life support:

  • Circuit City
  • Atari
  • Pets.com
  • DeLorean
  • Kodak
  • PanAm
  • Tiger Woods
  • Lance Armstrong

The lessons to learn from their mistakes are many. First, building a brand is not for the timid. It takes planning, time, money, smarts, time, and consistency – and did I mention time? Each of those listed failed for different reasons – didn’t deliver customer service, didn’t understand what business they were in, didn’t adapt to the times, weren’t honest with their publics, etc. I won’t go into detail here on each one, but I’m sure you can figure it out for yourself.

Good Brands

So who is doing it right? What companies can we look to as examples of brand excellence? Here are the Top 10 global brands according to Forbes.

All of these companies have invested and are continuing to invest heavily in their brand, to the tune of hundreds of millions of dollars annually. In their respective categories, more people think of these brands than any other. When you see these brands, what comes to your mind? What do you think their brand represents?

Does a supplier or vacation rental provider have to invest hundreds of millions to build their brand? Well, it would certainly help. But what can be done to build your brand when you don’t have a bottomless budget?

Define Your Brand

This is the most important step. What do you want your brand to be – to represent? It might be a particular strength you have, or something you do better than anyone else. Is it quality, speed, proximity to something, family, volume, inventory, price, fun, design, technology, convenience, installation, support – what is it? Not sure? Take a look at your mission statement (you have one, don’t you?). Often, your brand promise is the same or similar to your mission statement.

Get Your Team On Board

Everyone in your organization needs to have a clear understanding of what your brand represents. Don’t just have one meeting where you dictate to everyone what your brand message is. Have an open discussion – often. Try and get everyone involved, to the point where they have ownership in your brand. Talk about it frequently with your team – daily, if possible. Have contests to see who can explain it the best. Print it on posters throughout your offices. Have pop quizzes when you see your employees and hand out cash awards to those with the right answers. Open every All-Hands meeting with an overview of your brand message and ask random people what they did to help build your brand that week.

Your goal should be to get everyone on your team totally immersed in your brand message and knowing it like the back of their hand. Anyone who has contact with your target audience can impact your brand – from the things they say, how fast they respond to an email, what they wear at a trade show, how they act at social events, their grammar, the cologne they wear, you name it. All of your employees are your brand ambassadors. Make sure they know how to express your brand personally and you’re way ahead of the game.

Be Consistent

Whatever you decide is your brand message, you need to eat, drink and sleep it – in other words, be consistent. Stay with it for a long time. You can’t switch your brand message every two months and expect your market to switch with you. It takes a long time for your brand message to sink in with your audience. But you had better be able to deliver on your brand promise or your brand will NOT survive for long. You can certainly fool some of the people some of the time, but eventually people catch on and come to their own conclusions.

Focus On Brand #1

A lot of companies want to create a unique name for just about everything they offer – from their newest widget to their special sauce. Often, they even want a logo to go with those unique identifiers.

My advice is to avoid “over branding”. When you create too many brands, you dilute your core brand, your #1 brand. It’s difficult enough to build one brand. When you try and build multiple brands, it’s nearly impossible unless you have deep pockets like Procter & Gamble. Instead, always tie your core brand to your sub-brands. So if your brand name is Bamster and you create a cool entertainment package called Fo’Fun, you should always refer to it as “Bamster Fo’Fun.” That way, your core brand is always being promoted. Because at the end of the day, you want people to remember Bamster. Whether or not they remember Fo’Fun doesn’t really matter.

Market Your Brand

Don’t be afraid to boldly stake out your brand position with your target market. If you have the best service, then proudly proclaim that. And don’t just make the claim, offer some proof statements. These can be in the form of statistics, customer testimonials, visuals, expert analysis, reviews – whatever helps to solidify your brand position. Then communicate your brand consistently and frequently.

Create a tagline that communicates your brand message. Of course, you will use all of the obvious media like social, ads, direct marketing and websites, but don’t overlook other elements that reach your target audience – email signature, invoice template, elevator pitch, business cards, voice menus and messages, proposal template, property collateral, vehicle signage, etc.

Repetition is very important. The average consumer is bombarded with nearly 5,000 messages daily – from emails, direct mail, billboards, social media, TV ads, radio ads, you name it. To combat this, we’ve all created our own set of filters that help us to stop messages from getting through, or we just ignore them. So getting your brand message through is no easy task. You have to stand out. You have to be repetitive. You have to be consistent. And did I mention it takes time?

Measure Your Brand

Unfortunately, no matter how hard you try to communicate your brand message, sometimes your target audience concludes something different. Just because you THINK your brand means “X” doesn’t mean your market thinks it means “X”. To them, it could mean “Y” or it could mean “?&%$” – something you may never have imagined.

That’s why it is important to occasionally measure your brand. Find out what your target audience thinks of your brand. Ask them anecdotally. Survey them scientifically. Find out if your brand message is resonating the way you want it to. If it is, great. If not, you need to either adjust your brand message or change how you’re communicating your message. Then, after a while, measure again.

Your brand is who you are. If you aren’t a brand, you’re nothing more than a commodity. So get your brand on!

Bill Schlosser

Bill Schlosser

Bill is the owner and brand master at Dr Brando – a brand marketing agency serving suppliers and managers in the vacation rental market. Bill can be reached at Bill@DrBrando.com.

Where do the U.S. presidential candidates stand on vacation rentals?

By
VRM Intel Staff
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0

As voters look to elect a President of the United States for a potential eight year term, vacation rental owners and managers are starting to ask themselves where the current candidates stand on vacation rental regulations, Airbnb and the overall sharing economy.

In the last eight years, the vacation rental industry has witnessed an enormous amount of change. Eight years ago during the election of 2008, Airbnb founders (then AirBedandBreakfast) were selling Obama O’s and Cap’n McCain’s cereal to get their idea for Airbnb off the ground. HomeAway’s founders had purchased VRBO.com in 2006 and were looking toward future expansion, and Expedia had taken a majority stake in FlipKey (four years before it spun off TripAdvisor along with the vacation rental subsidiary).

Since then we’ve seen significant changes in the vacation rental regulatory environment. Crippling regulations have moved from the jurisdiction of Home Owners Associations to city councils in hundreds of municipalities and are shifting to the state level in dozens of states. Just a few months ago, the Federal Trade Commission (FTC) hosted a robust debate about the sharing economy in which Airbnb and the AH&LA debated the vacation rentals, leaving ample room for potential federal regulation of the industry that supports millions of Americans, as there are approximately 1.3 million vacation rentals in the U.S. and thousands more American jobs that support the industry.

Where do the top-tier POTUS candidates stand on vacation rentals?

 

Hillary Clinton

In July, Hillary Clinton openly spoke out against the sharing economy labeling it the “gig” economy.

“Many Americans are making extra money renting out spare rooms, designing websites, selling products that they designed themselves at home, or even driving their own car,” she said, in what could be interpreted as a reference to Airbnb, Etsy, Uber, and Lyft.

“But as the on-demand economy “creat[es] exciting opportunities and unleash[es] innovation,” Clinton said, “it’s also raising hard questions about workplace protections and what a good job will look like in the future.”

Hillary Clinton believes these endeavors are creating unregulated income for entrepreneurs. According to Clinton, “I’ll crack down on bosses (Airbnb, Uber, Lyft, etc.) who exploit employees by misclassifying them as contractors or even steal their wages.”

According to the Federalist, “The odd aspect of this course is how much it doubles down on the worst aspect of Clinton’s brand: that she is merely a Nixonian power-seeker uninterested in the priorities of the people, even the people who make up her base.”

 

Donald Trump

Donald Trump has said little about vacation rentals or the sharing economy in his campaign speeches. However, as the Chairman and President of Trump Hotel Collection and a self-proclaimed proponent of increased business regulations, vacation rental owners and managers have cause for concern about his stance.

While Trump hails that he is self-funded and is not beholden to outside interests, he makes it clear that, as a good business man, he is going to work to protect his own business interests.

According to BizJournals, Trump said about Airbnb: “I’ve never seen such change in an industry. It’s a very changing industry, almost as much as anything other than the Internet itself. But the one thing about that particular industry … it’ll all acclimate and it’ll all work out. It’s going to be very interesting.”

The AH&LA has already waged war on the vacation rental industry. It appears unlikely that Trump, as an AH&LA member, will abandon his hotel interests to support an open vacation rental environment.

 

 

Bernie Sanders

Like Clinton, Bernie Sanders has spoken out against the sharing economy and would like to see all entrepreneurs be regulated and be “employees” and not “contract workers.” Specifically, Sanders said he has “serious problems” with Uber and the sharing economy because it is so “unregulated.”

According to Forbes, “Bernie Sanders has spoken out forcefully against Uber, insisting that the company should be further regulated, ignoring the possible consequences of higher fares for users of the Uber app and the ease of doing business for Uber drivers should such regulations become enacted. The primary contention drawn by Democrats is that Uber drivers are legally classified by as independent contractors, a status under which they are exempt from most state and federal labor laws, as opposed to being classified as employees.”

Like Clinton, Sanders seeks to further regulate the sharing economy in order to create a level playing field in the overall U.S. economy,

 

Marco Rubio

As Speaker of the House for the Florida Legislature when Florida initiated the vacation rental protection bill in 2009, Rubio is familiar with and has been an historic proponent of vacation rentals.

After Clinton spoke out against the sharing economy that she dubbed the “gig” economy, Marco Rubio came out forcefully in support of Airbnb and Uber. According to Business Insider, “Sen. Marco Rubio (R-Florida) on Tuesday spoke out against regulations on the so-called ‘gig economy,’ frequently praising companies like Uber and Airbnb as revolutionary businesses that are needlessly hampered by the federal government.”

“The American economy is fundamentally transforming. Uber didn’t even exist when our current president was sworn in. Today it’s worth $51 billion,” Rubio said during a speech in front of tech industry workers in New York.

The sharing economy industry has generally leaned left for years, donating heavily to Democratic candidates. But as some companies like Airbnb and Uber have butted heads with local governments over proposed regulations, many republicans have positioned themselves squarely on the side of sharing-economy companies.

In October 2015, the Florida senator praised Uber and Airbnb. He says such “disruptive” companies and the people who work for them are unfairly burdened by government regulation. Read Rubio’s views on the sharing economy.

Rubio decried the federal government as “out of touch” with Americans who want a high-tech, service economy. Rubio delivered his speech to a group of tech enthusiasts in New York City and he criticized local efforts to cap ride-sharing giant Uber and Airbnb, which helps people rent out their dwellings.

 

Ted Cruz

While Ted Cruz has not yet weighed in on vacation rentals or the sharing economy, Cruz has repeatedly shot down additional and unnecessary regulations on businesses at the federal level.

“Overregulation harms everyone, but it especially harms those who don’t have the resources or the political connections to get a special exemption, to have a lobbyist, to get a favor from government—and far too often, those are minorities,” Cruz said during a Senate Judiciary Oversight Subcommittee hearing.

