“Plans are nothing. Planning is everything.” — D. D. Eisenhower
In a year where just about every forecasting model fell flat on its face, as an industry we could be forgiven for placing less of an emphasis on future planning just to pause for a time and reflect on where we are as the pandemic continues to impact each and every one of our organizational stakeholders. Self-reflection is a great thing, and for many professional managers, a toast this holiday season to simply being in business at all will be deeply enjoyed.
We’d better make that toast a quick one though: we’ve discovered that our strategic forecasting models have a long way to go, and we’ve got work to do.
In an ironic sense, it may be that for the professional managers in drive-to markets that have seen a surprisingly strong season this year, the sense of urgency to evolve will take a back seat simply to maintaining day-to-day operations. In other words, even with the disruption of the pandemic strong market players may not be changing fast enough.
That makes sense. If it’s not broke and there is a line at the door, focusing on today isn’t a bad thing at all, but strong organizations are doing two things at once; they are relentless on today’s guest and owner experience while at the same time driving strategies toward different future success as well. One focus or the other is necessary but won’t be sufficient for long-term sustainability in a rapidly changing market.
It’s that changing market that is the focus of our strategic forecasting models. 2021 will most likely be another strong year for many vacation domestic home rental operators as travelling confidence will be slow to return.
It’s 2022 that is the big question mark.
As more traditional vacation options once again become available, it also makes sense that we’ll see a flat or even down year in the vacation rental business as families unleash some pent-up demand for a Disney trip, a cruise, a Bahamas vacation, all-inclusive resorts, or the European stay. Our forecasts, then, should include a range of revenue outcomes for 2022: green, yellow, and red demand, for example, should drive corresponding investment decisions today.
It may well be that with such strong current demand in many places that professional operators won’t be forced to evolve until a slackening of that demand appears and yet when that time comes we’ll also see the strongest future differentiation among these companies; a return on strategy will unfold in 2022 that will leave, as the tide recedes, our swim clothes bare for all to see.
To really begin to link sound strategic forecasts to operational decision-making, strong operators will invest in distinct efficiencies in 2021 (in a good year) and see a distinct return most likely in 2022 (conceivably a down year) and beyond. To use an analogy, if we like the shade of financial security across market cycles, the time to plant the tree is today and not when we feel the heat of a down-year sun.
Even more broadly, it’s also sensible to think that 2022 will be a watershed year for our facilitation friends at Airbnb as well. As professional managers seek to offset revenue reductions in 2022, it will be tempting for those operators to seek greater distribution channels as their current demand dries up and excess capacity becomes available—look for Airbnb to have a breakout year with professional operators in 2022. Those who were slow to invest in professional sustainability in 2021 will be the first, in turn, to seek fast channel offsets should 2022 reveal a weakened demand stream.
This is all to say that while we make our hay, it’s also wise to think about how much we’ll need for the future.
If our own crops suffer a drought in 2022, we’ll need to really understand—through sound forecasting—how much we have on hand, where else we can find it, and how long until it may rain again. Otherwise, we’ll find 2022 carrying with it a reliance on other channels for our own sustained success.