Attn FVRMA Members:
A a FVRMA member, we want to give you first access to the Winter issue of VRM Intel Magazine and – if you haven’t already – invite you to subscribe to receive future issues mailed directly to you. And it is free! Our goal is to provide vacation rental professionals like you with the news, information, education and analysis to help grow your business. Also, we want your feedback. Take a look at the issue below, and let us know what you think.
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Vacation House Destinations, which provides hand-picked vacation rental homes to guests around the Northwest United States, has been acquired by the Vortex Organization to add more homes for its members.
The company’s unique Club membership system requires property owner members to maintain homes to high standards and pass in-person inspections by VHD leaders. Guest Members join in order to access such homes and treat the homes as if they owned them.
The business was started in 2004 by Tony Bacso, who will remain an advisor to the company during transition.
“Running VHD has been a wonderful journey with benefits and owners alike because they get to know and trust one another. Joining it to Vortex will provide more properties and services for our members.” said Bacso.
Unlike Global so-called Luxury Destinations Clubs which feature very expensive homes in exotic locations, Vacation House Destinations primarily features homes in the regional areas of Washington, Oregon, Idaho and British Columbia.
Bacso added, “Our guest members begin to feel as if each home in the club is their own and want to be able to easily drive to their ‘houses’ which is why we prefer operating in the Northwest.”
“Our organization is the only one in this area that specializes in handling properties in many markets where we already have onsite personnel to provide personal service to Owner Member properties,” noted Penny Taylor of Vortex.
“Plus Vortex sales office is open longer hours for our members, and provide 24/7 phone, email and onsite services, which our members will .” notes Bacso.
The club will add properties from those operated by Vortex Property Managers as well as new homes that meet club standards. Interested homeowners should email Owners@VacationHouseDestinations.com.
Guests are invited to join the club for access to a wide ranging list of properties, for early booking opportunities and best rates.
– – – – – – – – – – – – – – – – – – – – –
Vacation House Destinations is a club offering vacation rental homes hand-picked by club leaders. Members chose homes of their liking and book stays through the club. Visit VacationHouseDestinations.com to join. Email Info@VacationHouseDestinations.com. Phone 425-440-0229.
The Vortex Organization provides back-office reservations, advertising, marketing and accounting services for properties all around the Pacific Northwest. See VortexManagers.com or contact Info@VortexManagers.com, phone 866-925-5188
Contact:
Josh Dettwiller
Vortex Managers
PO Box 22987
Seattle WA 98122 USA
Phone : 866-925-5188 Fax : 888-628-0-839
Info@VacationHouseDestinations.com
VacationHouseDestinations.com
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The Winter issue feature articles are:
Plus the following articles:
“Offering trip insurance protects your guests, safeguards your homeowners, and increases your bottom line.”
Vacation rental property managers who offer trip cancellation insurance to their guests understand its value in more ways than one. Most have become keenly aware that insurance sales can also be a meaningful source of income. Some companies offset operating expenses, pay employee bonuses, and fund other costs with income generated by the sale of trip insurance.
Everyone in the vacation rental industry takes revenue increases seriously. It pays to increase the percentage of reservations that include the purchase of trip insurance. Pay close attention to the often overlooked detail of selling insurance. If your business does not yet provide this significant product, consider adding it to your total package. Number one, it affords protection for your guests when cancellation cannot be avoided due to unforeseen events. In addition, it generates added income. We can all use some of that!
Consider the following scenarios: You have guests scheduled to stay in one of your properties; their reservation is paid in full. Two days before check-in, they call to cancel. A family member has been hospitalized, or there’s been a death. The bread-winner just lost his/her job. The children’s school year has been extended. Inclement weather caused a flight cancellation and your guests are unable to re-book at this late date. All are life events that vacation rental managers hear about on a regular basis. When events like these occur during a high-rental time of year, the manager may have no trouble re-booking the property. But consider the result when a last-minute cancellation comes at a slow-rental time. The chance of re-booking drastically decreases and the likelihood of your satisfying property owners, guests, and your own company goes downhill quickly. During peak season or off-season, you do not need this problem.
Trip cancellation insurance not only protects you and your valued guests, it safeguards your homeowners by providing further assurance their investment is secure. Those homeowners look to you to provide income and to keep their homes rented. When a last-minute cancellation occurs they still look to you to bring in the money. An added bonus: When a guest purchases trip insurance for a small percentage of the reservation fee, the insurance company works directly with the renter, further minimizing time you and your staff work to satisfy both guests and homeowners.
Insurance not only protects everyone’s monetary investments when a guest cannot avoid a last-minute cancellation, it becomes paramount when unforeseen events interrupt a long-awaited vacation after it is underway.
Your guests have checked in; everyone in the family is happy and enjoying a great week. Suddenly, Dad cuts his foot on a piece of glass while playing with the kids on the beach, or he twists his ankle showing off on the slopes after a fifteen-year hiatus from skiing. The family has health insurance through Dad’s employer, but it carries a $3000 deductible with a non-payment penalty of being dropped from the health plan network. Bad news for everyone!
Dad now has an injured foot and spends the rest of an expensive vacation day at the local emergency care center. Mom and the kids forfeit a perfect beach or snow day to stay with him. Both parents are worried about how they will pay the unexpected medical expenses. After all, they just spent their savings on this vacation.
In most cases, if the guests are covered by trip cancellation insurance, they are covered for this type of emergency. An added plus: Paperwork is handled by the insurance provider, not the property manager.
Trip insurance can also cover more serious medical conditions, as well as dangers associated with natural disasters like hurricanes and earthquakes. It can help in the case of delayed flights and lost or stolen items. It provides peace of mind for everyone involved. Vacation rental managers who explain the key benefits of coverage at the time a guest is considering a reservation can help turn a less-than-great situation into an acceptable one for all involved.
Today the vacation rental market is experiencing a boost in several ways. The interest level of travelers seeking vacation rentals is on the rise. There is unprecedented growth in the industry itself, and companies are committed to serving both the guest and the homeowner. It’s thrilling to watch this growth occur and to be a part of the excitement.
At the same time, success breeds imitation. More and more large companies want a piece of the pie. Many property managers are beginning to feel a strain on their profits. Since most managers keep only a small portion of the rental reservation amount, it becomes more important to look for additional ways to increase profit. Trip insurance can provide a welcome answer. It becomes part of the revenue your company keeps, revenue that is not shared with a distribution site, another property manager, or the homeowner.
As our industry becomes increasingly global and attracts more and more international guests, it is a fact that everyone in the industry has an opportunity to profit by providing vacation rental homes. In turn, U.S.-based companies that manage global inventory are seeing more and more U.S. citizens traveling abroad.
If travel insurance, along with close attention being paid to the value insurance brings your guests, is not already a vital part of your vacation rental business, then it should become an important element in your revenue growth plans for the future.
By Carie Leyden
I’ve been thinking about this topic for a couple of weeks and wanted to share it with you. As a service provider in the Vacation Rental Management industry, I have the opportunity to have lots of conversations with employees and owners of vacation rental management companies and other providers in the industry.
One thing that always strikes me about this industry is how friendly (well for the most part) everyone is. This isn’t surprising given how most vacation rental businesses are started. Someone lives or visits a beautiful vacation location. They decide that they want to buy a second home or they meet a friend that has a second home and suddenly find themselves doing property management and taking reservations. The next thing they know, they are employing 20 people annually and opening a laundry division, or they are passing the baton to their children to run the business or even their grandchildren.
For these folks, and there are so many of you out there, HEART is the center of your business. It is how you understand the difference between providing more than just a home. You are motivated every day to help people come and enjoy the beautiful place where you live and work with hospitality. This is so different from so many other industries. When you do your job well, you are offering one of the most important things that people have – their memories. The time that is shared with friends and family cannot be replaced.
That’s why I find it so interesting that so many service providers in this industry don’t understand this perspective. Of course they see the potential money to be made in the industry and they run to throw up a shop in a tech hot spot, like Austin. They bring in a few software familiar folks who have been around in Silicon Valley (see a hilarious description of this type in the article “7 Signs Your CEO Needs to Grow Up” from entrepreneur.com from someone who has worked in the valley before). Next, they start to taut the latest and greatest product. They may end up delivering a product or they may just keep delivering the promise of the product. Either way, this isn’t the worst of this scenario.
What really ends up missing here is the lack of understanding about the HEART of the vacation rental industry. They don’t delve down into the very real needs of what you have to deal with day in and day out. For example, I recently hosted a breakfast meeting for folks to understand how to get to Airbnb through one of our partners My Booking Pal. A very nice representative from AirBnB delivered an engaging presentation about AirBnB, their intention for how they will work with professional property managers, and the benefits of doing so. The only problem is that the way they structure their payments put them in direct conflict with the real estate law of North Carolina. As one attendee pointed out, “this all sounds great until you are headed for jail because of trust fraud.”
To AirBnB’s credit, they understand that they are going to have a learning curve about the vacation rental industry and have devoted a team to figuring out these issues. As our representative put it, “we’ve handled governmental regulations around the world, we have the resources to take care of these issues.” Fair enough. Also, in the case of AirBnB, the principals of what the company was founded upon – local hospitality – does more frequently align with those of the vacation rental management companies.
My point here is to be wary of “bleeding edge” solutions and to some extent industry providers who haven’t been in the industry for some reasonable period of time. Because you are a unique tribe, you deserve the in-depth understanding of the heart in this industry. I am not suggesting that innovation shouldn’t be a top priority, just that there is great value in finding good relationships and partnerships with the vendors that should be helping you.
Claiborne Yarbrough Director of Customer Engagement Barefoot Technologies claiborne@barefoot.com Claiborne has been in the software industry for over 25 years primarily focused on marketing. Her favorite thing about the vacation rental industry is getting to make so many friends.
Halloween 2014, an early Chicago snow left powdery flakes on my Hyundai as I packed to leave on a year-long Vacation Rental Road Trip. Career goals in flux and a bucket list of places to see, I set out to explore vacation rentals around the country and to learn as much as possible about our fast-growing industry. Harboring an admitted aversion to crowds and conscious of budget constraints, I hopped off-seasons and was able to visit twelve great locations during the year. From one destination to the next, I encountered a level of professionalism I did not expect. A few of the many discoveries: superior housekeeping, keyless entry, and 24/7 customer service. What was the most important payoff of the entire road trip? A network of amazing, lifelong friends I cannot wait to see again.
Austin, Texas
Austin, chock-full of top-notch music and culinary creativity, is a vibrant, eclectic mecca for free spirits. While I didn’t think of it as a traditional vacation rental destination, Austin-based TurnKey Vacation Rentals has found a highly lucrative, short-term rental business there. My Austin home was a clean, cozy cottage off South 1st in what I later learned was the highly esteemed “78704 district.” From there I could easily access the downtown area, South 1st, Lamar and South Congress. From 6th Street’s hipster-meets-Bourbon-Street flair to amazing restaurants, live music, and funky shops in the SoCo area…from bats under the Congress Avenue Bridge to the food trucks’ gastronomic artistry, Austin is never boring. And staying in a vacation rental makes it all the easier. If you don’t have a car or don’t want to risk driving, both Uber and Lyft are inexpensive and fast in Austin, and there is never a lack of things to do. Hands-down, Austin has the friendliest population I’ve found. The most difficult thing to work into your Austin plans – time to sleep!
Bethany Beach, Delaware
Located just a few miles north of Ocean City, Maryland, Bethany Beach provides a safe, traditional, family-friendly, beach destination within a four-hour drive of some of the largest cities in the country. I stayed across the street from the beach at Sea Pines Village, in a townhouse managed by Sandcastle Realty. The centrally located destination made it a snap to explore areas near Bethany Beach, Ocean City to the south and Lewes, Delaware to the north – then drive home to enjoy the pool, patio, grilling area, and super-clean accommodations. The rental was a short walk from the Bethany Beach boardwalk and only a block away from Mickey’s Family Crab House where I can vouch for the crab dip, crab cakes, steamed crabs and snow crab. When in Rome…
Deep Creek, Maryland
Was I the only one who didn’t know how amazingly beautiful Deep Creek is? I stayed in a very private townhouse aptly named Amazing Views, managed by Taylor-Made Deep Creek Vacations. My intent was to accomplish much work in the serene environment. But the falling November temperatures added to the temptation of a private hot tub overlooking the lake, plus two fireplace levels forced work to take a back seat to relaxation. Taylor-Made owners Joe and Jodi Refosco were wonderful hosts and made time to show me the area, talk over drinks/dinners about the way they built their business, and what the area means to them. I followed their recommendation to hike Swallow Falls. It was, without a doubt, one of the highlights of my trip to the Deep Creek area. If my schedule hadn’t forced me to move on, I might still be in Deep Creek today!
