VRM Intel Magazine Summer 2019 by Amy Hinote

Summer 2019 Performance

Message to VRMs: Don't Give Up

Riding the Wave of Consolidation Vacation Rental

Danger Zones

Personalizing

the Guest Experience

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VRM Intel Magazine | Summer 2019

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Contents On the Cover

25 Workforce Development: 2019 and Beyond 48 Message to VRMs: Don't Give Up 64 Riding the Wave of Consolidation 68 Personalizing the Guest Experience 82 Vacation Rental Danger Zones

21 Summer 2019 Performance

Summer 2019 Performance

Message to VRMs: Don't Give Up

Riding the Wave of Consolidation Vacation Rental

Danger Zones

Personalizing

the Guest Experience

Business 21 VRM Summer 2019 Performance Snapshot

Marketing 41 Taking Your Digital Advertising Strategy to the Next Level 75 Pinterest: A Vacation Rental Marketer's Modern SEO Strategy

36 Play to Your Strengths as an Independent Local Brand 48 Message to VRMs: Don't Give Up 56 Vacation Rental Revenue Management Glossary 64 Roll with the Changes: Riding the Wave of Consolidation 66 The Evolution of Property Management Software 73 Namolokama: Braided Together

87 10

82 Vacation Rental Dwelling Danger Zones 88 Allowing Guests to Pay Over Time for Bookings

VRM Intel Magazine | Summer 2019

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Contents Customer Service

Human Resources

46 Conflict Management: Are 25 Workforce Development: You Asking The Right Questions? 2019 and Beyond 68 Applying Love Languages to Guest Experience 79 10 Inexpensive Vacation Rental Upgrades Under $100

Education 38 Inaugural Short-Term Rental Regulations Forum Coming to Austin 62 Data and Revenue Management Conference for VRMs coming to Atlanta 90 Calendar of Events

30 Building Innovative Teams 35 Integrating Marketing, Sales, and Revenue Teams for Success 87 A "Speedometer" for Housekeeping Performance

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48 VRM Intel Magazine | Summer 2019

VRM Intel Magazine | Summer 2019

Dear Readers,

The challenge with publishing a print magazine about the fastchanging vacation rental industry is that by the time you get the magazine in your hands, big news stories will have inevitably broken about major industry developments that are not addressed in the following pages. I highly suspect that will be the case this summer. We’ve been hearing that Wyndham Destinations is getting close to making an announcement regarding the sale of its US vacation rental business, and we expect to hear about significant changes in technology companies that will affect a number of vacation rental managers (VRMs).

At my first Vacation Rental Management Association (VRMA) conference 13 years ago, I heard someone say that the vacation rental industry is like the Wild West, a comparison often repeated even today. When I first heard the comparison, I envisioned entrepreneurial pioneers with their families in covered wagons, heading west to stake their claim in a bold, new frontier. Now when I hear it, the comparison feels more like a Wyatt-Earp-styled scene with mob boss cattle ranchers/tyrants backed up by gunslingers taking over pioneers’ farms and threatening the townspeople. In real life, however, over time, the Wild West developed, and communities came together to protect each other, their livelihoods, and their independence. The July 4 holiday was a chance to reflect on independence. As has been the case throughout our history, independence is not achieved by each individual standing alone; it can only be preserved by joining forces with like-minded stakeholders. More specifically, in our industry, independent vacation rental providers need to find a way to come together in a meaningful way to use their collective power to 1) provide much-needed education to guests and homeowners, 2) push back on policy changes by large companies, 3) petition for open and trusted technology solutions, and 4) battle regulations that threaten the industry. In this issue, we look at summer performance across some key vacation rental markets by examining average daily rates (ADRs), occupancy rates, and more. We still believe that access to comparative market data is critical in the vacation rental industry, and we’re happy to see growth in companies like Key Data Dashboard, who provided data for the article. Regarding summer activity, while ADR is higher than last year in most markets, occupancy rates have declined. This article presents interesting data about these metrics, along with changes in average booking window and average length of stay.

We also have articles that address consolidation and changes affecting the industry and that provide a little encouragement that, in spite of the burnout and fatigue many VRMs are reporting, now is not the time to give up. I don’t know what the future holds, but I’ve had the opportunity to take a deep dive into market conditions affecting our industry, and in spite of all of the turmoil, the future is bright. One fun bit of news: At the upcoming VRMA International Conference in October in New Orleans, HomeAway cofounder Carl Shepherd will be joining me on stage to talk about industry changes. Those of you who know Carl know this is going to be a fun session. I’m looking forward to hearing his take on the evolution of the vacation rental sector. I hope you enjoy this issue, and as always, I look forward to your feedback. Sincerely,

Amy Hinote

Editor-in-Chief

VRM Intel Magazine | Summer 2019

VRM intel magazine Editor-in-Chief Amy Hinote Director of Design and Production

Donato Berbelja Copy Editor

Kelly Mutual Contributors

Heather Bayer

Amber Leto

Jodi Bourne

Tyann Marcink

Ali Cammelletti

Andy McNulty

Matt Curtis

Alex Moshenskiy

Justin Ford

Billy O'Sullivan

Jeremiah Gall

Claire Reiswerg

Amy Gaster

Matt Renner

Mike Harrington

Vincent Rosan

Dore Jean

Beverly Serral

Durk Johnson

Jason Sprenkle

Sue Jones

CJ Stam, III

Doug Kennedy

Jinnie Templin

Betsy LaBarge

Travis Wilburn

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 2019 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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Summer 2019: VACATION RENTAL Performance

Average Daily Rates Are Up, But Overall Occupancy Rates Are Down

f you’ve been reading VRM Intel, you know that we have been a long-time strong advocate for comparative data in the vacation rental industry. We believe that having access to objective, reliable market data is critical to making informed business decisions for the vacation rental management company (VRMC) of the future—and these business decisions don’t just include using data for revenue management. We believe that comparative market data sets allow VRMCs to authoritatively communicate with homeowners, help in targeting new inventory, reveal opportunities VRMCs may not have seen otherwise, and equip destinations with ammunition to compete more effectively with other markets.

The data sets in the article were provided by Key Data Dashboard. There are two types of data being offered by comparative vacation rental data companies: source data and scraped data. Source data sets originate directly from VRMCs’ property management systems

and represent real performance by professional management companies. In contrast, scraped data sets are extracted from readable pricing and calendar information on OTA websites and listing websites (i.e., Vrbo, Airbnb, Booking.com). Scraped data sets are broader and include homeowner performance, but they are less accurate. Key Data Dashboard is a source data provider. The information below represents aggregated information from the following markets: the Alabama Gulf Coast, the Florida Panhandle, North Carolina’s Outer Banks, South Carolina’s Coastal Areas, and Tennessee’s Sevier County (Gatlinburg/Pigeon Forge area). The key performance indicators (KPIs) we are examining below are as follows: Average Daily Rate, Occupancy Rate, Average Length of Stay, and Average Booking Window.  Note: Check out more terminology in the Revenue Management Glossary on page 56. VRM Intel Magazine | Summer 2019

Average Daily Rate

June and July Performance: 2017, 2018, 2019 June Average Daily Rate 2017

2018

2019 (as of 7/1)

YOY (+/-)

Alabama Gulf Coast

$342.52

$334.26

$356.95

Florida Panhandle

$337.03

$365.56

$377.45

Outer Banks, North Carolina

$318.01

$408.44

$429.49

South Carolina Beaches

$379.48

$394.96

$411.32

Sevier County, TN

$227.33

$254.13

$257.79

2017

2018

2019

YOY (+/-)

Alabama Gulf Coast

$372.06

$357.16

$387.01

Florida Panhandle

$363.93

$393.56

$411.35

Outer Banks, North Carolina

$398.68

$508.01

$531.89

South Carolina Beaches

$422.17

$436.57

$457.94

Sevier County, TN

$260.46

$286.20

$305.19

2017

2018

2019 (as of 7/1)

YOY (+/-)

Alabama Gulf Coast

-3%

Florida Panhandle

-8%

Outer Banks, North Carolina

-4%

South Carolina Beaches

-6%

Sevier County, TN

-6%

Occupancy Rate

July Average Daily Rate (As of 7/1 Each Year)

June Occupancy Rate (%)

Average Length of Stay

July Occupancy Rate (%) (as of 7/1 each year) 2017

2018

2019

YOY (+/-)

Alabama Gulf Coast

-7%

Florida Panhandle

-11%

Outer Banks, North Carolina

-8%

South Carolina Beaches

-11%

Sevier County, TN

-12%

2017

2018

2019 (as of 7/1)

YOY (+/-)

Alabama Gulf Coast

5.3

5.9

5.3

-12%

Florida Panhandle

5.8

5.9

5.8

-2%

Outer Banks, North Carolina

7.7

7.4

7.2

-2%

South Carolina Beaches

6.4

6.5

6.7

Sevier County, TN

4.0

4.1

4.2

June Average Length of Stay (Days)

July Average Length of Stay (Days) (as of 7/1 each year) 2017

2018

2019

YOY (+/-)

Alabama Gulf Coast

5.8

5.6

5.2

-6%

Florida Panhandle

6.3

6.0

5.8

-4%

Outer Banks, North Carolina

7.3

7.2

-2%

South Carolina Beaches

6.7

6.6

Sevier County, TN

4.4

VRM Intel Magazine | Summer 2019

Average Booking Window

Data Provided By Key Data Dashboard

June Average Booking Window (Days) 2017

2018

2019 (as of 7/1)

YOY (+/-)

Alabama Gulf Coast

Florida Panhandle

-6%

Outer Banks, North Carolina

146

152

159

South Carolina Beaches

108

114

124

Sevier County, TN

July Average Booking Window (Days) (as of 7/1 each year) 2017

2018

2019

YOY (+/-)

Alabama Gulf Coast

-1%

Florida Panhandle

-5%

Outer Banks, North Carolina

164

170

173

South Carolina Beaches

125

124

133

Sevier County, TN

Year-over-Year (YOY) Performance, Summer 2019 2019/2018 YOY Performance (Percentage Change)

June

July*

June

July*

Average Length of Stay June July*

Alabama Gulf Coast

-3%

-7%

-12%

-6%

-1%

Florida Panhandle

-8%

-11%

-2%

-4%

-6%

-5%

Outer Banks, North Carolina

-4%

-8%

-2%

South Carolina Beaches

-6%

-11%

Sevier County, TN

-6%

-12%

Average Daily Rate

Occupancy Rate

Average Booking Window June July*

*July data as of 7/1 each year In June 2019, across these markets, ADR increased while occupancy rates declined. Additionally, in most of the markets, guests booked sooner, not later. As a result, VRMCs may have seen an overall increase in revenue, but individual home performance may have suffered.

Full disclosure: At VRM Intel, we are not revenue managers. However, at first glance, the data sets suggest that prices were too high at the time of booking, and last-minute bookings didn’t fill in the gaps. For markets that rely heavily on OTAs, it is important to remember that sites like Airbnb and Vrbo were charging guest fees, and consumers may have seen an even greater increase in the total booking amount.

The decrease in 2019 occupancy rates is a cause for concern, but a bright spot in the data is the booking window. We have been hearing that consumers are booking more last minute. However, Key Data’s data sets indicate that this assumption may not be accurate; alternatively, if consumers are booking later, they are not choosing properties from independent VRMCs. There could also be a trend of more owners staying in their own properties during the summer. Now that the industry is getting accurate source data, VRMCs are able to take a deeper dive into their company performance versus the market. For example, more insight would be gained by examining the following:

 KPIs for guests coming from core feeder markets  Performance by property type (houses vs condos)  Performance by property size (number of bedrooms, sleeping capacity)  Performance by property location and amenities (beachfront, pools, hot tubs, etc.)  YOY booking pace Local VRMs might also consider market conditions such as weather, traffic conditions, regulatory issues, and construction activity as factors in performance. Working with destination marketing organizations such as convention and visitors bureaus will help in identifying market conditions that could be affecting occupancy.

For VRMs wanting to learn more about data sources and pricing strategies, VRM Intel is hosting a Vacation Rental Data and Revenue Management Conference in Atlanta on August 6–7 (page 62-63). The objectives behind the conference are to take a deeper dive into comparative data products and pricing tools, get on the same page in regard to identifying common industry terms and KPIs, examine revenue management practices, and find new uses for both internal and market data. VRM Intel Magazine | Summer 2019

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VRM Intel Magazine | Summer 2019

| HUMAN RESOURCES

Workforce Development 2019 and Beyond By Sue Jones

ne thing is for sure. In the coming years, as business owners you will need to become more flexible with your workforce to ensure that your business continues to adapt and thrive. The most important conversations among business leaders today focus on the future of work, what the workforce will look like, and the challenge to attract, engage, and retain top talent. Think about the changes in the vacation rental industry and how your workforce may need to adapt.  Have you considered how the high speed and pace of technology change may affect your current workforce?  What are you doing today to prepare for your future workforce?  What is your strategy to remain relevant in your marketplace? As you consider your answers, it’s important to understand today’s employment landscape, and what you as employers can do to get ahead of this curve. Scanning the environment is key to understanding the employment climate. While the economy is still thriving, there is a labor shortage for

all industries across the spectrum. Record low unemployment (May’s unemployment rate of 3.6 percent is the lowest rate since December 19691) combined with tighter immigration policies is making it challenging for employers to attract and retain the right talent. Although unemployment remains low, there are still many jobs available. The problem for employers is that there isn’t a skilled workforce to fill all the open positions. A study by Bloomberg and Workday found that college graduates are not bringing enough technical or soft skills to the job market; in fact, only 35 percent of employers feel that college graduates are sufficiently ready to join the workforce.

Hiring talent remains a top concern for CEOs. As reported in the most recent Conference Board annual survey, CEOs stated that the failure to attract and retain top talent is the number one issue on their minds. The Conference Board found that business leaders view the unavailability of talent and skills as the biggest threat to their business and that they recognize how the high cost of outside hiring may affect their business decisions. VRM Intel Magazine | Summer 2019

Business leaders are focusing their attention on people analytics (data analytics for your workforce) so that they have the data they need to make strategic human resources decisions. There is a lot of talk about data analytics in the vacation rental industry, but the focus has been on finance, marketing, and sales. Imagine making a business decision to change your PMS without using financial reports and other data analytics to guide your decision. Most business leaders would not make that decision without fully understanding their ROI. Yet this is exactly what most people do when making key decisions that affect their human resources. People analytics has the ability to touch every aspect of managing your human resources, from calculating the cost of turnover to measuring the productivity and engagement of your workforce. Now is the time to focus on people analytics and the largest expense line—your labor. Employee demographics are shifting. For the first time, there are five generations in the workplace, and this requires a new way of doing business. Companies are bracing themselves for an influx of millennials. Millennials are now the most prevalent generation in the workplace and are on track to make up 50 percent of the workforce by 2020. Generation Z is following in their footsteps. These two youngest generations will comprise nearly 70 percent of your employees in the next few years. What are you doing now to prepare for this generational shift?

With five generations in the workplace, it means that the solutions you currently have in place for attracting, engaging, and retaining talent can no longer be deployed as a one-size-fits-all approach. Engaging five generations in the workplace side by side requires you to actively seek out and value diversity and inclusion. Focusing on creating a more diverse workplace and workforce at all levels in your business is a competitive advantage. It’s important to not dwell on differences. Dwell instead on how to best engage this diverse workforce. Start building collaborative relationships, finding ways to encourage more diverse thinking. Creating opportunities for employees of different generations to interact in both work- and nonwork-related settings can help to build relationships and minimize misunderstandings, creating opportunities for cross-generational mentoring. Don’t automatically assume that younger generations will be mentored by older generations. All age groups have opportunities to learn from one another. Consider the different life paths of your employees. Critical points for engaging them are understanding where your employees are at in their lives, learning their personal preferences, and recognizing how they expect to be compensated. Technological advances, including AI, continuously change the employment landscape. Today jobs are not necessarily disappearing, but they are being augmented by technology. As technology becomes more affordable and mainstream throughout the vacation rental industry, it is changing the very nature of how we do our work.

Automation is now reaching into the office, making the way we work today look nothing like it did a few years ago. As machines take over mundane tasks, employers are expecting more complex, creative, and varied functions from their employees. Continuously review your technology solutions and automation to apply new technologies to streamline repetitive tasks. Online collaboration tools, shared drives, videos, YouTube, Facetime, Skype, Zoom, etc. are changing the ways employees get their work done. The ever-changing nature of the employment landscape puts more

VRM Intel Magazine | Summer 2019

pressure on employers when it comes to attracting and retaining employees. With increased competition and online reviews, customer expectations are going up, resulting in your customers seeking an authentic customer experience. They are shying away from generic customer service responses. Today’s customer expectations require your employees to deliver an authentic product and service experience. The focus now is on deciding how to best use AI to help your employees do their jobs better. Scanning the environment is key to understanding emerging workforce trends. Listed below are several things that you as employers can do now to get ahead of this curve.

Create a compelling employee experience that attracts talent

Today millennials are looking for more than stability, competitive wages, and benefits to be committed to a company. They are driven by a sense of shared purpose. Understanding their part in the bigger picture is what drives them to bring their best to the workplace. By 2020, employee experience will be as important as any other factor for your company’s success. Figuring out the gap between what the millennial workforce expects and what your workplace has to offer is important. Millennials are all about convenience, connectivity, and functionality. Start by incorporating tools and technologies that enable their productivity.

