VRM Intel Magazine Fall 2018 by Amy Hinote

Q&A with Airbnb's

Clara Liang

Predictive Economic

Indicators

Today's Customers

Demand "Now" Theory of

Limited Edition Jeremiah Gall: Hotel Convergence is Pushing Quality for Vacation Rentals VRM Intel Magazine | Fall 2018

VRM Intel Magazine | Fall 2018

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VRM Intel Magazine | Fall 2018

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As I sat in Valerie Hawkins’ class at our Partner Conference this year, watching her shine on stage and teach other partners about phone reservation skills, I found myself thinking back to the very first time I met this tenacious property manager. It was just a few months after her company, Perdido Key Realty, joined LiveRez, and we were in her area visiting a few other Florida partners. We sat down together in her cozy office and I mentioned we were meeting later with a brand new LiveRez partner in her area who hadn’t yet gone live. Valerie got this burst of energy and said, “We would love to go help them out with the transition!”

“

resources and experiences battling tough vacation rental legislation. From managers in Mexico who like to visit with all the new LiveRez partners in their area and help them master the software and talk best practices. And, just this past year as the LiveRez family joined forces to create LiveRelief, a movement to support partners going through tough times. Having suffered massive losses in a past hurricane, Valerie was front and center again, helping lead the charge on the LiveRelief silent auction, where LiveRez partners raised more than $80,000 to support other partners devastated by the recent hurricanes.

I’ll never forget the look on that new partner’s face when I told them about Valerie’s offer. You see, when you join with LiveRez, you quickly realize our partners are YOUR partners.”

I’ll never forget the look on that new partner’s face when I told them about Valerie’s offer. You see, when you join with LiveRez, you quickly realize our partners are YOUR partners. You become part of this passionate network of local professional property managers, that are all driven to grow their business, learn from each other, and stand united.

Sharing ideas, visiting other partners’ operations, marketing each other’s properties, and working to build each other up… That’s the norm for our community of partners. And, it’s why all of us at LiveRez believe so strongly in the power of partnership with professional property managers.

We see this firsthand from partners in San Diego who are sharing their

Tina Upson VP of Operations

VRM Intel Magazine | Fall 2018

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VRM Intel Magazine | Fall 2018

Contents

On the Cover

64 Q&A with Airbnb's Clara Liang 50 Predictive Economic Indicators 68 Today's Customers Demand "Now" 36 Matt Landau's Theory of Limited Edition 43 Hotel Convergence: Pushing Quality in Vacation Rentals

Q&A with Airbnb's

Clara Liang

Predictive Economic

Indicators

Today's Customers

Demand "Now" Theory of

Limited Edition Jeremiah Gall: Hotel Convergence is Pushing Quality for Vacation Rentals

Business 29 Good Neighbor Guide to The 50 Economic Indicators and Vacation Neighborhood Changing Consumer Behavior 32 Staffing to Meet Business Needs

56 Shooting for the stars: Consistency Drives Convergence

43 How Hotel Convergence is Affecting the Vacation Rental Industry

62 Meyer Turns Laundry Facility into Largest Commercial Provider on Gulf Coast

46 Georgia Mountain Cabin Rentals Founder Paul Gribble is Raising the Bar

85 Condo-World Offers Insight into Dual Model

49 What Selling Your Business Could Cost You

90 Lessons in the Fall: Steve Trover Closes All Star Vacation Homes

68 10

36 VRM Intel Magazine | Fall 2018

VRM Intel Magazine | Fall 2018

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VRM Intel Magazine | Fall 2018

Secure access meets smart home automation.

Our new Smart Controller interfaces with BeHome247 Enterprise Property Controlâ&#x201E;˘ to remotely monitor and manage utilities anywhere in the world.

Oracode keyless access allows you to issue and activate access codes to your guestâ&#x20AC;&#x2122;s mobile device while the Smart Controller provides scalable extended home automation capabilities. Visit dormakaba.us/oracode VRM Intel Magazine | Fall 2018

Contents Marketing

36 Are your homes commodities or Limited Edition? 53 A Generational Shift in Traveler Behavior 64 10 Questions with Airbnb's Clara Liang

Technology

78 Simon Lehmann: Vacation Rental Softwareâ&#x20AC;&#x201D;The Good, Bad, and Ugly 80 Data Security: Donâ&#x20AC;&#x2122;t Let Your Business Fall Victim to a Data Breach

83 Smart Home Automation 68 Instant Gratification and the Creates Happy Guests and 5-minute Golden Window Happier Operations

74 Marketing Through the Guest Journey 76 A Funnel Approach to Social Media

Property Care 44 The Push for Quality in Vacation Rentals 95 Annual Deep Cleaning

Customer Service 41 Elevate the Guest Experience 56 The Need for Ratings for Vacation Rentals

88 The Power of I in Vacation Rentals

Education 96 Vacation Rental Women's Summit 97 VRMA: Working to Raise the Bar with Education 98 Knowledge is the Key to Business Success 100 Calendar of Events 102 Business Directory

50 14

VRM Intel Magazine | Fall 2018

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Dear Readers,

In July 2015, when I was considering starting this magazine, a close friend and mentor asked me, “Do you think you can come up with enough to write about in a quarterly magazine?”

VRM intel magazine

I hesitated and replied, “I think so.” Who knew?

In July 2015, things were changing rapidly, to be sure. But Expedia had not yet purchased HomeAway. Booking.com was just emerging as a viable channel with its launch of Villas.com, and Airbnb had just begun to promote and seek out professionally managed rentals in non-urban markets. Multi-destination managers were only beginning to pick up noteworthy market share. Since then, professional vacation rental managers have been on quite a roller coaster ride; however, in spite of margin compression, a whole new world of technology, industry consolidation, and ever-increasing customer expectations, the overall industry is thriving. That being said, not all individual destinations experienced the record-breaking year they hoped for. In the article “Economic Indicators and Changing Consumer Behavior,” we look at some summer results, the use of predictive economic indicators, and shifts in generational travel. There is a definite trend toward increased professionalism in property management. Best practices are being established, formal educational resources are emerging, and multiple multi-destination business models are being tested. There are rumors of further consolidation in vacation rental technology companies, and, by the time you get this publication, we may already have news of a private-equity-funded rollup of tech providers. In addition, one of the most interesting changes we are seeing is that several large, market-leading vacation rental management companies have decided to no longer list their homes on OTAs. Although some destinations and new companies are necessarily reliant on these channels for bookings, established brands with identifiable drive-to markets are finding more success by redirecting marketing funds to core feeder markets instead of being lost in OTA listing algorithms and beholden to the terms and conditions of channels and channel managers. For these companies, the pushback from guest fees, merchant of record requirements, refund policies, inability to adequately set guest expectations, high cancellation rates, and inability to properly vet guests contributed to their decision. Most notably, these companies are not reporting a decrease in bookings as a result. Although becoming OTA-independent is not for every vacation rental manager, some companies are finding success by shifting marketing funds and efforts toward targeted geographic and demographic audiences.

For property managers listing their homes alongside hotels on large OTAs, merchandising and providing hotel-like accommodations and service is another challenge. In this issue, Jeremiah Gall discusses how hotel convergence is affecting vacation rentals, and Alex Nigg talks about the need for a rating system. In contrast, Matt Landau’s has an article about how commoditization is not necessary and that identifying limited edition qualities can help set your company and properties apart.

I believe the real story of our industry right now is being told on two fronts: global and local. For those looking at the vacation rental industry from a global perspective, the influences of external funding, OTAs, multi-destination managers, hotelier interest, scalability, and sector growth are driving discussions and decisions. For local property management companies, owner relations and communication, regulations, property care, workforce development, brand awareness, changing consumer behavior, and marketing management are the factors moving the needle toward higher profitability. A business decision that is right for a company trying to raise funds or look for a buyer could be catastrophic for a company trying to operate in a profitable and sustainable way for years to come. My hope is that, whether your view is global or local, you will find useful and actionable information and insight in this issue. Oh, and please consider attending the first-ever Vacation Rental Women’s Summit on February 19–20 at the Ritz-Carlton in New Orleans. I look forward to your feedback. Sincerely,

Amy Hinote

Editor-in-Chief 20

VRM Intel Magazine | Fall 2018

Editor-in-Chief Amy Hinote

Director of Design and Production

Donato Berbelja

Vice President Alexa Nota Contributors Heather Bayer

Linda Kaczmarek

Ali Cammelletti

Matt Landau

Mike Copps

Simon Lehmann

Shea Courtney

Clara Liang

Ben Edwards

Sean Miller

Jeremiah Gall

Colin Morrison

Paul Gribble

Lela Newell

Michelle Hodges

Jack Newkirk

Alex Husner

Alex Nigg

Durk Johnson

Brett Parry

Sue Jones

Steve Trover

Advertising Amy Hinote, amy.hinote@vrmintel.com Address VRM Intel Magazine LLC

1222 Chicago Avenue, Suite 604, Evanston, IL 60202 To subscribe to VRM Intel Magazine to request additional copies, contact info@vrmintel.com or go to www.vrmintel.com

© Copyright 2018 VRM Intel Magazine LLC. All rights reserved. We cannot accept responsibility for any mistakes or misprints. Reproduction in part or whole is strictly prohibited without written permission from the publisher. We cannot accept responsibility for unsolicited manuscripts or photographs damaged in the post. Material sent on speculation, unless enclosed with a stamped addressed envelope, will not be returned to sender. VRM Intel is not responsible and will not be held liable for the opinions expressed by contributing authors. VRM Intel Magazine LLC reserve rights of ownership.

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A LEADER You Can Count On For over 26 years, CSA Travel Protection has been a trusted leader in vacation rental insurance. As Generali Global Assistance, we remain committed to developing valuable solutions that benefit you and your guests. We continue to leverage the experience and industry expertise you’ve come to rely on—with the strength and backing of one of the world’s top insurance companies.

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VRM Intel Magazine | Fall 2018

The Evolution of an Industry Leader

rom the very beginning, CSA Travel Protection established a unique foundation that differentiated itself from other travel insurers through dedicated partnerships, innovative product developments, award-winning customer service, and dedicated in-house administration. Today, we’re proud to continue this legacy as we prepare to solidify our identity as Generali Global Assistance by aligning with our global shareholder, Assicurazioni Generali S.p.A. (or simply Generali). Becoming Generali Global Assistance comes with significant advantages and opportunities in a rapidly expanding marketplace. It enables us to do more than just responsibly confront regulatory changes. We are now empowered to further diversify our product offerings and grow our internal support channels, such as providing our partners with improved e-commerce and marketing solutions and expanding the customized service that we’ve built our reputation on—all while maintaining the core values that have come to define CSA.

Our Story Collaborating with business partners to address region-specific challenges and build a strong network of mutually beneficial solutions is exactly how both CSA and Generali got started. In the early 1990s, CSA Travel Protection began offering insurance solutions for ski tour operators and other travel providers in mountainous locations, providing them with guidance as insurance and administrative experts. Additionally, we learned of unique insurance needs on the East Coast. Property management companies in hurricane-prone regions wanted hurricane protection—a demand we were able to develop a coverage solution for and introduce to the industry by the mid-nineties. By this time, we had also innovated and launched the first vacation rental damage protection product of its kind. While these protection solutions continue to thrive in the marketplace, we are committed to evolving our product offerings to meet the diverse needs of our business partners and their customers. Recently, we launched new region-specific, all-season insurance programs for mountain and ski areas as well as for certain coastal destinations. These plans offer coverage and services designed to address specific geographical challenges faced by management companies and their guests who vacation in these areas. Another coastal company that understands seasonal challenges, the Generali Group, started in Trieste, Italy, at the turn of the nineteenth century. During this time, 1804 to be exact, the Bora wind caused significant damage to the region and resulted in fifteen insurance companies banding together to create the first collaborative agreement in the history of maritime insurance. The Generali Group, which resulted from this collaboration, has set milestones in the insurance industry ever since, including helping to conceive the opening of the Suez Canal in 1869, campaigning for better road safety in 1953, insuring the construction of Italy’s first satellite launchpad in 1962, and creating Genertel in the 1990s—the first company in Italy to specialize in selling insurance over the phone and later online. Your dedicated account management team is happy to answer any questions you may have about our rebranding initiative. If you aren’t currently a CSA–Generali partner, we invite you to learn more about how we can help you and your guests. Visit us.generaliglobalassistance.com/vr or contact us at 800-989-8684 for more information.

VRM Intel Magazine | Fall 2018

NoiseAware is the first and only privacy-safe noise monitoring solution that solves one of the short-term rental industry’s top problems: noise complaints. When it comes to privacy, safety, and property protection, NoiseAware is the industry standard. In a recent Palm Springs Case Study, it was found that there’s a 41 percent reduction in resolution time when using NoiseAware rather than relying on local authorities. NoiseAware has monitored over 80,000 reservations, providing managers and owners protection like never before. Rather than being the last to find out about noise disturbances at your properties, NoiseAware gives you the power to be the first. NoiseAware’s newly released Gen 3 model was built for both property owners and property managers. Now users will be able to monitor their entire property—no matter the climate conditions. Featuring both indoor and outdoor sensors, Gen 3 also includes the first ever NoiseAware mobile app, allowing users to have peace of mind at their fingertips. Our 3rd generation noise monitoring solution is the culmination of over a year of development focused on responding to valuable feedback from existing customers and adding new performance improvements and features that were previously impossible for us to deliver. We are very proud of the work our team has put into this product and know that with it we can continue to provide an industry-leading solution for our customers. -Garrett Dobbs, Head of Product Now, NoiseAware users will be at ease knowing that their entire property is being monitored for noise nuisance issues, thus protecting both their property and their reputation.

VRM Intel Magazine | Fall 2018

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Won’t you be my neighbor? Good Neighbor Guide to The Vacation Neighborhood By Linda Kaczmarek, Owner, President, Silicon Travel

o many generations remember the Patron Saint of the Good Neighborhood: Mr. Rogers. He taught us how to loosen our shoes, ease into our sweaters, and enjoy the people and places around us. Yet, as many of us ride the little red trolley out of our day-to-day lives, we lose our sense of good neighborly conduct when we hop off at our destination: Vacationville.

For many, Vacationville has no rules, responsibilities, or curfews. It’s nice to feel free of the constraints of everyday life. But for renters, easing into their sweaters (or swimsuits) often means letting their hair down in a way that may lead to conflict with others—especially those whose daily routine still includes getting up at 6 a.m. and settling down at dusk. It’s an age-old battle, and vacation rental managers may have to step in, give a friendly wave, and welcome renters into their neighborhood. But how do we facilitate the “don’t be a menace” message while still encouraging renters to have the time of their lives?

Fortunately, there’s a wealth of user-friendly systems, software, apps, and devices that can guide renters through their stay, helping them maintain the utmost respect for their temporary community while still enjoying all the pleasures and amenities of their much-anticipated holiday.

VRM Intel Magazine | Fall 2018

Below are a few guidelines on how to leverage technology to help your renters achieve “good neighbor” status.

Stand by Your Brand Your brand can often become a blur among the sea of online listing and reservation sites out there. Chances are that renters may not remember who is responsible for that amazing “8 BR, 9.5 BA Luxury Coastal Retreat” that the Joneses and 20 of their closest friends just booked!

Make sure your name and logo are prominent on check-in information and signs and are clearly marked in central places around your property, such as at entryways, on tables and kitchen islands, on the refrigerator, and by all telephones. Visual reminders and ease of contact, such as a simple logo link, make it convenient for renters to contact you if they have any questions or concerns.

Locked and Loaded High-speed internet is an expected luxury these days, so while having an Internet provider that can take care of the streaming demands of the Jones’s party of 20 is nice, securing that connection is necessary! Implement systems that protect you and your homeowners from data overages or any illegal online activity that could be linked to the property.

Continue to make the most of that connection by collecting valuable information through emails, surveys, click-through rates, and other communications to be able to constantly improve your guests’ experience and keep them coming back.

Send in the Reinforcements What is an eight-letter combination of uppercase, lowercase, numerals, and a symbol? It’s not a launch code, but it may as well be for a parent with two crying toddlers who is trying to access Netflix on a tablet computer.

When the season swings into full force, so do the phone calls about lost passwords, poor connections, and issues with every smart TV under the sun. Having a knowledgeable and professional team of IT experts in place and on call to field all those technical support questions can save you a ton of time and money, not to mention headaches, in the long run!

Time for an Upgrade Your guests expect the same comforts of home—or even better! It seems like house features constantly need to be upgraded, replaced, or outfitted to ensure the best experience and a return visit. Yet, while that fancy new NEST thermostat has helped with the power bill, the “shabby chic chalet” three-ring binder someone put together 20 years ago may not be as helpful since the upgrade. Renters need current information on demand, or else they will start pushing every button in the house, which will most often lead to a problematic call to you. An easy and accessible online guidebook that can be updated with only a few clicks is best for keeping those renters’ wandering fingers in check!

You Are Here Wouldn’t it be great to give vacationers a directory with a “my location” star on your home, just like at the mall? You can, and you

VRM Intel Magazine | Fall 2018

should! We spend so much time securing our guests’ arrival that often we overlook their stay. Checking in is only the beginning! We want renters to feel like locals by the time they leave. Presenting a curated list of sights, activities, eateries, and even urgent care clinics gives your renters an insider’s view of the area that they will not get from anyone else.

Toga! Toga! Toga! We want our guests to enjoy their time with us, but sometimes the siren song of old times or free spirits is just too strong. Moonlight dance parties, cannonballs from the second story balcony, and using the lawn as a parking lot are all situations when a good neighbor reminder can come in handy.

Make sure renters are aware of the home’s maximum capacity rate, noise curfews, and policy violations. A friendly monitoring system or alert device is always better than flashing blue lights.

Pool Noodle, Anyone? In Vacationville, the most disregarded responsibility often is cleaning up—after all, this is one of the biggest perks of relaxing away from home. Disposing of both recyclables and daily trash, as well as last-minute discards (accompanied by common end-of-stay mantras like “it won’t fit on the trolley home” or “we don’t need a pool noodle in Kansas”), can be among our biggest neighborly concerns. As a courtesy, send daily or biweekly reminders about those things that are not as obvious to out-of-towners, like trash collection, local emergency procedures, and weather alerts.

Parting is Such Sweet Sorrow When it’s a mad dash to get out the door, we know guests aren’t the most dependable at reading checkout instructions. With housekeeping on standby and new guests ready to check in early, time is of the essence! To ensure a painless turnover, remind guests mid-stay about checkout times and procedures. Streamline your checkout system to alert housekeeping as soon as a house is vacant and ready for cleaning. The more your systems communicate, the less time is wasted. A friendly virtual wave to renters, both on their way out and on their return home via a parting email, text, or thank-you note, keeps them pumped and ready to push that rebook button for a return visit to the “neighborhood.”

Silicon Travel is a tech-based company that provides wireless Internet service and support as well as Wi-Fi-based management tools for the vacation rental industry. With our innovative vacation attendant Wi-Fi package, Silicon Travel can accommodate all your Internet needs and provide technical support, keep one-on-one contact with your guests, collect emails, provide concierge services, set up reminders, and virtually check out your properties—all while highlighting your brand! We are constantly working to better our service, broaden our products, and keep up with the fast and ever-changing landscape of the vacation rental industry. Our goal is to provide an unforgettable vacation experience that will keep your guests coming back year after year. We look forward to showing you what we’ve got!

Lexicon Travel Technologies is a sales and marketing engine for vacation rentals.

VRM Intel Magazine | Fall 2018

Today’s Challenge Staffing to Meet Business Needs By Sue Jones, CEO, HR4VR

or the first time ever, there are more job openings available than there are eligible people to fill them. It should come as no surprise that employers of all sizes are struggling to find qualified employees for more than 6.7 million job openings. Oregon State University conducted a study to answer two questions about the hospitality industry labor shortage:

 Why is there is a labor shortage in the hospitality industry?  What are some possible solutions to the labor shortage? 32

VRM Intel Magazine | Fall 2018

The study indicated that millennials are the primary reason for the labor shortage. The study found that they were the least satisfied with their jobs; most likely to leave the industry within a five-year period; and that they view compensation differently, placing value on workplace culture, professional growth, and task variety. The authors concluded that the issues are unlikely isolated to the millennial generation but are an emerging trend of the future workforce. On the flip side, baby boomers, about a third of today’s workforce, are now working longer and staying in the workplace past retirement ages. Research from Gallup found that baby boomers, who strongly agree that they currently “have enough money to do everything [they] want to do,” expect to retire at age 66. Baby boomers who strongly disagree with this statement predict they will retire significantly later, at age 73.

Today it is critical to provide “reskilling” and “retraining” for your current workforce to meet future needs and to start thinking about the workforce you have today as your primary workforce of tomorrow. There is no “new wave” of talent entering the workplace to fill the 6.7 million job openings. You have to develop your own talent.

Consider your location and the affordability of the area so your employees can live close to where they work. An article in The Denver Post illustrates how a tight supply and high demand for housing makes it challenging for workers to find living arrangements in an area with lots of work available. The article states, “They are living in tents in Crested Butte. In Telluride, they could soon be squeezed into portable shelters. They are in motels not suited for ski vacationers in Steamboat Springs. And in Breckenridge, some locals are living in their cars.” This situation is becoming more prevalent in a vast majority of vacation destination markets throughout the United States.

Let’s not forget about the cost of childcare. According to the fifth annual Cost of Care Survey, childcare costs rose for the fifth year in a row. The survey found that childcare is less affordable for families than it was a year ago. One in three families (33 percent) spend 20 percent or more of their household income on childcare, 19 percent spend 25 percent or more, and a whopping 71 percent spend at least 10 percent of their annual income on childcare. For comparison, the U.S. Department of Health and Human Services defines affordable childcare as up to 7 percent of the household income. Filling open positions requires a new way of thinking about recruitment, compensation, training, and other incentives you might not have in place. With multiple generations and different needs in the workplace, you need more than a “one size fits all” approach to attract, engage, motivate, and retain talent. Additionally, companies are starting to relax their standards around education and experience requirements. There is a shift in relaxing preemployment drug testing to exclude marijuana as a way to attract candidates. Finally, reassess your recruitment practices and procedures so that you are prepared to make offers in days versus weeks. Today’s applicants are typically juggling several job offers. Make sure your offer is the best and the one the most closely fits the individual’s needs. All of these factors are challenging employers to think differently about the following:

 Tapping into diverse recruitment pools  Buying talent through compensation  Recruiting at the speed of light  Retraining: developing your internal workforce

Tapping into Diverse Recruitment Pools Employers can step up creativity with how and where to find new talent. Consider different demographics, such as veterans, military spouses, and nonviolent ex-convicts—three demographics to start with. Remote workers, disabled workers, and individuals reentering the workforce are additional recruitment pools.  Veterans: Looking for hardworking, motivated, and ethical employees? Veterans have the proven ability to learn new skills and concepts. They know and understand the dynamics of leadership, and they perform well under pressure. Veterans have a respect for procedures and know what it means to do “an honest day’s work.”

The Society for Human Resources Management stated in a recent article, “More veterans are college educated now than ever before with rates surpassing those of civilians. Because of a highly competitive military recruiting market and the implementation of the Post-9/11 GI Bill, we’ve seen a dramatic shift and significant increase in the level of education our service members have achieved before, during, and immediately following their time in service.”  Military spouses: It is a major challenge for military spouses to find jobs and build a career while supporting their military service member. Military spouses often get overlooked as a strong recruitment source even though there are hundreds of military bases throughout the United States for employers to partner with.

Just like veterans, military spouses have diverse backgrounds. They tend to be more adaptable and are less likely to become overwhelmed in a stressful or changing environment. According to the Military Family Life Project, about 10 percent of military spouses have a master’s degree, MBA, or professional degree.