“Small businesses are the backbone of the American economy, but in the current environment they are going out of business in record numbers,” Cruz said. “We need to empower small business owners and entrepreneurs. Through lower taxes, less onerous regulations, and greater competition, we will unleash their ability to be an engine for growth and innovation.”

 

By Amy Hinote

RemoteLock for Vacation Rentals

By
VRM Intel Staff
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0

RemoteLock for Vacation Rentals

HomeAway CEO Addresses Traveler Fee Concerns

By
VRM Intel Staff
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7

HomeAway posted an open letter to property managers and homeowners yesterday addressing the addition of traveler fees for bookings on the site. In November, HomeAway announced it would be mimicking Airbnb and TripAdvisor’s FlipKey by adding a traveler fee for bookings completed on their sites with the goal increasing their take rate without burdening homeowners and managers. There was little reaction to the announcement at the time, but as HomeAway has begun to implement the fees, homeowner backlash has been strong. HomeAway CEO Brian Sharples addressed concerns in the letter below.

Letter to Owners and Property Managers from Brian Sharples

Since the launch of the new service fee on HomeAway, I have heard from many of our long-term customers via email. And I’ve been following posts on the subject on social media. Many of you share the same concerns, so it makes sense to respond with an open letter to all concerned customers so you have the opportunity to read my answers to your questions.

I want to let you know that I am listening to your concerns, and every HomeAway employee is committed to making you as successful as possible.

First, I understand that many of you would like more and clearer communication on changes coming to our sites. Despite our attempts at communicating this change in advance, we fell short of your expectations. I take full accountability to make sure we are better on this in the future. Below, I want to explain our rationale for launching a service fee, and tell you a bit about how we plan to incorporate your feedback going forward.

Second, I want to acknowledge that we are in the middle of a huge shift for the industry. The good news is that vacation rentals are now considered a mainstream travel option, but as a result travelers are demanding more from listing sites like HomeAway and VRBO. Our research and experience shows that it is no longer enough for us to just operate an online classified listing site. (I miss the good old days too – believe me.) We know this because properties that are online bookable get chosen at almost double the rate of ones that are not. And our most dissatisfied travelers are complaining louder than ever about listings with inaccurate calendars and offline payment methods that can’t be backed up with online receipts and solid financial protection from our company.

As a result we announced in late 2014 that we would ask all of our owners to make their properties bookable online by the end of 2016. This doesn’t mean you can’t still communicate or negotiate with travelers prior to accepting a booking request, but it does mean that your properties need to be accurately quotable online, calendars need to be maintained, and we need to be able to process the booking through our systems in order to provide the financial guarantees travelers are demanding.

To incentivize our owners to adopt online booking, we have increasingly been favoring online bookable properties in our sort algorithms. It is no secret to any of our owners that a higher position in sort leads to more bookings. We are also rewarding listings in sort when they have higher conversion rates – because a listing that rejects most of its booking or inquiry requests is not a good experience for travelers. Most of the travelers who choose to stop using our sites say it’s because they are frustrated by not being able to find a property that is actually available. This is offset by being able to book the property online so it increases the number of travelers who gravitate to HomeAway listings that are bookable online. Worst case for our customers and HomeAway: travelers leave our sites and go to sites where all properties are already required to be online bookable.

Our #1 goal at HomeAway is to drive more bookings to our owners and property managers. Your success is our success, as it has always been in this business. Every piece of evidence says that the right way to do this, given the demands of the “new” vacation rental consumer, is to do the following:

  • Provide transparent price and availability data so travelers can get accurate quotes online
  • Back up every transaction with a strong guarantee, instilling trust in new travelers who are unfamiliar with our industry and how it works
  • Invest heavily in brand and online marketing to compete with other travel alternatives such as hotels. Now that vacation rentals are mainstream and the category is large, we need to work harder than ever to bring in more travelers

Protect the rights of owners to rent their homes on a short-term basis. We are currently fighting battles in dozens of cities and investing millions of dollars to maintain your ability to rent out your home to guests.

So why did we launch a service fee?

The biggest motivation was to better accomplish the things I’ve mentioned above. Today, our subscription customers pay us roughly 3% of the revenue we generate for them while our major competitors charge 6-15% (mostly in service fees). We’ve always been proud to be the lowest cost solution for renting your home. But we simply can’t provide the level of marketing and service that today’s travelers expect without asking travelers to also pay a fee for the service we provide.

Many owners have asked me if our fee was motivated by greed. The reality is that we’re re-investing the majority of this money into marketing to bring in more travelers (we nearly doubled marketing spend with the introduction of this fee) and to provide true financial guarantees that can protect and help travelers who have bad experiences from using our sites. And we’re also more than doubling our investment in government relations efforts to continue fighting for the rights of property owners all over the world.

With that said, let me address some of the other things I’ve heard in the letters and posts from our owners and managers:
 
“The new fee represents double-dipping because we’re charging both the owner and the traveler”

In our marketplace there are two people that benefit: travelers and owners. Going forward, we are asking both sides to bear some of the cost for the service we provide, and research shows us that travelers do not see the fee as a barrier to booking.
 
“The combination of the new fee and what you already charge is too much”

We hear you on this. With the launch of the service fee, we did take down the rates charged to our suppliers for our pay-per-booking listing product (and our subscribers are always welcome to choose that option). In April we will announce a new long-term plan for subscribers that we believe is more balanced than what we have today. This will be based on our research leading into the launch, the data we are observing from this launch, and also will include the feedback we’ve been receiving.
 
“Travelers won’t pay these fees and they will choke off bookings”

I can completely understand this fear, in fact, I had that worry, too. So we did a lot of research and testing before launching this fee, which is already charged at even higher rates by our two largest competitors in the United States. We’ve processed tens of thousands of bookings in just the last few days with a service fee. Early data tells us that the fee has not been a meaningful deterrent for travelers making a booking on our sites. We will be carefully studying how these fees impact bookings at different pricing levels, and adjustments may be made in the coming weeks. The booking data we’re seeing supports our belief that this fee will not have a meaningful negative impact for the vast majority of our customers.
 
“By simply calling it a ‘service fee’ on the site the travelers don’t know who is actually charging them.”

The community is right about this and we hear you. We’ll be adding language to the sites to let travelers know the service fee is being paid to us, and will clearly spell out the extra guarantees that come along with booking online.

 

“I’m better off dropping online booking, even though it is what you asked me to do.”

Many of you are justifiably concerned that non-online bookable properties now look cheaper on the site. And you may think switching back to the “old way” will make you more competitive. I completely understand the point here, but it would not be the right move for your rental business, because the benefits of sort would completely outweigh any short-term benefit of opting out of online booking. The fact is that all online bookable listings are advantaged in sort order. And our sort algorithms going forward will be incorporating booking history and booking conversion as a factor in determining search position. Simply put – the more and higher frequency of online bookings you do, the better you’ll perform on our sites over the long term.
 
I hope this explanation was helpful, and I appreciate that many of you are nervous and still quite concerned. I also want to acknowledge again that I could have done a better job of communicating our rationale up front. Please know I am listening to your concerns, and we will take them into account as we design our new pricing plan to be announced in April. And rest assured that if we see a meaningful decline in bookings from the fee, we will make adjustments to get it right. But at the moment bookings are flowing at a very good pace (consistent with booking volumes before launch of the fee), and I should also note that most of the calls made to customer service have been from owners, not the travelers paying the actual fee.

Please continue to write and provide input. Again I’m sorry I can’t answer everyone’s email personally. But I will read them and come back in a few days with a post to answer other questions that are consistent from our community. In the meantime I ask you to please bear with us through these changes and evaluate our service as you always have – based on the business we deliver to you over the next several months and years.

Thank you,
Brian Sharples
Co-Founder and CEO

Traveler Fees: A Win-Win-Win for Vacation Rental Managers.

By
VRM Intel Staff
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Vacation rental managers get unexpected wins as TripAdvisor and HomeAway add traveler fees to keep step with Airbnb.

Vacation rental managers get unexpected wins as TripAdvisor and HomeAway add traveler fees to keep step with Airbnb.

“We are going to be free to travelers,” said Brian Sharples, co-founder and CEO of HomeAway, to shareholders in November of 2014.

“TripAdvisor and Airbnb have chosen to charge big fees to travelers,” Sharples continued. “Well, we’re going to have a pretty sizeable marketing budget in the next few years. And we’re going to be letting everybody know, when you come to our platform, you don’t pay a fee, and we think that’s a big deal because if you look historically at the travel industry, those competitors who adopted no traveler fees first are the ones that ended up being the big winners in that business.”

But that was 2014.

One year later, Sharples announced that, not only was Expedia purchasing HomeAway, but that HomeAway was following the lead of competitors Airbnb and TripAdvisor and incorporating a fee for travelers.

“We do plan to introduce a traveler service fee in mid-2016 on transactions through our platform,” said Sharples in HomeAway’s Q3 2015 Earnings Call. “We’ve been preparing for these changes for most of the year and have already decided prior to this combination that launching the service fee is the best way forward for our marketplace.

How the Traveler Fee Started

2009: In 2009, AirBed And Breakfast rebranded as Airbnb. TechCrunch reported in a March 2009 article Y Combinator’s AirBed And Breakfast Casts A Wider Net For Housing Rentals: “As AirBnB here is also a monetary benefit to opening up the site, says Chesky. For each rental, AirBnB takes a 7 to 10 percent cut of the traveler’s payment (as the rental price of the accommodation goes up, AirBnB will take less of a cut) and also takes a flat 3 percent cut of what the seller receives.”

2010: In 2010, Forbes published an article entitled “Airbnb: The Ebay for the Entire House,” stating Airbnb “gets 6% to 12% of guest fees (and an additional 3% from the host to cover transaction fees).”

2011: According to an Airbnb.com help page in 2011, “This service fee is what actually goes to the site’s operation, enables the platform that we provide, and allows us to offer great customer support before, during and after travel. We charge travelers a 6-12% service fee, depending on the total of the reservation. The higher the total, the lower the percentage of the fee. The reason we scale the fee is so the traveler can save money when booking large reservations. Airbnb also charges the host a 3% fee for every booking that is completed. This fee covers the cost of processing the guest’s payment.”

2015: In early 2015, TripAdvisor began proactively targeting Airbnb’s hosts and adding a pricing model for individually owned rentals that mimicked Airbnb’s. However, TripAdvisor had not offered that pricing structure to VRMs. In an August letter to VRM Intel, Tracey Zhen, then GM of TripAdvisor Vacation Rentals, said, “While property managers always have and will remain a fundamental part of what we do, another key change this year and last has been our increased focus on homeowners as demand to list independent properties continues to rise sharply in the vacation rental market. Property managers – which have sometimes thousands of properties and require account managers, custom technical integrations and more – have different requirements to independent homeowners. We’ve set our rates to match these requirements, and these rates are very much in line with industry standards.”

Then came the November 2015 announcement that Expedia was purchasing HomeAway along with HomeAway’s decision to follow Airbnb’s lead and add the traveler fee.