Become the employer of choice in your marketplace

Employers of choice know what their competition is doing and how they stack up against the competition when it comes to attracting, engaging, and retaining talent. Today, employees are looking for a healthy workplace culture, opportunities for learning and growth, more interesting or challenging work, a variety of tasks, and of course more competitive pay, benefits, and incentives. To remain competitive you need to be offering more benefits, such as health insurance, 401(k) or savings plans, time off to volunteer, flexible schedules, and an ability to work remotely. Think about your business and focus on what will differentiate you as an employer of choice in your marketplace.

Embrace automation

Focus now on deciding how best to use technology to assist your employees with doing their jobs better. The World Economic Forum predicts that 42 percent of workplace tasks will rely on some form of AI or automation by 2022. Although technology will play a big role in your team’s productivity, Deloitte’s 2018 Global Human Capital Trends report states that the most sought-after talents of future employees won’t be purely technical skills like coding or cybersecurity. They will be “essentially human” soft skills like creativity, communication skills, and complex problem solving. Embracing automation and using technology more effectively will free up your workforce to spend more time on innovation, collaboration, and business planning.

VRM Intel Magazine | Summer 2019

the skills you need and the employees who are interested in learning them; then provide employees with the education assistance (and the time) to obtain the skills. The cost of reskilling is considerably lower than the cost of firing and hiring. Back to people analytics, understanding your cost of hiring and terminating is vital to developing your talent. For example, it may cost $6,000 to hire an employee or $3,000 to provide additional training and education for a current, engaged employee—to reskill that person so as to bring more relevant skills to your business. Investing in your employees’ development is a win–win.

Train now for trending skills

By 2022, no less than 54 percent2 of all employees will require significant retraining or reskilling. Of these employees, 35 percent could require training for up to six months. Skills continuing to grow in prominence are emotional intelligence, analytical thinking, and innovation, followed by active learning and learning strategies. With the advancement of technology and AI in the workplace, employers will see a decline in roles that require skills such as manual dexterity, quality control, coordination, and time management and technology use (monitoring and control).

Assess your managers’ emotional intelligence (EQ)

Soft skills training is essential to developing your workforce, and at the top of the list is EQ. As Marcus Buckingham says, “People don’t leave bad companies, they leave bad managers.” Providing more training for your managers on soft skills, such as how to give effective feedback, setting smart goals, and dealing with conflict will go a long way toward improving your employee engagement and retention. Set your managers up for success. Your managers have the greatest impact on engaging and retaining your workforce.

Develop the talent you can’t find

The best employees are made, not found. Given the war for talent, you have to think differently about what the job is and who is going to fill it. Businesses no longer have the luxury of finding individuals with the skill sets and the talent key to their business, so retraining and reskilling current employees is on the upswing, focusing on the skills that are in high demand. Start by identifying 28

VRM Intel Magazine | Summer 2019

Tapping into diverse recruitment pools is a must

Looking for talent outside of your normal channels and pipelines is important for successfully hiring talent in today’s economy. There are several disadvantaged groups to focus on, such as veterans (and military spouses), remote workers, disabled workers, family members reentering the workforce, and individuals with criminal records. Employers are now widening their search for applicants to consider candidates with criminal histories, as one in three adults (70 million Americans) currently have a criminal record. What types of criminal records are you as an employer willing to overlook? According to the Society for Human Resources and the Charles Koch Institute, employers are more likely to hire people with a criminal record of substance-related felonies and misdemeanors than those who have committed financial crimes or violent or sexual felonies. Employers are willing to consider candidates with criminal histories if they have good references, a solid performance record, and training in skills the employer is seeking, according to the report. Several states are starting to offer certificates of rehabilitation. Currently Arizona, California, Illinois, Nevada, New Jersey, and New York offer rehabilitation certificates or something similar. To harness the potential of this future workforce, start by incorporating tools and technologies that will assist your employees in doing their jobs better. Focus on engaging and retraining or reskilling your current workforce. Developing a workforce culture that creates a sense of community—a sense of belonging and purpose—is essential to attracting and retaining talent today. Set your managers up for success with soft skills training. Providing training for your managers on soft skills has a direct correlation to business profitability, increased ROI, and engaging and retaining your workforce. 1 2

US Bureau of Labor Statistics (update June 7, 2019). Future of Jobs Survey, 2018 World Economic Forum.

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 US Navy, holds a Master’s Degree in Business Administration from Northeastern University and is both SHRM-SCP and SPHR certified.

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VRM Intel Magazine | Summer 2019

Building Innovative Teams

| human resources

By Ali Cammelletti

ave you ever encountered someone who exuded passion about his or her career, hobbies, family, or even the beauty of life in general? I had the privilege of meeting such a person named Paresh on my recent plane ride home from Peru. The conversation started after Paresh volunteered to switch seats so our families could sit together. I remember talking about family, where we were both traveling to and from (my family was on the way home from Peru, and he and his family were visiting potential colleges), and then about our line of work.

Of all of the people I could have been seated next to, it turned out to be Paresh Shah, who is a keynote speaker, the founder of Lifter Leadership, and a partner in The Non-Obvious Company. We connected about topics such as the women's movement, trust in the workplace, creating innovation through Non-Obvious thinking techniques, amazing new approaches to effective leadership, and my favorite topic, gratitude.

At the end of the flight, he gifted me a little bracelet and his card, sharing his TEDxYouth talk on Lifter Leadership with me. After being drawn to this simple purple bracelet with little whales on it and continuing to wear it each day, I realized I needed to watch his talk. That is when I understood his message completely. TEDxYouth invited Paresh to come to Hong Kong and present his Lifters talk to the youth of the region because they believe the younger generation will start to create change in our world very soon. They felt so strongly that young people needed to hear his powerful message that his talk was streamed live to elementary, secondary, and high schools. I, too, resonate deeply with the four “Mindshifts” that organizations must make to embrace Lifter Leadership and realize the power it has to engage today’s workers, drive innovation, build trust with customers, and change the world.

What struck me was how the Lifter Leadership approach was universal, so relevant to today’s times of broken leadership and the ways it could resonate with all people, young or old, men or women, senior leaders or frontline workers, and people from all cultures. When Paresh shared the inspiring stories of Lifters he met on the road, he lit up like fireworks at 30,000 feet, knowing his Lifter message was changing the hearts and minds of CEOs, governments, line workers, and youth everywhere—he was a man on a mission to change 30

VRM Intel Magazine | Summer 2019

the world. A Harvard MBA and leadership guru-well-versed in mindfulness, yoga, and ancient wisdom-was now shepherding a message, along with practical methodology, on how positivity, purpose, compassion, and creativity were not only compatible with success, they were essential to success and survival.

This reminds me of a story recently shared by a client. A vendor in the vacation rental industry told a homeowner how lucky he was to work with Bennington Properties, the company that manages his home. He said, “I would follow the owner of this company into a burning house.” Why? Knowing Robert Bennington, I knew exactly why! It is because he is a Lifter! His leadership team and employees are so loyal and appreciative of him. He uplifts his employees, his customers, his partners, and his community. They will follow his lead anywhere, knowing his integrity and intentions are always positive. Many members of his team have worked there for decades. Lifter Leadership can help solve the five biggest problems companies face:

 The Need for Innovation 88 percent of CEOs are unhappy with the pace of innovation. (Fredrik Harenstam, Ben Thuriax-Aleman & Rick Eagar, “Systemizing Breakthrough Innovation,” Arthur D. Little, February 2015)

 Employee Motivation Seven out of ten workers are disengaged in America. (Society for Human Resources Management)

 Building Trust and Loyalty with Customers Only 56 percent of consumers trust companies.

(Edelman, “2019 Edelman Trust Barometer,” January 20, 2019)

We cannot do things the way we have in the past because it no longer works, and we must embrace this change now. The Lifter Leadership model our new frequent flyer friend shared with us is the first holistic, teachable way to address all five challenges above. Solving these problems will not happen overnight, but the Lifter principles and skills make sense, and many practices can be conveyed in a short hop from Los Angeles to Seattle with time left over for some Netflix.

Lifter Leadership creates engaged, innovative, loyal ambassadors for your organization by applying the Four Lifter Mindshifts. Paresh says, “Mindsets often can be too rigid. People get fixated and rigid, when, in fact, we need to adapt and evolve. Society is rapidly going through a major transformation. Just look at the contrast and chaos in the world. It’s a clear indication that the world is shifting into a new era, a whole new world. We need to evolve the way we think, speak, and behave, and it doesn’t happen overnight. Like anything new, it takes practice. The “Four Lifter Leadership Mindshifts” Paresh shared reminded me one of my favorite books, which I use as the foundation of relationship-building sales: The Four Agreements by Don Miguel Ruiz. The Four Lifter Mindshifts are these: The Hunt is Over, Tune or Consequences, Be a Yes AND Leader, and Take Invictus Action. Here’s my take on them:

 1 The Hunt is Over In the outgoing model, much of business has been about exerting power over others (customers, employees, suppliers, competitors). Lifters move beyond being transactional to bring purpose and positivity to serve those around them, rather than seeing them as prey to hunt.

Robert Bennington recently proposed the following purpose for his leadership team, asking for their feedback: “Change people's 64 percent of CEOs say corporate social responsibility is crucial to lives, make dreams come true, and live lives of abundant, overflowtheir business. ing joy.” He shared that he is working to have a full-time coach on staff to work with his leadership team on aligning their individual (PwC, “19th Annual Global CEO Survey,” January 2016) purpose with a corporate purpose.

 Leading with Purpose

 Reducing Workplace and Academic Stress

75 percent of employees have more on-the-job stress than they might have had a generation ago.

(Rashaun Roberts, Paula L. Grubb & James W. Grosch, “Alleviating Job Stress in Nurses,” NIOSH & Medscape, June 25, 2012).

I personally see each of these challenges in companies I coach. It is real, and it takes a toll on employees, leaders, company performance, and all of their futures.

I am watching middle managers struggle with the stress and how to manage each of these areas. Many managers want a quick fix, which is common in today’s world. However, progressive leaders understand that working through these challenges takes a systematic approach, inner reflection, a consistent message, patience, and a desire to make a difference and be purpose-driven. After hearing that 70 percent of our workforce in 2020 will be millennials and Gen Z, the need for this major shift becomes even more apparent. As Paresh points out in an entertaining and endearing dig at his Indian father, “Older generations have always criticized younger people, and much of the criticism of new, younger workers is misguided and unfair because we are leading them with outdated approaches . . . This generation wants to work with companies with strong Lifter cultures that have purpose, positivity, authenticity, and integrity—they simply won’t stand for less any longer and they really shouldn’t.”

Decades ago, few executives would have been as bold as Bennington. Today such boldness is more commonplace and not so far-fetched, from a bottom-line perspective. Newsweek recently published an article explaining that people with a sense of purpose live longer. The article defined purpose as “a self-organizing life aim that stimulates goals, promotes healthy behaviors, and gives meaning to life.” Who wouldn't want that in a company they work for? Scientists aren’t able to identify the exact link between living longer and having a purpose. Some people suspect it could be due to preventing genes linked to inflammation, a major factor in disease, pain, and workplace absenteeism and presentism.

 2 Tune or Consequences This second Lifter Mindshift is all about embodying authenticity and integrity in every aspect of your business—your products, marketing, internal processes, and treatment of others. Paresh talked about how sensitive today’s younger generation is to inauthenticity and how attuned it is to authenticity. These young workers have no tolerance for companies Instagramming pictures of their executives doing “socially responsible” deeds while treating workers unethically across the globe or dumping toxins in the environment. Customers and workers will proactively, or often subconsciously, move toward companies they feel are authentic and shy away from those they feel are dishonest. I have been working with Robert and his team to discuss the company values and how his leadership VRM Intel Magazine | Summer 2019



team can embody them during 2019 as a goal for the company. We have been digging into how employees are living the values and what it looks like when the values are compromised. The goal is to celebrate successes and coach employees on opportunities, striving to live the values in all ways.

 3 Be a YES-AND Leader This is one of my favorite Mindshifts and speaks straight to my heart. In the outgoing model, organizations would box people into specific role types and stereotypes—front-line cooks and cleaners, quantitative people, salespeople, operational people, etc. Jobs would be defined in a constrained way that left little room for people to express their unique creativity. Who wants that?

With so many organizations struggling with diversity and innovation, the Lifter Mindshift gives people permission to express their “Yes AND” gifts and skills. It helps organizations recognize, tap into, and skill up to benefit from encouraging their team members to align their own passions, interests, and uniqueness with their responsibilities. Part of the reason so many workers are disengaged is that they feel they are treated like automata who do not think.

When Lifter leaders help employees apply their unique gifts to their jobs, even in the smallest of ways, they unlock a treasure trove of commitment, innovation, passion, and drive that they never saw before. When I look at Robert’s “Yes AND,” I see a business owner and father of six who homeschools his children and takes his boys sailing to learn about math, physics, geography, oceanography, government, and marine biology. His leadership team is constantly in awe of him and his dedication to the business and his family.

VRM Intel Magazine | Summer 2019

 4 Take Invictus Action Lifters take action in compassionate ways and seek ways to help everyone win, not just a few people. One of the skills taught under this Mindshift of Taking Invictus Action is “Redefining victory.” For many business owners, having a thriving business is a victory. For Robert, supporting and growing the people who make his business thrive is victory. This action, in turn, creates a leadership team that does the same with its members, in their individual departments. The members then flow this same purposeful action into their everyday encounters with coworkers, guests, suppliers, the community, and even so-called competitors they cooperate with to serve customers if needed. Everybody wins! This Mindshift was inspired by Nelson Mandela’s campaign to forge unity in the divided country of South Africa—creating true beauty, harmony, and victory of a new kind.

This is a high-level overview of the Lifter Leadership approach and the Four Lifter Mindshifts Paresh shared with us. What resonates most with me about these Mindshifts, is that they apply to all employees, from owners to front-line staff. Each Mindshift has specific teachable and learnable skills, and teams enjoy practicing them. We know the Lifters in our lives and workplaces. They make things better, and people are drawn to them.

 It’s a whole new world being created, and Lifters are the New Leaders of this world.  —Paresh Shah

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| HUMAN RESOURCES By Vincent Rosan, NAVIS Consultant for Vacation Rental Businesses

Unified Teamwork

Integrating Marketing, Sales, and Revenue Teams for Success

t’s no secret that when teams work together, organizations benefit. Vacation rental management companies (VRMCs), in particular, can reap significant advantages when their marketing, reservation sales, and revenue teams operate from the same data playbook—or more specifically, the same platform. The cornerstone of team integration is collective access to the same data. It’s the single most important strategy to positively affect employees, guests, and the company’s bottom line. When all parties work with the same information, you can streamline processes, better connect with guests, and determine what’s truly successful for your VR business.

one in the next year (Digital Doughnut). This shows the impact companies want to gain from their data management platforms, but many data platforms don’t add up to return on investment (ROI) because of decentralized data, which is frustrating and expensive. Think about how much time is wasted searching for information when it’s spread across multiple platforms—a problem easily solved by storing information in a consolidated and accessible place. Having a better understanding of where a lead originated and what the pathway was allows reservation sales to better nurture and convert leads. This gives potential guests the personalization they crave, which can lead to a superior experience and more bookings.

Creating Efficiencies and Optimizing Performance

Team Performance and Accountability

The relationship between reservation sales and marketing is most productive when information consistently passes between the teams. Unbooked leads are your competition’s database; therefore, it’s essential for reservation sales to seamlessly refer data to marketing, who can then utilize remarketing and marketing automation tactics to reach out to past guests and lost leads.

Creating a culture of accountability enables leaders to rationally distribute resources and watch their staff thrive. Tracking employees’ performance can illuminate their strengths, which can then be appropriately leveraged; this also sheds light on employees’ weaknesses or areas in which training might be beneficial. Similarly, creating a sense of accountability by department allows supervisors to see where room for improvement regarding processes or procedures lies and where additional resources may be necessary. This added layer of transparency reveals how each employee’s efforts reinforce a collective goal, creating a sense of pride and purpose throughout the organization.

When reservation sales, marketing, and revenue teams cross-utilize data, it allows for a complete view of the guest’s journey—from inquiry to post-stay—that leads to smarter decisions. For example, if marketing wanted to create a shoulder season offer for price-sensitive prospects who called last year, they could remove anyone who has booked a stay. After all, no VRMC wants to have a guest call to say they received a better rate for a trip they’ve already booked.

Improving the Customer Experience Working from the same data also allows you to gain a 360-degree view of the prospect or guest, leading to consistent messaging—no matter who is interacting with them. It enables all team members to communicate the value of the home, community, and destination in the same way and to tailor that messaging to the lead’s interests. All team members can be confident they’re sharing the same information about any on-site amenities, common areas, or other perks. Additionally, they will be able to see any special offers a lead has been presented, thereby avoiding any uncomfortable rifts in the guest experience. When teams are aligned, it gives guests confidence in the property and a better experience throughout their stays. Having all historical customer information on one platform allows for an elevated experience from all guest touchpoints. Marketing can use automation to deliver emails to the right people at the right time; sharing personalized communications before, during, and after guests’ arrival ensures they have a wonderful stay and drives repeat visits. Businesses can then leverage post-stay survey data for marketing segmentation and further personalization.