One of the greatest ROIs in hiring military spouses is retention. You can train them while they are stationed near your location and then continue to retain them as a remote employee when they transfer duty stations.  Nonviolent ex-convicts: Instead of focusing on the perceived risks of hiring ex-convicts, hiring individuals with previous convictions can significantly expand your applicant pool. Ex-convicts are a disadvantaged recruitment pool and are often found to be incredibly hard working and grateful for the chance to excel with an employer. This is a great time to reevaluate your current recruitment and hiring practices to ensure that you don’t automatically exclude ex-convicts from your applicant pools.

 Remote workers: You can fill workforce staffing and skills gaps by recruiting more remote workers. You will gain access to qualified applicants throughout the country (and internationally), and you open up another pool of individuals who prefer to work from home or have specific hours available to work. While not all positions are suited to remote workers, there are several responsibilities that can be completed remotely as a fulltime or part-time position. Effectively hiring and retaining remote workers requires a shift in the company culture as well as careful planning for the workflow, performance management, communication, and engagement of the remote employees.

 Disabled workers: It is a challenge for people with disabilities to get their foot in the door. Many employers don’t have procedures (or goals) to recruit from this demographic. Working with local, state, and federal agencies to create a plan to recruit, hire, and retain people with disabilities is a key step businesses can take to increase their workforce. This group is willing to work hard and is excited for an opportunity to contribute.  Individuals reentering the workplace: There are a significant number of family members reentering the workforce after raising children, taking care of elderly parents, or caring for a family member. Others who have owned a small business or who retired early are now reentering the workforce because they now need or want a job. This is a great resource for a part-time workforce. Look for transferable skills and soft skills that identify what they have done, what they know, and how they can utilize their skills in your business. Individuals returning to work are an asset to businesses. The first step is to create training programs to reintroduce VRM Intel Magazine | Fall 2018

VRM Intel Magazine | Fall 2018

these individuals back into the workforce. Skill sets can change but aptitude rarely does.

Buying Talent through Compensation It is now officially an employee market, which is especially brutal for businesses with fewer than 50 employees who can’t compete with the pay and benefits of larger firms. Buying talent means that you are going to be paying more in the form of higher wages, competitive benefits, paid time off, performance-based incentives, and other types of compensation outside of base wages. If you haven’t already done so, now is a great time to rethink your compensation and benefits strategy to address what is most important to the individual(s) you are looking to attract. Companies are starting to offer more fringe benefits, such as extra time off; time to volunteer or participate in children’s activities; training seminars and conferences; flexible work schedules (hours/days); and company-issued cell phones, tablets, and laptops.

Calculating the value of your employee’s total compensation package works as a recruitment and retention tool. Providing total compensation statements illustrates for applicants and current employees what their total compensation is, or will be, based on both actual wages and fringe benefits. For more information on marketing the value of total compensation statements, visit HR4VR.com/Media.

Recruiting at the Speed of Light Applicants today are typically fielding several job opportunities. Putting applicants through long processes is no longer effective. You need to find ways to be more flexible, address things on the spot, and make hires within days, not weeks. Candidates who apply still need to be recruited. Listed below are some things that are becoming more mainstream when recruiting great hires during low unemployment.  Immediately start contacting qualified candidates and leads by texting them and asking when they can interview by phone or in person. Sending emails and waiting for a response or calling and leaving a voice message is less effective and wastes valuable time.  If your company uses an applicant tracking system, make sure that you are checking applications frequently, every couple of hours. I recommend removing filters for education, experience, and other criteria that restrict the resumes flowing to managers. Too often, great candidates can fall into a black hole and become lost because of unnecessary filters.  Be prepared with competitive compensation. Know what you are willing to offer the candidate and have it ready to go. Many states no longer allow you to ask about salary history. However, you can ask what the applicant is looking to earn. Too often, companies spend time finding the right person and then when they present an offer, the candidate is outside of the range, which wastes a lot of time and causes everyone involved angst.  Employee referral programs work and are typically a company’s best recruitment tool. In this economy, increasing your referral fee for hard-to-fill positions is a no brainer. For example, a $2,000 referral fee for a $40,000 salaried position may be easy to quantify given the cost of hiring and the lack of applicants.  In the past, the best practice was to “hire slow and fire fast.” Today, it is all about hiring fast. Take time to review your internal

hiring process to find areas that you can eliminate and bottlenecks where you might be able to speed up the process. It is all about connecting with the individual as quickly as possible. Scheduling interviews when all the decision-makers are available is key so you don’t have to bring candidates back for additional interviews.  Make immediate employment offers. Being prepared to present qualified applicants with an offer the same day as the interview is critical in today’s low unemployment environment.

Retraining: Developing Your Internal Workforce The Manpower Group conducted a survey of 2,000 employers and identified that the number one skill that is hard to find are skilled trades. Maintenance technicians, landscapers, electricians, plumbers, and other skilled trades positions are some of the most challenging positions to fill.

With soft skills, the number one skill gap is communication skills. 61 percent of respondents cited written and verbal communication as the largest gap they see with applicants. Here are some things trending with businesses today as they develop their workforce:

 Companies are starting to identify new skills their employees might be interested in learning and are then providing them with the educational assistance and time to obtain the skills. Additionally, they are creating internal programs to develop the talent they can’t find.  Onboarding and orientation programs now include more than what is necessary to complete the employee’s job responsibilities. Companies are creating training programs around written and verbal communication, basic workplace professionalism and etiquette, and other core business practices to assist candidates with entering or reentering the workforce.  Work with baby boomers to create knowledge transfer programs for internal employees when they retire. Pairing millennials with baby boomers to teach them how to use technology more effectively in the workplace is another great retention strategy.

As you wind down from your summer, or wind up for your winter, thinking more broadly on how to recruit, compensate, train, and retain your workforce today and in the future will be time well spent.

Sue Jones, owner of HR4VR, is passionate about creating human resource programs and services that are strategic in scope and consistent with the goals and objectives of vacation rental clients. Sue’s innovative approach to HR and extensive experience encompasses businesses of all sizes in multiple industries. When addressing the needs of her clients, Sue is especially skilled at transferring her knowledge, skills and abilities across business channels in a personable manner. Sue is a veteran of the U.S. Navy, holds a Master’s Degree in Business Administration from Northeastern University and is both SHRM-SCP and SPHR certified.

VRM Intel Magazine | Fall 2018

F O y r o e h T e h T

By Matt Landau, Founder, VRMB and Host, A Sense of Place

Are your homes commodities or limited edition offerings?

would like to share what I feel is the most radical concept in the vacation rental industry today—the theory of limited edition—which argues that, contrary to large OTAs and corporate growth, focusing on the elements of a business that do not scale is the most viable (and enjoyable) path for independent vacation rental success. Formulated over the past two years with the help of our Inner Circle Community, the theory of limited edition reminds us that we have everything we need to succeed. 36

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Commodity versus Limited Edition The theory first began with a very serious realization. As the vacation rental industry grows, independent owners and managers are being forced to choose between two polar opposite business models: the commodity vacation rental and the limited edition. There is increasingly less opportunity for success anywhere in between.

Commodity vacation rental businesses should not be looked upon negatively because they are the standardized businesses—the completely stocked kitchens, the online booking functionality, the hotel-level cleanliness—mainstream travelers want and need. Let’s face it, until a new industry has baseline standards, first-time vacation rental travelers won’t know what to expect (as a consequence, we will almost inevitably let them down). The biggest caveat (for homeowners) with the commodity model is that it plays into the hands of big business wealth and strength—the proverbial Goliath. The game of standardization is one in which big hotel chains or even companies like Vacasa or TurnKey are poised to conquer with only small tweaks to their already well-oiled systems and processes. It’s a game in which independent owners and managers will have a tough time competing because it’s all about scale. In a match of strength versus strength, Goliath wins almost every time. However, the opposite of the commodity vacation rental business model is the limited edition. The limited edition business does all

of the things a commodity business does but with an additional layer of personality, style, and differentiation. Fortunately, these are the things small business owners already possess, so crafting a limited edition business model is more about discipline and deliberate choices than it is rocket science. Limited edition means going against the grain and building yourself a business that is protected and whose success is defined on your own terms. It is the case in which David changes the terms of the playing field and pulls out his slingshot—and his chances at success increase dramatically. Let’s dive into how this theory was born as well as some of the factors that contribute to its success.

The Wonderful World of Collector’s Items When I first visited the neighborhood of Casco Viejo in Panama (a neighborhood I would go on to call home for twelve years), I walked around with a real estate agent named Patrizia, who explained there were strict preservation laws in place because the historic district was a UNESCO World Heritage Site. Developers could not build up or out in Casco Viejo, and they had to stick with the original, historic facades. This meant there would only be a fixed number of properties on the market in the entire neighborhood. Buying real estate in Casco Viejo was, as Patrizia said, “a limited edition investment.”

I really enjoyed this concept and began to explore what it meant in other areas of business and pleasure when I discovered Antiques Roadshow, a television show on PBS in which people submit antiques for appraisal by experts. What I noticed about one-of-a-kind antiques (as they related to real estate in Casco Viejo) was that limited supply preserved the value of the items. With this in mind, I focused on the elements of our businesses that cannot be replicated or mass-produced, and I began to look at the independent vacation rental niche. How could independent owners and managers use this idea of limited edition to harness what makes them so special and use that to change the terms of the playing field against the bigger, richer OTAs?

are only so many. The penthouse is another nice example because there’s typically only one per building. Architectural homes, mountain-top properties, and one-of-a-kind views are all hard factors that contribute to a limited supply—thus, an irreplaceable vacation rental experience. These factors are worth considering when you acquire your next property or plan your next remodel.

Because so many of these external factors are outside of our full control and are expensive to obtain, the theory of limited edition chooses to focus on the second type of supply-limiting factor, the internal factors within us. These factors include style, tastes, preferences, and stories that are unique to each and every one of us. These internal factors are essentially free and accessible to all. So, I decided to dig deeper into how these natural strengths could be channeled and packaged into a marketing portfolio to stave off bigger, richer competition.

I began to interview limited edition entrepreneurs around the world—in the vacation rental industry and in small businesses in general—and eventually distilled their innovations into eight common factors that make up the prototypical limited edition vacation rental. They are, in no particular order, distinction, personality, names, surprises, customer zero, help don’t sell, parting thought, and landmarking (or anchoring). You can sign up for the complete limited edition workshop (www.vrmb.com/Ltd/) to learn more about these factors and how to boost your overall limited edition score.

Supply-Limiting Factors When it comes to vacation rentals, I began to notice there were two kinds of “supply-limiting” factors worth considering. The first is external factors that are outside of our control, such as beachfront properties, of which there VRM Intel Magazine | Fall 2018

Why Limited Edition? This question is incredibly important because it is directly connected with our desired outcome. The more limited edition your business is, the less you have to worry about industry shifts or market corrections. The more limited edition your business is, the less you have to play by the commodity rules. The soft way of presenting this is that the factors involved with limited edition can help independent owners or managers carve out their own definition of success. The stronger way of presenting it— the method to which I subscribe—is that an independent owner or manager in our industry cannot succeed without it. Sway too far to the side of commodity and you’re in a race to the bottom. Meander too much in the middle, and you’re swallowed whole.

need to demonstrate the factors. You can’t fake them.

Additionally, it’s important to remember that limited edition is not synonymous with price. Many limited edition businesses are composed of less expensive materials than their commodity counterparts. Some limited edition efforts actually subtract value in the eyes of the general public (Google the phrase “Mario Balotelli camouflage car” and you’d argue that limited edition has made this item less desirable on the open market). In short, it’s not the price but the collection of eight factors that makes the limited edition business more valuable and protected over the long haul.

Conclusion As the theory of limited edition evolves, we’re left with what I like to refer to as “the million dollar” question. Once independent vacation rental owners or managers have figured out their limited edition profile, how do they scale? We understand limited edition as it relates to single use cases, but is it prohibitively small scale? This is a question we haven’t learned the answer to yet. This is a question that may remain unanswered for years to come. My hope is that publications like this one, aimed at documenting the strengths of independent owners and managers and the truest stakeholders in this industry—the pioneering homeowners who paved the way for the greatest travel trend of our lifetime—can help guide the way.

Because this is still a working theory, limited edition comes with some asterisks. For instance, it’s worth noting that just because we say we are limited edition does not mean we actually are. If you’ve seen the “limited edition collectors coin” on infomercials late at night (it’s yours for just $19.99!), you catch my drift. You really

VRM Intel Magazine | Fall 2018

Matt Landau is a vacation rental enthusiast who, after exploring Central America, accidentally fell into the vacation rental industry when he purchased Los Cuatro Tulipanes, the oldest existing luxury rentals in Casco Viejo. Matt is the founder of VRMB, a free resource that documents the industry’s best practices to close the learning gap between newcomers and the biggest brands in vacation rentals.

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vip@breezeway.io VRM Intel Magazine | Fall 2018

Think your homeowners insurance covers your vacation rental business?

THINK AGAIN. Discover the 8 things you need to know to protect a vacation rental property. Download our new eBook at cbiz.com/vri ! www.cbiz.com/vri NYSE: CBZ 888.883.5696 VacationRentalSales@cbiz.com 40

VRM Intel Magazine | Fall 2018

Elevate Your Guest Experience By Shea Courtney, Copywriter, Bluetent

n a recent article from Think with Google, “Why it’s time for travel marketers to rethink loyalty,” the research revealed that customer service, quality websites, and authentic reviews are what travelers care about most. According to Google’s research, “Loyalty programs are not even one of the top three considerations when choosing which brand to book travel with. Customer service is the clear priority (60 percent), followed by an easy-to-use website (55 percent) and online reviews (50 percent). The service you provide, across all touchpoints, is more memorable than the points you can offer.”

Considering the competition in the vacation rental industry, details matter. Rather than leaving it up to guests to plan on their own, vacation rental managers should seize opportunities throughout the travel journey to develop a well-constructed experience that inspires guest loyalty and, as a result, leads to better reviews, more bookings, and increased annual revenue. Once travelers have booked their rental, their excitement is high. They anticipate adventures ahead, and not surprisingly, their expectations are high. This presents the perfect opportunity to personalize their experience with solutions that will ease their journey and motivate them to curate their trip with your business. To help you elevate your guest experience, gain positive reviews, and increase repeat bookings, here are four marketing strategies.

Stay Ahead with Automated Communication Spare the headaches. Save time for your guests and your team with automated communication, such as stay-cycle emails. This communication starts once the reservation is confirmed and is accessible to guests throughout their vacation. Automated communication builds confidence in your brand and offers a memorable experience. Instead of your guests wondering whom to contact with questions or when to reach out to your team, you can skip ahead and clearly address key information beforehand. Send emails that include all the necessary information for check-in/checkout procedures, door codes, property documents, and more. Your guests will feel comfortable when they arrive because they already know what to expect and where to find the property information. Plus, engaging with your guests from the start informs travelers who is fulfilling their rental and fosters positive associations with your brand, shows that your vacation rental company is approachable, and builds personal relationships.

Help Curate Your Guest’s Vacation Your guests are excited to explore! Feed off their enthusiasm and encourage them to craft their entire trip before they arrive. Drum up excitement by sharing blog posts, emails, newsletters, and additional content that highlights your local knowledge of activities, events, and restaurants. This welcomes your guests and creates a sense of community while educating them about your location and team. Additionally, providing a messaging platform for your guests to collaborate with everyone in their group is a convenient way for them to share their itinerary and trip details.

Build Repeat Bookings with Captivating Content You don’t have to wait until your guests have checked out to send them special offers or information about future events. Plant seeds during their stay with enticing content like blog or link suggestions that keep them up to date as well as motivated to plan their next vacation. Also, don’t forget to take care of your past guests. Create deals and offers that are tailored to them and send emails that encourage repeat bookings.

Capture Reviews while Memories Are Still Fresh Keep in mind that online reviews are one of the top three considerations for choosing a business and you’re more likely to receive a response immediately after a guest’s stay. To promptly collect reviews, we suggest sending a review request via email at the time of departure. In conjunction with sending review requests at checkout, you can also gather feedback about your company from social media. An 2017 American Express report asserted that “Americans are more likely to post about good experiences (53 percent) than poor experiences (35 percent) on social media.” Because social media is heavily used to connect people to place, travelers turn to it for inspiration. When guests post positive experiences about your company, you can then repost their photos and comments. This allows you to quickly and effectively gain more exposure for your business, share your brand message, and attract more travelers.

Conclusion Overall, the guest experience that you create directly affects the success of your vacation rental business. At every touchpoint, you can nurture your guests and create memorable experiences. With the abundant options available to travelers, it’s important to act on all the opportunities you can to elevate the guest experience and increase guest satisfaction while simultaneously saving time for your team and growing your business.

To speak with Bluetent about refining your guest experience strategy, please don’t hesitate to reach out: info@bluetent.com, 970.704.3240, or bluetent.com. Rezfusion Guestbook Rezfusion Guestbook is a branded guest experience solution for vacation rental professionals. Easily deliver memorable experiences for loyal guests, better reviews, and more bookings. This platform has all the time-saving automation tools you need to motivate travelers with excellent vacations that engage with your brand and deliver the trip of their dreams. About Bluetent Bluetent is a digital agency with a passion for reaching travelers, inspiring guests, and attracting owners. Our eCommerce suite, Rezfusion, supports vacation rental managers in developing a well-rounded digital presence with direct-booking websites, listing distribution, guest experience tools, and marketing services. VRM Intel Magazine | Fall 2018

VRM Intel Magazine | Fall 2018

The Push for Quality

How Hotel Convergence is Affecting Vacation Rentals By Jeremiah Gall, Founder, Breezeway

dozen years ago, before HomeAway acquired VRBO and before vacation rentals had any presence with major online travel agencies (OTAs), rental managers were busy adjusting to the new world of online marketing and discussing how to raise awareness of the vacation rental industry. At the same time that Expedia and TripAdvisor were dipping their toes into vacation rentals, Airbnb began its incredible story. First, Airbnb formalized couch surfing and then redefined the private accommodation landscape, which helped push vacation rentals to the forefront of the hospitality industry. Fast forward ten years.

The business of vacation rentals evolved, and the short-term rental landscape looks very different today. Vacation rentals have the attention of travelers and the major travel and hospitality brands and investors. Alternative accommodations are the new normal, and unique travel experiences are the new standard. There’s never been more choice, an overwhelming choice, of accommodations to choose from. The average traveler and rental guest look a lot younger, too. Millennials are traveling more frequently than the generations before them, averaging almost four vacations per year. These young, technology-centric guests expect the perfect rental experience: the uniqueness of a vacation rental with VIP-level amenities. This article discusses how players in the hospitality industry— long-established hotel brands, short-term rental marketplaces, and luxury residential buildings—are evolving to meet the rising demands of rental guests.

Hotel Invasion in the Short-Term Rental Market The line between vacation rentals and hotels is fading. Vacation rental inventory can now be found side-by-side with hotel rooms through online travel agencies such as Expedia, Booking.com, and TripAdvisor. Similarly, hotels can be found on major vacation rental marketplaces such as HomeAway and Airbnb. For hotel brands, this strategy is a no-brainer. More impressions lead to more bookings, and hotel executives feel their brand, and their ability to provide quality listings and concierge services, stands out among the sea of rental home listings. “As some of these platforms have grown into millions and millions of units, there is an almost paralyzing array of choices and a lack of branding,” said Marriott CEO Arne

Sorenson. “The lack of real attributes of quality around service and product makes this an area where we think we can deliver something which is simply better.”

However, Airbnb doesn’t perceive hotel inventory on its platform as a threat. In fact, according to its policy, Airbnb “welcomes listings hosted by professional hospitality providers if they offer unique spaces and personal hospitality to the community.” These “personal qualities” can include access to common gathering spaces and rooms that incorporate local influences. As long as the listings contribute to Airbnb’s authentic and communal brand, the company will expand its listings and offer additional options to consumers. Hotels haven’t stopped at cross-listing though. Major brands have witnessed the rampant growth of short-term rentals, and they do not want to sit idly by, so they are developing private accommodation strategies to grow with the evolving travel landscape. For example, Marriott is currently testing a six-month short-term rental pilot in partnership with London-based home rental management company Hostmaker. Each of the pilot’s 200 homes is handpicked to adhere to Marriott’s standards and consists of one or more bedrooms, a full kitchen, and laundry facilities. Marriott expects to capitalize on a gap in the vacation rental market between easily accessible quality rentals with customized services and high consumer expectations. This is where hotel chains plan to grab market share—at the top end of the market, which is the most lucrative to vacation rental managers.

AccorHotels shares a similar thesis on the opportunity for hotels within the vacation rental market. The French hospitality company, with more than 4,200 hotels in over one hundred countries, wants to leverage its expertise and infrastructure to accommodate the rising consumer demand for quality and concierge services. The company jumped at the opportunity to enter this new market and acquired short-term rental operators Squarebreak, Travel Keys, and Onefinestay and consolidated them under the Onefinestay luxury brand. AccorHotels promotes the work it does to vet each home for comfort and uniqueness and has standardized amenities to ensure rental guests enjoy a consistent brand experience across properties. In fact, Onefinestay goes to great lengths to create a luxurious endto-end service and offers amenities such as twenty-four-hour guest support, personalized check-in, and professional cleaning throughout the stay. VRM Intel Magazine | Fall 2018

Airbnb’s Push for Hotel-Like Quality Thanks to its meteoric rise over the last decade, Airbnb has felt significant and understandable growing pains. With so many diverse listings and the largest number of individual hosts and managers, Airbnb faces new challenges to identify listings that align with consumers’ growing interest in quality. In fact, Airbnb recently made global changes to its basic requirements for hosts and its review system. The new standards outline clear expectations for every host to follow, with specific guidance and instruction on cleanliness, amenities, and check-in. Keenly aware of this push for quality, the policy intends to create a more reliable and predictable stay for guests. Additionally, Airbnb updated its review system to better facilitate honest feedback about the rental experience. According to Airbnb’s blog, “Hosts and guests can only see reviews from a completed trip after both participants have completed their assessment of the experience.” (https://blog.atairbnb.com/building-trust-new-reviewsystem/) The blog post added, “We believe members of the Airbnb community want to ensure that their profile is an accurate representation of the way they approach hosting and traveling. We are committed to finding new, personalized ways to help our community share honest feedback and trust.”

Yet, a bigger indication of the massive push for quality came in February’s announcement of Airbnb Plus. Leveraging a segment of “Superhosts” with stellar reviews and service, the new program creates a collection of high-quality and well-equipped homes. In practice, this means predictable amenities and services that move the private accommodation experience closer to that of a hotel travel experience but with the charm and uniqueness of a vacation rental. A collective of this type of inventory would be a massive differentiator in a travel landscape that has seen commoditized inventory on all the major online travel websites. However, the real difference is in the property itself. Every Airbnb Plus property is visited in person to ensure hotel-like conditions and amenities and is inspected with a one hundred-point quality checklist that includes things like fully stocked cooking equipment, fast Wi-Fi, filtered water, and quality toiletries. The inspection goes beyond cleanliness and amenities, incorporating the property’s intangibles of character and thoughtfully arranged decor. Attention to detail like this demonstrates Airbnb’s push for hotel-like quality and indicates a significant maturation of the product compared to Airbnb’s early days of air mattresses on the floor and leftovers in the fridge.

Emphasis on Concierge, Amenities, and Services The elevated quality and concierge services within hospitality isn’t isolated to hotels and Airbnb. In fact, vacation rental marketplaces and managers have caught on to consumer demands for extraordinary experiences and have positioned their businesses accordingly.