Sharples maintained they thoroughly vetted the decision to add a traveler fee. “We have done, and our suppliers who are listening should understand this too, we’ve done enough research and testing on this to know that it isn’t going to substantially change conversion rates on bookings,” said Sharples. “We have unique inventory and unique products, and when somebody goes to rent that particular house in Martha’s Vineyard with four bedrooms, they want that house. We’re going to have caps on fees. It’s not going to be some extraordinary thing that’s going to be a huge burden to travelers. We’ve really thought this thing through, and we believe it’s going to be a big success.”

One month later, TripAdvisor Vacation Rentals announced they had made the decision to add the traveler fee for professionally managed listings – as well – saying, “As of December 9th, the fee for managers will be only 3%. This covers the cost of processing credit cards. In exchange, we will charge the traveler a fee to make a booking.”

Why a Traveler Fee Works

Airbnb’s inventory grew from shared accommodations and urban accommodations not previously listed in the marketplace. It was new inventory, so consumers could not compare pricing on other channels. A traveler fee was effective because consumers were not able to find a better price elsewhere.

Even as late as mid-2015, in HomeAway’s Q2 2015 Earnings Call, Sharples said, “We’ve been doing some research in the U.S. and looking at property overlap for Airbnb, we were surprised that how low it was, we actually did a very thorough job of looking at that. And so think about that kind of in the 10% range in the U.S. We’re doing a similar study in Europe, we do have an expectation the overlap will be higher in Europe, probably not substantially, so maybe at the outset could be 2X of that so maybe 20%.”

With only a 10% overlap in vacation rental inventory in the U.S. between the two largest marketplaces in the industry – Airbnb and HomeAway – in June of 2015, the pricing structure for Airbnb’s rentals arguably hasn’t been tested against competition.

But Airbnb is quickly moving into the professionally managed vacation rentals.

“Airbnb is a very dynamic and exciting company, and they are moving into the professionally managed vacation rental industry very quickly,” said Julian Castelli, CEO at LeisureLink. “We started providing property managers integrated access to Airbnb in the second quarter of 2015, and have seen very strong growth from this channel.  We are working hand in hand with Airbnb to help them tailor their offering to the needs of property managers, and have seen great progress.  As you know, their original offering was designed for urban hosts, so there has been a learning curve for both Airbnb and property managers as they learn to work together.  We are excited to facilitate the acceleration of this learning curve by helping both sides understand the needs of the other, and providing tools and services to bridge gaps when they arise.”

With Airbnb’s technology integration with PMS platforms, including LiveRez, BookingPal and Kigo – as well as LeisureLink – the amount of overlap of inventory between the marketplaces is expected to grow quickly. Fortunately for Airbnb, now that HomeAway and TripAdvisor have adopted their pricing model, consumers will not see a substantial pricing difference when comparing identical homes between these third-party channels.

1. VRMs Win with Better Pricing on Third-Party Channels

“In conjunction with the new traveler service fee, we’ll be lowering commission rates for most of our pay per booking suppliers and providing meaningful incentives to our subscribers based on the bookings they do through our platform,” said HomeAway’s Sharples. “All in all, we expect these business model changes to be a huge win for our suppliers and travelers while providing an engine for accelerated and sustained growth well into the future.”

The TripAdvisor email announcement of their move to add a traveler fee and lower commission rates for VRMs said, “We’re excited to announce this because it makes it easier to be part of the largest global travel website. Why this change is good for everyone: As a property manager, you will pay less commission, the fee will be just 3% for accepted bookings, Managers will pay the same fee as individual owners going forward, and we think this will create a stronger marketplace with more managers able to participate.”

According to Alex Aydin, CEO at BookingPal, “With distribution channels transitioning to sharing the channel cost directly with customers, this should help more property managers participate that did not have the margins to do so previously. This is an opportunity for many additional property managers to participate in these powerful distribution channels.”

LeisureLink’s Castelli agreed, “This represents both innovation and a legitimate attempt by these distribution channels to adopt new pricing models that can better accommodate property manager economics. These channels want to work with property managers, and they are getting a better understanding of the economic constraints that property managers face. Since vacation rentals are not generic, and are not often listed on dozens of sites, there is an opportunity to shift some of the cost of distribution to the consumer in exchange for the convenience and selection being offered to them. I think this is a good effort, and I look forward to seeing how it is received.” 

2. VRMs Win with Rate Parity

Eye for Travel defines rate parity as “maintaining consistent rates for the same product in all online distribution channels – Expedia, Orbitz, Hotwire, etc. – regardless of what commission the OTA makes.” When hotels partnered with an OTA, the OTA required hotels to agree to rate parity, and the hotels were not allowed to undercut the rates they display for your rooms on their own websites.

But rate parity agreements are changing. According to the Chicago Tribune, “In the United States, a recent court decision in a class-action antitrust suit upheld the legality of parity agreements: The court held that they represented ‘rational business interests rather than anti-competitive behavior.’ Several European governments, on the other hand, are actively trying to loosen them, with some success: Responding to pressure, Booking.com has agreed to make its standard agreements less restrictive, and the pressure is mounting from several governments.” Perkins, E. (2015, April 28). Rate parity: The battle to determine how you buy hotel rooms. Chicago Tribune

See more at “What We Learned About Working with OTAs From Hotels” 

In the vacation rental industry, OTAs are not currently enforcing rate parity of any kind. This allows VRMs the flexibility to make sure the best price available is the price customers receive by booking directly through the management company.

3. VRMs Win Because Consumers are Smart

“Consumers are also very savvy so I would imagine that we will see a resurgence of the billboard effect where consumers check the direct property management website prices and may end up booking directly after seeing their inventory on a distribution channel to avoid the above the line fees charged by the channels,” said BookingPal’s Aydin. “This could be a big win for both the channels and the property managers.”

Today’s consumers are extremely knowledgeable in performing online comparison pricing shopping. By simply copying part of the property description in a search engine or by doing a quick image search, vacation rental shoppers can easily find the property management company that originally listed the home. With additional traveler fees being added to HomeAway, Airbnb and TripAdvisor transactions, potential guests will quickly figure out that they can save money by booking direct, and VRMs have an opportunity to speed up this discovery with a little consumer education about traveler fees.

The Best Property Management System for Your Company: Do You Already Have it?

By
VRM Intel Staff
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The Best Property Management System for Your Company: Do You Already Have it?

By: Doug Macnaught, Founding Member, The VRM Consultants

A question I am frequently asked is, “What system should we buy?” In VRM Intel’s “Changing Your Technology Provider: What You Need to Know” (October 2015), Tom K and I outlined some in-depth methodology to finding that answer.

However, it is also quite possible that the answer to that question is – The one you already have!

Getting the Most Out of Your Existing System

When you purchased your current property management system (PMS), hopefully, you went through a Come out from under the rock, take a look at the latest version of your software and see what it does. thorough process to select the best one for your needs following with a comprehensive Installation and Training process. You fully understood the capabilities of the software and were using it in the best possible way for your business.

What about now?  Let’s explore some of the ways you can maximize the benefit of what you already have.

Come Out from Under the Rock and Get the Latest Release

It may be surprising, but most companies never evaluate the systems they have once they are installed. They “do it this way because that’s how the system has to work.” Many companies have been saying that for more than a decade, yet the new versions of their product have evolved beyond recognition.

It probably won’t save you money on your car insurance, but you may be pleasantly surprised at what it can do for your business.

Seek Out New Features

Some of my most successful clients were the ones who met with us every year to evaluate the new things that had been added to the system. These clients made a point of trying to stay up to date on how the software was evolving and adapted their business practices where relevant.

You will go through this process whenever you change software because a new system will not work exactly the same way. Why not consider an annual review of your current system to see how it can benefit you in areas you had not thought of before? The cost of doing this will be significantly less than buying a new system.

New Tools & Add-Ons

One of the fastest growing segments of technology innovation in the vacation rental industry is coming from third-party vendors in the form of tools and add-ons for Email Marketing, Price and Yield Management, Mobile Guest Apps, Housekeeping and Inspections (to name a few).

These third-party tools are typically very specialized and can add tremendous value for the money. Check to see what new integrations your software vendor has and see how they may benefit you. In my experience, integrated tools can add significant value to your business and fill gaps in your main system capabilities without the need to change the core PMS.

Continual Staff Training

If you are a real estate agent or broker, you are required to attend continuing education classes to stay current with changes in rules, regulations or best practices. Consider the same with your PMS and the staff that uses it. How many of your current staff were trained by the software vendor? When the existing software was installed the staff made decisions on how to set up the system based on the conditions at that time. Are they still valid?

Use the resources provided by your software vendor to get your key staff trained again. You will discover that things have likely changed, and this will give you the opportunity to better use the system.

Selling to Your New Staff

When new staff members come in to the business, especially at middle and senior management levels, they often lobby to change the core system.

This is usually because new managers are unfamiliar with the system’s capabilities and see the system as inferior. This is not a good enough reason to change. Reach out to the software vendor and have them arrange a presentation to the new managers as if they were selling the system. The vendor should be happy to do this so that he won’t risk losing a client.

Find New Sources for Information and Pick Their Brains

Whether it be new staff or friendly companies that use the same products, find out what they like about the systems and see how you compare. One of the best ways to enhance your systems is with a breath of fresh air from other perspectives.

A number of companies that I know developed relationships with other users of the same system in “non-competitive” markets. They would meet twice a year and have an exchange of staff ideas and knowledge. This was immensely useful in maximizing the use of their systems. Each company has very different solutions to the same issues that challenge all companies, so consider this as a way to help all aspects of your business and not just the software component.

Requesting New Features

Software companies rely on feedback and suggestions to continue to develop their products. This is mostly received during the New Sale process and less from existing clients.

If you have a need for a new feature or a change to an existing one, rather than migrate to a new system, use whatever mechanisms are in place with your existing vendor to have it added to your product.

User Conferences

Not to be confused with Industry Conferences, User Conferences are held by technology providers and can be the most valuable use of your training and travel budgets.

The advantages to you and the vendor are that they are product specific, offer training sessions for your staff, allow you to meet their new partners, and you can attend networking events with companies that are using the same systems.

It is a great venue to suggest new features, learn existing ones and share knowledge of your implementation.

If you are a user and your vendor has a conference – attend!

If they don’t – encourage them to start one – then attend!

Industry Events

Over the years, industry conferences have undergone significant changes both in size and relevance. In the last couple of years, product-specific education opportunities have also increased.

At recent conferences there have been User Events and Product Specific education tracks for sponsors. Reach out to your vendors to see if they are able to provide education either before or after the events.  This can save on travel costs for the both of you.

Professional Evaluation

There are many consultants operating in the industry. Ask your software company to recommend one that has an in-depth and current working knowledge of your system. It is important that the knowledge is current, otherwise you will be wasting money and time.

If you get the right one, software consultants can be very useful and generate a great ROI in terms of productivity and efficiency, not to mention increases in guest satisfaction.

It’s All About the Relationship

Changing the key PM Software is a traumatic experience for any company. Most medium to large companies keep their systems for at least five years simply because it is so disruptive to change it.

Keeping a good relationship with your existing vendor is the best way to get the most out of the system. They should be eager to tell you about their system and what it can do for you as well as resolve any issues that you have.