Understanding the ROI Recent statistics show that 44 percent of marketers say they use data management platforms, and 33 percent are planning to utilize

The Importance of Operating with a Hospitality CRM Platform When an entire VRMC uses the same information to work together toward a common goal, it leads to greater efficiency and improved performance. Integrated teamwork will look different depending on the organization, but it all starts with a unified platform. Each team possesses a different, equally important piece of the puzzle, and a fully functioning customer relationship management (CRM) system will combine them to provide a clearer picture in the form of a comprehensive view of the guest. With NAVIS—the only complete hospitality CRM platform—reservation sales, marketing, and revenue management truly operate as one team, positively affecting employees, guests, and the company’s bottom line. With more than 10 years of combined hospitality business management experience, Vincent’s career has afforded him the opportunity to work with over 1,000 property managers and hospitality leaders in a consultative sales role. Vincent is passionate about helping businesses grow and prides himself on providing unbiased insight into areas for organizational improvement. Each vacation rental company is unique, but most companies’ core goals remain the same. Vincent’s mission is to assist this ever-growing industry by helping the people who make it tick achieve their goals. VRM Intel Magazine | Summer 2019

By Douglas Kennedy, President, Kennedy Training Network

Privately Owned VR Companies

Play to Your Strengths as a Local Brand

ike virtually all industries these days, the vacation rental (VR) business is experiencing a period of extreme disruption. For so many years, this lodging industry niche was overlooked by large corporations and travel distribution companies. I remember when I spoke at my first VRMA conference in 1996 when I was expanding my hotel training company into the VR space. Back then, the hotel industry was suddenly being severely disrupted by a number of factors, such as the emergence of hotel mega-brands, new pricing, revenue-management data (STR Reports), and a tidal wave of new distribution models, now known as OTAs. Yet the VR space seemed immune to these changes and remained a relatively simple business for many more years. Attempts at creating the first large national brand (ResortQuest) fell short. Revenue trend-reporting companies like STR showed no interest in the VR space, probably because they saw the complexities of aggregating the data (too many nonstandardized unit types and attributes and far more PMS systems than the hotel side). Most VR companies continued to thrive as locally owned “mom-and-pop” business models, a large percentage of which were truly owned by a mom and a pop!

During this time, there was a change in the VRMA board leadership, and I took a break from a 10-year run as a conference speaker, skipping five straight years, and instead focused on training in the traditional hotel and resort industry. When I returned to VRMA as a speaker in 2015, I was absolutely amazed at how much had changed. Now it seemed the VR industry was suddenly facing a level and pace of disruption even beyond what I had seen happen to traditional hotels. These changes included the following: 36

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Emergence of enabling technologies for “by owner” rentals This included “smart homes,” remote key access, and of course owner-friendly distribution websites such as VRBO and Airbnb.

Established national brands (hotels and others) entering the VR market Initially, the buzz was all about Wyndham and Choice, but now we have the premier brands such as Accor and Marriott moving in.

OTAs promise to create new demand OTAs promise to expose new clients to the concept of a vacation rentals, but they charge significant fees to do so, possibly inserting themselves between the company and its existing direct-booking repeat guests.

Data and revenue management Tech companies are offering data and systems for dynamic pricing and better revenue management. Yet when I speak with our numerous KTN vacation rental training clients, it seems that by far the biggest disruptor of all is the proliferation of national (and international) VR focused mega-brands entering the market, backed by seemingly unlimited private equity venture capitalist funding. These companies are buying up local brands and syphoning off inventory by offering guaranteed rents and seemingly lower commissions while cutting operational costs by pushing guests to use apps and by outsourcing operations.

Certainly, these companies will continue to experience some degree of success, just as the mega-brands have in the hotel space.

| business However, there is plenty of market space open for local brands in the VR space, just as the independent “boutique” and “lifestyle” niche lodging has continued to thrive. (In fact, in recent years independent hotels have shown a significantly higher growth in ADR and RevPAR than branded hotels.) Since the vacation rental business is by definition about vacations, which are very personalized travel experiences, local brands can be especially successful if they play to their strengths when selling and servicing guests. Similarly, most owners of VR homes have a personal connection to their place. Therefore, if local brands find new and better ways to engage with owners, they can also out-service the mega brands to protect inventory. In summary, here’s my message to the locally owned vacation rental leaders: rather than trying to fight the latest disruptors by playing their game, beat the disruptors by playing your game really well! Here are some suggestions:

Encourage human interactions with guests Be accessible when they need you the most. Mega VR brands seem to be doing everything possible to push guests away. Perhaps it is because they buy in to what I call the “millennial tech myth” and truly believe guests prefer full automation, but I also suspect it is to reduce labor costs. Instead, go the opposite direction and take advantage of having in-house, on-site experts.  Post your phone number prominently on your website, especially on your mobile website.  Add text next to the number that says something like “Call our local area experts,” or “Call our in-house vacation planners.”  Provide online click-to-chat, but train your staff to offer to call the guest right away if the exchange gets complicated. If the guest is asking for opinions on which property to book, or if their words start to indicate frustration or dissatisfaction, click a note that says, “May I call you right now to better assist?”  Post after-hours numbers prominently in the rental accommodations so that guests can reach someone with a quick question at a critical moment.

Empower your frontline staff Guests are more likely to experience problems and quandaries during a stay in a VR home than in a hotel room for many reasons. The accommodations are larger and have more moving parts. Larger and more diverse age-group parties stay as guests, and guests spend more hours of the day in their accommodation than they would at a hotel. Being local and having actual employees on the ground, as opposed to VR brands who have to rely on less-loyal contractors, allows for empowerment of the frontline staff. Push decision-making power down the organizational chart to your company’s “first responders,” who are closest to the guests. Responding promptly and reacting with creative solutions can generate goodwill out of what would otherwise result in a stinging review. Similarly, empowered colleagues who go above and beyond for guests’ special needs can turn indifferent guests into social media promoters.

Put names and faces on your local brand, literally! Buy business cards for all guest contact staff, including maintenance and housekeeping supervisors. Include head shots in email signatures. Post pictures of support staff, such as a group picture on

the “about us” company page and photos of key players who service owners. Make sure your website tells the story of your company’s founders or owners. Today’s guests crave local, authentic experiences and want a “feel good factor” when spending their discretionary funds with small businesses. If your company owners are up for it, make them as visible as possible. Otherwise, promote a key leader as the local face of the company.

Train your staff to proactively offer local insider’s tips and to volunteer information beyond what is asked for Encourage your rental sales staff to sell vacation experiences and your on-site operations people to volunteer helpful ideas during conversations. This might require you to conduct a bit of local area familiarization training to bring your staff up to date on local attractions and events, as locals often are too busy to do what tourists do.

Embrace both high-tech and “high-touch” business practices Find ways to use tech to increase a sense of “touch.” (People of all ages and cultures appreciate this.) Reservations agents should use screen sharing to walk guests through online images instead of sending them links or directing them back online. They should also send camera phone pictures when guests have specific questions. If you ask me, the biggest opportunity right now is to use personalized, individual video email to engage prospective guests, connect with in-house guests, and personalize communications with homeowners. For two years now I have been sharing this concept in my VRMA conference presentations and private on-site trainings, yet the adoption rate has been very low. If you are interested in this, just shoot me an email (doug@kennedytrainingnetwork.com), and I will respond with a sample message. I recommend a particular app that can be used on any smartphone to quickly and easily send personalized messages such as the following:  Personal video welcome messages (at least for those booking higher-priced homes, multiple units, or longer stays). This takes less than two minutes, so not having enough time is no excuse.  Sending all in-house guests a welcome message of the week with insider’s tips provided by staff.  Video messages to homeowners and prospective homeowners still in the funnel. This is a concept that I do not see mega-branded VR companies ever embracing, and, even if they tried, it would be difficult to personalize from a remote location. Your staff, on the other hand, can easily work this into their day-to-day business practices because it takes even less time than sending a guest a personalized email or text. In summary, the vacation rental industry is at a fork in the road. Mega companies are headed in one direction, which is to rent out units as if they were a commodity like an airline seat. They will end up homogenizing the VR business to some extent, just as mega hotel brands have done. Today, if you book a room at a full-service Hilton, Marriott, or Intercontinental hotel, your room will be essentially the same. A Hilton Garden Inn feels identical to a Courtyard Marriott or Holiday Inn Express, and they all serve the same free breakfast. Yet boutique and lifestyle hotels reflect a fast-growing niche, where rooms command a higher ADR. Surely, national VR brands will succeed at what they do best, and some guests and owners will give them a try. However, if local brands do what they do well and do it with pride and passion, they can continue as viable businesses for many years to come. VRM Intel Magazine | Summer 2019

| education

Smart City Policy Inaugural Short-term Rental Regulations Forum Coming to Austin, August 16

h en I was coming up in local politics, a community leader would hold meetings throughout the day with people from opposing sides of any issue. Those meetings could be chaotic at times, with people representing different positions sitting together and outlining their separate points. He seemed to bring many opposing sides together this way because they would find some common ground on which to build a solution.

He said to me, “I believe if you get them in the room and put them around a table together, the answers will find themselves. The groups will learn about each other, understand their various positions, and find an answer to their shared problem.”

Cities and towns of all sizes have been troubled for the past ten years with a shared problem: how to create effective regulations of vacation rentals (or short-term rentals) that work and achieve compliance. On August 16, in Austin, Texas, a first-of-its-kind summit will bring together the three core groups who have been working to address this issue—tourism boards, local government, and vacation rental leaders.

The goal is simple: learn from one another about how to communicate better and create local rules that address management, registration, inspection, auditing, accounting, tax remittance, safety, quality of life, and more. We want to get the biggest group of tourism, city, and vacation rental leaders together and find solutions to their challenges.

As the old community leader told me, “Get them around the table.” Our firm has held dozens of these conversations around the world over the past two years, but none were so enlightening as the most recent in Sonoma, California. There, on a gorgeous spring day, we assembled representatives from local townships, the regional travel 38

VRM Intel Magazine | Summer 2019

association, and vacation rental managers.

I threw out questions and posed topics to address the standard challenges that each side faces, and the attendees began to answer. At first their answers came slowly and only to me, but eventually they began to look at one other and converse. Before I knew it, they were sitting around the table and finding answers to their problems.

For the travel industry leaders, problems seemed to revolve around questions about safety and quality of the local experience for travelers. They also cared about creating regulations to ensure any applicable taxes are paid.

The city leaders, including planning department and code enforcement staff, had questions about how to communicate and educate operators about new regulations, how to fully understand the industry so that they could appropriately write land use rules, and how to regulate inspections and quality of life rules so travelers’ safety could be guaranteed. The vacation rental managers wanted to work with the travel and city leaders to educate them on new trends and demands of family visitors, to let each group know what they were already doing to ensure compliance, and to discuss how they were operating legal vacation rentals in a professional manner that maintained a high degree of safety and accounting precautions.

As the conversation continued, the three groups began to understand the concerns—and the solutions—each group brought to the table. They began asking one another questions, and my occasional moderation merely kept the conversation flowing toward solutions. By the end of the discussion, the three groups seemed to find an understanding on key issues. For questions about travel trends and family demands, the vacation rental managers were able to point to important data and show that the average length of stay was longer than the length of hotel stay. They were able to show that the typical family size for rental stays was much larger than that for hotel stays, and they were able to point to survey information showing that travelers insisted on homes with certain amenities to make their stays enjoyable.

For questions about registration and concerns about quality of life, the city leaders expressed their desire to see homes and operators enter a simple registration program; this would allow local authorities to more easily communicate with operators and maintain a comfort level in knowing rules were being followed. The city lead-

Summit 2019 ers were able to show they had legitimate concerns regarding quality of life issues, such as inspections and records maintenance.

For questions about tax remittance and marketing, the travel industry leaders heard from vacation rental managers that safeguards are in place to collect and remit all necessary taxes. The managers also expressed an equal level of desire to assure every operator remits these taxes—they understood that the success of the local economy depends on these tax obligations. All three sides articulated their wish to maintain the highest visitor experience satisfaction levels so that the region could be successfully marketed as a travel destination for years to come.

The three different groups found agreement on these issues and others. They worked together to find a level of understanding regarding each other’s concerns and the ability for each to help address those concerns.

The Sonoma summit was a success, and the long-term goal is to see successful regulations created from that conversation in each of the areas. On August 16 in Austin, Texas, we will test the model for a larger global summit. This summit will bring together concerned stakeholders worldwide with travel, city, and vacation rental backgrounds; and the effort to bring them “around the table” will focus on solutions.

Sessions will include conversations with code directors and city leaders who have faced the most difficult discussions on vacation rental (or short-term rental) regulations. These sessions will focus on gaining an understanding of code and planning departments’ concerns to help them navigate the nuances of the industry and find solutions that can help them achieve their goals. Other sessions will include discussions with lawyers who have battled state legislation, courtroom debates, and tax law. They will educate attendees on how judges and state actions typically address vacation rental activity and what laws apply to tax remittance.

Other sessions will include vacation rental managers and travel leaders, who will discuss the benefits they bring to communities, the challenges as seen by those in the travel fields, and how communities can benefit from a robust array of accommodations that include professionally managed vacation rental properties. The audience will learn about new trends in urban environments and vacation destinations and how these trends rapidly change— this constantly evolving industry is seeing the latest online tech-

nology features, making it easy for some travelers to find desired properties and add activities to their trips.

This summit—A Conference on Short-Term Rental Regulations— will occur on the last day of a major government conference and the day before a major travel industry conference, so this is a oncein-a-lifetime opportunity to be fully surrounded by interested stakeholders.

Getting these stakeholders around the table helps. It helps cities to discover whether their existing regulations achieve compliance and to create regulations that work for issues they have yet to address. It helps travel industry leaders get the best from their entire spectrum of travel options, and it helps vacation rental managers avoid the unnecessary anxiety of burdensome, ineffective regulations or bans. We hope to bring the different sides together and help them find solutions. As the old community leader said, “Get them around the table and the answers will find themselves.”

visit www.SmartCityPolicySummit.com

Matt Curtis is the founder of Smart City Policy Group, a team of consultants working with cities around the world on innovative solutions in the New Economy. Matt is a former right hand to the past two Austin mayors, and he gained extensive experience in municipal government and local politics by working on a broad variety of initiatives and best practices in a rapidly changing city. He is a trained facilitator with 15 years of expertise in helping connect potentially conflicting interests to create effective policy.

Most recently, he served as head of global government affairs and public policy for HomeAway/Expedia, where he worked with governments and local communities around the world to create best practices and effective policies. He has served on the United States Conference of Mayors Business Council, the National League of Cities Corporate Council, the Sharing Economy Advisory Network, and the Travel Technology Association Board. Curtis currently serves on the Vacation Rental Management Association Board. His team at Smart City Policy Group includes former policymakers and thought leaders with extensive backgrounds in local governments. VRM Intel Magazine | Summer 2019

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VRM Intel Magazine | Summer 2019

| marketing

Take Your Digital Advertising

Strategy to the Next Level

By Jinnie Templin, Digital Marketing Sales Specialist, and Alex Moshenskiy, Digital Advertising Manager

igital advertising has come a long way since the days of simple banner ads. These days, an intent-based digital advertising campaign can yield highly qualified, highly targeted traffic to drive more bookings. In this article, we’ll first talk about an innovative strategy to reach travelers online and then highlight two specific types of digital advertisements.

Each highly targeted ad shows a property image, date range, and price. Every ad links back to the associated property page on your site, bringing the potential guest back into your booking funnel. Best of all, Google Ads is integrated with your website and updates property data every 24 hours. This ensures that the images, prices, and units in your dynamic display ads are always up to date without a single action on your part.

Use an Intent-Based Strategy to Reach Your Ideal Traveler

Leverage the Second Most Popular Search Engine with YouTube Advertising

Once upon a time, demographics were your best bet for creating a target audience for your digital advertising. However, Google is innovating its ad-serving infrastructure to leverage new signals using Google Search, Maps, Apps, and more to reach audiences. Collecting data about consumer-intent signals—the actions people take online that give clues about their interests and needs—is now a more effective way to target potential travelers. Savvy vacation rental managers are seeing results from the intent-based approach. Ads targeted with only intent signals have a 40 percent higher purchase intent lift than the same ads targeted using only demographic signals.

Intent-based audiences are created using a variety of different tools and the abundance of data now available. You can use historical data to categorize people who book on your website into groups. For instance, you can target people in the market for a vacation rental and interested in a trip to Myrtle Beach. You can use email lists to target guests who have stayed with you in previous years. You can use Google Ads to autogenerate similar audiences to those people who have visited your website to target travelers much more likely to book on your website. The possibilities are endless to optimize your advertising budget and bring a higher return on investment. Let’s look at two ways to use this strategy.

Create a Personalized Ad Experience with Dynamic Display Advertising Dynamic display advertising allows you to reengage potential guests with extremely personalized content. These intent-based ads target your website visitors—those who have shown interest in specific rentals—with display ads on other websites they visit.

How does it work? When a visitor to your website hovers over a property, views a property details page, or starts (but doesn’t finish) a reservation, that visitor’s data is captured. The data is used to generate display ads highlighting properties the visitor has viewed. The personalized display ads are then featured on other websites visited by your potential guest.

