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It may be one of the best times to sell a vacation rental management company, but are you ready?

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VRM Intel Staff
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By Greg Herr, Weatherby Consulting — It has been an exciting few years in the Vacation Rental Management Industry and the next few years look to hold as much, if not substantially more, prospects for growth and success. An overall improved economy, low interest rates, and an increased awareness in the Vacation Rental Management space has led to many significant acquisition transactions. The industry and, more importantly, well-managed companies within the industry are clearly recognized as stable and profitable ventures. At the same time Vacation Rental Management Companies face new and increasing challenges that are applying significantly more pressure to their ability to run a successful and increasingly profitable operation.

Does this environment of acquisition activity and increased challenges for independent Vacation Rental Management Companies mean it is time to consider selling? The simple answer might be YES, but are you prepared to maximize your net proceeds and exit the business successfully? The answer to this question, it is as much about the current industry environment, the business you have built, and just as importantly, the process you leverage in considering an acquisition. Let’s dig deeper into all three…

 

Market Conditions

Clearly an improved economy has benefited the travel industry as a whole. Occupied nights are up significantly and average rental rates continue to improve and increase on an annual basis. Visibility and recognition for the Vacation Rental Industry, as a whole, also continues to grow which has led to new found popularity among companies looking to invest or increase their holdings in the industry. As mentioned, vacation rental operations are increasingly seen as a stable and profitable venture when reasonably managed.

These economic and industry specific factors have led to a significant increase in acquisition activity and will continue to drive substantial buyer interest for profitable and well run independent Vacation Rental Management Companies. The increase in demand makes now an excellent time to capitalize on a sale and secure a successful exit strategy.

 

New Pressures

Running a successful Vacation Rental Management Company can be as challenging as ever. Business owners are felling these pressures in the form of new technologies, new business models, additional regulatory scrutiny, increased operational costs, and increased marketing expenses. At the same time, the challenge to acquire and retain rental owners is more competitive than ever. As expenses continue to increase, certain revenues are not increasing at a commensurate rate, creating a need to financially manage at a more granular level.

 

Talking Tech

Of course, technology is playing a larger and larger role in the day-to-day operation of Vacation Rental Management Companies. Never before have there been so many solutions to enhance revenue, mine data, and market to past and potential guests. New products and integrated solutions for property management software, customer relationship management and responsive web technologies give Vacation Rental Managers (VRMs) the power to operate on the cutting edge, but at a cost. Ben Edwards from Weatherby Consulting states, “Many VRM’s are behind the curve relative to new technology. Incurring the capital expense to purchase and incorporate the often necessary upgrades can be daunting. In some situations, this may drive an acquisition transaction where the buyer has already implemented newer technology and can onboard additional inventory into their platform fairly seamlessly.”

In addition to new technologies that drive and improve the overall business, there is an increased necessity to be in compliance with enhanced security measures. Of course, you need to accept on-line bookings, but are you fully Payment Card Industry (PCI) compliant and prepared for a cyber-attack on your data? The days of tape charts and hand written registration cards have been gone for years, but in our new cloud based reality what does it cost to protect you, your owners, and your guests?

 

New Models

As always, the internet is both the best thing and the worst thing at the same time. As stated previously, Vacation Rental Management Companies have more internet based technologies available to them than ever before, but on the downside cutting edge internet based solutions and new stripped down business models allow easy entrance into the market place. Owners that turn to self management often apply downward pressure on rate integrity while forcing traditional full service Vacation Rental Management Companies to be more competitive on commission rates.

 

Rash of Regulations

For years, typical Vacation Rental Management Companies have been the stewards of following the rules while new entrants and entirely new business models have flown under the radar. In an effort to ensure the full collection of sales, lodging, and other applicable taxes local, regional and state authorities have become more aggressive when it comes to short-term rentals. In addition, local officials are feeling the pressure from primary home owners to “control” situations such as excessive occupancy, parking, trash collection, and other issues. Again, Ben Edwards from Weatherby Consulting states, “I’ve noticed an increase in regulations, and the costs associated with those increases, throughout the industry. Whether it is restricting rentals to a minimum of monthly stays in parts of California to reducing the availability of parking in beach markets of Florida these additional regulations can hurt revenue while increasing costs.”

 

Increased Operational Costs

Everyone has felt the pinch over the last number of years and we all know the drill. Costs are rising, and as the unemployment rate drops, operators are forced to increase wages to attract and keep good employees. The cost of supplies and services provided by vendors are also on the rise. At the same time, commissions continue to remain static, or worse, may even drop in certain competitive landscapes.

 

Increase in Marketing and Distribution Costs

New technologies have brought an almost endless array of paths to reach potential guests, but the costs to access these paths can be staggering for a Vacation Rental Management Company utilizing older technologies. Leveraging responsive web design is critical in delivering content across all platforms, but most importantly mobile platforms. In May of 2015, Google officially announced what we all knew was coming – more web searches occurred on mobile devices than on desktop computers. Fully responsive websites with integrated booking engines bridge the device gap but can come with a premium price tag. Even with responsive tool sets, the cost of Search Engine Optimization and Search Engine Marketing continues to grow. Not only have the Search Engine Marketing costs increased, in general, with an increase in market specific competition, but new forms of SEM have been added to the mix. Rebranding display ads that provide impressions and conversions throughout the relevant Google Display Network are becoming more effective and a necessary way to stay with, or ahead, of the pack.

The squeeze is also felt from the distribution side of the business. The largest and most effective channel partners continue to push for higher net rates or larger commission structures. While 10% to 15% had been common place for these distribution avenues in the past, 20% to 25% is becoming the standard. All this leads to a significant increase in the cost of acquiring a guest.

 

Getting & Keeping Owners

As these pressures build, it seems one of largest challenges operators face is obtaining and keeping quality rental owners and their rental properties. Not only do Vacation Rental Management Companies have more options, paths, and opportunities via new technologies so do owners. It is easier than ever for an owner to “jump ship” in favor of listing based self management or a hybrid of listing services and reduced local services. This forces operators to consider reduced commission rates or adjustments to the services they provide.

 

Are You Ready to Sell?

Chances are you built your Vacation Rental Management Company from the ground up with ample amounts of sweat, long days, and more lost weekends and holidays then you can count. Understanding why you may be interested in selling is the first step, and maybe the hardest, but if you are sure then applying a strategic plan is critical. At this point, it is highly recommended to seek the help of a transaction advisor that is intimately familiar with the Vacation Rental Industry.

 

What is your Vacation Rental Management Company Worth?

Ben Edwards with Weatherby Consulting has facilitated many acquisition transactions in the Vacation Rental space and says the help a consultant can provide often is the difference between a good deal and a bad deal.

Edwards explains, “There certainly is a list of critical items to address. Creating a grounded and sound market valuation for the business based on past financial performance is key to a successful start to the process. Having the proper non-disclosure agreements and a confidential offering package to articulate the value, culture, and story of the business brings the best potential buyers to the table. Understanding the differences in closing options in relationship to your goals ensures the transaction will meet your needs.”

Establishing an accurate valuation and offer package involves many elements. Edwards continues, “Having a top-tier financial package certainly makes a difference, and taking the time to normalize the financials of any expenses unrelated to the direct operation of the business can result in a large increase in the purchase price. In my experience, most Vacation Rental Management Companies have a very compelling story relating to their success. It is imperative to tell that story. It is also important to take the emotion out of the transaction and allow the advisor to secure the highest value for the business possible.”

Valuations are most often based on multiples of EBITDA making a solid presentation of normalized financials critical to obtaining the best purchase price possible.

 

The Art of the Deal

The difference between a good deal and a bad deal is often understanding your goals and the possible options. Ben Edwards explains, “There are generally three types of Vacation Rental transactions in today’s market: 1) Transactions that involve all cash at closing; 2) Transactions that involve a material down payment with guaranteed cash payments, plus interest over a set period of time; and 3) Transactions with an amount paid down and payments tied to some form of operating metric or earn-out over time. Transactions with purchase price payment terms similar to type 1 and 2 are the best course of action for Vacation Rental Companies. When an earn-out or contingent payment is involved, all of the risk lies solely on the Seller.