Getting the “Mist” Out of Your Existing System (DYAC)

When I was first asked to write this article, DYAC (Damn You AutoCorrect) got in the way and changed the title from “Getting the Most Out of Your Software” to “Getting the Mist Out of Your Software.” But, on reflection, there is no way of getting rid of mist other than to be patient and wait for the sun to shed some light on it. My suggestion to you is open the doors and let the sun in, shed some light on your existing system and see what it can do for you, hopefully you will be pleasantly surprised.

Doug Macnaught, co-founder of Instant Software and creator of PropertyPlus software has worked in the vacation rental industry for decades to implement integrated technology solutions that allow large vacation rental management companies to operate efficiently and effectively. He is a founding member of The VRM Consultants.

“Imagine this…”: Storytelling Is Key To Reservations Sales Success

By
VRM Intel Staff
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Storytelling Is Key To Reservations Sales Success

By: Doug Kennedy, Kennedy Training Network

As marketing professionals across all industries know, the concept of storytelling is an integral component for success in today’s environment. You can see this approach playing out across all mediums from print to web to radio and television. Car ads are no longer about the features and benefits of the car, but rather about all of the places that car can take you. Soda ads are not so much about the taste, but about how happy you will be by sharing it with friends and family, showing bottles labeled with real names or “dad” and “grad.” Maybe the best example is the new Liberty Mutual Insurance advertising campaign where various spokespersons speak to you directly to tell a story about what happens when “you” have your first accident and the rates go up or when your current company says they will only replace ¾ of your car. Smart marketers know that storytelling is a great way to grab the attention of multi-tasking viewers, readers or listeners.

Similarly, vacation rental reservations sales agents should also incorporate storytelling into their toolbox of both written and verbal presentation techniques. As the reservations rate inquiry process has become increasingly automated, it is more important than ever to connect with the callers and email senders when there is an opportunity to do so.

Being in the telephone mystery shopping business, I often hear recordings of reservations agents speaking with our KTN callers. Too many agents sound as if they think of their job as being a “technical support” role of simply helping the caller find out what rentals are available.

As addressed in a previous article, it is important for agents to use a more conversational and less transactional sales approach.

These days many reservations inquiries are coming in via email. Likewise, more often than not, today’s agents simply respond by sending back a list of links to the properties that are available that fit the sender’s dates and specifications. If anything, the response includes a template of standard copy, such as:

“Thank you for your inquiry regarding (insert name of property and/or dates requested.) Below are links to the properties that are currently available. You can book these online or call us directly…” 

If your vacation rental sales team responds in the same way as everyone else does, they are ensured only of getting their “fair share” of the business in the market. As I often say in my workshops, “If you want to get the same results as everyone else gets, just do the same things everyone else does.” If your goal is to get more than your fair share of results, you have to find ways to stand out from the competition.

Providing a laundry list of what is available and sending the inquirer back online to continue their research will not help you increase conversions. Instead, make sure your agents are using an investigative sales process to engage the caller and “unmask” their story whether asking during phone conversations or when responding via email. Train them to ask the single most important question circa 2016: “As I’m checking availability, are there any questions I can answer for you such as about the location or amenities?”

Thereafter, make sure your agents respond to the caller’s questions and that they sell to any comments, remarks and “clues” to what they are looking for by using a storytelling approach to selling the overall vacation experience and to not just be a “unit renter.” Here are five training tips:

  1. Engage callers (and senders) by beginning benefit statements with wording such as “Imagine sitting out on your balcony in the evenings and seeing…” Or “Imagine your family/participants enjoying…” thus grabbing their attention as you take them along for the ride.
  1. Lead sentences with “you” as in “you will enjoy…” or “your family will experience…” instead of the normal tendency to lead with “we have” or “we offer” or worse yet – “it offers.” (Vacation rental homes should never be referred to as “it.”)
  1. Use these techniques to highlight the most relevant offerings. Of course it is easier to focus on relevant benefits if you have taken time to connect with the caller or email sender and to investigate and discover their needs and preferences.
  1. Tell real-world stories about the past experiences of similar guests you have hosted such as “This is one of our most popular homes/locations for families like yours because…” Or “Our romance couples always comment about the (privacy, view, etc…)”
  1. Paraphrase and restate in writing what you have discovered about their needs to lead into the stories of personalized benefits. “Since you had mentioned… your (family or party) will find this convenient because…”

Doug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of customized training programs and telephone mystery shopping services for the lodging and hospitality industry. Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he been for over two decades. Since 1996, Doug’s monthly hotel industry training articles have been published worldwide, making him one of the most widely read hotel industry training writers. Visit KTN at www.kennedytrainingnetwork.com or email him directly. doug@kennedytrainingnetwork.com

Resolutions 2016: A New Year, A New You, A New Approach to Your Business

By
VRM Intel Staff
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By: Ben Edwards, Weatherby Consulting

Every year millions of people make New Year resolutions in a positive effort to impact their health, personal relationships or other facets of daily life. Many also create a set of personal goals to achieve in the new year. With so much time, attention and thought dedicated to personal improvement, we want to shift the focus this New Year to Business Improvement or Business Resolutions for 2016.

We encounter many vacation rental managers who operate their businesses in a lax hospitality state of mind, similar to that of a relaxed, family-run operation. This type operation is generally service-centered, and that may be the only attribute. While providing great service is always key to any successful vacation rental operation, a professional vacation rental management company must be centered on properties, people and process.

Access to third-party listing sites and the ease of setting up distribution channels has allowed numerous entrepreneurs the opportunity to establish vacation rental businesses. However, simply owning and operating a vacation rental business is a far cry from progressively managing a professional vacation rental business. In today’s ever-changing landscape, creating a consistent and meaningful profit for your business is more important than ever. It is also as challenging as ever. Sustainable profits and business operations require professional, prudent decision-making skills, grounded in fact based, data driven metrics and the application of strong financial management. The result is the dividing line between a vacation rental hobby and a progressive vacation rental business.

The following business resolutions are designed to impact profits while creating a professional business operation. As we travel the country working with vacation rental operations of all sizes, we discover that the specific categories found below represent the greatest opportunities for the average vacation rental manager.

Let’s get started.

We will begin with the center point of every vacation rental operation and discuss macro-business operations and strategy, all the while working toward the more granular aspects of the business.

Properties, People and Process – At Weatherby Consulting, we’re huge fans of Marcus Lemonis, star of The Profit, which airs on CNBC. Marcus’ mantra is People, Process and Product. We’ve applied his over-arching strategy to the vacation rental business and developed Properties, People and Process as the macro center point for a professional, progressive vacation rental business.

  • Properties

Does your operation accept any and all properties or only specific segments of the market in which you operate?

The most successful vacation rental companies we work with have a plan surrounding their property mix that leverages their operational structure and the market in which they operate. Having the right property mix ties directly into gross rental revenue and ensures that your business is not weighted in one specific area. It also protects your business from creating an inventory mix not suited to travelers seeking your destination.

Example: An excess of one particular property type such as a two-bedroom/two-bath condominium may work well if your market, like the Gulf Coast, is primarily condominiums, and if the average guest demographic presents a strong demand for condominiums. However, if you’re operating along the coast of the Outer Banks, condominiums are not as attractive to vacationers in that destination. Continual review of properties in your rental management program, or those desiring to join your program, focused on profitability and ease of management will ensure that your company has a balanced portfolio and is not overly weighted in inventory that does not generate a reasonable return.

For too long vacation rental managers believed the number of properties correlated with increased profits. Even today, number of properties remains a primary benchmark in the industry. More often however, it’s not so much the number of properties, rather the right mix of properties, that drives increased profits.

In today’s vacation landscape travelers are more discerning; their expectations are higher. Owners unwilling to properly maintain and upgrade their rental properties become a liability to your business and decrease the return necessary to operate a professional business model. Does your operation have proactive ways of keeping owners engaged in the proper care and upgrades necessary to continually and consistently deliver on the expectations of the guest?

  • People

Jim Collins, author of Good to Great, preaches the procurement of the right people for any organization. The vacation rental business is no different. Having intelligent, service-oriented personnel is a must in any vacation rental business. Clearly communicating the company’s goals and objectives is imperative in leading a successful operation and getting not only the most, but the best, out of your personnel. The goals and objectives of your personnel are best managed when clear, measurable results are identified for all parties involved. If you can’t measure it, you can’t manage it! Providing your team clear direction will help ensure that each individual is pulling in the same direction and operating as effectively as possible.

  • Process

This is where we get a bit granular. Assuming your vacation rental business has good inventory with a clear plan to maintain and grow your properties, and your business has the personnel capable of success, then the devil is indeed in the details. Or in our case, the Process. In any vacation rental business we can draw distinctions between processes relative to Accounting, Operations and Marketing, but to manage a professional vacation rental business progressively, you must leverage the results in each area for combined decision-making and solutions that benefit the overall business.

Financially managing your vacation rental business with sound, generally accepted accounting principles is as critical to the evaluation of everyday operations as marketing initiatives are to the generation of gross revenues.

Does your vacation rental business produce a monthly financial package that succinctly ties revenues and expenses to items such as budgets, bank accounts, trust accounts and cash flows? If so, is the financial package properly reviewed to assist in making short-term and long-term decisions necessary to maximize profits? If the answer to either question is no, you have your first business resolution of 2016.

Operationally, a progressively-managed, professional vacation rental business sets itself apart from others by utilizing work flows, systematic forms and quality rules that create successful and consistent guest and owner experiences through accountability. In addition, having a clearly defined organizational structure as an operational process creates efficiencies in leadership. Setting the proper expectations for personnel and having the processes in place to track results and establish accountability creates an environment in which the employee knows specifically what is expected and has the tools to properly execute his responsibilities.

Examples of these processes include: Inspection forms for inventory, routine maintenance checks with detailed results for owners, proper evaluation of housekeeping fees versus expenses and revenue-orientated goals for reservations employees. Operational work flows and tracking mechanisms can leverage an ever-increasing array of software solutions or may simply require a proven and streamlined checklist.

Understanding the profitability of certain tasks or departments often requires a simple evaluation applying proven formulas utilized throughout the industry. As your second business resolution, make 2016 the year you review, initiate and/or improve your operational work flows and the systematic forms behind each process and evaluate each process for profitability.

Of course, no conversation on progressively managing a vacation rental business is complete without a look at revenue generation and the marketing behind it. As we mentioned earlier, with the wide variety of electronic channels available, almost anyone can “grab” a few units and set up points of distribution. But is this really effective marketing? For most, participating in distribution channels is not an option but a critical part of overall revenue generation. We certainly understand this, but is your business leveraging your tools and processes to determine the best return on your investment? Could marketing dollars be shifted from one initiative to another to increase revenue without increasing expense? Understanding how to evaluate performance of marketing initiatives and implementing the processes to routinely do so, drives top-line revenue while minding the associated expenses.