Fayetteville, Texas
Fayetteville was an unplanned offshoot of my trip to Austin and turned out to be one of the most special getaways of the entire journey. Located in central Texas between Austin and Houston, Fayetteville was settled in 1844 and is known for the biannual antique shows held in nearby Round Top. Visiting Fayetteville is a trip back in time. It’s a unique Texas town complete with an ice cream parlor, a diner, a corner market, a tavern, and a courthouse centered on the town square. I stayed in a private home owned by Sand ‘N Sea’s Claire Reiswerg and managed by Country Butler. The historic farmhouse was charming! A few of the perks: original hardwood floors, high ceilings, and deep, inviting porches. For a girl raised in a small town in Mississippi, Fayetteville was a great place to rediscover the charm of roots. When the road trip began I had not considered including a small town snapshot of Americana, but I am so glad I did.
Gulf Shores, Alabama
Gulf Shores, with its 32 miles of breathtaking beaches, is home base for me. It’s where I got my start in the vacation rental industry and most of my family lives nearby. Spending the holidays at a condo at The Colonnades Condominiums, managed by Meyer Vacation Rentals, was truly going home. The Colonnades is located right on the Gulf of Mexico at the east end of Gulf Shores. It is surrounded by two miles of uninhabited, sugar white beaches – total relaxation to savor and enjoy! Ground-floor facilities include in- and outdoor pools, solarium, gym, private theater, library, grilling area, and plenty of private beachfront. Another plus: The Colonnades is within walking distance of several good restaurants. While there in December, I was treated to a meteor shower. I grabbed a bottle of wine, a quilt, and headed to the beach where I sat undisturbed for hours, entertained by a natural fireworks show. The sky was alive with shooting stars and their reflection in the gulf waters sparkled like diamonds. Sweet Home Alabama!
Harbor Springs, Michigan
If you’re in the market for a waterfront escape from the summer’s heat, North Michigan is the ideal. I invited a couple of Chicago friends to join me on the trip to Harbor Springs for some peaceful R&R on Lake Michigan. Our cooler stocked with meats and veggies for grilling and wine for drinking, we headed for the lake. Our destination: Eagle View, a large, 3-bedroom, private, lakefront home rental, managed by Holiday Vacation Rentals. Located along the road known as the “Tunnel of Trees,” the house was well equipped, quiet, and serene. Holiday Vacation Rentals owner Alan Hammond and his wife Kathie went to dinner with us at Legs Inn, a Polish restaurant a couple of miles further down the Tunnel of Trees. There I heard the personal story of their experiences in the vacation rental business. We also had a lively discussion regarding the next direction the industry is taking. During the next few days we explored nearby Harbor Springs, relaxed on the shores of Lake Michigan, grilled our meals under the stars, and read by the fire. My hope is to one day add an annual vacation in North Michigan to my August calendar!
Nenagh, Co. Tipperary, Ireland
As a presenter at the VRMA 2015 European Seminar in Dublin, I had the grand experience of staying in several Irish vacation rentals. The first was Ashley Park House in County Tipperary, just a wee bit north of Ardcroney. I discovered Ashley Park through hiddenireland.com and treasure making the acquaintance of 93-year old owner, Sean Mounsey, during my stay. A narrow lane winds from the gatekeeper’s cottage, beneath an archway of trees. Suddenly, the limbs part and an enchanting country home emerges, complete with white-washed stone walls, mullioned bay windows, a green tile roof, two sections of which are turrets, and verandahs reminiscent of Savannah’s. In addition to sightseeing green Irish hillsides, thatched-roof villages, castles and abbeys, hill-loads of sheep, and sampling crisp fish ‘n chips in a variety of pubs, daily activities also included morning walks on the 90 acre estate, afternoons spent rowing peaceful Lough Orna, and tea in the parlor by a welcome fire. Evenings brought luscious meals, a local play, wine, and international conversation around the fireplace. My ancestors were from Ireland – is that why I feel so at home there?
Dromoland Castle, Newmarket-on-Fergus, Co. Clare, Ireland
One of the most famous baronial castles in Ireland, Dromoland doesn’t actually fall into the category of a vacation rental, but my experience there was just too good to leave out. Arriving at the castle, I felt like a 21st century Cinderella. Ancient blue limestone with chiseled workmanship, heavy wooden doors, ornamental grounds, gardens and woods extending over 1500 acres of land, and panoramic views of two rivers – the Shannon and the Fergus, are just a few of the delights. A castle stay is not cheap by any means, but there are off season deals to be found on the website. My room was huge with a 15’ ceiling and crystal chandelier, a lovely sitting area with fireplace, and a huge bay window overlooking the castle entrance. The dressing room/bath was spacious; marble and decorative tile appointments functioned as well as they looked. All drapes and furnishings in the castle were upholstered in designer fabrics. Morning coffee in the gallery, afternoon tea in the drawing room, wine and hors d’oeuvres in a cozy, fire lit pub, and five-course meals in the dining room. Even in February the grounds were immaculate. I enjoyed a horse-drawn buggy ride, strolls by the lake and in the ancient walled gardens, and watched as the crows made their daily sunset flight, returning to the rookery beside the lake. What was the toughest aspect of staying at Dromoland Castle? Stepping back into reality when I had to leave.
North Myrtle Beach, South Carolina
Following the VRHP National Conference in Charleston, I drove to North Myrtle Beach and stayed at Ocean Bay Club, managed by Elliott Vacation Rentals. The beachfront condo had all the bells and whistles: indoor and outdoor pools, fitness room, grilling area, private balcony, jetted tub, and walking proximity to the downtown area. From sunrises over the Atlantic (worthy of a top-notch artist) to high-energy shag competitions downtown, North Myrtle Beach proved to be a great beach getaway from morning till night. Owner Rick Elliott and GM Brandon Cox met us for a fabulous dinner at Joe’s Bar and Grill where we talked about Rick’s father, Senator Dick Elliott, who started the company and marveled at the way Elliott Vacation Rentals has grown to become one of the top ten largest vacation rental management companies in the USA. This was another place I could have stayed longer.
Orange Beach, Alabama
By January, I was ready for an off-season blend of wide-open Gulf front beaches and proximity to restaurants and nightlife. I found both at Regency Isle Condominiums, managed by Meyer Vacation Rentals. The large, 3-bedroom condo boasted a fabulous Gulf front and a corner balcony with amazing sunset views. The sugar sand beaches in Orange Beach are expansive and Regency Isle is located next to a state park with a mile of unspoiled coastline to the west. I stayed for a month and enjoyed every moment. Meyer offers renter-pleasing, weekly housekeeping services in which they clean, change sheets, and replace towels. Hotel services with all the perks of a vacation rental. It didn’t hurt at all that the condo was within a quick walk of the legendary Flora-Bama Lounge!
Sandestin, Florida
The Sandestin trip was all work…well, mostly work. Several colleagues and I had planned a meeting in the Destin area. We opted to rent a 4-bedroom, penthouse condo at Sandestin’s Baytowne Wharf. The condo, located in the Bahia building, proved to be pure luxury with rooftop balconies, resort amenities, plus all the activities and fun Baytowne has to offer. Downtown Baytowne is an enticing combo of upscale shops and restaurants, including the Marlin Grill, the Funky Blues Shack, Hammerhead’s, Lumpy’s Wine Bar, Poppy’s Seafood Factory, and the Village Door Smokehouse. The huge dining table in our penthouse easily transformed into a boardroom table for our meetings and the balconies offered great areas for entertaining after hours.
Winter Park, Colorado
March in Winter Park is pure magic. I stayed at the Zephyr Mountain Lodge condos in Winter Park Resort, managed by Winter Park Lodging Company. Zephyr offers easy access to one of Colorado’s most popular ski destinations. Being a less than Olympic skier myself, I looked for a way to enjoy the area without breaking a leg. Snowmobiling fit the bill! At Winter Park’s Grand Adventures I was able to ride the Continental Divide on Colorado snowmobiling trails that top out at nearly 12,000 feet. Panoramic views of the entire Winter Park ski area and Fraser Valley were spectacular. I loved it so much I made the trip three times and can’t wait to go back on a future vacation. Winter Park Lodging Company has the friendliest, most cohesive team I encountered in my travels. They all genuinely care about each other and their guests, and it shows in everything they do. From special flower arrangements to team get-togethers, WPLCO operates in a team environment and ensure their owners and guests are part of that team.
One of the greatest NFL football coaches is Vince Lombardi. At the beginning of each season he would take grown men, some of whom had played football for decades, and hold up a football and say “Gentlemen, this is a football.” He would then explain the basics of the game. After a while they would move to the football field and the explanation of how the game is played and the objective of the game would be explained.*
As leaders and managers we need to do the same thing with returning seasonal staff and fulltime year round staff. We need to cover the basics of what we do and why we do them.
Here are a few housekeeping basics to cover:
Housekeeping Kit: Discuss how and why each chemical or tool is to be used. Take the time to do demonstrations of proper ways and improper ways, so they can see how it is to be used. The basic housekeeping kit should have:
Inspection Kit: Talk about the necessity of the inspection kit and how it can help them be effective at doing their inspections. What is inside the kit is going to vary on what guest amenities are provided and what expectations you have for your inspectors? Some of what should be included would be:
Specialty Cleaning Products: I call them specialty cleaning products because only certain people have access to them and are trained to use them. There are two types of products I would like to highlight today:
Piece Rate: All housekeepers should be paid piece rate. This motivates the housekeeper to clean with speed and quality.
Inspections: Every arrival must be inspected for housekeeping quality and guest readiness. This inspection allows the inspector to make sure all is in order in the home. Some items include:
Standard Property Appearance (SPA): Every company should have a document that illustrates and explains how the property is to be left when the housekeeper and inspector have completed their work. This document is not easy to create. It takes a lot of thought and work, with many people and departments collaborating for the final product. Once complete, everyone knows how the property is to look when the housekeeping staff have completed their work. Follow the wall – this procedure is a foundational housekeeping principle and every housekeeper and inspector should use it every time they clean, inspect, or check a property.
Some of the items this document addresses are:
One last item for you to consider, every housekeeper is a memory maker. Every time a housekeeper or inspector does work in a property they are a part of memories made in the property. We need to remind our staff of this.
If you have any questions you can visit www.VRHP.org or reach out to me for more information.
* Vince Lombardi, in Donald T. Phillips, Run to Win: Vince Lombardi on Coaching and Leadership (2001), 92.
By Durk Johnson
Love them or hate them, third party distribution channels have fundamentally changed the way consumers shop for vacation rentals and the way property managers find new guests. When HomeAway purchased VRBO.com in 2006, the idea of paying a third party to market homes to guests seemed like a feasible idea to boost shoulder season bookings and fill hard-to-sell inventory. But paying a third party channel for peak season bookings seemed…well…foolish.
But in 2006 listing a home on VRBO.com was cheap. At $299 per listing, it only took a handful of bookings to produce an acceptable return on investment, and VRBO.com had traffic from guests looking for a deal. As a result, HomeAway continued to sign up properties by the hundreds and then by the thousands, and when possible, HomeAway acquired other third party websites with thousands of properties. As Amazon and others have proven, consumers like to shop where there is the most selection, and with increased supply came more guests which further increased supply, and so on.
