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Airbnb CEO Brian Chesky Predicts Travel Revolution: “Travel as we know it is never coming back.”

By
Amy Hinote
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2

At this week’s Skift Global Forum, Airbnb cofounder and CEO Brian Chesky told an audience of travel providers that the world is experiencing a “travel revolution” and “travel as we know it is never coming back.”

“There’s a whole new game,” Chesky said. “And I think it’s a good thing.”

Chesky explained his theory, sharing that “hundreds of millions of people”—a phrase he used often during the interview— are working remotely; have more flexibility without being tethered to an office; and are now combining living, working, and traveling by staying in “Airbnbs” for longer term stays. “This revolution is really about flexibility. You can live anywhere. You can work anywhere . . . so imagine hundreds of millions of people now all flexible.”

Watch Skift founder Rafat Ali’s interview with Airbnb CEO Brian Chesky.

20% of Airbnb’s business now for stays longer than 30 days

“A fifth of our business, by room nights, is 30 days or longer. And we think this is going to stay and probably go up,” Chesky said. “So that means that one-fifth of our business—and growing—is not even travel. It changes our entire identity.”

He went on to describe how hundreds of millions of people can now “live in Airbnbs” as people are no longer tied to a place because they are able to work remotely.

At first blush, it seems—in order for Chesky to make this proclamation—that an insignificant portion of Airbnb’s revenue is coming from traditional vacation rentals. According to Key Data, the average length of stay for vacation homes booked on Airbnb is 4.1 nights, consistent with the prior year. However, the average length of stay for vacation rental bookings coming from Vrbo is 20 percent longer, and the average length of stay for direct bookings is 44 percent longer than stays booked on Airbnb. 

Leisure and Domestic Travel

Chesky acknowledged that domestic travel has increased in popularity. “The less people travel for business, the more, I think, they travel for leisure,” Chesky said. “It’s a little bit of a shift, and business and leisure will probably blur together anyway. I mean, when your home is your office, they’re kind of blurring anyway.”

“The reason domestic travel is going to stay really popular is—what’s one of the largest expenses in travel? It’s flights. I think a lot of long-distance travel is being replaced by short-distance travel.”

40% of Airbnb’s shoppers don’t know when or where they want to travel

Chesky told Ali that, previously, consumers would come to Airbnb and search for short-term rentals in a specific location and travel dates. However, since the pandemic, “that whole paradigm has changed.”

“40 percent of people come to Airbnb—now this is hundreds of millions of people—and they either don’t have a destination in mind or they don’t have a date range in mind,” he said. “What this means is that we have an ability to point demand to where we have supply.”

Airbnb’s role in directing consumers where they should travel is part of the company’s plan to combat overtourism, which Chesky defined as “too many people going to too few places at the exact same time.”

“The holy grail of overtourism is travel redistribution,” Chesky said. “More than 500 million people have used our ‘flexible date’ feature.”

Chesky told Ali that consumers’ indecision about where they want to travel gives Airbnb the ability to steer them in way that combats overtourism for destinations. It would be interesting to know how conversion rates for “flexible searches” on Airbnb compare to searches with a specified location and date.

Airbnb’s Significant Decrease in Marketing Spend

Ali asked Chesky about Airbnb’s reported shutdown of marketing during the pandemic.

“We were spending $800 million on a run-rate basis, mostly on Google keywords,” Chesky said. “And we got to do the experience that I think every CMO in the world wishes they could do: ‘What if we just turned off 100% of marketing? What would happen?’” 

Chesky continued,” Of course, we were forced into that experiment. So we shut off $800 million of run-rate marketing, and what happened was our traffic was still 95 percent of the year prior. So we realized that we don’t have to return to that spending, and we have not.”

“If you can get people talking about you, that’s the best marketing.”

Family Travel

After Chesky’s “travel revolution” declaration, Ali astutely asked Chesky about family travel, the historic primary driver of vacation rental travel. Chesky’s response demonstrates that—in spite of company’s narrative that hundreds of millions of people will be living in Airbnbs in the future— Chesky is clear-eyed about the high returns coming from large vacation homes and the importance of the established family-leisure travel sector.   

“A bigger opportunity [in the next] ten years for everyone is family travel. Even people with families—they can’t be totally untethered—but most of their kids are only in school 180 days in the year.” Chesky said. “The other 185, they can travel—a lot of them—so I think family travel is one of the greatest [opportunities], and it has benefited us.”

“I mean, why did our average daily rate (ADR) go up? Our unit economics improved, in part, because people started spending more money per night on Airbnb. Why did they do that? Because we were booking larger homes. And who were booking larger homes? Families and groups. So, I think family travel will boom, and the other thing that I think is going to boom is multiple families traveling together or friend groups traveling together.”

How is Airbnb stacking up for bookings in larger homes? The charts below show 2021 vacation rental KPIs comparing direct performance with Airbnb and Vrbo by bedroom size. Airbnb’s average stay value is lower, the length of stay is shorter, and the booking window is smaller on Airbnb than Vrbo and direct-channel bookings for professionally managed vacation rentals. The gap widens as the size of the home increases, and Vrbo is performing much better for larger professionally managed vacation homes. 

Subscription Model

Rafat also asked Brian what he thinks about the future of OTA subscription models.

“I think anything that’s used frequently is where a subscription model works,” Chesky said. “Some people have asked, ‘What is the most popular app in the world that’s never worked?’ And a lot of people say it’s a travel planning app. Like every engineer and every product person, their pet project is a travel planning app. Why do travel-planning apps not stick? It’s because they’re very complicated and people use them once a year. That’s a bad combination.”

“You need to have something that’s used frequently,” he explained. “And to be a travel app that’s used frequently, you need really big scale or you need to be something that’s relevant to people’s lives. That’s hard in an infrequent business. If you can solve the scale problem or the frequency problem, you have a great subscription platform.”

Whether he knows it or not, Chesky’s comments throw a bit of shade on TripAdvisor’s new subscription model. We’ll look forward to hearing from TripAdvisor CEO Stephen Kauffer, along with Expedia CEO Peter Kern and Booking CEO Glen Fogel later in the show. 

One more Chart: Average Stay Values by Booking Source

Looking at average stay values (ASVs) for professionally managed vacation rentals, Airbnb had an ASV of $906, which was more than 53 percent below the ASV for direct bookings ($1,935). The difference in ASVs is the result of a combination of higher ADRs and longer stays for direct bookings.

Another way to look at it is that it takes 2+ bookings on Airbnb to equal one direct reservation. Even though Chesky is looking for a revolution, the company needs to close this gap in revenue per booking. 

Skift Founder and CEO Rafat Ali Discusses Upcoming Skift Global Forum, Sep 21-23

By
Amy Hinote
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0

Tuesday kicks off the annual Skift Global Forum at the TWA Hotel at New York’s JFK Airport, September 21 – 23. However, this year’s conference is a “hybrid” event, meaning participants can attend the forum either in-person or virtually. In-person tickets are $2,495, and online tickets are $345.

The travel industry has been transformed by the pandemic, and vacation rental industry leaders are anxious to hear directly from executives at OTAs, hotels, urban short-term rentals, and destinations about how they view both the significant changes to leisure travel and the increased demand for vacation home rentals. Key interviews on Skift’s stage include Airbnb CEO Brian Chesky, Booking Holdings CEO Glenn Fogel, Marriott International CEO Anthony Capuano, Google VP and Travel GM Richard Holden, Expedia Group CEO Peter Kern, Sonder CEO Francis Davidson, HomeAway cofounder and investor Carl Shepherd, Family Travel Association founder Ranier Jenss, and Visit Florida CEO Dana Young.

Check out the Skift Global Forum agenda, and then use this link to save 25 percent on your online ticket. 

We caught up with Skift founder and CEO Rafat Ali to hear more about this week’s event, how he feels about getting his team back together at their NYC home base, what insights attendees are hoping to gain from the forum, and how hybrid formats are transforming B2B events.  

“This is the first time the whole team will meet since March 2020 last year,” Ali said. “We haven’t used this muscle in more than two years now, and it will take some doing to shake off those rusty muscles, so to speak. So much of the happiness is just meeting our team again—and so many people we have hired in the last two years we haven’t ever met in person! Also NYC is back, for sure, so there’s a little bit of that thrill of being part of the revenge of the big city.”

On Tuesday, September 21, the event kicks off by introducing human mobility to the dialogue followed by a discussion about its implications between Ali and Airbnb CEO Brian Chesky. “Brian will be talking to me about a big picture conversation on future of human mobility, with all the changes happening on climate change, immigration, global talent shortage, changes in future of work and living, and other larger geopolitical issues.”

Ali will also be talking to Chesky about how he envisions building out Airbnb for the next decade. “It will be less granular on the current business and financials, also because they’re coming to a quiet period because of their earnings coming up,” Ali added. “He is planning to give an update on some booking and host trends they’re seeing, so do tune in for that, but it’ll be smaller part of the conversation.”

In light of the many changes facing the travel industry, we asked Rafat what he thinks attendees are hoping to discover through these discussions.

“I think one of the biggest things people and our editors are keen on understanding is the shape of recovery as we enter winter 2021 and the obvious slowdown with the Delta variant,” Ali responded. “Yet it’s a very hopeful time, as the demand over the last year has been incredible for domestic [travel] and has benefited sectors like yours [vacation rentals] and others.”

“The other things everybody’s trying to figure out are when international travel will open—particularly to the US—and what’s the shape of vaccine mandates for employees of travel companies as well as for customers/travelers. The last part is particularly applicable to the airline companies,” Ali added.

We also asked Ali about his decision to host a hybrid event and if this hybrid format will be the future of B2B events. “How can we not have a hybrid future for conferences going ahead?” he asked. “It would seem like a big loss if we only do physical [events] when, if anything the last 18 months has shown us, it is that technologies like Zoom allow us to open up to the world, both in terms of where we hire our teams as well as in terms of our audiences and other stakeholders on events. It is more complex than just running a physical [event] or just running a virtual event, because you’re almost running two conferences at the same time with two different audiences that at times are at cross purposes. We are going to learn a lot of lessons the hard way in the next few days.”

To learn more about the event, check out the Skift Global Forum website, and then use this link to save 25% on your online ticket. 

Former Expedia and Airbnb Exec Shaun Stewart Shares Insight at Data and Revenue Management Conference

By
Amy Hinote
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1

In a keynote presentation at the 3rd Annual Vacation Rental Data and Revenue Management (DARM) Conference last month, Shaun Stewart discussed the recent “seismic shift” in the vacation rental industry over the last 18 months. 

“What’s clear is VR was already in the biggest seismic shift it’s ever seen,” Stewart said. “But pre-pandemic, we were all talking about how this was continuing to go from 1 out of 10 trips in the US, to 2 out of 10 trips, to 4 out of 10 trips. And what happened during the pandemic is that a level of fuel just got added to that fire that nobody’s ever seen before.”

In this keynote, Stewart explained how this explosion of demand during the pandemic has affected outside investment, current and future shifts in supply, and distribution strategies. He also addressed technology, Vacasa, and the future of rate parity. There was so much interest in Shaun’s presentation, that DARM emcees, Sarah Bradford and Tim Cafferty hosted him on their Sarah and T podcast to follow up on the concepts presented and how VRMs can capitalize on the current environment.

Although our intent was to offer this presentation exclusively on VRDARM.com as part of the paid video package, I feel strongly that all of our readers would benefit from hearing this presentation. There is a lot here, and Stewart shares valuable data. In addition, I highly recommend also listening to the Sarah and T podcast follow-up episode as they dive deeper with Stewart into several of the topics discussed in the presentation below. 

 

 

If you’re not familiar with Shaun Stewart, he graduated from Cornell University in hospitality and worked with Expedia from 2000 – 2010, mainly focused on negotiating deals with suppliers. He then helped to build Jetsetter, which sold to TripAdvisor in 2013. After working for TripAdvisor for 18 months, he moved his family to California in 2014 to join Airbnb as Global Head of Vacation Rentals, focusing on growing its performance outside of urban city centers and into leisure space. He was the first to explore and build integrations with property management systems for vacation rental management companies. In fact—this is the role he was in when I first met Shaun and heard him speak at the 2015 Liverez Partner Conference after Airbnb had successfully completed its first VRM API integration with Liverez’s PMS. In 2016, Shaun left Airbnb to join Google to develop Waymo, Google’s self-driving car company, after which he returned to New York as CEO of Newlab, an advanced technology accelerator which has raised 1.6 billion over the last four years to help 220 different companies get to market.

I highly encourage you to listen to both Shaun Stewart’s keynote presentation from the DARM Conference and the follow-up Sarah and T Podcast. It will help in understanding the current vacation rental landscape and give you insight and ideas about how to approach the future.

You can also purchase the video package from the DARM Conference at https://vrdarm.com/

Moving Mountains Acquires Breckenridge’s Paragon Lodging

By
Amy Hinote
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2

Colorado’s Moving Mountains has expanded into Breckenridge with the purchase of Paragon Lodging. Founded in 1997 by Robin and Heather Craigen, Moving Mountains currently manages over 120 luxury vacation rentals in Steamboat Springs, Vail, and Beaver Creek, With the acquisition of Paragon Lodging, the company is adding 70 top-tier vacation rental homes in the Breckenridge area.

Paragon Lodging was founded by Johna Rice and Krista Rider in 2000. Although Rice and Rider are exiting the company, Moving Mountains is retaining all Paragon staff members.

“Our guests constantly ask where else they can stay with us, and with this expansion further into Colorado we can help meet their needs,” said Robin Craigen, president and CEO of Moving Mountains. “We have known Johna and Krista for over seven years and have long identified with the similarities in our approach to service and experience. They have a special team and spectacular homes—the perfect opportunity for smart growth different to what is happening elsewhere in the industry.”

Craigen continued, “The relationship with Johna and Krista makes this a natural fit. We had not approached any other business in Breckenridge because this was always our number one choice to grow into this market. After our success with expanding to Vail and Beaver Creek, adding another premier resort like Breckenridge just made sense.”

According to Paragon Lodging cofounder Johna Rice, “Krista and I are thrilled to be passing the torch to such a well-respected leader in our industry. We have developed a great friendship with Robin and Heather over the past seven years, and we have the utmost confidence that they continue to deliver the highest standard of excellence which Paragon is so well known for. We have no doubt that our staff, homeowners, guests, and business partners will thrive under this new ownership.”

By merging these two companies with complementary portfolios of luxury mountain homes, Moving Mountains looks forward to further solidifying its foothold in the top-tier ski destinations of Colorado. It is expected that Moving Mountains will bring disciplined financial management along with “the highest level of service in luxury mountain vacation home management” for both their guests and owners.

Paragon’s inventory will be marketed nationally on the Moving Mountains website but will be operating locally as Paragon Lodging by Moving Mountains.

Marketing Without Data is Like Boating Without A Motor

By
Scott Hahnert
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0

Spoiler alert…you won’t get very far. Getting the most out of your marketing efforts means investing in data.

Come up with a tagline, use a beautiful picture of a vacation home and insert your contact information – easy as one, two, three, right?

In today’s marketing landscape – not so much. This approach to creating an owner postcard, homeowner landing page, or any other owner-directed marketing asset is known as “spray and pray” marketing. And, this no longer cuts it in the vacation rental industry.

Why?

Because your competitors are now doing data-driven marketing and are seeing better results.

How do we know?

We do data-driven marketing at Vintory for over 100 partners in the VR space, and this is also how venture-backed VR companies do it too.

 

Why Data-Driven Marketing Works

In a nutshell, data-driven marketing uses customer data to predict their needs and optimize marketing efforts for the highest possible return on investment.

Data-driven marketing will help you reap a number of benefits that traditional marketing doesn’t, including:

  • Access to more leads you currently aren’t reaching
  • Targeting higher quality leads that have a higher chance of converting
  • Personalized marketing outreach, leading to higher conversions
  • More successful, unbiased campaigns that remove the guesswork

 

How To Start Doing Data-Driven Marketing

There are a few ways you can begin to incorporate data into your marketing campaigns:

  • Pull data records yourself (not for the faint of heart)
  • Hire a data analyst
  • Partner with a VR marketing specialist like Vintory

 

What Does a Marketing Data Analyst Do?