Taking that amount of risk is not prudent, as it clearly favors the buyer, creating a heavy handed scenario, while leaving Vacation Rental Company owners with significantly less value.

 

Should I Stay or Should I Go?

Of course the most obvious factors in this decision are financial. Is the purchase price appropriate and are the closing terms favorable and acceptable? Will the offer satisfy your financial goals for the next phase of your career or retirement?

However, in considering an offer to sell, you should consider all factors including non-financial factors. As an example, how will the business be managed moving forward and how will current staff be transitioned? Are you ready to move on and let go of the business? Often times aligning with a buyer that shares a similar business philosophy and vision for the business will provide the seller with the peace of mind to move on.

Indeed, it may be one of best times to consider selling a Vacation Rental Management Company and with the assistance of a trusted, experienced, and knowledgeable transaction consultant and a sound strategic plan, maximizing your net benefit is certainly within reach.

Takeaways from OPMA Fall Executive Summit

By
VRM Intel Staff
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The Onsite Property Management Association (OPMA) held its Fall Executive Summit Nov 17-18 in Tampa, FL. This forward-looking conference addressed a multitude of high-level topics and opportunities for onsite rental property managers representing the hybrid condo hotel lodging sector.

OPMA is made up of onsite rental property management companies and provides education, advocacy, and the promotion of the value of the rental experience through onsite property management companies.

 

Key takeaways from OPMA’s Fall Executive Summit

 

Jeruel Photography www.JeruelPhotography.com ©1. Know the impact of your business on your economy.

Dr. Steve Morse, Economist and Director of Hospitality and Tourism Program College of Business, Western Carolina University College of Business, presented a “How-To” session on determining an OPMA member company’s economic impact.

Morse said, “Every property management company should know their economic impact and should have these numbers available at any given time. It is imperative that you make a conscious decision to show your economic impact to community leaders.”

Morse identified four metrics that a vacation rental manager should know:

  • Spending Created
  • Jobs Created
  • Worker’s Paycheck
  • Taxes Generated

Dr. Morse, working in concert with one of the OPMA members, produced a beta test model in a major vacation rental market which was presented at the Summit. Morse demonstrated how to use business intelligence, in combination with numbers from the CVB or State Tourism Department to determine the impact, including number of nights, average size of party, average stay length, and average daily rate.

 

2. There are new tools to help communities identify illegal vacation rentals.

New technology is emerging to help communities identify and penalize rogue vacation rentals who are not paying taxes or complying with regulations. Vacation rental industry veterans Jim Olin and Micah Berg have developed map-driven technology that provides enforcers with workload and process management.

According to Olin, “The percentage of rent-by-owner vacation rentals that are in violation is substantial, in the double digits in most destinations.”

The software platform allows investigators to identify non-compliant rentals, track their investigation process and monitor ongoing activity, communications and progress.

 

3. Hotel brands are starting to understand vacation rentals.

While the AH&LA attempts to discredit vacation rentals as a credible lodging option, several mammoth AH&LA members are moving toward a deepened understanding of the vacation rental industry.

According to a presentation given by OPMA member Kevin Groff, Vice President of Corporate & Strategic Development at Wyndham Exchange and Rentals, the U.S. vacation rental market generates $22.8 billion in revenue, and the European market represents $57 billion. Groff also presented a timeline of the acquisitions Wyndham has made in the vacation rental space.

Other major hotel brands are also investing in the sector or are look for ways to leverage the channels. Hyatt recently invested $40 million in London vacation rental company OneFineStay, and CEO Mark Hoplamazian said, “From our perspective, we’ve looked at this whole sharing economy dynamic as a broad consumer issue and the consumer behavioral change, and we’ve always been drawn to it…This is going to be a part of how people travel.”

Extended Stay CEO Gerry Lopez observed, “Airbnb could become a distribution channel just as much as it could a competitor.”

Even in Marriott’s recent announcement of its acquisition of Starwood, both the New York Times and Marriott CEO Sorenson cited the growing online home rental marketplace as a major factor in the decision to consolidate.

In addition, both Priceline and Expedia have made sizable recent investments into growing their vacation rental business pointing to the concept of marketing to the complete traveler.

Priceline CEO Darren Huston said, “In terms of the vacation rentals incremental or not, our general belief is, first of all, it’s one customer. And either a customer is just a consumer or they’re a business person and a consumer. And they take a number of trips every year, and every trip has a different rationale. And if somebody is a hotel booker on three of their trips, they may be on a trip with their family and become a vacation rental booker. We want to be able to provide all of those instances and all of those scenarios through Booking.com, so they become comfortable with that, rather than in the past, they feel if I need a hotel, I go to booking, and if I need a vacation rental, I go to company X, Y or Z.” (Read more of Huston’s comments)

 

4. Vacation rental managers can earn more business by adopting a 3D approach to the traveler.

In a session on the future of vacation rental marketing, John Dalton, Chief Marketing Strategist for OPMA, spoke in depth about marketing the experience over the property.

Dalton said, “The supply side is trying to sell a product, while the guest is trying to buy an experience.”

Dalton presented research demonstrating how the travel experience is viewed by the traveler in three stages:

  • Anticipation of the vacation
  • The actual vacation
  • Memories of the vacation

His findings showed that more focus was spent by the traveler in the anticipation and memory stages than in the actual vacation. Marketers can leverage this opportunity by finding ways to build loyalty in the anticipation and memories stage, including trickling value added services in the anticipation stage, and memory-based, guest-centric messaging post-vacation.

 

5. “Trust” is key in securing future vacation rental guests.

With the influx of shared accommodations in the marketplace, trust is becoming a bigger factor for travelers in their decision to book a vacation property.

“Guests don’t book because they’ve never tried a vacation rental, they don’t trust a vacation rental or the process, and they don’t know what to expect,” said Dalton. Communication of professional management, safety and security is key going forward, and there is opportunity to differentiate the services OPMA members provide consumers by promoting:

  • 24/7 service
  • Safety
  • Security
  • Online Booking
  • Credit Card Payments
  • Travel Insurance

Dalton added, “The currencies of the future are differentiation, targeting and value-added service.”

 

The summit also addressed customer relationship management, guest surveys, and loyalty programs. The next OPMA Executive Summit will be held in May 2016 with the specific venue and dates yet TBA. For more information on joining OPMA, go to http://theopma.org.

 

By Amy Hinote

LeisureLink partners with Springer-Miller

By
VRM Intel Staff
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LeisureLink™ today announced a new partnership with Springer-Miller Systems, Inc. (SMS), a cross-platform, guest-centric hospitality management systems.

The integration offers SMS clients direct access from their SMS|Host Hospitality Management System to LeisureLink’s global distribution network of top online travel channels like Expedia, Booking.com, and Priceline as well as all the major GDS players and travel sites to maximize bookings. Users of SMS will be able to activate LeisureLink as a channel partner to build and manage their property listings and distribute data to the LeisureLink network. LeisureLink will automatically receive property details including descriptions, amenities, photos, availability, bedroom data, rates, and nightly restrictions. Each time information is updated, the new content streams from SMS|Host to LeisureLink. This two-way integration enables LeisureLink to pass guest data, including travel dates, back into SMS|Host.

“Springer-Miller is thrilled with the expanded capabilities the integration of LeisureLink with our SMS|Host Hospitality Management System will bring to our clients,” said Victor Vesnaver, Senior Vice President, Sales and Marketing for Springer-Miller Systems. “LeisureLink presents the broadest array of lodging channels targeted at the specific market our clients serve.  The vacation rental market is hungry for access to customers like ours, and we are eager to assist them in maximizing their revenue potential and exposure.”