In 2007 another third party channel launched which initially focused solely on professionally managed vacation rentals with an added element of reviews. This distribution channel was called FlipKey, and it attracted investment from TripAdvisor in 2008 – in the same year that Brian Chesky and his roommate Joe Gebbia were selling “Obama O’s” and “Cap’n McCains” cereal to raise enough money to get their idea off the ground for a company called Airbnb.
Fast forward through a plethora of fundraising, acquisitions, successes, and failures including: Orbitz’s failed entry into vacation rentals via a partnership with Zonder, HomeAway’s transition into a publicly traded company, Expedia’s spin-off of TripAdvisor, the VRMA’s defunct Switch initiative, TripAdvisor’s purchase of FlipKey, Booking.com’s 2012 introduction of vacation rentals, Expedia’s 2013 slow-moving partnership with HomeAway, the launch of metasearch via Tripping.com, HomeAway’s partnership with Kayak, Airbnb’s steady and uninhibited ability to raise capital, and Expedia’s purchase of HomeAway. Now we find ourselves in present-day 2016 with third party channels that are almost essential in attracting new guests to vacation rental properties.
While there are hundreds of third party channels for vacation rentals, the market is becoming slightly less fragmented with four major channels taking the lead: Airbnb, Booking.com, HomeAway, and TripAdvisor.
When TripAdvisor entered the vacation rental industry with FlipKey in 2008, FlipKey had 50,000 professionally managed listings. By 2011, they had opened up their model to owner managed homes and had grown to over 160,000 listings. This year the company began adding shared accommodations and increased inventory to a reported 720,000 listings by the middle of 2015.
HomeAway purchased VRBO.com in 2006 with 65,000 listings. In 2011, HomeAway took the company public and expanded to 641,000 listings by the end of the year. With a steady flow of market-leading acquisitions and growth in inventory, HomeAway reported 1,185,000 listings in the second quarter of 2015.
Founded in 2008, Airbnb fought their way into the short term rental market game. With small funds and big ideas, the founders joined Y Combinator’s winter incubator session in 2009 for three months of training. In 2010, they raised $7.2 million and in 2011, actor and partner at A-Grade Investments Ashton Kutcher announced a significant investment in Airbnb. in 2015, Airbnb reported 1.5 million listings, is the third most valuable venture capital-backed company in the world, and is currently valued at $25.5 billion.
Booking.com entered the vacation market in late 2012 and by the end of 2013 had accumulated over 100,000 listings. Their model requires “instantly bookable” vacation homes. In 2014, they launched Villas.com, which has grown to over 350,000 listings as of August 2015, proving to the industry that an online marketplace can build a large supply of verified, instantly bookable vacation rentals.
A variety of pricing models exist among the four major vacation rental marketplaces. Airbnb charges a 3-5% transaction fee to owners/hosts/managers and a 6-12% fee to the traveler. Airbnb collects money from the guest upfront and released payment to the “host” 24 hours after check-in. Booking.com also operates solely on a performance-based pricing model with owner/manager fees of up to 15% of the transaction.
HomeAway and TripAdvisor offer both subscription and performance-based pricing to vacation rental managers, and as of August 2015, TripAdvisor also still offered a Pay-Per-Lead Model, a model HomeAway phased out earlier this year.
“By offering side-by-side comparisons, access to the growing array of travel options and competitive prices, online travel companies have empowered travelers to search, compare, and book from the palm of their hand from anywhere in the world,” said Steve Shur, President of the Travel Technology Association. “It is clear the American public not only relies on the convenience of shopping across multiple travel brands in a single place, but they continue to trust online travel companies with their vacation and business travel itineraries.”
Third party channels have been able to gain trust in the vacation rental marketplace by focusing on and continuing to improve the following components: selection, reviews, professional site design, advanced search capabilities, high quality images, updated availability calendars, accurate property information, mapping, easy online booking, and instant confirmation of transactions.
Building a marketplace with these elements requires an increasing amount of time, money, and expertise. As a result, the industry is seeing a consolidation among the third party channels and an expanding barrier to entry for new players in maturing markets such as the U.S. and Europe. For the first time in ten years, in 2015 no disclosed seed funding was raised by a new U.S. third party channel. Furthermore, every U.S. channel that received funding in 2015 has been around since at least 2010.
As business models transition and these online marketplaces evolve, investors almost unanimously believe vacation rental owners and managers are willing to spend 10-15% to secure a booking. As a result, the industry can expect to see distribution costs creep upward over the next few years.
Today’s property managers are faced with the decision to: 1) absorb the third party fees, 2) pass the fees on to the owner, or 3) pass the fees on to the guests by raising prices on channels.
However, the third option of passing the costs of distribution on to the guests may not be sustainable. With the introduction of metasearch, the industry is likely to see rate parity become more encouraged and enforceable by the channels in the future. At least one channel (Booking.com) has already included rate parity requirements in their user agreements.
To determine how much to spend on third party channels, vacation rental managers should calculate their cost of acquisition of a new customer.
“I use my PPC costs as a gauge for what I am willing to spend on a third party channel, said Steve Milo, Founder and Managing Director at Florida based Vacation Rental Pros. “If we are spending 7% or 10% in a market, we consider that our cost of acquisition. In some markets it is higher because of the increased competition.”
Milo added, “It is also important to determine your true cost of using the channels. Some channels are easy to work with while others require an enormous about of time and manual effort.”
With the rising costs of listing on third party channels, it is critical that vacation rental managers formulate a solid plan for making the most out using these middle-man marketplaces. A successful strategy for the use of third parties for bookings involves maximizing the use of the channel, implementing a plan for lead capture, and retaining guests obtained through the channel.
by Amy Hinote
A leader in the vacation rental industry for close to 30 years, Jim is the former CEO of Abbott Resorts, ResortQuest, and Sterling Resorts. He has overseen as many as 20,000 vacation rental units, 250 resort real estate agents, and 200 homeowner associations. Jim has also been involved in more acquisitions within the vacation rental space than anyone else in the history of the industry. A Broker in four states, Jim is one of only eight real estate professionals in the entire United States that is simultaneously an invited member of the Counselors of Real Estate (CRE) and the Council of Real Estate Broker Managers (CRB).
What got you interested in the vacation rental industry?
In 1989, as I was working in the tourism industry, my wife June and I decided I would go to law school. We had three kids already, but she pushed me to go, saying we would live like hippies for three years as I went. I asked Bill Abbott, owner of Abbott Resorts and a friend, to write a letter of recommendation for me for law school, and he immediately said, “I am saving you from being a lawyer.” He hired me as CEO, but made me go undercover and work in every facet of the company first (laundry, housekeeping, reservations, mowing yards, etc). I was truly the first Undercover Boss. It was the greatest experience and I highly recommend it. Bill and his brother Steve taught me everything about this industry. They were way way ahead of their time.
You have been CEO of some of the largest vacation rental companies in the industry, and were CEO when ResortQuest had over 20,000 units. How have you seen the industry change over the years?
Obviously, the self-management fad has further fragmented our industry, when we were already very fragmented. It made us adjust our service offerings and in many occasions squeezed our margins and profits. On a more positive note, I have seen the management companies become much more professional, doing a much better job keeping up with all the technological changes that have occurred. I am bullish that this self-management fad will slowly die down, as governments start to regulate these activities in a manner that is proper to put everyone on a level playing field.
If you owned a vacation rental company right now, what would you be doing to prepare for the next big wave of changes?
First and foremost, never stop learning. Don’t trust that you know everything. You don’t. Also, embrace hiring consultants and advisors when you start to feel you may be lagging the competition. Many national consultants are seeing things that you may not hear about until it is in your market. And there are plenty of great ones out there to tap into. Just ask around.
What is the Biggest Threat to the “Mom and Pop” vacation rental company right now?
The “threat” of consolidation. Everyone is concerned when a “Big Boy” national vacation rental brand comes to town. Local companies start looking over their shoulder so much that they stop focusing on their customers. This is not a “Walmart coming to town” scenario. We are in the relationship business. Maintain
your relationships, do the best job you can, keep up with the changes in the industry, and you will do great.
You have completed more buy/sell transactions than anyone else in the industry. How have the transactions changed over the years?
They have become much more technical in nature than before. While lawyers and CPA’s have always been part of the process, they are more involved now due to the plethora of tax changes and ways in which a deal can be structured. I actually work a lot harder on each deal nowadays than in the days when we were closing two deals a month at ResortQuest. Every deal seems to have to be changed midway through, as we discover some tax law or corporation structure that makes it better to close the deal a little different than planned. One deal I did recently ended up closing as three separate deals, with two being 1031 tax free exchanges and the third as a stock transaction.
As someone who tends to represent buyers more than sellers in a transaction, what do you look for initially when assessing a potential company to buy?
My first look at a company obviously involves combing through the financials. I like to look at 3-12 month periods. From there, I look at how “together” the company is. Are they organized? Do they have their contracts, leases, and other agreements in one location (hard copy or cloud based)? Have they kept up with the changes in technology and marketing? These all give me an idea of what is in store for me as I proceed with a possible acquisition.
Is it a Sellers market right now?
In terms of the number of potential buyers out there, yes. In terms of the price points and “multiples” used to determine value, not really. There is a lot of activity, but I have not seen a huge increase at all in prices buyers are paying. Still, if a company is thinking of selling, this is a good time to at least test the waters.
Besides the Financial Performance of a company, what other factors make the company worth more to you?
I like to see loyalty of homeowners. For instance, how many of your homeowners have been on your program for more than three years? Even if you are growing, are you adding five and losing three, or are you keeping owners on your program? I also like companies who do not have one person controlling all the action. A company that empowers their employees is more attractive to me. As I stated previously, I like a company that is organized and has their act together.
Two final questions – your use of Gumby as your “mascot”, and the name C2G. How did both come about?
The Gumby came about after I endured a 3-day HOA Board meeting in Destin one fall. We adjourned only to go home and sleep. We were the management company and we were getting beat up. At the end of three days, I felt like I had been twisted every different way, and all I could think of is the toy Gumby I played with when I was a kid. I keep a Gumby doll on my desk to always remind me of how much we all must adjust in our industry, and how we are always pulled by our two customers who want opposite results – our owners and our guests! Owners want us to charge high rates and allow 2 people in their 5 bedroom house. Guests want us to charge low rates and want to stuff 10 people in a 1 bedroom!
The C2G name was given to me by a client. After I worked on a very complicated transaction for many months, the client complimented me for sticking to it, and he told me that I worked his deal from “Cradle to Grave”, which was a huge complement. I was in the midst of renaming my company, and decided on C2G because of it. These acquisition deals are all different and can be exhausting to get closed, but I feel blessed to be part of this industry and helping entrepreneurs achieve their dreams.
For more information on Jim Olin, go to www.C2GAdvisors.com.
Today the Austin City Council will debate an initiative that potentially phases out short term rentals. The Travel Technology Association (Travel Tech), the trade association for the travel technology industry, representing the leading online travel companies, travel technology solutions providers (GDSs), and short term rental companies, Airbnb, HomeAway, and FlipKey, sent the following letter to the City of Austin addressing proposals before the city council that would effectively ban Austin’s thriving short-term rental ecosystem.
“Short-term renting is a part of Austin’s DNA,” said Steve Shur, president of Travel Tech. “The ability to eat, drink, and stay local has become a large part of what draws nearly 23 million domestic visitors each year to Austin festivals, events, and destinations. Unfortunately, the proposals currently before the city council could rob travelers of the chance to live like a local.”
“These proposals do not represent smart short-term rental regulations,” said Mr. Shur. “As we’ve seen in other cities that have turned to such heavy-handed provisions, these types of regulations are almost impossible for short-term rental operators to understand and comply with – ultimately pushing the practice underground.”
January 27th, 2016
Dear Mayor and Austin City Council Members:
The Travel Technology Association (Travel Tech), whose membership includes short-term rental companies such as HomeAway/VRBO, TripAdvisor, and Airbnb, would like to reemphasis its concern with proposed amendments to the city code related to short-term rentals. Over the past few months the Austin City Council has heard from a number of stakeholders on this issue, and we would strongly urge the Council to reconsider any action at the upcoming January 28th City Council meeting.