As the Senior Data Analyst at Vintory, I will outline what our data team does for VR Managers to boost their marketing efforts and accelerate their inventory growth.

There are two main steps we take to do this:

  1. We provide customized data targets
    Here we dive deep into the specialized data VR Managers are looking for. Maybe it’s 3+ bedroom properties, has a pool, or an estimated property value of $800K+. Whatever the case, our goal is to find a healthy record count that corresponds to our VR’s criteria, resulting in highly qualified leads.
  2. We provide customized data purchases
    Here we compile a data set from a variety of sources, run this data through a series of data transformations, and load this data onto our CRM platform. We follow the data integration process called ETL, which stands for Extract, Transform, and Load. ETL provides the foundation for data analytics by standardizing raw data in a methodical manner. This process results in giving the clearest, consistent, and usable data possible.

 

Extract: We get our raw data from generally two sources: Public County Records and OTA (Online Travel Agency) data.

Transform: Next, we take that raw data and customize it for our specific needs. To do that, we need to clean and unify our data (known as data wrangling) as well as run the data through our standard data transformations.

 

Our standard transformations include:

  1. Skip Tracing OTA data and custom data with any & all owner information.
  2. Unifying our data from multiple sources into one.
  3. Removing duplicate owners.
  4. Removing current owners.
  5. Removing “do not contact” owners.
  6. Appending emails & phone #’s.
  7. Making custom A-B-C targets.
  8. Providing data visualization through tools such as BatchGeo.

 

Load: Once we complete these transformations, we review the file with our partner and then load it into Vintory – our CRM and marketing automation platform.

And once we’re done, that’s not an end-all, be-all data set locked in time. We get feedback from our mail campaigns for address changes and update our records accordingly on our CRM. We also periodically offer new data purchases as well since data decays over time.

 

So what separates Vintory and our data process from others that aren’t, well… so great?

  • We listen to our partners and come back with fresh data that align with their custom interests
  • The quality of our scripts to provide high-quality data is superb and unparalleled
  • We are detail-oriented, accurate, and ethical in how we source data
  • We work closely with our partners to explain how to best use their data list and create personalized marketing campaigns to these homeowner leads

 

Final Thoughts

This article only scratches the surface of how to acquire, analyze and use homeowner data for data-driven marketing campaigns. The real takeaway is to understand why data-driven marketing will provide you a higher return on your marketing efforts and is necessary in today’s competition.

Engaging in a single purchase of data can provide invaluable insights into your target market and enhance your marketing efforts, such that it’s worth the effort to give it a try.

If you’re interested in learning more about how Vintory acquires and uses data, feel free to learn more about Vintory’s services here. You can also send me an email at: scott@vintory.com.

VTrips Receives “Significant” Equity Investment. Will Use $250M+ to Buy More Vacation Rental Management Companies

By
Amy Hinote
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4

One of the US’s largest vacation rental management companies, Florida-based VTrips, received a “significant minority equity investment” from Hudson Hill Capital. According to the company, “all capital will be funded to the balance sheet,” and VTrips will leverage the investment to speed up its acquisition strategy and further strengthen its technology offering.

With this injection, VTrips expects to spend over $250 million to acquire attractive vacation rental management companies in the near future.

Founded in 2002 by CEO Steve Milo, VTrips offers full-service vacation rental management with most of its current inventory located in the Southeast US. Steve Milo, founder and CEO of VTrips, shared, “Our new investors have placed a significant vote of confidence in our vision, our people, and our technology that will further enhance the customer experience. This investment, combined with Hudson Hill’s track record of scaling businesses like ours will help us extend our market leadership through a carefully designed acquisition strategy that will further build our category defining technology and service offering. VTrips possesses a very promising future.”

Related: Video clip from panel discussion with VRM Intel, May, 2021. Steve Milo: “We’re a unicorn, too; and we’re set to actually scale and be sustainable. . . . Profitability matters.”

According to Eric Rosen, managing partner of Hudson Hill Capital (HHC), “Steve has built VTrips into the leading independent vacation rental management platform and one of only a select number of operators with a multi-state footprint. Perhaps more notable about VTrips is its proven ability to operate effectively and profitably over multiple decades. HHC is excited to partner with Steve during the company’s next phase of growth and to use our collective experience to help build the company’s footprint both organically and through M&A, capitalizing on the tailwinds within the growing vacation rental market.”

Milo added, “This significant investment represents another key milestone for our company as the vacation rental resort market in North America continues to boom, especially in drive-to markets. There is far more demand than supply which has resulted in a more than 20 percent increase in average daily rates (ADRs) in many markets. COVID-19 accelerated the adoption of vacation rentals over hotels, and the sector also benefited significantly from social distancing, remote work. and remote learning which allows more flexibility for travel.”

VTrips has already completed three acquisitions in the first half of 2021, most recently acquiring Panama City, Florida-based Resort Collection with close to 800 units. The Resort Collection deal follows several other acquisitions in the Southeast region, including Distinctive Vacation Rentals in Ft Myers Beach and Resort Properties in Tennessee. The company has completed over 20 acquisitions since its founding.

According to Milo, owners of local property management companies are increasingly concerned about whom they sell to. “We are encountering more and more sellers who want a buyer that will hire all their staff, take care of their brand and legacy, and allow them to live in their community with pride. With this capital infusion, we are poised to accelerate our activity as a buyer and represent a unique landing place for an independent vacation rental operator.”

Milo will be speaking next week at the Vacation Rental Data and Revenue Management (DARM) Conference in Charleston, SC, Aug 17 – 18. 

Vacasa Acquires Meyer Vacation Rentals, Doubles Footprint on Alabama Gulf Coast

By
Amy Hinote
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4

Vacasa has purchased Meyer Vacation Rentals and Meyer Services from SH Enterprises, doubling its short-term rental footprint along the Alabama Gulf Coast. Starr Textiles and Meyer Real Estate will remain under the SH Enterprises umbrella and will be managed by president Michelle Hodges and CEO Les Williams.

Founded in 1967, Meyer began as a real estate company and moved into vacation rentals as the Gulf Coast witnessed an explosion in development in the late 70s. Meyer Vacation Rentals was the largest property management company in the area for decades, managing 2,200 homes and condos at its height before 2008’s recession. Increased competition slowly eroded its market share along Alabama’s Gulf Coast, and Vacasa reported today that it is acquiring 980 units at Meyer. 

Founder Sheila Hodges had recently transferred ownership to her daughter and Les Williams in March of this year. 

Based in Portland, Oregon, Vacasa is set to go public this fall through a merger with TPG Pace Solutions, a special purpose acquisition company (SPAC), with a $4.5 billion valuation. Company information presented with the SPAC announcement (source: Skift) shows that Vacasa receives a 30% commission on rentals and then adds a number of fees resulting in a 49% take rate (fees and commissions that the company collects on gross rental revenue).

 

According to SH Enterprises president Michelle Hodges, “While l appreciate everyone’s kind words about me and especially Sheila (Hodges), what makes this team special are the people that get up every day and come to work. That’s not going to change, they are what makes Meyer special, they are the team that just landed us as one of the best companies in Alabama. They will also be what makes Vacasa special; it may be another name but they are the ones that Make It Happen. Those aren’t just words. Truly Vacasa could have acquired a few smaller property managers to pick up inventory but they chose this team and fought for it, and I believe the reason is the talent and professionalism of a world-class group of professionals who know vacation rental operations like no one else.”

With previous acquisitions of TurnKey, Wyndham Vacation Rentals, and Mandoki Hospitality, Vacasa already has a large operation in the Gulf Shores and Orange Beach area outside of Meyer Vacation Rentals, and the company touts its ability to create synergies for scalability and efficiency. For example, when Vacasa purchased Wyndham Vacation Rentals, the company let go a significant number of Wyndham’s employees in Alabama within months following the acquisition. 

 

 

Impact to the Destination

The leadership at Meyer Vacation Rentals has served in critical roles with the state tourism department and the Alabama Gulf Coast Convention and Visitors Bureau, consistently advocating for promotional funding for the destination, beach renourishment projects, workforce development programs, and development of conference facilities and the airport. The company is a key supporter for shoulder-season events that bring people to the area, including Hangout Festival, Shrimp Festival, concerts series, fishing tournaments, and nation-wide youth and collegiate sports. In addition, Meyer Vacation Rentals funds area charities, schools, and community events and initiatives. Vacasa, historically, hasn’t invested as heavily in the destinations or communities it enters. 

According to Glen Kaiser, broker and partner at Kaiser Vacation Rentals, “When you begin to think about all the influence Shelia (Hodges) and Meyer have had in the community through her passion and entrepreneurship you can’t help but wonder how losing that presence will affect the business and community.”

Kaiser’s vacation rental division sold to Wyndham Vacation Rentals in 2013, and Vacasa purchased Wyndham Vacation Rentals in 2019. Earlier this year, Leonard and Glen Kaiser reentered vacation rental management with the relaunch of Kaiser Vacation Rentals. 

“Change is inevitable,” Kaiser said. “Those who are left after a change are left with a responsibility to ensure that whatever the change affects will result in a positive outcome. We at Kaiser Vacation Rentals have experienced and learned from the effects of change like this sale of Meyer, so we work every day to ensure our actions are dedicated to reach positive outcomes. Our approach to business is what has been the cornerstone of how Shelia and the other pillars of the industry in our community—Kaisers, Bodenhamers, Bretts, Robinsons, Bollers—work toward, and that cornerstone is relationships and family-friendly business practices. So change such as this can be a little concerning that we don’t lose what has been worked so hard for and for so many years.”

Kaiser continued, “I guess I’m being a bit nostalgic, but I am proud of our community and of the reputation this community is known for.  My hope is those of us still in the field working never lose what people like Shelia have worked so hard for so many years to build.”

According to Vacasa’s press release, “To support the portfolio expansion and continuation of service levels, Vacasa will maintain the Meyer Vacation Rentals Gulf Shores office and the Meyer Services office in Foley, Alabama, in addition to welcoming more than 200 employees to its field and management team.”

Vacasa expects that Meyer Vacation Rentals’ homes will be fully integrated and bookable on Vacasa.com by October 2021, with Florida units to be managed by Vacasa LLC and Alabama units to be managed by licensed subsidiary Vacasa Alabama LLC. 

Upcoming battleground puts a spotlight on revenue management technology in the short-term rental sector

By
Amy Hinote
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0

Over the last two years, the short-term rental (STR) industry has exploded with increased consumer demand and a large amount of media attention resulting from Airbnb’s IPO, Expedia and Booking.com’s focus on vacation rentals, and industry-wide consolidation. Further, high growth and lucrative exits are attracting significant outside investment. The vacation rental industry is undisputedly the hottest sector of travel, with many vacation rental companies seeing 50%+ increases in gross revenue in 2021. 

As a result, professional STR management companies are swiftly becoming more advanced, technology-enabled, and efficient as they compete for both homeowner contracts and guests. In the traditional leisure-based vacation rental industry, older independent operators are weighing selling their companies as investment buyers flood into the sector seeking to capture market share via acquisitions. And the emergence of SPACS have allowed companies that haven’t achieved profitability (e.g., Sonder and Vacasa) to move toward public offerings with less scrutiny. 

Looking to the hotel industry as an example, short-term rental management companies have discovered revenue management strategies to help them take advantage of the influx of demand. No longer holding to static seasonal nightly and weekly rates, companies in the sector are quickly transitioning to dynamic revenue management strategies that mirror other travel verticals. However, the percentage of STR companies using tech solutions for revenue management is still small, and technology companies are racing to meet this emerging industry need. 

In Charleston, SC, next week, nine of these technology companies are entering an arena to introduce new functionality for STR companies at the Vacation Rental Data and Revenue Management (DARM) Conference Battleground sponsored by RevPARTY. Expedia Group is keeping an eye on the new industry dynamics and reached out to sponsor award recognitions at the conference, which will include a 2021 Innovation Award and a People’s Choice DARM Battleground Award. The DARM Battleground will be held on Aug 17 and 18, at the Francis Marion Hotel in Charleston. In addition to the battleground, Expedia Group is sponsoring the 2021 DARM Pioneer Award and the 2021 Vacation Rental Revenue Manager of the Year. 

DARM Battleground Presentations

Below is a preview of what attendees and judges will be viewing during the upcoming DARM Battleground sponsored by RevPARTY.

Art, Rented’s Automated Rate Tool with Andrew McConnell

Rented provides technology, tools, and services to help vacation rental pros optimize their portfolio of properties. Art, Rented’s Automated Rate Tool, is the only dynamic pricing software built for and by professional short-term rental revenue managers. With Art, your in-house specialists are empowered to set the right price for every property with intelligent rate recommendations and easy custom adjustments. For companies that need hands-on support, our Revenue Management Service provides a dedicated revenue manager who specializes in handling every detail: setting prices, monitoring performance, and making custom adjustments.

DemandIQ by Key Data with Melanie Brown

DemandIQ by Key Data is the lodging industry’s first product for capturing true, real-time, forward-looking traveler demand data. To date, we have all relied upon booking data to reflect traveler demand. While this tells the picture of the demand you captured, it doesn’t tell the full story about the demand you failed to capture or the market-level demand that never made it your way. With this new product, we will be able to offer clear insights into the full demand picture.                 

MarketMinder by AirDNA with Scott Shatford

AirDNA is presenting MarketMinder, its flagship platform for short-term rental data and analytics. In addition to its market intelligence tools, this battleground session will focus on two aspects of MarketMinder: My Properties, a tool where vacation rental hosts and managers can onboard properties, create custom comp sets, and benchmark themselves against the competition; and Smart Rates, a new tool to push automated pricing to their listings. 

Portfolio Analytics by PriceLabs with Oliver Marczynski

Portfolio Analytics by PriceLabs provides a convenient way to visualize internal booking data and helps identify opportunities to increase revenue. Intuitive charts make it easy to see portfolio and group performance at a glance without losing track of individual listings which might require additional attention. Pair Portfolio Analytics with our Market Dashboards to compare your booking trends against similar listings in the market and automate pricing adjustments to respond to patterns in bookings with our Dynamic Pricing tool for a full revenue management solution. Connect via our 50+ PMS partners or internal API and unlock actionable booking trends in minutes, free of charge.

RevMax with Desiree Garcia and Maureen Shilling

RevMax partners with data experts to offer market and business intelligence to help with pricing strategies. RevMax offers distribution channel management, nightly minimum management, as well as automated incremental revenue generation. Along with all of the tools to build an effective pricing strategy, the experienced RevMax team also offers consulting services for those companies that need some help to capitalize on the tools. RevMax is now open to non-Streamline clients, so it’s the perfect time to talk to the team to find out how they can help increase the bottom line.  

Shopping Cart Abandonment by NAVIS with Amir Rashid

The NAVIS Shopping Cart Abandonment (SCA) tool works behind the scenes capturing stay and contact details entered by guests as they search and explore options on your booking engine. Once a guest enters their email, all previously entered stay and contact data are sent to the lead form, even if the reservation isn’t made. With up to 80% of guests abandoning their shopping carts, SCA brings the lead data back to the vacation rental company and allows them to convert up to 30% of their abandoned web traffic leveraging highly personalized outbound emails and calling from captured data.    

Track Property Management Software with Michelle Marquis

Effective revenue management is about more than just unit pricing. In addition to giving PMs the ability to flexibly set and configure unit pricing and integrate with third-party dynamic-pricing providers, TRACK provides tools to optimize fees―the second largest revenue driver for most PMs. TRACK’s fee configurability gives PMs the power to overcome competitor commission-rate threats in retaining homeowners, package fees optimally to work within each channel’s limitations, and insulate against one our industry’s biggest negatives―being “fee’d to death” after choosing a home on rent alone. Once fees are built in Track, PMs establish business rules for automatically mass-applying them by unit type, location, reservation types, channels, etc., eliminating much of the manual work typically required to optimize this important revenue source. 