With access to 80 million visitors per month, LeisureLink is the preeminent vacation rental technology leader. The company is a recognized industry pioneer, with a full suite of next generation online connectivity tools including yield management, booking engines and distribution to enable vacation rental managers and owners to maximize bookings online, offline, anywhere.

Julian Castelli, CEO of LeisureLink noted, “LeisureLink offers a suite of proprietary services and technology that are a perfect fit for SMS customers. Vacation rental channels reach a different audience than traditional OTA’s, and the commission structure is more favorable to the property managers, increasing margins and profitability. By leveraging our extensive industry experience and best-in-class systems capabilities, we are confident the added exposure will keep them ahead of the competition and generate more business.”

Wyndham signs deal with Booking.com

By
VRM Intel Staff
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Wyndham Vacation Rentals recently inked a global distribution agreement with Priceline’s Booking.com. Per the deal, Wyndham’s vacation rental brands will use the Booking.com site and apps as distribution channels for its properties.

This deal comes at a time when rapid technological changes and evolving consumer preferences – as more guests book hotels and vacation rentals online – are making it necessary for hoteliers to invest in technological upgrades.

Customers typically take a cross-platform approach in travel, with most starting out on their mobile devices and completing the booking process on larger screens. This is where Wyndham Vacation Rentals stands to gain through Booking.com. All the brands of Wyndham Vacation Rentals will be available on the same platform making it convenient for guests to book their stay.

Some brands of Wyndham Vacation Rentals have already been working with Booking.com over the past couple of years in Europe and the new deal would further cement the partnership. Through the new agreement, Wyndham Vacation Rentals would be able to drive higher occupancy for its brands by leveraging Booking.com’s huge customer base. Further, Booking.com provides a good platform for Wyndham Vacation Rentals to promote its brands globally.

 

See more at: http://www.zacks.com/stock/news/199599/wyndhams-vacation-rental-signs-deal-with-bookingcom#sthash.SWXogpnF.dpuf

NEVRMA set to begin Dec. 7 in Portsmouth, NH

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VRM Intel Staff
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The New England Vacation Rental Managers Association (NEVRMA) Meeting kicks off Monday, December 7 at the Sheraton Portsmouth Harborside Hotel in Portsmouth, NH. Atlantic Vacation Homes, OldCape Sotheby’s International Realty, Franconia Notch Vacation Rentals, Seaside Vacation Rentals and other vacation rental managers will come together to discuss issues facing vacation rental managers in New England.

Topics include short term rental advocacy and how the VRMA is addressing the needs of its membership, advancements in technology for managers (i.e. Floor Plans, Inspection Companies, Book Now, Docusign), and industry laws and how they are changing.

In addition, vacation rental managers will discuss online bookings (including reviews and listing sites), industry trends and benchmarks, business models, travel insurance, branding, marketing trends, reservations, lead management best practices, and incentivizing reservations agents.

Registration is still open, so if you would like to attend, please contact Carla Hemmings at Carla@oldcape.com to register. The cost is $50 for property managers and $400 for suppliers.

 

 

 

 

 

 

LiveRez hits milestone with 1,000th software customer

By
VRM Intel Staff
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LiveRez and iVacationRental

Eagle, ID – LiveRez.com announced today the addition of its 1,000th customer.

“This is a historic day at LiveRez,” said LiveRez CEO Tracy Lotz. “Our strength is not only in our team and our software, but also in each individual partner. This milestone represents the collective efforts of the entire LiveRez community.”

The milestone adds to a banner year for the company. In just the past 12 months, LiveRez announced a real-time integration with Airbnb, won the Boise Chamber’s Travel Industry Excellence Award, and launched significant software enhancements at its annual Partner Conference in October.

The accomplishment also comes at a pivotal moment in the industry. Two weeks ago Expedia announced its $3.9 billion acquisition of HomeAway, which owns HomeAway Software for Professionals, LiveRez’s largest competitor.

In contrast to many of its main competitors which have grown through mergers, acquisitions and consolidation, LiveRez’s growth has been 100 percent organic. This growth has also outpaced it competitors, as LiveRez reached the 1,000 partner milestone in less than 8 years.

“With our new software enhancements and the HomeAway acquisition, our phones are ringing off the hook,” Lotz said. “We have been signing up new partners at a record pace.”

LiveRez also announced the conclusion of its “Race to 1,000 Challenge.” In the run up to adding its 1,000th partner, LiveRez donated 1,000 Thanksgiving meals to the Boise Rescue Mission. LiveRez then challenged their partners to offer 1,000 random acts of kindness before it hit the milestone. Partners, vendors, and friends of LiveRez responded with more than 3,000 acts of kindness. As thanks for the participation, LiveRez determined it would double its donation to the Boise Rescue Mission, for a total of 2,000 meals.

“In order to pay it forward, we put out a lofty challenge, and our partners responded in a big way,” Lotz said. “We’ve been blessed to partner with amazing companies from all across the globe, and without them our rapid growth would not be possible.”

Vacation Rental Managers in Paris Face Unprecedented Challenges in Wake of Night of Terror

By
VRM Intel Staff
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Vacation rental industry veterans are familiar with disaster preparedness. Hurricanes, fires, and other weather-related incidents have had dramatic impact in many vacation rental destinations around the globe. In addition, Mexico has confronted safety concerns and travel alerts, and other areas have seen travel drop off from anxiety surrounding ebola and SARS.

But nothing prepares a vacation rental manager for a tragedy like the one which hit Paris Friday night. Even after the events of 9/11, while air travel declined drastically and travel-related stocks plummeted, in 2001, there was no Airbnb, and professionally managed vacation rentals in urban areas such as New York City, Washington D.C. and Philadelphia did not exist.

Vacation rental managers Madelyn and Phillipe Willems, owners of Paris Perfect, Susan Doull, owner of Commendable Rentals, and Marie Pistinier, owner of Paris Be a Part of It, faced an unprecedented industry challenge this weekend and did so with grace and compassion.

Paris vacation rental managers face challenges after terrorist attack“Since last Friday we have had a 24 hour team in place to reach out to and ensure that all of our current guests are okay -thankfully, yes -and to answer questions from upcoming guests,” said Madelyn Willems at Paris Perfect. “In addition our social media team posted helpful links to information resources for guests who wanted to contact the local embassy and other useful resources.”

Susan Doull, owner of Commendable Rentals, said, “Yes, I did have guests in Paris, who were, fortunately, not in harm’s way, nor were any of the Commendable Team there. We did let existing guests stay on in the case of a cancelled flight, but cancelled flights were few, and delays were short. I have been touched by an outpouring of concern from clients and friend past and present who have expressed their concern.”

Paris vacation rentals open after bombingsDoull added, “Though one would expect that the events of Friday might deter bookings to Paris, I have been heartened to see Paris Bookings still coming through from Americans, who understand that life goes on by continuing to promote freedom and our lifestyles, by carrying on. For those who are considering or nevertheless, hesitating to book a trip to France, Commendable Rentals does offer ‘Cancel for Any Reason’ travel insurance through Rental Guardian, which will allow peace of mind, if they do change their mind after booking. I hope that those who love Paris, will show their support by visiting.”

Proactively reaching out to future guests, Willems said, “We’ve seen only a handful of cancellations. In fact, most guests and upcoming reservations have responded that they are looking forward to their stay and feel reassured about the increased security.”

Susan Doull addressed the situation, “It is a heart-breaking to see and hear of all the young lives snuffed out on the very streets where they lived. This kind of evil terror strikes at the hearts of all of us, which is of course what was intended. Parisians are brave and proud, and have made a statement of continuing on, just as Americans did after 9/11 and as Bostonians did after the Boston Marathon, etc. Giving in to Terrorism is just what the Terrorists want us to do. That is why they choose sites where Parisians gather to socialise and relax; a stadium, restaurants, and a concert hall. Or where Americans go work, or run in a Marathon. And why the will pick different sites and probably a different country or city the next time. As we know from 9/11, staying home or travelling, presents equal risks.”