Most people don’t realize YouTube is the internet’s second most popular search engine, boasting nearly two billion log-ins every month. Advertisements are an accepted part of the YouTube experience. For instance, YouTube mobile ads receive viewer attention 83 percent of the time—an incredibly high percentage compared to the attention received on other video platforms. In comparison, Facebook viewability is at just 30 percent.

Video has power: an estimated two-thirds of US consumers watch online travel videos when they're thinking about taking a vacation. Positioning an audible, viewable ad on YouTube increases your brand awareness, ad recall, and brand consideration.

Many people think creating video means expensive production costs and little opportunity to track any return on investment. Well, it’s high time to rethink: YouTube video advertising incurs minimal production costs and provides access to Google-powered results tracking. Additionally, with YouTube’s targeting capabilities, you can leverage strong user-intent signals across all Google platforms, allowing you to share your ads with the right people at the right time in their booking journeys. Throw in the fact that TV screens are YouTube’s fastest growing platform—over 150 million hours of watch time per day—and your ad can reach not only the web browser audience, but the TV screen audience as well.

Interested in crafting a next-level digital advertising strategy? Let us help. For 17 years, Bluetent has been providing innovative digital solutions to vacation rental brands of all sizes. From our direct-booking Rezfusion web platforms to digital marketing to channel management, we assist vacation rental managers in developing a well-rounded digital presence that inspires travelers, builds brand loyalty, and accelerates reservations and revenue. Contact us at 970-510-5615. VRM Intel Magazine | Summer 2019

Do what you love. Let us take care of the rest. Looking to sell? Vacasa takes care of you, your employees, homeowners and your community, leaving you with more time for the things you love. I knew Vacasa would honor my company’s legacy while giving my homeowners something I could not—the technology and tools to compete in a rapidly evolving industry. Laura Hancock Former Owner, Laura’s Vacation Rentals. 98% of homeowners saw improvements in rental revenue with Vacasa, averaging a 49% increase. Gulf Shores, AL

vacasa.com/ready 503.831.8782

VRM Intel Magazine | Summer 2019

"TRACK IS A GAME CHANGER" -Terry Whyte

"Software Of The Future" & Top 3 North America PMS for 50+ Units

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VRM Intel Magazine | Summer 2019

TRACK helps you own the guest relationship with an integrated, true all-in-one solution, built around The Best CRM in the vacation rental industry. Enterprise Trust Accounting Housekeeping & Maintenance Rate & Revenue Management

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VRM Intel Magazine | Summer 2019

| Customer service By Dore Jean, CEO, Kaizen

Conflict Management Are You Asking the Right Questions?

ike many guests, after waking up way too early, I arrived at my vacation rental in South Lake Tahoe tired from traveling and ready to put down my luggage and relax. I felt grateful for the detailed information on the helpful app I downloaded from RnR Vacation Rentals. From booking to arrival, everything had gone extremely smoothly.

I marveled at the keyless entry with a simple, easy-to-remember, personalized code. Connecting to Wi-Fi was a piece of cake. As I toured my beautifully appointed townhouse, I continued to be impressed with the welcoming feel and attention to detail. It was well equipped, immaculate, and all mine for the next several days. Technology and automation have indeed made our lives and businesses more streamlined and, in many ways, simpler. In the hospitality industry, we all enjoy those days when everything seems to run smoothly, guests are happy, and the staff is functioning at peak performance level. Homeowners are grateful for your hard work.

Still there are those days, despite the latest technology and automation, when we are painfully reminded of the often-unpredictable human element. Conflicts arise. The day takes a sudden turn. After all, you are dealing with human beings, and some team members have strong personalities (which you admired when you hired them because it looked like courage). Often, there are guests or homeowners whose expectations have become increasingly demanding. With more choices than ever, wowing them is sometimes difficult, despite your best efforts. If conflict, sometimes leading to difficult conversations, is inevitable, is there a way you can automate your response for greater effec46

VRM Intel Magazine | Summer 2019

tiveness—with something more systematic? Sadly, major conflicts often involve highly emotional reactive responses. For example, a guest with unmet expectations can become a bully over the phone, unsettling any normally confident guest service representative. My heart goes out to the unfortunate housekeeper who, confronted by an early arrival or a late checkout, may not be well-equipped to handle grumpy, sometimes rude guests.

I am continually impressed by the genuine, caring individuals in this industry, each sincerely wanting to give guests “the trip of a lifetime.” Equipped with the right attitude, when managing conflict, these valued team members may appear polite and helpful on the outside even if they are less than resourceful on the inside. While a positive attitude can be a great starting place, adding some core beliefs may take you and your team even further.

In my early days of studying neuro-linguistic programming (NLP), I heard, “The meaning of your communication is the response you elicit.” Was I suddenly responsible for everyone’s success in tough conversations? No. Did my flexibility improve as I adopted this mindset? Yes, absolutely. Simply put, I alone am responsible for my communication. I like to think of it this way: I am responsible for whatever falls out of my mouth. Furthermore, if I do not get the response I am looking for, it is up to me to try something different and keep trying until I reach my desired outcome. No more waiting for others to get on board with my way of thinking—I need to join their way of thinking.

Even after becoming much more proficient practicing empathy over time, I still felt I needed more tools.

The late Dr. Stephen Covey, author of The 7 Habits of Highly Effective People, added some key pieces: Be proactive. Exercise your power, freedom, and ability to choose your response regardless of external circumstances. Think win–win even in situations where others play win–lose. These mindsets allowed me to take a deeper level of responsibility for my communications.

I admit it was easier said than done. While continuing to study the factors affecting success in communication, I was struck by the crucial role of language and our use of words. You may be familiar with the statement, “It’s not what you said; it’s how you said it!” And although body language, tone of voice, and volume play roles, I often find what I say can make all the difference. The work of the late Dr. Marshall B. Rosenberg, founder of The Center for Nonviolent Communication, may well hold the key to dramatically improving the way you and your team resolve conflicts and create the best possible guest experience we all strive for.

He called his approach nonviolent communication (NVC), using the term nonviolence as Gandhi used it—referring to our natural state of compassion when violence has subsided from the heart. Although we may not consider the way we or others talk to be “violent,” words often lead to hurt and pain whether for others or ourselves. The process I am describing is also known as compassionate communication. Compassionate communication is founded on language and communication skills that strengthen our ability to remain caring human beings even under trying conditions. The intent is to remind us of what we already know: As humans we are designed to relate to one another, to experience and demonstrate compassion, and to work together.

Through its emphasis on deep listening—to ourselves as well as to others—NVC fosters respect, attentiveness, and empathy. I find that with its use, the quality of information I receive greatly improves, giving me more likelihood of getting the response or solution I am searching for.

The form is simple yet powerfully transformative. There are four components of the NVC model:

1. Observation

3. Needs (values)

2. Feelings

4. Requests (solutions)

Observation: First, we observe what is happening in a situation. The trick is to be able to articulate this observation without introducing any judgment or evaluation. For example, the statement “You should have told us you needed a late checkout” is a judgement and is not likely to lead to cooperation. Think about a surveillance camera. It captures actual footage only of what occurs in front of it. The camera does not judge what happened or make assumptions. It is only capable of video and audio recording.

We begin, then, with a simple statement we can all agree on. For example, “Our housekeeper has arrived and tells me you and your family are . . . (in the pool, etc.).”

Feelings: Next, we state how we feel when we observe this action: Are we surprised, sad, disappointed, or irritated? “I feel surprised. Your contract states checkout is 11:00 a.m. Your housekeeper is feeling uneasy because she is not sure she can have the home ready for our upcoming check-in at 3:00 p.m.”

Needs (Values): And third, we say what needs of ours are connected to the feelings we have identified. In this step, consider what is important and what it is you value. “I need your consideration and cooperation, please.”

Request (Solutions): This fourth component addresses what we want from the other person. We make a specific request, starting with “Would you be willing to . . .”

“Would you be willing to partner with me to find a solution to benefit all parties?” Obviously, this is a starting place, and the guest will most likely interrupt with comments, excuses, or perhaps even solutions. A few different word choices here could make a big impact.

“Next time, or in the future, if you let us know, we would be happy to arrange a late checkout. I regret we are not able to offer it to you and your family today.” “I can offer you help packing” is more effective than “I can’t give you more time because another guest is arriving soon.” “I wish we could offer you more time” sounds more compassionate than “There’s nothing we can do.” Note that, in the examples above, there is no genie in a bottle granting wishes. The guest still needs to pack and go. This approach is more likely to get cooperation than continued argument. When speaking to team members, tell people what you want rather than what you don’t want.

For example, avoid saying, “Don’t be late tomorrow. We are meeting with a new homeowner.” You have just, by the power of suggestion, increased the likelihood that they will checkout late.

Say, “Please arrive a few minutes early tomorrow when we meet with a new homeowner.” This one shift is amazing. Don’t believe me? Don’t think about pink rabbits. Can you? The phrase “pink rabbits” puts pink rabbits in your head. Think about who you want to try this with first. Would you be willing to test these approaches?

With each interaction, we have the opportunity to feed into the conflict with our own judgements and negative emotions or create cooperation through compassion. As compassionate communication replaces our old patterns of defending, withdrawing, or attacking in the face of conflict and criticism, we come to perceive ourselves and others as all wanting the same outcomes: harmony, joy, connection, and happy times.

As I said goodbye to my new friends at RnR, I shared this advice from another favorite mentor, Jim Rohn. Jim said, “Don’t wish it was easier; wish you were better. Don’t wish for fewer problems; wish for more skills. You can cut down a tree with a hammer, but it takes about thirty days. If you trade the hammer for an ax, you can cut it down in about thirty minutes. The difference between thirty days and thirty minutes is in the skills.” Dore Jean is the CEO of Kaizen, a training and consulting firm, which is named after the Japanese word for continuous improvement. She has a master certification in NLP (Neuro-Linguistic Programming) and is a certified FranklinCovey facilitator with over 35 years of experience. Dore spent almost 20 years on Kauai, HI, offering private practice and teaching “The7 Habits of Highly Effective People” to community leaders and over 3,000 individuals. She now lives in the Pacific Northwest and continues to lead trainings and offer consulting for professional and personal growth. Dore believes every day counts! For more information, visit www.dorejean.com.

VRM Intel Magazine | Summer 2019

| BUSINESS

Donâ&#x20AC;&#x2122;t Give Up The vacation rental industry may be changing, but now is not the time to give up. By Amy Hinote, Founder, VRM Intel

VRM Intel Magazine | Summer 2019

Don’t Give Up Burnout: Physical or mental collapse caused by overwork or stress

Fear: An unpleasant emotion caused by the belief that someone or something is dangerous, likely to cause pain, or a threat

Opportunity: A set of circumstances that makes it possible to do something

Vacation: An extended period of leisure and recreation, especially one spent away from home or in traveling

Service: The action of helping or doing work for someone

Hospitality: The friendly and generous reception and entertainment of guests, visitors, or strangers

Community: 1) A group of people living in the same place or having a particular characteristic in common; and 2) a feeling of fellowship with others, as a result of sharing common attitudes, interests, and goals

Management: 1) The process of dealing with or controlling things or people; and 2) the responsibility for and control of a company or similar organization

Technology: The application of scientific knowledge for practical purposes, especially in an industry

Exit Strategy: A preplanned means of extricating oneself from a situation that is likely to become difficult or unpleasant

t VRM Intel, we receive regular emails and calls from company owners and executives who are feeling burnt out, overwhelmed, and fearful about the future. The vacation rental industry is experiencing another wave of consolidation and change, and I don’t know many company owners (VRMs or vendors) who haven’t at least entertained the idea of selling their companies in the near future.

I’m one of them. When I started VRM Intel, a big news story affecting the industry broke about once a month. Outside of those, I wrote fun company profiles; shared marketing, customer service, and housekeeping tips from industry pros; and discussed a few fringe regulatory issues. Life was good. However, things changed . . . as they always do.

Regulatory battles arose from border to border, and a cascading flow of capital in and out of our industry began filling my inbox. The pace of industry news is extraordinary, and now that the vacation rental industry has become mainstream, there is a constant stream of announcements about acquisitions, investments, changes at OTAs and tech companies, and emerging business models. Managing and growing a team has been extremely difficult, and the rising costs of pretty much everything make the future appear less bright than it once did.

However, after taking a deep dive into market conditions affecting the vacation rental industry, as a self-aware pessimist, I can say with confidence that the future is indeed bright. Yes, there is a wave of consolidation and acquisitions, but it isn’t the first one we’ve seen, and it won’t be the last. The opportunities in our industry are huge. If you have a second (or third) wind in you, now is not the time to give up.

Burnout and Fear: Where Is it Coming From? Feelings of burnout and fear in today’s entrepreneurial climate are not exclusive to the vacation rental industry. Burnout is now a legitimate medical diagnosis, according to the World Health Organization.

With mass consolidation and a lack of antitrust or online oversight, large corporations have been given free rein to create structures and policies that are harmful to entrepreneurs. However, in the vacation rental industry, we have additional challenges.

Four Primary Factors Causing Burnout and Fear for VRMs  Technology Changes While the introduction of new technology-enabled business models is changing the fabric of the vacation rental industry, the biggest struggle for managers actually lies with the core property management software system (PMS) as selecting software is the primary cause of operational angst reported by VRM Intel’s readers. Changing software is arguably the most painful challenge a vacation rental management company (VRMC) faces through the course of its business, and with the current wave of consolidation, property managers are struggling to find software solutions they feel confident they can trust and invest in over the long term. Additionally, new technology products and distribution channels present opportunities for VRMCs, but seamless integration between systems has historically been a challenge for the industry, making it difficult to use new technology offerings.

 Margin Compression On the expense side, rising costs for technology, staffing, and marketing—along with the costs associated with meeting higher customer expectations—are contributing to margin compression for VRMCs. On the revenue side, there is downward pressure on rental commissions and the additional fees VRMCs can charge because of competition from emerging business models and aggregation on OTAs. Managers are expected to do more for less, leading to fears about long-term sustainability.

 Workforce Instability and Productivity On page 25, Sue Jones writes about labor shortages and difficulties in developing, training, and motivating today’s workforce. The cost of hiring, training, and maintaining a consistent hospitality team is higher than it has ever been, and today’s workforce requires a new generation of management skills and constant recruitment, contributing to many founders’ feelings of frustration and burnout.

 Overall Wave of Consolidation and Fear of Missing Out (FOMO) Main street small retailers were pushed aside in favor of big box stores (i.e., Walmart, Home Depot, Best Buy), and now the big box chains are losing out to online retailers. Almost every local VRM Intel Magazine | Summer 2019

bank, grocery store, and pharmacy has been purchased or pushed out, and more and more independent boutique hotels are now operating under large hotel flags. The vacation rental industry is also experiencing a wave of consolidation, leading VRMCs to wonder if they are fighting a losing battle to remain independent. As a result, company owners in the vacation rental industry, both VRMCs and vendors, are demonstrating fear of missing out (FOMO), in regard to their opportunity to sell their companies at a high multiple. There are many signs that now is not the right time to sell, but with fatigue about margin compression, technology, and staffing, as well as an influx in solicitations from prospective buyers, the idea of a quick exit is appearing more attractive.

Opportunities for Local VRMCs Even with the challenges, the vacation rental industry has seen significant growth, and there are still big opportunities for independent VRMCs. Although it is true that a handful of multi-destination VRMCs are expanding, there are market conditions that favor growth for destination-specific VRMCs.

Consumer Awareness To be fair, OTAs and listing sites like Airbnb, Expedia, and Booking.com have helped to increase consumer awareness of vacation homes as viable lodging alternatives. Although the industry has not had a reputable consumer market study in years, Phocuswright reported, “In 2015, nearly one in three US travelers used private accommodation, up from fewer than one in ten in 2010.”

which can help build that ‘moat’ around your business and make it much more difficult for disruptors looking for a quick buck to cast you aside. We’re starting to see some of this through operations technology like Breezeway, Properly, TRACK, etc. I’m also a big believer that the companies that will continue to be successful will not and cannot be all things to all people.”

Harrington added, “Focus on what you do best, and double down. Look for new ways to diversify your revenue stream within your current operations setup. What services are you currently not providing that can help with either the guest or owner experience? These can be simple things like bringing laundry and linen and towel service in-house, partnering with a contractor or design firm to offer turnkey renovation and upgrading services, offering monthly services to nonrental homeowners in your area (inspections, cleaning services, general maintenance), or something else.”

“Ours is a niche concept, lauded and applauded, but by a fairly small audience of travelers. When we began to see holes in our calendar where none existed before, we knew the issue was not our product or service, but marketing and delivery. Honestly, my first thought was, ‘Seriously? Another problem?’ But John Adams said that ‘every problem is an opportunity in disguise.’ And if the founding fathers could figure it out, so can I.” Beverly Serral, CEO and founder, BESTNEST in Hilton Head, SC.

As a disclaimer—in 2010—“private accommodation” did not include the shared-home or short-term urban inventory that Phocuswright included in 2015. However, for leisure destinations, what the industry does have now is a new generation of travelers for whom the idea of staying in homes for lodging is mainstream.

Vacation Rental Management as a Service (VRMaaS)

VRMCs’ Strengths vs Weaknesses

As Harrington stated, “We are in a service business.”