In addition to distribution channels, how strong is your ability to market directly to your target guests and owners? Having a website that is completely compatible and responsive — one with mobile platforms that provide full online booking capabilities — is critical in today’s technology driven landscape. A cutting edge web presence can also provide some of the most effective marketing initiatives at the lowest price points. For example, a website with excellent content and search engine optimization drives substantial traffic volume directly to your business at minimal cost. Routine email marketing and/or triggered email messaging, to both former and prospective guests, provides a cost effective way to reach a targeted audience.

As with any other process discussed, applying the same structured evaluation and tracking procedures to marketing efforts will create a clear picture of your business’s return on investment and how that contributes to overall profitability. Your third business resolution for 2016? Evaluate your marketing platforms, such as websites, and ensure you have the processes in place to properly track the performance of specific marketing initiatives.

2016 is a New Year

In addition to the typical goals associated with self-improvement, we hope we have inspired you to consider goals and resolutions for your vacation rental business. Carry the mantra of Properties, People and Process into the new year with the intent of leveraging all three aspects to enhance your vacation rental business and increase your profits.

Ben-Edwards

Ben Edwards,  Weatherby Consulting provides transaction advisory, consulting and asset management services with proven success in creating opportunities and solutions in the vacation rental industry. They deliver high-impact results, provide partner-level attention and implement tailored solutions to address each of their client’s unique goals and objectives.

Converting Web Traffic Into Results for Your Property Management Company

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VRM Intel Staff
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Vacation Rental Management Company - Converting Web Traffic Into Results

By: Carlos Corzo, CEO, Streamline Vacation Rental Software

Over the last 20 years, human communication has undergone drastic changes. The explosion of the Internet has revolutionized the way we connect with friends, family and even potential business clients. Through sites such as Facebook and Twitter, people have access to worldwide social interaction, and through internet ready devices such as cellphones, tablets – even smartwatches and tvs – interconnectivity has never been higher. It’s becoming increasingly apparent that computer literacy is a necessity to business in the modern world.

For property managers, the internet provides the perfect way to market their company to potential customers and clients across the globe. Of course, the first step is to create a website that appeals to the right audience. In the world of vacation rental management, this means targeting to two distinct groups: guests and owners. Oftentimes, you will find that these two groups have different views on what makes a great, user-friendly website.

What Makes a Great Converting Website?

What qualities are users looking for in a website?  For guests, one thing stands above all else – speed. A little under 50 percent of users expect a website to load under two seconds. Even worse, according to statistical research, about 40 percent of them will leave the site if it hasn’t loaded in three seconds. Making sure all pages of your site run swiftly and smoothly helps you hold on to the traffic your site generates and boosts conversions (more on this later).

Another important factor, which might seem obvious, is the usability of the site. Guests expect your website to be easy to understand and navigate. Craigslist is a popular website that takes user functionality to the extreme; the site is designed around pure functionality, requiring only a couple of intuitive clicks to deliver precise results – even though there are thousands and thousands of links to click.

If guests can’t quickly figure out how to find something, search or book listings on your website, they will leave. Also, keep in mind, few people go to travel sites with dates set in stone.

On the other side of the coin, we have property owners. Your owners are very proud of their investments. When they look at your website and judge your business, they want to see cutting edge technology. Property owners expect the most beautiful website that they have ever seen, and want to see a website that shows their property in the most extravagant way possible.

Vacation rental property management sites must strike a balance between these two competing interests. Your website must deliver concise, intuitive information with a sleek, engaging design, and the site should be lightning fast and not rely on a high technical level to access results. And don’t scare away users with too many bells and whistles. We also want the site to be usable from a variety of mediums: desktop, mobile and Smart devices.

Turning Traffic Into Conversions

Now that we have a great website design, it’s time to talk conversions. On average, websites convert 2 percent of their first-time visitors. That means that 98 out of 100 people are using your website, but not engaging. We could have the highest traffic site in the business, but if your conversion rate is terrible we still end up with no customers.

Here are four techniques we can use to boost conversion rate:

  1. A/B Testing

Google provides a wonderful service called A/B testing. This lets you create two versions of your site, option A or option B, and when visitors load your site, Google will randomly load one of these options for them. A/B testing provides performance statistics for each option, allowing you to tell which changes boost conversion for your site. Compare designs, pick a winner and then rinse and repeat the process to find the perfect design.

  1. Conversion Funnel

Another great tool Google provides is the conversion funnel. Think of a funnel – it is big at the top and it gets skinnier as it goes down. Now, imagine the same process of someone doing a search, clicking on a unit, clicking “Book Now”, entering their information, entering their credit card and clicking complete. This is the funnel created by your website.

The Google Analytics conversion funnel gives statistics traffic in this website funnel, Using the analytics tool, you will actually see where people are leaving. It could reveal that everyone leaves on the “Click to Continue” button during the checkout because it is not working on Firefox browsers. The results will surprise you.

  1. Heatmaps

Heatmaps are a great way to see how visitors are engaging with your website. Heatmaps show where users are clicking, allowing you to make informed design decisions that direct their interactions on the site. You would not believe where some people click on websites – heatmaps are an entertaining way to gain optimization ideas. While it can slightly slow down your site to run a heatmap test, running one for a brief period can deliver tons of useful information.

  1. Focus Testing

Focus testing is used throughout the sciences, and it can be applied just as easily to website design. First, we want to find a group of testers who know nothing about your website or your business. These people should cover a wide range of ages, technical aptitudes, and travel experience. Once we have our test group, we give them a simple set of instructions. First, specifically ask them to enter your entire URL into the Google search bar. It is amazing how many people don’t enter your website in the address bar. They enter your domain into the Google search bar. Then make a selection. Oftentimes, the browsers make it very confusing. Some people don’t even know that they are truly doing a search, when they think they are entering a URL into what seems to be the address bar.

Entering your URL into Google search will give them other options of related websites. It provides for a great test, because they might choose another site. If you don’t show up #1 when entering your URL into the Google search box, you will need to just give them your full URL and ask them to enter that into the address bar. Finally, ask them to make a booking at one of your homes in a specific location.

Now, sit back and collect data. This testing will tell you a lot about how user friendly your site design is, as well as help you narrow in on any roadblocks or hiccups. Perhaps your test group can find your site and locate a listing, but they can’t figure out how to place their booking.

Armed with this information, you’re ready to make changes. User feedback is one of the most important aspects for improving quality in your business – both for your website and for your listings!

Good Web Design Is An Ongoing Process

Building a successful vacation rental property management business means constantly evolving and adapting to changes in the market, and the same can be said for web design. Your site should evolve with your business. Never settle for second rate. Continually optimize your site to increase speed, improve clarity and incorporate user feedback.

At Streamline, our clients – owners and guests alike – are our greatest resource. We provide opportunities for our clients to listen to their customer’s comments, learn from their criticisms, and above all, deliver an experience that is memorable.

From the time they first visit your site until they leave the vacation home and head back to their daily lives, their experience should be hassle-free and engaging. In vacation rentals, we’re in the business of making memories – make sure that memory is exceptional!

Carlos Corzo founded and currently serves as CEO at Streamline Vacation Rental Software. Corzo regularly provides his valuable insight into the inner workings of vacation rental marketing and technology at https://www.streamlinevrs.com/blogs/.

Vacation Rental Bootcamps: Distribution & Technology Trends

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VRM Intel Staff
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Bring your team for a free workshop on Vacation Rental Distribution and how to maximize your exposure and conversion rates.   Learn about the top 10 attributes that make the biggest impact on whether or not your inventory will do well on sites like Airbnb, Booking.com and Expedia.

Hear from the partners directly, other industry leaders and network with other vacation rental managers just like you to discuss the role of distribution in the vacation rental industry.

Eastern Coast Bootcamp
Ocean City, NJ
March 10, 2016
8:30am to 12:30pm

Register for the Eastern Coast Bootcamp

 Southern California Bootcamp
Newport Beach, CA
March 21, 2016
8:30am to 12:30pm

Register for the Southern California Bootcamp

 

Online Marketing Components You Should Re-evaluate Each Year

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VRM Intel Staff
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By: Andrew Vick

On a personal level, the New Year often brings resolutions and promises to change, get better, do more of certain things like exercise and less of other things like eating cheeseburgers. From a marketing perspective, it is healthy to re-evaluate what is working and what is not. Here are a few tips and things to look for as we roll in to 2016:

Where To Start – Analytics

Evaluating where you’ve been and where you need to go has to start with Analytics. Hopefully your implementation of Google Analytics goes well beyond merely being able to see traffic and general trends, but if not, you still have something to start with. Is traffic up or down? Which sources are driving traffic to you? Paid or unpaid? Where are those sources geographically located? Does that align with where your guests are coming from? What percentage of your traffic comes from “mobile”? If you have a more advanced implementation, the questions become far more valuable – what sources of traffic are converting and at what rate? How does that compare to last year/season/month/week? Is my average online transaction up/down? Is the average stay longer/shorter? All these questions and so little time, but if you can glean some value from them, they will oftentimes lead you to focus on some key areas.

Below are what I see to be the key areas to make sure you have a handle on, or at the very least, a strategy for. Hope isn’t a good strategy.

  • Mobile Web Strategy

As of May 2015, Google reported that mobile has officially passed desktop browsing in terms of search queries and volume. What does that mean for you? You’ve been told this for a couple of years now – a mobile strategy is required. Responsive web design is the buzzword you’ve become accustomed to. It enables your brand and calls to action in order to work across multiple devices. The entry point into this technology is attainable at a wide variety of budget levels, so make it a priority in 2016 to create a plan and market strategy for your mobile presence. Give your guests the access they crave from whichever device they prefer.

  • Relationship Marketing

In my experience, this tends to be the most often overlooked, most cost effective way to drive cost effective bottom line revenue. Take a close look at your analytics and take note of those channels that are coming to your site because you have a relationship with them (email, social, etc.). Is that traffic staying on the site longer? Visiting more pages? Converting at a higher rate? Those channels should be performing at a higher level than those coming from general search, and if not, it’s time to take a look at the marketing initiatives that support those relationships. Are your emails relevant and segmented by audience? If not, work diligently to understand your audience and target appropriately. Are your posts on social media engaging and are you paying attention to your Weekly Page Update? Start there, and then consider the upgraded targeting ad features on Facebook. The retargeting and integrations within Facebook Ad Manager are powerful data driven features that typically drive great results. Serve ads based on retargeting, custom lists, actions, behaviors, page visits…the list goes on.

Instead of continuing to focus on quick, short-term and often expensive conversions, concentrate on long-lasting guest relationships.

  • Content

Many people have the impression that content is only used for search engine optimization. While that is one of the main reasons you should be creating regular, original, relevant and engaging content, the following points tell a compelling story about other important roles for content.

  • Relevant content builds trust and loyalty with your audience. If you can position your company either as the expert in your area, by types of accommodations or by any other defining aspect, you will win with both site visitors and search engines.
  • According to SmartBug Media, 90 percent of customers find custom content useful while 78 percent believe that companies with custom content are interested in building positive relationships.
  • Content marketing costs less than traditional marketing. According to Mashable, it is 62 percent less per lead.

While this is by no means an exhaustive list or comprehensive strategy outline, it should provide food for thought. Discuss these items with your internal team, set up a strategy outline with your marketing partner or reach out to a trusted advisor.