Trip Manager by LMPM with Sean Raftree

LMPM is next-generation property management software for vacation rentals. LMPM’s powerful Trip Manager can boost your revenue management strategy so you’re measuring RevPOR, not just RevPAR. Supplement your rate strategy by including additional services and experiences to generate ancillary revenue before and during the stay, monetize owner stays, and provide merchandizing benefit on channels.

Wheelhouse Pro with Andrew Kitchell

Wheelhouse will be introducing a few features from their newest platform, Wheelhouse Pro. Wheelhouse’s goal is to bring transparency and auditability to pricing engines in the accommodations space. Their newest toolset will demonstrate that ambition and illustrate the power and control that revenue managers can have with more transparency around how a pricing engine is working.

The Industry Needs Your Feedback in Phocuswright’s 2021 Short-Term Rental Survey

By
Pete Comeau
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1

Short-term rentals in the US have been on a steady growth trajectory over the past decade. Since 2013, Phocuswright, a leading travel industry research firm, has conducted several pioneering research studies to size the market, analyze consumer and industry trends, and explore the rise of digitalization in this segment. 

 Click Here to Take the Survey

 

 

Phocuswright’s most recent study, “Here to Stay: U.S. Short-Term Rentals Move Mainstream,” showed that gross bookings increased at a CAGR of nearly 6 percent from $31B in 2017 to $34B in 2019. Furthermore, online bookings grew at nearly double the pace of the total industry. 

COVID-19 upended nearly all travel in 2020, and short-term rentals also felt the impact. Some companies operating in the sector shut down, while others downsized. 

Homeowners and hosts pivoted to serving long-term renters, taking short-term inventory off the market. 

But as the year wore on and travelers sought to get out and about while avoiding high-traffic areas to stay safe, they turned to vacation rental properties with social distancing baked-in. Short-term rental demand recovered as summer travel skewed toward rural, less-crowded destinations and drive trips. 

With vaccines on the way and an expected recovery in travel to follow, will short-term rentals continue to prosper and outpace the greater lodging market? Will short-term rentals benefit from the behavioral changes the pandemic has wrought? Which trends are holding up? What new trends are emerging? 

Phocuswright is conducting a 15-minute survey of US-based short-term rental property managers to understand the marketplace and study key trends among PMs who offer their properties to travelers. 

 

The study will answer key questions, including the following: 

 What was the impact of the COVID-19 pandemic on revenues, and how is the short-term rental industry projected to recover through 2025? 

  How satisfied were travelers with how brands handled the COVID-19 pandemic? 

  How have travelers shifted their preferences in a post-pandemic world? 

  How are homeowners and property managers evolving in a post-pandemic world? 

  Which trends will be short-lived and which will be here to stay? 

  Which technologies will be most important as the market matures? 

  What impact will short-term rentals have on the future of lodging? 

 

What’s in it for you? If you qualify for and complete the survey, Phocuswright will share the results of the study with you. 

Click Here to Take the Survey.

All responses will be kept strictly confidential and will be used only to determine trends. 

 

IMPORTANT EDITOR’S NOTE FROM VRM INTEL

From Amy Hinote to VRM/PMC owners and GMs: 

It is incredibly important for you to complete this survey, as many significant investment decisions in our industry are based on this particular research presented by Phocuswright. 

Our professionally managed vacation rental sector has been lumped under the broader short-term rental umbrella, and your participation is critical to ensure that Phocuswright is not hearing from other sectors disproportionally, (e.g., urban rentals, individual hosts, marketing platforms, and shared accommodations). 

If our sector is not accurately represented, then subsequent investment decisions will be flawed, bringing a continued and substantial influx of capital injected into bad business models. 

When investors continue to pour money into bad business models, it makes it harder for all of us—VRMs, tech companies, and service providers—to compete as we are unfairly competing head to head with under-performing companies propped up by outside investment. And we’re not the only ones who suffer; guests and homeowners suffer from these poor business models as well. 

The professionally managed vacation rental sector needs to be heard, recognized, and represented in this study. 

I implore you to have someone in your company accurately complete this survey. Your participation is critical and will directly help the entire industry. 

 

Why Your Business Should Have an In-House Information Technology Leader at the Table

By
Wendy Glover
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0

Technology growth and consolidation in the vacation rental industry have exploded over the past five years. In a market where there were only five to ten core property management system (PMS) providers, there are now over a hundred. Some older players have left the market, while others were acquired or sunset. There are also multiple providers who offer only pieces of the comprehensive functionality that legacy enterprise PMSs provided in the past. 

What the current systems do (or do not do) is diverse and complicated. Understanding how all the different solutions integrate and knowing who to call when something is not working is no easy task. 

With technology playing an increasingly strategic role in the vacation rental marketplace, it is important that companies make the right technology decisions. 

Many companies grew with a core team of operators and made their technology decisions along the way based on what was available at that time rather than on a long-term business and technology plan. Hiring an IT lead as a permanent member of your business team is an important and strategic decision that can help your company grow to the next level. 

An issue for small- and mid-sized businesses is whether they are making the right technology decisions and making the best use of their current technologies to grow their business while increasing efficiencies and improving employee, owner, and guest experiences. Growing technologies like mobile, cloud, robotic process automation and artificial intelligence can provide opportunities to serve customers in new ways—and those opportunities are easier to spot with an IT person embedded on your team. 

An IT leader who understands your business, not just technology, is imperative. They need to be part of the budgeting process, involved in developing your strategic plans, engaged in marketing and business development projects, and fully versed in how your business operates day-to-day. They should map the entire customer journey (guest and owner) and work with you to determine the areas for improvement. 

A dedicated IT leader can help you navigate all the options and work with cloud providers, vendors, and outside contractors. Someone once told me that their PMS system took only 1 percent of their time to support but 100 percent of their time when problems arose. 

Are you willing to step away from running your business and serving your guests to fix an outage? An IT leader will know how to negotiate a contract with a cloud service provider that includes all the uptime, redundancy, failover, and security requirements to support your operations with penalties for outages or breaches. 

 

How much should a property manager spend on technology? 

According to a Flexera 2020 survey, the average IT spend across all industries is 8.2 percent of revenue, with an average of 18 percent of that spent on cloud-based technologies. Compare that to your spend to see if you are investing enough in your company’s success.

 

What Type of Role Should You Hire? 

IT has almost as many disciplines as medicine. When you are sick, do you need a general practitioner, a physical therapist, or an orthopedic surgeon, and how do you know? 

Your business might require the assistance of these technology roles: end-user support, help desk technician, network technician, network engineer, systems administrator, systems engineer, database administrator, telecommunications technician, developer, cybersecurity engineer, IT manager, and more. A senior lead on your team will know which type of support your company needs and who to contract or bring onto your team. 

 

Suggestions for Finding the Right Leader 

Hire Someone Who Speaks Both Languages 

A pure information technologist will not understand your business. Someone who has worked in the vacation rental industry in technology or technology consulting will be a better fit. 

 

Hire a Senior Role 

The position needs to have an equal voice on the management team. They should be able to communicate well and explain technology in a non-technical manner, including the benefits your operations will gain. They need to be able to negotiate with vendors, maintain strong vendor relationships, and possess a strong customer service mentality. Hiring someone in the $40–$50K salary range, depending on your location, is not going to get you the skills you need. Use Salary Monster or other online hiring tools to find the appropriate salary range for your market. If this level position is not in your budget, consider a part-time role that still sits at the executive level. This is sometimes called a virtual CIO. 

 

Check Their References 

This is so simple but people often forget to do this. An IT résumé may look impressive, but the reality may be different. Talk to prior employers or customers. Technologists can be great on systems but hard to integrate into a team. Look for experience in both areas. 

 

Give Them Some Rope 

Even a seasoned professional will need to learn your unique business model and operations. They need time to watch and learn. If you can, put them through a two-week boot camp during which they work a few days in each department. Do not expect big results immediately. 

 

Measure What Matters 

Each department has different goals. IT is not going to have a business development goal. Track project successes, on-time or under-budget delivery, cost savings, and new efficiencies. How they control and contribute to change management (which is a whole other article) should be a priority. Employee satisfaction with IT services is a good measure as well. 

Strategic leaders at growing companies know the challenges they face and the outcomes they hope to achieve, but they may not know all the options for getting there. Technology is now central to building a strong company, but the technologies themselves have become more complex and difficult to understand. To keep pace with fast-moving solutions, you need a technology leader on your business team. 

 

Providing Guests with a Catered Travel Experience: Big Brands Collection of Zero-Party Data

By
Wendell Lansford
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0

What day of the week is it again? With so many of us staying home because of the pandemic, it can be hard to keep track. A change of scenery to a tropical destination, a winter wonderland, or a temperate weekend getaway sounds pretty nice right about now. 

Recent vacation rental booking activity shows that quarantine has given travelers a bit of cabin fever. Families are dreaming about their next big trip, and many are looking to plan a safe, stress-free getaway sooner rather than later. 

Recently, Vrbo tapped Wyng to help keep its customers engaged during the pandemic and learn more about their future travel intentions. Enter the new Vrbo Vacay Finder, a micro experience built on the Wyng platform that provides individualized vacation destination recommendations based on a traveler’s personal preferences. 

 

VACATION IDEAS FOR EVERYONE’S NEEDS 

Vrbo’s Vacay Finder, facilitated by Wyng, is a single-page quiz that starts with a series of four questions to gather personal travel preferences, including: 

  Regional location within the US 

  Desired season for a vacation 

  Type of destination (city, beach, etc.) 

  The ideal level of activity 

 

 

The experience features unique answer displays, including both images and text to highlight answer choices. For example, the quiz starts with a map graphic of the US, with the names of each region overlaid on top. 

The visual aesthetic makes answering the questions less of a chore and more like a game. 

 

 

As travelers answer questions, Vrbo gets a deeper understanding of their unique travel preferences and interests which then enables Vrbo to provide highly relevant, personalized trip recommendations both in the moment and in future interactions. 

 

 

After finishing the quiz, users are asked to provide their names and email addresses and to opt-in to receive marketing email messages. 

 

 

The footer beneath the form is clear and easy to understand, and it includes a link to the Vrbo privacy policy. 

Finally, the results page outlines a user’s personalized vacation recommendations based on how they answered the quiz questions. They can then share their outcome with friends and family via Facebook, Twitter, or email. 

The results page also includes a dynamic “Trip Board” section that allows friends and family to collaborate to create a vacation itinerary together. It then hyperlinks out to the Vrbo website, so users can finalize their travel plans and begin booking their trip. 

 

 

As travelers scroll down the results page, they find a gallery containing all potential destination results. This allows users to explore other destinations without having to retake the quiz. Users can select filters or click on destination images for more vacation idea inspiration. 

The clickable tags facilitate a continuous journey of discovering more local vacation opportunities. This unique section proved powerful, as the results showed that, on average, users explored two additional vacation experiences before leaving the page. 

 

IMPACT AND THE FUTURE 

Vrbo found that Vacay Finder resonated with would-be travelers during the pandemic as nearly 80,000 consumers took the quiz in the first three months. 

The key to a successful quiz strategy is to continue to optimize, learn from the data, adjust to evolving restrictions, and adapt to the ever-changing digital consumer. 

Micro experiences like this allow brands to get to know their consumers better and provide them with the best possible experiences at each interaction. 

 

THE ZERO-PARTY DATA (ZDP) OPPORTUNITY FOR HOSPITALITY BRANDS 

Data deprecation is a hot topic for marketers in hospitality. Waves of privacy regulations (like GDPR in 2018, CCPA in 2020, and CPRA, which takes effect in 2023) and tech platform restrictions (like the demise of third-party cookies and Apple’s IDFA) are cutting off traditional sources of data and disrupting widespread marketing practices. 

Vacay Finder points to a privacy-friendly solution: zero-party data (ZPD). Generally, ZPD is all of the consent-based personal context data—preferences, interests, tastes, favorites, plans, etc.—that customers intentionally and proactively share with a brand to improve their experience with it. 

By engaging travelers directly and asking them for their personal preferences and interests, along with consent, Vrbo obtains the data it needs to personalize customer interactions. 

Forrester Research’s 2020 report, An Illustrated Guide to Collecting Zero-Party Data, stated, “ZPD gives brands a unique opportunity to not only learn more about a customer but also folds that customer’s input directly into her immediate and long-term experience. Tellingly, 49 percent of marketers say zero-party data is their most favored solution to data deprecation risk, according to Econsultancy.” 

With the Vrbo quiz in mind, here are a few quiz idea starters for vacation rental companies: 

Depending on the concept, quizzes can reveal ZPD like who is actively planning travel, when they are looking to book, who will be traveling, the purpose of the stay, and preferred destinations and activities. Some of the data may be long-lived (e.g., the number of family members), while other data may be short-lived (e.g., timing for a family vacation). 

Hospitality companies can collect ZPD by creating quizzes, surveys, preference centers, and other interactive experiences—and then use the ZPD to provide highly relevant and personalized content, recommendations, and offers to customers. 

 

COVID-19’s Silver Lining: Growth of Property Technology in the Vacation Rental Industry

By
Lino Maldonado
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0

The COVID-19 pandemic has placed hardships on many throughout our society over the past year. Yet some of us might admit in hushed tones that there has been a silver lining in how we now see the world. 

The simplification of life at home has driven an appreciation for what is most important in life and at work. This focus allows us to move forward with improvements that might otherwise have languished in procrastination or denial. We have learned to do more with less, at a distance, and by using more technology than ever before to deliver and delight our guests as they seek respite from the new reality. 

As the property technology, or PropTech, boom continues to reverberate through our industry, we can apply these principles of simplification and focus on the most important outcomes to drive better results, guest satisfaction, and profitability with our vacation rental properties. 

 

Expectations Have Increased 

During the pandemic, many future vacationers took advantage of the time at home to invest in their own primary residences. For many, that included installing home automation products such as smart locks, digital thermostats, security services, and sensors of various sorts. These same homeowners will expect similar amenities at vacation rentals. Properties perceived as technologically outdated will suffer reputational decline and unfavorable online reviews in the same way that dated décor, frayed carpets, or poor wall coverings can detract from the guests’ satisfaction. 

 

Rival Properties Are Stepping Up 

Just as primary homeowners are investing in automation, so are your competitors. Guests expect a digital property book, updated physical and Wi-Fi access codes, local information, and other details on their phones before they arrive. They will consider having to call the front desk an intolerable inconvenience and a sign of the property manager’s indifference. 

 

Labor Shortage Is Real 

Although reported nationwide unemployment is still high because of COVID-19 shutdowns, many vacation areas are desperately short of labor. Effective property managers will be looking for technology solutions that allow for the efficient deployment of labor throughout the property. Time spent by the front desk, maintenance, or housekeeping traveling to units across town or to other floors constitutes hours not spent on more important customer-facing interactions. A modern, unified property management platform will give the property managers real-time access to asset and personnel status, saving multiple person-days every week. 

 

Distance Has Been Reduced 

During COVID-19, people have grown accustomed to using technology to bridge distance and time. Video calls have moved from the exotic to daily occurrences. Hopping in a car or golf cart to check a unit’s HVAC, locks, or other statuses makes little sense when one can access the same information from anywhere. 

 

Cobbled-Together Point Solutions Are So 2019 

Guests expect technology to work seamlessly and in a coordinated manner. Having a different computer program for discrete functions is inefficient and frustrating. Accustomed to using programs that work together as one experience, such as the Microsoft Office Suite, property employees and guests alike will resist using standalone or poorly integrated systems for discrete purposes. 

 

Seize Opportunities to Enhance Revenue 

With a modern, unified property management platform, revenue enhancement opportunities can be automated to include early- and late-checkout offers, upsell discretionary amenities, sell mid-stay cleans, and offer additional nights to bridge orphan nights between reservations. As we all recover from the COVID-19 recession, most property managers are eager to maximize every opportunity to grow revenue per stay. 