At the VRMA Executive Summit in June, attendees were asked to write down their strengths and weaknesses. Interestingly—when articulating their weaknesses—rental managers said their greatest challenges relate to workforce development, technology, competition for inventory from new multi-destination companies, and regulations. In contrast, among their strengths VRMs listed experience, leadership, fiscal responsibility, meaningful brand equity, dedication to the community, guest and owner relations, customer retention, customer service delivery, company culture, team building, online marketing, property care, and relationships.

Of the ingredients necessary to manage second homes effectively and provide safe and secure vacations to guests, the strengths articulated by independent VRMs are much more critical to operational success than the challenges they are facing.

“While our industry seems to be changing faster than ever, and more competition from larger players is entering our markets, I think this opens the doors for new opportunities,” said Mike Harrington, founder and CEO at Carolina Retreats Vacation Rentals. “The value we provide is on a one-to-one basis with our clients/property owners. We are in a service business. I’ve long been a proponent of more innovation on the homeowner servicing side, 50

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The business of caring for second homes and offering these homes to guests as safe and secure lodging is primarily a service business— one that is more effectively managed locally.

Local VRMs have several advantages over multi-destination companies. For guests, local managers have relevant knowledge of the destination, the homes they manage, and the ancillary services provided. For homeowners, local managers provide asset management, guest management, accountability, and individual property care that multi-destination managers cannot provide at the same level at scale. For employees, local managers provide a connection to the community and a more meaningful team experience. “Building a vacation rental business with my sister over the last twenty years has been a marathon, and while we have enjoyed great successes along the way, having the determination to stick with it is not always easy,” said Amy Gaster, president and cofounder of Tybee Vacation Rentals. “This business is hard and stressful and complicated. We have grown to be the largest vacation rental company in our region, and we take that job very seriously. Having a capable staff and management team in place has been one of the keys to our success. We push forward in our mission for the sake of protecting our owners’ investments, serving our guests, [and] caring for our employees, and for the responsibility we have to our community.”

VRM Intel Magazine | Summer 2019

New Technology Solutions Although there is pain in change in technology today, streamlined innovation is coming.

New property care, smart homes, CRM, data, pricing, and marketing tech products are being introduced, and interfaces between these platforms and PMSs are being ironed out. Recently, a VRMled software advisory group was formed to address current integration challenges. It is petitioning technology companies in the industry for a common API to allow VRMCs to establish a more open plug-and-play technology environment and decrease reliance on the core PMS.

Renner added, “Those who bow out now are going to look back and wonder what they missed out on and why they jumped off the ride so early.”

Vacation Rentals as a Considered Purchase Vacation rentals are more of a considered purchase than hotel stays, meaning that consumers search for more information and spend more time considering clicking the “book now” button for a multinight stay in a vacation home than they do when booking one or two nights at a hotel chain. Independent VRMs have an increased ability to provide high-quality listing information, to staff more knowledgeable call center agents, and to build guest relationships that lead to repeat stays.

“For smaller VRMCs, they need to think of themselves as boutique vacation rental companies,” said Betsy LaBarge, owner of Mt Hood Vacation Rentals. “Find a niche and stick to it. We cannot play the way the large multi-destination providers play. We need to know our brand, work to its advantages, and develop relationships with guests, owners, team members and vendors to maintain loyalty and trust. Unfortunately, that may mean we need to spend proportionally more for our website, SEO, SEM, email marketing, social media marketing, photography, and a reliable PMS. In my opinion, smaller VRMCs that go all in with OTAs and skip using a good PMS and integrated marketing will find it to not be sustainable over time. Those companies will never build good repeat business, so they will find themselves constantly having to acquire new customers.” Further, homeowners find value in working with local managers who have owner-friendly cancellation policies, damage coverage procedures, and travel insurance offerings.

The Value of the Independent VRM Within the Community Local VRMs have done more to promote leisure destinations than any other sector. Although there is significant in-market competition between lodging providers, competition is even more fierce among destinations. For example, between the Alabama coast and the markets in the Florida Panhandle, competition among destinations for guests searching for their favorite Gulf Coast vacation spots is intense. The same dynamic exists in ski markets, along the Atlantic Coast, and across Hawaii. Consumers have choices, and communities must pool resources to ensure that a destination stays top of mind among their core consumers. “I think it’s such a fun time right now,” said Matt Renner, SVP Business Development, TRACK (TravelNet Solutions). “I’d rather be in an industry experiencing massive growth than in a stagnant industry without much innovation. Transformation isn’t easy, and this business isn’t for the faint of heart, that’s for sure, but we are super optimistic about where the vacation rental industry is heading. Technology is getting better, and the category is getting a massive lift from the huge investments pouring in. Long term, we see winners in this space from a PM perspective as being the ones who invest in ways to improve the end-to-end customer experience and who are able to leverage technology to strengthen and own the guest relationship. Creating demand for a product and then delivering a great customer experience is a fundamental formula that works regardless of time or industry. 52

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Emerging multi-destination VRMCs have been largely unengaged within the communities in which they operate and have been content to ride the coattails of local marketing efforts, picking up their spoils on OTAs and listing sites. They leave the heavy lifting of marketing these destinations to the independent local companies who are invested in their communities. Destination marketing organizations (DMOs)––such as Convention and Visitors Bureaus (CVBs) and tourism boards–– rely heavily on independent VRMCs for support in market promotion, legislative agendas, and consumer awareness; and these local VRMs understand the importance of their role within their communities.

“The city trusts local managers to partner with them to manage guest impact in residentials neighborhoods,” said Amy Gaster. “If we were to ‘sell out,’ we would not only be risking the balance in our

Don’t Give Up having a perfect exit strategy is tricky; and in the current political climate, selling to a mega manager does not seem right to us.”

The Importance of Hospitality From C.J. Stam III, Managing Partner, Southern Comfort Cabin Rentals I was born into hospitality. My father attended a university for hotel management in Switzerland during the 1950s. Almost all leisure travel at this time was considered a luxury, and in Europe, a formal education was nearly a basic requirement. He graduated and went to work for the Holland America Line aboard a luxury steam-powered cruise ship out of Rotterdam. His curiosity, love of travel, and spirit to serve led him to a job with Pan American Airways, where he was fortunate enough to travel the entire world. Fate would lead him on to entrepreneurship and a family, which naturally included me!

I often say “I grew up in a hotel” because my dad ran our home like a hotel. Our chores were departmentalized, and compensation was mostly predicated on initiative . . . much like gratuity. You probably wouldn’t be surprised to learn that I worked in a hotel for ten years prior to starting and running my own vacation rental company. What I’ve learned is that hospitality is doing the right thing because it’s the right thing, not because there is something in it for you at the end. Therefore, being good at it is the ultimate lesson in giving without expecting anything in return. This is likely the hardest thing to understand or accept when you’re in the hospitality industry. It can feel like a thankless job some days, especially when you have an upset customer who’s beyond reason and nothing seems to work anymore. Then there are days that you feel like you’re walking on sunshine, praise is unnecessary, and no reward could ever stand up to a heartfelt thank you received in acknowledgement of a job well done. It’s not always all about the Benjamins. My dad always told me “your attitude is the only thing you can control.” I believe the future for veterans and new enterprisers in the short-term vacation rental industry is bright. Property owners will seek all levels of companies to service their needs, and there will always be a place for those who are willing to do the right thing and create a memorable experience for someone else. The most important things for anyone to decide in business are why they are doing it and what they want their business to look like in one- to five-year sprints and ten-year milestones. The future is yours.”

community but also risking hundreds of employees and their families by potentially eliminating their no-longer-needed jobs––especially the professional middle class positions in sales, marketing, finance, guest services, and operations that are often performed at nonlocal corporate offices.”

Gaster continued, “A sense of responsibility and determination to succeed, and doing the best job possible is what built our business. Abandoning those principles to exit our business doesn’t really make sense. In the ever-changing atmosphere of our industry,

Claire Reiswerg echoed the importance of community involvement, “Our marketing focuses on the fact that we are local. We participate in every aspect of our community––from serving on tourism boards and legislative action committees to donating money to local events and community charities like Meals on Wheels. We remain fiercely loyal and dedicated to our community and to the tens of thousands of guests we welcome to our vacation homes each year.”

If mass consolidation wins out, the result will leave DMOs and CVBs without the support they require to promote and sustain local tourism. Consequently, destinations would see a drop in the number of guests and a decrease in property values for homeowners.

Will Consolidation Force Independent VRMCs Out? The short answer is no.

It is easy to look at the examples of retail or hotels as evidence that independent VRMCs will be pushed out, but this is an unfair comparison. In retail, big box stores pushed small businesses out by providing larger product selection and perceived lower prices than their main street predecessors. Online retailers have been able to beat big box companies by providing an even larger selection, lower prices, and the ability to shop in one’s underwear. For vacation rentals, OTAs provide selection, but they don’t provide lower prices. But even more important, there is a service component in vacation rentals that retailers do not face. Looking to the example of hotels, hotel properties have developer/owners, management companies, and marketing flags (or hotel brands). On face value, investors compare the hotel business structure to that of vacation rentals and believe that the vacation rental industry will follow suit. However, hotel brands/flags offer more than distribution channels to managers and consumers. Hotel brands have standardization requirements and brand promises that individually owned homes are unlikely to be able to consistently meet. In contrast, the vacation rental industry more closely parallels long-term rental management companies, real estate, HVAC service providers, CPAs, doctors, or attorneys.

Second-home owners require property managers who are able to care for the property, provide on-the-ground 24/7 service, preserve the value of the property as an asset, reduce liability and risks, and care for guests for the entirety of their stay. The business model for multi-destination VRMCs is built on the ability to scale its services, and it thrives under the assumption that every homeowner is solely focused on maximizing occupancy. This assumption falls apart when managers understand that most homeowners do not have the primary objective of maximizing occupancy. With the individual nature of second homes and the varied long-term objectives among homeowners, the ability to consolidate and scale the entire industry is a pipedream. It is worth noting that most founders of multi-destination VRMCs are not looking to consolidate the majority of the industry. They are just looking to create the perception that they can. The goal is to cash out, not to spend the rest of their careers leading vacation rental management companies. If they can prove a growth model, then they can sell the company at a high multiple and sail off into the sunset with their winnings. VRM Intel Magazine | Summer 2019

For Most VRMs, Now is Not the Time to Give Up “I’ve never met a VRM who at one moment or the other wasn’t ready to throw in the towel, myself included,” said Travis Wilburn, founder and managing partner at Stay Charlottesville. “Most of us are self-made, pushed through economic downturns, and had no choice but to create our market. We built our own systems and processes, defined our various jobs and titles, and ultimately developed our own product.” VRMs like Wilburn are finding ways to join forces to leverage their strengths. “I’ve been doing this for over ten years and ultimately decided I couldn’t do it alone anymore,” said Wilburn. “I can’t afford the 24/7 staff needed for reservations, or the staff that is needed seasonally whom I have no way to afford year round, or to know which vendor/partners would actually be leading with great intentions; and the added stress of just keeping afloat in a market where OTAs and/or venture capital are squeezing us out. We’re working on a solution to provide the best for the VRM so we don’t get ‘Amazoned’ like boutique retail. We know that we’re creating rare partnerships that actually help both the top line and the bottom line.”

The truth is that VRMCs are just now beginning to tap into their potential as second-home asset managers, and the value of the VRMC is changing as management companies begin to understand their data and provide and market services that go far beyond maximizing rental income. The industry is growing and morphing.

The abilities to vet guests and build the value of second homes as investments are gaining traction.

Additionally, the number of guests who know about and want to stay in vacation rentals is higher than ever before; and the need for families and groups to escape, travel, and stay together in a home instead of a hotel to connect in a meaningful way could not be greater. What I can say to you is the opportunity in caring for homes for owners and providing vacation rentals to guests is astronomical.

You give families memories that they remember and hold dear for their entire lives (and it needs to be said that these are memories that they wouldn’t have in a hotel). Remember the weddings, family reunions, golf groups, ski trips, and friendship getaways that you have facilitated. Remember the stories you have received from the guests you have had the privilege of serving. But it’s more than that. You provide jobs, and you connect your employees and their families to the community . . . to the beauty and value of your destination. You give back and work tirelessly in your city/town/village to make it better. You enable homeowners realize their dream of owning a vacation home in their favorite place to be in the world.

The value you provide is real, and the industry opportunities are enormous. Now is not the only time to sell, and the game is not over. A second wind is coming for you.

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 | Summer 2019

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G | BUSINESS

Revenue Management

lossary of Key Terms

evenue Management in the vacation rental industry is a discipline that is growing and developing at a fast pace. At VRM Intel, we collaborated with industry leaders, including Jason Sprenkle and Cliff Johnson, to identify key terms and metrics utilized in the vacation rental industry. As comparative data and revenue management tools continue to mature, establishing a base line of vocabulary will help us advance as an industry. The following glossary is a first step at establishing a common understanding of the terminology necessary for successful revenue management for vacation rentals.

Advertised Price The nightly price that a VRM is presenting to the consumer.

Algorithm A series of repeatable steps for carrying out a certain type of task with data. As with data structures, people studying computer science learn about different algorithms and their suitability for various tasks. Specific data structures often play a role in how certain algorithms get implemented.

Application Programming Interface (API) API is the acronym for Application Programming Interface, which is a software intermediary that allows two applications to talk to each other. Each time you use an app like Facebook, send an instant message, or check the weather on your phone, youâ&#x20AC;&#x2122;re using an API. 56

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Artificial Intelligence (AI) Refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. The term may also be applied to any machine that exhibits traits associated with a human mind such as learning and problem-solving.

Availability, Rates & Inventory (ARI) The minimum data set that is required to be synchronized between a VRM and a distribution channel to enable online booking (a.k.a. ARRI, which also includes restrictions).

Available Nights Also known as Room Supply or Nights Available. The total number of nights that the VRM is authorized to rent out. Typically, this is the total number of nights less owner reservations and maintenance-related down-time.

Available Occupancy Calculates the percentage of guest nights out of the total nights available for guests to book. By comparison, occupancy, the traditional hospitality KPI, calculates the percentage of guest nights out of the total nights in the period, without considering the owner nights and hold nights. Because owner reservations and hold nights take up some of the nights typically, Available Occupancy is helpful to how well youâ&#x20AC;&#x2122;ve filled up the properties from the nights that were available for you to fill with guests.

Average Booking Window Represents the average number of days between when the reservation is made by the guest and the check-in date. Average Booking Window is calculated as the average number of days the property is booked in advance of arrival for the selected period. Understanding the expected booking window for a property or group of properties helps you know when to adjust pricing by demonstrating when you should expect the property to book for certain seasons. Larger properties that sleep more people may have longer booking windows since they take more planning. Smaller properties typically have shorter booking windows. Booking windows are also different for different times of the year, and differ between markets.

Average Daily Rate (ADR) The calculated average nightly rate for a

property or group of properties. Calculated by dividing the total rental revenue by total nights sold. It is one of the most common financial indicators to measure performance in the vacation rental industry.

Average Length of Stay (ALOS) Calculated by dividing the total number of nights by the number of stays in a property or group of properties during a specified time period.

Average Rate Index (ARI)

Booking Pace The rate at which reservations are made for a property or group of properties over a specified time period, usually compared to another specified time period. Many VRMs also collect competitive booking pace data for a set of like-type properties.

Booking Window The number of days between when the reservation is made by the guest and the check-in date.

A vacation rental KPI that measures the performance of a VRM's ADR compared to a competitive set during a specified time period.

Cancellation Rate

Best Available Rate (BAR)

Canceled Stays

The lowest available unqualified rate, representing the fair market value for a property for each day.

The number of guest stays for check-ins during a given period that canceled prior to arrival.

Best Rate Guarantee (BRG)

Channel Fee, or Channel Host Fee

The promise that the unit price a consumer receives when booking directly with the VRM is the best rate offered in the marketplace. VRMs implement a Best Rate Guarantee (BRG) policy to drive consumers to book direct.

Fee charged by a distribution channel, channel manager, or marketplace. Typically, this fee is deducted from the payment before the VRM collects it.

Billboard Effect The theory that accommodations listed on third-party distribution sites gain a reservation benefit in addition to direct sales. That benefit, coined the "billboard effect," claims a boost in reservations due to the property being listed on an OTA website. Would-be guests gain information about the property from its OTA listing, but then opt to book directly through a channel controlled by the VRM.

Booking Curve

A tool that visually displays bookings over a certain period of time (e.g. room pickup, bookings, and availability). Data is displayed in a graph which shows how bookings develop over time. The data needed to create a booking curve is usually taken from a Property Management System (PMS).

Booking Engine An application which helps support an online reservation. For VRMs, the Booking Engine commonly refers to the application included on a VRM's website which facilitates online booking through an API connection to the Property Management System (PMS).

The percentage of reservations that canceled during a period.

Channel Manager An intermediator that provides connectivity between a VRM and third-party distribution channels. The channel manager keeps ARI in sync between the PMS and the third-party systems (a.k.a. Switch, Dumb Pipe, EDI).

Closed to Arrival (CTA)

A yield tool used to close days out from reservations arriving on a particular day. This yield practice originated from the airlines and is not considered a good practice in VR revenue management.

Competitive Set, or "Comps" A defined group of competitive properties that have a similar type, target market, location, and/or concept.

Complex A building or community with multiple units (e.g. Condo-hotel, Condominiums, or Townhomes) usually managed by a Home Owners Association (HOA). Individual units are often managed by multiple VRMs.