Willems echoed the sentiment, “We are deeply saddened by the barbaric killings in Paris last week. It has brought about such a heartfelt response from our guests, our staff, our friends and our Parisian neighbors who collectively share their love for the City of Light and deeply empathize with all of the people and their families who have been impacted. The response has been nothing short of remarkable, and the streets of Paris are filled with a newfound resolve and appreciation for each other.”

Willems added, “France will stay strong and prevail.  And Paris will remain perfect.”

 

By Amy Hinote

Marriott to acquire Starwood for $12.2B

By
VRM Intel Staff
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Reuters with CNBC – Marriott International will buy Starwood Hotels & Resorts Worldwidein a cash and stock deal valued at $12.2 billion to create the world’s largest hotel chain.

Starwood shareholders will receive 0.92 shares of Marriott Class A common stock and $2 in cash for each Starwood share held, the companies said Monday.

The offer translates into $72.08 per share for Starwood, a discount of about 4 percent to the stock’s Friday close. (Get the latest quote here.)

Arne Sorenson, Marriott’s CEO, told CNBC’s “Squawk Box” on Monday that company officials were “dissuaded” at first. “But as the months went by, we saw a relative shift in the values of the company, so it made it more attractive economically, and we became convinced that there was more value that could be created with the two companies together.”

 

Starwood shareholders will also get about $7.80 per share from the spinoff of its timeshare business and the business’s subsequent merger with Interval Leisure Group.

Starwood, the owner of St. Regis and Sheraton hotel brands, had indicated in April it was considering strategic options.

The company had reached out to potential bidders InterContinental Hotels Group, Wyndham Worldwide and sovereign wealth funds in July.

Before Friday’s close, Starwood shares had fallen about 14 percent since April 29, when the company said it was exploring strategic alternatives.

The deal is expected to close in mid-2016, the companies said.

Expedia to purchase HomeAway for $3.9B: Vacation Rental Managers Begin to Weigh In

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VRM Intel Staff
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HomeAway and Priceline Lead the Market

Today Expedia announced that it will acquire HomeAway for an estimated $3.9 billion in cash and Expedia common stock, representing a per share price for HomeAway shares of $38.31.

Simultaneously, HomeAway announced it will be adding a variable “traveler fee” adding approximately 6% for guests for all online transactions.

According to Expedia CEO Dara Khosrowshahi, “Our welcoming HomeAway is a winner in two ways. First, it brings industry leading vacation rental brands, traffic and unique inventory to the Expedia family. All of us have witnessed not only the incredible growth of the sharing economy, but also the substantial growth of alternative lodging in particular. Last year according to PhocusWright, one in four U.S. travelers went to private accommodations for their leisure travel. We’ve been very clear that the next chapter of our growth is supply bed, and we think HomeAway will accelerate that growth in the fastest growing segment we see out there.”

Khosrowshahi continued, “Second, HomeAway has been undertaking a challenging transition that Brian will talk about. That of a listing based model to an online transactional marketplace. The HomeAway team was working on this challenge on a stand-alone basis, but together we believe we can get there much faster and with greater certainty. As many of you know, we’ve been working with HomeAway for some time and very much respect their capabilities and -at the same time -are super excited about working together under a single corporate umbrella.”

Listen to the entire conference call. 

 

Brian Sharples added, “This will allow us to –one – aggressively accelerate demand growth for our suppliers, and –two – reinvest in products and services with a particular focus on making HomeAway the easiest to use and most trusted marketplace for vacation rentals in the word, all while accelerating revenue growth and margin expansion for the business. And the potential to do this is huge because our current take rate today is roughly 1/3 of that of our major competitors. So as a result, today HomeAway announced separately some important business model changes and though the specifics are still to be finalized, we do plan to introduce a traveler service fee in mid 2016 on transactions through our platform. Because we will begin rolling this out in Q2 and over the balance of the year, we characterize 2016 as the transition year with more notable impact in 2017 and beyond.”

Sharples continued, “In a transactional business, conversion is king, and optimizing conversion is a relatively new muscle for HomeAway, but an area where Expedia has tremendous capability. Given our industry leading booking volume even small changes in conversion should yield significant financial benefit.”

Read Dennis Schaal’s interview with Expedia and HomeAway CEO’s 

 

Key points from today’s Expedia/HomeAway call:

 

  • The vacation rental category is the second largest category of lodging behind hotels with an estimated global market size of almost $100 billion.
  • HomeAway will facilitate an estimated $14-16 billion in annual bookings in 2015.
  • HomeAway currently has 1.2 million whole home rentals in 190 countries.
  • HomeAway’s goal is to have all listings bookable online by the end of 2016.
  • HomeAway will roll out its “traveler fee” in Q2 2016.
  • HomeAway intends to increase its take rate from 3% to 8-10%.
  • HomeAway is not eliminating its subscription model.
  • The Expedia partnership is expected to increase demand for vacation rentals, increase inventory in urban markets and provide tools for optimized conversion on the sites.
  • HomeAway will continue to run out of Austin as a stand-alone platform under the Expedia umbrella.

 

Vacation Rental Managers Weigh in on Impact of an Expedia-Owned HomeAway:

 

T.J. Clark –CEO, Turnkey Vacation Rentals (700 properties)

“The changes coming from HomeAway will benefit PMs and owners that are focused on conversion.  As Dara K said on the call, ‘Conversion is the machine that makes everything else go.’  Listing rankings based on your paid subscription tier will be replaced with ranking based on listings that perform the best in terms of conversion. It will favor those who are using technology and process to have the best performing listings in the HomeAway marketplace.  And of course while HomeAway is big, the future opportunity for homeowners will be even bigger given the Expedia visitors that will be directed to HomeAway or see their listings more prominently displayed on the Expedia family of sites like Hotels.com. Homestays will be going mainstream in the travel marketplace which is a huge opportunity for owners, yet will need a more competitive approach that ever to succeed.”

 

Steve Milo –Founder, Vacation Rental Pros (1,100 properties)

“The new marriage between HomeAway and Expedia will bring new opportunities and unexpected surprises for professional managers in the Vacation Rental industry,” “The opportunities include true global distribution of vacation rentals using the best practices of HomeAway with the worldwide distribution expertise of Expedia. The surprises could include higher costs to property managers in more competitive advertising areas, spin-offs or sales of certain assets, brands or divisions, and personnel changes.  But, considering the marriage has just consummated let’s hope that it is a win-win for Expedia, property managers and HomeAway employees.  This positions four powerful well-funded companies in the vacation rental space now with Expedia, TripAdvisor, Airbnb, and Priceline all attempting to compete for supply in the core vacation rental resort market.”

 

Scott Breon –CRO, Vacasa (2,500 properties)

“Expedia’s acquisition of HomeAway is fantastic news for the property management industry – it opens a tremendous channel and opportunity that would not be possible otherwise. It is a smart move on HomeAway’s part to push ad costs to the consumer, due to the unique management contract structure of the PM industry. Spreading the booking cost between PM and Renter will enable HA/Expedia to further invest in new initiatives and capabilities that are not possible at lower margins and lowers the barrier of entry for PMs. I expect over the next year that the combined entity will see leaps in growth of customer acquisition and conversion of those customers, which is a win for HA subscribers. The increased demand from the combined company will increase achievable nightly rates and utilization – especially in smaller markets that lack hotel inventory on the Expedia platform. Urban destinations, fly-to markets, and international traveler hotspots will also see wins as hotel booking platforms are the primary path for those customers. The PMs that will be negatively impacted over the next year are those that are not instantly bookable and those that drive their customer base through SEM.”

 

Ben Edwards –Manager, Newman-Dailey Resort Properties and President, Vacation Rental Managers Association (VRMA)

“I’m excited about the opportunity this holds for professional vacation rental managers as such a large international travel company becomes more invested in the vacation rental industry.”