As presently proposed, the controversial measures scheduled for a vote will do irreparable harm to the overwhelming number of responsible short-term rental providers in Austin. Today, Austin has one of the most sound and reasonable short-term rental ordinances in the country, so it should come as no surprise that it also enjoys one of the highest compliance rates of any municipality. Unfortunately, the proposed measures are unnecessarily onerous to owners, operators, hosts, and the industry platforms they utilize. And we have seen time and time again, that similar regulations undermine compliance, drive short-term rental activity underground, and deprive municipalities of the corresponding tax and revenue benefits.
The Travel Technology Association believes in fair and reasonable regulations for short-term rentals, and has long viewed the Austin ordinance as a success story, and a best practice model for other cities around the country. As is so often the case, the proposed measures have been drafted in response to a small fraction of the city’s short-term rental community that is not in compliance with the existing city ordinance. Fortunately for the city and its residents, Austin’s current short-term rental law provides for the opportunity to simply enforce the existing code and remove the registration of a small number of problem properties. This is a simple solution already provided for in the existing law. A wholesale rewrite of the existing city ordinance is simply the creation of new governance for governance’s sake. The City should refrain from a full overhaul that includes the phasing out of Type 2 rentals until another year’s worth of short-term rental data can be collected and audited. In the meantime, addressing the problem properties under the current code is in the best interest of resident, providers, and travelers. With fair and reasonable short-term rental laws already in place in Austin, city residents and taxpayers deserve a sincere effort by the city to enforce the existing codes before creating new ones.
Thank you in advance for your consideration of our request to continue to allow for a discussion of these proposed amendments. The Travel Technology Association, and our member companies including Austin-based HomeAway, is available to the city of Austin as a resource and we look forward to having the opportunity to work with you.
Sincerely,
Steve Shur, President
The Travel Technology Association
sshur@traveltech.org
www.TravelTech.org
@TravelTech
This week the Austin City Council once again tackles the issue of short term rentals, and leaders from HomeAway, TurnKey Vacation Rentals, BedandBreakfast.com, OnceThere, and KeyToAnywhere joined together to address the Austin City Council regarding the crippling legislation on the table.
In 2013, Austin led the U.S. in adopting a balanced urban plan for short-term rentals that allowed Austin homeowners to offer short-term rentals to visitors. Unfortunately, the proposed City Code 25 ordinance would neuter the rights of homeownership while offering no real benefits to the city.
January 27, 2015
Dear Mayor and Council,
Companies in Austin, and Austin’s overall economic vitality, will be impacted by your decision on short-term rentals.
You have seen an economic impact study which shows more than 2,500 jobs in Austin are supported by short-term rental activity and that the Austin area receives $234 million dollars per year in economic impact.
This does not include the innovative technology companies that choose to make Austin their home, including; HomeAway, TurnKey Vacation Rentals and many more. These companies employ more than 2,000 locals and are growing.
Austin has become a travel technology hub in part because of the success of HomeAway, which was recently acquired by Expedia. Because of homegrown innovators like HomeAway, other startups have moved here, or launched here such as KeyToAnywhere, BedandBreakfast.com, OnceThere, TurnKey, RideScout and Departure Lounge to name a few.
The technology eco-system which these companies created have the potential to turn Austin into a “Silicon Valley for Short-Term Rental Innovation” which will benefit tourists, homeowners, neighborhoods and businesses, both here in Austin and globally.
Your decision to turn an ordinance which was effective into an industry-killing regulation because of a small handful of problem operators will have a much larger effect; it will touch off a series of events causing employers to look elsewhere to locate, bringing their innovations, jobs and economic impact with them. You will effectively throw away the industry-leading legislative framework which the Council put in place over three years ago.
Please take time and consider the greater impact this decision will have on our community. Austin should not take our technology leadership status for granted. We are only here because our community draws great talent, and your decision will push talent and innovative businesses away.
Respectfully,
Brent Bellm, Former President & COO HomeAway
Carl Shepherd, Co-Founder HomeAway
Chris Loughlin, Former CEO Travelzoo
Eric Goldreyer, Founder BedandBreakfast.com
John Banczak, Co-Founder TurnKey Vacation Rentals
John Weimer, Founder OnceThere
Kim Shrum, Founder KeyToAnywhere
T.J. Clark, Co-Founder TurnKey Vacation Rentals
Several years back, when I opened my Twitter account this was my first tweet, “Don’t let software vendors hold your data hostage!” It was seen by all four of my followers worldwide. As you can tell, this is a subject I am very passionate about, and my tweet was an indication of my frustration with cloud-based software providers. Not so long ago, we all ran software systems that resided on servers and networks in our own offices. While this meant we had to purchase and maintain equipment, apply updates regularly, and have the local IT shop on speed dial, it did have its advantages.
Vacation Rental Managers (VRMs) often have to run 10 – 20 different pieces of software to effectively and efficiently run their businesses. There may be vendors claiming to do it all, but rarely is this the case. Accounting, payroll, reservation software, lead management, call tracking, distribution channel management, marketing automation, business intelligence, website design, and booking engines are just a few of the tools needed to run a successful Vacation Rental Management Company. Having all of these different systems running creates data silos and can make it nearly impossible to get the information you need to make good, data-driven decisions.
When we housed all these systems in our own environments, it was easier for one vendor to create custom extractions of another vendor’s data. The other vendor may not have liked that, but it was the way to quickly create interfaces. This made integration simpler in most cases and meant that the originating vendor of the system, whose data was being extracted, didn’t have to spend time creating and integrating Application Programming Interfaces (APIs) for other vendors and could focus on enhancements to their core product.
The World Wide Web has changed all of that. Most of today’s systems that we use to run a vacation rental management company are cloud-based. Cloud-based software has some very distinct advantages over on-premise software, which I won’t go into here; however, there is a down side. The data captured by cloud based software is also stored somewhere in the cloud. While this also has some appealing advantages, such as better security and hopefully good backups, it means that third party vendors cannot get to your data without the original software vendor creating an API to access the data.
Over the last 17 years that I have been a part of this industry, I have seen most software vendors create APIs to easily access the data in their systems. Yet, there are a few who lock this data away as if it were their own and refuse to let you use your data as you see fit. I think we can all understand not letting your competitor have access to your client’s data, and I certainly think it’s fair to charge a fee for custom interfaces. Nevertheless, vendors should view the data in their cloud based systems as belonging to you to do with as you see fit.
How can we to avoid getting our data trapped in the cloud? Following are some things you need to ask before buying software to help ensure you have access to YOUR data.
These are just a few questions you should be asking current or future software vendors to verify that you can use all the data that you have spent days, months, and years gathering in a manner that you see fit. If your vendor answers “NO” to any of these questions, I suggest you keep looking for the best open solution to drive your business in the future.
Cloud based systems bring many advantages over traditional, on premise solutions. The key for VRMs and cloud vendors is to confirm that interfaces exist between all these disparate systems. This will ensure VRMs have access to all of the relevant data to make solid, timely business decisions.
By Mike Hollibaugh
NAVIS | Hospitality Sales and Marketing Optimization
T: 1-541-617-2930 M: 1-541-410-0870
www.TheNavisWay.com
Growing a small property management company in a crowded market can be tough. There’s competition from other agencies as well as the ease in which independent owners can market and manage their own reservations. The cost of marketing is rising as the jostling to gain exposure comes at a higher price, and on top of that, navigating the onslaught of restrictions and potential rental bans can take a toll on all but the most persistent and optimistic managers.
But here’s the good news. More and more second home owners are appreciating the opportunity to gain income in renting out those homes instead of letting them sit empty. Just as guests look for uniqueness in a rental house and want to avoid sterile, cookie-cutter options, so owners are seeking management companies that will treat them as individuals and create a relationship with them. You just need to find them.
Given the growth of the vacation rental business, homeowners have more choice than ever before in the ways they can promote their properties. They are courted by listing sites, other boutique agencies, and the mega-property management companies, so to get in amongst the contenders requires a solid base. It’s not enough to be enthusiastic and motivated; you need to demonstrate a strong knowledge of the local business and the strategies involved in marketing to a wider audience. You also need the foundation of a great website (that’s mobile responsive), a robust reservation system, and a commitment to serving client needs proactively and responsively.
With a wealth of choices, prospective owners are looking for companies that can do much more than just deliver bookings. They want value for the commission they are paying and want to see that up front – not have to push for the details of how the Property Manager (PM) will manage the rental of their pride and joy.
It’s surprising how many vacation rental websites pay scant attention to owners with poorly presented information and little encouragement for them to ask for more. Motivating a new owner to sign up for more information should be a primary goal in an acquisition strategy. Following are some ideas to help you make your vacation rental website more appealing to this target audience:
There is no doubting the power of video in building trust and confidence. Create video testimonials from your current clients, a walkthrough of your office to introduce your staff, and a series of educational videos showing how to set a property up for rental. You can even use this medium to create digital handshakes. These are short 30-second videos that take the place of a written email response to an enquiry. They can be produced quickly and easily and embedded into an email to thank the owner for their interest in your company and to introduce yourself. It is a powerful strategy that requires minimal time and equipment yet will set you apart from the competition.
Smaller companies rarely have the budget for the wider marketing campaigns to attract new owners, so they need to find creative ways of getting the message out. Offering a referral program to your current clients is an effective method. Provide them with an incentive to refer you to their friends, family, and network who may also have second homes. This might be a cash incentive, a commission reduction, or other give-away. What works for an agency in one area might not be as effective elsewhere, so give some thought to a motivating offer. Make it easy for them by providing a physical folder they can share for personal referrals or a page on the owner section of your website (not public) that describes your referral program.
The relationships you develop with local vendors and suppliers can often result in the best referrals. Realtors, insurance agents, plumbers, electricians, and independent cleaning companies are all people who can carry your business card and recommend your services, so work on creating great relationships with them. This should be symbiotic, so you should also recommend their services to your new owners verbally or via your website.
Knowing who your ideal clients are and what they want from you, then showing how you can deliver outstanding results is the key to developing a powerful owner acquisition strategy. You cannot be all things to all people and won’t convert every prospective owner who comes your way, but by exploring every marketing opportunity you’ll have a much better chance of doing so.
By Heather Bayer
Heather Bayer is CEO of Ontario based CottageLINK Rental Management with 190 registered properties. She is an independent consultant to vacation rental owners and agencies, the host of the Vacation Rental Success podcast and founder of Cottage Blogger, an information site hosting over 375 VR-related articles and downloads at www.cottageblogger.com
If you haven’t heard of Tripping.com before, you will very soon. Founded by Jen O’Neal in 2009, Tripping.com has become the world’s largest metasearch platform for vacation rentals.
Partnering with major vacation rental sites such as HomeAway, Wimdu, VRBO, FlipKey, Housetrip, Interhome, Roomorama, Booking.com, and more. Tripping.com aggregates over five million listings in more than 100,000 cities into a Kayak-like model and allows travelers to easily compare vacation rentals across providers.
Co-Founder, Jen O’Neal knows a little about building up online marketplaces. O’Neal was one of the first employees at StubHub, which was acquired by eBay for $310 million. After spending a year in Costa Rica launching the North American Marketing Division for ParadisePoker, O’Neal was invited by StubHub’s Co-Founder to head up marketing efforts for Viagogo. While living abroad, she developed a passion for the industry while hosting well over a hundred travelers through various hospitality exchanges.
We reached out to Jen O’Neal to find out more about her motivation to start Tripping.com, where the company is heading, what challenges are present for online distribution, and what opportunities she sees in the future for the vacation rental industry.
Q: What motivated you to start Tripping.com in 2009?
J.O.: The original concept for Tripping.com was a social network for travelers. I’d been a fan of sites like CouchSurfing, but I felt there was room for improvement on both the technology and safety fronts. Travelers seemed to agree. When we launched the company from TechCrunch Disrupt in 2010, we grew rapidly and had users in 175 countries within the first 30 days.
In addition to the viral nature of Tripping.com, our growth strategy centered around creating partnerships with organizations such as travel groups and study abroad programs. Soon after launching, we had over 40 partners including Ivy League schools, the Peace Corps, AmeriCorps, AARP, and more. Those partnerships enabled us to not only grow at breakneck speed, but they also gave us a highly vetted, high quality userbase.