Condo-Hotel Also known as a Hotel-condo or a Condotel. A building which is legally a condominium, VRM Intel Magazine | Summer 2019

but which is operated similar to a hotel with a front desk and onsite staff and services.

Confidence Interval The probability that a value will fall between an upper and lower bound of a probability distribution. Data Scientists use confidence intervals to measure uncertainty. A higher probability associated with the confidence interval means that there is a greater degree of certainty that the parameter falls within the bounds of the interval. Therefore, a higher confidence level indicates that the parameters must be broader to ensure that level of confidence.

Conversion Rate The percentage of users who take a desired action. Also known as the Look-to-Book Ratio.

Custom Fees

Additional fees unique to a property or a group of properties.

Data Integrity The accuracy and consistency (validity) of data over its lifecycle.

Data Science A multi-disciplinary field that uses scientific methods, processes, algorithms, and systems to extract knowledge and insights from structured and unstructured data.

Data Scraping A technique in which a computer program extracts data from human-readable output coming from another program.

Data Warehouse A system used to do quick analysis of business trends using data from many sources.

Depth of Inventory The number of like-kind units available in a similar region or complex. Inventory can be rolled up onto Representative-Level channels or broken out for Key-Level channels. Example: There are 8 x 2BR/2BA Ocean View units (a.k.a. Key-Level w/Depth).

Direct Booking

Direct bookings happen when a customer books directly through the VRM and not through a third-party channel.

VRM Intel Magazine | Summer 2019

Dynamic Pricing Dynamic pricing is a customer or user billing mode in which the price for a product frequently rotates based on market demand, growth, and other trends.

Global Distribution System (GDS) A network that enables automated transactions between VRMs and third-party distribution channels.

Gross Revenue, Gross Booking Revenue (GBR) Total revenue the VRM collects, including Guest Fees.

Guest Fees

Fees that the VRM charges the guest and are not part of the Rental Revenue (e.g. Cleaning, Booking, Pet, Parking, and Pool).

Hold Nights The number of nights unavailable for booking due to a hold (i.e. maintenance).

Key Performance Indicators (KPI)

management tools with consulting, analytics, transaction processing, and payment services.

Merchant Channel A distribution channel that charges the travelerâ&#x20AC;&#x2122;s credit card and sends the supplier a net rate (e.g. Expedia, Orbitz, Priceline).

Merchant of Record (MOR) The party that charges the travelerâ&#x20AC;&#x2122;s credit card.

Minimum Length of Stay, Minimum Night Stay (MLOS) A restriction dictating the lowest number of nights a guest can stay at a property.

Net Rate The total amount received from a merchant distribution channel which is the amount the traveler paid minus the commissions and/or fees charged by the third-party distribution channel.

Occupancy Rate (OCC)

A business metric used to evaluate factors crucial to the success of an organization (e.g. ADR, Occupancy Rate, Conversion Rate, and RevPAN).

1) The percentage of total available nights that have been rented for a property or a group of properties over a specified time period. 2) The percentage of all rental units that are occupied or rented at a given time.

Key-Level Listing, or Key-Level

Open Nights

A unit-specific listing that represents an exact vacation rental unit. Example: Emerald by the Seaâ&#x20AC;&#x201D;Unit 312. This is a corner unit on the third floor with a view of the ocean. Individual homes are merchandised as Key-Level Listings (a.k.a., By the Door, Unit Specific).

Machine Learning Machine learning is an application of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. Machine learning focuses on the development of computer programs that can access data and use it to learn for themselves.

Managed Distribution

A service that helps VRMs optimize online distribution. This includes channel managers and additional service providers such as consolidated contracting, consolidated accounting and reporting, additional content syndication services, revenue and yield

Nights that remain open for guest stays, that are not otherwise already booked by guests (Nights Sold), owners (Owner Nights), or blocked off. This is useful for quickly determining the opportunity remaining for a given period. When combined with ADR for a period of similar rates it can also be useful in calculating the revenue opportunity remaining, or money still "left on the table."

OTA Search Ranking The order in which your property is listed on the OTA channel search results page.

Owner Revenue The revenue the property owner receives. Calculated by subtracting the VRM's Commission from Rental Revenue.

Promotions, or Specials A discounted rate or an extra bonus when booking, such as "4th Night Free."

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PERFORMANCE ANALYSIS

BENCHMARKING INTELLIGENCE

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MARKETING

HOW OFTEN DO YOU CHANGE YOUR RATES? In a perfect world you would change them all the time, nimbly adjusting up and down, perpetually optimizing prices, achieving that elusive balance between ADR and Occupancy.

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Property In the vacation rental industry, a “property” refers to a vacation unit or home of any type.

Property Group For revenue managers and channel managers, this is a group of similar properties in a VRM's inventory that are priced together.

Rack Rate The full price at which units are sold to customers before discounts.

Rate Parity Defined as maintaining consistent rates for the same property across all channels.

Representative Style Listing, or Rep-Level A listing that represents a certain lodging type in a multi-unit building or complex. This listing might have “Depth of Inventory” and different unit types. Example: 2BR/2BA Ocean View (a.k.a. Hotel Style Listings, By Unit Type, Allocate on Arrival).

Return on Investment (ROI) The benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio. For VRMs, typically calculated by dividing the rental revenue generated from a source by the cost of the source.

Revenue Management The application of disciplined analytics that predict consumer behavior at the micro-market level, optimize product availability, and price to maximize revenue growth.

Revenue Per Available Bedroom (RevPAB) RevPAR broken down by bedroom, calculates the amount of Unit Revenue earned per bedroom per night. Because RevPAR offers diminishing value when comparing different property types, RevPAB normalizes the data to allow comparisons across properties with different numbers of bedrooms. This allows you to directly compare the rental revenue per bedroom over the number of available nights for 10-bedrooms vs 2-bedrooms. It also provides a more meaningful KPI for comparing the 60

VRM Intel Magazine | Summer 2019

traditional RevPAR across all properties when benchmarking against other companies, as well as for comparing all your properties against one another.

System of Record (SOR)

The revenue collected each night that a property is available to rent out. RevPAN is calculated by dividing rental revenue by the number of available nights for a property or group of properties.

A system of record (SOR) is an ISRS (information storage and retrieval system) that is the authoritative source for a particular data element in a system containing multiple sources of the same element. To ensure data integrity, there must be one—and only one—system of record for a given piece of information. This is typically a vacation rental manager's PMS in the vacation rental industry.

Revenue per Available Room (RevPAR)

Third-Party Distribution

A performance metric in the hotel industry that is calculated by multiplying a hotel's ADR by its occupancy rate. A critical KPI for measuring revenue performance, RevPAR takes into account both the ADR at which you booked the property and percentage of number of nights it was booked (Occupancy). This provides a better indicator of overall performance when compared to looking at the ADR or the Occupancy alone. Compared to ADR or Occupancy as stand-alone metrics, RevPAR provides a more complete measure of your company’s success by giving you an overall picture of both rental revenue and occupancy. In a single figure, RevPAR helps you understand how well your company has filed its properties both in the off-season when demand is low even though rates are also low, and in the high-season when demand is high and rates are also high. Be mindful that in vacation rentals a 10-bedroom is likely to have a significantly higher ADR, and thus RevPAR, than a 2-bedroom property. For this reason, VRMs are careful to use filters to draw appropriate conclusions when benchmarking RevPAR. For example, a comparison of RevPAR for 3-bedroom properties in a similar location vs other 3-bedroom properties in the same location may prove more insightful than a benchmarking of total RevPAR for a period inclusive of all property types.

External channels such as OTAs (e.g. Vrbo, Airbnb and Booking.com). Third-Party Distribution channels also include Tour Operators, Wholesalers, and GDS.

Revenue per Available Night (RevPAN)

Rent Per Available Sleeps (RevPAS) RevPAR broken down by the number a property sleeps, calculates the amount of Unit Revenue per unit of sleeping capacity per night. Because RevPAR offers diminishing value when comparing different property types, RevPAS normalizes the data to allow comparisons across properties with different sleeping capacity. This allows you to directly compare the rental revenue per the sleeping occupancy over the number of available nights for properties that sleep 14 and properties that sleep 2.

Total Revenue Per Available Rental Night (TrevPAR) Total revenue by the amount of available nights for a selected time period. For hoteliers, this metric is referred to as Total Revenue Per Available “Room” (TrevPAR) and typically includes total revenue for the period included food and beverage and all other revenue. Because most vacation rentals do not have F&B revenue and concierge revenue is still not widespread, TrevPAR only includes unit revenue and other revenue over the total nights in a given period.

Total Revenue Per Occupied Rental Night (TrevPOR) Total Revenue divided by the total guest nights for a selected time period.

Traveler Fee The fee charged directly to the consumer by an OTA which raises the total rate paid above the rate charged by the VRM or homeowner. Also called the "Service Fee" by HomeAway, Airbnb, and TripAdvisor.

VRM Commission A predetermined fee charged by the VRM to the homeowner, as a percentage of rental revenue.

Yield Management See Revenue Management. The process and discipline of making frequent adjustments in the price of a property in response to certain market factors, such as demand or competition.

VRM Intel Magazine | Summer 2019

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2019 DARM SESSIONS Mapping the State of Data-Driven Tools and Technologies in Todayâ&#x20AC;&#x2122;s Vacation Rental Industry with Ralf Garrison

Getting on the Same Page: Data and Revenue Management Terminology, Common KPIs, and Data Types with Cliff Johnson and Jason Sprenkle

Revenue Management Principles: Theories, Practices, and Applications panel moderated by Ben Edwards

The Pricing Technology Process: How Hoteliers Combine Internal, External, and Market Data with Pricing Tools, PM Software and Revenue Management Services and Where We are Heading in VR with Ryan Saylor

Smoke and Mirrors: Removing Bias from Data Analysis with Lynell Eaddy and Jack Newkirk

Advanced Revenue Management: How to Implement and Adapt Pricing Strategies with Anurag Verma

Smarter Pricing with Human and Artificial Intelligence with Scott Shatford

Comparing and Contrasting Vacation Rental Revenue Management with Other Industries with Mike Bohmer

A Look at 2019 Data Across Platforms with Lyse Perrigo and Jessica Haywood

Hotel and VR Revenue Managers: Panel to discuss the Reality of Hands-on Data and Revenue Management in Vacation Rentals panel moderated by Andrew McConnell

Completing the Story with Other Data Sources: Demand Data, Property Data, and OTA Data with Jeremiah Gall, Matt Renner, Ned Lucks, and Paul Hanak

Vacation Rental Software: How consolidation and innovation at VR software companies are evolving to handle integrations and pricing strategies panel moderated by Jim Olin

| BUSINESS

Roll with the Changes

RIDING THE NEXT WAVE OF CONSOLIDATION By Jeremiah Gall

s the industry hits its third wave of maturity, there’s a renewed focus on consolidation. Vacasa continues acquiring vacation rental managers at a rapid clip, and Airbnb has heavily invested in brands and a variety of new property managers. In case you missed it (which I doubt you did), the recent news of the technology “rollup” has property managers questioning the future of rental property management software and its implications for the industry’s ability to continue innovation and growth.

Believe it or not, consolidation isn’t a novel theme for the vacation rental industry. If we turn the clock back 20 years, we’ll find similar stories. ResortQuest acquired dozens of vacation rental managers as it pushed to build a multi-destination vacation rental brand before it eventually sold to Gaylord, then Leucadia, and then to Wyndham Vacation Rentals. Instant Software folded together multiple technology platforms to create the industry’s largest software provider before selling to HomeAway. Speaking of HomeAway, it also went on a buying spree, acquiring the top listing sites to create the largest vacation rental marketplace.

Many operators, both on the vendor and the property management sides, have been in this business long enough to see multiple waves of changes to the vacation rental sector. Shifting dynamics will continue, and the two core disciplines of the business will further evolve. Here’s a hot take on consolidation and how to roll with the changes and ride the next wave of vacation rental growth. 64

VRM Intel Magazine | Summer 2019

Dominant Acquisition Channels Move Marketing Opportunities Downstream As vacation rentals gain awareness and market share in the travel industry, the effects of consolidation are forcing a renewed approach to marketing. For operators in most destinations, spending on major online travel agent platforms has grown to dominate marketing budgets. With just 59 seconds to grab a guest’s attention at booking, platforms have adopted more targeted strategies to focus on rich information (e.g., location, amenities, and proximity to local attractions) to optimize the shopping experience and surface the best choices that match the prospective guest’s needs. As the online travel agents (OTAs) layer in more advanced pricing algorithms, they will continue to dominate search results and the top-funnel marketing landscape (i.e., potential renters looking to book a vacation rental).

To some extent, OTAs level the playing field for a large portion of top-funnel marketing. If the platforms control access to the majority of new travelers, then there isn’t much room to build in an advantage (putting search engine optimization aside). The real competitive advantage is moving down funnel and leveraging product marketing to deliver positive brand awareness and property services to ultimately drive guest loyalty. Generating repeat guests requires fewer marketing resources than that of attracting new ones, and improving your customer retention by just 5 percent

can increase profit by a whopping 75 percent.

tions do, and they don’t put up with even the most minor mistakes. Larger brands have invested in these processes to match the quality and standardization that guests want. Predictable, high-quality experiences must become the norm. With vacation rentals and hotels moving closer together, quality and safety are emerging as top trends. Larger managers are investing in these processes accordingly, and the industry should expect more regulations on this front.

Managers can earn repeat guests through better product marketing that addresses how the guest interacts with the property and with the service. Vacation rental managers are not property managers; they are hospitality providers. This requires a rededication to serving the hospitality needs of guests to deliver exceptional service. That’s the hard, local work that can’t be consolidated away at the top.

Software Consolidation Leads to Better Tools and Technology

Vacation rentals have always had a healthy multigenerational audience—travelers head back to the same spot (sometimes the same property) year after year. As generational families live farther apart, the resulting macro effect should see fewer repeat guests. Combine this with higher marketing costs to attract new guests, and the value of every repeat guest increases.

Managers must take active steps and create ways for branded touchpoints throughout the stay. Yes, this includes all of those details, like how welcome packages await the guests, how the towels are folded, and whether the curtains are open or closed in the living room. These details may seem small, but they combine to form the brand standards that define the experiences guests have when they walk through the door. But the marketing investment shouldn’t pause in between guest arrival and checkout. Cultivate the brand, engage with the guests during their stay, and offer value-added services to make their vacations more noteworthy. Heavily investing in reengagement campaigns (e.g., retargeting ads, surveys, thank you gifts, etc.) elevates your brand exposure beyond your competition and contributes to a more meaningful relationship with the guest.

Consolidated Inventory Drives Quality Standards and Deeper Service Engagement The second core discipline is management. Management in this context is property services—all the industrious work that goes into preparing a property for guests and providing asset management for the owner. Operations has always been the backbone of property management, from cleaning and property prep to inspections and maintenance—both preventative and unexpected repairs. For short-term rentals, these functions require a generous dose of human coordination to keep rental properties serviceable and clean before a guest arrives. Lately, I’ve been beating the drum on operations (you may have even heard me speak about them at a conference the last few years). Maintaining the highest-quality property conditions, branding the guest’s experience, and delivering more concierge services will define each manager’s success in the future of the vacation rental industry. This plays a role in the consolidation conversation.

As much as consolidation may bring new standardization to the market, so much of the work requires local knowledge. Managers can control this piece of the business effectively by fostering deep relationships. In fact, the local nature of the business and the existing fragmentation (i.e., there are significantly more vacation rental operators than hotel operators) shield managers from many of the competitive effects of inventory consolidation. That said, growth of national vacation rental brands, such as Vacasa and Turnkey, has downstream implications for all managers. Today’s workload has never been heavier and has forced managers to adopt a smarter approach to property care. Guests and owners are demanding more service, particularly with millennials and Generation Zs traveling more frequently than other genera-

Twenty years ago, vacation rental managers had limited choices as to which software to adopt. Systems were complex, and property managers gravitated to all-in-one solutions to operate their businesses.

Now hundreds of property management software platforms and an ecosystem of ancillary technology enable vacation rental managers to work better. Unless you believe that the role of the vacation rental manager is going to magically get easier, this dynamic will continue: more technology to drive additional value and efficiency to the business.

Property management and hospitality is a complicated business that requires diverse skill sets, software, and technology to be successful. Using different tools for different business functions is optimal. These technologies have a more singular focus and can afford to devote resources toward building incredibly deep functionality. Their products are purpose-built for the vacation rental industry, making for easier internal adoption, implementation, and a more user-friendly experience.

When effective, software adds tremendous value to business operations. As the segment matures, more intelligent solutions are coming to the market. Deeper functionality requires considerable investment, and with so much value left to be delivered to managers, innovation will undoubtedly continue. The software consolidation will have a trickle-down effect of additional investment and will lead to even better technology solutions for managers.

Conclusion Consolidation is a sign of the vacation rental industry’s maturity. Although we’ve seen this behavior in the past, the rollups feel poised for more success this time. Perhaps the intervening years have provided enough awareness that this wave of entities can capture synergies and value from their largess. Growth and innovation shouldn’t slow. Rather the identity of the rental manager will continue to evolve as a hospitality provider and expand the focus on delivering the best customer experience. The customer experience is the real business we’re in—helping travelers find, enjoy, and relish the memories of their vacations.