 

Steve Trover, CEO, All Star Vacation Homes & CSO, LiveRez 

“Predictably various managers have come out in support and ever excited about the prospect of this acquisition. While we too feel the increase in exposure of our industry could be a positive we think the industry is forgetting what has happened thus far. For starters Expedia has had vacation rentals on their website for many years. They have tried to introduce VR to consumers in many ways and each has failed to do anything other than produce more cost for the manager and owner. There has been no significant demand creation.

“Secondly we are forgetting what happened to hotels. They were enticed by the apparent demand that the aggregate shopping experience provided only to find out that it did not increase demand but only served as a major toll booth between the hotel brands and their customers. Costs continued to escalate until some of the chains attempted to fight back and pull out only to find that they had no power despite having thousands of hotels, large marketing budgets and major brands attached to them. How can we look at this and think that our industry will see a different result? How does the individual manager think they can fight against the inevitable massive increase in cost that is coming?”

 

Julian Castelli, CEO, LeisureLink

“This both 1) demonstrates that this industry is important to the major travel players, and 2) is another piece of evidence that it is going to be a more mainstream option for travelers. I predict this will accelerate growth for the industry. I  also think this is going to be a big step in bringing the industry into the modern e-commerce era. HomeAway was moving in that direction, and I see Expedia’s capabilities in this area as a big driver for the deal. After all, if their platform is good enough to power Orbitz and Travelocity, why not HomeAway’s as well? While Property Managers often prefer the listing model, I think consumers definitely prefer the convenience of e-commerce. This combination will accelerate the industry’s move in this direction.

“As for channel management, if my second statement is correct, then the need for up to date rate, availability, specials and content is going to increase, and that will increase the demand for good channel management solutions in the vacation rental industry. LeisureLink has enjoyed long and strong partnerships with both HomeAway and Expedia, and we congratulate both of our partners on this historic deal. We look forward to working with both of them to grow the vacation rental industry and their offerings in the space.”

 

PM Questions About the Purchase

Questions circulating among vacation rental managers regarding the impact of Expedia’s purchase of HomeAway center around the following:

  • Will Expedia retain or spin-off HomeAway’s software division?
  • What will a “Traveler Fee” mean to bookings?
  • Will our distribution costs go up?
  • Will we stop getting data from inquiries?
  • (For software clients) With access to our database, will Expedia market to our past guests?

 

By Amy Hinote 

 

 

Why Airbnb chose LiveRez over the rest for software integration

By
VRM Intel Staff
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0

Airbnb met with 87 vacation rental software providers and chose LiveRez for integration. In this video, Airbnb Head of Vacation Rentals Shaun Stewart tells us why.

At the 2015 LiveRez Partner Conference, Shaun Stewart, Airbnb’s head of global vacation rentals, gave a rousing speech on the future of the vacation rental industry. During this speech, he explained how Airbnb chose LiveRez from 87 different North American software providers they researched.

If you missed this seminal speech, you have to see it. Check it out below:

 

HomeAway adds “Traveler Fee” for guests to pricing model

By
VRM Intel Staff
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43

Today, as Expedia announced it is buying HomeAway for an estimated $3.9 billion, HomeAway also shook the vacation rental industry by announcing they are adding a traveler free to guests booking vacation rentals on HomeAway’s suite of online marketplaces.

Management Comments:

Brian Sharples, CEO, HomeAway: “Today we’re announcing business model changes, including the addition of a traveler service fee in mid-2016, which will dramatically change our ability to compete and thrive in the coming years,” says Brian Sharples, chief executive officer of HomeAway. “Better monetization will allow us to accelerate revenue growth, but most importantly will provide more resources for an even better product and service experience for our owners, property managers and travelers.” Mr. Sharples noted traveler service fee, which will be based on a sliding scale, will begin rolling out in Q2 of 2016 and is expected to add an average of roughly 6% to most transactions that run through its online shopping cart. In conjunction with the new traveler service fee, the Company plans to lower commission rates for most of their pay-per-booking customers and provide financial incentives to subscribers based on their annual booking volume through HomeAway’s platform.

 

Expedia Acquisition

Sharples continued, “Separately, we’re thrilled to announce our agreement to join the Expedia family of leading travel brands and couldn’t be more excited about what this move means for our very bright future. We’re eager to benefit from Expedia’s distribution, technology and expertise, which will allow us to provide an even better product and service experience for our owners, property managers and travelers. In this way, I believe our combination with Expedia will turbocharge our growth and industry leadership for many years to come.”

Dara Khosrowshahi, CEO, Expedia -“We have long had our eyes on the fast growing ~$100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years. Bringing HomeAway into the Expedia, Inc. family and adding its leading brands to our portfolio of the most trusted brands in travel is a logical next step. We have tremendous respect for the HomeAway team and the business they have built. With our expertise in powering global transactional platforms and our industry-leading technology capabilities, we look forward to partnering with them to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway’s global traveler audience and the owners and managers of its 1.2 million properties around the world.”

Expedia buys HomeAway for $3.9B

By
VRM Intel Staff
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0

Expedia (NASDAQ:EXPE) is buying leading vacation rental marketplace HomeAway (NASDAQ:AWAY) for $3.9B in cash and stock, or $38.31/share based on Expedia’s Tuesday close.

Expedia will pay $10.15/share in cash and issue 0.2065 shares for each HomeAway share. The deal is expected to close in Q1 2016.

Expedia Acquisition

Brian Sharples, HomeAway CEO: “Separately, we’re thrilled to announce our agreement to join the Expedia family of leading travel brands and couldn’t be more excited about what this move means for our very bright future. We’re eager to benefit from Expedia’s distribution, technology and expertise, which will allow us to provide an even better product and service experience for our owners, property managers and travelers. In this way, I believe our combination with Expedia will turbocharge our growth and industry leadership for many years to come.”

Dara Khosrowshahi, CEO, Expedia: “We have long had our eyes on the fast growing ~$100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years. Bringing HomeAway into the Expedia, Inc. family and adding its leading brands to our portfolio of the most trusted brands in travel is a logical next step. We have tremendous respect for the HomeAway team and the business they have built. With our expertise in powering global transactional platforms and our industry-leading technology capabilities, we look forward to partnering with them to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway’s global traveler audience and the owners and managers of its 1.2 million properties around the world.”

Best Vacation Rental Management Websites of 2015

By
VRM Intel Staff
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1

VRM Intel asked industry professionals to submit their favorite vacation rental management company websites that launched in the last 12 months to compete for VRM Intel’s Best VRM Websites of the Year. We received over two dozen entries and spent several weeks reviewing each site for 20 articulated metrics, including site performance, website features, user experience across multiple devices, and overall aesthetics.

 

What the winners did better than the competition:

  • Site Speed/Performance: Our top websites loaded quickly and scored very well in Google’s Page Insights test.
  • Simple/Smart Site Search Experience: Intuitive “refine search” or “advanced search” capabilities with a display of the number of rentals associated with each attribute. With an optimal search filter, when the user selects an attribute, the results automatically refresh to ensure that the user doesn’t choose a combination of attributes or amenities that would show zero results.
  • Smart Availability Calendars: Smart availability calendars that appear when the user enters travel dates on the individual property detail pages. As one judge said, “If you can display an error when someone chooses dates that are not within your booking rules, then why can’t you make the calendar not allow that to happen? Errors are never a positive experience.”
  • Beautiful Websites: When clients have large, beautiful images and video footage, you can really tell that it inspired the web designers to create photo-journalistic experiences throughout the web design.
  • Other:
    • Videos and Floor Plans
    • Obvious Lead Capture
    • Lead and Requested Dates Capture When a Search Yields “0 Results”
    • Live Chat or Push to Talk
    • Site Feedback Forms

1st Place –Midgett Realty, Hatteras, NC -by Bluetent

The inaugural winner of VRM Intel’s Best VRM Website 2015 award is Midgett Realty in Hatteras, North Carolina.