10 Things Vacation Rental Owners Look For In A Great Property Manager 

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VRM Intel Staff
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By: Alanna Schroeder

For most vacation rental owners, a vacation home is the largest, most high-maintenance investment they’ll ever make (aside from their primary residence, of course).

For that reason, property managers serve a vital function. They ensure the vacation homeowner’s investment is worth all that time, money and effort whether the owners are returns-focused and looking for a hefty profit or simply looking to cover costs when they’re not using the home themselves.

On top of that, the emerging vacation rental industry has seen a sharper focus on hospitality. “Customer service,” “guest relations” and “guest satisfaction” are the new buzzwords. For property owners who aren’t hospitality professionals, property managers bridge the gap.

And this is where it gets tricky for property managers. You represent both vacation rental guests and owners.

Complicating things even more, owners also have wildly different expectations when it comes to the level of involvement they want from you, their vacation rental manager. And vacation rental managers have expectations on levels of involvement with property owners.

How do we narrow that gap to create a more hospitable relationship between the owner and the manager?

As an active vacation homeowner myself, I wanted to share a few thoughts on what savvy owners are looking for in a great property manager. Hopefully this helps you see it from our side! 

10 Things Vacation Rental Owners Look for in a Great Property Manager

  • Customer Service

My number one focus as a vacation rental owner is customer service, and many of my fellow owners agree. We want to know that our manager is checking in with guests within 24 hours of arrival and departure. We’re also looking for a manager that will be there in our absence to address any issues in a timely, friendly and hospitable manner — no matter the request.

  • Housekeeping

A clean rental is a huge part of “hospitality.” It helps to know that our manager is contracting/employing top-notch cleaners and that these cleaners are experienced, honest, trustworthy, supervised and being held accountable. As markers of this, I personally look for training, regularly scheduled meetings and a consistent cleaning process for each stay.

  • Inspections/Maintenance

As a homeowner, it brings me a lot of comfort when I know a management representative has inspected my property after each guest. Priorities include checking for damage, confirming that the cleaners have satisfied their obligations, inspecting for maintenance issues and replacing batteries, light bulbs, air filters, etc. as needed before the next guests arrive.

  • Supplies

Owners love good quality supplies! This is not a place to try to save a few bucks. Leave a roll of garbage bags, a new sponge, dish soap, a few extra rolls of paper towels and other amenities. If you provide linens, give owners options from which to choose.

  • Listing Sites/Websites

We love options! If we can, we might love to keep our existing listings with VRBO/HomeAway, Flipkey and Airbnb. If you aren’t open to shared responsibility, we get it. But in that case, make sure the listing is high-quality with good copy and high-resolution pictures. We also want to be sure that you are following up quickly on inquiries and converting them.

  • Guest Screening

Owners want to know that there is a guest screening process in place. Please let us know if you have concerns about a potential guest. Drive-by’s during guest stays are also much appreciated!

  • Rate Management

It is essential for owners that a manager is keeping a watchful eye on market dynamics. For example, if a property is 90% leased, it is probably time to consider a rate increase. We will come to you with our thoughts, but we appreciate knowing you are watching the market and making educated recommendations.

  • Fees

Flat fees are a godsend. And no matter what, we are always looking at the absolute dollar amount of a management contract especially when it comes to percentage-based fees. Small and hidden fees lead owners to feel left in the dark and unhappy. We will also thank you for receipts for work that has been contracted or for supplies purchased as part of our monthly accounting package.

  • Neighborhood Relations

For properties in residential areas, maintaining good relationships with the neighbors is a high priority. Great property managers check in with those neighbors and keep communication lines open.

  • Steady Communication

All in all, communication is the key to any healthy relationship including the relationships between vacation owners and their property managers. That means a property manager should appreciate an owner’s goal for his vacation rental home, and the owner should appreciate his manager’s unique expertise. That way both parties can work to create a strategy that fits!

Alanna Schroeder owns and operates The Distinguished Guest, an online marketplace for vacation rental owners who wish to style their vacation rental with beautiful, simple, hotel-quality amenities and linens. Alanna and her family also own vacation rental properties in Lake Tahoe, California and Princeville, Hawaii. A special thank you to my vacation rental expert contributors Debi Hertert, owner of OregonShearwater and Donna Martinez, owner of  Abalone Bay.

Airbnb Host Refuses to Rent to Israeli Guest

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VRM Intel Staff
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An Israeli man said a British Airbnb host refused to rent an apartment to him because, the host said, Israelis don’t respect “basic human rights.”

Ben Kelmer, a Tel Aviv photographer, reserved a London apartment for a week in March through the online company, which has come under fire recently for listing properties in West Bank settlements. In some cases, the listings indicate that the properties are in Israel proper.

Ben Kelmer Israeli Guest Refused by Airbnb HostWhen Kelmer contacted the host with a question about public transportation, the host said he could not “even consider hosting you,” the U.K.’s Jewish News reported.

“This is how the world pictures you: aggressive settlers occupying land, destroying houses. In a few words: not respecting basic human rights,” the message said. “On that basis, I just cannot even consider hosting you, even if you pay me millions.”

Kelmer posted to Airbnb’s Facebook page: “We were served a healthy dose of Grade A, European bigotry and discrimination at its finest, poorly masked as so-called, socially-conscious political protest of the worst, most prejudiced kind, that is strictly reserved to Israelis.”

BY JTA, The Times of Israel

Cliff Vars to Head Up HomeAway Software

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VRM Intel Staff
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In an email to clients, HomeAway VP, North America Bill Furlong announced Cliff Vars as the new General Manager of HomeAway Software.

Cliff Vars“Cliff’s experience in enterprise software over the past 17 years and his recent involvement in the vacation rental industry makes him an ideal fit for the role,” said Furlong. “Cliff joined HomeAway Software in 2012 from IBM and previously served as the Director of Products, where he drove a strong set of products and features. I am happy to hand the General Management position over to someone with a proven track record who is already familiar with our industry, our products, and our passion for customer success.”

“This is a great appointment by HomeAway (Expedia) and the clients should be very pleased,” said Doug Macnaught, founding member of The VRM Consultants. “Cliff is passionate about the qualitative development of products that customers want, and he also shows a great understanding of the industry as a whole. The future of the software division is in safe hands.”

Technology – Can’t live with it, Can’t live without it!

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VRM Intel Staff
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By Michelle Marquis, NAVIS — Technology partnerships can be a love-hate relationship. When things are good, you think “WOW, how did I live my life without you?” But when things are bad, you think “Wow, why didn’t I think about that BEFORE I got into this relationship?”

Technology in the Vacation Rental industry has come a LONG WAY in the last 25 years!  In just the last two years, so many new technology providers have entered our space that I can’t count them on two hands and two feet.

With all of the changes in property management systems, distribution systems, cloud-based solutions, CRMs, lead management and pricing managers, there is much to be confused about. And much that unfortunately gets overlooked in the buying process.

Here are a few things to think about as you evaluate new technology partners that will certainly make your decision more sound. And steer you toward a new partner you can’t live without.

1. How are they funded?

What is their long-term plan?  There are a lot of entrepreneurs jumping into our space and you don’t want to end up with a partner who does not have the resources for continued investment and development.

2. Are they integrated with your other technology partners?

This is really important for any solution outside of your PMS. Having data in multiple silos creates tremendous operational process friction, and adding another layer of complexity only creates more inefficiency for your team.

3. Don’t sign a long-term contract.

This is not in your best interest nor is it consistent with the concept of partnership. With things changing so fast, you don’t want to find yourself in a situation where you cannot pivot in the best interest of your business.

4. Don’t pay ANY annual SAS fees up front.

What happens if your new partner falls short of their promises? You’re giving away your leverage and won’t be able to hold them accountable. If your new partner runs out of money in the midst of your contract year, you don’t want to be left holding the bag.

5. If a new technology’s price sounds too good to be true – it probably is.

Be sure you know exactly what you’re getting for your money. Ask about additional charges. And ask for references including those clients that have left. Be sure to get the full story before being “sold.”

6. Will they support you when your business might require it?

The hospitality business is a 24/7 business – are your technology partners there to support you? If not and you have a problem serving guests, who will be there to help you?

7. If they are cloud-based or use several technologies to pull together a point solution, make sure they have redundant partners.

What happens if something goes down?  Will you still keep running?  This is most critical when the technology you’re considering controls the cash register.

Michelle Marquis
A little dating and due diligence can save you from years of heartache.

By Michelle Marquis, NAVIS VP Marketing and Strategic Initiatives

Snapshot of NYSE and NASDAQ Companies in the Vacation Rental Industry: EXPE, PCLN, TRIP and WYN

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VRM Intel Staff
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As volatility continues to affect U.S. markets, stocks swing on turbulent oil prices, concern over global growth hit banks, and tech stocks continue to drop. According to the New York Times article Tech Stocks Have Fallen Faster and Further Than Broader Market, “The Standard & Poor’s 500-stock index is down 9.4 percent this year. The index’s technology components are down about 12 percent, and the closely watched so-called FANG stocks — Facebook, Amazon, Netflix and Google — are down even further, falling 17 percent on average this year after an 83 percent rise in 2015.”

We decided to look at publicly traded companies in the vacation rental industry, which include Expedia (NASDAQ: EXPE), TripAdvisor (NASDAQ: Trip), Priceline (NASDAQ: PCLN), and Wyndham Worldwide (NYSE: WYN), to see a snapshot of how these stocks have performed over the trailing twelve months (TTM).

 

Expedia TTM Vacation Rental Stocks February 2016TripAdvisor TTM Vacation Rental Stocks Feb 2016

Priceline TTM Vacation Rental Stocks Feb 2016Wyndham TTM Vacation Rental Stocks Feb 2016

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Vacation Rental Stocks Research Feb 2016

 

By Amy Hinote

Takeaways from Wyndham: CEO Steve Holmes Discusses Q4 Earnings

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VRM Intel Staff
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Wyndham Worldwide held its Fourth Quarter Earnings Conference Call Tuesday evening, and CEO Steve Holmes discussed the vacation rental business, working with HomeAway and Airbnb, and their new cohesive brand Wyndham Destination Network.

 

Vacation Rentals Revenue

We learned from Holmes that Wyndham’s vacation rentals revenue for the quarter “was up 8% in constant currency and excluding the impact of acquisitions in the Canvas divestiture. That increase reflects an 8.1% increase in transaction volume and flat average net price per rental.”

Holmes added, “We expect vacation rental transactions to grow 5% to 7% and average net price per rental to decline 1% to 3% primarily reflecting foreign exchange.”

Holmes also said, “We are moving to a more expensive vision of the business which combine offerings from our vacation rental and timeshare exchange brands to enable our Wyndham Worldwide customer base to experience vacation of their dreams. With rising awareness of the sharing economy and increasing consumer demand for unique places to stay, we believe this new strategy will drive higher customer engagement and higher growth in years to come.”

“Our portfolio of managed vacation rental brands posted great results in 2015. While some of our largest European vacation rental competitors had declines in vacation volume in 2015, all our brands both in Europe and the U.S. posted transaction increases enabling us to achieve transaction growth on organic basis of 7%.”