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 | Summer 2019

| BUSINESS

| By Amber Leto, Vice President of Product, NAVIS

The Evolution

of Property Management Software

’m ashamed (or maybe proud?) to admit it, but I’ve been around the property management industry long enough to remember the magic of “ONLV”—the keyboard shortcut to the change log in First Resort Software (FRS), a DOS-based program that was so reliable, so useful, and so extensive that it spent 30 years dominating the marketplace and had to be pried out of the hands of most property managers by the time HomeAway Software stopped supporting it a few years ago. The basis of FRS—and the loyalty from decades-old customers— did not come from blazing fast innovation and shiny new features but rather from a consistent and reliable software platform that provided reporting that could be trusted and peace of mind to accountants. Over the years, online booking and other functionality were added, but the platform lasted well beyond anyone’s expectation.

accurately defined as property management marketing systems (PMMS). Ironically, both categories will check many of the same features boxes—but they diverge greatly in terms of how they started, how data is treated, and how their product road maps continue to evolve.

It is important to evaluate more than just the cost of the property management software and consider the costs of the additional platforms you will need to run your business. Both PMS and PMMS systems require integration with third parties to solve different, specialized problems as the needs of your business grow or the competition in your market tightens.

Although the needs of property managers have changed drastically since FRS was launched in 1984, there are always lessons from history that, if embraced, become a hallmark for greater success. Today’s property managers still need accounting functionality and data they can trust, and most of them are not willing to forgo those two pillars of doing business for new shiny features.

Traditional PMS platforms began as operationally centric software systems and provide extensive native functionality to run the dayto-day vacation rental business. Property setup, traditional booking flows, accounting, housekeeping, and maintenance were the core functionality at launch, with smaller feature sets in regard to guests and marketing tools. These systems are incredible at handling booking details, cash flow, and room-cleaning prioritization without third-party integration. The APIs for these systems typically are tightly held and available only to carefully chosen strategic partners.

Almost every PMS uses a version of a tagline that reads “All-InOne Vacation Rental Software,” but there are basically two categories of PMS systems: traditional (PMS), and a new breed more

Using a traditional PMS system means you have to clean up your guest data, find a solution for lead management and marketing automation, and choose a channel manager to automate bookings from different online travel agencies like HomeAway, Airbnb, and

In the last decade, a plethora of companies calling themselves property management software (PMS) providers have entered the market. Yet, if you were to compare them side by side, you would notice that many of them have more in common with web marketing agencies and channel managers than with traditional PMS systems.

VRM Intel Magazine | Summer 2019

Traditional PMS platforms have been around longer than PMMS systems and are generally stable technology, with fewer bugs and headaches. But because they focus on building everything natively, their development and support costs are higher and they are slower to innovate.

Booking.com, and you need a web agency to build your website to drive direct bookings.

There are many options in the marketplace to solve for the lack of direct channel integrations, and there are many different flavors in that space as well.

“Channel management requires significant continuous investments to keep up with all the ongoing channel innovations. It is very synergistic for PMS providers to leverage the investments and development that channel managers are making in supporting the major players as well as the long tail of distribution channels,” said Alex Aydin, CEO and founder of BookingPal.

Marketing automation and website development have stagnated over the past few years because of consolidation or a lack of clear opportunity for new players in the space, but there are established companies that can help. As more property managers recognize the value of their guest databases and direct marketing channel opportunities, this space will flourish again.

PMMS turned this software category on its head. It started with a marketing-first approach, and natively included robust and modern booking flows, lead management systems, CRM functionality, marketing automation, integrated channel management, modern website development tools, and an open API to connect to third-party marketing channels, as well as specialized operations applications to solve accounting, housekeeping, maintenance, home automation, and revenue management. These software companies have product road maps that focus on features that drive additional revenue and enable more sophisticated marketing strategies while leveraging integration with best-in-class technology partners for back-ofthe-house needs. PMMS systems are generally newer platforms that offer a more modern user experience that resembles online booking engines rather than the tape charts of the past, minimizing the learning curve for new staff. However, new functionality breeds new bugs, and these systems are in the early stages of evolution. Finding the right balance of innovation and bringing new features to market while spending the right amount of time getting a feature to completion is a constant battle for any company trying to win market share.

Amiad Soto, co-founder and CEO of the short-term rental property management platform Guesty, said, “The fast-moving shortterm rental ecosystem is incredibly fragmented, which makes it harder to be efficient and grow. This is why we’ll see increased consolidation of software tools into platforms in the next year. Many platforms are trying to be the jack-of-all-trades, which requires a lot of capital in order to successfully create an end-to-end solution where property managers can manage all aspects of their business in one environment.” Jonathan Murray, co-founder and CEO of MyVR, believes that a sales- and marketing-centric PMS solution is the wave of the future for the short-term rental space. “Property managers want to grow, and that starts with being incredible marketers with powerful websites and direct booking strategies as well as a balanced and integrated approach to leveraging the OTAs and booking channels to gain market share. In order to do that effectively, the PMS needs to be the source of truth for prospect, guest, and booking data.” Of course, there are a few hybrids in the marketplace that are trying to do it all. It’s an aggressive approach to the market that has had growing pains but has pushed providers in all categories to play at the top of their game. “It is very exciting to see how much automation remains to be done in the vacation rental industry. We will see more intelligent revenue

Suggested Questions when asking for referrals from pms clients  Do you trust your data and reporting?  Do you feel like you own your data?  Can you get an accurate view of your guests and guest history?  Are there any features you stopped using, and if so, why?  If you had one wish and could get any feature built or bug fixed—what would it be?  What other systems are you using to run your business with XYZ PMS?  What did you have to change about how you run your business when you migrated to XYZ PMS?

management techniques built into the PMS, automated occupancy maximizing techniques, faster mobile websites, and more focus on accounting. Home automation will be taken to a whole new level,” said Carlos Corzo, founder and CEO of Streamline Software. Choosing the right solution for your company really depends on your pain points. If your primary goal is to grow and drive more revenue, a PMMS might be the right place to start. If your marketing and channel management strategy is solid but you are struggling operationally, then a traditional PMS might be your best solution.

Remember, there is no such thing as bug-free software, so before you choose a new platform for your business, make sure you are setting realistic expectations and clear goals. Software transitions are disruptive regardless of which platform you choose, so take your time and evaluate each vendor for features and cost as well as for reputation and support. Ask to speak with both happy and lessthan-thrilled current clients, or use social media to talk to former clients before you are wooed by flashy marketing and stellar sales techniques. Almost every company will check off all the features on your requirements list, either natively or via integration. It is the context in which the features work (or whether they only work in certain scenarios) that will be the key to choosing the right partner. Amber Leto has been part of the vacation rental industry since 2003. With an early start in the operations and owner relations side of the business, she has spent most of her career on the technology side of the industry. In the last decade, Amber built and sold a web marketing company to Instant Software (now HomeAway Software), she was the VP of eCommerce for Wyndham Vacation Rentals, the Chief Marketing Officer of The St. Joe Company, and most recently was the VP of Product for NAVIS before transitioning back to consulting with global hospitality software teams and tech-enabled vacation rental companies in early 2019.

VRM Intel Magazine | Summer 2019

| Customer Service

| By Heather Bayer, Tyann Marcink and Andy McNulty Tyann Marcink is the co-creator of the VR Mastered Vacation Rental Boot Camp, teaching social media marketing, best practices, and workflow in the short-term rental industry and is considered the leader in vacation rental photography. Andy McNulty is the co-founder of Touch Stay, a software service that enables hosts and managers in the short-term rental industry to create digital guidebooks for their guests. Prior to Touch Stay, Andy held C-level positions in luxury fashion, working at brands like Alexander McQueen, Gucci, and Victoria Beckham. Heather Bayer has been fully immersed in the short-term rental industry for over 25 years, first as an owner, and then as CEO of one of Ontario’s leading property management companies. She co-founded Vacation Rental Formula (formerly Cottage Blogger) where she contributes training materials that support independent owners and managers. She’s also the voice behind the Vacation Rental Success podcast.

What Is

the Guest Experience? Applying the Five Love Languages to Interactions with Guests We all want to give our guests the greatest experiences on vacation:  Accommodations that meet or exceed expectations

According to Airbnb, an experience could be classified as one of these:

 Enjoyment of all the area has to offer

 Swimming with pigs in Exuma

 Amazing memories they will share with family, friends, and across social media networks

 A wolf encounter in Anacortes, Washington

 Bucket list items checked off

Easy, right?

Then why is it that sometimes, despite our best efforts, we don’t seem to be able to please some guests? The guests don’t mention the nice bottle of wine that you strategically placed on the table, the super-comfortable beds with the perfect designer throw pillows, or the lengths you went through to compile (and test) which restaurants are the best in your town. Instead you receive vague complaints about what seem to be insignificant issues.

To unwrap all this and figure out how we can meet the needs of all of our guests, we should start at the beginning and figure out what the “guest experience” is anyway. 68

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 A yodeling workshop in Salzburg (think The Sound of Music meets “Home on the Range”)  Playing mermaid for a day in San Diego

 And many other “unforgettable activities in hard-to-find places” But does having one of these experiences define the vacation overall, and will that be the lasting memory that will be shared when they get home? Or are they more likely to talk about the difficulty they had accessing the property, the dripping tap that wasn’t quickly fixed, or the blunt knife that bruised their tomato at lunch?

Guests All Have Different Perceptions If you are an educator, you’ll understand learning styles and why it is so important to present learning materials in different ways.

Some students learn visually, whereas others like to hear the information, and some prefer to be hands on. Knowing this allows teachers to prepare their lesson plans to meet the needs of all learning styles. In a similar way, guests will perceive their vacation experiences differently, and the concept of Gary Chapman’s The 5 Love Languages allows us to explore this from a unique viewpoint.

In this summary of the presentation given to audiences at the Vacation Rental Management Association conference in Las Vegas, the Vacation Rental Women’s Summit in New Orleans, and the Northwest Vacation Rental Professionals conference in Bend, Oregon, we want to share how the concept of love languages can be applied to the guest experience.

From the perspectives as a property manager (Heather Bayer), an owner of multiple properties (Tyann Marcink), and a “serial guest” (Andy McNulty), we share how the love languages we (and our guests) speak reflect on the ways we can deliver service in a much more targeted way. Tyann: My mom introduced me to the love languages many years ago, and I didn’t pay a whole lot of attention to them beyond applying them to myself and my husband.

But then I saw that Gary Chapman had released a version about understanding the love languages of your teenager. That got my attention as I was struggling to communicate my love to my teen sons and recognize how they were showing their love to me as their mom in their own ways. I began thinking, why not apply the love languages not only to family but also to other relationships, like those I have with the guests at my vacation rental homes? Speaking guest love languages is important because it makes them feel welcome at your place. The love languages are those sometimes intangible items right at your fingertips—the feeling that you are cared for—but you can’t quite put it into words. The five love languages that Gary Chapman recognizes are these:  Acts of service  Quality time

 Words of affirmation  Receiving gifts  Physical touch

Here are our adaptations each of Gary Chapman’s five love languages for your guests:

Acts of Service Anything you do to ease the burden of responsibilities weighing on an act-of-service person will speak volumes. Can having the tea and coffee set out and ready for your guests to use be an expression of love? Absolutely!

The words he or she most wants to hear are, “Let me do that for you.” Laziness, broken commitments, and making more work for these guests tell them their feelings don’t matter and they are not valued. Speak this language:

 Fireplace prepped with wood and ready to be lit  Maintenance arrives when promised  Sharp knives in the kitchen

Heather: The language of acts of service speaks volumes to me because this is my top love language. When I arrive at a vacation home, a gift is less important than my host understanding that I’m unfamiliar with the space. This played out recently when I went to a new home that was to be registered on our management program. The owner was not there, and I was setting it up for a photo shoot, so I wanted to turn all the lights on. I could feel my frustration rising as I flicked light switches on and off to get the place lit ambiently, and I could imagine how the guests would feel when faced with this array of switches with no idea of what each was for. Simply labeling the lights unobtrusively would deliver a great experience to any guest but particularly to those who speak my language.

Quality Time For quality time, nothing says “I appreciate you” like full, undivided attention.

Being there for this guest is critical, but really being there—with the phone down, looking the guest in the eyes as he or she speaks, and all chores and tasks on standby—makes this guest feel truly special and loved. Distractions, postponed activities, or the failure to listen can be especially hurtful.

These guests thrive knowing that you have spent extra time to make their stay extra special. VRM Intel Magazine | Summer 2019

VRM Intel Magazine | Summer 2019

Speak this language:

 Welcome book with local area info

 Every question they ask answered even when the answer is in the listing  A well-made bed

Andy: It was 1 a.m. when Tyann and I arrived at a rental in the middle of a quiet, residential street in London—a narrow one with homes on either side and people sleeping despite the not-so-gentle hum of our car engine.

Tyann: My eyes light up when I receive a surprise, thoughtful gift from a host, so I very much enjoy giving gifts to my guests.

I especially enjoy when I am able to give extra-special gifts to guests because they have communicated to me their reasons for visiting the area or choosing my place.

One weekend I found out a young military serviceman was meeting his family at my house for his leave, and they were celebrating his birthday. I picked up a six-pack of local beers (we realize this is not legal in some areas) and a large birthday cupcake and placed them in the refrigerator with a note of thanks.

We checked our access instructions, which informed us the key was in a lockbox next to the door.

Words of Affirmation

I hastily called the property manager.

Hearing the words, “Thank you for being our guest,” is important; and hearing the reasons behind the thanks sends their spirits skyward.

There was no lockbox. Shining the torch (aka flashlight) all around the front of the house, we made sure we were not missing the simple lockbox.

It turns out the property manager had not taken the quality time to properly describe the location of the lockbox. It was not on the outside wall—it was inside a little blue hatch door.

Actions don’t always speak louder than words. For these guests, words of appreciation mean the world.

Horrible communication or rude responses can leave your guest shattered, and this misstep is not easily forgotten. This guest will thrive on hearing kind and encouraging words. Speak this language:

 Saying “thank you” in your communications

 Praising them for making a great choice for their stay—your place  Telling them you appreciate them as guests

Andy: This one is my top love language as a guest. When I travel, I sometimes send a few questions to the host before I book the property. If the host does not answer one of my questions or curtly tells me all answers are in the listing, I feel dismissed and not valued as a guest.

We highly suggest always thanking a guest for their questions and answering each question even if the information is in your listing. Then look over your listing or FAQ section to tweak the wording to communicate the information more clearly.

Physical Touch I had to open the hatch, crane my neck to the left, brace my body with one hand while holding my phone as a light in the other, then enter the code into the lockbox, and retrieve the key—at 1 a.m.

Receiving Gifts Don’t mistake this love language for materialism; the guest who loves gifts thrives on the love, thoughtfulness, and effort behind the gift.

For guests who speak this language, the perfect local welcome gift or gesture shows that the guest is known, cared for, and prized above whatever was sacrificed to bring the gift. A missed welcome gift or note could be disastrous. Speak this language:

 Welcome gift from a local source or with your logo  Surprise gift for a specific occasion for visiting  A pre-arrival greeting card with a local tip

This one may be especially difficult for a manager to do, and missing this one may be the reason for a four-star review that interrupts your streak of five stars.

The usual hugs, pats on the back, and thoughtful touches on the arm can’t quite be applied with guests, but there are other ways you can physically show your excitement, concern, and care for these guests. Physical presence and accessibility in some form are the important aspects with the physical touch love language. Appropriate and timely touches like a handshake or a phone call to make sure they arrived safely communicate warmth, safety, and appreciation to this guest. Another way to speak this language is through specific amenities at the property, such as clean, soft sheets with snuggly blankets on a well-made bed. Speak this language:

 Handwritten welcome note on arrival

 Comfortable temperature for the current season  Music playing for ambience

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Heather: This can be an easy language to scale as it may simply involve ensuring the property will be lovely and cool in summer, and cozy and warm in winter. In essence, it’s about letting the guests know, almost subliminally, that you care about their stay.

The Guest Journey—Speaking their Love Language Andy: I’m a serial guest. I spend a lot of time in vacation homes across the world and appreciate when hosts speak my language. Those owners and managers who are able to speak each of the languages at least a few times during an interaction will benefit from fewer complaints and a raised level of positive feedback. Here’s how to apply them: 1

Research

Consider this: Only nine percent of travelers have a brand in mind before they start researching. Source: Google’s Javier Delgado Muerza. We guests are wide open to be influenced, so influence us—in a positive way! Transform me from a pasty-faced, sunken-eyed, and frustrated would-be guest into a leaping-for-joy, alive, and energized guest. The research phase is supposed to be fun, people! So lose the dark photos, the ALL CAPS GET THIS DEAL sales pitch, and the personality-devoid copy. Show me enticing photos, and serve me stories, and you’ll get me dreaming. But keep it real too, please. Don’t overpromise and under-deliver. 2

Post-booking

I’ve found the perfect place, paid to secure the reservation, and have done this with no additional guest fees. YEEESSSS! I’m ready to start my vacation now. If only I didn’t have to wait six months. Still, at least my host will keep the anticipation high until then, right? Tumbleweeds. Ghost towns. Silence.

I must admit; I’m not feeling the love. I just booked a three-bedroom villa by the ocean, forking over $3,000 for the week. Where’s the host appreciation?