 

Openness and Flexibility Is Key 

As 2020 began, who could have foreseen the challenges that the rest of the year would bring? We learned that flexibility and the ability to develop and execute contingency plans is vital. We must avoid getting boxed into one technology. A modern, open, and unified property management platform will grow with a client’s property so that new software tools and hardware products can be seamlessly integrated when the time is right. This season’s project may be adding smart locks and digital thermostats. Next year, the property might add leak and noise detectors. Closed systems require management commitment in such an inflexible manner that they are an anathema in the face of uncertainty. Unprecedented times require flexible systems that grow with opportunity and respond to change. 

Everyone knows that technology boosts revenue and drives efficiency. The COVID-19 experience has taught us that simplicity, focus, and flexibility can be harnessed to make the achievement of those goals both possible and probable. “Life is short” is a cliché for a reason. Now is the time to take the steps to secure the future, whether we return to a new normal or continue to live in crazy but interesting times. 

 

Financial Planning: Connecting Your Business Ownership with Your Personal Goals

By
VRM Intel Staff
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0

Most successful business owners have a plan for their business, and quite often they have a mission statement. Mission statements usually spell out a business’s core values, its purpose, and vision for how employees and customers should be treated. In many cases, this statement is a guide for employees and spells out expectations as to how they should perform their duties. Future goals are often expressed so that employees and customers know how the business hopes to develop over time. The mission statement and the business plan help drive the direction of the business moving forward. 

However, we often find that while owners have a vision for their business, in many cases, they lack planning that ties their business to their personal financial goals. We have interviewed many VRM owners, and a common theme we hear is that they are so focused on running the business and making sure the rooms are cleaned, repairs are made, and amenities are in order that they neglect personal financial planning. Therefore, there is no plan in place to help them understand how to one day unwind their business ownership when all their personal goals can easily be met. 

The formation of a personal financial plan starts with a conversation that will help your advisor understand you, your situation, and what is important to you. How much monthly income will you need in retirement to live the life you want to live? Are there children or grandchildren you want to benefit from your success, and if so what is the best way to structure? Many businesses are tremendous supporters of their communities. If it is important for this legacy to continue, have plans been made? If selling to a third party, are there key employees you would like to protect or to benefit from a sale? If transitioning to family members or key employees, when should the process start? 

All these questions can be addressed with planning. In many cases, the best strategies take years to implement. The earlier that goals are identified, the better the odds that strategic moves can be made to accomplish these goals. 

One of the most important areas of personal planning is understanding future retirement income needs. At the end of your career, you want to maintain the lifestyle you have been accustomed to or even increase spending with extra time for travel and fun. Having a clear understanding of your income goal can help you identify how much you will need from the sale of your business. Industry experts tell us that many sales are missed because owners don’t understand what the other side of a sale will look like. They aren’t sure what their needs will be or how much income can be safely produced from the proceeds of an offer. This fear of the unknown can cause paralysis, and if this occurs at the top of a business cycle, it might cause the owner to miss the best offer they could hope to receive. 

Understanding retirement cash flow goals can also help you identify which areas of the business you might not want to sell. For example, if the business owns income-producing property, you might want to negotiate to keep it and rent it to the new owners if that helps you meet your income needs. 

Knowledge is power, and the more you understand about what it will take to meet your goals, the better position you will be in to negotiate. 

Last, identifying your goals can motivate you to make adjustments so the business is more attractive to prospective buyers. This can be the difference between running a business that you “live out of ” versus managing the business for eventual sale. In other words, you should manage your business in a way that will increase the multiple you receive when your business is sold. A higher multiple could be a game-changer during the golden years! 

It all boils down to having a plan that ties your business ownership to your personal goals. When you identify what you want to achieve and create a written plan that will be monitored and adjusted along the way, your odds of achieving your goals will dramatically increase. You worked too hard not to stack the odds in your favor. 

 

3rd Annual Vacation Rental Data and Revenue Management Conference: Session Descriptions by Time (Data, Revenue Management, Marketing, and Executive)

By
Amy Hinote
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0

3rd Annual Vacation Rental DARM Conference (vrdarm.com)

August 16 – 18, 2021

Francis Marion Hotel, Charleston, SC 

Click here for a printable PDF on the DARM Conference Descriptions.

Tuesday, August 17, 2021   |  Wednesday, August 18, 2021

Monday, August 16

5:00 – 6:00

Inhabit IQ’s DARM Welcome Happy Hour

 

Tuesday, August 17

8:00 – 9:00

Registration and Breakfast Pickup and Meetup, Colonial Ballroom (Lobby Level)

 

9:00 – 10:15

2021 DARM Welcome with Sarah and T and Keynote Daniel Levine, C19 Trends Aftermath & the 2022 Travel World, Carolina Ballroom (Meeting Level)

 

10:30 – 11:10

Key Performance Indicators (KPIs): Which metrics matter and how are they calculated and compared across vacation rental systems?

Presenter: Cliff Johnson, Vice President, New Homes, Realtor.com

Successful revenue management not only requires access to comparative data, but it also requires a comprehensive understanding of the data, including definitions, equations, and why they matter. Cliff Johnson will take us through the terminology and KPI equations used by revenue managers to craft, implement, and evaluate effective pricing strategies.

 

Rate Strategy: Building revenue management strategies in the new travel landscape

Presenter: Natalia Sutin, VP, Revenue Management, Vacasa

Dynamic pricing is nothing new for vacation rental operators, but the strategies behind it are shifting to adapt to the new travel landscape. What key market indicators should revenue managers be looking for to signal rate adjustment? How can an effective revenue approach support local operations—and deliver results for homeowners—during peak seasons or, conversely, fill gaps in the booking calendar while maintaining price integrity? During this presentation, attendees will get answers to all those questions and more from Vacasa’s vice president of revenue management Natalia Sutin. Sutin will address how strategies shifted during the pandemic, as well as the fresh pricing challenges that emerged, and which trends she expects to hold as the travel industry continues to rebound.

 

The Theory of Limited Edition 2.0: Leveraging the things that do NOT scale as your superpower to growth and happiness

Presenter: Matt Landau, Founder, VRMB and Unlocked Podcast

Matt Landau believes every independent vacation rental manager is sitting on a goldmine of unique selling attributes that differentiate from the bigger, richer, flashier competition. But that without some very intentional sculpting of these attributes, those same managers can easily slip into a commodity price race to the bottom. After several years on the road documenting some of the world’s most profitable and sustainable vacation rental brands, Landau reveals the common denominators of their stealthy positioning and the direct impact it has on data, revenue, and lifestyle design.

 

Long-Term Value Building: For executives, building value in your business to accomplish long-term goals and exit strategies

Presenter: Cynthia Odell, Senior Wealth Planning Strategist, Wells Fargo

You are busy building your business, but are you building the value of your business? Understanding the fundamentals of business value is the key to creating a valuable enterprise that you can convert to personal wealth, funding your lifestyle, retirement, or family legacy goals. Beyond the basics, Odell will review VRM market trends and valuation dynamics which can inform your value creation strategy, examine the impact of risk, answer your question regarding ownership transition options, and discuss best practices successfully used by other company owners, as they prepare for their future.

 

11:20 – 12:00

Rentals Recovery Roadmap: What industry trends will prevail?

Presenter: Jamie Lane, VP of Research, AirDNA

Since the onset of the COVID-19 pandemic, the US economy—specifically, the hospitality industry—has gone through an unprecedented contraction and recovery. Jamie Lane, vice president of research at AirDNA will outline how government stimulus, easing lockdowns and travel restrictions, and pent-up demand for travel allowed certain sectors and markets of the vacation rental industry to recover and outperform other segments of the US lodging industry. He will present an updated economic forecast and outlook of the VR industry for a variety of U.S. locations.

Lane will then provide an overview of industry trends including historical and future demand pacing, how record occupancy is impacting ADRs, and where supply is growing fastest. Other topics include a review of the host wars (how successful Airbnb and VRBO have been at attracting new hosts), how exclusivity of supply has changed over time, the overlap between platforms by location type, and if/when international travel will return.

 

Revenue Strategy Levers: Pricing levers vacation rental revenue managers pull to influence booking activity

Presenter: Anurag Verma, Founder and CEO, PriceLabs

Revenue managers have more than rate at their disposal to impact reservation activity. PriceLabs founder and CEO Anurag Verma will define and explain industry pricing levers including minimum night requirements, booking window, promotions, channel policies, fees, cancellation policies, and more. In addition, he’ll give examples of how each lever can influence booking activity across channels and discuss different strategies involving a combination of levers and channels.

 

Generating Bookings with a Comprehensive Digital Advertising Strategy

Presenter: Conrad O’Connell, Founder, BuildUp Bookings

In this presentation, O’Connell will talk about the data-driven strategy and tactics behind his company’s managed ad spend (over $1.5M in the last 12 months) across Google Ads, Facebook, Instagram & more. He will share best practices in targeting, reporting, measurement, and budget allocation, and share how you can spend effectively no matter what your monthly ad spend is. O’Connell will also cover updates around the iOS 14.5 updates and the future of ad tracking for vacation rental managers.

 

2022 Forecasting: Predicting revenue when historical performance is unreliable

Panel Discussion: Mike Bohmer, Turnkey/Vacasa; Scott Bunce, Cabins for You; CJ Stamm, Southern Comfort Vacation Rentals; Ben Edwards, Weatherby Consulting; and Moderated by Amy Hinote, VRM Intel

Year-over-year (YOY) data sets are unreliable in today’s current environment. In addition, 2021 was an extraordinary year for many property managers. Looking ahead to rental projections and budgets in 2022, how can vacation rental managers predict revenue and set expectations for homeowners? We’ll discuss how companies are looking at the upcoming competitive environment and planning for the future when recent historic data may be an anomaly.

 

12:00 – 1:15           

Farmer’s Market Lunch and 2021 DARM Battleground (Part 1), Carolina Ballroom (Meeting Level)

 

1:30 – 2:10

PMS Data: Finding data and business answers hidden in your property management system (PMS)

Presenters: Patrick Power, Solution Architect, TRACK; Chad Blankenship, CTO, Southern Vacation Rentals

Hidden inside your PMS software are many of the answers you need to accelerate your company’s growth and provide better guest, owner, and staff experiences. Getting to these insights typically requires connecting data that most systems don’t provide out of the box. In this session, we’ll showcase ways to unlock insights like how to rate and incent house cleaners using guest satisfaction scores, data that helps you pull the different distribution channel levers that maximize occupancy and profitability, and smart methods for segmenting guests to boost marketing performance.

 

Optimizing Listings and Pricing on Vrbo/Expedia

Panel Discussion: Expedia/Vrbo Revenue Team and Cameron Felton, Director of Revenue Management, Evolve; Sarah Franzen, Director of Revenue Management, Natural Retreats; and Jordan Locke, CEO, RevPARTY

Expedia’s revenue team for lodging and vacation rentals will join a panel of revenue managers to discuss how PMs can optimize their listings and pricing display on Vrbo and Expedia, and they will answer questions about how to execute the latest strategies and maximize and monitor performance.

 

How Search Engine Optimization (SEO) REALLY Works for the Vacation Rental Industry

Presenter: Paul Hanak, Director of Marketing, ICND

SEO is always referred to as a “dark art” due to its technical nature and the years of knowledge and experience required to master. For this reason, property managers often rely on outsourced SEO companies for prime placement in the search engines. The cold hard truth? Many SEO companies don’t focus on what really matters. Audits and scores from online tools don’t rank your site better, but the methods in this presentation do. Geared toward both beginner and advanced technical levels, Hanak will explain what’s important for search engines in the vacation rental sector and how to stop the wool from being pulled over your eyes from outside agencies. Join a twenty-year SEO veteran as he walks you through some eye-opening myths about the SEO game and what a property manager can keep an eye out for to make sure they are getting the best bang for their buck.

 

Margins Matter: Benchmarks across 100s of P&Ls that lead to profitability

Presenter: Ben Edwards, President, Weatherby Consulting

In a world in which well-funded multi-destination short-term rental companies are buying growth with zero attention to margins, it is becoming increasingly difficult to remain both profitable and competitive. We’re being told that an EBITDA of 5 – 8% is normal. However, leading managers are bringing well over 20% to the bottom line. Margins are critically important for both long-term growth and when buying and selling companies. Having reviewed—in-depth—hundreds of P&Ls, Edwards will shed light on what property managers are spending in key areas as a percentage of revenue and will discuss how to increase profitability in the current and future competitive environment.

 

2:20 – 3:00

Data-Driven Property Managers: How to set up your benchmark metrics for success in your Key Data Dashboard

Presenters: Jennifer Talbert, Revenue Management Consultant, and Taylor Hill, Business Development Manager, Key Data

Like all well-run companies, property management companies should be data-driven at their core. With so many different software platforms that don’t all integrate together, this can be hard. The best companies are still finding a way. We will discuss how to identify, measure, collect, report on, and―most importantly―act on your data. Companies making clear data-driven decisions are leading our industry and will continue to do so. Jennifer and Taylor will walk through how to set up and monitor metrics in your dashboard, how to build reporting, and how to identify ways your company can start improving today.

 

Optimizing Listings and Pricing on Airbnb

Panel Discussion: Airbnb Team and John de Roulet, Wheelhouse; Tim Speicher, Buoy; Doug Truitt, Rentals United

Airbnb will join a panel of revenue managers to discuss how VRMs can optimize their listings on Airbnb and will answer questions about how to execute the latest strategies and maximize and monitor performance.

 

Play Bigger: Tips & Tricks to Drive Direct Bookings

Presenter: Tim Schutts, Vice President, TravelNet Solutions‘ Atlas Digital Marketing

Not all clicks are created equal. Conversion is still king, but clicks at every stage of the guest journey are critical to overall direct booking success. We’ll explain how different channels drive clicks that boost overall traffic, and how implementing specific digital marketing tactics at each guest journey stage can dramatically improve your booking performance. Attendees will learn how to deploy a full-funnel digital marketing method that increases direct bookings. They’ll learn tools and tactics for increasing traffic and conversions, how to effectively measure ROI for decision making at each stage, and the measurable business results that Property Managers and Hoteliers are experiencing by using this more effective approach.

 

The VRM Technology Mix: Pros and cons of a company’s “tech stack” when buying and selling companies

Panel Discussion: Jakob Dwyer, President, Realjoy Vacations; Steve Milo, CEO, VTrips; Zac Monahan, VP, M&A, Vacasa; and moderated by Jacobie Olin, President, C2G Advisors

The theme of this panel is to learn what components of a seller’s “tech stack” are important to buyers. We will also hear of common pitfalls that have happened in the past and ways to avoid them in the future.

 

3:00 – 3:30

Fruit, Cheese, Caffeine, and Chocolate Break, Colonial Ballroom (Lobby Level)


3:30 – 4:10

Driving Results with People Data: Using data to identify job candidates and put your team members in the right seats

Presenter: Steve Trover, Cofounder, Better Talent by Laveer & Co.

What is people data and how can you use people data to measure behavioral drives and cognitive abilities while taking into consideration the total person when evaluating candidates and leading team members? This session will present ways to collect and utilize people’s data to improve overall company results. You will learn how to identify, hire, and inspire your company’s most important (and costly) asset―your team.

 

Channel Management Checklist

Presenter: James Burrows, CEO, Rentals United

If you have a direct connection through your PMS, why would you need a channel manager? Rentals United cofounder and CEO James Burrows will discuss what channel management features you need to look out for to drive ROI. Along with case studies with customers from around the globe, Burrows will answer questions from revenue managers about how they can optimize existing channels and new opportunities with Google Vacation Rentals.

 

Merchandise Properties and Maximize Bookings on Your Own Website

Presenters: Braeden Flaherty, Bluetent; Josh Guerra, Bizcor; and Ben Ollic, Q4 Launch with Photography Expert Rebecca Lombardo, TruPlace

Across enterprise-level vacation rental management companies, over 50% of bookings are coming directly . . . not through third-party channels. Too often when looking at revenue management, we neglect our own websites. This panel will discuss how to merchandise property listings, optimize sort algorithms, display pricing and policies, use strike-through and urgency pricing, and maximize promotions on your own website to increase online bookings and keep guests on your site.