Although we pivoted a year later, our new model resonated with our original users and they continued to engage with the site. Those early users formed the core of our current user base, which helped us transition into our new business model.
Q: How has the idea behind Tripping.com evolved over the last 6 years?
J.O.: We made a major pivot in 2011. At the time, the vacation rental industry was catching fire thanks to the growing buzz around Airbnb and HomeAway. My cofounder and I are data-driven people, so we did an analysis on the market. Three things jumped out to us immediately: the market was enormous, the existing VR technology was easily 10 years behind hotels, and the entire space was intensely fragmented.
The fragmentation caught our attention more than anything. We reasoned that building a metasearch site would solve fragmentation, both giving consumers an easy way to find vacation rentals and giving rental sites additional traffic. In late 2011, just 30 days after reviewing our initial data findings, we relaunched Tripping.com as a metasearch site for vacation rentals.
The only problem was that we were three years too early.
The market wasn’t ready for metasearch, but Jeff and I could clearly see where everything was heading. We pushed forward. Our cash was limited (most investors weren’t willing to fund an unproven model), which made us scrappy and creative. By the time the market was ripe for a metasearch player, we were perfectly positioned to capture the opportunity.
Q: Is the market still fragmented?
J.O.: Yes! A report published by Evercore (see chart) earlier this year shows that there is still intense fragmentation in the vacation rental industry. To point, the top four players – HomeAway, Priceline, TripAdvisor, and Airbnb still only have about 22% market share. This underscores the value of metasearch and what we’re building at Tripping.com:
Q: How did your experience with StubHub and Viagogo help in your vision for Tripping.com?
J.O.: As an early employee at StubHub and Viagogo, I developed a love of marketplace businesses. I also got to see exactly what it takes to build billion-dollar companies both in the US and internationally, which has proven to be a solid blueprint for what we’re building at Tripping.com.
Q: With your experience in aggregating the eccentricities of the vacation rental industry, what strikes you as being the biggest challenge facing the industry?
J.O.: The shift towards instant bookings is a major challenge for the industry right now. This isn’t just from a technological standpoint. While users seem ready to whip out their credit cards and book rentals, we still see a significant amount of resistance on the part of property owners and managers. Major brands are trying to push hard for online bookings, which will ultimately advance the industry. With that said, it will still be a few years before the vast majority of properties can be booked with a click of a button.
Another challenge centers around calendar availability. In aggregating data from top rental suppliers, we often see inconsistencies in rates and availability. We work closely with our partners to solve these issues and we reward properties with updated availability data by moving them up in Tripping.com’s search results. That’s the beauty of a search engine; we can ensure that the best properties always go to the top of our results.
Q: To add to the question of aggregating vacation rental data, what – if anything – was easier than you expected?
J.O.: We only had a handful of partners for the first three years. This is because rental sites either didn’t have the capability to build feeds or they weren’t interested in working with us. Now we have a growing queue of over 200 rental sites that are waiting to get on Tripping.com. This has been a really nice surprise and it makes building partnerships easier than ever before.
Q: What does having a successful metasearch platform mean for vacation rental managers?
J.O.: Vacation rental managers who list on sites like VRBO and Booking.com (among our other great partners) are getting more bookings thanks to Tripping.com. We’ve really nailed the marketing side of the equation, which means that we’re sending highly qualified traffic to our partners. This traffic converts into bookings, which means that managers are filling up their calendars and making more money.
One important distinction is that metasearch increases the quality of users. This is because users can do an initial comparison on Tripping.com, find the property they want, and then click over to our partner’s site to book it. Since they’ve already done their research up front, they’re more likely to convert once they hit our partners’ sites. And of course this translates into more bookings for vacation rental managers.
Q: (In the preceding “funding” article, I am reporting on your Series B raise of $16M) Tripping recently raised $16M bringing your total to over $21M. What are your plans for the company over the next 12-24 months?
J.O.: We were excited to announce our Series B earlier this summer. The round was led by Steadfast Venture Capital out of New York and other investors including: 7 Seas Venture Partners (founded by Jeff Xiong, former Tencent CTO), Enspire Capital out of Asia, Fritz Demopoulos (Qunar founder), Erik Blachford (former Expedia CEO), Monte Koch (board member at Choice Hotels), and Drew Goldman (Head of Real Estate Investing for Deutsche Bank), among others. We’re also happy to have the continued support of Recruit Holdings in Tokyo and Quest Venture Partners, a Silicon Valley firm that led our Seed round.
We’re using this funding to fuel our growth, enhance our product, and aggressively expand into international markets. Since closing the round, we’ve substantially grown our teams in both San Francisco and Europe.
Q: How does Tripping.com fit in the overall vacation rental marketplace in relation to HomeAway, Airbnb and other distribution channels?
J.O.: An investor recently compared us to a spoke in a wheel. As the top metasearch site for vacation rentals, we sit in the middle of the industry by sending bookings to rental sites such as HomeAway and Villas.com. Though there is always a natural tension between metasearch sites and their partners (as we’ve all seen with Kayak, Trivago, and Expedia), our team is ruthlessly focused on helping our partners grow. We work closely with them to optimize conversion funnels and ensure that travelers have a great experience booking vacation rentals.
Q: Looking at the industry from your unique perspective, what do vacation rental managers need to do in order to be successful in marketing their properties online in 2016/2017?
J.O.: Great question. Based on what we can see, this is what I’d recommend for vacation rental managers who want to increase their bookings:
Managers often approach us directly, asking if we can help them price their listings to make sure they’re getting the most money for their properties. Our team is always happy to help with this, since our data enables us to actively and simultaneously increase revenues for both managers and our partners.
Q&A
by Amy Hinote
You have decided to find new software, a new marketing agency, a new travel insurance solution, or whatever the case may be. Maybe a company has approached you with a new idea, service, or offering. How do you go about making a decision? Is the best solution the cheapest or most expensive? Is it best to go with what everyone else is doing? Following are some suggestions on how to proceed based on what I’ve seen by being on both sides of the equation.
While running a sales and marketing division, I typically ran into two scenarios: we either needed to find a better way of doing what we were doing (pain) or someone introduced us to an entirely new concept (opportunity). Identifying and understanding which scenario we were dealing with was step one due to a variety of factors, but either one usually boils down to a cost/benefit or return on investment (ROI) analysis. Let’s take an in-depth look at the two scenarios – pain and opportunity – and discuss some possible approaches to each.
We’ve all been there – something about a product, service or technology no longer works. While on the surface it can often seem to be the actual deliverable, many times there are more subtle instances that cause us to seek alternatives. These instances can be personalities, response times, or increasing costs. The bottom line is that there is pain associated with this supplier, so the replacement process goes into motion.
This scenario is usually the easier of the two – you know what you’re currently getting (or not), what you’re paying, and the specific things you are unhappy with. The way to approach it is to define the list of pain and seek other potential suppliers about those specific things. Ask open questions, but stay focused. This will enable you to shorten the list based on the supplier’s responses, without getting into a full blown “THIS IS EVERYTHING WE CAN DO FOR YOU FOR HALF THE COST” discussion. Be wary of those suppliers that only want to introduce anything and everything, unless they specifically address the pain that is causing you to seek a better solution. This keeps emotion down and critical thinking involved.
As vacation rental managers, we’re often introduced to cool, new, shiny things at conferences, through direct marketing and by word of mouth. The conversation in your head typically goes something like, “COOL. WE HAVE TO HAVE THAT. Wait, how much is it?” You then begin the internal debate that includes questions such as: Is it worth it? Do I have the budget set aside (usually not)? How can I justify it?
This scenario typically requires more openness than Scenario One. Let’s say there are two companies that provide similar whiz bangs, and you set up a conversation with each. Look for two distinct approaches – the first one focuses on you and your business, how you do things, and looks for opportunities where either their product or service will drive value. Let them ask questions and answer honestly and you’ll quickly gain a sense for how much they care. The opposite approach is similar to the Scenario One conversation and is sometimes known as the “show up and throw up” approach. This supplier has gone to great lengths to make sure they have all of the latest and greatest features, that they know and understand what is best for you, without asking a single question. They simply don’t need to.
So how do you make a decision? In my experience, you stop looking for a supplier and instead focus on creating a relationship where everyone has a vested interest in the success of each other. In Scenario One, if a supplier will honestly and openly answer the questions that address the pain, I’m more apt to trust them. In Scenario Two, they demonstrate they care by showing that they are interested in my business and how we do things. They care enough to make sure that their whiz bang will provide value to my business by asking intelligent questions. Care and trust are two foundations of a great relationship, and that’s where the focus should be. Rather like dating, no?
By: Andrew Vick, President, Vick and Company
970.319.7614
andrew.vick@gmail.com
There is a significant technology trend occurring in the U.S. and other countries that is having a major impact on the vacation rental market – the adoption of Smart Home technologies by homeowners and Vacation Rental Managers (VRMs). This article examines the growth in the sector, the benefits and risks to homeowners and VRMs, and the best course of action for all.
Here are some stats to get started:
Yes, you read that right. Smart Home growth is expected to rival mobile phone growth. Fueling much of this is the growth in consumer awareness of the technology. Giants like Apple, Google, Samsung, LG and others are committing huge resources to the category and have invested hundreds of millions in marketing to shine a very bright light on Smart Home. Google’s purchase of Nest and Apple’s launch of HomeKit have brought more attention to the category and opened the eyes of many consumers to the advantages of Smart Home technology.
For the homeowner, Smart Home provides peace of mind knowing they have more control over their property, from remotely controlling locks and thermostats to being alerted when someone enters their home. Plus, there are significant cost savings that come from automating energy usage and controlling min/max temperatures. This is especially critical for vacation rental properties that often see guests leave the air conditioning on high after they check out. Smart Home automation provides alerts when thresholds are exceeded so that temperatures can be remotely adjusted.
Vacation Rental Managers are able to significantly reduce their risk and liability with Smart Home since they can eliminate hard keys, which are often lost, copied or stolen. The news is filled with terrible stories of vacationers experiencing theft and violence during their stay because of so many keys unaccounted for. Smart Home not only provides new lock codes for each guest, it provides the VRM with the ability to monitor and remotely control access and temperature for ALL their properties. Not having to send someone out to a property to let someone in or change the thermostat saves operational costs for VRMs.
In addition to Apple and Google bringing attention to the category, Samsung, LG and others are shifting their focus from mobile and TV to Smart Home devices. The result of all of this is that homeowners are increasingly eager for the added security and convenience, as well as the energy savings that Smart Home provides.
For VRMs, this has both good and bad ramifications. On the bad side, the more control homeowners have over their locks and thermostats, the less control this gives the VRM. There have been many reports from VRMs of homeowners changing the temperature of their home while a guest was occupying their property. That’s right – while the guest was there.
Of course, one of the positive aspects of the Smart Home wave is that homeowners are much more open to the technology and can thus be more easily convinced to go with a solution offered by the VRM.
It’s important to point out here that the market push by the major players is focused on the DIY/Consumer-Grade technologies. These are self-contained solutions that give the homeowner control of access and temperature for just their property, usually from their smart phone or other mobile device.
VRMs, on the other hand, require an enterprise solution that provides centralized control of multiple properties, something a consumer-grade solution cannot provide. It’s this enterprise class system that gives the VRM the type of property intelligence they need to see a complete picture of property status. This real-time information helps them to streamline turn days, improve operational efficiencies, and provide a better guest experience – things that every VRM wants.
So what should a VRM do? What’s the best course of action? As with any major trend, especially one that is changing the market in so many ways, VRMs need to get in front of the wave or they will find themselves struggling to catch up. If homeowners adopt Smart Home, which we know is already happening, VRMs will be relinquishing control of access and temperature. Once a homeowner has installed Smart Home, they will be reluctant to uninstall it.
VRMs should talk to their homeowners now and show them the advantages of an enterprise system that provides centralized control of all their properties. PointCentral, the leading provider of enterprise Smart Home solutions in the vacation rental market, has found that the large majority of homeowners are not only eager to adopt Smart Home, they are very open to covering the cost since they will be reaping many of the security and energy benefits.