This is changing the way vacation rental managers approach their own marketing. For example, look at the landing pages for TurnKey. Contrary to the traditional approach of immediately showcasing their listing inventory, the emphasis is first on the unique experience that each property provides. The message to the consumer has shifted from quantity to quality and features terms like “exceptional vacation rentals,” and “one-of-a-kind vacation rentals offering the experience of a fine hotel.” That said, the quality experience goes beyond the comfort and condition of each property. TurnKey has recognized the demand for VIP-customized service and promotes amenities like keyless entry, a concierge app with local entertain44

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ment and restaurant suggestions, and boots-on-the-ground staff to answers questions 24/7. Yes, we all know these are the same services that many rental managers have provided for years, but many managers have yet to adjust their marketing to fully highlight this part of their business.

The types of hotel-like concierge services that are becoming the new norm for short-term rentals are permeating other living styles. Residential renters are starting to demand more in-apartment amenities, and luxury buildings are in a full-fledged “amenities arms race” to outdo each other. “We raised renters’ expectations and now have to provide this huge array of amenities just to get their attention,” said Daniel Geham, studio director for Humphreys and Partners Architects. “What was once a luxury is now an entry-level amenity.” Amenities like laundry rooms and fitness centers are practically mandatory these days, while items like Wi-Fi lounges and yoga rooms, which were once cutting edge, are now commonplace. As the lines blur between hotels and private accommodations, convergence is bleeding into the long-term residential living experience. In the case of “Niido Powered by Airbnb,” the two are one and the same. The development firm Newguard has teamed up with Airbnb to build fourteen Airbnb-branded complexes by the end of 2019. The apartments are leased on an annual basis, but tenants can rent out their units for up to 180 days a year (tenants keep 75 percent of the profit and Niido takes 25 percent). Airbnb guests who rent a unit will have access to hotel-style amenities, which include on-demand concierge services and luggage storage.

What Does This Mean for Property Managers? The operational role of a property manager, for the guest and the owner, is rapidly changing. Consumer expectations for quality and concierge services are growing, and managers must adapt to meet these elevated standards. With property management commissions getting squeezed by new managers in every market, a refocus on delivering excellent property care services is a key differentiator. Companies that leverage intelligent property care programs will rise above their competitors and capitalize on the continued growth of the vacation rental industry.

Even if you can’t upgrade your tech stack today, setting brand standards can help you meet guest expectations. Brand standards are the guidelines that define the personality of your vacation rentals, for example how you want guests to feel when they enter your property and interact with your business. Brand standards are a staple of most hospitality providers and help ensure a quality and consistent guest experience. Deciding how all the small details should be handled builds a cohesive program that can be followed by staff and cleaning contractors to ensure consistency. Remember, this is how hotels and new tech-enabled operators are planning to gain market share. Brand standards will be a key differentiating factor as private accommodations and vacation rentals enter the next phase of maturity within hospitality.

About the Author Jeremiah Gall is a serial entrepreneur and vacation rental market veteran with a history of delivering great products to rental managers. Jeremy cofounded FlipKey.com in 2006, which grew into one of the largest vacation rental marketplaces in the world and was acquired by TripAdvisor in 2013. Jeremy cofounded Breezeway in 2016, which provides intelligent software to help property managers automate their property care and maintenance programs and deliver the type of quality experiences that guests and owners demand.

VRM Intel Magazine | Fall 2018

By Alexa Nota

Blue Ridge Elevations How Georgia Mountain Cabin Rentals Founder Paul Gribble is Raising the Bar for the Mountains that Raised Him

h e phrase “born and raised” becomes less passive and more active and ongoing for Paul Gribble. Though he was born and raised in the traditional sense in the Blue Ridge Mountain area, he is now returning the favor to Blue Ridge, Georgia, bringing new life to its economy and raising its visitor experience. Following successful stints in car dealerships and real estate practice taught by his father, Gribble started Georgia Mountain Cabin Rentals (GMCR) in 2004 in the vibrant mountain town of Blue Ridge. At the time, there were only a few property managers there, but he saw the potential for an emerging business and started GMCR, managing just one property. Today, his company manages about 50 homes with nine full-time staff and 11 independent contractor cleaners. 46

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The homes they manage are primarily second homes for future retirees who “have their heart in Blue Ridge,” according to Gribble. The homes aren’t necessarily luxury properties, he said, but he and his team make sure guests get more value than they are paying for. They focus on customer service and delivering beyond expectations, including personal phone communication and attention to details such as pets’ names and special occasions. They often provide gift baskets, pet treats, and hand-signed thank-you notes from the entire staff. “It doesn’t take a lot of money but makes a big impression,” Gribble said. And it works. GMCR has a 68 percent repeat guest rate and checks in nearly 10,000 guests annually—without the use of OTAs.

The company tested a small group of properties on different OTAs over the past two years but found that there were more instances of

property damage among OTA guests, the reservations were mostly for peak times that would have booked anyway, and they lost the customer touch they are known for. To them and their homeowners, this wasn’t worth the commission rates. Instead, GMCR pushes the #bookdirect message in its marketing and works hard to make sure guests return. Most of GMCR’s guests come from Atlanta and Florida where Blue Ridge is the first real mountain town they can get to coming north. Families come during summer and school vacations, and couples and small groups visit for Valentine’s Day, leaf peeping in the fall, and festivals throughout the year.

One of those festivals is the Blue Ridge Blues and BBQ Festival, a three-day weekend of music, food, and other celebrations of local culture. The Blue Ridge Lodging Association created the festival eight years ago in an effort to bring tourists to the otherwise

The Blue Ridge Lodging Association has been held up in the industry as a model to follow not only because of its community-first nature but also because of its successful implementation of the blues and BBQ festival to enrich local tourism. Other markets have reached out to Gribble and the association for help starting their own organizations. His advice to property managers about working with their communities is, “Get out of your comfort zone, and stop thinking that you have the only trade secrets that work.”

But Gribble’s relationships with industry peers is more than a smart business tactic for him and the local economic ecosystem. “We’re competitors on paper but friends first,” he said. He and the leaders of other local property management companies go on vacation together, share ideas and procedures that can help each other make money, eat dinner together, and even have each other’s backs when guests try to play one off the other. “It’s a Blue Ridge family.” When he’s not running GMCR, the festival, his hotel, or the lodging association, Gribble consults for property managers outside of his market who want to grow and be more efficient but just aren’t 100 percent sure how, he said. “Sometimes companies just need an experienced answer,” and he is happy to help. If that weren’t enough, he is a real estate broker, leads a construction company that specializes in vacation cabins, sits on the board of directors for the Fannin County Chamber of Commerce (he was chairman last year), and chairs the chamber’s tourism board.

Oh, and somehow he finds time to travel occasionally with his wife, and the two blog about their trips on ShortTripSecrets.com.

quiet dip in the season. “You could shoot a cannon up our main street and not hit anything on that weekend,” Gribble said. Now, the third weekend of September every year is considered a holiday in the town because it’s as full as it is on the 4th of July. The annual event draws around $2 million to the area and raises tens of thousands of dollars for local children’s charities. The lodging association itself serves as a strong model of collaboration for other vacation rental markets to follow. Among its members are vacation rental managers, B&Bs, and two hotels (including Gribble’s own Reid Ridge Hotel). Gribble was the association’s first nonfounder member, and he now serves as its president. Its goal is to set a high standard of achievement for providers with minimum membership requirements to make sure guests who come to Blue Ridge get the “good warm fuzzies” and want to come back, he said.

In a world where business is often empty “busy-ness,” Gribble’s demanding schedule is anything but. His efforts in developing and raising the community that raised him represent the best of the vacation rental industry. And he loves it all. “This is fun. I enjoy what I do, and there is something new every day,” he said. “Every day is like a different puzzle. Construction, hotel, property management—mixing it all together to do the best we can do.”

Inside and outside the organization, the lodging companies work alongside each other and with other industries, including restaurants and retail, to advance tourism and take care of the town’s guests collectively.

“We work together to make sure guests who come to Blue Ridge come back to Blue Ridge,” Gribble said. “As Matt Landau says, we are a young industry, and people coming together to work with each other makes us all stronger.” VRM Intel Magazine | Fall 2018

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VRM Intel Magazine | Fall 2018

Hidden Pitfalls

By Ben Edwards

What Selling Your Business Could Cost You

elling a vacation rental business is one of the largest transactions of one’s career. Vacation rental purchase and sale transactions are now a mainstream exit strategy for vacation rental company owners. Owning, managing, and maintaining a vacation rental business is a difficult endeavor and requires diligence and focus to successfully propel the business. As vacation rental company owners consider selling their businesses, the same diligence and focus should be applied to understanding the true cost of selling their business.

Of course, attorneys, advisors, and accountants are an expense associated with selling your business, and sellers should be mindful of the expenses incurred by engaging these parties. However, the largest costs associated with selling your business are the hidden costs not as easily identified during the transaction process. Many vacation rental company owners are not aware of certain process points or market rate deal terms that can significantly outweigh any transaction costs associated with the sale of a vacation rental business. Taking a wrong turn in the sale of your vacation rental business could critically impair the success of your transaction. Most recently, we’ve seen a number of hidden pitfalls regarding the transaction process that deserve more discussion and sunlight. Here are a few of these hidden costs:

B If you, as a vacation rental company owner, are relying on a buyer to guide you, the seller, through the process, expect to be disappointed. Not understanding market rate deal terms will precipitate untold costs to you. The length of purchase price payouts, guarantees, or promissory notes associated with owner financing and set-off provisions are just a few deal terms that can sink a transaction. Unfortunately, many vacation rental owners learn about these terms subsequent to closing, which is too late to effectuate any change.

C Understanding the value of your vacation rental business is paramount to increasing the sales price of your vacation rental operation. Properly adjusting a business’s income, coupled with the market rate multiple of earnings, clearly determines the sales price of a business for all parties involved. The process is clear and has been widely used for more than twenty years. As you decide to prepare your business for sale, knowing the value of your business and how to increase its value will help ensure that the sale of your business is a success and does not cost you the ability to obtain maximum value. D As you prepare your business for sale, you should highlight qualitative and quantitative attributes of your business and convey them to prospective buyers. We’ve discussed accentuating the quantitative results of a business because the sale of a vacation rental business is truly the sale of a revenue stream derived from your contractual relationship with property owners. The financial results are extremely important, but equally as important are the qualitative results of the business. The fundamental attributes that create the quality, goodwill, and reputation of the business are not generally articulated in a manner necessary to increase the enterprise value of the business. These qualitative points can significantly increase the value of your business, and not doing so can cost the seller valuable dollars by reducing the multiple of earnings when calculating the sales price of the business. Understanding the true cost of selling your business will help ensure the successful sale of your vacation rental operation. If you have questions about preparing your business for sale or are curious about the value of your vacation rental operation, please contact Ben Edwards of Weatherby Consulting.

VRM Intel Magazine | Fall 2018

Leading Economic Indicators By Amy Hinote

Are Predictive Indicators Holding and Are Generational Changes in Consumer Behavior Affecting the Vacation Rental Industry?

ver the last two decades, experienced vacation rental professionals have predicted market performance using a set of economic indicators, including real estate activity, consumer confidence, unemployment, hotel performance, gas prices, international travel behavior, and vacation rental awareness.

The effect of these indicators differs across destinations. What is a positive sign for ski markets can be a negative predictor for southeast beach destinations, and metrics that are positive indicators for destinations reliant on airline traffic can negatively affect drive-to markets. Additionally, in destinations with a major metropolitan market as the top feeder market, indicators perform differently than in drive-to markets whose major feeder markets are more heavily composed of mid-size cities and rural areas. In the vacation rental industry, we are just beginning to establish definitive correlations between economic conditions and realized performance, but as the vacation rental industry matures, analysts are taking more time to research and create new sets of destination-based predictive economic indicators to adjust pricing and more adequately prepare for the future. Now that the industry is starting to participate in and utilize integrated comparative data tools, vacation rental managers are seeing actual, real-time performance metrics for the first time, and several destinations are finding that realized performance during the 2018 summer months didnâ&#x20AC;&#x2122;t follow predicted trends. Although some vacation rental destinations saw record-breaking performance, other markets, most notably along the Gulf Coast, experienced a disappointing seasonâ&#x20AC;&#x201D;leaving destination analysts to wonder: Are predictive indicators holding, or is there a shift in consumer behavior? 50

VRM Intel Magazine | Fall 2018

FL Panhandle and AL Gulf Coast: 2018 Summer KPIs (Occupancy, ADR, REVPAR, Booking Window) Data provided by Key Data Dashboard

10 5 0

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For new vacation rental managers, the idea of monitoring economic indicators may also be new, so letâ&#x20AC;&#x2122;s look at an overview of common predictive sets widely used in the vacation rental sector.

Real Estate Market Vacation rental performance has been closely tied to real estate performance because, historically, destinations go in and out of favor among vacation renters and second-home buyers in parallel fashion. Approaching the 2018 summer season, the real estate boom was in full swing.

However, real estate analysts are already seeing signs that the peak of this cycle occurred in August, as early economic indicators are beginning to show a slowdown:

 The number of new construction permits declined 5.5 percent in August from last year. (U.S. Census Bureau and the U.S. Department of Housing and Urban Development)  Mortgage rates are on the rise. The 30-year fixed-rate mortgage rate averaged 4.65 percent in late September, according to Freddie Mac, marking the fourth straight weekly gain.

 Sales of previously owned homes, as of August 2018, are 1.5 percent lower year to date than in the same period last year, just months after finally regaining a post-crisis high. The decline in home sales occurred despite a shortage of supply, which has pushed housing prices to record highs in many major markets across the country. (National Association of Realtors)

 The median existing-home price for all housing types in August was $264,800, up 4.6 percent from August 2017 ($253,100). August’s price increase marks the 78th straight month of yearover-year gains. (National Association of Realtors)  For millennials aged 25 to 34, homeownership is eight percentage points lower than baby boomers at that age and 8.4 points lower than Generation X. (The Urban Institute)

 Pro Tip: The conditions in your market can differ greatly from the macro conditions in the United States. Professional markets will find it beneficial to compare their individual market(s) to overall performance in establishing an optimal set of indicators.

Consumer Confidence and Unemployment According to the Conference Board Consumer Confidence Index®, U.S. consumer confidence surged to 133.4 in August, a near 18-year high, as households remained upbeat on the labor market, pointing to strong consumer spending that should help to sustain the economy for the remainder of the year.

For many vacation rental managers, performance over the summer paralleled the index with small declines in June and July, followed by an upswing in August.

“Consumer confidence increased to its highest level since October 2000 (Index, 135.8), following a modest improvement in July,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions improved further. Expectations, which had declined in June and July, bounced back in August and continue to suggest solid economic growth for the remainder of 2018. Overall, these historically high confidence levels should continue to support healthy consumer spending in the near term.” Unemployment in the United States fell to 3.9 percent in August 2018, down from 4.4 percent in 2017, 4.9 percent in 2016, and 5.1 percent in 2015, according to the U.S. Bureau of Labor Statistics.

Hotel Performance The value for vacation rental managers in looking at hotel data is the age-old question: “Is it travel, or is it us?”

STR Global reported that the U.S. hotel industry showed mixed results in the three key performance metrics during July 2018. In year-over-year comparison with July 2017, the industry posted the following:

 Occupancy fell .2 percent to 73.6 percent.

 Average daily rate (ADR) increased 2 percent to 133.44.

 Revenue per available room (RevPAR) increased 1.8 percent to $98.17. According to STR, U.S. hotels have now posted 101 consecutive months of year-over-year RevPAR growth. “The heart of the summer vacation season helped the industry establish an all-time record in demand, which topped 120 million room nights sold for the first time in history,” said Jan Freitag, STR’s senior VP of lodging insights. “However, there was enough supply growth (+2.1%) to outpace the year-over-year increase in demand (+1.9%), and that led to the first monthly occupancy decrease in the U.S. since last July. That, combined with just a 2% lift in ADR, produced our lowest RevPAR increase since April 2017 . . . As we noted in our revised forecast released last week at the Hotel Data Conference, we expect the industry to continue breaking demand records through 2019.”

 Pro Tip: Experienced vacation rental revenue managers take a deeper dive into leisure travel versus business travel and into related individual markets.

Gas Prices Gas prices barely budged through the 2018 summer, with the national average for regular gasoline hovering around $2.85 a gallon since mid-June. That's down slightly from a high of nearly $3.00 at the end of May, but it's still about 43 cents a gallon more than drivers paid at this time last year. However, compared to the 2014 summer when gas prices averaged $3.70, most vacation rental industry analysts looking at drive-to markets do not believe that changes in gas prices had a significant impact on consumer traveler behavior in 2018.

International Travel The 2018 impact from changing international travel behavior has two faces: Inbound travel to the U.S., and outbound travel from the U.S.

For destinations reliant on inbound travelers, incoming international arrivals to the U.S. were down 4 percent in the first three quarters of 2017. By comparison, international tourism arrivals worldwide in 2017 were up 7 percent, representing the strongest result in seven years, figures from the United Nations World Tourism Organization (UNWTO) show. In addition, the UNWTO says Spain is about to replace the United States as the world's second most popular tourist destination, after France. And according to surveys conducted for the 2018 U.S. News Best Countries Rankings, the United States fell from the fourth best country in the world in 2016, to No. 7 in 2017, and down to No. 8 in 2018.

As a result, in 2018, the U.S. Travel Association launched a "Visit US" coalition with other U.S. industries to reverse declining U.S. competitiveness for international travel dollars. However, many destinations have few non-U.S. travelers. For these markets, a decrease in international travel is a positive indicator as more U.S. travelers vacation domestically.

Nevertheless, despite a decrease in international travel to the U.S., American travelers are taking more vacations outside of the U.S. According to the U.S. Department of Commerce, National Travel and Tourism Office (NTTO), the number of U.S. citizens traveling VRM Intel Magazine | Fall 2018

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VRM Intel Magazine | Fall 2018

to international regions increased 9.3 percent from 2016 to 2017. The NTTO reported the top two destinations for U.S. international travelers were Mexico and Canada. Travel to Mexico (31.2 million) was up 9 percent, marking a new record for the fourth straight year. Mexico now holds a 39 percent market share of all U.S. outbound travel. U.S. travel to Canada (13.9 million) was up 10 percent.

Vacation Rental Awareness The awareness of vacation rentals as a lodging alternative has increased among consumers. According to Phocuswright’s 2017 study, “A Market Transformed: Private Accommodation in the U.S.,” “In 2015, nearly half of U.S. travelers either rented or considered renting private accommodation, compared to just 35 percent in 2014.” A recent Booking.com survey showed, “One in three travelers (33 percent) say they’d prefer to stay in a holiday rental (a holiday home or apartment) over a hotel.”

Proponents of OTAs, including Booking, Airbnb, Expedia, and TripAdvisor, often point to the increase in awareness for vacation rentals as their biggest contribution to the industry. David Angotti, in his article, “Long Live the OTA!” in the spring issue of VRM Intel Magazine, wrote: “The larger a listing site becomes, the more powerful the brand can become and, ultimately, the whole industry benefits . . . The economies of scale are bringing additional awareness for our industry and shifting the supply and demand curve in a way that benefits us all.”

Is There a Generational Shift in Traveler Behavior?

n evaluating company and destination performance, besides economic indicators, vacation rental managers are analyzing changing trends in generational consumer behavior. For example, in traditional vacation markets, the vacation rental industry has enjoyed a 30-year trend of multigenerational family trips. However, changes in millennial behavior are creating disruption in the traditional family vacation. Historically, the large, multigenerational family vacation consisted of a matriarch/patriarch who footed most of the bill for a large vacation home for the children and grandchildren to gather every year. The ultimate score for a vacation rental manager was to capture and retain the same family for multiple years of annual vacations in large rental homes.

Revised Generational Birth Years, Pew Research Center Generation Z (Post-Millennial), 1997+

The Future of Economic Indicators for the Vacation Rental Industry Consumer behavior in the U.S. is quickly becoming a tale of two worlds, with economic conditions for inhabitants in major U.S. cities differing greatly from rural residents. In looking at these indicators, professionals in the vacation rental industry will find it increasingly beneficial to analyze economic and behavioral conditions in their feeder markets, rather than relying on macro-U.S. data. Moreover, a positive indicator for urban markets might be a negative indicator in traditional, drive-to vacation rental markets.

Thankfully, the era of self-reported comparative data is coming to an end and is being replaced with real-time data that is integrated with property management software systems for apples-to-apples comparison. As the vacation rental industry matures, and comparative market data is available on a market basis, the correlation between economic conditions and actual performance will become rapidly clearer. And the best news is that professional managers will not have to wait as new market data platforms are able to pull in data from previous years. Comparing monthly vacation rental comparative performance metrics for the last three to five years to destination and feeder markets—such as new construction permits, single and multi-family real estate performance, the Consumer Confidence Index, unemployment rates, in-market hotel performance, international travel behavior, and sector awareness—is likely to yield a strong trend pattern for a professional manager that will help to establish a strong set of predictive indicators.

As the vacation rental industry becomes more professionalized and comparative market data is more trusted and utilized, property managers will evolve in measuring how leading economic indicators aid in predicting performance for each individual destination and for specific traveler demographics.

Millennials 1981–1996

Generation X 1965–1980

Baby Boomers 1946–1964

The Greatest Generation pre-1963

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Recent data in some conventional vacation rental markets, however, is beginning to indicate a shift in family travel behavior as millennials are experiencing a late start to “adulting,” demonstrated by living at home longer and delaying marriage and parenting.

The reasons for the changing behavior are becoming more validated. The millennial generation is the first since the Great Depression to grow up in a recession—one that peaked in 2008. According to Jeff Fromm, author of Millennials with Kids (a must-read for vacation rental marketers looking to reach millennials), this generation has not experienced the economic prosperity enjoyed by previous generations, and this has shaped how and when they form their families and raise their children. So far, only 26 percent of millennials are married, compared to 36 percent of Gen Xers and 48 percent of baby boomers when they were the same age.

Although societal shifts, a changing workforce, and the economic landscape contribute to this change, low wages, student loan debt, and exponentially increasing rents are also factors. Analysts no longer blame millennials for being lazy or unambitious but attribute the shift to these macro-conditions, which have encouraged the most tech-savvy and educated workforce in history to live at home, take underpaying jobs, and feel disenfranchised from the American dream they were promised.

VRM Intel Magazine | Fall 2018

More than a Third of Millennials Live at Home The Pew Research Center reported 35.5 percent of 18- to 34-yearolds in the U.S. live with their parents, compared to 26 percent in 1990. And according to Trulia, that number increased to almost 40 percent when adding those living with stepparents, grandparents, and other relatives and is at its highest point in 75 years.

“Even though unemployment rates have decreased and the economy is picking up, we know wages are stagnant, so this will impact this generation of homebuyers,” making it more challenging to save for a down payment, said Cheryl Young, senior economist at Trulia. “The millennials are getting married later and having fewer children, and that’s particular to this generation.” As adult children put off having children and buying a home, it is taking longer for parents to become grandparents, which contributes to a reported decrease in the number of large family vacations in some key rental destinations.

The Family Travel Association found in its annual Family Travel Surveys (2015–2017) that the number of families who were “very likely” or “likely” to travel with their child or children in the coming 12 months fell to 88 percent in 2017 from 95 percent in 2016.

Families “very likely” or “likely” to travel with their children in next 12 months

95%

93%

88%

2015 2016 2017

“This number exceeded the 31.6 percent of young adults who were married or living with a partner in their own household,” Aimee Picchi wrote in the CBS News article, “Young Adults Living with Their Parents Hits a 75-Year High.” “That marked a tipping point for the first time in modern history, since the norm for decades was for young adults to push out on their own after high school or college.” For parents who support these adult children, it is less appealing to initiate and pay for a special family vacation when they still see one another for breakfast and dinner every day.

Millennials Are Delaying Marriage and Parenting Delays in the traditional transition into adulthood among millennials carry over to having children. The share of households between the ages of 18 and 34 who had never been married or had children was 40.1 percent, compared to 27.6 percent in 1990.