 

Mitigating Risk: A Roundtable Discussion about the “T” (threats) in a VRM’s SWOT analysis

Panel Whiteboard Discussion: Moderated by Jim Olin, C2G Advisors, with Eric Thibodeaux, Laird Sager, Andrew Kitchell, and Andrew McConnell

In a SWOT analysis, the T stands for threats. In an uncertain environment, PMs are finding it necessary to perform a solid risk assessment and strategize to mitigate these risks. In this open discussion, we’ll sit down with executives, identify these threats facing both the industry and individual companies, and discuss how PMs can plan for the future.

 

4:20 – 5:15              

The Future of VR Data and Revenue Management, Carolina Ballroom (Meeting Level)

Vivek Bhogaraju, GM, Revenue, Lodging and VR, Expedia Group; Steve Milo, CEO, VTrips; Scott Shatford, CEO, AirDNA; Anurag Verma, CEO, PriceLabs  

Moderated by Amy Hinote, Sarah Bradford, and Tim Cafferty

 

Wednesday, August 18

8:00 – 9:00             

Lowcountry Breakfast, Colonial and Carolina Ballrooms

 

9:00 – 10:15           

Welcome Back with Sarah and T, and Keynote with Shaun Stewart, The Interconnected World of VR in 2021, Carolina Ballroom (Meeting Level)

 

10:15 – 10:45           

In-Case-You-Stayed-Out-Too-Late Refueling Break, Colonial Ballroom (Lobby Level)

 

10:45 – 11:25

Analyzing Operations and Property Data: What’s changed (and hasn’t) in the last 18 months

Presenter: Jeremy Gall, Founder and CEO, Breezeway

The growth of the short-term rental category is well documented―not only with respect to the number of rentable homes and management companies, but also the identity, challenges, and priorities of vacation rental operators. In this presentation, Breezeway’s founder and CEO Jeremy Gall will reflect on this growth by presenting three different sources of internal data: operations survey data from spring 2020 and 2021 (e.g. biggest property care challenges, plans to differentiate their business, frequency of client communication, number of software tools in use, etc.), and data on five million property care tasks from the Breezeway platform (average length of cleans/inspections/repairs, most frequently repaired items, most urgent guest requests, etc.). Jeremy will discuss different trends that the data reveal and share his perspective on what challenges and opportunities lie ahead for industry operators.

 

Hotel Revenue Management Strategies: When to use, when to adapt, and when to toss

Panel Discussion: Scott Bunce, COO, Cabins for You; Dwight Yang, Partner, Richer Logic; and Michelle Marquis, VP, Revenue, Travelnet Solutions

As more hotel-trained revenue managers enter the short-term rental sector, hotel revenue management strategies are being tested and evaluated for vacation rentals. What are the similarities and differences between the two lodging sectors? This panel will explore what attributes are the same, what is different, which strategies translate, and which do not.

 

The Battle for Direct Bookings Is Hand-to-Hand Combat, Not Aerial Strafing

Presenter: Doug Kennedy, Founder, Kennedy Training Network

Doug Kennedy will show us how to secure more direct bookings via textual selling, in-platform messaging (on OTA’s), and via every guest/staff conversation. Participants in this session will walk away with a list of specific training tips to help their companies secure more direct bookings and reduce their reliance on costly third-party channels that can also be a barrier to return bookings. While the war for direct bookings does require “aerial strafing” (digital marketing), the most important battles in VR distribution occur through human and not digital interactions.  Whether by phone, chat, email, or a random in-person conversation with a maintenance tech, it is the people that make the difference. 

 

Building a 2022 Revenue Optimization Team: What does the org chart look like for a high-performing team (sales, marketing, distribution, and revenue management)

Panel Discussion: Amber Carpenter, CMO, Acme Vacation Rentals; Amy Gaster, CEO, Tybee Vacation Rentals; John de Roulet, Wheelhouse; Doug Truitt, Rentals United

Whether big or small, how are your sales, distribution, revenue, and marketing efforts working together?  Revenue in general is always a top-line goal and KPI for companies. In this panel, we will have industry experts discussing how these four areas collaborate together successfully in order to reach top-line revenue goals/KPI’s.

 

11:35 – 12:15

How to Hold a Revenue Strategy Meeting

Presenter: Heather Richer, Richer Logic

Richer Logic’s Heather Richer will discuss how to construct an effective agenda for a revenue strategy meeting, including who should be there, what KPIs are monitored, how revenue managers are being held accountable, and how marketing and data teams fit in. Whether your team is in-house or outsourced, holding regular and effective meetings will keep everyone on the same page and on track.

 

Length of Stay (LOS) Strategies: Using LOS tactics to manage channel performance and optimize occupancy and revenue

Presenters: Jeff Paglialonga, CEO, Teeming Vacation Rentals; and Desiree Garcia and Maureen Schilling, Streamline

One of the primary levers used by revenue managers is the length of stay (LOS). Jeff Paglialonga, CEO, Teeming Vacation Rentals, was able to fast-track revenue growth using LOS strategies. In this case study, Jeff will discuss his objectives and then demonstrate with his software provider, Streamline, how he executed the strategies and was able to get ahead of his competition.

 

Increasing Repeat Business: Converting guests into repeat customers

Panel Discussion: Tyann Marcink, David Angotti, and Matt Landau with Arthur Colker and Suneel Goud

Looking ahead to what could be a highly competitive 2022, having confirmed reservations on the books is worth gold. What are PMs doing to increase repeat business, and how are they converting OTA travelers into loyal guests? Tyann, David, and Matt will lead this discussion on building repeat business and will talk about tech ideas with StayFi’s Arthur Colker and NEC’s Suneel Goud.

 

VRM Staffing Challenges Abound: Addressing the #1 challenge for vacation rental managers

Presenters: Sue Jones, CEO, HR4VR, and Ari Eryorulmaz, CEO, Extenteam

Finding, compensating, and retaining staff are some of the biggest challenges facing industry professionals today. Property managers have learned that finding and retaining employees takes creativity with compensation and flexibility with schedules. No longer does a one-size-fits-all approach work. Remote workforces have opened up staffing alternatives across the US and internationally. Join Sue and Ari for a lively discussion on ways to approach your staffing needs.

 

12:15 – 1:45           

Taste of Carolina Lunch and 2021 DARM Battleground (Part 2), Carolina Ballroom

2:00 – 2:40

Rental Inventory and Homeowner Metrics: A guide to measuring and improving what really matters for your inventory

Presenter: Brooke Pfautz, CEO, Vintory

After speaking with hundreds of VRMs, Vintory CEO Brooke Pfautz quickly realized that most professional property managers are in the dark when it comes to understanding the key metrics of inventory growth. Join Brooke in this session for an insider’s look at metrics and data never presented in our industry before. Quickly become an expert in running growth numbers and calculating the ROI of a new property for your program. See where you stand vs your colleagues and competitors. Metrics for metrics sake are not very useful so we’ll move beyond the numbers and get to the bottom line―what leadership must focus on to drive a successful vacation rental business. 

 

Channel Technology: Implementing revenue management strategies across all channels using channel managers, PMSs, and direct connections (Part 1)

Panel Discussion: Jim Barsch, NextPax; James Burrows, Rentals United; Braeden Flaherty, Bluetent; and Matt Gurley, BookingPal with Revenue Managers

Revenue managers have questions for channel managers, and this panel has answers. In this discussion, vacation rental managers will have the floor to ask questions about connectivity and strategy execution, hear about their roadmaps, talk more about the Google Vacation Rental platform, and suggest new functionality.  

 

Gold In Plain Sight: Email marketing strategies to grow revenue

Presenter: Amir Rashid, NAVIS

With inventory filling fast this year, too many email marketing strategies got put on the backburner. Covering tactics around automation, crafting personalized messages, and more, learn how your email strategy is key to building guest loyalty, keeping units filled, homeowners happy, and getting the most revenue per booking.

 

Executives Look Ahead to 2022 and Beyond: Revenue optimization, consolidation, competition, and homeowner retention

Panel Discussion: Moderated by Andrew McConnell, CEO, Rented, with Sarah Bradford, Winter Park, and Steamboat Lodging Company; Tim Cafferty, Outer Banks, and Sandridge Blue; Max Schuster, Stay Marquis; and Steve Milo, CEO, VTrips

For company owners and stakeholders, Andrew McConnell will moderate this important discussion with industry leaders about what the future holds in the vacation rental industry in the areas of revenue optimization, industry consolidation, the upcoming competitive environment, and homeowner retention, communications, and loyalty. 

 

2:40 – 3:10              

Ice Cream Social, Colonial Ballroom (Lobby Level)

3:10 – 3:50

Traveler Demand: Why you need the data now!

Presenter: Amber Carpenter, CMO, Acme House Company and founder, Demand IQ

To date, we have all relied upon booking data to reflect traveler demand. While this tells the picture of the demand you captured, it doesn’t tell the full story about the demand you failed to capture, or the market-level demand that never made it your way. This session will help you understand Demand Data: What is it? Why are you losing money if you’re not using it? And how do you get started putting it to work for you?

 

Advanced Revenue Management Roundtable Discussion: Revenue managers sit down tech providers (Part 2)           

Panel Discussion: Cameron Felton, Evolve; Sarah Franzen, Natural Retreats; Natalia Sutin, Vacasa; Emily Pattillo, Casiola, with the Industry’s Technology Providers

Today’s revenue managers are struggling to execute pricing strategies using available technology and connectivity. Many managers have built their own technology as a result. This panel will discuss what they’re able to accomplish in proprietary tech vs what the PMSs, channel managers, and pricing tools are able to.

 

Building Competitive Sets: Developing comp sets and tools available     

Presenters: Tim Speicher, Buoy; Jamie Lane, AirDNA; and Jennifer Talbert, Key Data

Building competitive sets, aka comp sets, is challenging but necessary in building rate strategies. After last year’s DARM Conference, we realized that revenue managers were in need of a tool for comp sets. As a result, AirDNA and Key Data set out to help. In this panel, revenue managers will meet up with comp-set-tool providers to talk about what factors are used in building comparable comp sets and will discuss how to use technology to monitor competitive performance.

 

The Future of VR Technology: How are technology companies approaching the future? A panel with tech leaders about future plans, consolidation, and connectivity

Panel Discussion: Eric Broughton, CSO, Inhabit IQ; Ryan Bailey, CEO, TravelNet Solutions; James Burrows, CEO, Rentals United; and Jeremy Gall, CEO Breezeway; and Moderated by Amy Hinote, VRM Intel

During this panel discussion led by Amy Hinote, we’ll learn more about what the VR tech environment is going to look like in the coming years. We’ve assembled a panel of C-level tech executives in our sector to discuss private equity, consolidation, road maps, and how we’ll connect in the future.

 

4:00 – 5:00

General Session: The State of the Vacation Rental Industry with Key Data’s Melanie Brown and Closing with Sarah and T, Carolina Ballroom

 

Third-Party Distribution Channels: Are OTAs Your Foe, Friend, or Frenemy?

By
Michelle Marquis
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0

My experience on this topic began with a foundation in the hotel industry where I saw distribution, revenue management, and use of online travel agencies (OTAs) become a big part of how we planned revenue. 

When joining the vacation rental industry, I brought that experience with me. Initially, I ran my revenue budgeting and planning very similarly as I did when I was a hotelier because I simply did not know any different. However, I soon discovered the things I had learned from my hotel days also worked really well for vacation rentals. 

One of the biggest lessons that transferred was thinking about distribution as not just how much business is “allowed” from each channel but at what price and when. To create an effective revenue plan, distribution is a necessary part of that plan. 

 

In general, distribution channels include: 

  Voice 

  Your branded website 

  SMERF – not little blue people, but an acronym for Social, Military, Educational, Religious and Fraternal groups and refers to group business that falls into a social category

  OTAs – including several platforms and models (although we will only cover two) 

 

Hotel-Style and Industry-Specific OTAs 

All OTAs are marketing platforms; they market your products to consumers who might not otherwise find you. In addition to the reservations made through the OTA, property managers will also see a lift in direct bookings if they market and brand properly on these platforms. 

Traditional OTAs include Expedia, Booking.com, and TripAdvisor—let’s call them hotel-style OTAs. This is not an inclusive list, and many of the other OTAs are owned by one of these larger entities. Hotel-style OTAs charge a 15–25 percent commission. 

What I like most about using these platforms for vacation rentals is that you can access exposure to new guests because the shoppers on these sites are typically hotel guests, meaning that the product is in front of someone new to the category of vacation rentals. 

In our industry, the industry-specific OTAs that we are most familiar with are Vrbo and Airbnb. Vrbo started as a listing site that delivered leads for guest stays, and then converting those leads was up to you. Some PMs still use this model with Vrbo, but most of the industry has transformed to a commission model where you pay part of the commission, and the guest pays part of the commission (via a fee). It is no secret that both Vrbo and Airbnb have started rolling out a commission fee of 12–15 percent to be paid by the property manager. What was once a very low acquisition cost is rapidly increasing. 

I am unsure about whether these platforms bring new guests who were not already interested in vacation rentals; however, with their brands being so strong, it is imperative to include them. Luckily, these marketing platforms are fairly inexpensive (for now). Understanding acquisition costs related to OTAs is both essential to the business and to understand the rest of this article. 

The last year has been an “E” ticket for the vacation rental industry. 

Approximately one year ago, I had conversations with a PM who believed that they were going to lose the business they loved. Many companies laid off team members they considered family and loyal employees, which meant that marketing budgets were slashed not only for PMs but also for OTAs. 

During the pandemic, travelers felt more comfortable driving someplace and staying in a vacation rental home or condo, which resulted in phones ringing off the hook with much of the industry seeing record-setting occupancy rates. Because most hotel-style OTAs’ revenue is derived from the hotel industry, they could not invest in marketing to the levels that they had invested previously. 

This was a coup for the vacation rental industry. The year 2020 was very profitable for rental managers in drive-to destinations that were allowed to have visitors, which led to record business combined with lower acquisition costs. 

Bookings for vacation rentals in 2021 continue to outpace those in any previous year. Demand is higher than available supply in many markets (for various reasons, including more owner use), which leads us to wonder how property managers continue to capitalize from this environment. The answer is that PMs can capitalize in two ways: more inventory and lower costs (specifically, acquisition costs). 

 

A Good Time to Shift-Share 

Acknowledging that obtaining more inventory takes time, PMs must do something I call “shift-share.” Shift-share means focusing on shifting from a more expensive channel, such as some of the more expensive OTAs, to a less expensive channel. I will admit that this is a slippery slope because many OTAs offer benefits for having availability year around. 

Strategic channel management will help keep inventory year-round but lower conversion on those sites by increasing rates for those channels. Shift-sharing allows PMs to shift attention and marketing dollars to the most profitable channel(s). 

The vacation rental industry also has another headwind; Expedia, Airbnb, and Vrbo specifically have returned to investing in marketing—including performance marketing and TV advertising—taking the lead position on where to book vacation rentals. The foot race to own the vacation rental category is ongoing, and the budgets of these brands are substantial. 

Part of their advantage is that they—Vrbo and Airbnb—understand their audience (your guests) even better than most of us do. Millennials want to stay in vacation rentals but also want to have an easy way to search, compare, and book. Their selection is larger, and their websites (including mobile sites and apps) are easier to use. 

The vacation rental industry is unique. Every destination is different, and in most cases, every home is unique, which is not something that can easily be commoditized. We do have the upper hand regarding our product and brand. 

 

So how does a professionally managed vacation rental company compete with Goliath? 

1. Plan in advance how much from each channel you want to capture. Understand your true costs for each channel. 

2. When you list with OTAs, ensure you are branded at every opportunity. 

3. Once guests from a channel stay with you, own them for all future stays. 

4. Own your brand in your market. Most vacation rental destinations are in drive markets, which means you can carefully target (without huge expense) those potential guests. Ensure you are well represented at your brand and destination levels. 