 

Wyndham Destinations Network, fka Wyndham Exchange & Rentals

Holmes: “Now turning to Wyndham Destination Network. As discussed on last quarter’s call, we changed the name from Wyndham Exchange & Rentals to reflect our standing as the world’s largest provider of professionally-managed unique vacation accommodations. Anything from cottages to castles to timeshare resorts.

“We continue to see momentum in our rental brands which strengthen our core customer source markets, which are the U.K., Denmark, the Netherlands, Germany and the U.S. Despite new entrants into the rental market, we’ve seen little impact in the competitive landscape. With the strength of our brands and the depth and breadth of our offerings, we provide a great value proposition to both homeowners and travelers. These attributes enables us to be largely insulated from economic as well as geopolitical risks and produce reliable consistent results.”

 

Working with HomeAway, Booking.com and Airbnb

According to Holmes, “Last year we bolstered our strong proprietary distribution network through global partnerships with online portal such as HomeAway and Booking.com. We’ll continue to pursue the strategy in 2016. We have local presence and global average, which provides strong advantages compared with the full rent by owner option in the same channels. Providing the wide distribution for a property owners has been a primary strategy for the Wyndham Destination Network and it’s working. For example, ‘Know This All’, our Danish brand now sources renters from over 80 countries, that’s up from 50 countries just 18 months ago.”

When asked whether Wyndham would consider working with Airbnb, Holmes responded, “As I commented, we are using Booking.com and HomeAway for some of our distribution. And HomeAway has been in this market for quite some time. This is not — they are not a new entrant and Airbnb has been there for a while.”

Holmes continued, “Airbnb’s systems do not accommodate our rental model as well as some of the others do. So as of right now, we’ve run some test that require a lot of manual effort to try to use Airbnb as a distribution channel force, because that’s really what they are. But we have not been able to find an automated way to do it. So I think it’s unlikely that they will be a big distribution avenue for us, but HomeAway and Booking.com will continue to be.”

Using Storytelling as a Key To Reservations Sales Success for Vacation Rentals

By
VRM Intel Staff
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By Doug Kennedy — As marketing professionals across all industries know, the concept of storytelling is an integral component for success in today’s environment. You can see this approach playing out across all mediums from print to web to radio and television. Car ads are no longer about the features and benefits of the car, but rather about all of the places that car can take you. Soda ads are not so much about the taste, but about how happy you will be by sharing it with friends and family, showing bottles labeled with real names or “dad” and “grad.”

Maybe the best example is the new Liberty Mutual Insurance advertising campaign where various spokespersons speak to you directly to tell a story about what happens when “you” have your first accident and the rates go up or when your current company says they will only replace ¾ of your car. Smart marketers know that storytelling is a great way to grab the attention of multi-tasking viewers, readers or listeners.

Similarly, vacation rental reservations sales agents should also incorporate storytelling into their toolbox of both written and verbal presentation techniques. As the reservations rate inquiry process has become increasingly automated, it is more important than ever to connect with the callers and email senders when there is an opportunity to do so.

Being in the telephone mystery shopping business, I often hear recordings of reservations agents speaking with our KTN callers. Too many agents sound as if they think of their job as being a “technical support” role of simply helping the caller find out what rentals are available.

Reservations for Vacation RentalsAs addressed in a previous article, it is important for agents to use a more conversational and less transactional sales approach.

These days many reservations inquiries are coming in via email. Likewise, more often than not, today’s agents simply respond by sending back a list of links to the properties that are available that fit the sender’s dates and specifications. If anything, the response includes a template of standard copy, such as:

“Thank you for your inquiry regarding (insert name of property and/or dates requested.) Below are links to the properties that are currently available. You can book these online or call us directly…”  

If your vacation rental sales team responds in the same way as everyone else does, they are ensured only of getting their “fair share” of the business in the market. As I often say in my workshops, “If you want to get the same results as everyone else gets, just do the same things everyone else does.” If your goal is to get more than your fair share of results, you have to find ways to stand out from the competition.

Providing a laundry list of what is available and sending the inquirer back online to continue their research will not help you increase conversions. Instead, make sure your agents are using an investigative sales process to engage the caller and “unmask” their story whether asking during phone conversations or when responding via email. Train them to ask the single most important question circa 2016: “As I’m checking availability, are there any questions I can answer for you such as about the location or amenities?”

Thereafter, make sure your agents respond to the caller’s questions and that they sell to any comments, remarks and “clues” to what they are looking for by using a storytelling approach to selling the overall vacation experience and to not just be a “unit renter.” Here are five training tips:

1. Engage callers (and senders) by beginning benefit statements with wording such as “Imagine sitting out on your balcony in the evenings and seeing…” Or “Imagine your family/participants enjoying…” thus grabbing their attention as you take them along for the ride.

2. Lead sentences with “you” as in “you will enjoy…” or “your family will experience…” instead of the normal tendency to lead with “we have” or “we offer” or worse yet – “it offers.”  (Vacation rental homes should never be referred to as “it.”)

3. Use these techniques to highlight the most relevant offerings. Of course it is easier to focus on relevant benefits if you have taken time to connect with the caller or email sender and to investigate and discover their needs and preferences.

4. Tell real-world stories about the past experiences of similar guests you have hosted such as “This is one of our most popular homes/locations for families like yours because…” Or “Our romance couples always comment about the (privacy, view, etc…)”

5. Paraphrase and restate in writing what you have discovered about their needs to lead into the stories of personalized benefits. “Since you had mentioned… your (family or party) will find this convenient because…”

 

Doug KennedyDoug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of customized training programs and telephone mystery shopping services for the lodging and hospitality industry. Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he been for over two decades. Since 1996, Doug’s monthly hotel industry training articles have been published worldwide, making him one of the most widely read hotel industry training writers. Visit KTN at www.kennedytrainingnetwork.com or email him directly. doug@kennedytrainingnetwork.com

 

Maidbot: Housekeeping robot does floors and makes beds. Available Jan 2017

By
VRM Intel Staff
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2

A small company in Ithaca, led by a 19-year-old entrepreneur, has a robot they say can clean floors and will make beds. The robot is still in prototype stage, but the team behind Maidbot is hoping to bring the “Rosie” from The Jetsons-type machine onto the market within the next year.

Maidbot CEO Micah Green’s mother works in the hospitality industry, and he decided to follow suit and attend the Cornell School of Hotel Administration. A short stint in the field as a room attendant while taking a hotel operations class showed Green first-hand what the work was like. The apprentice paid close attention to each task, and he couldn’t help but notice the constant repetition.

“Vacuuming, reaching out and wiping mirrors or picking up a big king-sized mattress to stuff sheets under it…” says Green.
 

Maids and housekeepers have one of the highest injury rates in the hotel industry and in the entire private sector, according to a 2012 report by UCLA. Green immediately thought the workers could use some relief.

“Robotics in general focuses on dull, dirty or dangerous tasks. Housekeeping encompasses all of those,” says Green.

Over the last 10 months, Green and his team of seven have mapped out an extensive plan for the look, feel and launch of Maidbot. He says the first edition of the machine will focus on cleaning hotel floors, from the bedrooms to ballrooms and meeting spaces. Green chose not to disclose how much money has been put into the invention so far. He was, however, happy to finally have a prototype to show off.

“We have a [rotor that propels things] and an actual intake that we designed and created. And then we have the base plate that will have all of the wheels together. We have these really cool Omni wheels, so they’re multi-directional,” says Green.

 CREDIT UCLA

Injuries and Illnesses Underreported

Housekeepers are exposed to known risk factors for musculoskeletal pain and injury, such as awkward postures, forceful movements, heavy pushing and pulling, heavy lifting, and frequent bending. Coming in at around 40 per cent, back injuries are the most commonly reported, followed by pains in the hand and wrist, and shoulder.

“As many as 69 per cent of injuries and illnesses are not reported. Ergonomic injuries are more subject to underreporting because they’re not as obvious,” says Grant Esler, a lecturer of occupational safety and health at Rochester Institute of Technology.

But musculoskeletal injuries are difficult to identify as work related, since they can happen while doing everyday tasks at home.

“Workers are reluctant to apply for workers comp. The musculoskeletal disorder column has been taken off the OSHA log, so it’s not called out specifically any longer like it was for a few years,” adds Esler.

 

Forward Thinking

Aside from injury prevention, the Maidbot team believes the hospitality industry is long overdue for some internal adjustments.

“It’s been the same for over 100 years. The biggest innovation in housekeeping has been an electric vacuum which came out in 1905,” says Green.

The team is working towards a version of the product that they can begin to test, which is expected to be ready by late spring 2016, and then begin a pilot program with hotels. Maidbot plans to send its machine to different hotel chains and ask for feedback. The housekeeping robot is anticipated to hit store shelves in January 2017.

“We’re not just trying to sell robots; we’re trying to sell time. If you just imagine the time that we could save by creating a product that does it for you, completely autonomously, to me that’s amazing,” says Green.

CREDIT SASHA-ANN SIMONS/WXXI NEWS

RedAwning launches VR rez platform for travel agents

By
VRM Intel Staff
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0

RedAwning.com announced that it has introduced a new reservations platform for travel agents and tour operators to book vacation rentals. TravelProRentals.com by RedAwning is a onestop reservation portal for travel professionals to browse, search, and view vacation homes, condos and apartments around the world; get realtime quotes and availability; and to book instantly for their clients by credit card. Agents can store credit cards securely, track bookings and payments in one place, and choose to earn net or commissionable rates for bookings.

In addition, the new portal provides features for personalized, white-labeled client service. Agents will be able to market selected homes professionally to their clients by creating agency-branded emails, printouts and brochures, and they will be able to save, store and keep properties with notes in client-specific or property folders for efficient service and proactive business development.

The travel industry has seen a surge in the popularity of vacation rentals as an accommodation choice in recent years and it is now estimated to be at least an $85 billion dollar industry worldwide. But the lack of a B2B ecosystem for vacation rentals has limited vacation rental bookings to a fraction of their potential.

TravelProRentals.com by RedAwning seeks to become the leading B2B supplier of vacation rental inventory to travel professionals worldwide says RedAwning Chief Business Development Officer and TravelProRentals.com cofounder, Rick Haggart. “Tour Operators and Travel Agencies have generated billions in hotel bookings due to a mature B2B ecosystem of hotel suppliers and platforms, and now TravelProRentals.com enables travel professionals to market and book vacation rentals in a way that supports their existing business models and booking processes.”

RedAwning CEO Tim Choate agrees. “TravelProRentals.com by RedAwning empowers travel agents to be more nimble and professional than ever before in this booming sector. By giving agents instant access to a huge inventory of vacation rentals they can trust, we enable them to take advantage of the vacation rental trend and substantially grow their businesses.”

The original TravelProRentals.com was acquired by RedAwning along with PerfectPlaces.com in April 2015. Initially serving a s a custom B2B product for tour operators working on net rates, it has since been adapted to include commissionable bookings for travel agents, and it now hosts all RedAwning.com inventory on the platform.