Marital and parental status among 18-to-34 age group WIDOWED: NO CHILD

WIDOWED: CHILD

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never married: no CHILD

never married: CHILD

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Delayed behavior, Not changing behavior There is good news, however. Research is showing that millennials are following the same overall trend in home ownership, having families, and travel . . . they are just getting a later start. The Pew Research Center reported that in 2019 there will be 73 million millennials, followed by 72 million baby boomers. And the upcoming family vacation unit will be led by baby boomer grandparents with millennial children—and their children/grandchildren.

As we have reported in previous issues, millennials value travel, treasure local experiences, are tech savvy, are more brand loyal than Gen Z coming behind them and Gen X that preceded them, are more educated, are less likely to live alone, and have a strong desire to be married and have a family one day.

Although their timeline is a little longer than previous generations, their trajectory is on par to catch up to their predecessors in coming years. As a result, for vacation rental marketers, finding ways to reach millennials with aspirational messaging is expected to pay significant dividends. In analyzing trends in the economy and in consumer behavior, the vacation rental industry is maturing rapidly. The most exciting part of being in this industry, at this time and place, is the opportunity as vacation rental professionals—including technology providers, marketers, and property managers—to be the first to identify and measure correlations between these shifts and company performance.

VRM Intel Magazine | Fall 2018

Shooting for the Stars

Why The Vacation Rental Industry Needs Ratings By Alex Nigg, CEO, Properly

Consistency Drives Convergence

n a recent USA Today article on why Airbnb and similar sharing economy businesses are dwindling in popularity, this quote caught my eye: “Travelers say they’re tired of the unknown.”

Why is it so difficult to determine what you’re getting in the shortterm accommodations industry? It should be a straightforward equation: a good experience leads to good reviews, good reviews lead to better conversion, and better conversion leads to a higher average daily rate (ADR).

The problem appears at the beginning of this chain of events: there’s no industry standard for a “good” experience at a vacation rental. Properties are wildly different, and expectations are different depending on the type of property rented and the temperament of the guest. One guest might love your rustic cabin and give it a 5-star review; another might call it dirty, complain about the proliferation of bugs on the porch, and leave a 1-star review. Neither of those reviews is helpful to the guest browsing a listing site trying to figure out whether the property is going to deliver the experience they personally want. How, then, can short-term accommodations set better expectations for the type of experience guests can expect from a given property? Our industry needs a rating system.

Ratings Are Not Reviews Reviews confirm whether a listing matches guests’ expectations. Ratings set those expectations, and setting expectations is essential if guests are to determine whether the experience they were promised matched the experience they had. 56

VRM Intel Magazine | Fall 2018

If expectations are managed well, it should be possible for an older, unique property—priced well and described accurately—to receive an outstanding review. At the same time, a luxury property may end up with a mediocre review for not delivering against very high expectations. The rating, then, has to come before the review. Before the first guests stay at a property, a rating-setting body should explain what kind of property to expect so guests know whether the property lived up to their expectations. That is an important point in an industry where certain categories grow extremely quickly and up to half of all listings may not have existed a year earlier.

Calibration is extremely important and can be accomplished by establishing guest expectations up front, transparently and honestly. Stand-alone reviews cannot set expectations as clearly as ratings, and although platforms like TripAdvisor or Airbnb have done well with such reviews, these published reviews might not be especially helpful. A 2015 study conducted at Boston University showed that almost 95 percent of Airbnb reviews showed 4.5 or 5 stars, confirming the study’s title, “A First Look at Online Reputation on Airbnb, Where Every Stay is Above Average.”

Steve Milo, a prominent US property manager, has a radical approach to setting guest expectations accurately. His company, VTrips, has created its own rating system. Properties range from Bronze to Diamond and score 1 to 4 “suns” (more on that below). The lowest level, Bronze, corresponds to zero suns. When guests book at that level, they must specifically acknowledge that they understand what quality standard to expect—in this case, “dilapidated.” According to Milo, while his system leads to a higher initial cancellation rate, it also results in happier guests because they understand the situation and choose the price-quality trade-off at the outset.

The Hotel View: Ratings vs. Consistency and Brands While many European and Asian countries have formal hotel standard-setting bodies, there isn’t a single standard in the United States. Forbes (previously Mobil) and AAA are probably the bestknown hospitality standard-setting and inspection bodies; both publish travel guides that rate hotels. However, with more than 50 percent of US hotels belonging to major chains, and with those chains offering highly uniform products, US hotel ratings are arguably secondary. Most consumers know what to expect when they book a Courtyard or Doubletree vs. a Marriott, Hilton, or Hyatt vs. a Ritz-Carlton, Fairmont, or Raffles Hotel. Few guests will ask whether a certain hotel is a 2-star or a 3-star; they already know the type of service that’s delivered and maintained by a particular brand and see no need for an external rating system.

Ratings are much more important in Europe where there are more independent hotels. To set expectations for each one, guests need a rating system. While most European countries have national or regional standard-setting bodies, the German standard, Deutsche Hotelklassifizierung, has emerged as the standard-bearer of European harmonization efforts. This 300-point inspection program covers physical attributes, services offered, and quality-management systems that guarantee each hotel’s standard can be delivered consistently.

Taking Ratings and Quality to Vacation Rentals At the moment, vacation rentals don’t have a consistent rating system in any country. There have been a few attempts to set guest expectations in the United States and Europe through channels each one prefers. In the States you’ll find a brand approach, while in Europe you’ll see rating systems.

The recent funding successes of Sonder and other fledgling alternative-accommodations brands shows an approach to quality that mimics the US hotel world: quality is delivered via (budding) brands and uniformity. Sonder and others are essentially mimicking what Ian Schrager and Chip Conley did for boutique hotels decades ago and are creating new boutique brands from scratch. Meanwhile, emerging US VR operators like Vacasa or Turnkey rely on reviews and overall consistency of services to tell guests what to expect. Europe’s more established vacation rental brands have taken a different route from the emerging US boutique brands: they deal almost exclusively with existing inventory and operate on a larger scale. Novasol, Interhome, Interchalet, Belvilla, and Sykes Cottages all offer unique inventory, and each has taken a page from the (European) hotel playbook and established its own five-level rating system.

The last player worth mentioning is Airbnb. Airbnb introduced Airbnb Plus as a soft-brand approach that tries to combine elements of a review and a rating system. Similar to Forbes’ Travel Guide, it focuses on mid- to high-end properties and on inspection and uniform presentation. One interesting question is whether this soft brand will be allowed to live outside of Airbnb’s distribution platform. Will a time come when an Airbnb Plus property can advertise itself as such on Expedia or Booking.com? Simon Lehmann, former GM of Interhome, a major Swiss/ German operator, shows the difficulty of rating unique homes, recounting an all-hands retreat with his European management team where they tested Interhome’s own ratings. His team assessed a

formally 5-star-rated Tuscan villa with scores ranging from 1 to 5 stars. While one manager appreciated the 500-year-old open fireplace, another smelled 500 years of poorly vented smoke.

A Flight to Quality: The Devil Is in the Details The fact that it’s difficult for branding and rating systems to coexist may explain why it took so long for ratings to make an appearance in vacation rentals—at least on this side of the Atlantic. Ratings inspire confidence in guests, drive conversion, and raise the ADR for premium properties. However, creating a rating system that allows existing brands to confidently represent listings under their own brand is a tall order.

At the same time, there is undeniable evidence that quality has become a major theme across the industry. Hotels (Accor, Hyatt), Airbnb (Luxury Retreats, Airbnb Plus), and private equity funds and VC investors (Sonder, StayAlfred, Lyric, Evolve, Vacasa) have put almost a billion dollars into this category in pursuit of branded, quality experiences. Rating systems are clearly a necessary next step in creating credibility for vacation rentals. So what would an industry-wide rating system look like, and how would it differ from what hotels have built over recent decades?

A Blueprint for Quality Ratings Let’s start with the objectives.

First, quality ratings should give customers a clear, concrete idea of what to expect. That increased confidence should drive conversion and ADR. A good rating system would, therefore, show a clear correlation between ADR and quality.

Second, quality ratings should allow brands to confidently select listings that they can distribute under their own brand or soft brand. Branded companies should be able to select from 10 million units to a few hundred or thousand that fit with their brand. Branded companies, then, would become a new high-value distribution channel for property managers. Third, ratings should allow branded collections and property managers to better sort listings in curated collections—family friendly, business ready, pet friendly—to match guests’ preferences and expectations.

Hotel rating systems are a great place to start. A spot check of the German rating system shows that almost 80 percent of the 280 criteria used for hotels would apply to our industry. But there are important differences. As Simon Lehmann points out, equating hotels with private accommodations is tricky. A hotel’s basic asset lies in its uniformity while uniqueness is often the key draw for those seeking alternative accommodations. It follows that standard presentation would be a key requirement for an alternative accommodations rating system (e.g., having a photo for every room and a description that includes specifics about location attributes—hotels are often clustered in a few areas around town and the draw of alternative accommodations is living in a neighborhood, but those can be less well-known than tourist hot spots). Because hotel standards have a different focus, it might serve us well not to use stars. Steve Milo’s “suns” or Sykes Cottages’ “tick marks” help to establish clear differentiation from other systems. Hotels have relied on inspections to ensure their standards are upheld, but I don’t believe inspections are the answer to a quality rating system for vacation rentals because the economics are difVRM Intel Magazine | Fall 2018

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VRM Intel Magazine | Fall 2018

ferent. For starters, inspecting 200 rooms in a single hotel is a task that could be completed in an afternoon, but visiting 200 private accommodations across a city is a significantly different challenge that involves a far different cost structure.

There must be some means of ensuring that alternative accommodations are providing the standard promised by the rating structure. Airbnb’s founder Brian Chesky recently told Fortune that he “wants Airbnb to guarantee to its growing number of users that their rentals meet hotel standards like clean beds and Wi-Fi so that customers avoid any surprises.” Unfortunately, whether the Wi-Fi works on any given stay cannot be ascertained by a onetime inspection.

For example, in the last five Airbnbs I stayed in there was no WiFi available. I concede that was an unusually bad string of luck, but there’s a reason it’s relevant to our need for quality processes: every property had a different reason for the Wi-Fi being down. In one, the router had reset after a storm. In another, the host had failed to provide the password and was unreachable by phone. In a third, the owner had forgotten to pay the bill. Could any of those incidents have been prevented with a one-time inspection that merely confirms the Wi-Fi is working? Of course not. The storm would still have taken out the router, the host would still be unreachable, and the owner would still have forgotten to pay the bill. Only an ongoing assessment would have caught all those problems and ensured that I would have had access to Wi-Fi upon my arrival. To ensure that every guest arrives to the same experience, vacation rental managers need to implement an ongoing assessment through quality processes. Self-inspections, standardized owner

onboarding questionnaires, and remote photo verification would likely be key attributes of an effective rating system for our industry.

In Summary A significant development in vacation rentals in the last year has been a pronounced flight to quality. Quality can be guaranteed by brands or by ratings that set expectations in conjunction with reviews that confirm whether expectations were met. Our industry has been slow to introduce and communicate ratings; arguably, the United States has been a laggard while efforts in Europe have been fragmented and confined to the larger providers. Quality ratings for private accommodations can drive several principal industry developments, including (1) convergence with traditional lodging by increasing buying confidence and conversion as well as ADRs and (2) an acceleration of the entrance of traditional hotel brands that can serve as additional high-value distribution channels. Hotels have led the way in ratings, and hotel standards can be a great starting point for quality metrics for our industry. But there are important differences. Quality management platforms, supplemented by remote inspection networks of cost-effective, on-demand inspectors and used by brands to manage standards seamlessly across fragmented property managers and their service providers, herald a bold vision for our industry. If we can successfully inspire confidence as an industry, there’s no reason that private accommodations shouldn’t grow from 20 percent to 40 percent of the global lodging industry—and that’s a $100 billion prize well worth shooting for.

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VRM Intel Magazine | Fall 2018

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VRM Intel Magazine | Fall 2018

Common Threads

How Starr Textile Services’ Ties to the Vacation Rental Industry Helped the company Knit Success By Alexa Nota

f any company can find opportunities amid challenging circumstances, it’s Starr Textile Services.

In 2004, Meyer Vacation Rentals in Gulf Shores, Alabama, was quickly outgrowing the only local laundry service available when Hurricane Ivan slammed into the coast. During the region’s regrowth after the storm, a 35,000-square-foot building on seven acres in nearby Foley came on the market. “This was not a good time to buy a building and launch a new enterprise,” said Sheila Hodges, owner of Meyer’s parent company, SH Enterprises, “but I believed it was exactly what we needed.” She was right. Originally named South Alabama Commercial Laundry, the facility served only Meyer properties for two years until the area

began b o o m ing with new condos and other developments. SH Enterprises capitalized on this growth with a new name, Starr Textile Services, and a new $8 million facility that broke ground in 2007. The recession hit the following year, unraveling Starr’s market as construction permits expired and foreclosures mushroomed. The Gulf Coast was dealt yet another blow with the BP Deepwater Horizon oil spill in 2010. As tourism languished, servicing only Meyer Vacation Rentals wasn’t an op62

VRM Intel Magazine | Fall 2018

tion, but neither was shutting its doors, so the company began expanding into new markets in Atmore, Biloxi, and New Orleans.

It was in New Orleans’ recovery from Hurricane Katrina that Starr capitalized on another opportunity: a 13,000-squarefoot laundry facility in the city and a newly renovated convention hotel in need of laundry services. Within a few months after opening its second location to service New Orleans hotels, Starr contracted with the convention hotel, and by 2013, the company had grown into a new 55,000-square-foot plant under the name Starr Textile Services of Louisiana. Today, Starr can process up to 80 million pounds of laundry annually, including linens, towels, uniforms, and dry clean only items. It employs 120 staff members in its New Orleans plant and 80 in

F o l e y, w h i c h combined serve 10,000 hotel rooms, Meyer’s 35,000 reservations, and other customers in Louisiana, Mississippi, Alabama, and Florida. It is now the largest commercial laundry provider between the Texas and Florida coasts. Michelle Hodges, president of SH Enterprises (and Sheila’s daughter), was a part of Starr’s expansion from the beginning. She credits much of its success to its roots in the vacation rental industry and explained that commercial laundry services usually come from a manufacturing

Starr adds efficiency from an environmental standpoint as well. “People may think that when you do millions of pounds of laundry that it uses an excess amount of resources like water, but it’s actually extremely environmentally friendly,” Michelle said. Starr facilities use continuous batch tunnel washers that are 500 percent more efficient than traditional washers in terms of water and electricity consumption.

The textile business has its challenges, though. Like many companies in the vacation rental industry, Starr faces workforce limitations, particularly entry-level job turnover. “As automated as the equipment is, it takes a lot of people to make the system work,” Michelle said.

Seizing on another opportunity in a different kind of recovery, Starr employs local prison inmates through work-release programs. This may not work for every company, but she recommends that other property managers talk with local wardens to see if a work-release program might work for them.

Finding creative solutions in the face of challenges isn’t unique to Starr. While the laundry business overcame the hurdles of the last 14 years, so did Meyer, through an innovations engineering approach Michelle shared with VRM Intel in the May 2017 article “Under the Hood: Meyer Vacation Rentals in Gulf Shores, Alabama”:

base, but for Starr, coming from hospitality gives the company a competitive edge. “It’s a service-level mentality. We know what it’s like to have a guest on one end and a need on the other end. It’s not just about the product you’re turning over, but a guest, a user, who expects expedited, 24-hour turnaround.” Starr’s staffing, equipment, and other decisions are direct results of that 24-hour turnaround expectation.

Starr also differentiates itself from other commercial laundry facilities with another vacation rental-specific service: fitted sheets. Michelle explained that hotels don’t use them, but vacation rentals do, and without a daily turnover, their beds can get sloppy. Starr invests in equipment that allows them to dry and fold fitted sheets, so guests always have a crisp, clean set.

Although Starr initially grew out of Meyer Vacation Rentals and its need for a larger service provider, and the two are interlaced as sister companies under SH Enterprises, Michelle added that Meyer doesn’t use Starr as an owner retention or recruiting tool. Meyer’s typical owners are absentee investors, some with multiple properties.

“They don’t have interest in how we get it done, just that we get it done,” said Michelle. Instead, Starr whirrs along behind the scenes, adding efficiency to Meyer’s operations, particularly when it comes to deep cleans. Having multiple locations also gives Meyer and its owners a backup in case something happens at the Foley plant.

In 2013, Meyer engaged the Alabama Technology Network’s (ATN’s) Mobile and Auburn University Centers to help address its innovation and growth challenges through the implementation of a year-long Innovation Engineering Management System (IEMS) project. Innovation Engineering is a systems-thinking approach to innovation with a methodology that teaches individuals and companies how to create and test meaningfully unique ideas using a Fail Fast, Fail Cheap approach to reduce risk and increase speed to market and to create a system and culture of never-ending innovation. The system fit into our company culture so well that with ATN’s assistance, we decided to bring Innovation Engineering in-house and maintain the system to both encourage and manage meaningfully unique ideas into implementation. Two years into the program, IEMS became the catalyst for shifting our entire organizational structure to remain competitive in a changing market and better serve our property owners. The changes enabled Meyer to manage like a small property management company while also leveraging the tremendous resources and expertise of a large property management company. The growth and innovation aren’t slowing down for Starr and SH Enterprises. Both Starr laundry facilities are nearing capacity, and the service is eyeing further expansion. “There’s a continuing demand for professional, reliable laundry providers.” To Michelle, it’s been thrilling to have a secondary business outgrow Meyer Vacation Rentals. “We know the ups and downs, and when you build a successful business, it’s something to be proud of,” she said. VRM Intel Magazine | Fall 2018

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VRM Intel Magazine | Fall 2018

10 questions with Airbnb's head of professional hosting, Clara Liang

irbnb currently offers 5 million listings in 191 markets (compared to HomeAway, which lists 1.6 million properties). Growth rates at Airbnb have been extraordinary, as it has added tours and activities (“experiences”) and boutique hotels to the platform and is expected to add other travel verticals in the future. The company is now ten years old, valued at $35 billion, and likely to become publicly traded in the next 18 months. But the macro overview of the company is only part of the story for its professional suppliers, or as Airbnb refers to them, “professional hosts.”

While Airbnb has been extremely successful in many vacation markets, the company still represents a small share of supply in traditional US markets such as North Carolina, South Carolina, Alabama, and the Florida Panhandle. According to data provided exclusively to VRM Intel by Beyond Pricing, in May 2018, on the Alabama Gulf Coast, Airbnb listed 1,543 units on its site, while HomeAway listed 13,633. In the Florida panhandle, the story was similar. Airbnb listed 3,544 units on its site, while HomeAway offered 26,167.

For professional vacation rental managers, the decision to list homes on Airbnb is multi-faceted, based on target demographics, feeder market types, percentage of direct/repeat bookings, connectivity, need for guest communication, and merchant of record requirements. In the winter issue of VRM Intel Magazine, we will take a deeper dive into these considerations across channels.

We reached out to Clara Liang to find out more about how Airbnb is viewing working with “professional hosts.” Liang leads the Professional Hosting team for Airbnb's Homes business, and

is responsible for growth, retention and success for professional hosts on Airbnb. She is a technology leader with over 15 years of experience across enterprise B2B and consumer technology companies. Prior to Airbnb, Liang served as chief product officer at Jive Software leading product management and design for Jive’s enterprise collaboration solutions. She has also held a number of leadership positions at IBM across product management, engineering, technical services and design. Her educational background consists of a B.S. in Symbolic Systems and a minor in Chemistry from Stanford University, as well as an M.S. in Technology Commercialization from the University of Texas.

Amy Hinote (AH): Why do property managers want to work with Airbnb? What are you hearing and learning from these hosts? Clara Liang (CL): Property managers have told us that Airbnb brings them new guests from all over the world and helps them reach different demographics. Access to Airbnb’s massive, rapidly growing community is definitely a key motivation for working with us. Equally important is the inspiration we get from a property manager’s commitment to hospitality. We have shared goals in providing personalized, delightful guest experiences, and by partnering with property managers on providing this premier hospitality, we’re able to help them grow and scale their businesses.

AH: To what do you attribute Airbnb’s consistent outpacing in vacation rental growth, and what do you see as Airbnb’s differentiators compared to competitors in this space? VRM Intel Magazine | Fall 2018

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CL: Our biggest differentiator is building and fostering relationships as a partner instead of as a channel. We’re working day in and day out to support the creation of new businesses, and we help current businesses deliver better, more unique, and more magical stays. Our number one goal is to support our partners in growing their businesses. We don’t want to commoditize them, we want to showcase, enable, and help them.

AH: Are there particular emerging markets you see contributing significantly to inventory growth now and in the near future? CL: With more than five million listings in over 191 countries, we’re focused on worldwide growth. For us, it’s less about a geographic focus and more about supporting partners everywhere and anywhere. We know some guests are looking to travel to traditional vacation markets, but more and more guests are looking for new and unique options, so our global approach helps us meet the needs of our partners’ guests.

AH: Is there a difference in how Airbnb sells to and supports professionally managed inventory versus owner managed inventory? CL: We look at this in three ways: tools, support and operations, and technology integration. Our platform was initially built for individuals who wanted to rent their primary home. As we’ve evolved and grown, we’ve invested in making sure our product does as well. We’ve adapted key elements from our consumer tools and created professional ones designed to enable hosts to manage inventory at scale. In the past year, we’ve released new features that make it easier than ever for partners to grow their businesses—for example, advanced pricing and availability rules and support for additional fees. On the support and operations side, we have a global team dedicated to property managers and hotels. This team supports professionals in growing their businesses and in responding to any issues that may arise. Our support team works closely with our technology team, so we are constantly adapting our tools based on host feedback. Last, in addition to building out our professional tools, we’ve built integration with leading software providers to make it easier than ever for hosts to list and manage their homes on Airbnb.

AH: In terms of ranking, are there any changes to Airbnb’s search functionality that can help property managers improve their performance? CL: The number one goal of the Airbnb search ranking algorithm is to help guests find the perfect listing for their trip and to help hosts find guests who are a great fit for their space. We look at nearly 100 different factors in every search, including guest preferences, pricing, length of stay, how quickly the host responds to guests, and, more specifically for property managers, we’ve created insights related to these search factors to help hosts optimize their listings to maximize conversion. You can think of these tips like SEO best practices that help improve your visibility and drive traffic to your listing.

AH: Are there any new technologies that Airbnb is adding to better serve suppliers? CL: Absolutely. We’ve rolled out a number of tools created specifically for hosts managing inventory at scale. For example, we’ve introduced the following:

 an improved listings page with search and sort and a feature that enables hosts to make updates across multiple listings for things like amenities, cancellation policies, and additional fees  a multi-calendar that makes it easy for hosts to set advanced pricing and availability rules across all of their inventory  dozens of improvements to our API to support hosts who manage inventory through other software systems

These are just a few examples. There’s more to come, and you can learn more about our new technologies when Airbnb speaks at VRMA.

AH: We have watched your fast progress in integrating with software systems, with over 100 integrations completed. How does this increase your ability to add more supply with property managers? CL: We use technology to empower people, not replace them, so our integrations with software systems are focused on efficiency and conversion. We want to help property managers free up time so they can spend it on providing amazing hospitality.

AH: Do you think metasearch has a future in the short-term rental industry? CL: It’s certainly an interesting space we’re all keeping an eye on; however, at Airbnb, people come to us for differentiated experiences. The magic of travel is through people, and we know that’s what our guests are looking for. We’re committed to supporting hosts in providing magical experiences that extend across the end-to-end trip.

AH: What are your priorities in 2019? CL: We are focused on supporting our hosts in growing their businesses, and we’ll do this by providing ways to give guests the unique and differentiated travel experiences they’re looking for.