5. What does conversion look like on your website? What can you do to increase that? Does your marketing company work with you on strategies to improve conversion? 

6. If you are still not mobile-friendly (not mobile-first), you will lose bookings. Make mobile search and booking easy. 

7. When you are investing in PPC, ensure that you truly understand how you are investing every dollar. Dig into each campaign, and make sure you are not overspending on keywords that are not converting. This is an ongoing effort. 

 

Many destinations are already full for summer, so ensure that you are utilizing, targeting, and booking through the most profitable channels for any remaining inventory. Next, start working on the future. I hope 2022 is another record-breaking year for all of us, but I suggest that everyone look at their channel costs this year to make sure next year is as profitable as possible by participating in shift-share. 

 

Thinking Outside the (In)box: Using Email Marketing to Drive Bookings in Today’s Economic Climate

By
Jennifer Perez
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0

The world of travel is opening again. With COVID-related restrictions lifting and vaccine distribution expanding, the public is hungry for travel—and they’re booking vacation rentals. Our industry is seeing record numbers of reservations. To ensure your brand is in front of today’s eager audience, you need a strong marketing strategy. But to address our new economic climate, you also need to shift your marketing message. 

Ryan Austin, Bluetent’s Director of Email Marketing, and his expert team have helped clients successfully pivot their email strategy for the new challenges presented in 2021. Austin has identified two marketing concepts that all vacation rental brands should consider implementing for the summer—and beyond. 

 

Shift your focus to book remaining inventory and promote engagement. 

In recent months, Austin’s team has worked with many managers whose inventory is almost fully sold out. Often the remaining inventory has been lower tier: properties that aren’t particularly photogenic or suitable to feature in an email newsletter. However, having only little (and possibly unattractive) inventory left to book doesn’t mean you should stop sending emails; it’s important to continually keep your brand in front of potential guests. 

With a slightly different approach, one concentrating on experience and amenities instead of on actual inventory, Austin’s team has developed email campaigns that have garnered reservations for his clients’ remaining available properties. Instead of typical monthly e-newsletters, the team has launched single-message postcard emails playing to the fear of missing out (aka FOMO). “Book Now, Inventory is Filling Fast” and “Summer 2021 Vacation Alert” emails are driving bookings successfully, regardless of their listing desirability. And although it sounds outrageous, emails promoting future vacations—for the 2021 holiday season and even into spring 2022—are yielding transactions. 

Another email strategy to drive engagement and keep your brand in front of travelers is to revisit the inspirational messaging that proved so successful in 2020. Invoke nostalgia or excitement with email postcards featuring rich photo and video content that reminds potential guests that “the beach is waiting” or “the mountains are calling.” Educate travelers about the beauty and recreational opportunities in your region by linking to in-depth articles or blog posts. Encourage subscribers to “give the gift of travel” with special offers and rewards. Run a photo contest. The possibilities are endless, so be creative! 

 

Drive owner acquisition efforts with automated email campaigns. 

Given the current popularity of vacation rentals and the scarcity of inventory, Bluetent’s client base is increasingly turning its marketing efforts to acquiring more properties. A successful owner acquisition campaign starts with driving traffic to the property management page on your vacation rental website, but it certainly doesn’t end there. Capturing homeowner contact information comes next, and most importantly, capturing their attention must follow. 

Capturing homeowner information can be as simple as including a contact form link on your property management web page. However, Austin and his team have seen consistently higher conversion rates by using carefully deployed “pop-ups” to request contact information. Although frequently disparaged, pop-ups can be incredibly effective when used thoughtfully. Ensuring your pop-up doesn’t interrupt users who are actively viewing your site is key. Providing relevant content—a pop-up associated with your property management page might offer additional information about partnering with your brand—increases the likelihood that a user will provide their email address. 

After the email address is collected via a form or pop-up, an automated email journey kicks in to capture homeowner interest. Although every campaign is different, Austin’s team recommends an initial confirmation email followed by a series of educational emails (sent at regular intervals) that highlight your value as a property manager. This is your time to shine. Each email’s content should reflect your professionalism and feature one clear value in terms of partnering with your unique brand. 

The opportunity to connect directly is a critical component to include in each email. Provide a link to schedule time with a company representative—and remember, the easier it is to schedule an appointment, the higher your conversion rate will be. Note that scheduling a conversation should stop the homeowner’s automated email journey. 

The automated campaign not only captures the homeowner’s attention but also provides you with essential data for refining future campaign messaging. A review of engagement via open and click rates for each email yields information regarding which of your value propositions are most important for potential homeowners. 

 

Keep engaging! 

Remember—building your subscriber list will always be of utmost importance. Cultivating and nurturing an audience that sees you as a trusted advisor and inspirational host will never go out of style. 

Are you interested in fine-tuning your email marketing strategy? Our experts are here to help. Contact Bluetent at 970-340-4400. 

 

NAVIS Purchased in Private Equity Rollup under Hotel Marketing Platform Revinate

By
Amy Hinote
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0

In an email to its clients today, NAVIS announced that it has been purchased by Serent Capital as part of a rollup under the hotel guest marketing platform Revinate. According to the release, “As a combined company, Revinate will continue to focus on delivering innovative and market-leading direct revenue and profit-generating solutions to the hospitality industry.”

Lance Fenton, Partner at Serent Capital, stated, “NAVIS and Revinate are two platforms that provide a tremendous amount of value to their customers. By tightly integrating Revinate’s leading guest data platform with NAVIS’ leading voice channel conversion platform, we see the opportunity to bring exceptional direct booking performance to the hospitality industry.”

NAVIS CEO Kyle Buehner—who will be leaving the company—wrote, “As part of our continued commitment to this  mission, I am pleased to share that we will be joining forces with Revinate, an award-winning guest data platform. Together, as part of Revinate, our combined direct booking solutions will enable you to be even more effective at maximizing profits from the direct channel while providing a superior guest experience.” 
 
Buehner added, “As we evaluated Revinate, I’ve gotten to know their founder, Marc Heyneker, as well as many of his team. I’m impressed with their people, their reputation and with what they have accomplished as the global leader in guest data management and intelligence. It became clear to me that the marriage of our two companies would bring significant additional value to our collective client base.  

The purchase price was not disclosed. 

Stand Out from the Crowd by Teching Up Your Rental Property

By
Sean Miller
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0

We’ve seen a rising wave of professionalization sweep across the vacation rental industry in recent months as property managers and owners have responded to traveler demand for heightened operational standards. The pandemic has undoubtedly pushed the notion of smart tech even further up the short-term rental management agenda, resulting in accelerated levels of technology adoption. 

Innovative developments in smart property automation, revenue management, CRM systems, PMS programs, and property operations can help property managers function more efficiently and effectively. 

Now is undoubtedly a good time to tech up your properties, get up to speed operationally, and impress your guests with smart home features. 

 

Smart home tech benefits 

Smart tech has a broad range of applications for the vacation rental market, from keyless access and leak detection to noise monitoring, thermostat controls, and operational tasks such as knowing when cleaners enter and exit a home. According to Phocuswright’s 2020 report, 46 percent of property managers have integrated some type of smart technology into their properties. 

Applied correctly, smart tech can be an effective traveler experience differentiator. Today’s guests are digitally connected and demand a higher level of digital functionality throughout their booking journeys and stays. Direct-to-home check-in, keyless entry, and controlled thermostats are features expected by modern travelers, and they’re willing to pay for them. 

Furthermore, tech can help address heightened guest safety concerns that have emerged during the pandemic and will continue to resonate as travel reopens. Automated and verified cleaning processes and contactless stays can go a long way toward reassuring guests that everything is being done to create safe, hygienic environments. 

Adoption of appropriate tech solutions also means greater operational efficiency. Savings of up to 23 percent on heating and cooling are achievable with the appropriate systems in place. Considering the asset protection that tech affords in terms of monitoring and reporting HVAC overuse, water damage, and protection of the property during the off-season, the benefits of teching up become clear. 

 

Standing out from the crowd 

This past year has been plagued with travel restrictions and has been challenging for all property managers. Many drive-to destinations have experienced solid demand, but operators were hesitant to (or couldn’t) bring back full staff. Interestingly, tech has come into its own in this situation because managers have been able to run operations remotely and still meet (and often exceed) their guests’ needs. Operators with fewer than 25 properties have needed tech even more than before because they typically don’t have big support staffs. 

What does this tell us? Enterprising property managers can use exactly the same smart tech stack that larger, multi-destination companies use to great effect. Size, in this instance, is irrelevant. In fact, tech can give you the edge as an operator whether you have 20 properties or 20,000. Your guests are demanding a contactless experience regardless (e.g., for check-in or grocery deliveries). 

 

How to build the perfect tech stack 

As with any purchase, it’s always wise to do your homework. Choosing the right tech can seem bewildering at first, but here is a shopping list to consider: 

Essentials: 

 Keyless front door locks: Direct-to-home check-ins save time and money and improve safety. 

 Connected thermostats: Smart thermostats make properties comfortable for guests’ arrivals and save owners money. 

 

Nice to haves: 

 Pool control: Run the pool and spa heating system only when there is a paying guest in the property. 

 Water sensors: Devices can prevent costly flooding. 

 Noise monitors: Receiving noise alerts can help keep community relations friendly. 

 Monitored life safety sensors: Sensors protect the property and guests from burglary, smoke, and carbon monoxide threats. 

 Garage door controller: Remotes ensure guests can access the garage easily. 

 Lighting control: A connected porch light can add a nice welcome when a guest shows up after dark. 

 Voice assistant/connected speakers: Connected tech will delight digitally savvy guests. 

 

New operating standards 

As managers of all sizes start building their own tech stacks, the bar for operational standards in the sector continues to rise. This can only be a positive development. The past year has shown that tech has the potential to improve your bottom line as well as your guest reviews—whether you have a small, growing portfolio or a bigger business. Tech is a great leveler in this respect; anyone can jump on board and reap the benefits. 

 

New Vacation Rental Data Standards in a Post-Pandemic World

By
Melanie Brown
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Experts in many fields, from economics to health care, have referred to COVID-19 as an accelerator that escalated shifts in societal behavior. The pandemic has certainly accelerated the growth and maturation that was already happening within the vacation rental industry. 

The pandemic also sped up the sector’s increasing dependency on vacation rental performance data. VRM Intel’s first Data and Revenue Management (DARM) conference in 2019 marked a significant change in the industry’s reliance on and attitude toward data. In March 2020, vacation rental managers realized that access to comparative benchmark data is essential. The increasing use of data in important business decisions means data providers must reliably provide actionable and high-quality information. Using examples from around the United States, below are the new standards for vacation rental data. 

 

1. Updated daily 

Until recently, hospitality data sets were reported on a weekly or monthly basis. But when travel advisories, local regulations, and renter sentiment change overnight, the five-day wait before your next data update seems like an eternity. One example is how quickly reservation activity for Gulf Shores and Orange Beach, Alabama, changed when the beaches reopened on May 1, 2020. New reservations immediately spiked for the following weekend. For the first weekend of May in 2019, the average time between a guest making a reservation and arriving was 57 days. For the same weekend in 2020, that window dropped to 12 days. This influx of bookings caused the weekend’s paid occupancy rate to increase by 11 percent in just three days. 

When performance changes this quickly, you need up-to-date data as soon as you sit down at your desk in the morning. 

 

 

2. Insight into actual occupancy rates 

Old-school vacation rental revenue management tended to prioritize high occupancy rates. Now, most revenue managers have shifted to balancing the Big Three: occupancy, average daily rate (ADR), and revenue per available rental (RevPAR). 

The pandemic also accelerated the need to have a deeper understanding of what “occupancy” means. Calendar occupancy shows how many nights are unavailable to book. What it fails to show, however, are the non-revenue-generating nights such as owner stays, nights blocked for maintenance, orphan nights between stays, or even cancellations. 

During the pandemic, historically safe assumptions about how often a unit would be used by the owner, hold nights, or cancellations are no longer relevant. 

During April and May of 2020, the owner-occupancy rate in Big Bear, California, was 41 percent, up from 14 percent the previous year. Hold occupancy rates in Telluride, Colorado increased from 20 percent to 47 percent. The number of canceled nights in Nashville increased from 20 percent in 2019 to 79 percent in 2020. 

If you intend to use market-level performance data to benchmark your inventory against your competitors or create revenue estimates for potential owners, make sure your data source considers the nuances of the overall occupancy rate. 

 

 

3. Market segmentation 

The past year has reminded us that just because one segment of the market is performing well does not mean that every segment is. As the perception of risk, group size and composition, and destination activities have evolved, the variation in performance between types of units has grown. 

One of the most acute examples of performance differences in segments of the market can be seen between single-family homes and condominiums. During the early stages of the pandemic, booking activity for condos was much lower than for houses. Most likely, this was caused by renters assuming that single-family houses reduce the amount of contact with other people. In Florida, between June and July, RevPAR increased by 6 percent for houses and decreased by 2 percent for condos and apartments compared to the previous year. Overall statewide RevPAR increased by 3 percent. 

If your inventory is primarily condos, looking at data for the entire market could lead to false expectations for your units’ performance and to poor revenue management decisions. Your data provider should give you the ability to look at market data by segment or even by custom competitive sets. 

 

 

4. Hyperlocal data 

Similar to performance differences between unit types, performance differences between markets have also increased. Local regulations, changes in travel preferences, and shifts in traveler activities have benefited some destinations while harming others. Even for similar markets within 20 miles of each other, year-over-year changes in performance vary considerably. 

Breckenridge, Keystone, and Vail are all relatively close together in Colorado. However, their changes in ADR versus last year are quite different. For December through February, the ADR for rentals in Breckenridge was $15 higher than the prior year. Keystone increased even more, by $32. But in Vail, the ADR declined by $14. Although it might be tempting to group all three markets together (which would show an increase of $21 for the region), that would not reveal the dramatic differences between the destinations. 

To help you stay competitive and make informed revenue management decisions, you should be able to track data at a number of different levels, including your own town or neighborhood. 

As the vacation rental industry continues to become more sophisticated and make headlines, so should our expectations of our data providers. At a minimum, expect your reporting tools to include daily updates, insight into types of occupancy, market segmentation, and hyperlocal data. If they don’t, you won’t have the information you need to stay at the top of your game in an ever-changing environment. 

 

 

Professional Vacation Rental Marketers are Heading to Charleston for a Post-Covid Look into the Future, Aug 17 – 18

By
Amy Hinote
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Professional vacation rental marketers looking to the future are predicting a rapidly changing competitive landscape. After hearing from these executives, a substantive marketing track has been added to Charleston’s 2021 Data and Revenue Management (DARM) Conference with a surprising amount of new information and education about direct marketing.

By definition, revenue management is about delivering the right product to the right consumer at the right time at the right price on the right channel. Revenue management is essentially a marketing function. Consequently, it didn’t make sense to deliver this year’s DARM conference without addressing the biggest marketing challenges the vacation rental industry is facing—including direct marketing. 

As a result, this conference has a high-level direct marketing track that addresses the many shifts in vacation rental and online marketing for professional vacation rental managers. Although many of the other sessions about data and revenue management are also marketing functions, here are the direct marketing topics we’ll be discussing:

  • Your “Limited Edition” Unique Selling Proposition (USP) with Matt Landau, founder, VRMB and Unlocked Podcast
  • How Search Engine Optimization REALLY Works for the Vacation Rental Industry with Paul Hanak, director of marketing, ICND
  • Generating Bookings With A Comprehensive Digital Advertising Strategy with Conrad O’Connell, founder, BuildUp Bookings
  • Social Campaigns: Optimizing Social Channels the Right Way with Greg Minor, founder and CEO, Vacations4you
  • Optimizing Brand.com: An In-depth Look at Merchandizing Properties on Your Own Website with Braeden Flaherty (Bluetent), Ben Ollic (Q4 Launch), and Josh Guerra (Bizcor)
  • #BookDirect and Your Call Center: The Battle for Direct Bookings is Hand-to-Hand Combat with Doug Kennedy, Kennedy Training Network
  • 2022 Email Marketing Strategies: Email Marketing Strategies and Tactics as a Key Component of the Revenue Optimization Strategy with Amir Rashid, NAVIS
  • Talking to Homeowners: Communicating Revenue Management and Marketing Initiatives with Homeowners, Panel
  • Traveler Demand: Measuring and Comparting Consumer Demand with Amber Carpenter, CMO, Acme House Company and founder, Demand IQ
  • Building Repeat Business: Converting Direct and Third-Party Guests into Repeat Customers with Tyann Marcink, David Angotti, Matt Landau, Suneel Goud, and Arthur Colker
  • Play Bigger: Tips & Tricks to Drive Direct Bookings with Tim Schutts, vice president, TravelNet Solutions’ Atlas Digital Marketing

Register for the 3rd Annual 2021 Vacation Rental Data and Revenue Management (DARM) Conference, Aug 17 – 18, Francis Marion Hotel, Charleston, SC. 