The Smart Home wave is here and it is good for homeowners, VRMs and guests.
VRMs have a remarkable opportunity to help their homeowners, their guests, and themselves – by implementing Smart Home technology.
The key to this opportunity is to implement it before your homeowners. VRMs across the U.S. report that many of their homeowners are installing Smart Home because it provides better security and saves on energy costs.
But homeowners are installing consumer-grade systems that will give control of access and temperature to the homeowner, not the VRM.
VRMs need to install a commercial-grade solution that provides centralized control of ALL their properties.
Tnooz – Even as vacation rentals draw the scrutiny of regulators worldwide, investors continue to see enormous potential in the fast-growing industry.
Today, the last-minute marketplace for holiday rentals Snaptrip received a $2.2 million Series A capital injection from a group of investors, led by Bestport Ventures, which follows Forward Partners as the second venture capital firm to invest — in the latest affirmation of vacation rental bookings as an industry.
Based in London, Snaptrip has raised $3.25 million to date. It did not disclose what valuation was placed on it by the investors.
The startup said that it booked 30,000 customers last year. It claims to have have more British properties in its inventory than AirBnb, the vacation rental giant, which recently raised $1.5 billion.
About 18 months old, Snaptrip aims to distinguish itself from its better known rivals by focusing on offering what it calls exclusive discounts at the last-minute on selected breaks. Unlike some (though far larger) rivals, like Airbnb Homeaway, it claims 100% instantly bookable inventory with live rates.
In exchange for a person’s email address, it offers access to discounted rates on more than half of its listed cottages, the company said.
Snaptrip CEO Matt Fox said in a statement that the company will use the money to invest in marketing, product development, and hiring.
The funding round comes as regulators in Europe and elsewhere look to legally define parameters for the self-catering sector.
Sean O’Neill is Editor-in-Chief of Tnooz.
Before joining us, Sean was tech columnist at BBC Travel, senior editor at BudgetTravel.com, and associate editor at Kiplinger’s. He lives in New Jersey and on Twitter.
Editorial by John Banczak, Co-founder and Chairman, TurnKey Vacation Rentals
It would be virtually impossible for anyone involved in the sharing economy or vacation rental industry to be unaware of the increasingly complex and growing body of government regulations. Short-term rentals are a very attractive lodging solution for families and groups, and improvements in both the ease of finding and booking them over the past several years have enabled more and more travelers to take advantage of them. The increase in popularity has come with increased scrutiny from local governments as well as from lodging alternatives like hotels or B&B’s which view vacation rentals as competition.
Local governments and the American Hotel and Lodging Association (AHLA) presented recently at the FTC Sharing Economy Workshop made fair points that virtually all professional vacation rental property managers agree with:
· Vacation rentals should be a positive influence in the community
· They should pay the same type of taxes any lodging provider pays
· They should be licensed and regulated to promote these goals.
What Are Illegal Hotels?
The AHLA uses the phrase “illegal hotels” in a lot of situations. The origin of this phrase seems to stem from large apartment buildings in major metro areas that have been converted to handle short-term rentals. They often resemble hotels in just about every way – multi-story buildings with multiple units per floor, elevators, and a single investor/owner. The AHLA defined them as “individuals or companies operating multiple properties as a business.” While we believe the AHLA understands the difference between a true “illegal hotel” and a traditional vacation rental manager like Wyndham for example, there is some concern that the general public does not.
The “illegal hotel” definition more and more often is starting to be loosely applied to the traditional vacation rental management industry, which is entirely different from a metro-area illegal hotel. Unlike an illegal hotel operator, traditional vacation rental managers do not own units at all – they provide services to individual home owners much like any local service provider.
The decades-old vacation rental management business can be thought of as having two broad categories. The first are Resort Managers (RMs) – folks like Wyndham, Marriott, Westin for example that might manage a vacation rental structure that resembles a resort or hotel, and may have individually or corporate-owned units. The second category are Owner Service Providers (OSPs) – folks like TrueGreen, Lawnlove, America’s Swimming Pool Co, Merry Maids, TurnKey Vacation Rentals, Evolve, Handy, ARS, Paypal, Square, HotSpot Tax, even Wyndham in many areas, and thousands of small business across the country that provide some type of service for an individually owned primary or secondary home. OSPs help most vacation rental owners in some aspect of the process (such as a housekeeper, electrician or lawn service).
Should an individually-owned, single-story, single-family home rented for part of the year be required to have the same type of sprinkler-system, earthquake reinforcements, and health-code inspections as a thirty-story hotel in downtown San Francisco that has multiple restaurants and event catering? Few would agree. But should it pay the same taxes and not be a nuisance to neighbors? Absolutely.
Does a two-hundred unit, twenty-five story apartment building in Manhattan owned by a REIT seem more similar to the twenty-five story hotel across the street than it does a stand-alone single-family home in Austin, TX? It sure does, and the AHLA would have a good argument that that the fire code of the hotel and the apartment building in Manhattan should be similar, while the fire code on the single family home should not.
Do Resort Managers with multi-floor/multi-unit structures seem a lot like hotels? They sure do – many are owned by the same hotel companies represented by the AHLA. Does an OSP that helps an individual home owner take care of their property in some way resemble an illegal hotel? No, individually owned homes whether rentals or not hire all sorts of OSPs to help maintain their property.
Professional Vacation Rental Managers are Owner Service Providers (OSP), not Illegal Hotels
A traditional, professional property manager doesn’t run illegal hotels, they are an OSP that may provide a few focused services to owners, or they may provide a wide range enabling an owner a single point of contact for most of their needs. The easiest way to understand what traditional managers is to compare three examples of similar properties in an average coastal community. The first owner does everything on his own, the second owner uses a couple different OSPs, and the third has hired a full-service professional property manager to be their single point of contact. Each home is a single family residence, should have the proper permit to be a vacation rental and should pay all transient occupancy taxes due.
Our first example owner – Joe – owns a three bedroom home a couple blocks from the beach. Joe is retired and spends about four months a year at his vacation home. His primary residence is a three hour drive away. Joe manages most everything on his own – he has listed his home on VRBO since 1999, handles all of his email inquiries, phone calls, takes payment in the mail by check or online through Paypal, and serves as the guests only contact point. He contracts out to local cleaners or course, has a local lawn service, a pool service, a plumber and electrician he uses, and a contractor for larger repairs. He runs his own finances and is responsible for paying his own local taxes each month. He keeps things like spare sheets on site, extra lightbulbs, and has guests bring their own amenities like toilet paper, shampoo, etc. For the most part the rental runs smoothly, save for the occasional instances when Joe’s not available to answer the phone in an emergency, or there is a problem with the quality of housekeeping or pool service. Joe has plenty of time on his hand to handle all of the scheduling and has always been more of a do-it-yourselfer.
The second owner – Susan – owns a three bedroom home right next door to Joe. Susan spends less time at the home as Joe, living a couple hours flight away. Susan is an EMT and cannot be reliably available to answer emails or phone calls so he contracted with Evolve Vacation Rentals – a professional service that lists his property on VRBO, provides 24/7 phone and email support, and handles payments from guests. Susan likes that guests always can reach someone and he doesn’t have to worry about sleepless nights. She also contracts with Hotspot Tax to handle all of her tax filings. She’s always used H&R Block to do her taxes, and he likes the idea of a professional filing each month so it is accurate and verifiable. Susan uses the same local lawn service and pool company as Joe, but has a different housekeeper that she schedules himself, and her own plumber and electrician. She’s looking for a new general contractor as his recently moved out of town. The rental runs smoothly, save for the occasional issues that arise when the plumber is busy or the old general contractor couldn’t be found. Susan doesn’t mind doing a little work now and then, but feels that paying for phone, email and tax service is well worth-it.
The third owner – Fred – owns a three bedroom right next door to Joe. Fred uses the home just as much as Susan, and lives in the same hometown as Joe. He plans on retiring there to live full-time eventually. Fred used to manage his home on his own, but got promoted to a regional sales rep and is on the road most of the week with no time to schedule any of the services. Fred started using Beachwise Vacation Rentals as his OSP. Beachwise acts as a single contact for owners, providing a VRBO listing, phone and email services, and payment handling like Evolve does. Beachwise uses the same housekeeping company, electricians, and plumbers as Joe, but does all the scheduling of them so Fred doesn’t have to. Beachwise also provides regular inspections of the home and keeps basic supplies on hand for renters like toilet paper, shampoo, garbage bags and paper towels. Beachwise handles things like tax payments, they even verify each guest’s photo ID, put digital locks on the doors for added security, and hire a local private security patrol on weekends and during big events. Fred likes having one local point of contact – he is busy at work, and feels better having someone manage all aspects of his home – after all, he spent years saving enough money to afford a second home and wants to make sure it is well looked after.
Each of these home owners has chosen a set of OSPs that work best for their own situation. Whether a home owner is the do-it-yourself type, or they want to have one single point of contact – the combination of OSPs doesn’t change the characteristics of their homes in the community. The homes are identical, all providing the same type of rental to guests. Each home owner is free to switch their plumber, housekeeper or electrician if a newer, better, or less expensive provider comes along. Competition among service providers is strong in the USA and owners benefit from that competition. Beachwise, a single point of contact OSP simply bundles up services for owners that need more convenience.
The mere bundling of services however doesn’t change the home itself, nor does this bundling of services imply that full-service managers like Beachwise are running illegal hotels in their area.
OSPs vs Illegal Hotels
We doubt that the AHLA’s intention is to group traditional full-service professional managers into the same category as illegal hotels. We would urge them to clarify this position. Making it difficult to bundle services for home owners, or reducing competition among service providers wouldn’t do anything to curb the type of illegal hotels mentioned in the larger metro areas. It would only serve to hurt the hundreds of thousands of second home owners.
Professional property managers have been providing bundled owner services to individual owners for decades in a thriving, competitive local marketplace serving as a valuable OSP to almost half of all vacation rental home owners. We hope that the all of those discussing the issues in the sharing economy make it a point to fully understand that traditional vacation rental managers are not running illegal hotels, and to further define the type of lodging that has become problematic.
By Vanessa Humes, ICND — You’re probably tired of hearing about everything going mobile. It’s all you’ve heard about since responsive web design came on the scene a few years ago.
Responsive website design is the approach of developing a site that responds to a user’s behavior and environment based on the device, screen size, and orientation. As a result of the new device habits of your guests, they are booking with their mobile phones. If you are a vacation rental manager who is hesitant to make the investment into a new site or a marketing director who needs further ammunition to approve this expenditure on the next year’s budget, then we’ve got the fact and figures to prove – responsive matters. Mobile matters.
As a provider of custom vacation rental website development and marketing, we’re fortunate to have a large sample size of website data (via Google Analytics) at our fingertips. For this article, we included data from 16 sites taken as a random sampling. We analyzed the data from January 1, 2015 to August 31, 2015, compared to the same time period in 2014. If you like what you are reading, head over to our website www.icnd.net/mobile-study for a full view of our data and more takeaways. Below are some statistics we put together for you:
Log into Google Analytics to take a look at your own data. On the left side menu, click on Audience, then click on Mobile, select your dates from January 1, 2015 to August 31, 2015, and compare the data against the previous year. This will show you desktop, mobile, and tablet usage. It will break it down by traffic and the number of transactions (if you have Google E-commerce tracking set up). Chances are you are going to see your mobile traffic increase, desktop traffic decrease, and mobile transactions up regardless if you have made the move to responsive or not.
Why are we seeing such a jump in mobile users? There’s no denying that we use our phones more and more. As phones increase in size and capabilities, we are able to use them for more than just calling and emailing. Here are some statistics we gathered:
When you are looking to differentiate yourself from the competition, take a look at the behavioral actions of your customers. What percentage of users are accessing your site from a mobile device? What percentage of your marketing dollars lands in the hands of someone holding a mobile device? Is the user experience on a mobile device as good on your website as it is on your competitor’s? Think about these questions when you are looking at when and how to update your Vacation Rental website.