This means acting on our vision of Airbnb for Everyone and making it easier for guests to find the perfect place to stay, every time. If I’m traveling with my husband, we prefer staying in a private room in a host’s home. We love connecting with the community and engaging with our host. When I’m traveling with friends or groups, we want a home all to ourselves. We have kids running around, and we want to cook and spend time with each other—a home to ourselves is perfect for that. I might want a boutique hotel if I’m on a quick trip where I land late at night and have to leave first thing the next morning. Guests are searching for all types of properties on Airbnb, including the three examples I just shared with you. They’re also searching for so much more, such as Airbnb Plus homes. This collection of curated and verified listings appeals to an even wider range of guests and gives guests more dependability and improved merchandising for hosts.

AH: What can we expect from Airbnb in 2019? CL: You can expect us to be laser focused on helping our partners grow their existing business and on the addition of new revenue streams. You can expect us to do this with Airbnb’s people-powered approach. We’re people first, supported through technology, and we will continue to bring that unique angle to our partnerships.

VRM Intel Magazine | Fall 2018

Instant Gratification and the Five-Minute Golden Window

n 2007, Dr. James Oldroyd’s Lead Response Management Study found that agents who responded to a lead within five minutes of the inquiry submission were 100 times more likely to make a successful contact, and the lead was 21 times more likely to enter the sales process than if the agent had responded thirty minutes after the submission. Success rates further declined sharply when the response time lengthened from minutes to hours to days. These statistics have held steady over the past 11 years, and responding to a lead within five minutes is still a gold standard in the sales world.

Vacation rental guest leads are no different, and if you feel like guest impatience has gotten worse lately, you’re not imagining it. A 2017 YouGov study that Fetch commissioned found that 40 percent of UK and US consumers say they are more impatient than they were five years ago. It’s only going to get tougher from here—over half of 18 to 24 year-olds answered the same way. It should come as no surprise because seemingly everything around us is increasingly designed for instant gratification: Netflix on-demand streaming, Amazon Prime and same-day delivery, digital voice assistants, Seamless and other food delivery services, subscriptions for everything from meals to wardrobes to cleaning supplies, or chatbots. Heck, some companies are built with bot-based assistants at their core, such as Trim and Cleo. When it comes to general customer service needs, what customers say are acceptable response times varies by channel. The Social Habit research found that of the respondents “who have ever attempted to contact a brand, product, or company through social media for customer support, 32 percent expect a response within 30 minutes. Further, 42 percent expect a response within 60 minutes,” writes founder Jay Baer for Convince & Convert. A Kissmetrics study found that 50 percent of respondents who submit their question via email expect a reply within a day. But given Oldroyd’s study and the ultra-competitive nature of the vacation rental industry, these “acceptable” response times don’t cut it. “Nowadays a ‘real time’ response is not just a nice feature—it’s an expectation,” wrote Paul Comaroto in Glip’s blog post “How to Ace Customer Service in the Age of Immediacy.” “For many issues, there are plenty of fast and easy ways to access what we’re looking for, from a quick online search to AI, chatbots, and other automated responses. The point is speed, not nuanced customer service and niceties.”

Expediency is a nonnegotiable, especially for prebooking questions but also the in-home, I-can’t-work-the-toaster ones, as guests’ experiences during their stay are part of the sales process for future reservations. Property managers have no choice but to keep up on both sides to compete with each other and maintain a huge upper hand against the OTAs.

The Downside of Autoresponders Autoresponders have helped alleviate some of this pressure, particularly with a first quick response. Many companies leave autoresponders at the “We’ve received your message and will respond to you as quickly as possible” default reply. Others may process the request or question through support software that routes the inquiry to the most appropriate person or department, sometimes pushing out status updates to the customer along the path to resolution. Some companies employ a chatbot to help with initial triage of a question and provide an immediate answer when possible. These tactics are good for letting customers know they’ve been heard, but they do not meet the golden target of five minutes for a human response. Too often they are simply a stopgap between a question and its answer, akin to calling and being put on hold for hours at a time. The benefits of a quick first response are negated if it takes an unacceptably long time to get the answer, and the risk that the lead will abandon the company for its competitors increases dangerously with each minute that passes. So, too, are automation and autoresponders ineffective when they attempt to find a solution and fail, such as the sites or chat tools that ask customers a series of questions to suggest an irrelevant FAQ article before connecting them with humans. Of course, even the best systems won’t be 100 percent accurate, but to improve overall service rather than add frustration, these must be deployed with extreme care and be better at finding answers than the customer is. I have yet to find a tool like this that supplies the answer I needed. That’s why I’m trying to connect to a live person—after all, I’ve already done the search myself and didn’t find the answer.

“Once the customer isn’t getting the answers he or she wants, the next step is to speak to a human being. And often, that customer is now frustrated not just with the problem but also with the time and effort it’s taking to find the solution,” wrote Comaroto.

Speed to the Right Answer to the Right Question The key is that not only is speed important but also speed to the right answer to the right question is the ultimate objective: instant gratification. Speed and quality are not independent of each other. In fact, improving one by nature improves the other. The higher quality your support tools are, the faster a guest can get the answer he or she needs. The faster guests can get solutions, the higher quality the service is to them.

When property managers take a hard look at lead response times, conversion rates, and customer satisfaction data, and find a patVRM Intel Magazine | Fall 2018

VRM Intel Magazine | Fall 2018

tern of slow or ineffective service, it does not mean that all guests should call in for every question and that property managers should put all staff eggs in the call center basket. It may simply mean the tech + people + operations equation needs some rebalancing. Improvements will depend on what’s causing the problem. Looking at the macro level, Ventana Research reported that the top customer service challenge is communication channels managed as silos. Vacation rental management is a prime environment for this to occur. Marketing handles social media messages, reviews, and comments; guest services or reservations take incoming calls, emails, and chat requests; maintenance and housekeeping receive requests and complaints in the field. Without a centralized system for managing all this, things can easily fall through the cracks. Shoring up these systems is a good place to start improving response speed and quality.

Reduce Stress on the System with Self-Service A major benefit of successful self-service options is keeping nonsales inquiries from clogging sales channels. However, you should not design self-service support with your company’s efficiency in mind. Build it with guest satisfaction and convenience as the foundation, prioritizing both speed and effectiveness for them.

B2C self-service support takes the form of an FAQ section on a website, interactive voice response phone trees, messenger bots, or other tools that funnel a user to an answer without human intervention. The information they typically provide, however, only goes so far. “Do you have pet friendly homes?” “Should I get travel insurance?” “Where is the nearest grocery store?” Sure, these FAQs are legitimate, but asking reservationists, housekeepers, and maintenance techs what else they answer on a regular basis can reveal a much deeper well of questions that can be answered with self-service tools. In addition to building a helpful self-service information library, property managers will benefit from ensuring that guests who prefer to get help this way can do so—quickly and from a mobile device. Chances are guests and potential guests will be looking for information from a smartphone. Kissmetrics reported that 75 percent of customers ages thirty-five to forty-four, and 77 percent of those eighteen to twenty-five use their mobile devices for customer support at least once a month. The company also reported the top challenges consumers encountered when doing so:  Incorrect displays or difficult navigation (90 percent)  Unhelpful search results (75 percent)  Slow load times (40 percent) The mission here is to refine your system’s user-friendliness with a focus on mobile and easy navigation until most questions can be answered in two to three steps. You can also leverage tech to prevent excess service volume by anticipating guests’ needs before they ask—send pre-arrival emails and social media to distribute area guides, how-to’s, checklists, and so on. Data dives may also reveal FAQs for specific homes or groups of properties. For example, if a condo complex has a tricky gate, or homes with a certain TV provider frequently have guests calling for help with channel listings, use targeted emails to just these guests with pertinent information.

Low-tech, in-home options can be ideal, too. For example, small signs above each sink and toilet informing guests of the delicacy of that neighborhood’s plumbing and septic systems and kindly asking them not to flush or drain food, paper towels, or other toiletries can cut down on calls for clogged toilets or worse. The more effective self-service and preemptive support is for guests, the more efficient property managers’ overall customer response can be.

Make Five-Minute Agent Response Possible Even with the most robust self-service tools and perfect automation, people will always need to talk to people. Kissmetrics found that 79 percent of customers still prefer to call when they need help, followed by 33 percent by email, and 12 percent by web chat. Getting to a five-minute lead response time can feel like a herculean task, particularly when strapped for time, money, staff, or all the above. An InsideSales study found that the most common barriers to address include the following:  Poor distribution of sales leads based on geography and “fairness”  Retrieval of leads from a CRM database daily, rather than continuously  Sales reps focus on generating their own leads rather than reacting quickly to demonstrated customer interest Streamlining all pieces of the lead response process can help free up the necessary time agents need to provide solutions and get to the next lead faster. In addition to correcting the above problems if they exist, other strategies include these:  Studying incoming requests to see when and where people need to talk to a live person, and then schedule staff accordingly.  Giving reservationists a quick-reference information library to cut and paste (and personalize!) natural human responses to common questions in email and chat.  Automating CRM to instantly direct inbound leads to reservation staff; it’s even better if they can be directed to the first available person.  Outsourcing lead response during off hours or during the times reservations or guest services staff will be busy, such as the July 4th check-in weekend.  Assigning agents to channels based on strengths. For example, some agents may be better able to juggle multiple chat conversations than others, so put them on the live chat front lines rather than on the phones. Responding to leads and requests in near-real time is no longer optional. Property managers can avoid being left in the dust in the race against each other and the OTAs with persistent, incremental steps toward the five-minute golden window. How will your team be first off the line? By Alexa Nota

VRM Intel Magazine | Fall 2018

In the closing months of 2018, the insurance industry’s collective eyes are on Proper Insurance and its comprehensive vacation rental program. A new paradigm for niche insurance, Proper continues to set the bar with the most comprehensive coverage available in the United States for short-term vacation rentals. The company’s recipe for success is simple: create an all-inclusive policy customized for the unique risks of a vacation rental business, back it through Lloyd’s of London—the world’s oldest and most respected marketplace— and provide the best customer service in the industry. Proper’s customers agree that the formula is working. Michael and Barbara from New York speak about their experience: [We] had a great experience working with Proper Insurance when we sought a policy for our primary residence that would also cover short-term rental property owners. They answered all [our] questions and presented a competitive quote within a few days. Their staff is extremely friendly and responsive even if you file a claim. The agent and the adjuster contacted us right away after we had some storm damage. They’ve been easy to work with; [our] claim was resolved fair and quickly. The high level of service and uniquely personal approach taken by Proper Insurance has served the company well in addressing the natural disasters and catastrophic events that insurance companies historically struggle with. Buoyed by excellent underwriting and fair adjusting, Proper Insurance has continued to garner stellar reviews from those affected by Hurricanes Irma and Harvey, winter storms blanketing the East Coast, and the fires in California and the Western United States. Kim from Santa Barbara knows just how far Proper will go to help customers: I’m still in shock considering the trauma endured by my family, but the response by Proper Insurance and the teams they hired kept our home safe. This insurance company is not just an insurance company—they have now become part of our family. They watched over us, they protected us, and they asked how we were doing. When I saw the two Proper-hired firefighters in our garden collecting their hoses, all I could do was burst into tears. Thank you, thank you, thank you for saving our home! Given the growing popularity of short-term renting in the United States, Proper Insurance has seen the need to develop a niche program designed to bring total peace of mind to the owner and property manager. For more than four years, the team of experts at Proper Insurance has produced quality policies that meet communities’ short-term rental requirements, equipped with $1,000,000/$2,000,000 of commercial liability, written on special cause of loss forms, with liability coverage extended to amenities such as docks, swimming pools, hot tubs, bicycles, and much more. Proper Insurance is set to remain the number-one choice for short term rental policies in 2019 using the proven formula that brought the company success in years prior. After all, with more than fifty cumulative years of experience in specialty insurance, Proper’s policy is the highest-quality insurance available today for vacation rental property owners. Proper policies are available in all fifty states. Call or e-mail to get connected with an account executive, or get a quote online and get yourself properly insured!

The Guest Journey

Understanding Your Guests’ Vacation Rental Journey From Planning to Memories

By Colin Morrison, NAVIS

o you want to find better ways to monetize the interactions you have with your guests? Measuring and managing the guest experience is an art and ongoing challenge for many vacation rental owners and management companies. But, looking at the guest experience (or journey) from start to finish can provide valuable insight into making their experience better—from booking to departure—and increase revenue for your business! We call this “monetizing the guest journey.”

Learning to take a complete view of the guest journey can give you the insight and tools you need to better measure your business, gain a greater understanding of your data, and yield better results from your existing resources—results that will positively affect your bottom line.

Explaining the Guest Journey What is the guest journey? Why does it matter for your business? The guest journey is defined differently depending on which com74

VRM Intel Magazine | Fall 2018

pany or solution you are viewing, but for us, the guest journey is described as, “the stages a guest goes through before, during, and after their stay at your property.” Many vacation rental owners and managers believe the guest experience starts with the booking; however, the guest’s journey begins when they first approach your website or see an advertisement, and it does not end until after their stay has ended and they are back home! Managing and capitalizing on the entirety of the guest journey allows you to monitor, measure, identify, and act on opportunities for elevated customer satisfaction and increased revenue.

The Guest Journey Starts Before Booking A common misconception is that the guest journey starts with a booking. However, considering a complete view of the guest experience before the booking will help you evaluate sources of demand, challenges, and opportunities with your guests. You can then measure, monitor, and act upon greater demand and see better results. Why is the prospective guest looking to stay at your

property? What are their needs? Do they have children with them, or are they looking for a romantic getaway? It’s likely that the types of individuals and groups who stay with you regularly have similar wants, needs, and desires. Appealing to their wants, needs, and desires ahead of the booking is how you can get a complete view of your guests.

B Shape Understanding

How Your Systems Affect the Guest Journey

Put your team together for the analysis and strategy planning. Make sure you include equal representation from the different departments that touch data.

As you may have already gathered, a productive business and marketing strategy for a vacation rental business measures the entire guest journey. If you feel like your internal tracking and data systems are siloed, you have likely already encountered some environmental challenges and inefficiencies. This common data issue can also cause gaps or lost opportunities with your guests throughout the life cycle of their stay. Disorganized systems can also slow down the booking process, create headaches for your team, and affect your revenue. The best way for your business to capitalize on the entire guest journey is to examine where, why, and how your internal systems may hold your business back and look for a customer relationship management system that is more comprehensive and efficient.

Look at the guest and their experience from all angles.

Use the Data at Your Fingertips If you are using a cloud-based customer relationship management (CRM) platform, you have all the data you need to foster a positive relationship with your guests and potential guests. You can create a sales funnel for repeat business and provide your guests with a number of valuable touchpoints to help them feel comfortable and more satisfied throughout the life cycle of their stay.

If you have not invested in a unified CRM platform, now is the time to consider how the right CRM can help increase your bookings, improve your marketing success, and lead to increased revenue for your business.

Take a 360 View Another way of looking at the guest journey is to stop viewing your guests as one-dimensional and start taking a 360-degree view of your guests. Look at the guest and their experience from all angles. This approach will enable you and your team to move from a transactional guest relationship to a guest-centric relationship. Changing your view and then making organizational changes to support your vision will lead to more effective marketing efforts, capable teams, and increased revenue.

Explaining Data Strategy and How Can It Help The ability to take a complete view of the guest journey is dependent on having a strong data strategy. The data you have in various systems can work better for you if a strategy is built around how and where to use your guest information. It is critical to understand the steps that are needed when you are putting together a data strategy for your business.

A successful data strategy requires an alignment of your staff and resources. Get the word out and set your expectations internally before you begin.

C Assemble a Team

D Inform your Team Make sure your strategy team understands the goals and needs of the project. It may take some education to get there.

E Assess Your Current Data Conduct an analysis of your existing data to discover what’s operating efficiently and what’s causing problems or gaps. This audit will enable you to build a practical and all-inclusive strategy.

F Develop Your Areas of Focus Your overall goals should have been established by now but waiting until this stage to develop the area of focus will allow your data analysis to inform the action plan.

G Lay Out Recommendations Put together concrete proposals so that you can get key stakeholders on board.

H Create a Data Road Map Your recommendations will evolve into the final strategy or road map for your data.

I Prepare for the Data Change Once you have a plan, you need to execute it. But first, it’s going to be vital that you onboard relevant staff and team members, so they can correctly implement the data strategy.

J Execute Your Plan Do the work! Get your data strategically aligned.

K Analyze Results Once you have a new approach in place, it will be helpful (if not critical) that you analyze your effectiveness and efficiency over time. Data can be a business’s best friend or worst enemy when it comes to understanding and monetizing the guest journey. However, gaining an understanding of your guest, by taking a 360-degree view, depends on how your data is programmed, processed, and utilized. Don’t let your data fall into disarray or lose its impact. Take the time and the initiative to understand your guests, and the monetary gain will follow.

VRM Intel Magazine | Fall 2018

A Funnel Approach to Social Media Advertising Lela Newell , Client Success Manager, ICND

ocial media advertising is still finding its place with marketers in the vacation rental industry because many companies put it on the back burner or they don’t have time to really invest in it.

However, compared to branding and inexpensive payper-click campaigns, social media has the most traditional media beat. Many marketers think of social advertising as an à la carte menu where they can pick and choose the type of campaign, such as traffic to their website, a specific conversion factor, or brand awareness. On the contrary, most social advertising platforms, especially Facebook, have given us the ability to really create something great with our ads. The answer comes in two words: sales funnel.

Creating a Sales Funnel in Social Media Creating a sales funnel to persuade your target audience is more effective than throwing a “Book Now!” ad in someone’s face. Think of it this way, if you are a vacation rental company located on the East Coast, you don’t want to market to everyone on Facebook, and targeting an ad by age and location isn’t enough. The objective is to find people who are truly interested in the East Coast and all it has to offer: people who love the culture and the food—East Coast advocates. Then show these people that you exist and can give them exactly what they want, “Funny, you like the East Coast. So do we!” Most marketers stop there, but we need to take it further. We need to join a buyer’s journey, and we need to tell a story: a story of why it’s so important that their next vacation should be with your company and not someone else. That is where telling a story comes in.

But how do we tell the story with ads?

Start by “Introducing” Show some empathy toward the target audience’s interests. When they see that you love the same things they love, they will want to know more. If you think about it, this is basic human instinct. We are drawn to like-minded people, people who share the same passions that we do. Making the connection is the difficult part, but you can do this by offering them something unique.

For example, everyone has taken an online quiz. A quiz is a great way to build your target audience and engage them with something they are interested in. Additionally, it is a great way to learn about the people you are targeting while possibly gathering some information like names and emails. It’s okay to ask for a name and email when giving something in return. 76

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Consider offering something like a travel guide or an e-book. These are things that are definitely beneficial to people who want to travel to a specific place, and it might give them the information they need to make the next move. The whole point of the introduction stage is to build an audience that truly cares about the local vacation area. You don’t want an audience, you want vacation advocates!

Keep in mind, the introduction stage is just a brand awareness campaign on Facebook that targets general interests.

Turning Thought into Action and Traffic So we’ve introduced ourselves, we’ve given our audience something they think is valuable, and, in return, they told us who they are. Now it’s time to show that audience why booking a vacation with your company should be their next step. This is where people get lost because many companies can’t tell you why they are different. You should come stay at my resort, but why? What can you offer that your competitors can’t? If you can figure that out, then you can stand out from the crowd. (By the way, “We’re the best” isn’t a valid response to that question.)

The idea is to take the audience that now knows you and give them a reason to visit your website. Focus on the emotion behind a vacation. To us, our local vacation rental town is home, but to our audience, it’s an escape from reality. Most individuals only take one vacation a year, and they want it to count! Promote content that will get them excited about your company and its unique location.

 Pro Tip: Stop trying to get bookings from social ads. Nobody is going to book their next vacation from Facebook; that’s what your website is for. Social media is a means to generate referral traffic and is a top-of-the-funnel approach. A good ad will generate traffic to your website. There is no other goal in this type of campaign besides generating traffic. If you try to make this type of campaign about bookings, and not about generating traffic, you are going to lose money.

Calls to Action For some reason most people overlook their calls to action when they put together social media ads. Probably one of the most important pieces of the puzzle is to tell your audience what to do next by giving them clear direction. Do not overlook your calls to action.

Make it very clear, “Visit our website,” “Book your dream vacation,” and “Read more about this home.” Be direct and concise. Facebook offers the option of different calls to action. Choose the one that clearly describes what your audience should do next.

What about Facebook Conversion Ads? The most frequently used campaign is the conversion campaign in Facebook. Obviously, we all want more conversions; however, heading straight for a conversion campaign isn’t the answer. Why not? Conversion campaigns operate at a high cost per click, and if you are paying for clicks, you want them to count. This is the perfect campaign for remarketing.



Pro Tip: Concerned about remarketing to people who have already booked? Set up an exclusion audience for everyone who has landed on your booking completion page. This will remove anyone who has actually followed through with the booking process. You can do the same thing with an email list of everyone who has booked.

Let’s Review Remember all of the people you sent to your website? Well, most of them didn’t book a vacation. It doesn’t mean they aren’t interested; it just means that something prevented them from booking at that point in time. Remarketing ads are a great way to get in front of your website audience and give them another chance.

There are three very important steps to this funnel-style marketing strategy:

Step 1 Introduce yourself with a brand awareness campaign and create a captive audience. Show the audience that you exist.

Step 2 Drive referral traffic to your website with a traffic campaign by using the audience you created with the step one brand awareness campaign. Make this campaign simple and concise.

Step 3 Remarket with a conversion campaign to the people who visited your website but didn’t take action. Some of the most successful Facebook remarketing campaigns I have seen are review highlights. Take one of your five-star Facebook reviews and use that in the ad copy. This tactic builds brand value and might be the last thing you need to turn your audience into a customer.

By adopting this strategy in your next digital marketing campaign, you will decrease the spend amount in the budget by no longer paying to try and convert everyone—only the people who are truly interested.

VRM Intel Magazine | Fall 2018

By Simon Lehmann

Vacation Rental Software

The Good, the Bad, and the Ugly

he vacation rental industry is booming. In the United States alone, there are an estimated 4,500 professional operators managing more than 600,000 units with a compound annual supply growth rate as high as 7 percent. When smaller operators with less than five units are thrown into the mix, the total number of operators increases to more than 20,000. And the United States represents only 25 percent of the global market. This space is massive! What about demand? Take one look at the growth of Airbnb’s valuation versus Marriott’s, and it is clear the vacation rental side of the hotel and lodging industry, which is expected to continue to grow by 10 percent year over year through 2022, isn’t going anywhere.

$ 60 B

VALUE OF MARRIOTT (est. 1927) VS. AIRBNB (est. 2008)

Without naming names, it’s time we take an honest look at some of the core issues and inefficiencies on the software side of the space, which from a bird’s-eye view has remained largely unchanged for the past five-plus years (with the exception of revenue and yield management tools, which are frankly still maturing). I’d also like to nod to some of the promising new technologies and services along different parts of the value chain that I believe are helping move the industry forward. There is tremendous opportunity out there for the brave, the bold, and the innovative.

Without further ado, I give you the good, the bad, and the ugly of the B2B side of our beloved vacation rental industry.

$ 45 B

First, the Ugly: Lack of Transparency, Price Gouging, and Dishonesty

$ 30 B $ 15 B $0B 2008

To that end, although both supply and demand are growing, the ever-changing vacation rental industry we all know and love remains highly fragmented and outdated on the business-to-business (B2B) side (for more than just technology). I’m not going to beat around the bush . . . it’s a mess!

2010

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VRM Intel Magazine | Fall 2018

2014

2016

2018

There exists, at this very moment, a thriving third-party distribution player that offers its paying customers zero visibility into reservations for the very units they manage. “You got a booking!” But from which channel? Not provided. Who is staying at our property? Sorry, but we mask the guest email address, and you can’t talk to them. How do I email my guests the check-in info or a survey after the stay? You can’t. Exactly how much are you making off of my inventory? Apologies, but we can’t tell you that.