TravelProRentals.com by RedAwning will give agents and tour operators the ability to book vacation homes instantly with a credit card, with standardized terms and cancellation policies. In addition, there are no security deposits, a $3000 damage waiver is included, and businesses and end-user customers alike can receive 24×7 customer support by email, chat or
phone.

“The new reservation platform is going to be a welcome tool for the leisure travel market and a great source of extra income for the travel agent industry,” says New York travel agent Frank Borrelli CTC, past chair of the Travel and Tourism program at John Fisher College in Rochester, New York. Borelli has been in the travel business for over forty years and is already an active
user of TravelProRentals by RedAwning which he calls “excellent” and “a snap to use.” “It’s also good to know that you have 24×7 support if needed.”

TravelProRentals.com by RedAwning is free to use, but requires registration and is only available to approved travel professionals. It can be accessed at TravelProRentals.com. Travel professionals can choose net rates or earn a 10% commission from the rental fee, payable by RedAwning after each guest’s stay.

Fetch My Guest helps rental managers automate their marketing

By
VRM Intel Staff
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0

Fetch My Guest is a California startup with a marketing automation platform for vacation rental managers that’s on a software-as-a-service model.

By Sean O’Neill, Tnooz

If you run a vacation rental management company, and you want to reduce your dependence on lead-generation sources like Airbnb, Flipkey, and Homeaway, and you want to view all of your digital marketing efforts in one place, than the premise behind Fetch My Guest must seem appealing.

It’s created by people who have been in the vacation rental business and who have an eye toward analyzing lead-generation patterns, discovering more efficient marketing processes, and boosting repeat direct bookings.

It works in conjunction with a vacation rental manager’s property management system (PMS) or alongside one if the manager’s PMS isn’t compatible with it.

 

Tell us how you founded the company, why and what made you decide to jump in and create the business.

Fetch My Guest started as an internal business problem that needed be solved. Our vacation rental management company was too dependent on listing sites that were not working in our best interest.

We needed to find a way to lessen our dependence on these sites by communicating directly with guest through our brand and building stronger relationships.

Within a few months our business saw dramatic improvement in booking performance and office productivity. We decided to build a community around a service-oriented platform that rewards the efforts of professional host.

 

Size of the team, names of founders, management roles and key personnel?

Our team is comprised of respected industry contributors in hotel management, vacation rental management and technology. The team is lead by co founders, Vince Perez and Dede Harrington, with advisors from Yahoo! and the Blackstone Group.

 

Funding arrangements?

Fetch My Guest has raised an initial round of funding lead by a former Blackstone Group executive in the hospitality division.

 

Estimation of market size?

Fetch My Guest is targeting the professional market segment that represents 43% of the $100B vacation rental market spend. Professional market segment is defined as two or more properties.

 

Competition?

Direct competitors in the marketplace include Homeaway (Expedia), Flipkey (TripAdvisor), and Airbnb.

 

Revenue model and strategy for profitability?

Fetch My Guest current revenue model is a subscription model that gives access to the platform and branded meta site. As Fetch My Guest expands the business offerings we anticipate multiple revenue streams as we deliver on customer success.

 

What problem does the business solve?

The current listing site model is fundamentally broken. The incumbents continue to alienate the vacation rental professionals through aggressive attempts to monopolize their inventory. The end results are ever increased costs and loss of brand recognition.

Fetch My Guest Provides an “intelligent” integrated marketing platform that gives the professional manager complete control of the guest experience, resulting in more direct bookings — while dramatically reducing marketing costs.

 

How did the initial idea evolve and were there changes/any pivots along the way in the early stages?

The idea evolved organically. As we saw our performance improvements, we understood that we needed to make the platform easy to consume. The important decision we made early on was to partner with API-focused booking systems.

 

Why should people or companies use the business?

Fetch My Guest provides professional vacation rental hosts a platform to showcase their respective brands to vacation rental travelers resulting in stronger relationships and more direct bookings. Professional hosts have been looking for an alternative to the incumbents for years. Fetch My Guest is that alternative!

 

What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?

Fetch My Guest promotes our clients destination through social media channels, unique content, local perspectives and stories on the professionals that will be servicing them during their stay.

We are also engaged with key industry thought leaders who are introducing our platform to their respective communities as viable alternative to the incumbents.

 

Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?

We believe that 2016 is a pivotal year for our industry. In three years from now, Fetch My Guest will be the premier platform for the “service-oriented” professional. Some of the challenges we anticipate are traveler FUD from the incumbents, the continued push to commoditize, continued consolidation, and local regulatory issues.

 

What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?

In the case of vacation rentals, there was never an emphasis on lead performance as it relates to repeat bookings. Established professionals are now understanding the consequences of not being able to control the guest experience.

The results are too much inventory in the hands of the OTAs…and subsequently, higher marketing and operating costs. The hotels have a marketing infrastructure in place….we are now providing that same infrastructure to the vacation rental professional.

 

What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style… and why?

37Signals. We appreciate the focus on simplicity and value presented by their products. They are very focused on the customer experience.

 

Which company would be the best fit to buy your startup?

Several companies would find interests in what Fetch provides. Ranging from large travel concerns (distributors, travel agencies, booking sys) to CRM focused companies looking to add a highly focused vertical to their model.

 

Describe your startup in three words?
Disruptive. Focused. Motivated.

Fetch My Guest has create a Vine to illustrate its pitch.

 

Tnooz view:

We’re not vacation rental managers who can take the product out for a test spin with real data, so it’s difficult for us to judge how well Fetch My Guest has executed on its vision.

But we wanted to highlight it as an example of a likely growing industry.

Just as a variety of companies have sprung up to help hotels try to manage their marketing spends, reduce a dependence on third-party booking and lead-generation sites, and increase the number of direct and repeat bookings, it seems likely that the vacation rental sector will also encourage the rise of companies like Fetch My Guest.

There’s a problem here waiting to be solved, and eager customers willing to pay for a quality solution that’s well priced. We’re eager to see if Fetch My Guest is the one that breaks through.

About the Writer :: Sean O’Neill

Sean O’Neill is Editor-in-Chief of Tnooz. Before joining Tnooz, Sean was the future of travel columnist at BBC Travel, senior editor of BudgetTravel.com, and an associate editor at Kiplinger’s. He now lives in New Jersey, after having worked in London for four years. He’s on Twitter and is excited for #Rio2016.

Working With Your CVB/DMO: A Partnership With Benefits

By
VRM Intel Staff
-
0

By Gary Ellis, Compass Media — The goal of a Destination Marketing Organization (DMO) or a Convention and Visitors Bureau (CVB) is to increase vacation and business visitors by promoting a town, city, region, or country. According to Destination Marking Association International (DMAI), DMOs are responsible for supporting the long-term development of communities through travel and tourism strategies. Even over the last 20 years, while helping many in the professional vacation rental industry with their marketing and promotional efforts, I’ve observed the benefits of partnering with local DMOs/CVBs. Following are some benefits that Vacation Rental Managers (VRMs) can derive from building relationships with DMOs.

 

5 ways to get the most benefit from your DMO/CVB

 

1. Expand ways for potential guests to find you.

DMOs work with local and national organizations to drive visitor awareness in what a specific area has to offer. Alastair Morrison explained, in his 2013 book, Marketing and Managing Tourism Destinations, “A DMO has many potential partners that it can call upon for collaboration and cooperation.” Often you can find complimentary or low fee services to list your accommodations in various online and print publications that reach a variety of audiences through DMOs. You can also meet and build relationships with fellow industry partners that can benefit from discounts or referrals between your vacation rentals and local attractions.

 

2. Make strategic decisions for your marketing and outreach plans.

Understanding the hopes, trends, and attitudes of visitors coming to your area can help you make decisions that drive your business. DMOs often provide statistical data on their websites which can be a valuable resource to VRMs including: destination growth indicators, visitor profiles, annual reports, economic updates, presentations, tourism summit results, lodging studies, and other research. Such data can help you focus and describe your offerings that would most likely appeal to visitors when developing marketing materials. For example, on the Gulf Shores and Orange Beach Tourism website you can find the “Summer 2014 Visitor Profile Report” which vacation rental professionals can use to learn the average household income of visitors, top origin states, percent of pet owners, average number of people in travel parties, and other useful visitor demographic information. Contact your local DMO to find out what is available in your area.

 

3. Stay informed of local economic development plans.

Take on a holistic view in what is occurring in your area and consider how this might change your business strategies. For example, are sports complexes in the plans for your local area, if so, how will this affect the demographics of your target audience? In a recent interview, Joanie Flynn, Vice President of Marketing for Gulf Shores & Orange Beach Tourism explained that the number one industry in the southern Alabama area is tourism, so those in the vacation rental industry can work together with their local DMO, chamber of commerce, and economic development agencies to ensure the local economy is healthy, expanding, and growing.

 

4. Dive into using social media.

To stay on top in the vacation rental business you must learn to transact digitally with your customers. Flynn revealed that over 60% of user traffic on the GulfShores.com website is currently from smart phones and mobile devices; therefore, her organization started a social media university to help educate industry partners in the area on best practices for using social media and responsive web design. “People can come and have a great experience with what we offer on our website, and as they click on our industry partners that same experience needs to carry over,” explained Flynn. The trend in the field is moving toward having a responsive website for cell phone users and effective social media campaigns. It is important to be up to speed with how technology is used by visitors and how audiences are changing. Such progressive initiatives offered by this CVB can benefit local rental companies by keeping them in the know on the positive impact social and digital media can have on their businesses.

 

5. Provide current information and get involved.

Be sure to talk with your local DMO to find out what they need from your company. “Consider what you offer to visitors to enrich their stay and get involved with meetings and events such as showcasing programs and educational opportunities outside of the main seasons,” said Flynn. Attend meetings and question DMO representatives to discover how your niche could be useful to visitors both on and off-season. I have personally observed the benefits that professionally managed vacation rental companies can offer DMOs such as timely responses in communications, increased security and safety, and fraud protection for visitors. As you connect with your local DMO/CVB, be sure to highlight such benefits and others your company offers to make your guests’ vacations more memorable.

 

Gone are the days of throwing ideas at the wall and hoping something sticks to bring in guests. Now, VRMs can make data driven decisions in marketing and guest service initiatives by using demographics, lifestyle factors, media habits, and visitor trends provided by DMOs. Times are changing in the vacation rental industry. To stay current, partner with your local DMO for insight into making your vacation rental business strong for the future.

Gary picCompass Media has been practicing leisure travel marketing for almost 30 years by helping clients tell their stories with innovative marketing and promotional materials including website design and development, search engine optimization, digital and print advertising, documentaries, and vacation guides.

By J. Gary Ellis, CEO of Compass Media, Inc.

 

VRM Intel Magazine Winter Issue Online Version

By
VRM Intel Staff
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1

The new issue of VRM Intel is here! We’ve worked hard to provide vacation rental professionals like you with the news, information, education and analysis to help grow your business — and we want your feedback. Take a look at the issue below and let us know what you think.

Thank you for reading,
Amy Hinote, Editor-in-Chief

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