Written by: Vanessa Humes, ICND
Since 1999, InterCoastal Net Designs (ICND) has been serving a nationwide client base of vacation rental companies. ICND’s ability to build custom designed websites, digital strategies, and offer a suite of business automation tools has pushed ICND to the forefront of providers in the industry. To ICND, the guest experience starts with your website and marketing. They make it easy for guests to find you, search your site, book online, sign digitally, and plan their vacation all through the suite of products they offer. This allows you to focus on what you are good at – providing a memorable vacation to last a lifetime.
Be aware there are major changes coming with how you pay your employees. If you have salaried employees earning less than $50,440 per year ($970 per week) they will be eligible for overtime, if the Department of Labor’s (DOL) new Fair Labor Standards Act (FLSA) regulations take effect in 2016. Under the proposed rules the salary threshold would be set at $50,440 per year for the executive, administrative, and professional employee.
The overtime rules have not been updated since 2004 when the threshold of $23,660 ($455 per week) was established, and under the current regulations the salary threshold is below the poverty level for a family of four. The DOL intends to continue to raise the proposed salary threshold of $50,440 on an annual basis to keep pace with inflation.
The DOL stated that at “the proposed salary level, the number of overtime-eligible salaried white collar employees paid at or above the salary level would be reduced by more than 50%.” The DOL projects that the proposed rule will extend overtime protection to nearly 5 million white collar workers within the first year of its implementation. This will significantly impact the retail and hospitality industries and greatly affect small businesses.
The new regulations are coming and businesses will have to comply. It is just a matter of when.
A chief concern employers have with the proposed overtime rule is how they will afford the overtime for additional people, assuming the salary threshold for exempt positions is raised and more employees become eligible for overtime. Research from the National Retail Federation and Oxford Economics study suggests that employers will minimize the impact of the additional labor costs by:
Three scenarios provided below demonstrate how raising the salary threshold could significantly increase direct payroll costs, impact employee morale and engagement, and increase administrative costs and burden if you aren’t prepared to address these changes before they occur.
Scenario One: Raising the salary threshold will increase direct payroll costs. Consider the following example of how reclassifying a salaried employee as non-exempt can very quickly increase your payroll costs.
Scenario Two: Raising the salary threshold will have an impact on employee morale and engagement. Consider the following example of lowering hourly rates of pay to leave an employee’s total amount of pay unchanged (keeping both the employer and employee whole).
Think about this. The employee was salaried coming and going without recording their time. There was inherent flexibility and perceived “status” built into being paid a salary. Now the employee is required to record the hours he/she worked and be paid an hourly pay rate that could be perceived as a “decrease” in hourly pay, even though mathematically the employee is earning the same amount. Most employees will take their salary and divide it by 2,080 hours to determine the hourly pay rate. In this situation, dividing $35,000 by 2,080 hours equals an hourly pay rate of $16.83, not $14.30 ($35,000 divided by 2448 hours). As illustrated above, employees are going to have a hard time digesting this rationale.
Scenario Three: Raising the salary threshold will increase the number of employees classified as non-exempt which, in turn, increases administrative costs.
As revealed by these three scenarios, the proposed changes not only impact the financial aspects of your business they also have a significant impact on employees morale and engagement. Now is the time to get creative and develop strategies to incorporate into your business to minimize the impact of these changes. Make a plan now so that you don’t absorb additional labor costs and you continue to keep your employees engaged. Listed below are some proactive steps to consider as you begin to plan for these changes.
The DOL ended a 60-day review period for the proposed rule September 4, 2015. The final rule is expected to take effect sometime in 2016. For more information and updates on these changes visit the following websites:
Department of Labor Overtime Pay Resources at http://www.dol.gov/whd/overtime_pay.htm
Department of Labor – Frequently Asked Questions at http://www.dol.gov/whd/overtime/NPRM2015/faq.htm
Society for Human Resources at http://www.shrm.org/pages/default.aspx
About Sue Jones
Sue Jones, founder and managing director of KLS Group, is passionate about creating strategic human resource programs and services to effect positive change in organizations. She is an innovative HR leader experienced with both large and smaller businesses. Sue has worked in many different industries and is adept with transferring her knowledge, skills and abilities across business channels. An experienced HR professional, Sue brings a fresh approach to her clients, addressing their needs in a personalized manner. Sue is a Veteran of the US Navy, holds a Master’s Degree in Business Administration from Northeastern University and is both SHRM-SCP and SPHR certified.
About KLS Group
Today’s business landscape is complex. Companies rely on KLS Group for all of their human resource needs, from consulting to training to recruitment. Based in Bend, Oregon, KLS Group serves businesses large and small throughout the US.
The KLS Group, keeping life simple. Please visit us at www.theklsapproach.com
When it comes to information, the balance of power has shifted to the caller’s side of the equation. In the not so distant past, those planning a vacation had very little information. Some only had the name and 800 number of the rental company they got from the phone book or a small advertisement. Others might be looking at a thumbnail picture and a few bulleted features listed in the company’s “annual planner” directory. Alternatively, today’s callers are armed with a seemingly infinite amount of information prior to dialing our phone numbers. Many have read online guest reviews specific to the rental home they are interested in. Most have viewed numerous photographs; some have even taken virtual tours, and if your company is really up on innovations, they might have even seen 3-D floor plans. The research callers have done often results in them knowing more about a specific rental home than the reservations agent who fields their call!
Yet still they call our 800 numbers! Had you surveyed marketing professionals in the VR industry in the early 2000s when everyone was rushing to put everything online and asked them whether they believed people would still be calling in to book in the year 2015, most would have answered no. This begs the question: Why do they still call?
With most vacation rental companies offering online booking systems, one thing is for sure; they are not calling to find what is available. They already can see that online.
Yet being in the mystery shopping business, when I call most VR companies their agents seem to have what I call a “website search support” paradigm; these agents perform as if they were in a “tech support” department that exists to help people search availability. In other words, they approach their job as if it was to help callers find a list of homes that are available for their requested dates. As I often exclaim to my participants, “THEY DON”T NEED US FOR THAT!”
Still other agents have been trained by well-intentioned marketing executives to approach their job as if they worked in the “marketing data collection department.” These agents start off a call by asking right up front for contact information such as a full name, a phone number, even though it likely displays in caller ID, and an email.
It is certainly a good idea to ask for a caller’s name so that it can be used to personalize the call; however it should be up to the caller to self-identify by their first or last name. (If a full name is given it is a good idea to use their surname to error on the side of being too formal.)
Likewise, later in the call (after you have connected with the caller) it is definitely a good idea to secure a caller’s email address so that you can follow-up non-booked inquiries by sending an email to recap what was discussed, and also good to ask for a phone number to follow-up “Just to see if you have any questions or what else we can do on our end to help you plan your vacation.”
Yet when agents are trained to ask too many of these “marketing data collection” questions up front before building rapport, it sets the tone for a “transactional” as opposed to “conversational” interaction.
Guests (and customers in general) these days are looking for genuine authentic connections. This seems to be the hottest topic at recent lodging industry conferences. For example at the recent Southern Lodging Summit that was held in Memphis in August, 2015, several executives were quoted in HotelNewsNow.com in an article entitled “Hotels Embrace The Age Of Authenticity”:
“There’s no question the authenticity of an experience is what drives guests…” said Robert Cole, President and COO of Atlanta-based Hospitality Ventures Management Group. “Guests are demanding authentic experiences in locations where they’re staying,” added Michael Tall, President and COO of Charlestowne Hotels. “In terms of uniqueness and authenticity … it’s about pulling back the magic curtain of operations…” said Dana Shefsky, Director of Digital Product Innovation for Hilton Worldwide.
Perhaps Jordan Bartells, who is GM of the Hotel Indigo Pittsburg East Liberty, said it best in his quote from HotelNewsNow article on July 6 of this year: “Our goal is to make things less of a transaction and more of an interaction. … You can almost tell when people are going through the motions. Engaging the guest is the most important part.”
Therefore, the best approach circa 2016 is for reservations agents to use an engaging, customer-focused and conversational sales style. Here are some training tips:
By Douglas Kennedy, President, Kennedy Training Network
2514 Hollywood Boulevard, Suite 406
Hollywood, FL 33020
Mobile: (954) 558.4777
Office: (866) 922.4662
By Philip Minardi, Short Term Rental Advocacy Center
Over the past year and a half, the Short-Term Rental Advocacy Center (STRAC), a program of the Travel Technology Association, has been active in growing a broad-based coalition of property owners and managers, hosts, travelers and businesses that recognizes the value of short-term rentals to both travelers and the local communities they visit. The Travel Technology Association believes that municipalities and states should embrace this economic opportunity and work with all industry stakeholders to establish a reasonable, pro-growth framework for regulating short-term rental activity so that everyone involved can benefit.
Over the past year, the rate at which short-term rental activity across the nation has been confronted with the threat of new, burdensome, and often existential regulatory action has truly been astounding. Small vocal minorities have emerged in towns and cities around the country – and indeed across the world who advocate for the outlawing of short-term renting. Often bolstered by the network and financial support of commercial interests like the American Hotel and Lodging Association (AH&LA), these anti-STR stakeholders have leveraged exaggerated misinformation and scare tactics to urge local policymakers to act quickly and without proper consideration on laws that stifle the short-term rental industry, property owners and managers and the travelers who utilize their valuable services.
The most unfortunate component of many of the regulations proposed in recent months has been that they are often driven by isolated cases of problem rentals, and count on the fact that most municipal officials are part-time policymakers without the time or resources to gather facts and consider the ramifications of the actions they are about to take.
A few years ago, new short-term rental regulations being proposed at the state and local level were a growing concern for the industry. Today, they represent the proverbial barbarians at the gate for all those involved in the short-term rental ecosystem: travelers, managers, hosts, homeowners, local businesses, and the community.
The simple reality is that with easy access to technology and more choices than ever before, travelers are increasingly looking for short-term rental accommodations that provide flexible housing options and allow them to spend longer periods of time in communities, in a unique setting, all while contributing to the local economy. As such, it’s only logical that municipalities embrace this economic opportunity by working with industry stakeholders to establish a reasonable framework for regulating short-term rental activity so that all may benefit.
As we work toward improving the regulatory environment at the state and local level for short-term rentals, it is essential that such regulations are developed to protect the community, property owners and managers, hosts and travelers. But it is only in an environment where all parties are part of the ongoing discussion that fair and reasonable regulation can be achieved. Absent this collaborative effort, we will continue to see instances where groups of small vocal opponents call for swift and baseless action that undermines the industry and limits choices for travelers. It is our responsibility as stakeholders to understand that reality and work to counter the threat we now face.
Unfortunately, such collaborative discussions rarely take place. This must change.
In the meantime, policymakers continue to move quickly to adopt oppressive or limiting regulations on short-term rentals, creating laws and ordinances that lead to the detrimental effect of driving our valuable industry underground, effectively eliminating accountability and depriving communities of any corresponding tax and revenue benefits. We know that communities throughout the United States rely on local taxes to promote travel and tourism, and the fair and reasonable regulation of short-term rentals has the ability to ensure increased compliance, and in turn, increased tax revenue.
What does smart short-term rental legislation look like? At its core, effective and sensible short-term rental regulation allows municipalities to easily identify and contact a short-term rental owner, make the tax collection and remittance obligations clear, and ensure that short-term rentals remain an option for owners, manager and travelers. Just as importantly, smart regulations balance the needs of long-term residents and the community as a whole. In order to do so they rely on fact based methodology and collaborative efforts in developing fair and reasonable regulations.
Over the last year, Travel Tech has worked extensively with groups throughout the country to help reinforce the important core concepts that policymakers should consider when crafting or amending any short-term rental regulations.
While many local policymakers are often willing to recognize the value of short-term rentals in providing flexible accommodations to visitors, it is the questions surrounding safety regulations, tax collection and remittance and the ultimately accountable party that often drive any short-term rental conversation.