Looking at vacation rental distribution, the DARM conference includes additional pro vacation rental marketers will find valuable, including:

  • Rate Strategy: Building revenue management strategy in the new travel landscape
  • Revenue Strategy Levers: Pricing levers revenue managers pull to move the needle
  • Length of Stay (LOS) Strategies: Using LOS tactics to manage channel performance and optimize occupancy
  • Hotel Revenue Management Strategies: When to use, when to adapt, and when to toss
  • Optimizing Listings and Pricing on OTAs: Vrbo, Airbnb, and other Channels
  • Channel Loyalty: Are all your eggs in too few baskets?
  • API Connections: Implementing revenue management strategies on channels using channel managers, PMSs, and direct connections
  • C19 Trends Aftermath: The World in 2022
  • The Future of Vacation Rental Revenue Optimization
  • Building a 2022 Revenue Optimization Team: What does the org chart look like for a high-performing team ( sales, marketing and revenue management)
  • Key Performance Indicators (KPIs): Which metrics matter and how are they calculated and compared across vacation rental systems?
  • PMS Data: Finding business answers hidden in your PMS data
  • Holding a RM Meeting: How to conduct a revenue strategy meeting
  • Channel Management Profitability Checklist: Features that drive profitability
  • Data-Driven Property Managers: How to set up your benchmark metrics for success in your Key Data Dashboard
  • Rentals Recovery Roadmap: Which short-term rental industry trends will prevail?
  • Building Competitive Sets: Developing comp sets and tools available
  • Rental Inventory and Homeowner Metrics: A guide to measuring and improving what really matters for your inventory
  • Measuring Channel Performance: Channel metrics, incremental and A/B testing, and what to do when API connections fail
  • 2022 Forecasting: Forecasting when historical performance is obsolete

There is a lot here, so we are recording all of it—and attendees will receive a video package of all the sessions.

If you can’t make it to Charleston, we’re also allowing VRMs to purchase the recordings (which will be available on September 8). 

OTAs: The End of Property Management as We Know It

By
Alex Nigg
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2

 

A $70 Billion Difference 

A manager at one of the three big global listing platforms recently told me, “There is no doubt that rent-by-owner has become much easier during the last 10 years.” On the face of it, it’s an obvious statement: Without the help of a property manager, 10 years ago, I would have been largely relegated to market my property on my own, and I would have struggled. Today, in a few minutes, I can list on Airbnb, Vrbo, or Booking.com, which collectively generated about $70 billion in bookings in 2019. 

The listing platforms have been responsible for much of the value creation in our industry in the last decade, and much of that was due to Airbnb’s success. Today, Airbnb’s brand supports a market cap of more than $100 billion. That market cap is also supported by a belief that Airbnb alone will add another $60 billion in bookings in the next five years while also significantly improving its own economics. 

Crudely simplified, this can be good or bad for property managers (PMs). If those incremental bookings drastically shift the mix of direct versus indirect bookings for PMs, thus making PMs less relevant, it would decrease their appeal and their take rate. 

Also, if the listing platforms improving their own economics is a zero-sum game shifting take rate from PM to the listing platforms, then over time the economics will deteriorate for PMs. The industry will continue to be massively fragmented, with small PMs increasingly eking out a living in the shadow of the listing platforms. 

If, on the other hand, the listing platforms drive the growth of the entire market rapidly, then worsening unit economics for PMs might well be more than made up for by the increase in volume. 

Our industry is thus at an interesting juncture: Does the rising tide lift all boats, or are PMs relegated to wane in influence and take an increasingly smaller commission for their services as more bookings come from the listing platforms? 

 

Which Model Is Winning? 

The market has been abundantly clear about which model it favors: Airbnb and its peers trade at a much higher multiple than PMs. 

The largest vacation rental (VR) business in the world, Wyndham’s European portfolio (today Awaze), with some 110,000 listings, was sold in 2018 for a reported $1.3 billion. Stripping out other businesses included in the sale, the VR segment at the time likely generated about $200 million in sales. Assuming a 35 percent commission, this would imply gross bookings of about $600 million. Skift reported that the entire business sold for 10 times Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and assuming Wyndham’s VR business generated an EBITDA of 15 percent of revenues, the VR business would have been valued at $300 million, or 0.5 times gross booking value. These are rough estimates. 

Conversely, Airbnb is today valued at approximately three times its 2021 forecast gross booking value, and that’s despite the fact that Airbnb’s current take rate is less than half that of a typical PM, and Airbnb is not profitable yet. So clearly, the market believes that Airbnb and other listing platform’s business models are superior to that of a PM, likely on three counts. 

 

1. Scale versus Size 

Listing platforms have demonstrated they can scale. Conversely, PMs have largely been hyperlocal businesses that struggle to develop economies of scale beyond local markets. 

Indeed, successful PMs typically run highly local businesses that thrive because of the dominance of a local market and favorable local economics due to local density. They tend to have a large percentage of direct bookings from returning guests and from local feeder markets where they have built a local brand often over decades. 

Exceptions to this rule are few and fall into two categories. First, there are those that grew by acquisition and strung together collections of hyperlocal markets. However, it’s unclear they derive any scale effects beyond these local markets. Arguably, they have achieved size but not scale. Even large PMs tend to hit a “sound barrier” at 20,000 listings. AJL’s Simon Lehmann attributes this “natural law” to the founder of Interchalet, who decades ago observed that PMs struggle to grow beyond 20,000 units. It will be interesting to see if this law applies to Vacasa after its purchase of Turnkey. 

Contrastingly, there are those that have partially or fully let go of the non-scalable local parts of the business and focus on marketing and guest support, leaving the on-site operations to the owner or partners. Arguably, the latter looks more like listing platforms than PMs and might well scale, but the proverbial proof is in the pudding, and their long-term success will be defined by what percentage of bookings they generate directly and whether their unit economics improve as they grow. 

Listing platforms, in comparison, clearly scale, which is reflected in improving unit economics as they grow. Analysts expect Airbnb’s gross booking value to sustain a compound annual growth rate of more than 20 percent over the next 5 years; critically, this growth is organic. 

 

2. Shifting Take Rate 

When listing platforms generate tens of billions of dollars of bookings and add tools to make it ever easier for owners to list directly with them, this will shift the take rate from PMs to listing platforms. Many industry observers agree that PM commissions will continue to be challenged. 

This effect will, of course, differ by market. As former PM Richard Vaughton points out, the effect will be much more pronounced in urban markets—that exist because of the listing platforms—than in traditional VR markets where listing platforms are still less important as a source of bookings. But due to powerful global brands, billions of dollars invested in digital marketing, an increasing share of business from millennials that grew up with the listing platforms, and an increased ability to leverage hotel traffic for VR, these effects of scale will increasingly be felt in traditional VR, too. 

Urban markets may be interesting case studies of what’s to come. As science fiction writer William Gibson said, “The future is already here—it’s only unevenly distributed.” Urban managers that depend largely, or exclusively, on one or two listing platforms have in general not fared well. They very much depend on the listing platforms, and although the listing platforms may see them as attractive enablers to get an owner listed (until the listing platform builds better DIY tools), it’s unclear how much long-term value they hold to the listing platform. What is generally clear is who holds the better cards in that relationship and who will extract more value from the guest over time.

PMs fundamentally do three things: they put heads into beds, they manage guest relationships, and they turn and maintain properties. Interestingly, some European PMs charge the same commission whether the homeowner chooses to deal with turns and maintenance or whether the PMs manage those. This is a clear indication of where they see the value: Although there clearly is value in dispatching cleaners and maintenance, a future of “glorified housekeepers” and erosion or disintermediation of the guest relationship is probably not in PMs’ interest. 

As marketing power and more pieces of the guest relationship transition to the listing platform, the take rate will shift with it. Analysts expect Airbnb’s take rate to increase from 13–15 percent to 21 percent in the next few years, and it’s unlikely that this will come out of the owner’s pocket: Everyone needs supply to grow. A manager at a listing platform said to me years ago, “PMs take too much money for what they actually do.” 

 

3. Profitability 

Not all listing platforms are profitable today, but all have clearly shown the ability to be drastically more profitable than PMs. 

It is estimated that hyperlocal PMs typically generate an EBITDA of around 7–25 percent of revenues. Conversely, analysts expect Airbnb to reach an EBITDA of about 45 percent by 2030 because it benefits from scale. This might seem like a pipe dream given that Airbnb has only ever achieved profitability once in its 10-year history, but it is not far-fetched at all given that the more mature Booking.com has demonstrated achieving EBITDA in excess of 40 percent already, and Airbnb looks even more scalable than Booking.com. 

Can the “wave of consolidation” that we have so long expected make PMs drastically more profitable? 

It is unlikely if consolidation continues to simply string together local markets without clear economies of scale. 

As Sykes’s Graham Donoghue commented to Phocuswire’s Jill Menze on the Vacasa–Turnkey deal, “The key will be value creation and the road to efficiencies—you can’t just keep collecting stuff as eventually you’ll get found out.” 

Evolve in the US and Sykes and several others in Europe are pursuing models that resemble the listing platforms more than US full-service PMs. If they achieve a high percentage of direct bookings and exclusivity on listings, this model seems to be more profitable over time than a traditional PM. 

 

A Red Herring? 

So, in summary, if PMs can’t scale, if their commissions erode, and if they slowly become less profitable (from an already low base), what will become of them? 

The future is likely not as bleak as the above suggests; we are also in a period of unparalleled optimism about our industry. Several industry observers expect Vacasa’s unstoppable streak of acquisition to drive toward a SPAC or IPO at revenue multiples comparable to Airbnb—even if their economics and business models couldn’t be more different. 

This optimism might be based on one of three factors. First, the rising tide lifts all boats, and the growth created by Airbnb and the other listing platforms as well as pent-up demand will either negate or more than compensate for any deterioration in unit economics. Second, the market believes that the “tech-enabled PM” indeed provides for superior economics. Third, Vacasa and Airbnb share at least one major investor, so before long, Vacasa, too, may well look more like Airbnb, or it may add highly scalable, unbundled services to its portfolio. 

 

So What? 

So what’s a PM to do? Whichever way one looks at the future of our industry, it’s highly likely that the pace of change will accelerate, which will require adjustments for all industry participants. 

 

1. Focus on inventory acquisition. 

Supply acquisition will be the key battle of this year and the years to come, and being local, PMs have a competitive advantage (more so than with guests). So every owner of a PMC should spend as much of their time as they can on inventory acquisition. 

The RBO market (i.e., the 50 percent of homeowners/hosts who don’t currently use a PM) is more attractive than just poaching homeowners from your competitors, but you have to be creative on how to attract those who don’t want full service (yet). The homeowner relationship is the key asset of a local PM. 

As Steve Milo of VTrips notes, as opposed to anyone else in the ecosystem, PMs have an exclusive relationship with owners, and once that’s in place, it’s a defensible competitive advantage. 

 

2. Get a piece of as many homeowners as you can rather than getting all of a few. 

The vast majority of the US market is focused exclusively on the full-service model. This is an unusual characteristic of the US market and is not shared with the rest of the world. Evolve has built a successful, scalable model unbundling this offering. Their success, and the experience in Europe, suggests that there is plenty of room for other models. 

Why not offer owners a wide range of services and thus leverage the core local strength in owner acquisition across a wider menu of á la carte services? For example, you could offer 1 percent for a DIY (white-labeled) owner tool and 3 percent for some basic remote services, offer access to unbundled housekeeping at a subscription fee plus a per-job charge, offer unbundled marketing and guest management at 10–15 percent, and then upsell all the way to full-service management. 

But each additional customer—even if it’s just a piece of full service—builds your local dominance and creates local scale on as much of the guest relationship as you can. 

 

3. Diversify your channels; focus on the ones that matter. 

In a world where increasingly more bookings come from channels, you should at least ensure you keep your channel mix diverse. In practice, focus on the ones that matter, and when practical, favor the challenger. If you are in Destin, give Booking and Airbnb a try; if you are in Tahoe, in addition to Airbnb, also list on Vrbo and Booking. 

Expect an all-out war to break out because Vrbo and Booking. com, as well as the entire hotel industry, are salivating over Airbnb’s market cap as a public company. The opening shots in this battle have already been fired, with Vrbo taking the fight to Airbnb and Booking.com chasing Vrbo. There will be pressure on each to serve up bookings to newly signed listings, which should create an opportunity to diversify a PM’s channel mix. 

In addition, consider new entrants. Homes & Villas by Marriott International has by all counts been highly successful. Their success will likely inspire other traditional lodging providers to throw their hats in the ring (as well as other travel providers, such as airlines). In the past, these offerings have had mixed success, but Marriott seems to have cracked the code, and others will likely follow. Successful regional or niche listing platforms may also round out your mix. 

And then there’s Google. This currently requires more work, and success very much depends on where you are. But reaching your customers via Google may be more cost-effective for some, and doing do certainly diversifies your channel mix. 

 

Conclusion 

So, will property management really end? PMs provide highly valuable services to many homeowners, and that won’t change. But short-term rental property management as we know it may well change drastically over the next few years. 

This article might sound odd this year, which promises to be the best on record for many PMs. Not only is the industry likely to benefit from both pent-up demand and longer-term favorable dynamics in 2021, but this year, at last it seems the power balance between PMs and listing platforms is shifting in favor of PMs. Many PMs are booked out, with some of the highest levels of direct bookings ever, and listing platforms are competing ferociously to woo PMs. PMs barely have time this year to consider the deals listing platforms are throwing at them. 

But this year is likely to be an exception, and shrewd industry observers are setting their sights on 2022, when the battle for both guests and owners will escalate. 

The biggest surprise of the last 10 years has been just how slow change in this industry has been for traditional PMs in traditional VR areas. 

The pace of change is likely to accelerate sharply over the next few years. 

Urban managers have seen this change more than their colleagues in traditional leisure VR. Although these two markets have fundamentally different dynamics, urban managers are an interesting case study of a market with high dependence on listing platforms. 

There are few certainties other than that the pace of change will continue to accelerate. If I had to bet money, I’d bet that those PMs that get good at acquiring and retaining owners while maintaining a high percentage of direct bookings will fare the best. 

 

How to Avoid Making Costly Mistakes When Selling Your Vacation Rental Business

By
Ben Edwards
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With many of us experiencing a pandemic rebound, operating cash and earnings are at all-time highs. 

Each of us would be lucky to “go out” on top. Historically, that was a primary driver in determining whether to sell your vacation rental business. More recently, multiple external implications and industry dynamics have generated a flurry of questions for our M&A team. Of course, selling a business for maximum value is paramount, but other considerations are becoming increasingly material. We’ve been working through vacation rental transactions for more than 20 years, and this has been one of the most interesting years ever. 

With unprecedented earnings recognized in many operations, determining a reasonable valuation has been difficult in recent years. Company owners obviously want to use 2020 earnings, but buyers are looking for more of an average or weighted average. It’s important to note that nearly all transactions are based on a multiple of earnings (if you’re considering a sale of the business where a market valuation method is not being used, you should be asking “Why not?”). 