Midgett Realty by Bluetent Wins Best VRM Website 2015 -VRM Intel

The creation and launch of a successful vacation rental management website is a true partnership between the property management company and the website development company. A critical and delicate balance must exist in the relationship that includes clear requirements, open dialogue, and an actionable feedback loop. The Midgett Realty team clearly worked hand-in-hand with Bluetent to ensure a seamless experience for their user, and as a result, MidgettRealty.com had the lowest number of technical errors among the submitted sites.

 Other winning attributes:

 

  • Optimal “Refine Search” experience
  • Smart availability calendars
  • Simplified booking process

 

2nd Place –Brindley Beach Vacations and Sales, Outer Banks, NC -by Visual Data Systems

Brindley Beach Top 5 Vacation Rental Wesbites -VRM Intel

 

Winning Attributes:

  • Most unique homepage experience with beautiful opening video
  • High scores on page load speed (great for SEO and User Experience)
  • Best lead capture design throughout the site

 

 

3rd Place –Taylor Made Deep Creek Vacations, Deep Creek, MD -by InterCoastal Net Designs (ICND)

 

Taylor Made Vacations Wins Top 5 VRM Websites -VRM Intel

 

Winning Attributes:

  • One of the best integrations of photography and video throughout the site
  • One of the few managers to integrate interactive tours and floor plans
  • Lead capture opportunities throughout the site experience

 

4th Place –Tybee Vacation Rentals, Tybee Island, GA -by Bluetent

 

Tybee Vacation Rentals Wins Top 5 Vacation Rental Websites -VRM Intel

 

Winning Attributes:

  • Evident and strong branding throughout the site
  • Consistent and simple search experience
  • Straightforward and easy to understand rates

 

5th Place Tie –Winter Park Lodging Company, Winter Park, CO -by Streamline Vacation Rental Software

 

Winter Park Lodging Company Wins Top 5 Vacation Rental Websites 2015 -VRM Intel

 

Winning Attributes:

  • Smart site search experience
  • Consolidated, simple booking experience
  • Total rate displayed on date-based search results (very unique!)

 

5th Place Tie –Park City Lodging, Inc. , Park City, UT -by Blizzard Internet Marketing

 

Park City Lodging Company Wins Top 5 Vacation Rental Websites -VRM Intel

 

Winning Attributes:

  • Beautiful imagery
  • Integrated floor plans
  • Live Chat and Push to Talk Capability

 

 Website Checklist

Want to know how your website would score? You be the judge.  Score Your Own Website:

1. Is your Website Responsive?

2. How fast do your website pages load on a desktop? Tip: Run your site through the Google Page Insight Test

3. How fast do your website pages load on a mobile/cell phone?

4. How fast do your website pages load on a tablet?

5. Is it easy for your consumers to refine their search to find the right set of homes to compare?

6. Can you sort your search results in a logical way based on price, bedrooms, and occupancy?

7. Do you have site search?

8. Do you have large, beautiful images of your properties?

9. Do you have floor plans on your site?

10, Do you have videos, virtual tours, or interactive tours on your site?

11. Does the availability calendar on your property detail page allow you to choose dates that are not available resulting in an error?

12. Are your rates easy to understand with explanations for fees?

13. Does your booking process take your guest through three pages or less?

14. How do you rank in Google for the common search queries used for guests who visit your destination?

15. Does your Homepage clearly display your destination without scrolling or clicking to another page?

16. How easy is it for guests to sign up for your deals, promotions, or newsletters? Do you have several places to collect lead information?

17, Do a search from your Homepage for something that you know goes against your booking rules like a one-night stay. Do you get a page with an error message?

18. Do you have Live Chat and/or Push to Talk features on your website?

19, Do you have a Site Feedback Form on your site, so that your website visitors can tell you about their online experience in real-time?

20. Grade the overall site aesthetic appeal? Does it promote your brand, your destination, and your homes in a professional way that communicates professionalism and trust?

The First VRM Intel Magazine is Here!

By
VRM Intel Staff
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0

And we couldn’t be more excited! After a lot of hard work and support and contribution from from industry experts and suppliers, we mailed the first issue of the VRM Intel Magazine to over 4,000 property managers last week and distributed over 1,500 magazines to attendees at the VRMA Annual Conference in New Orleans. The response has been humbling, and we are very happy that we are going to be able to continue this on a quarterly basis. More details to come, but here is a link to the digital version.

 

 

For information on advertising in VRM Intel Magazine, click here.

Vacation Rental Marketing War Room Seminar Held at VRMA Annual Conference

By
VRM Intel Staff
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0

When looking to determine a vacation rental management company’s marketing budget and plan, concrete education and information is hard to come by. On October 28, 2015, at the VRMA Annual Conference in New Orleans, VRM Intel’s Amy Hinote and industry marketing consultant Amber Mayer led a four-hour tactical bootcamp seminar designed to work with vacation rental marketers to analyze current marketing strategies, determine how much money should be spent on marketing, demonstrate how to create a marketing budget, and discover ways to save money and increase the effectiveness of the marketing plan.

Some of the marketing tactics we examined were content marketing, website UX, merchandizing properties, distribution enhancement, SEO/SEM, email marketing, marketing automation, and more.

 

Train Your Reservations Team to Use a “Conversational” Vs. “Transactional” Sales Approach

By
VRM Intel Staff
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0

By Doug Kennedy –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 have looked 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. If your company is really up on innovations, they might have even seen 3-D floor plans. The research callers have conducted 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!

If we surveyed marketing professionals in the vacation 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 can already see that online.

Being in the mystery shopping business, when I call vacation rental companies most agents seem to have what I call a “website search support” paradigm. These agents perform as if they were in a technical support department that exists to help people search availability. In other words, they approach their job as if they were supposed 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 a “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, then use their surname to err on the side of being too formal. Likewise, after you have connected with the caller, secure the caller’s email address to follow up on non-booked inquiries by sending an email to recap what was discussed. It is also important to ask for a phone number for a follow-up call, “Just to see if you have any questions or what else we can do on our end to help you plan your vacation.”

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.

Today, guests and customers are looking for genuine authentic connections. This seems to be the hottest topic at recent lodging industry conferences. For example, at the Southern Lodging Summit held in Memphis in August 2015, several executives shared their ideas in the article “Hoteliers Embrace the Age of Authenticity” in HotelNewsNow.com: “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 a HotelNewsNow.com 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 for agents:

 

  • Begin calls by listening to the caller’s opening remarks. This can be done by paraphrasing and restating whatever they are saying and adding a hint of enthusiasm about their plans. This shows the caller that you “get it” and makes them feel that they are special, not just another squeaky voice coming through the earpiece. For the agent, it might be the third family reunion call in a row, but for the caller, the first time they are reconnecting with relatives in many years.

 

  • Use an investigative questioning process. Some callers are “call gushers” who spew out their whole story right up front. Others need a little more prompting to reveal their details. Here are some examples:
    • “Do you have a property in mind or are you looking for help in selecting?”
    • If they do not have any property in mind, ask, “Are you looking for something more upscale or a traditional accommodation?”
    • “As I’m checking availability, what questions can I answer for you about the location or amenities?”
    • “Is there something special you are looking for that I’ve not mentioned yet?”

 

  • Conduct guest empathy training. Hold a discussion about the various types of “guest stories” being lived out every day on the other side of the front doors. Often those who work in a reservations position have not yet lived out the same experiences as those they are speaking with. Help them understand why callers ask seemingly “annoying” and “clueless” questions such as: “How many steps are there between floors?” “Exactly how far of a walk is it to the beach?” Maybe the party includes an elderly grandparent or very young  children.

 

  • Understand how important a vacation is to the person planning it. Recognize the various special occasions people are looking to celebrate. This can be accomplished by asking how it feels to be planning a vacation for the last summer vacation before a teenager heads off to college, the first trip with a newborn baby, or the first time coming back to visit without bringing grandpa this year. Understanding always fosters empathy.

