“Prediction is very difficult, especially if it’s about the future.” —Niels Bohr (Nobel Prize in physics, 1922)
When we focus on the future, we tend to focus on the immediate future. It’s easier to predict which of last year’s trends will continue or use data from last month to project next month than it is to imagine how far the vacation rental industry will travel in our lifetimes. But that doesn’t make it any less important to do so, particularly for those who depend on vacation rentals for their livelihood. Changes in demand and revenue performance can have a real impact.
Increased personalization has been a trend across all sectors for a long time; however, the vacation rental industry is ideally positioned to capitalize on increased personalization, given that it is founded on creating a unique experience. Travelers are increasingly looking for options that best suit their individual needs—be it off-the-beaten-path experiences, uncrowded destinations, the ability to travel with a pet, or the need to work while away—and it is through vacation rentals that they are able to have such bespoke experiences.
Personalization works both ways, and OTAs, tech platforms, and service providers will have to embrace personalization to meet the individual needs of vacation rental managers and owners the same way vacation rentals must embrace their uniqueness to provide personalized experiences to travelers.
However, embracing personalization provides a challenge for revenue managers. Offering the right rate to the right traveler at the right time becomes increasingly complex as there are more channels to offer rates on, more travelers looking for unique experiences, more properties, and more tech platforms servicing those properties. The revenue manager of the future will not only have to deploy increased personalization to capture demand and increase revenue but also personalize the methods and tools they use to do so.
The availability of quality data also continues to grow. Real-time market intelligence on everything from bookings, available supply, and competitors’ rates is now easily accessible. Almost any vacation rental operator can see into the future with leading indicators such as search demand and forecasted occupancy computed with machine learning.
Increased personalization, a growing ecosystem of vacation rental technology, and the democratization of data promise to add complexity to the future of vacation rental revenue management. But the rewards of this complexity are significant, both for the vacation rental travelers whose experience will be much improved and the operators who will benefit commercially from the ability to provide a much more personal and tailored experience.
Hosts and operators who fail to invest in forward-looking, data-driven revenue performance capability will simply be unable to keep pace with those who embrace it.