If the sale of your business is based on a multiple of four-times earnings, prospective buyers are looking to realize similar earnings each year moving forward, hopefully over the next four years. However, if your business has had an extraordinary increase in performance, like many of us had in 2020, it would be difficult to model a successful investment in your business. 

It also appears that 2021 will be a banner year, but will 2022 or 2023? This is where a reasonable, weighted average of net income is a solid middle ground and may be the difference in finalizing a successful transaction. 

Other factors influencing the sale of businesses domestically were recently announced. The current administration has proposed an over 100 percent increase in the federal capital gains tax rate, and while it remains to be seen whether business households making less than $400,000 per year will pay more in taxes, those exceeding $400,000 per year are expected to receive a tax increase. 

 

So, what does this mean for me as a VR business owner? 

For starters, it means less free cash flow. In the event you are considering exiting the business, I would strongly encourage you to look at selling in the 2021 tax year. While it’s not guaranteed that all these proposed tax increases will get passed, certain taxes will increase. The government will be forced to raise taxes to offset the increase in spending and programs being proposed. So, when you think about going out on top, don’t consider only the purchase price—think about the timing and tax consequences that may come into effect. 

Another material consideration to the rising taxes and slowing economy is inflation. If the capital gains tax increase comes into play and inflation rises, we as business owners will expend more cash for the same goods and services. And if this is happening in your business, you can bet this is happening with each family that stays with your rental operation. 

Be mindful of changes on the horizon. There are major shifts at play that could dramatically affect your decision-making and/or business in 2021. Understanding the true cost of selling your business will help ensure the sale of your vacation rental operation is a success. The same is true for generating a material profit. 

If you have questions about preparing your business for sale, are curious about your vacation rental operation’s value, or have questions about increasing your company’s profitability, please do not hesitate to contact Ben Edwards with Weatherby Consulting via phone at (850) 496-7360 or email at Ben@WeatherbyConsulting.com. 

 

Helping Your Guests Create Memories that Matter One Experience at a Time

By
Chris Taylor
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1

A guest’s memories of a vacation can be different from their true experience and are sometimes shaped by a single event. That is why it’s critical to understand the guest’s journey and how you can help shape it. 

Daniel Kahneman, Nobel laureate and creator of the theory of behavioral economics, spoke in a TED Talk about the riddle of experience versus memory. Mr. Kahneman tells the story of a lecture attendee describing his experience of listening to a symphony recording. It was glorious, but at the end there was a dreadful screeching sound. The person said, “It ruined the whole experience.” 

But it hadn’t. It ruined the memory of the experience. He’d had 20 minutes of beautiful music, but because he was left with a ruined memory, they counted for nothing. “The remembering self is a storyteller. Our memories tell us stories, that is what we get to keep from our experiences,” Mr. Kahneman said. 

 

UNIQUE AND DELIGHTFUL MEMORIES FUEL GROWTH 

Vacationers want to have a happy experience on their trip, and vacation rental management companies want their guests to have happy experiences during their stay. This seems like a perfect match, right? Well, experiences and memories can be a funny thing. Marcel Proust wrote, “Remembrance of things past is not necessarily the remembrance of things as they were.” 

Simon Lehmann, one of the foremost experts on short-term and vacation rentals, said in a Slick Talk podcast with Wil Slickers, “30 percent of US travelers rent a [vacation rental] property for their vacation.” He goes on to say, “Uniqueness needs to be lifted. If we want to address the 70 percent of US travelers who don’t rent, then we need to deliver something better than just a furnished place.” That means a unique property and an experience that you will not get anywhere else. 

What can you do to help your guests have great experiences and make great memories? As you think through the guest’s journey, examine each of your interactions with them, and consider how you can minimize the screeches and maximize the glorious music. 

 

HELP YOUR GUESTS CREATE GREAT MEMORIES ON THEIR JOURNEY 

THE RESEARCH AND BOOKING STAGE 

The study, “Vacationers Happier, But Most Not Happier After a Holiday” in Applied Research Quality Life found that vacationers experience a significant boost in happiness during the planning stages of their trip because they’re looking forward to the good times ahead. 

As travelers research, they are deciding between different locations through a mix of big-listing sites and local property managers. They are researching pricing, excursions, attractions in the area, and flight or driving information. How can you delight guests at this stage? Provide engaging images and content on your website and listings that make future guests feel as though they’re already there. The customer journey and the overall experience with your brand begins here. Start building your rapport now. 

Feed their enthusiasm with honest information. “What’s it like during Christmas?” is surely a common question for vacation rental managers (VRMs) in Florida. Confidently describe the good and the bad: say, “Yes, Christmas is the best time to come, everything is decorated, and you’ll have an amazing holiday experience. But a lot of others are thinking the same thing. We can give you advice on how best to manage the crowds.” Feed that enthusiasm, and make the inquiring traveler feel that they’re making a great decision by staying with you. 

 

BEFORE THEIR ARRIVAL 

In the Netimperative article, “Consumer frustrations with travel marketing: Gen Z want more tailored offers,” 25 percent of consumers said they would be more loyal to travel experience providers if those providers understood consumer needs. 

Lauren Boyer, marketing manager for Holiday Beach Rentals, personalizes the guest experience, in part with prearrival emails that get their guests excited and ensures they know about the special things that will make up their experience: “7:00 p.m. on your balcony you’ll see an amazing sunset” and, “Don’t forget the wet bar.” 

Get your guests excited as their vacation draws near. Boyer says an open line of communication for last-minute questions is important. There are so many common questions that guests have: “Do I need to bring my hairdryer?” “Do you provide sunscreen?” “How deep is the pool?” “How far is the beach? I want to know if it will be a problem for my elderly mother.” 

Determine the best way to communicate with your guests. At Holiday Beach Rentals, for example, Boyer explains, “Guests don’t want to talk live with anyone. They’re used to texting or online chats.” 

Matthew and Angela Tesdall, owners of Family Time Vacation Rentals and Sisters Vacation Rentals, have almost 200 managed properties. Their motto is, “Family memories made here.” 

Matthew says, “Guests want to spend time as a family or as friends. They want an experience that’s solid, with easy arrival instructions, a door code, someone to provide support if needed, a clean and sanitized place that is CDC compliant. Otherwise, they just want to enjoy their time.” 

Sometimes creating positive memories means avoiding negative experiences. The most common complaint in negative reviews is a dirty property. Another problem can be finding addresses in rural areas where Google Maps doesn’t work. In these cases, you need to provide specific driving instructions. They may be nervous if it’s really dark in the surrounding area, so let them know in advance, and make them feel comfortable. Making sure lights are on, for example, provides a welcoming introduction to the home. 

 

DURING THEIR STAY 

Albert Einstein said, “I love to travel, but I hate to arrive.” Unfortunately, that might be true for many travelers. Once they arrive, the exciting expectations during the research and booking phase collide with reality and don’t always match. 

But you can help. A guest’s overall first impression is the first memory of their vacation. It can set the trajectory of the rest of the stay. If it’s negative, it’s likely to linger and affect the impression of everything else. This may be reflected in a lower rating or negative comment in a review. You need to find out if there are any problems by reaching out shortly after they’ve arrived, whether through an email, text, phone call, or greeting in a digital guidebook. A negative experience can be turned into a positive memory if you take care of it quickly. Combine that with a personalized greeting, and you’ve really created a great first memory. 

Guests don’t always know how to find or use everything on your property, they don’t want to call or text with every question. But even if they do, trying to explain an issue on the phone isn’t always easy. They want to know there’s someone there if they need help, but they’d prefer to be self-sufficient, troubleshooting issues on their own. Provide information on the property and the local area to make them feel at home and capable of finding what they need. More and more vacation rental managers are turning to digital guidebooks like the wall-mounted GuestView Guide interactive concierge from Sharp NEC Display Solutions. 

Tim Justynski, director of business relations for Kissimmee Guest Services in Florida and a former board member of the Florida Vacation Rental Management Association, has a great hospitality approach. His company doesn’t just provide a great deal on tickets to attractions, it provides the road map to great memories. This includes ways to avoid traffic, the best strategy to navigate your park visit, how to cool down on hot days, and more. Tim says to always smile when talking with guests whether in person or over the phone. 

Tim also talks about the importance of providing recommendations to guests about restaurants and activities. There are 240 restaurants listed on Yelp near or on International Drive in Orlando, Florida. Of those, 115 have 4.5- or 5-star ratings. How does a guest decide? A list of your recommendations with short descriptions can make the selection process a lot easier and guide your guests to the places you know will create a great experience. Which places are best if your guests have young children? Or are they looking for a fun Thursday night happy hour? How about celebrating a special anniversary? It’s all about the memories! 

Another way to help create a great guest experience is by offering services that enhance their stay. These can be services you control, such as late checkout and mid-stay housekeeping, or third-party services such as boat charters, personal chefs, yoga classes, and more. By offering a variety of services, you’re helping create more experiences and memories that guests are happy to pay for. 

Take advantage of these memories to build your brand. No, they’re not staying in an Airbnb! They’re staying at one of your properties. So continuously brand your company before, during, and after the stay. Once at your property, this can include digital signage. 

 

DEPARTURE AND AFTER THEIR STAY 

One of the best ways to create a memory for your guests is to take advantage of that last impression. Amber Carpenter, co-owner and chief marketing officer of ACME House Company, is in the process of creating gift baskets for departing guests that will include allergy-friendly road snacks, bottles of water, and hand wipes, all packed in a branded backpack. The backpack is especially important because it keeps their company name with the guests until they’re ready to book their next vacation or share their experience with friends. That last positive impression as they’re leaving is likely to create a memory they won’t forget. 

Following up after the stay via email or text message is a sure way to stand out from many of your competitors. Travelers want to be heard, whether their experience is positive or negative. And if it’s negative, this is another chance to turn a bad memory into at least a neutral one. It’s also a perfect time to emphasize the value of a rating and a review. Positive reviews build your brand. 

 

GUESTS REMEMBER YOU AND COME BACK 

Studies have shown that less than 20 percent of travelers remember the company they stayed with 60 days after checkout. If a guest feels they were taken care of and listened to, you increase your chances of being in that 20 percent and building a relationship. As Amy Hinote says in a recent VRM Intel Magazine article, “In 2021, rebooking is vital. Strategize incentives and messaging—like locking in rates or creating reward programs—and create a foolproof plan to ensure guests who booked on third-party sites book directly with you in the future. Set a goal to increase rebooking by X percent, and track progress weekly.” Some of the most successful vacation rental management companies have rebooking rates of 30 percent or more, which helps lower marketing costs. It’s often the least expensive way to grow. 

Remember, it’s about the memories as well as the experience. 

 

The Value of Asking Questions to the Guest Experience, Your Work Environment & Beyond

By
Ali Cammelletti
-
0

Questions are a critical foundation of all relationships that we experience in life. They are said to create learning or liking, and, in the end, they accomplish both. 

At a young age, we are groomed to either embrace question-asking or have it shut down. I think of my younger sister at three years old; we referred to it as the “why” age. At 13 years old, I probably gave inappropriate responses to my curious sister or begged her to stop asking by repeatedly answering, “because.” I am now experiencing the “why” age with my own daughter, and we have learned to ask Google when we do not know, because I no longer pretend to know everything, and she has a knack for remembering everything. 

If we are shut down at a young age, sometimes that phenomenon carries over into our adult lives (not counting the teenage years, when the majority purport to know it all!). I remember being scared to ask questions early in my career because I thought my leadership team believed that I should have all the answers; isn’t that why they hired me? 

When we discuss how best to build professional relationships in sales or guest services, I spend a good deal of time talking about the importance of asking two open-ended questions. Asking open-ended questions makes for the exchange of more information more efficiently than moving through a long list of yes-or-no and other types of questions that aren’t open-ended. 

Pro Tip: A great exercise to conduct with teams is called “Sell Me This Pen.” It really helps teams appreciate the power of open-ended questions. 

 

Some of my favorite open-ended questions for sales and guest services include: 

 What brings you to the area? 

 What is most important to you? 

 What did you previously enjoy most? 

 What would help you most during this time? 

 How do you feel about the price? 

 Can you share more details about what exactly happened? 

 How would you envision this being resolved? 

 

The key is to build on the first question and then ask another open-ended question. 

A few years ago, I was working with and getting to know a physical therapist who was new to me. I asked if he had kids. He shared that he had two boys, both 13 years old. It would have been easy for me to assume that they were twins. But I went in for the second question and asked, “How is that?” He opened up and shared with me the most amazing adoption story, including the fact that he adopted his boys in the same city where my adopted daughter’s birth mother is from. I felt an instant connection to him, and it allowed for deep conversations about open adoption and the vulnerability it requires. 

I will always go for the second question and steer away from making assumptions. It would have been easy for me to assume he had twin boys, in which case I would have missed out on a story that felt validating and brought me to tears. 

Another time, I had been researching material about “asking questions” and came across a good amount of information asserting that people like you better if you ask questions. I decided to put that notion into play at an industry conference. Instead of focusing on making connections based on similarities, I asked questions and in just 10 minutes learned so much about the person with whom I spoke. At the end, this person knew my name and had my business card yet didn’t know much else. As we parted, I received a hug from this person who just minutes before was a complete stranger. I had a huge smile on my face as I thought, “Wow!” 

The articles I had read were absolutely correct! People do like you better if you ask questions. People enjoy talking about themselves. All we need to do is ask. 

Another approach I use: When I start to feel like I am being critical of someone, I instead channel my energy into curiosity. Maybe the person has made a statement that I find offensive or misaligned with my values, but if I cut short my inclination to judge the person and instead ask the person for more information, I can better understand the context for such a statement and, ultimately, better understand the person. This technique promotes more generous thoughts about others and leads to more compassion for people who feel differently than ourselves. 

Asking questions is the key to the difference between coaching and training. What I believe sets my coaching apart is that I am not afraid to ask, “why is that?” 

I remember meeting someone who had been a leadership coach for over more than 40 years. She was very passionate about not going to the “why.” However, I believe that when we understand why we behave as we do, it sparks our mindset and enables us to change our patterns of behavior and perception and perhaps understand their deep roots. 

I had a one-on-one coaching session with an employee who was struggling with an interpersonal relationship in the organization. She had many judgments about this person and shared with me that she felt anxious when going to work and knowing that she was going to be working with the person. I felt sad for this employee because she was so triggered by this peer. I asked her what she did not like about the person. She ran through a huge list of criticisms, and then I asked if she had ever had someone else in her life who was similar. It took a bit of time for her to recall, and then she exclaimed, “Oh my!” It turned out that this peer reminded her of her foster mother, for whom she had unresolved feelings. When we have such experiences, it is a reminder that we have work to do in this area. Unless and until we dig in and do the personal work, we will continue to experience such situations. 

 

Now, when it comes to coaching others, a few favorite questions I use include: 

 What do you want to make sure we cover today? 

 What do you mean by that? 

 Why is that? 

 Can you tell me more about that? 

 What do you believe is creating this behavior? 

 What is getting in your way? 

 What is your vision, and how are you going to get there? 

 What is one thing you took away from our time together today? 

 

There are several different beliefs about why people do not ask questions, such as being egocentric, which is wanting to impress others with their own ideas. For some it is apathy, not even caring enough to ask, or they believe that the answers will bore them. And sometimes it is because they believe that they already know the answers. On the other hand, some people do not ask questions because they feel it will reflect badly on them because the very fact that they’re asking shows that they don’t know the answers. 

Once you have mastered the asking of questions and understand your obstacles, it is important to make sure you are actively listening. I will always remember a conversation I once had with someone who had been a salesperson for their entire career. This person asked me a question and then scanned the room looking over my head the entire time I was answering. If you are going to ask questions, it is critical to listen to what is being said and really demonstrate your interest. 

As Dale Carnegie advocated in his book How to Win Friends and Influence People, make sure that the questions you ask are the questions that others enjoy answering. When asking questions, try not to guess or assume what the answer might be and what you will say next; such anticipation gets in the way of true listening. 

I encourage you to go beyond the superficial and get curious by asking questions to learn more and create connections in our world, which has suffered so much from disconnection over the past year. 

 

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