 

  • Offer personal recommendations, suggestions, and endorsements. This should be done only after an agent has connected with the caller and investigated “the story” behind their call.

 

These techniques help reassure the caller that they are making a good choice.

 

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

 

Crystal Balling the Industry’s Technology Glut

By
VRM Intel Staff
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0

The industry is being deluged with technology, some fueling next-gen VRM business models. This panel highlights hot new technology categories,  while noting the staggering cost of buying them all and pondering dilemmas facing VRMs.

This panel presented at the Annual VRMA Conference  questions such as: What are some of the most interesting new products? Which technology categories may emerge as “must-haves?” Which are candidates for merger into reservation systems? The panel will conclude with predictions about how emerging technologies will affect the future of vacation rentals.

Presenter(s): George Volsky, Seaside Realty; Tom Leddy, Leddy Associates, Inc.; Amy Hinote, The VRM Consultants; Doug Kennedy, Kennedy Training Network

VRMA changes management companies –SmithBucklin in, RGI out

By
VRM Intel Staff
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0
VRMA Seminars

The Vacation Rental Managers Association (VRMA) Board of Directors voted unanimously to retain SmithBucklin Corporation as the association’s new management company.

According to a letter send to members, “After considerable discussion and reflection we have chosen SmithBucklin Corporation as our new management company, effective December 1, 2015. The vote for SmithBucklin was a unanimous board decision.”

The Raybourn Group International (RGI) who previously served as the management company for VRMA was notified last month about the decision.

According to VRMA President Ben Edwards, “We are excited about this opportunity to partner with SmithBucklin, the association management and services company more organizations turn to than any other. SmithBucklin has extensive experience in managing and growing professional trade associations such as VRMA.”

Edwards continued, “In particular, its experience in government affairs and advocacy efforts will assuredly help us navigate the ever-changing regulatory landscape and help fight anti-vacation rental legislation. This partnership also provides us with access to knowledgeable staff members who have developed and implemented successful strategies for other not-for-profit organizations to enhance educational offerings, expand membership, and build strong sponsor relationships with major players in the industry.”

The VRMA will move operations to SmithBucklin’s Washington, DC office on December 1.

Airbnb passes marketing costs on to owners/managers

By
VRM Intel Staff
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1

Airbnb, the largest marketing site for short term rentals, is passing on its marketing costs to homeowners and property managers. If this statement makes you scratch your head, you are not alone.

According to All About Airbnb, like most vacation rental managers, “In order to keep attracting new customers winning the over the competition, Airbnb has to run ads on Google, spending money for every click.”

Airbnb made the decision to charge suppliers (hosts, owners, managers) for the cost of this Google advertising, more commonly knows as PPC or AdWords.

 

Airbnb Passes on Ad Fees to Owners

Photo Credit: All-About-Airbnb.com

 

According to an Airbnb web page explaining this change, “The most frequent request we hear from hosts is that you want more bookings. To make this happen, we need to make sure that more people hear about Airbnb. As an organization, we’re spending as much as we can on marketing, like our first TV commercial, Never a Stranger, and many types of online advertisements. But there’s no end to the amount of advertising that can be done. By charging a higher fee—but only when hosts are directly profiting as a result of the advertisements—we can finance additional advertising.”

 

3 Implications for Vacation Rental Managers

 

1. Yes, Airbnb’s Google AdWords advertising for your properties competes with your own Google AdWords ads for your properties. 

There is one reason to use a distribution channel (i.e. HomeAway, Airbnb, TripAdvisor, Booking.com) –to get homes in front of customers who would not have otherwise found you. There is no reason to pay a distribution site to do for you what you can do for yourself.

As a vacation rental manager, you are very likely using Google Adwords in your online marketing strategy. If your management company’s Adwords cost per acquisition (CPA) is lower than the 12-15% that Airbnb is charging, there is no reason to cannibalize your own PPC strategy. In addition, Google AdWords is built on a bid model, so paying Airbnb to market your homes using AdWords actually increases your AdWords costs.

 

2. Airbnb essentially raised the take rate to 15-20% without a publicized increase to managers/hosts.

Without a press release or a host boycott or a Wall Street Journal article, Airbnb found a way to increase their take rate without disturbing the peace. Airbnb currently charges 3-5% of the booking, collects the money, and pays the host/manager 24-48 hours after check in. With this 12-15% marketing “option” the cost per booking rises to 15-20%. (Note: This $25 billion dollar online marketing channel added a 12-15% increase in the booking total for online marketing costs. That is like Apple charging you an additional 12-15% for technology.)

 

3. Airbnb’s “opt-out” page layout provides ideas for managers.

Vacation rental managers are increasingly finding the need to pass some marketing costs (i.e. distribution, floor plans, keyless locks, etc) on to property owners, and  Airbnb’s opt-out form in the property setup is smart. When adding new inventory, managers might consider ideas stemming from Airbnb’s new “opt-out” marketing form.

 

Sources: Airbnb, All about Airbnb, Tnooz

By Amy Hinote

 

VRHP Annual Conference Nov 9-11 in Orlando

By
VRM Intel Staff
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0

The 2015 Vacation Rental Housekeeping Professionals National Conference Agenda has been finalized and posted for your review.

The topics discussed at this years conference include: Sustainable Chemicals, Improving Housekeeping Process, What Laundry Equipment Do I Need?, How to Have a Better a Conversation with my Employees or Boss, just to name a few.

The agenda can be found here: 2015 VRHP National Agenda and Registration.

Sessions

  • Managing the Stress of the High Season
  • The Lost and Found Dilema
  • Defending the Brand – the importance of property inspections
  • Linen Life Expectancy and Different Types of Linens (show and tell)
  • Using Technology in Housekeeping in 2016
  • Training and Maintaining Non-English-Speaking Housekeepers
  • Keynote: OSHA Presentation
  • Keynote Address: Brindley Beach & Emergency preparedness
  • Stewart Couch Award & Executive Housekeeper of the Year Award
  • Laundry Machine Sizing and Terminology
  • Impacts of Good and Bad Housekeeping on Guest Satisfaction and the Bottom Line
  • Multiple Managers and Managing the Same Areas of People
  • Sustainable Cleaning Products and Other Green Certifications
  • How to Get Housekeepers, Maintenance Staff, and Owner Relations to Work With and Speak to Each Other
  • Evaluating Operational Efficiency/Effectiveness of Housekeeping
  • Product Demonstration
  • Keynote: Communication Techniques – Keeping Lines of Communication Open

 

Vacation Rental Housekeeping Professionals Education

 

 

Looking forward to seeing you there!

VRM Emergency Preparation: Save Valuable Time & Resources with Smart Home Control

By
VRM Intel Staff
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0

By Adam Norko, PointCentral –Emergency preparation is never easy. Tensions are high, and resources are low. Time is short, and the to-do list is long.

Whether it’s flooding out west, snow in the mountains, or hurricanes on the east coast, we can all relate to the threats Mother Nature can send our way.

Emergency prep takes center stage. Securing your home and making sure everyone is safe becomes priority numero uno.

As vacation rental managers know well, this prep is multiplied exponentially when you manage 10, 100 or 1,000+ homes covering vast distances.

PointCentral Hurricane-joaquin-articleThe logistics are mind boggling for VRMs during emergencies. It’s an all-hands-on-deck excursion that must be executed as quickly a possible. Every home must be touched and the clock is ticking. Every minute counts.

Hurricane Joaquin has been splashing around in the Atlantic for a number of days. Late last week, the track placed its target on the Outer Banks with winds in excess of 100 mph.

Luckily, Joaquin stayed out to sea, but it was close enough that the experienced Outer Banks VRMs rallied their troops to cover 50+ miles of beach to secure ALL homes. A daunting task.