Now, more than ever, the willingness of all parties involved in the short-term rental industry to work together, is vital to the success of the industry. Working in concert, we can help develop an open and transparent dialogue among policy makers, industry stakeholders, property owners and our local communities. Such a collaborative effort is the best and only chance at stemming the tide of poorly contrived short-term rental regulations. So, let’s talk.
As the volume of vacation rentals and the competition increases, guest acquisition is at the forefront of many Vacation Rental Property Management Companies’ concerns to increase profitability and marketability. However, what most Vacation Rental Managers (VRM’s) need more than new inquiries are better strategies to focus on the leads that have the most conversion potential, as well as the strategies and tools that will convert them to repeat guests. Otherwise, it can be like trying to fill a bucket with a hole in the bottom.
With an avalanche of leads coming in via email, websites, listing sites and phone, it is becoming increasingly difficult for VRM’s to stay responsive. Managing all of the listing leads especially, is time-consuming and sometimes overwhelming. In many cases, inquiries are coming from travelers ready to book quickly and are expecting an immediate response. It’s also a challenge to know exactly which listing sites attract the most qualified inquiries and which are most likely to book. The urgency of following up can often end up taking priority over being strategic and efficient. Without the right tools and process in place, it is scattershot. VRM’s need ability to ensure timely response to all the leads managed to maximize bookings, revenue, and guest experience.
What if, instead of focusing on only filling the funnel with inquiries and the hefty price tag associated with it, VRM’s focused on converting more of these existing leads and winning their repeat business? After all, repeat guests are exponentially more prized than new guests are. Repeat guest bookings cost less to acquire, and according to a Gallup study, engaged guests (a category that includes repeat guests) are all around not as price sensitive. In fact, a review of spending patterns across more than 91,000 reservations shows that repeat guests spend from 13%-29% more than first timers.
Consider the following:
When it comes to profitability, there is no reservation more valuable than that of a repeat guest. Consider every first call, first click, and first walk through the door as an opportunity for a lifelong, lucrative guest relationship.
World-class service begins with reservations agents who make a quantifiable difference when it comes to guest revenue. Repeat guests who book via the phone channel spend 29% more than new guests who book via the phone channel. Studies also show that new guests who book via phone spend more than those from any other channel because it offers an immediate opportunity to build a personal connection, making it more likely to reap significantly higher share of wallet. Therefore, VRM’s should ensure that all reservations agents keep this in mind when answering inquiries, and consider increasing agent incentives for repeat-guest reservations.
A guest retention program may include all of the above strategies as well as a marketing component that uses lead management to automate and track campaigns to previous guests based on trends (seasonality, weekday, weekend), preferences, and behaviors. Regular nurture campaigns through multi-channel touchpoints to past guests are essential to capture the full potential of repeat guest business.
Consider finally that a loyal, repeat visitor will attract even more loyal, repeat visitors. In the hyper-connected world in which we live, creating loyal guests has the potential to open up your vacation rental audience substantially. When a guest posts on Facebook or shares photos of their stay on Instagram-especially those repeat guests who share regularly-that advocacy builds trust within their circles, attracting new business and maximizing your Guest Lifetime Value (GLV).
The ideal solution to this problem is NAVIS’ suite of solutions for all Vacation Rentals (VR’s) of different sizes. Comprehensive lead creation, management, tracking and analysis software will transform any call, email, website contact, listing site inquiry or interaction into a current and future sales opportunity. Through NAVIS’ integrations with your existing PMS and HomeAway services, in one convenient place you can ensure prompt, high-quality guest experience and maximum revenue and profit. NAVIS offers the right solutions at the right price for the VR Market.
About NAVIS
NAVIS is an award-winning reservation sales system company that increases leisure voice booking conversions and bottom-line leisure revenue for resort, hotel, and vacation rental companies. NAVIS provides a proven system that enables clients to build reservation sales and marketing decisions on accurate, real-time data. The NAVIS system uncovers previously hidden revenue sources. It provides operators with 100% of the revenue source picture, not just online and social media bookings. It implements powerful outbound leisure sales strategies and measures true marketing ROI for each online and offline campaign. NAVIS captures guest and prospect data, tracks key revenue metrics, and provides 24/7 reservation call center services to help operators increase occupancy, ADR, and close more leisure business. To learn more visit www.thenavisway.com
About Michelle Marquis
Michelle Marquis is Vice President, Marketing and Strategic Initiatives at NAVIS. Michelle joined NAVIS in 2006 after serving as Director of Sales and Marketing at Mount Bachelor Village Resort in Bend, Oregon. As a previous NAVIS “power user”, she successfully utilized The NAVIS Way to help her resort increase their conversion rates and bring in incremental revenue from their existing call volume. Michelle draws on her 20+ years of hospitality sales experience heading up the NAVIS Sales Consultant team. As NAVIS continues to grow at a rapid pace, Michelle also focuses on the company’s strategic expansion and exciting path to international markets. She is a frequent speaker at numerous hospitality events around the U.S., including the Google Travel Conference, HSMAI and Preferred Hotel Group. Michelle has a deep understanding of what it takes to drive revenue in the hospitality industry and is driven to help hotels, resorts and vacation rental companies be more successful.
By Tim Cafferty GRI, ARM
Recently I was requested to reprise a seminar I first conducted in 2006 on behalf of VRMA. “An Introduction to Homeowner Relations” was the original title of the 3 hour course that I taught in San Diego at the annual conference there. The challenge to make this course a webinar for a 2015 audience was to convert the material from paper handouts to colorful power point slides and to trim the time to 50 minutes. Now, for the purposes VRM Intel Magazine I’ve got just 1800 words that you can peruse in less than 10 minutes! With this in mind here are some key points to consider on this vital aspect of vacation rental management.
We are The Middle Man
One of the very basic points of vacation rental management is to understand that we are paid to be the middle person in the relationship between guests that wish to experience a vacation rental property and the property owner that has the desire to profit from their investment. The key to success is remembering the property owner provides us the platform for our business, but ensuring you communicate expectations to what in effect is your business partner (the property owner).
Just as in life, successful partnerships require clear communications, and a common bond of a positive outcome in the relationship. Failure to set expectations from the start is often the key element in a relationship going bad.
What is Your Why?
Certainly before any partnership with a property owner can take place comes the courtship phase. Much like a life-partner relationship, you need to differentiate yourself from all other prospective suitors. I call it the “why.” Why you? Why should I place my future in your hands? Why are you going to be a better choice for me than the company down the street (or than I can do for myself)? Is it your delivery of service, superior housekeeping, above market income generation, technology, or your outstanding staff? What exactly is your “why?”
Remember when you got your first contract from a property owner that chose your vacation rental firm? That was a wonderful time! You provided information to the owner, you probably met with them (several times) and your charm and business acumen won them over. It was a time when you felt vindicated, and energized about your work. It was also a time when you focused on the “why.”
As time goes on many of us forget that wonderment, and it may behoove some to step back and answer the tough questions just as we did in those golden days. What was it that set you apart? And is that same “why” valid today as prospective new business partners put you and your company to the test?
I submit that it is more competitive today in the vacation rental business than ever before. Not only do you have the threat of business loss to the company down the street who promises half price commissions, rebates, or other creative inducement, but the shared economy has property owners believing that the value of a professionally managed property may be overblown. Never before has there been such a forum for do it yourself vacation rental owners as there is today, and if you are finding, as I have over the last few years that many new vacation rental owners are new to the experience you indeed have to have a steely focus on your “why.”
Delivering on Your Promise
Once you resolve the meaty issue of your “why” comes the phase of the relationship I will call the operations phase. Things are going along as expected. You are delivering your promise of performance. Bookings are good, housekeeping is performing perfectly, guests are doing their part, and in short the operations of the vacation rental are percolating like a fine tuned Proctor Silex (that is an old school coffee maker for you younger vacation rental managers out there). But then something happens.
Just as with a life-relationship that hits the rocks a business partner relationship too can have issues that can be drilled down to poor communications. The owner starts to feel differences in how they are valued by your firm. Maybe a work order or four are charged incorrectly. A blip in their housekeeping happens, or heaven forbid a guest review makes them question what “you people” are doing. “I don’t know you anymore.” “You don’t care like you used to.” “You’ve gotten too big.” These are all comments that may be stated by a property owner that starts to experience doubt.
I firmly believe many issues that surface can be traced directly to poor communications. The truth is that you HAVE lost focus on communicating that value proposition (the “why”) back to your property owner on a daily basis. Or maybe you didn’t have “the talk” with them about what expectations they should have, and you unfairly were expected to perform to a standard that you never realized was in place in the mind of the property owner.
That’s when you need to hold the proverbial mirror up in front of you and determine how you can not only recover the once trusted relationship with that owner that believed in you, but also deliver the value proposition each day to all of your property owners.
That mirror often does not provide a flattering image. Consider the five W’s of news reporting. Who? What? When” Where? And Why? How do you communicate with your owners? Is there another way? What are you communicating to your owners? Should you be communicating more and in different ways? When are you communicating? In a timely and appropriate forum? And probably the most important one (again) why are you communicating? What is the purpose of your contact?
If you don’t tell them who will?
I submit that if you do not advise your owners of what you are doing for them then no one else will volunteer for the job. Isn’t that a self-serving philosophy? You bet, but again your job is to ensure that your business partner feels good about your relationship whenever they think of you.
Communication is so vast and varied these days that you should explore this with your team. From owner’s statements to social media we have so many channels of communications with our property owners that we should be clear on which the best are and how they will be used. I never thought for instance that I would be text messaging a homeowner when I first wrote this course 10 years ago, but I do it every day now.
One time consuming, but potentially valuable tool you may consider implementing is an Owner’s Manual that you would present to your business partner at an appropriate time in your relationship. This booklet might be 10 pages, or it may be 100 pages, and it would outline how you do business. This is what we do, and this is something we do not do. This is who you call to get this done, and please don’t call us to do this for you because we don’t do that. Something to consider no matter if your company is just getting started or has been around for decades.
Building Loyalty
One of our last points to consider in the discussion of property owner relations is the idea of building loyalty. Obviously delivering on your mission is a key in how you are perceived by your owners. If you consistently deliver on your promise of performance certainly you will build loyalty, but over time there are numerous opportunities you have to point out to your owners just how lucky they are to have you as their VRM. From annual homeowners gatherings at your office complete with a band and booze, to discounted services from local vendors, to gifts, to no charge work orders, to something as simple as a handwritten anniversary card marking when they joined your program there are countless ways you can think of to outwardly show appreciation for your business partner.
Making your owners feel appreciated is a great way to build good word of mouth, and what better referral can you hope for than one from a happy and satisfied business partner?
Analyzing the Relationship
Finally when speaking of property owner relations there comes the point of analyzing the relationship. First you should analyze your business plan. Amy Hinote delivers thought provoking articles on her website (www.vrmintel.com), and recently she had a great discussion about whether VRMs should look at quantity versus quality when it comes to building their footprint. There was significant data in the article I reference to make one realize that growing your firm solely by adding properties to your inventory may not be the most profitable or appropriate philosophy. Bigger is not always better, especially when you consider the wear and tear on your staff with some owners.
Whether you analyze relationships automatically each year or not there should be a point in time when you take a hard look at not only your delivery on the promise of performance, but also analyze what your business partner has brought to the relationship. In short, are they doing their part in the relationship? If the answer is not a resounding yes, you should go back to the communications portion of this article and read that carefully to ensure you are not to blame, but short of that you need to make a hard decision regarding the future of your relationship.
As alluded to above have you considered not only how you are treating your property owner, but also how they are treating you and your staff? If you conducted a poll of your staff of the top protagonists and disruptions to their work would certain owners be at the top of everyone’s list? If so, you may need to consider the reality that your staff, and your firm may be better served without this particular business partner. The proverbial scales of justice may come into play in terms of the amount of money you make from a property versus the angst your team has to deal with, but I can tell you from experience that the loss of one property owner may open the floodgates of productivity for your team.
And In Summary
So as you consider the myriad of property owner relations (note I never used the term “home owner” in this article….these are not their homes, and that is another article altogether) the key points to remember are knowing your “why,” communications, and constant evaluation (of your company and your business partners). If you build off of that base you can’t go wrong!
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