Well, it turns out that this particular provider, which has substantial market share, is generating what are arguably exorbitant sums of money considering they don’t even have the keys to the properties. According to an anonymous but verified (and frustrated) customer, “After prodding one of their team members on a recent call he finally admitted to me that they always mark up the prices fed to channels like Airbnb, HomeAway, and Booking.com such that before paying the channel their company nets 23.5% in fees, at minimum, from each booking . . . for just channel management, which we already pay them 3–4 percent to handle.” This frustrated customer continued, “If inflating prices for entire markets isn’t bad enough, we also found out they are double dipping our damage waiver fees by lumping our $75 waiver into the ‘cleaning fee’ they serve up to the guest, then charging each guest a separate waiver of $39 to $99, which their company keeps. We’ve calculated that over the past 90 days they have raked in over $25,000 from our company off of only 80 reservations, $7,500 of which is from damage waiver fees alone.” Understandably, the aforementioned supplier has decided to pull its inventory from this service provider. Although generating revenue is critical for any business, are significant price markups and non-transparency with suppliers and consumers helping move our industry forward? Is it logical that the party on the ground managing the unit has zero control of its reservation data or communication with the guest? I think my fiveyear-old could answer that one.

Next, the Bad: Lack of Innovation, Nickel and Diming, and Inertia Although property management systems (PMS) and ancillary distribution tools are the backbone of the industry, there is a growing level of disdain among property managers for the software they depend on to run their businesses. Why?

The incumbents (several of whose tech platforms are between six to 10-plus years old) aren’t easy to use and simply aren’t innovating— not technologically, commercially, or in terms of customer success. Pricing models are old school, often involving thousands of dollars for setup with ongoing fee structures that are convoluted and really add up. Need to add a gateway? That’ll be $50 per month per bank account. Ready to add another property? First you have to buy the individual shell for $120, then pay $6.98 per month per unit (regardless as to whether it’s just an unused shell). Need to connect to our API? That’s $2.28 per month per unit. Oh, and we also charge you 1–5 percent per transaction. Furthermore, the systems—even the leading “all-in-ones”—are disconnected, often leaving managers with no choice but to pay for, and sign into, five to 10-plus separate providers. Need an invoicing tool? We don’t do that, but we integrate with a company that does for $4.00 per month per unit. Housekeeping task management? Can’t do that, but we integrate with a company that does for $3.00 per month per unit. Contracts? That’ll be $50 per month. Need to distribute to this or that channel? We don’t have an integration with them, but we have a partner that does for 2 percent (or more) of every transaction. Sound familiar?

In the current ecosystem, the incumbent platforms aren’t user friendly, it’s costly to ultimately market and monetize inventory, and it isn’t a cinch to switch providers (three to six months to on-

board on average). The result? Inertia. It’s no wonder vacation rental software has remained largely unchanged for more than five years.

Finally, the Good: Standardization, Growth, and Breakthrough Solutions Of course it’s not all bad out there. Consumer adoption of vacation rentals continues to rise, and professional suppliers are getting savvier. But the market is ready for technology adoption and consolidation. Guest experience and hotel-like services are a major focus, and innovation is greatly needed. Well, the cavalry is on the way.

Thanks to smart home technology and the Internet of things, guests are now enjoying more automated and flexible check-in/ check-out procedures and better service overall as property managers are able to shift their focus to guest experiences by automating control of locks, garage doors, thermostats, noise monitoring, and more. Property owners benefit from lower energy expenses, increased security and peace of mind, and ultimately more revenue generated. This is just the tip of the iceberg of what this technology will do for the industry. On the growth side of things, more and more we’re seeing national (and multinational) operators steadily increasing the size of their portfolios through acquisition of smaller suppliers in an effort to become a household name among the masses. The challenge in building a brand that to the consumer is as reliable as the best hotel brands is providing a consistent experience. Smart home integration is a core component, but the ones who will ultimately provide the best service and generate the most revenue aim to standardize all operations while still maintaining the charm inherent in vacation rentals: standardization of guest communication and in-destination experience, on-the-ground staff workflows, and onboarding of acquired property owner clients, to name a few. We are witnessing this progression at this very moment. There are also a growing number of urban, multi-family players who have moved from owning or leasing out individual spaces to working directly with developers to build new complexes or renovate vacant old spaces into apartment-style units they lease to the operator. Business travelers who appreciate the comforts of home and the reliability of hotels get the best of both worlds. This phenomenon is largely thanks to Airbnb’s model and technological advancements over the last decade. As we approach the new year, players will have greater access than ever before to near real-time market information for making better data-driven decisions. Operators large and small will have access to new educational tools, more growth capital, and new M&A opportunities.

But what about the PMSs professional operators run on? Technologically speaking, we’ve already witnessed a few generations of players progress through the product life cycle. The incumbents are recognizing that change is afoot and, in response, are increasing the features and services they offer through acquisitions and integrations but often offering little innovation of their own. To that end, I think we are about to witness the new generation of the all-in-one PMS. These providers are harnessing the latest web technology, ignoring the patterns that have led to the current fragmented space and instead innovating with game-changing features, best-in-class parity tools, and true end-to-end solutions. 2019 is going to be an interesting year. VRM Intel Magazine | Fall 2018

Data Breach

Don’t Let Your Business Fall Victim to Data Hacks Jack Newkirk, NAVIS System Consultant

he hospitality industry is the second-largest industry for data breaches. Crazy, right? In 2016, over 1,200 hotels in the Intercontinental Hotels Group experienced malware attacks targeted directly at acquiring guest data.1 Breaches like this are no longer uncommon in the hotel industry, and if you’re not concerned about a possible hack of your data, you should be.

Any time you partner with a technology provider to manage your guest data, you are trusting that partner to protect precious information. Any time you hire an employee, you are trusting this new person with sensitive guest and company information, and the list goes on. As data breaches (or hacks) become more and more prevalent at home and abroad, the risk to vacation rental managers increases exponentially. At the end of the day, your guests trust you with their data. A security or data breach can, and has, put companies like yours out of business. 80

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The challenge is that it can be unclear what you as the owner, or manager of a property, can do to ensure guest data is secure and that you aren’t personally liable if a data breach occurs. Scary, right? Whether it be internal or external, here are some commonsense solutions to help protect your vacation rental(s) from a data or security breach.

Identify Security Strengths and Weaknesses Your company is not as safe from a data breach as you might think. The best way to plan ahead and ultimately protect your portfolio from a breach in security or data hack is to analyze the current safety of your guest data systems. Are there any weak spots in your security network? Do you have data spread out across lots of different platforms? Does your data have the same level of security across the board? We’re guessing

there are areas or elements of your data management systems that could be stronger and/or improved with more security.

It’s also important to pay attention to whether or not your business is PCI compliant—these regulations go hand and hand with data security. We will cover more on this topic in the following sections.

Put a Data Breach Action Plan into Place One of the best ways to prepare for the unpredictable, especially when it comes to the security of your guest information, is to develop an action plan just in case a security breach occurs. Believe me, I’m not trying to create more work for you. I know how busy you are, but if a hack or security breach occurs, you’ll wish you had a plan in place to cover your bases.

This plan should cover what your team will do if a security breach or hack occurs, how guests will be informed, and the steps needed to ensure the right parties are involved (e.g., regulatory, local law enforcement, crisis management groups, and/or public relations partners).

Plan for Weak Spots or Gaps It can be easy to assume “it won’t happen to us.” After all, you’re not a hotel chain or a resort. However, statistics show that data breaches and hacks are growing in number, and the size of your business is not necessarily a factor. In fact, in 2017, 34 percent of all companies in the United States experienced a data breach.2 This includes smaller, family-owned businesses, which can actually be easier targets! Here are two things to consider when looking at your company’s weak spots: 1. Employee Turnover A disgruntled former employee may lead to a data breach. Keep a close eye on your systems and change all passwords as needed to avoid this after an employee leaves the company. 2. Proper Training If your team doesn’t understand how a data breach or hack will likely occur, they will not be prepared when it does. Include security training in your onboarding process for all employees and make sure your team meets to discuss any changes to your systems when they occur. The environment can change quickly, and your business will need to adapt to protect your guest information and company data.

Vetting Third-Party Vendors One of the quickest and most surprising ways to weaken your company’s data security is to skip properly checking the background

of the third-party vendors that work with your team. Treat your vendors like they are your employees. When you consider a vendor partnership, take a close look at the company’s reviews, ask questions about what they do to avoid security breaches, and ask for references before trusting your sensitive data to their care. It may seem like you’re going overboard but think of these relationships like a marriage. You (hopefully) wouldn’t just marry anyone without getting to know them first, right?

Plan for Privacy Laws In the past few years, new and broader privacy laws have been passed in our country and by international governments as well. This has all been in an effort to protect consumers.

The General Data Protection Regulation (GDPR) is an international privacy regulation that can affect many business owners in the United States. You can learn more about how GDPR works, what it means, and how the regulations might affect you and your business at eugdpr.org. Other privacy laws (i.e., payment card industry security, sometimes called PCI laws) are popping up across the country. Individuals and businesses need to be prepared and take data protection seriously so they can stay compliant with the latest regulations and laws. To be PCI compliant, you need to understand how to put processes in place that will adequately obtain consent from your guests and sufficiently protect their data from potential breaches.

These practices are critical to helping your business stay compliant and to avoiding a data hack. Recently, Colorado and California passed privacy laws affecting businesses that process credit card payments. We anticipate that many more states will follow this lead in the coming years. You can obtain more information and tools on the PCI website at pcicomplianceguide.org.

Be Aware of Red Flags Trust your instincts. If something seems fishy, it might be a warning sign. Red flags such as questionable behavior by a team member, new unplanned passwords needed to access company accounts, reports of strange financial activity from a guest, or signs that your online or internal systems may have experienced a data breach, are all red flags. Don’t ignore these warning signs. Take red flags seriously.

No business is entirely safe from a data security breach or hack, but there are many practical things vacation rental owners and managers can do to make sure, at the very least, you are creating an environment of security around your data and your company. Your efforts will only benefit you, your team, and your guests. By eliminating potentially dangerous security holes in your data systems and taking your data security more seriously, you’ll set yourself and your company up for success.

Sources: 1. Hospitality Technology https://hospitalitytech.com/. 2. eSecurity Planet https://www.esecurityplanet.com/.

VRM Intel Magazine | Fall 2018

Smart Home Automation Creates Happy Guests and Happier Operations By Sean Miller, President – PointCentral

reating the best possible guest experience is what every vacation rental manager seeks. The greater the guests’ enjoyment of their stay, the more likely they are to repeat the booking and leave a positive online review. After spending the day driving or flying to your destination, everyone wants to get started with the vacation fun as quickly as possible. The last thing guests want to do is stand in line at your office for a key or wait for their rental to be cleaned, regardless of how many soft drinks and cookies you offer. The amount of resources and effort required to optimize the guest experience can appear daunting if you try to tackle the job all by yourself. Let me show you how technology that costs less than $600 can automate a lot of what goes into delivering a great guest experience and make the overall experience better for operations, owners, and guests.

perature problems (vs. a guest simply loading a bunch of warm groceries). Remote wall plugs can reset routers when the Wi-Fi goes down (PointCentral operates over private lines with AT&T and Verizon, so we don’t need to worry about the reliability and security holes inherent in Wi-Fi). PointCentral’s HVAC Analytics let you see when an HVAC unit is not operating sufficiently to keep up with the set point. Maybe it’s taking too long to get the property to 72 degrees, or maybe it can’t get there at all. With PointCentral smart thermostats, you will notice early on when problems arise, so you can schedule HVAC maintenance when a unit is vacant, preventing more costly failures during occupancy, which could affect guest satisfaction.

Smarter Arrivals

Smarter Checkouts

Smart Home technology automates the guest’s arrival in many ways. First, with smart locks, guests do not have to go to your office to pick up a key. They can go straight to the property and enter their unique access code, which automatically disappears as soon as they check out (which doesn’t require an office visit, either). This allows them to start their fun right away.

Another Smart Home feature that has guests smiling is the arrival temperature. Through our PMS integrations, our system knows when guests will arrive and automatically sets the system to achieve a comfortable temperature (say, 78 degrees) at an energy-efficient pace, keeping guests and owners happy. For a little extra money, property managers can incorporate additional features. Home automation devices like light switches or plug-in outlets can turn porch lights or table lamps on to warmly greet guests who show up later in the day, and voice assistants like an Amazon Echo can help answer basic concierge questions (where is the closest pizza restaurant or where can I rent a bike?) that help guests get their vacation started off on the right foot.

Smarter Stays Not having to worry about keys is a bigger deal than you might think, especially with larger parties. Guests no longer have to figure out who has the key or worry about losing the key when they head to the beach. This translates into peace of mind for guests, knowing that they will never be locked out, and it saves your staff from having to spend time running out to let guests in. It’s a big downer when a major appliance stops working during a vacation. Simple remote temperature sensors in a refrigerator can let property managers know whether a fridge is having tem-

The sad day has arrived when the guests have to leave their wonderful vacation and return to normal life. As soon as the guests depart, PointCentral will automatically return the property to an energy-saving temperature (owners love the 10 to 15 percent in energy savings and system preservation). However, the HVAC system is not completely asleep. High humidity can wreak havoc with a property, resulting in mold and pests that thrive in those conditions (and wreaking havoc on a guest’s vacation). PointCentral smart thermostats eliminate this problem by monitoring humidity levels in unoccupied homes. When levels approach mold growth levels, our system automatically activates the air conditioning for a short period to bring humidity levels down, saving your guests and owners from health concerns.

When a guest departs, the system notifies the cleaning crew that the home is ready to be cleaned. After the cleaner and inspector complete their work, a “house ready early” notification can be sent to the next guests to let them know that their unit is ready for occupancy—and you can get your guests into vacation mode sooner.

If the home will be unoccupied for a while, driveway cameras and video doorbells can help keep the property safe for the next guest. Water sensors can also notify you if as little as three-hundredths of an inch of water is present, ensuring that guests will be swimming only in areas where you want them to swim. It’s no wonder that 86 percent of millennials and 65 percent of baby boomers not only prefer a rental with smart home automation but also will pay more for one. Sean Miller is the President of PointCentral, an Alarm.com subsidiary, which is the leading developer of enterprise scale smart-home solutions for short-term and long-term property managers and their tenants. VRM Intel Magazine | Fall 2018

VRM Intel Magazine | Fall 2018

Double the Delivery What it Means to Be a Property Manager and an OTA

ounded in 1985, Condo-World has had the opportunity to serve both owners and guests in an evolving industry and has taken its thirty-three years of experience to build a model that caters to the needs of both. Here, CondoWorld takes a closer look at what it means to be both a property manager and an online travel agent (OTA).

How is your model different from traditional OTAs? As an accommodations provider, we have an in-depth understanding of the business that we believe other channels don’t have. We’ve built a brand that has resonated with millions of vacationers over the past thirty-three years, and we’ve used our experience to build a model that caters to the needs of property managers and their guests. 70 percent of our partner reservations are booked online, and 30 percent come through our call center. We learn about our partners’ properties and their policies and create an exceptional online presence that converts at a higher level than industry standards. Our model also allows guests to call and talk to someone who is knowledgeable about the property. Once booked, the guests’ information is immediately passed through to our partners. They process the payment and continue the conversation with the guests just as if the booking was direct. We operate on a fair commission that’s less than that of the major OTAs..

Do you rent other types of accommodationS besideS condos? Yes. World-Class Destinations by Condo-World is the parent brand for our out-of-market partnerships that include resort, cabin, and beach home collections. The major OTAs have had a challenge trying to figure out how to organize vacation rental inventory in a way that makes sense to the consumer. Our model effectively markets various types of inventory at the same destination, which has been a unique advantage for us.

What insights have you gained being on both sides of the table as a company that uses OTAs to promote your properties while also acting as a hybrid OTA to promote your partners? Choosing the right channels is critical. We’ve seen channels that produce high bookings but have cancellation rates of up to 60 percent. Some channels don’t allow communication between guests and property managers, some restrict access to the guests’ full contact information, and some act as the merchant of record. We’ve built a model that is the opposite of all these things. The information gleaned using OTAs has helped us build a program that is mutually beneficial and protects the interests of both our partners and guests. If guests book through our website and want to return to the same property the following year, we want them to book directly with our partner. If they want to try a different destination, we want them to return to Condo-World.

How does Condo-World grow its technology-heavy infrastructure organically without relying on investment funding? As a start-up within a profitable and established organization, we have the advantage of leveraging technology and resources that simultaneously grow both sides of the business. Instead of growing by acquisitions, we made the choice to build this program using our brand and technology. We’ve continuously achieved growth and profitability, even with a substantially higher marketing investment. This is a great sign for the future should we pursue additional funding opportunities.

How does Condo-World ensure its call center staff is knowledgeable enough about its partners’ destinations and properties to provide a seamless experience for guests? Infusing our industry knowledge into the customer service side of this model is a major competitive advantage. We train our agents on our partners’ properties and policies so that guests are well informed upon arrival. We have recently partnered with TRACK Pulse to expand our call center operations, and we’re building a new multi-destination training program to ensure new hires are prepared to take calls for all properties we market.

What encouraged homeowners and management to support Condo-World becoming an OTA as well as a property manager, and how does Condo-World balance serving its homeowners and OTA partners at the same time? The decision to use our brand to market properties we don’t manage was risky, and it was crucial that our internal team be on board. We had homeowners who didn’t understand why we would want to rent properties in other locations, but once they saw the value of growing our brand beyond North Myrtle Beach, the benefits became clear. Our OTA partners are progressive companies that see the benefit of distributing to Condo-World to reach new audiences they wouldn't normally be exposed to. This collaborative nature has been a tremendous win-win for all stakeholders, homeowners, and partners involved.

Where are you focusing now, and where do you see the company expanding to in the future? Does Condo-World want to expand its property management into other markets? Our current focus is on the Florida Panhandle, Gatlinburg, Pigeon Forge, Orlando, Hilton Head Island, and Gulf Shores. We're assessing interest in other destinations on the East and West Coasts for 2019. Our property management will remain limited to North Myrtle Beach, so both sides of the business can operate without conflicts of interest.

VRM Intel Magazine | Fall 2018

By Ali Cammelletti

Is Texting the New Email?

Giving Great Service While Texting

ommunication via texting is rapidly increasing as we all see every day. Now when I dine out at a restaurant and I am waiting for a table, no longer am I handed a device that buzzes when my table is ready; now I receive a text letting me know to be at the lobby in five minutes to be seated. I really like the additional five minutes, just in case I need to pay a beverage tab or use the restroom before going to the table. I also get texts letting me know when a pharmacy prescription is ready or when a prescription needs to be refilled, as well as reminder texts for dentist appointments and payment reminders from my cell phone provider. Texting is likely the most prevalent form of communication today and deserves a much more prominent role in business communications. For example, we can send mass texts to guests, such as those concerning weather disasters, but we can expand to handle other communications with the immediacy and personalized tone that we do with all relationship-focused communications.

It is important to satisfy today’s experience-seeking customer. If you offer a better—and more immediate—experience than your competitor, consumers will buy from you. Texting is an easy way to give your customers the assurance they are seeking. Are you sending out a text when the home is ready for check-in, or are guests expected to call to see when it is ready? Texting is quick and convenient and can easily provide a high level of service if done correctly. Often, companies are not able to program a specific number that shows who the text is coming from and have a character limitation. Are you stating the company name first, so guests know who it is coming from? Are you using templates that are the correct number of characters and are still coming across as warm, allowing employees to make small changes to customize them? Maybe the notification that a home is ready states, “Hi, Smith Family! Your oceanfront home is ready at 200 Seaside Lane with a door lock code of 3333. Reminder that your sunset view this evening is 8 p.m. Amazing Rentals hopes you enjoy your time.”

Statistics say that eight trillion texts are sent every year with an open rate of 99 percent, and a typical response time of less than three minutes; 33 percent of Americans prefer texting to any other form of communication. It is also the most used form of messaging for Americans under the age of 50. As an industry, we have already experienced a huge increase in website bookings; for some companies, it has reached up to 70 percent of all bookings. Often, 86

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when rental agents ask customers to view the home together on their computer, callers say they will be able to when they are done with the call because they are on their phones. Consumers are not spending the time to open a computer to view the homes together because they rely on their phones so much for vacation rental searching and booking. I recently had a friend tell me she used VRBO for her European bookings because it was easy to access on her phone during travels. Now that we understand how popular texting is and why we should be using it in our businesses, let’s start off with some basic guidelines for how to text for business purposes.

Spelling, Grammar, and Respect Spell out words instead of abbreviating like you might when texting to a friend or family member. Even if the person you are texting with starts abbreviating, remain the professional service provider by spelling out your words and using correct spelling and punctuation. Just because they might not capitalize an “i” doesn’t mean you should do the same. Imagine that you are texting a colleague; it often helps to keep it professional. Part of being human is that we are often judged, and texting is another line of communication that guests will make judgments on. Keep in mind the Platinum Rule and treat others how they want to be treated. If I am moving fast when texting—as we all usually are—I might misspell or use the incorrect word, but that doesn’t mean that I am OK with a company doing the same when texting me.

Tone As with email, it is crucial to watch your tone while texting so that communication isn’t misinterpreted. Take time before responding so that you don’t come off as flippant or harsh. Entrepreneur.com recommends using polite touches like “please” and “thank you,” as well as rereading every message before sending it to help double-check your tone.

When to Text and When to Call Address serious topics with a phone call. If you are talking about cancellations of any kind, finances, or what might be interpreted as bad news, take the time to call.

Building Trust You can build trust with frequent communication, but if you overcommunicate via text, you could annoy someone. I recall the last time I was interviewing a renter for a studio we own, and we were texting about references and details. The renter filled my phone with long, detailed texts right up to 10 p.m. at night. I finally stopped responding. The next day, he said something about blowing up my phone and I responded with, “Yes, you did.” We both laughed about it, and he never did it again.

Unplugging On an internal business note, take breaks from technology occasionally. I hear about managers who are receiving texts on their days off and sometimes even owner-relations employees doing the same. I understand we are in the hospitality industry, and it is focused on pleasing people, but I spend a good amount of my coaching time helping people create healthy boundaries so they don’t become burned out or need a month off to rejuvenate. If we are going to give with all of our hearts and build healthy relationships in business, we need downtime so we don’t get snarky or annoyed.

Communication Times One of the bigger points that I find to be extremely important is to watch when you are sending texts. I recommend 9 a.m.–5 p.m. for business texts. With that said, if you are texting about an update on a maintenance issue that is pressing, I feel it is appropriate to text as late as 7 p.m., but I wouldn’t recommend any later. If you are com-

municating due to an after-hours call, ask permission for how late you can communicate via text or if the guest would prefer another form of communication.

Inc.com wrote a great article about why texting increased Dirty Lemon’s revenue by 1,400 percent. The first reason was due to personal communication via SMS, which optimized the direct-to-consumer experience. I completely agree with this because I tend to make quite a few purchases through Facebook Marketplace, and I like the quick and easy transactions. It is said that understanding consumers drives smarter product development. The ability to track what consumers want and the areas that your company is not delivering in allows for business changes that meet and even exceed their needs. Texting speeds up consumer communication and eliminates lengthy phone calls or email queries that sometimes never get answered or mistakenly end up in the spam folder. It is time to embrace texting communication in business if you haven’t already. “If we’re growing, we’re always going to be out of our comfort zone.” John Maxwell

Ali Cammelletti of Cammelletti Consulting has more than 28 years of experience in the hospitality industry. She has served in many capacities within the industry, from working as a frontline restaurant and lodging employee to building and owning a successful event-planning business. She currently runs a consulting company that coaches and trains frontline staff and managers and helps them improve their leadership skills.