As smart home control becomes a standard in the vacation rental industry, PointCentral clients are realizing the far-reaching benefits…like efficient, secure storm prep.

Imagine collecting, sorting, handing out, tracking, and recollecting keys for 300+ homes…on top of your daily operations. Yikes!

  • That’s a long process.
  • And who is tracking all those keys?
  • Did you get them all back?
  • Any copies made?
  • How do you/homeowner know the home was actually checked?

Enter PointCentral.

When I arrived to work yesterday morning, I was greeted by a pleasant message from one of our Outer Banks clients sharing a storm prep team communication. They didn’t choose PointCentral to improve their storm prep, but they sure did reap some added benefits…

All,

Some of you have been running around for days now handling storm issues. Thank you everyone for your efforts.

We take it for granted now…….

But it would have been a MAJOR pain in the butt if we had to put together hurricane rings of keys for each route, and get them to correct people, and then split them up for those working after the first couple of days, and then get them back together for the post storm festivities.

We certainly reaped the benefits of the keyless locks over the past few days.

Thanks again to all who have worked tirelessly, in the pouring rain and monsoon winds, to keep the circus on the road.

Glad we could play a part in your storm prep Seaside Vacations!

Want to Sell Your VRM?

By
VRM Intel Staff
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0

With values of vacation rental management companies soaring, many managers are wondering if now is the time to sell…and what steps need to be taken to get the company ready for a sale.

At the 2015 VRMA Annual Conference in New Orleans, Oct 25-27, there are several educational opportunities to address these questions:

 

Financially Managing Your Vacation Rental Business

This session will provide vacation rental managers with the information necessary to financially manage their business with consistent and reliable financial reports. As expenses in the vacation rental industry continue to rise, effective financial management is imperative to providing sustainable profits. Presenter(s): Ben Edwards, Newman-Dailey Resort Properties/Weatherby Consulting

 

Selling Your Vacation Rental Business for Profit

As the purchase and sale market heats up, vacation rental managers are being agressively solicited to sell their businesses. This session will provide tangible techniques to properly present your business for sale, initiate discussions with prospective buyers and negotiate a fair agreement while achieving maximum value for your business. Presenter(s): Ben Edwards, Newman-Dailey Resort Properties/Weatherby Consulting

 

Tax Considerations in the Operations and Sale of Vacation Rental Businesses

This session will discuss several tax issues common in the vacation rental industry, recent changes in the tax code applicable to vacation rental company owners and certain techniques to avoid paying more than your fair share of tax.  Edwards & Prince has also been involved in a number of vacation rental purchase/sale transactions and will discuss tangible methods to ensure preferred tax treatment when selling a vacation rental company. Presenter(s): Tony Edwards, Edwards and Prince Attorneys at Law; Jeremy Prince, Edwards and Prince Attorneys at Law.

 

The Art of the Deal

Gain a full understanding of the important items and criteria for buying and selling vacation rental businesses in today’s marketplace. This session provides details from both the buy-side and sell-side of current acquisitions and sales in the industry by two of the leading “deal guys” in the vacation rental space. Presenter(s): James Olin, C2G Advisors LLC; Ben Edwards, Newman-Daily Resort Properties/Weatherby Consulting

LiveRez Announces Keynotes and Sponsors for 2015 Partner Conference in Sun Valley

By
VRM Intel Staff
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0
LiveRez and iVacationRental

LiveRez.com announced additional details for their 2015 Partner Conference to be held October 19-23 at the historic Sun Valley Lodge in Sun Valley, Idaho.

The conference is expected to draw more than 400 attendees from all across the United States and abroad.

“The Sun Valley Resort is the perfect destination for a conference of this caliber and represents a homecoming for our company,” said Tracy Lotz, CEO of LiveRez. The company was founded in nearby Hailey, Idaho and is now headquartered outside of Boise.

Tuesday’s keynote will be Marcus Luttrell, decorated Navy SEAL and New York Times best selling author of “Lone Survivor.” Luttrell is one of the most sought after speakers in the country, having delivered his inspirational account to hundreds of groups around the country.

The Wednesday keynote will be Shaun Stewart, Head of Global Vacation Rentals at Airbnb. The Cornell grad is a rising star in the hospitality industry and previously held senior roles at Expedia, TripAdvisor, Travelscape and Jetsetter. Airbnb is one of the hottest tech start-ups in the world, with a recent valuation of $25 billion.

“We are thrilled that Marcus Luttrell and Shaun Stewart will be our keynote speakers. This is going to be an unforgettable week of events,” Lotz said.

Lotz also announced the Platinum Sponsors for the conference, which are CSA Travel Protection and VacationRentPayment. Based in San Diego, CSA Travel Protection is a leading provider of travel insurance and emergency services. Located in Walnut Creek, California, VacationRentPayment is one of the leading payment solutions for the vacation rental industry.

 

Learn More About LiveRez
LiveRez is the most widely used software platform for professional vacation rental managers. The company’s cloud-based, end-to-end platform offers fully integrated solutions for reservation and property management, websites with online bookings, trust accounting, CRM, housekeeping and maintenance, reporting, reviews and more. LiveRez is a proud Gold Sponsor of the Vacation Rental Manager’s Association (VRMA).

Link to Booking.com using LeisureLink/HomeAway Software Integration

By
VRM Intel Staff
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0

LeisureLink™ was selected to be the preferred partner for HomeAway Software® for vacation rental listing distribution to Booking.com. The agreement leverages LeisureLink’s extensive online network to maximize exposure and seamless inventory distribution to drive higher revenue for professional property managers using HomeAway Software.

LeisureLink offers HomeAway Software customers one consolidated platform for channel management, distribution technology and expert services. The Utah-based company is a recognized industry pioneer, delivering more than one billion dollars in bookings to clients since 2007 and has the largest network of distribution partners, collectively reaching more than eighty million travelers monthly.

“We have enjoyed a long, successful relationship with HomeAway Software, and are excited to expand our distribution partnership to maximize exposure on additional channels,” says Julian Castelli, LeisureLink CEO. “HomeAway Software provides some of the best business tools to manage the operations of a property management company, and our distribution tools are an ideal complement to that toolset. We have tremendous confidence in what the value of our new partnership will bring to HomeAway Software’s customers.”

“LeisureLink has been one of our key distribution partners for many years,” says Bill Furlong, HomeAway Vice President and General Manager. “They have always been at the forefront of innovation and emerging technology for the vacation rental industry.  We are very excited for this latest initiative which exemplifies our ongoing commitment to provide the broadest possible distribution opportunities for our customers.”

As a platinum sponsor of HomeAway Software’s RezFest 2015, LeisureLink will be a featured exhibitor at the premier technology and networking conference for the vacation rental industry, from October 6-8, at Red Rock Casino Resort & Spa in Las Vegas. The company has also announced they will be extending exclusive pricing and product options to HomeAway Software users at the conference.

To learn more or request a live demo of the LeisureLink solution, please visit http://content.leisurelink.com/demo-land-page or call 1.855.840.2249.

 

About LeisureLink 

Salt Lake City-based LeisureLink helps vacation property suppliers optimize the value of distribution by providing one platform with access to the majority of online travel agencies like Expedia, Booking.com, Airbnb, and Orbitz, all major global distribution system players, and the top travel tour operators. Through Leisurelink, suppliers can optimize rates, availability, specials, and even change content. LeisureLink also provides many value-added services, such as specialty distribution consulting, and accounting reconciliation.  For more information, visit LeisureLink.com, One LINK to more bookings – online, offline anywhere.

About HomeAway Software

HomeAway Software is the leading provider of property management software for professional vacation rental managers. HomeAway Software solutions consist of powerful productivity tools that automate key vacation rental management tasks, streamline operations, and help vacation rental managers maximize their online potential through world-class websites, booking engines, and the industry’s leading distribution programs. HomeAway Software is part of HomeAway, Inc. (NASDAQ:AWAY) the world’s leading online marketplace of vacation rentals.

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