Back in 2010, I started Stay Charlottesville, our humble vacation rental company. At the time, the vacation rental management (VRM) industry was at the beginning of its boom; and we were searching for a property management system (PMS), a search that ultimately led me to a coin flip between two choices—LiveRez or Instant Software.
About the same time, as I was building Stay Charlottesville, I accidentally acquired a “Groupon” like company called CvilleSaver. When I say accidentally, I couldn’t mean that more. I was trying to acquire CvilleSaver for a publishing group that I worked for; however, unbeknownst to me the group was going through a merger and they couldn’t make a move on it, Somehow I ended up with it.
As a reminder, 2010-2011 were the days of the deal craze. Everyone was trying to build a deal platform and get into the market, similar to the present day in the vacation rental management space. Once I acquired CvilleSaver, the first move I made was getting it onto a 3rd party platform, (to remain anonymous, not because I’m trying to be secretive, but because after ten years of operating a vacation rental management company my memory can only retain what is needed, and apparently that detail is not).
In 2012, CvilleSaver couldn’t have been doing better, we were beating Living Social and Groupon locally in the market, and for whatever reason, the Central Virginia community loved local, supported it, and bought into it. I often said when I acquired CvilleSaver that if it did well after six months I’d be impressed; if I had it after a year, I’d start looking for buyers; and if I had it for 18 months I’d sell it to anyone who would write a check.
What I didn’t count on is the 3rd-party platform going belly up in October 2012, and leaving me 60 days to figure out what I was going do. Fortunately, I was going to be forced to do something, like it or not, in my 18-month time frame.
Unfortunately, when your entire company existence relies on proprietary software to operate, it truly affects your options. Luckily, I found a buyer with an existing platform; however, a distressed sale on a cash flowing company was not ideal.
So, my 2010 coin flip for choosing a PMS landed on LiveRez. The other side of the coin would have landed me on Instant Software, which was shortly thereafter acquired by HomeAway. Fast forward nine years, and all of us in the VRM space find ourselves deciding what platform is now best for us—fees are going up, consolidation is happening, investment is coming in, platforms are getting sunset, and the industry is moving fast.
This past year has moved at lightning speed, and I bet the coming year will move at light speed.
There is a lot of fear in the market right now, rightfully so, but do not let that control your decision, try and control your outcome.
Outside of the obvious considerations when choosing a PMS, obvious being that it works, think about these questions:
How is it funded?
Running a PMS today with the proper development resources is expensive. Likewise, moving to a new PMS comes at a high cost. Do your due diligence to avoid getting caught with an underfunded PMS. The other side of the funding coin is that most successful PMSs will have exit strategies; try and get to know the founders and learn what their intentions are.
Who is using it?
All PMSs will give you customer referrals, so try and find the VRMs that are using them that are not on those lists. Use those lists to find others and be purposeful in the questions you seek answers for.
How fast does it move and change?
There is not a one-size-fits-all PMS. Most PMSs need to be connected to 3rd party vendors to be relevant in today’s market—not because they don’t offer a solution, but so they can offer the right solution for your business. These solutions are going to come fast and not all of them will have connectivity already in place to your current PMS. How long does it take their development team to make something move and what is on their development road map?
In closing, the more your business relies on just one tool, the more your business is susceptible to all that goes into making that tool function, and the more your livelihood is affected when that tool doesn’t function well. While I’m not recommending one PMS over another, I am recommending siloing your business over multiple 3rd party platforms. Be strategic in your technology solution plan, so when a tool you use every day gets sold or goes under, you minimize the impact to your team’s day-to-day operations.