THE OPMA DIFFERENCE Constant focus on the future and the shaping of the lodging industry Controlling our own destiny through leadership initiatives and not simply relying on advocacy and secondary support roles Targeted growth and strategy: Aggregating the most condo hotel rental inventory in the most popular vacation destinations. REPRESENTING

THE BEST OF BOTH WORLDS

CONDO ACCOMMODATIONS

& HOTEL AMENITIES

877.870.6510 THEOPMA.ORG

Assisting our members in measuring and delivering their collective economic impact in the local markets they serve Develop and introduce training programs that provide uniform messaging and that enhance the sales and service levels and the proﬁtability of the membership Minimize the number of suppliers in any product/ service category translating into more signiﬁcant long-term relationships with OPMA onsite managers VRM Intel Magazine | Fall 2018

The Pow in the Vacation Rental Industry By Brett Parry, CMO, Streamline VRS

Influencers

Let’s start with our “Industry”

any of us have heard “Do what you love” or “Follow your passion.” For most people, these remarks represent a fantasy that is unachievable. This sudden realization can turn a smile into sour disappointment. One of the most striking things I have experienced over the past thirteen years in the vacation rental industry is that we are here because the industry stole our hearts, and we love what we do. It is an industry packed with growth, innovation, exploration, independence, opportunity, community, and more. As our industry evolves, it is important that we fight to protect it. Entrepreneurial spirit has been the fire igniting our success, and the same fire and sense of community can ensure this industry thrives.

Inspire Our ultimate mission is to inspire people to travel and to book vacation rentals. We are changing travel around the world. We offer a new and valuable travel experience for many people, especially families and groups. The traditional hotel stay is great, but it is limiting, and it’s only one possibility within the entire travel sector. Over the past several years, vacation rentals have become mainstream. Our actual market size is expanding, but we need to continue spreading the word while elevating the guest experience.

Infrastructure As with any sector, quality infrastructure can mean the difference between success or failure. In our industry, we need to identify the most effective organizational and community structure to combat current and future challenges. There are powerful, large-scale forces aligned with local grassroots movements that threaten the very existence of vacation rentals. This is a fight we should all be in together. Reversing legislation is more difficult than establishing favorable legislation. We need to form and support the appropriate networks and associations to protect the industry and to win local battles. The best possible approach is to be proactive instead of reactive. We need organized, coordinated efforts—both internally and in our communities—to take on this issue. 88

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It is time for our people to step up and lead. It is critical that industry voices collaborate to refine messaging and organization. Our ability to react and adapt to any situation needs to become more sophisticated, and that will only happen through proper leadership. The influential companies in our industry must align for the greater good. We compete on many levels within the industry, but we also compete against other industries and agendas.

Innovation As the world progresses technologically and customer expectations increase, the vacation rental space must innovate at a rapid pace. We are competing for a larger market share of the overall travel segment. Technology is at the forefront of helping property managers stay efficient and provide an optimal experience to travelers. We can elevate the overall quality of a vacation rental stay through innovation. We must be diligent because competing against traditional travel accommodations requires a reconditioning of the traveler’s mind. Beyond technology, property managers need to be innovative in their overall offering and traveler experience.

Independence At the heart of our industry is the professional property manager, and it is important they diversify and stay independent. While the OTAs provide our industry with excellent value, it’s important that we all place emphasis on the local property manager. Local companies are essential to building relationships with travelers and delivering a special vacation rental experience. On top of the booking experience, guest services, and general stay, there is the daunting task of on-site operations. Providing optimal housekeeping and timely maintenance is especially important to travelers choosing vacation rentals for their travel experience. We need companies to be healthy, sturdy, and valued. We encourage property managers to build their brands, build their guest and owner relationships, and evolve their brands in every way.

Information In our industry, we are gaining access to usable data for statistical analysis like we never have before. Converting this data into usable

er of “I” information will become more important as we make decisions on how to communicate and move forward. There are entire companies that utilize, distribute, and interpret data. We should leverage this data influx to optimize the direction of our space and our businesses. It’s important that we be responsible with data and protect it in every way we can.

International Among the many remarkable elements of our industry, its vastness is possibly the most exciting. Most of us in the vacation rental space love to travel, explore, and experience new things. Connecting to the world through travel is really something special, and we have the privilege to do so. Beyond this, the opportunity to expand our market size is virtually limitless. The global nature of our industry offers spatial, product, and technology expansion because every market has different demands. We have become more sophisticated, but as we continue to evolve, it will be interesting to speculate on how international markets, processes, and technologies will collide.

Integration Consumers, especially the millennial group, are looking for instant gratification. Delivering real-time responses to every consumer is paramount. Integrating technology, from property management systems to the OTAs, distribution channels, CRM systems, and any ancillary service, is a big part of what will make us successful. This integration will help us become more efficient and will help companies stay lean and face upcoming challenges.

Everybody knows the industry is growing, but it may fly under the radar that our balloon (market) has a ton of room for expansion. The major brands in our industry have done a great job of increasing awareness, but the expansion has only just started. We are taking market share from the general travel space, and we are growing the market by attracting new travelers. Branding our industry is key to accomplishing this.

Investment The last topic in this article is investment, because the amount of money pouring into the space is astronomical. We have seen many acquisitions over the years, and the trend is not slowing. We see the acquisition of property management and technology companies and a general movement toward consolidation. With the influx of capital, the level of sophistication in vacation rentals has potential to rise. This is excellent for the overall vacation rental experience, but it’s essential that companies keep up with technology while evolving internal processes and procedures.

About Streamline and the Power of “I” Streamline is a visionary technology company revolving around people and their talents, needs, and passions. The power of “I” is our culture that brings individual talents, knowledge, and brilliance to the forefront in a dynamic collective setting. Every individual, whether a Streamline team member or a valued Streamline customer, is empowered to contribute to the evolution of its solution-focused technology.

Inventory Vacation rentals as an accommodations alternative are one of the most impressive products sold in the worldwide economy, including cars, clothing, technology, art, food and beverage, movies and more. There is something special about a vacation home. Home is where the heart is, and unlike other travel and accommodation options, you really do get to experience a home away from home in a vacation rental. This is true for condos, villas, and cabins alike. Being in a property with your family that was individually decorated by a private home owner is something unique. Remember, the true keeper of the inventory is either a direct property owner or a professional property manager. Our product is unique, dynamic, and versatile.

Inflate At the recent 2018 Streamline Summit, we used the hot air balloon to symbolize “rising up” as a metaphor to represent our market size.

Brett Parry VRM Intel Magazine | Fall 2018

Lessons in the Fall

Steve Trover Discusses Closing All Star Vacation Homes and the Hard Lessons He Learned Along the Way

ith considerable media attention and millions of dollars flowing into our sector from venture capitalists and private equity firms, it has been exceptionally easy to focus on the vacation rental sector’s high points, high valuations, and reported exponential trajectory. In contrast, we don’t often take the time to examine the many difficulties experienced by founders in the sector. Over the past two years, we watched channel management company LeisureLink shut down operations with significant debt after 90

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it raised $42 million, read recent reports of metasearch platform Tripping.com’s demise after it raised $52 million, and heard about market-leading vacation rental management company All Star Vacation Homes closing its doors. And these companies are joined by approximately 30 other reports of companies in the industry who have had to throw in the towel on their vacation rental businesses over the past two years. In addition, we’ve seen dozens of others sell their companies in less than optimal conditions in an effort to exit somewhat gracefully.

The story of All Star Vacation Homes (ASVH) has been particularly interesting to vacation rental industry professionals because of its market-leading position and because its cofounder, Steve Trover, served in highly visible industry leadership roles as he built a vacation rental management company many admired. When ASVH permanently closed its doors in 2017—and talk of owners who were not paid began to spread—the vacation rental industry buzzed as one of its most recognizable faces fell from grace. I sat down with Trover to talk about what happened. As with any tale of difficulty, there are distinct lessons to be learned. And for those who truly know Trover and his undisputed love for the industry, it is not surprising that he is willing to tell his story in hopes of helping other property managers avoid the mistakes he made.

THE BEGINNING In 1997, Steve Trover and his mother, Sue, founded ASVH as a vacation rental marketing company that worked with Florida property managers to obtain net rates and market Florida vacation rentals to a broader audience.

“We worked with other managers to promote their properties,” Trover said. “We had a strong web presence and it was very profitable. This was in the time before online reviews, and our challenge was a lack of quality control. So we decided to dive headfirst into full-service property management.” They began focusing on property management and by 2000, the business was growing rapidly. “We began feeling like the business was going to be successful very early on as we started with essentially no start-up capital,” Trover said. “Once we hit 150 properties and about 35 employees, it was really taking off . . . I can’t say I ever had a love for operations, but I was laser-focused on providing the very best product and service,” he continued.

Despite travel challenges related to 9/11, flooding in 2003, several hurricanes in 2004, and the Great Recession, ASVH continued to expand and soon became known as one of the premier vacation rental businesses in the highly competitive Orlando area.

ASVR had a strong real estate arm and spun off a side business named Beyond Furnishings, an interior design company, only adding properties to the company’s inventory they had sold and furnished. “Until the recession, our model was to sell the house, furnish it, and rent it,” Trover said. “Our interior design company, Beyond Furnishing, furnished 500 homes in the Orlando area. Our secret sauce was to have more control over the physical product, and we think we did that better than most for a lot of years.” The industry took notice, and Trover quickly became a respected leader and passionate promoter of professional management. Trover joined the board of directors for the Central Florida Vacation Rental Management Association (CFVRMA), the Florida Vacation Rental Management Association (FVRMA), and the Vacation Rental Management Association (VRMA) in 2008, serving as its president from 2011 to 2013. “At one time, I was on 14 boards and committees,” Trover recalled. While on the VRMA board of directors, Trover publicly advocated for several initiatives including the PBS television series Getting Away Together, a hefty public relations campaign and online marketing initiative to promote professional rental management, and the ill-fated Switch, a connectivity platform and distribution channel designed to aggregate professionally managed rental inventory and leverage the collective buying power of suppliers to work with

OTAs for manager-friendly branding, access to customer data, and reasonable commissions and fees. In addition, Trover consulted with a property management software company and rental management companies and hosted and visited hundreds of property managers to share information. During this time, Trover remained as the hands-on CEO at ASVH. Over time, Trover became increasingly less passionate about the operations side of the business.

EXPANSION TO OTHER DESTINATIONS AND PURPOSE-BUILT DEVELOPMENT In 2012, ASVH expanded into Captiva, Florida, and purchased a company in San Diego in late 2013, which grew to the company’s inventory to 350 homes under management. “I thought because we were highly successful in one destination, we could easily replicate that success in another,” Trover said. “It wasn’t that simple.” While expanding into new destinations, directing new initiatives as VRMA president, and consulting with vacation rental companies, Trover ventured into a new area: purpose-built homes. Trover recognized the need for standards in the industry and studied the hotel model in which there are builders/developers, management companies, and marketing arms. He believed it was possible to mirror models used by Hilton, Four Seasons, and Marriott, who often design, develop, and build properties; hire management companies for operations; and handle the sales and marketing services for properties. He worked on precursor developments and made the decision to take on outside investment to create Fullhouse, a purpose-built development company that would design and build inventory specifically for short-term rental use. “We had been working with builders and developers for years with success, but they wouldn’t listen to all of our advice,” Trover said. “When we built our very first truly ‘Purpose-Built Vacation Home,’ leveraging data and what we called ‘Guest-Influenced Design’ (both were ASVH trademarks), I knew we were onto something huge. We built 25 of them, ranging between 7 and 14 bedrooms, and they were revolutionary. They made the owners money, made the company money, and the guests were raving fans.” With its new, broader vision, ASVH added several highly paid executives to the team with the goal of proving the purpose-built model and expanding into additional markets.

ASVH’S CASH FLOW CHALLENGES AND THE SALE OF THE BUSINESS By late 2014, ASVH was stretched thin with multiple business extensions, expansion into new markets, and large investments into Fullhouse. The diversification diverted focus from the core Orlando business, and with large resources committed to Fullhouse, cash flow became more of a challenge.

Some of the challenges stemmed from prior difficulties during the recession. “The Great Recession took its toll on us like everyone else,” said Trover. “And in 2014, [cash flow] started to become a significant issue when deals we had in the works at Fullhouse fell through. We attempted to power out of it and were able to do so to some extent, but it certainly reduced our resources. That’s why we looked at options to sell the business.” VRM Intel Magazine | Fall 2018

“There is the old business axiom that ‘cash is king.’ When you run out, the music stops,” Trover lamented.

With mounting debts, several layoffs, and decreasing funds, while looking for a buyer, Trover still wanted to believe the business could be saved. “We had an exceptional team, and I truly believed we could still turn it around,” Trover added. “Like many VRM entrepreneurs before me, I was willing to pay them before I paid myself because I felt they were worth it.”

Trover made an early decision to favor guests over homeowners in his approach to the cash flow challenges. “It was my number one priority that guests did not arrive without a place to stay. In some cases, as things got bad, we rented homes from other management companies to accommodate guests. Our guests worked all year for their Orlando vacation, and I could not have families bring their children down and not have place to stay.” Trover tried to stay optimistic and eventually found a buyer in 2015, an ASVH homeowner of several large vacation homes who agreed to purchase the business with a commitment to a line of credit that would offer enough runway to put ASVH back on track.

The situation had personal consequences. “At the time we sold the business, I had several family members in the business including my parents, my sisters and my brother,” Trover said. “My wife and mother of my four children, who had been running our vacation home interior design company, was diagnosed with an aggressive form of breast cancer the year prior and was forced to stop working.” “To say it was a difficult time would be an understatement,” Trover added.

With the sale of the business, Trover began to dig out of his family’s obligations, and took on other work to support his family. However, things took a startling downturn, when--within a year-the new owner wanted out, without following through on the line of credit. The new owner contacted Trover and gave him and his mother an ultimatum, they could either take the business back or he was closing the doors—which meant employees would not have jobs, guests would arrive with nowhere to stay, and owners would have zero chance to receive funds owed to them. “We were given an ultimatum by the new owners: Buy it back or it would be immediately closed,” Trover said. “They had purchased it to leverage it for a large project that was not coming into fruition. It was an exceptionally difficult decision. If we did not buy it back, all employees would immediately lose their jobs. Owners and vendors would receive nothing, and guests would have shown up to find they had no property to stay in.”

Trover’s back was against the wall, and in a gut-wrenching move, he decided to take the business back. “I have seen this play out several times and even though it was no longer our liability we couldn’t let it happen,” Trover said. “The company had been cut down to a fraction of its former self. We knew it was a long shot, but we had to try and make it work.” Ultimately, a come-from-behind success story was not in the cards for ASVH. In 2017, the company permanently shut down operations and Trover began the extremely painful process of dealing with the aftermath.

LESSONS LEARNED Having to close the business, especially with extensive debt, was a severe blow for Trover and his family as he had built what once was a respected business, industry relationships that had evolved into close friendships, a public role as an industry advocate, and a rep92

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utation for being successful. The personal and financial losses were devastating. And while his experience has been public, he is certainly not alone. The vacation rental industry is a service-based business that doesn’t scale well, and millions across the industry have been lost. For example, according to Phocuswire, “Accor’s $288 million write-down of its Onefinestay acquisition shows how hard it could be to pick a winner. So does Hyatt’s $22 million impairment charge it took on Oasis this past summer.” Oasis was recently purchased by Vacasa for a fraction of its valuation just a year ago.

But with four children to set an example for, Trover is not sitting still. His love for his family and the industry drives him forward, and he wants to use his experiences, with all their ups and downs, to help other vacation rental professionals.

IDEAS AND INNOVATION VERSUS FOCUS With new markets and business models, the vacation rental industry is full of shiny opportunities, Trover admittedly saw opportunities in many areas and identified solutions to challenges facing the industry. And to his detriment, he often saw them too early. However, the truth he found is that chasing one idea meant diverting focus from another, and the scarcest resource that vacation rental industry innovators have is time. “This business [property management] requires 100 percent of our focus,” Trover said. “While there are a lot of innovative and exciting things to do, property managers have to decide if these things are the right thing to do for their business. Then they have to decide if they have the resources to succeed.” “This was also true for us at VRMA while I was president,” he added. “If we had picked one or two of our initiatives to focus on instead of trying to solve the problems of the entire industry, we would have found greater success during that time.”

RISKS IN EXPANSION With a growing number of multi-destination vacation rental managers jumping into new markets, it is tempting for VRMs to expand without weighing in the external funding required. Upon hearing the ASVH story, I had to ask: “If you could go back in time, would you have expanded to Captiva and San Diego?”

“No, I would not, and I advise colleagues and clients on that regularly,” Trover said. “So many of us want to be that big brand with dozens of destinations. Like others, I thought because we were highly successful in one destination, we could easily replicate that success in another. It wasn’t that simple. Just because you are a rock star in one destination, it doesn’t mean you can easily replicate that success in a tight market. Whether you use an organic growth approach or an acquisition model, it’s harder than you think to expand. I am sure a multi-destination company will eventually figure out the formula, but for all the attempts there have not yet been significant successes.” When Trover talks to other managers considering expansion, he asks two questions: Have you maxed out your destination from a market share perspective or is there more you can do to gain inventory in your own market? And do you have the resources for this to fail in the new market for five years?

TRUST ACCOUNTING: AN INDUSTRY-WIDE BEST PRACTICE Only a few states legislate a business practice called trust accounting that requires vacation rental managers to hold rental payments

received from guests in escrow accounts to be distributed to homeowners after guest check-in or departure (depending on the state). The practice of trust accounting protects the funds owed to homeowners by prohibiting managers from using guest payments as operating cash. Even though most states do not require this process, Trover regrets he did not implement trust accounting and believes that—while it cannot be legislated overnight—it should be a best practice for vacation rental managers. “When I consult with clients today, it’s one of the first questions I ask. I think there is a need for a federal mandate or at minimum, state laws similar to those in North Carolina in this regard,” Trover said.

Besides providing accountability, trust accounting—when utilized by a state or market—builds a barrier to entry for new, less responsible businesses. As Trover pointed out, in North Carolina’s Outer Banks where trust accounting is required, the reason there are several large management companies instead of dozens of small companies is that the trust accounting requirements are burdensome for fly-by-night operators. And the greatest benefit is for guests who then work with experienced managers who have established, solid businesses and guest services. In addition, markets that require trust accounting are far less reliant on OTAs for bookings. “From my experiences, being able to ‘sleep at night’ is what shapes markets….and it is why there are so many big companies and not a ton of smaller ones in North Carolina. The barrier to entry in North Carolina is more difficult. I think the quality of properties and services where there are more requirements is higher—the companies and bigger, and there are fewer small fish who lack experience.”

“While I am not a proponent of heavy legislation, I believe Florida should work toward requiring trust accounting by vacation rental management companies,” added Trover. "How do we get to that? It's a bad math problem . . . it is very difficult for a 100-unit Florida management company to get there, especially if they are upside down, and too many are. To be fair, we would need a three-year runway.”

PURPOSE-BUILT INVENTORY Trover believes that developing homes purposely built for vacation rentals still has a future.

“What went wrong [with Fullhouse] was we never scaled this into communities as we had planned to,” Trover explained. “We came very close multiple times, including the purchase of a land parcel from Disney. I still feel very strongly that this concept will survive and thrive, and we will see vacation rentals designed and developed that achieve the highest returns and the happiest customers.” In the vacation rental industry, we are now seeing signs of development and funding for purpose-built vacation rental communities.

CHANGING INDUSTRY The vacation rental industry is rapidly evolving and margin compression is becoming more of a challenge for managers. According to Trover, when managers take their eyes off the core business for expansion, new models, or personal reasons, it is easy to fall behind.

“For 17 years, ASVH was a leading company in Orlando and respected around the U.S. It was only in the last few years that things got challenging.” Trover said. “As many seasoned managers know, it is easy to have a great business for a short time and much harder to maintain success over the long term. When you are successful,

it is easy to think it is going to just keep going, but this industry changes.”

KNOW YOUR STRENGTHS AND ASK FOR HELP SOONER THAN LATER As Trover explained in our discussion, not everyone who starts a vacation rental management company—or any business—has a financial background.

“Get help quickly,” he said. “As entrepreneurs, we think we can fix the problem we caused. However, it is unreasonable to believe that the thinking that caused the problem can solve the problem or, in some cases, even identify it.”

According to Trover, one of the challenges is that when a company doesn’t have strong financial controls, they don’t even see problems when they start to have them. “When you see your balance sheet going down, and the cash flows depleting, you have a problem,” said Trover. “But when you start having difficulty paying owners or making payroll, it is a catastrophic problem. My advice is don’t wait until you get to that point. You must have backup funds in this industry. There are too many variables—weather, the economy, etc. You can’t control everything. Strong financial controls are rare in our category, and so many of us don’t have that background. If you don’t have a finance background, you better go find it.”

BE SMART WHEN LOOKING FOR A BUYER When it is time to sell, finding the right buyer may be more challenging than expected. Trover shared, “Unless you are willing to walk away and not care about the business moving forward you need to view the search for a buyer like you search for a partner. They are going to take what you built and make changes. Try to find a buyer that has similar values to yours.”

PERSONAL EFFECTS As Trover mentioned earlier, many members of his family were involved in the business and the effects of the company’s closure were widespread. However, they have held together in the hard times and stayed true to their love of the industry.

“My family is resilient, and they don’t stay down,” Trover said. “My brother is in operations at another VRM. My sisters started their own company leveraging their experience in the space and my parents are semi-retired. I’m proud to say that my wife is now a fouryear cancer survivor and doing great as a third-grade teacher. I’ve gone from running multiple companies to focusing on consulting. With two decades of experience, both good and bad, I know I can make an impact.”

TO WRAP UP It is easy to tell a success story, but much more difficult to talk about the hard times. However, as many of us who follow the vacation rental industry closely know, there are more management companies struggling with changes to the business than we are able to discuss. In closing, I asked, “If you could go back to 2012 and have a talk with your former self, what would you tell that guy?” Trover replied, “I would remind me what a wise businessperson had already said years prior: ‘Son, you may think you are superman, but you don’t have the cape. Pick one thing you can be world class at and focus on it.’” VRM Intel Magazine | Fall 2018

o ss

i at

I N T E R N AT I O N A L C O N F E R E N C E October 27 - 30, 2018|MGM Grand, Las Vegas

T WO CONFERENCES IN ONE! Who Should Attend? Vacation rental managers, owners, and executives Operations, housekeeping, reservations, and property services staďŹ&#x20AC; Marketing, sales, business development Industry tech, IT professionals + software/app developers Industry suppliers Industry consultants and other travel and hospitality partners H E A D O V E R T O V R M A I N T E R N AT I O N A L . O R G T O R E G I S T E R !

Your Statewide Vacation Rental Managers Association The Florida VRMA represents the professional management of vacation homes, condos and resort units throughout the state of Florida. We are your statewide vacation rental management industry association dedicated to supporting and protecting the $31,000,000,000 per year economic impact realized through the Florida vacation rental industry. The new Florida VRMA continues to deliver the educational programs, legislative advocacy and member benefits to help you to grow your segment of the industry throughout the state of Florida and beyond. Explore what our new regional chapters can mean for your business as a professional in the Florida vacation rental industry. The Florida VRMA is the largest statewide association in the US market today supporting property managers with tens of thousands of vacation rental units. From major Florida attractions to local supporting tradesman, the Florida VRMA has various participation levels for all businesses and industry partners.

Find out what the new Florida VRMA can do for you at

www.fvrma.org or call us at 407-218-6600 VRM Intel Magazine | Fall 2018

Deep Cleans Mandatory Annual Deep Cleaning FOR VACATION RENTALS

By Durk V. Johnson, Industry Consultant and Executive Director, VRHP

nce a year, some of us make an appointment with a doctor for a physical. This is when the doctor “lifts the hood” and makes sure the ol’ ticker and other systems are functioning well. The doctor orders and completes tests; discusses diet, exercise, and unhealthy habits; and makes recommendations to help the body function well.

A vacation rental is no different; it is a property full of systems that need to be checked, tested, and cleaned to ensure there are no issues. In our industry, we commonly refer to this annual checkup for our properties as a “deep clean,” and it is fundamental in making sure homes are the best they can be.

When planning for a deep clean, here are several things to remember:  Check with the property owner before you start. I have had the sad experience of doing a deep clean only to have a construction crew show up and renovate the kitchen. Not a good day!  Before deep cleans begin, train the staff on the deep clean procedures and policies. This would include how to lift the cleaning products being used (some products are only used during deep cleans) and how maintenance and housekeeping will be communicating.  Because each department has specific responsibilities during a deep clean, housekeeping and maintenance will have to collaborate on their schedules,  Maintenance will need to pull out the stove and refrigerator and use a ladder to bring down the high light fixtures as well as perform other tasks the housekeepers are not allowed to, or cannot, do based on the workers’ compensation policy.

Every property manager must have a document that describes what is being done during a deep clean. This document, called a Service Standard, allows the homeowner to know what to expect and tells the housekeeper what is to be done during a deep clean.

When allocating time for a deep clean, the team must know the difference between a departure clean and a deep clean. For some property managers, a departure clean is similar to a deep clean, so the deep clean will not take much time. For others, the disparity between a departure clean and a deep clean is like the Grand Canyon—deep and wide! In this instance, a deep clean will take a very long time.

For most professional vacation rental managers, the annual deep clean is mandatory. If a property sleeps 10 people and the property is occupied for 16 weeks straight, a total of 160 people have stayed in the property! (This number does not count the eight weeks that the guests snuck in an extra five occupants for an additional 40 people during the 16 weeks.) That means the property has been well used. For example, the fridge has been taxed with it going from empty to being full of warm food; the HVAC system has worked hard to keep the property at the set temperature; and indescribable items have accumulated in, under, and behind armoires, beds, sofas, and chairs. With all this occupancy, the property is in dire need of a thorough check and cleaning.

 Maintenance will need to help move the beds and take them apart (many workers’ comp policies say a housekeeper cannot lift over a certain amount; be sure to check your policy). Moving beds and flipping mattresses generally takes two people so as to not strain the back.  Maintenance does an annual walk-through to check all the systems: HVAC, hot-water heaters, boilers, oven cycles (to make sure the correct temperature is reached), how the paint is holding up, etc. Any deficiencies can be reported to the owner so they can be addressed.  Either maintenance or housekeeping can clean the coils with the fridge pulled out. Heavy use causes a buildup of dust on the coils and the dust makes the compressor work harder. A good vacuum with a nozzle can be used to suck the dust off the coils. This is an annual or biannual event, depending on the occupancy.  Housekeeping can do a thorough check for bed bugs with the beds torn apart. They can check the mattress seams, baseboards, bed frame, nightstands, and the carpet for the telltale signs of bed bugs using a $5 LED flashlight.  After the deep clean is completed, floor care can be addressed. Every floor surface needs to be cleaned or polished. Just like the annual physical the human body receives from a doctor, the deep clean is the annual check-up of the property. Once the deep clean, maintenance walk-through, and floor care are completed, the property is ready for the next season. VRM Intel Magazine | Fall 2018

Inaugural Vacation Rental Women’s Summit February 19-20, 2019 The Ritz-Carlton New Orleans New Orleans, Louisiana

Early Registration Fee: $749 through NOVEMBER 30th

vacationrentalwomen.com

2019

New Orleans Feb 19-20 2019

VACATION RENTAL WOMEN’S SUMMIT

Join us for an incredibly special event celebrating women in the vacation rental industry with inspiring keynote speakers, presentations from industry leaders, unique events, workshops, and content tailored to the conversations professional VRM women are having about the industry. Plans for the inaugural Vacation Rental Women’s Summit are being prepared with great care, and we promise you will be treated like the queens and princesses you are. Located on the corner of Dauphine and Canal, the Ritz-Carlton New Orleans is a truly extraordinary hotel, and they have given our group a very special room rate of $239 to $259 per night (or upgrade to the Club Level for $339). Use code VQLVQA when making your reservations. Space is limited, so register and book your room early to secure your spot.

VRMA

Working to Raise the Bar

t’s always great to have the opportunity to contribute to an issue of VRM Intel. The Vacation Rental Management Association (VRMA) is excited to be partnering with the VRM Intel team and serving as the presenting sponsor of the upcoming Vacation Rental Women’s Summit this coming February in New Orleans. Thanks to VRM Intel for this opportunity and for the continued support of VRMA. The more education we can help bring to the industry, the better. Education is the very foundation of VRMA.

We are, after all, a trade association built and governed by vacation rental managers for vacation rental managers. Since 1985, and now more than ever, VRMA has been focused on raising the level of professionalism in the industry and distinguishing our core members—traditional professional vacation rental managers—from the bad actors and outliers who are drawing so much negative attention to our industry. Our education and advocacy efforts, driven by our board of directors, all have in mind the goals of raising the bar, elevating the industry, and advancing the great work this industry has been doing for decades. That’s central to our role in the Women’s Summit and of all that VRMA does. Another example of these efforts is our brand-new Vacation Rental Management Certificate program. Launched in July, this program provides vacation rental managers the opportunity to participate in a comprehensive online certificate program designed specifically to acknowledge and differentiate our professional membership.

This assessment-based program provides a complete view of the roles and responsibilities of a vacation rental manager working in the industry today and is intended for managers (or above) who are in charge of multiple departments in their companies.

This program is not a new concept; this version has been in development for some time. In 2016, the VRMA board of directors commissioned a study to perform research and analysis on implementing a professional certificate program in the vacation rental management industry. This research confirmed that there was and is a high demand for a professional program to designate vacation rental managers who have demonstrated a standard of industry expertise. The study found a high level of support for VRMA, as a nonprofit trade association, to provide this certificate program.

That last point was key; as the only nonprofit industry association focused solely on vacation rental management, VRMA’s motives are clear. It is not a for-profit entity; there are no shareholders or principals. All proceeds from VRMA programs go right back into VRMA and its members. We want to provide more value to our membership through best-in-class programs like this and increased educational offerings both in person and online.

VRMA then began developing the program; key to this process and to the program’s success was the participation of over twenty subject-matter experts in developing the content and assessment.

By Mike Copps, VRMA Executive Director

VRMA arranged focus groups of successful and experienced vacation rental managers and industry experts to articulate the subject areas and competencies that should be covered in this program. VRMA subsequently sent a survey to its membership to validate the work of these experts. The industry experts worked closely with a VRMA staff certification specialist and an instructional design consultant to ensure that the content aligned with best practices in certificate development and principles of adult education. The VRMA board of directors reviewed the program’s content before finalizing it. The result is what is available right now: a high-value program for all stakeholders that raises the standard of awareness and professionalism in the vacation rental industry, delivered in an accessible online format to maximize engagement.

The program contains five comprehensive online modules with information on topics ranging from accounting and finance to maintenance, marketing, and guest and owner relations. Critical components of the business, such as housekeeping safety standards, reservations and sales training best practices, compliance with employment laws and local and federal regulations, and management of dynamic relationships with owners and guests are just a few of the topics covered in this program. To receive the certificate, an applicant must complete all five modules and achieve a passing score on the subsequent skill assessment. Those who achieve a passing score on the assessment can utilize the designation Vacation Rental Management Professional (VRMP) after their names and signature blocks to proudly display their accomplishment to colleagues, clients, and potential owners and guests. Individuals don’t have to take the full exam to utilize these modules; they are also available for purchase on an individual module basis. Companies can also use these modules as part of their training and on-boarding.

Initial feedback has been very positive across the board. In addition to the high value that our educational content is bringing, many of our members have already taken and completed the assessment and earned their VRMP designation. These individuals will be recognized at our fall conference in Las Vegas and throughout the year.

We are very proud of this program and we are looking to use it as a building block for more to come. We’ll be announcing complementary educational offerings and programs in the very near future. Be sure to join VRMA if you haven’t already, or follow us on social media to stay up-to-date on our latest offerings.

We look forward to helping you continue to grow your association. For more information on the Vacation Rental Management Certificate program, visit www.vrma.org/certificate. VRM Intel Magazine | Fall 2018

Continuous Learning

Knowledge is the Key to Business Success By Heather Bayer

“What’s the point of learning about crypto-currency? It will never affect me.”

hat was my sister’s response when I told her I was researching distributed networks for travel and how consumer transactions for vacation rentals might one day be in Bitcoin.

She could be right—she’s in her early 70s, lives in rural Ontario (albeit in the posh part), and has gotten by for years on minimal technology; she hates Facebook and has only recently mastered Spotify. Indeed, there is so much new to learn that perhaps it is best to stick with what is important to us, rather than trying to understand every bright and shiny thing that comes along. So, we got into this lively discussion about learning and what to spend our time on.

It just so happens that my sister is about to start renting part of her home on Airbnb. This isn’t a new activity, since she’s been in the vacation rental business almost as long as I have, but it’s been a while since she last rented, and things have changed.

It’s not a matter of just listing and watching the bookings flow in, as it used to be when we started out. You need to know about marketing on Twitter and Instagram, how to write a blog post (and what to write about), what to put in a rental agreement, and how to manage today’s guest expectations. If you are a property manager, as I am, it’s all about continuously learning how to stay abreast of or even ahead of the competition, in terms of marketing automation, channel management, reservation systems, and managing operations. 98

VRM Intel Magazine | Fall 2018

And that’s just the beginning.

Learning in this industry is like parenting. There’s so much advice from so many people that it’s tough to distinguish what will work specifically for you from what to discard because it’s faddy or irrelevant to your needs.

What do you want to learn? The type of education that is going to be right for you will most likely depend on where you are in your short-term rental journey.

A new owner might have minimal knowledge of how to market, operate, and manage a rental business and may need more comprehensive education than a seasoned operator who wants to upgrade his or her knowledge of rental practices.

At the next level, someone preparing to move into property management will have different learning needs from an established property manager with employees, a significant number of owners, and a larger budget. So, the first task is to define your learning needs, which is easier if you can sort them into the following categories:  Strategic Management

 Operational Management  Marketing

 Guest Services

 People Management  Technical Skills

Take each one and map out what you need to know now, what is important but less urgent, and what could be outsourced. For example, it may be fun to learn about Instagram for Business, but if it’s going to contribute less to your bottom line than a course in converting website traffic to reservations, it may be best to leave that to someone else—or a third-party company that can take care of social media marketing for you.

Formula and offers a range of short courses on numerous topics, with some longer courses scheduled for publication later in 2018.

 (Editor’s Note: In addition to Vacation Rental Formula, the VRMA now has an online VRM certificate program, and RealJoy’s Micah Berg recently launched the Vacation Rental University. While have not yet thoroughly vetted these programs, they are worth investigating)

So where do you learn all this stuff that will make Credible Resources a difference to your business? To identify which resource is going to work for you and how you Should you really trust someone who has been in the business six months and is now telling you how to make $100K a year as an Airbnb host, or the owner of one small vacation rental who is touting consultancy at $100 per hour or offering a course that will unlock the “secrets” of the short-term rental industry? Do you need a “boot camp” experience, or a sampling of the education available at one of the many conferences held throughout the year, or can you glean all you need to know from a Facebook group or a Learning Center hosted on one of the OTA sites? There are plenty of knowledge sources, including the following:

Facebook Groups There are dozens of peer-operated Facebook groups in which owners ask questions about managing rentals and members contribute their knowledge. For a pressing question on an operational topic, you can usually find a quick answer there. However, you’ll find that the quality of the answers differs widely.

Forums The days of the Yahoo group forums are past, but other forums are still going strong, such as the UK’s Lay My Hat (free) and Matt Landau’s Inner Circle (paid membership).

Webinars These can be a great source of information on a single topic, such as social media marketing or insurance issues. The Association of Vacation Rental Operators and Affiliates (AVROA) and the Vacation Rental Management Association (VRMA) deliver monthly webinars featuring known industry experts (free for members).

Conferences There are plenty of events to attend at which you can immerse yourself in the world of vacation rentals over a few days. The largest, the VRMA International Conference, is held primarily for property managers and is worth attending for both the educational content and the army of industry vendors filling the exhibition hall. The Vacation Rental Success Summit (Canada/US) and the Vacation Rental World Summit (Europe) are focused more on the independents, while VRM Intel and VRMA also hold regional events. Some industry software suppliers have their own user events (e.g., HomeAway, Streamline, and LiveRez).

Online Training There are plenty of courses available online, so lay out your criteria for credibility testing and contact them for details. For example, Cottage Blogger has just been relaunched as Vacation Rental

can sift through all the learning opportunities available, start by defining your criteria for a source of knowledge.

There’s a whole industry out there that involves teaching people how to sell courses on any subject without knowing much about it, so checking out the credentials of the person providing the learning is the first step. At the moment there’s no accreditation system for learning resources in our industry. Anyone can put together a professional-looking website, create a course, slap a price on it, buy some Facebook ads, and take your money. And you have no idea whether what you are buying is going to be worth the time you’ve spent and the price you’ve paid. Ask these questions:  How long have you been in the business?  How many properties have you owned and managed?  What experience do you have with property management issues?  Have you spoken at industry conferences?  Have you published articles in any journals or other publications? Check the source’s website for an About page that answers all of the above questions, and if it doesn’t answer them, be wary.

A final note about vacation rental education Our industry changes frequently, whether it’s an algorithm adjustment by one of the OTAs, a threat from a new entrant, a shift in the way guests perceive the business, or new technology forcing us to look differently at the way we do things.

This is why we need to keep up to date with what’s new, adapt and evolve our practices, and be prepared for whatever may come next. Disruption is always on the horizon, and those with the in-depth knowledge necessary to handle change effectively will be the winners in the constant battle to remain successful. Education is key to this process, so when you hear someone tell you that there is nothing new to learn about this business, know that you’ve just overtaken them in your quest for knowledge.

Heather Bayer is co-founder of The Vacation Rental Formula and host of the Vacation Rental Success podcast. She is also CEO of CottageLINK Rental Management, a property management company based in Ontario, Canada. VRM Intel Magazine | Fall 2018

 Orlando, FL  NAVIS Office  www.thenavisway.com

100

VRM Intel Magazine | Fall 2018

 Orlando, FL  NAVIS Office  www.thenavisway.com

HOMEAWAY SOFTWARE ROADSHOW

 St. Petersburg, FL  Courtyard St. Petersburg Downtown  www.software.homeaway.com

NOV

NOVEMBER

NOV

NAVIS PERFORMANCE EDUCATION: NARROWCAST

BLUETENT MIND AND DINE

 Galveston, TX  TBD  www.mindanddine.com

VRMA CONNECT – NEW ENGLAND

 Portsmouth, NH  Portsmouth Harbor Conference Center  www.vrma.org

NOV

0608

NOVEMBER

BLUETENT MIND AND DINE

NOVEMBER

NOV

NAVIS PERFORMANCE EDUCATION: REACH

 Port Aransas, TX  TBD  www.mindanddine.com

NOV

0506

NOVEMBER

BLUETENT MIND AND DINE

NOVEMBER

VRMA INTERNATIONAL CONFERENCE

 TBD  South Padre, TX  www.mindanddine.com

NOV

NOVEMBER

2730

 Las Vegas, NV  MGM Grand Las Vegas Hotel & Casino  www.vrma.com

NOV

NOVEMBER

OCT

OCTOBER

Calendar of Events 13

HOMEAWAY SOFTWARE ROADSHOW

 Gatlinburg, TN  Park Vista by Hilton  www.software.homeaway.com

VRMA CONNECT – HAWAII

HOMEAWAY SOFTWARE ROADSHOW

 Nashville, TN  Travellers Rest Plantation  www.vrhp.org

DEC

VACATION RENTAL HOUSEKEEPING PROFESSIONALS (VRHP) SEMINAR

DECEMBER

 Myrtle Beach, SC  Marina Inn  www.software.homeaway.com

VACATION RENTAL HOUSEKEEPING PROFESSIONALS (VRHP) SEMINAR

 Honolulu, HI  Equity Hawaii Real Estate  www.vrhp.org

APRIL 2019

FEB

1920

INAUGURAL VACATION RENTAL WOMEN’S SUMMIT

MAR

 New Orleans, LA  Ritz-Carlton  www.vrmintel.com/womenssummit

1719

VRMA 2019 EUROPEAN CONFERENCE

 Prague, Czech Republic  Grandior Hotel  www.vrma.org

APRIL

 Chapel Hill, NC  The Carolina Inn  www.vrma.org

 Waimea, HI  Mauna Kea Resort  www.vrma.org

1516

VRMA 2019 SPRING FORUM

 Charlotte, NC  Charlotte Convention Center  www.vrma.org

APRIL

VRMA CONNECT – NORTH CAROLINA

APRIL 2019

FEBRUARY 2019

 Wilmington, NC  Courtyard Wilmington Downtown  www.software.homeaway.com

MARCH 2019

DEC

HOMEAWAY SOFTWARE ROADSHOW

DEC

HOMEAWAY SOFTWARE ROADSHOW

 Asheville, NC  Renaissance Asheville Hotel  www.software.homeaway.com

NOV

DEC

DECEMBER

OPMA FALL EXECUTIVE SUMMIT

DECEMBER

1416

DECEMBER

PHOCUSWRIGHT CONFERENCE

 Sandestin, FL  Sandestin Golf & Beach Resort  www.theopma.org/opma-summit

NOV

NOVEMBER NOVEMBER

1315

 Los Angeles, CA  JW Marriott at L.A. Live  www.phocuswrightconference.com

NOV

NOVEMBER

NOV

NOVEMBER

DEC

DECEMBER

2320

NORTHWEST VACATION RENTAL PROFESSIONALS SUMMIT 2019 CONFERENCE (NWVRP)

 Sunriver, OR  Sunriver Resort  https://nwvrp.org

VRM Intel Magazine | Fall 2018

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VRM INTEL MAGAZINE

Business Directory ASSOCIATIONS

CREDIT CARD PROCESSING

Florida Vacation Rental Managers Association (FVRMA)

Ascent Processing

fvrma.wildapricot.org 407-201-0120

www.ascentprocessing.com 888-721-9301

PAGE: 94

PAGE: 87

PAGE: 94

Vacation Rental Management Association (VRMA) www.vrma.org 202-367-1179

www.lynnbrookgroup.com 919-761-1560

PAGE: IBC

www.c2gadvisors.com 850-699-1828

NAVIS

Guest Experiences PAGE: 01

TRACK www.trackhs.com 866-757-8229

PAGE: 50

PAGE: 48-49

Xplorie www.xplorie.com 866-546-1534

PAGE: 31

INTERNET SERVICES AND VACATON ATTENDANT

PAGE: 45

www.silicontravel.com 800-459-2256

Comparative Data

INTERNET MARKETING AND WEBSITE DESIGN

Key Data Dashboard

BizCor

102

VRM Intel Magazine | Fall 2018

PAGE: IFC

Silicon Travel

Red Awning

www.keydatadashboard.com 410-829-0711

PAGE: 18

INTERACTIVE FLOOR PLANS AND PHOTOGRAPHY go.truplace.com 301-972-3201

Lexicon Travel Technologies

www.redawning.com 888-733-2964

PAGE: 22

TruPlace

CHANNEL MANAGEMENT www.lexicontravel.com 453-631-2391

Weatherby Consulting, LLC. www.weatherbyconsulting.com 888-304-1405

PAGE: 28

C2G Advisors LLC

CALL TRACKING AND LEAD MANAGEMENT www.thenavisway.com 866-712-3439

FINANCIAL AND ACQUISITION CONSULTING SERVICES

Vacation Rental Housekeeping Professionals (VRHP) www.vrhp.org 252-455-4121

PAGE: 02

Lynnbrook Group

Onsite Property Managers Association (OPMA) www.theopma.org 877-870-6510

PAGE: 54

www.bizcor.com 877-736-4250

PAGE: 58

INDEX

PROPERTY MANAGEMENT SOFTWARE

Blizzard Internet Marketing www.blizzardinternet.com 888-840-5893

PAGE: 15

Bluetent Digital Marketing Agency www.bluetent.com 970-704-3240

PAGE: 21

InterCoastal Net Designs (ICND) www.icoastalnet.com 910-575-6095

PAGE: 70

Q4Launch www.icoastalnet.com 910-575-6095

PAGE: 23

Barefoot Technologies Corporation www.barefoot.com 877-799-1110

PAGE: 26-27

PAGE: 11

Condo-World

PAGE: 84-85

TripsIn

PAGE: 64

Product Suppliers

PAGE: 06-07

PAGE: 104

Rented.com

www.rented.com

PAGE: 00

Revenue Management Beyond Pricing

PAGE: 42

SMART HOME AND KEYLESS ENTRY Dormakaba www.dormakaba.com 817-468-3555

ABUNDLE

PAGE: 16

www.pointcentral.com 888-532-3032

Breezeway

TECHNOLOGY CONSULTING SERVICES

PAGE: 39

www.vrmconsultants.com 970-456-4564

CBIZ

TomK Consulting Group PAGE: 40

Proper Insurance

PAGE: 13

PAGE: 82-83

PAGE: 66

PAGE: 59

The VRM Consultants

Property Insurance

PointCentral

PROPERTY CARE TECHNOLOGY

www.tomkconsulting.com 443-310-5110

TRAVEL INSURANCE

PAGE: 72-73

CSA Travel Protection

PROPERTY MANAGEMENT COMPANIES

thegeneraliway.com/vr (800) 348-9505

Vacasa

Red Sky Travel Insurance

www.vacasa.com/ready 503-345-9399

www.beyondpricing.com

www.tripsin.com sales@tripsin.com

www.proper.insure 888-631-6680

PAGE: 12

Virtual Resort Manager

Rental Income

www.booking.com (888) 850 3958

www.cbiz.com/vri 888-883-5696

www.streamlinevrs.com 888-590-1946

Booking.com

www.breezeway.io 857-600-2799

PAGE: 04-05

www.maxxton.com 214-559-7158

www.virtualresortmanager.com 866-849-0817

www.abundle.com 847-743-4445

LiveRez

OTAS AND LISTING SITES

www.condo-world.com 833-628-9723

PAGE: 17

Streamline

NoiseAware www.noiseaware.IO 888-847-5538

www.kigo.net 855-977-0843

Maxxton

NOISE MONITORING

PAGE: 08-09

Kigo, a RealPage Company

HR4VR PAGE: 34

www.ciirus.com 321-251-8020

www.liverez.com 800-343-2891

PAGE: 03

CiiRUS

HR CONSULTING SERVICES www.hr4vr.com 541-213-2075

PAGE: 40-41

www.redskyinsurance.com 866-889-7409

PAGE: 24-25

PAGE: BC

VRM Intel Magazine | Fall 2018

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New from VRMA! Are you looking to strengthen your industry knowledge, sharpen your skills, advance your career and gain a competitive edge in the professionally managed vacation rental business?

Take the next step in your career and earn your VRMA Vacation Rental Management Certificate. Visit vrma.org/certificate to learn more. VRM Intel Magazine | Fall 2018

W H E R E V E R T H E D E S T I N AT I O N . . .

Offer your guests the most comprehensive destination specific travel insurance available in the Vacation Rental Management Industry.

redskyins u ran ce . c o m â&#x20AC;˘ 8 6 6 . 5 4 9 . 5 2 8 3 Coverage2is underwritten by Magazine Arch Insurance Company (a Missouri corporation, NAIC #11150) with executive offices located in New York, NY. VRM Intel | Fall 2018 Not all insurance products or coverage are available in all jurisdictions. Coverage is subject to actual policy language.