Okay, so I’m just one of 20 bookings this year for this host. Why would they invest the time to converse with me, send me exciting information, and generally make me feel good? Because I’m the customer. Because I had choices. Because I tell friends.

Because not many people spend $3,000 on a single purchase in a year! This doesn’t have to be a manual process. Create a simple repeatable set of emails that go out at certain times pre-stay with something that makes my post-booking period memorable. This can be a quick “Hello, hope you’re looking forward to your stay” email, a digital local area guide, or a welcome book with all the great activities—simple stuff. 3

Pre-stay

Help me have a stress-free journey. Traveling with a family is often stressful, especially to a new place. Think tired and hungry kids.

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Hopefully, I won’t have to pull over and dig out a hard-copy map to find my way. Hopefully I won't have to arrive at midnight to a hidden lockbox without the proper instructions to find it. Make it easy: use a simple set of directions, include a photo of the street and home, and make the key pickup or door code access seamless. Then I get to arrive relaxed with a big smile on my face. 4

During the Stay

It’s almost cliché these days, but a welcome note and small gift, although not everyone’s preferred love language, will hit three of the languages in an instant: acts of service, words of affirmation, and receiving gifts. Do it—especially if the gift is of the area. Speaking of the area, don’t we all want to go somewhere that our friends haven’t been—somewhere that our host has handpicked as the place to go?

Give me a list of these places. Not only will you support local, independent businesses with my tourism dollars, but you’ll also ensure that I am social with the experience and tell my friends. Don’t let me search TripAdvisor and find McDonald’s as the No. 1 restaurant. True story—this really did happen to Joe, my business partner. Don’t get me wrong, I’m partial to a McDonald’s flat white coffee, but I’d certainly prefer the local artisan alternative. By the way, please also give me sharp knives in the kitchen. It’s a metaphor for quality amenities and is oh so important. 5

Post-stay

You’ve sent me off relaxed and happy from my vacation, at least until Monday morning comes around. But don’t forget me.

Send me a thank-you note. This is repeatable and scalable if you use an outsourced service that handwrites and sends thank-you cards. It’s easy and effective. But don’t forget me even after that.

Why not get my permission to join your exclusive mailing list, whereby I’ll get reminders of the incredible experience I had at your place? Touch base every two to three months with interesting articles and enticing photos. Invite me to your social media accounts to follow what is going on in your area. Take me back to that moment. Grab me emotionally. One day I will return, and you’ll save 15 percent by my booking direct! There you have it.

We didn’t have to wrestle to understand how we can reach all our guests in one way or another. You don’t have to get them to complete a questionnaire or do a quiz.

Just know that we all perceive our worlds and express our connections with them in different ways. Then take action.

P.S. Want to know your own love language as a guest? Take our quiz based on Gary Chapman’s book The 5 Love Languages: touchstay.com/love.

| Business

Namolokama Braided Together Aloha VRM Intel Ohana! My name is Billy O’, and I want to tell you about the Hawaiian word of the day:

crops like the all-important taro. And, just behind Namolokama is Mt. Waialeale, which averages nearly 400 inches of rain every year.

NA-MOLO-KAMA Say it slow. Namolokama. Good!

amolokama means “braided together” or “tied together” in Hawaiian. About three miles from my home on the North Shore of Kaua’i lies Namolokama. It’s the amazingly beautiful mountain that ties all the other mountains of the North Shore together. It’s also the name of the canoe club for which I proudly paddle. This word introduced me to a culture of Hawaiians and the spirit of aloha.

As a vacation rental manager nearing his 20th year of managing properties for myself and others, I absolutely think “Namolokama” is a word from which we can all learn something. First, let me introduce you to this sweet beauty (photo on the right). That’s her in the middle of the other mountains. Namolokama is also one of the wettest spots on earth, giving life to the whole North Shore with VRM Intel Magazine | Summer 2019

Over the past two decades of being involved in the sharing economy, the tectonic plates of the vacation rental industry have shuddered and shifted, creating many mountain-sized businesses, bank accounts, egos, successes, and more than a few failures.

I am by no means an industry pioneer; but back in the day, before Y2K, I had to hustle flyers to all of the hotspots near my Sunset Strip condo, like the Directors Guild of America, the Screen Actors Guild offices, local talent agents, the Laugh Factory Comedy Club, and any other place I thought I could market to potential guests. It was fun! I took checks in the mail, shuffled keys, and met people in person before their stay to ensure they were “suitable” guests. There was no review system to hold people accountable to be decent, no centralized software I knew of that would help me save time or make more money. Vrbo and GreatRentals were two options for guests, but frankly, I didn’t really like the idea of someone randomly clicking and booking my special place in Hollywood. Back then, it was a totally different ballgame—shaking hands with guests, looking them in the eye, and approving their stay based on vibes. The experience was simple and pure but also quite clunky and, in my eyes, not something that would be remotely fun to do at scale. Back then, my vocabulary didn’t even include the word “scale”!

Bedlam! Fast forward to 2019, and it’s . . . bedlam! Tech companies and venture money all over the place, sharing economy insanity on the 5 o’clock news, APIs, dynamic this and AI that. It’s mind-boggling. All these “VR mountains” are looming in the distance all over the world, but you are just a little seedling, and you don’t know which way is up or how to grow. This is big business now. Look around.

Everyone is trying to take a couple of points off your bottom line to offer you some snazzy product. “Namolokama” is your ammunition for entering the arms race to create spoiled guests (thanks, Matt Landau) and allows you to make more turns every month with less hassle.

BraidED together However, without having a network or helping make this community better than it was when you stepped into the space, you aren’t “Namolokama.” I operated this way for about 18 years, just making dollars. What do I mean by this? This is, after all, the sharing economy. That means we need to share: share the knowledge we’ve got, think tank, brainstorm, roundtable, whiteboard, chalk and talk. We need to work on being more closely braided together. Because, after all, we control the destiny of this business. We owners and managers control the inventory, and if you don’t like the way your company is being treated in the space, chances are someone else relates, knows the answer, and would be more than happy to share it with you. I’m not talking about rapping on the “Say No to VRBO Service Fee” forum on Facebook. I’m talking about signing up to be a mentor to someone in this industry who needs you but doesn’t have the courage to speak up and ask for help.

We can succeed by building two-way relationships I’m challenging the newbies who are reading this article to find someone you respect online or at a convention, meet up, and then 74

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reach out to actually build a relationship with them so you can approach them about mentorship. It’s what ties this whole thing together one relationship at a time. This could take place over lunch, during a walk or cycling—but ideally, not at a Zoom meeting. I don’t think our senses have the same reaction when we see or read something on a social platform. It’s a blip, a speck; it doesn’t sink in. We need more time together one on one, just hammering it out, face to face. If you are ready to give back to this community that has given you so much, or if you’d appreciate having someone who’s got some experience to talk to and work with once in a while, I want you to email kelly.mutual@vrmintel.com. We will compile and email out a list of mentors and folks who need a mentor. You’ll also get a white paper (written by yours truly) on mentoring and how to make it a win–win for both parties.

Why do I feel so strongly about this? About two years ago, I was pretty burned out on being a vacation rental manager when I met this guy named Steve Hart, the co-founder of Property Management, Inc. He’d been building a franchise model for property management over the past 10 years, starting with long-term, then adding commercial and HOA business models. He admittedly knew very little about vacation rentals, but he felt that hyper-local, owner–operator vacation rental offices could be the future of the business in the US. Long story short, after about six months of getting to know each other, he asked me to build the platform, launch the community, and develop the training, systems, and support. Build a complete platform for someone who knows nothing about vacation rentals to become a top-shelf manager? Wha-a-a-t? This was not going to be easy. But it was my Namolokama. For me, it tied everything together. After building this property management company for the last year and a half, it has become everything I’d hoped it would be. We have about 90 vacation rental managers, and the mentorship programs ve’ve put in place are easily the most successful, satisfying relationships I’ve ever seen in the vacation rental business: people helping people, giving without the expectation of receiving—quite the pure and beautiful thing I remember from so many years ago when I welcomed my first guest. The power to solve your problems is already within our beautiful little space. You just need to offer it and ask for it. Aloha,

-Billy O’

Billy O’ Sullivan has been building vacation rental property management teams for over 17 years in locations ranging from Utah, California, Hawaii, and Seattle. A natural born leader with a wealth of marketing experience, Billy has written, produced, and directed award-winning commercial campaigns as well as launching boutique real estate businesses, and building a small vacation rental empire. This hasn’t stopped him from putting family first. He manages his Seattle teams remotely so he can spend more time with his parents. Billy is excited to share his knowledge and energy with the property management family.

| MARKETING

A Vacation Rental Marketer's Modern SEO Strategy

Stop! Before you turn that dial, hear me out.

know Pinterest seems like just another social media tool and you have no use for social media beyond what you are already doing.

But Pinterest is not a social media site—Pinterest is a social search engine—just like Google, only better! When you understand what Pinterest really is and learn how to use it strategically to bring traffic to your website, you can see that it gives vacation rental marketers like you a huge opportunity to get in front of a very select audience. And by “very select audience,” I mean people with money who are looking for travel inspiration and vacation planning ideas. After all, 64 percent of Pinterest users earn higher than average income, and 39 percent of people in households worth more than $75,000 or more use Pinterest. Many of these people are on Pinterest specifically to find and save travel ideas. According to Pinterest data from a comScore study in August of 2018, almost half of US travel Pinners turn to Pinterest when they start to plan their next trip and 76 percent of travelers

searching on Pinterest make a purchase after seeing content from brands on Pinterest. This means people are looking at Pinterest to get travel ideas, they are planning their vacations and saving vacation ideas on their boards, and more importantly, they are booking accommodations and making other travel-related purchases from them. And what’s even more exciting for independent vacation rental owners and property management companies is that there is plenty of room for your pins from your website to show up at the top of the search rankings. With Pinterest, the top search results come from a combination of the most popular pins with the most engagement, the newest content with relevant keywords, and sponsored ads. Since most businesses focus on their SEO strategy with Google, there is now an open playing field for you to get on the first page of search results on Pinterest.

How Travel Brands Are Using Pinterest Just a quick Pinterest search for “travel,” “beach vacation rentals,” or “things to do in Nashville” will show you that tourism offices, travel bloggers, vacation rental owners, hotel and resort chains, and other travel-related business owners are using Pinterest through their own boards and pins. VRM Intel Magazine | Summer 2019

What is also interesting is the number of pins you will see from individual Pinterest users who are saving content from travel brands on their personal boards—this is the beauty of Pinterest. Your content is being saved and shared over and over again by people who are interested in your destination or vacation rental. Right now, there is almost no competition if you have a beach rental and are creating content and using effective keywords on Pinterest. I found the following pin at the top of my search for “beach vacation rentals.” It was a “things to do” blog article from a vacation rental website in Anna Maria Island and had been “repinned” 116 times:

6 Steps to Get Started With Pinterest Step 1: Keyword Research There are several ways to do some quick research of the kinds of pins your users would be interested in.  Pinterest Search

First, try the Pinterest search bar for travel and use the tags at the top to narrow your search. These tags are keywords and you can use these keywords in your board descriptions and pins to help people find your content. Click on a keyword and narrow down into a deep dive of even more keywords. Keep notes on which keywords and combinations show your content. Be sure and do a search for your particular destination as well to see what you find.

 Search what pins your own site’s users are already pinning. Use this link: http://pinterest.com/source/yourwebsite.com/. Replace “yourwebsite.com” with your actual website. You may be surprised to see that your site has already had some users pinning from it.

Here is a Pinterest search I did for my tourism blog in my hometown. Note that only the images with my name are my own pins. And yes, someone pinned an image of my face… 76

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Step 5: Create boards with content you can share with your guests Sharing great content with others is imperative. You can use Pinterest as a place to curate travel ideas, things to do, restaurants, shops, etc. that will help people get to know your destination. As people share your pins, find your boards, and follow you, you will have more opportunities for new people to find your content and your vacation rental. This is the social part of “social search engine.”

Step 6: Track Your Results with Google Analytics

Step 2: Create Your Business Account  Visit the Pinterest account creation page and set up your account in 15 seconds.

 Read about Pinterest business features including the “Getting Started Guide and Tools.” (Also check out Rich Pins which are helpful for making your pins show up better in search results.)  Use the keywords from your research to start a few boards and begin pinning.

Step 3: Create Your Images and Videos With so many different images, the competition may be tough, but with just a bit of creativity and some free image creation tools like Canva, you can make your image stand out. Last year Pinterest began allowing users to pin videos and carousels as well as images, so play around with what works best. Think creatively about how you want your image to stand out. Use colors and fonts and remember that the best images will create more interest. You can use stock photos if necessary.

Step 4: Add Your Image to Pinterest  Go to your Pinterest account and click the plus sign to add a new pin. Copy the URL of the page the pin is on to pull images from that page. You can also add an image, video, or create a carousel of images from your computer.  Once you have added the image to a board, you can add a description with a call to action (use your keyword research to describe your pin so that users can find it when they search).

 Add the URL where the pin should link. For those familiar with Google Analytics, you might want to consider using UTMs to track specific images back to your site.  View your pin and click the little pencil to change the description, and be sure to add a description that invites pinners to click on your link. This is similar to the meta-data description area in Google.

Although Pinterest provides business users with analytics details such as the number of re-pins, shares, and click-through rates, they only tell you half of the story. By using Google Analytics and your Pinterest analytics, you can find the real data you need to make better marketing decisions.

Use Google Analytics “Source/Medium” Reports to see how much traffic Pinterest is sending to your site as well as what that traffic is doing once it gets there. If you are an advanced user, you can add UTM codes to your pins and track which specific images and pins are bringing you traffic. Check out my website jodibourne.com/ pinterest-tracking to read more about how to track and test your pins.

In Summary First, understand that Pinterest works best for those with content to share. Although, you can use it to drive traffic to your vacation rental booking page or other online listing, the more pages of content and images you have with travel ideas, guest information, trip planning, etc., the better your strategy will work for you.

It is also important to note that Pinterest is a long-term strategy that should be used in conjunction with other networks to bring traffic back to your site. Have a plan for where you want your pins to lead and what actions you want your users to take. If you are sending traffic from pins to your blog, be sure and have an email capture set up on your site with a great lead magnet or discount offer for renting your property.

Remember, like any form of social media, Pinterest works best when you engage with others. Look for pins that will interest your followers and share them on Pinterest and in your e-mail newsletters. Good luck and happy pinning!

By Jodi Bourne Jodi Bourne is a digital marketing strategist, web designer, and content creator with a passion for tourism. As the owner of a small consulting and web design agency in the Texas Hill Country, Jodi helps vacation rental owners market their destinations, attract better guests, and put more heads in beds. Learn more about Jodi at jodibourne.com. VRM Intel Magazine | Summer 2019

VRM Intel Magazine | Summer 2019

| CUSTOMER SERVICE

l a t n e R n o i t a c Inexpensive Va

0 0 1 $ r e d n U s e Upgrad

e used to talk about the "wow" factor and what we could do to elicit that superlative response. That may have been fresh flowers, music playing softly in the background, a personalized greeting, and maybe the offer of some type of concierge service. It wasn’t difficult to surprise and delight because few owners and managers were doing it. It worked for a long time in those early days of reviews.

Then expectations began to rise, and it seemed the more we worked at making the vacation memorable, the harder it became. Guests were sharing all the special touches and what they loved most about a property, and in readers’ eyes, those qualities made up the norm. In our mission to be the best, we’ve been educating guests to expect the highest standards, and yet we still anticipate they will see the hard work as something extra to be applauded. As this has happened, margins have become tighter, and it’s challenging to provide those extras without hitting the bottom financially. So is it possible to still make guests happy without breaking the bank? Yes.

It may not be the one-off event that captures their hearts and their iPhone cameras—instead, today’s methods of keeping the five-star reviews coming tend to involve consistency of service, alleviating frustrations, staying up to date with the basic needs guests have, and anticipating what drives people’s contentment on vacation. The following list is drawn from guest experiences and reviews in which they’ve mentioned little things that made their vacations enjoyable and trouble-free. Mostly they’re simple additions, all priced under $100.

By Heather Bayer, CottageBlogger

B USB chargers Picture the family arriving to a property after a long journey. They’ve realized halfway that they forgot to bring any chargers (unlikely, maybe, but not outside the realm of possibility). Not to worry, they assure the kids—there will be at least one or two USB chargers at the vacation home. The last thing they want to do is to kick off their stay by searching for somewhere to plug in their devices. The outlet should be simple enough to locate, but it also should not be placed so that the guest has to crawl under a bed to find it. The argument that these chargers are the most likely item to disappear is valid, and the expenses add up if they have to be replaced on each changeover. The simple solution is to create a permanent charging station—a space where all devices go to be juiced up.

Then the answer is to ditch the old clock radios—yes, there are still a lot of them out there—and replace them with bedside clocks/ USB chargers, making sure there is one for each bedroom, too. Here’s a bonus tip. Put the Wi-Fi user details in a PERSPEX® card holder on a bedside table in each bedroom—your guests will love that too.

C Motion sensing night-lights Most accidents happen in vacation rentals in the first 24 hours of a stay, and it’s often due to unfamiliarity with the space. Guests often arrive late in the day—they are tired, hungry, and in need of a first cold drink. It’s unlikely they will spend much time getting the VRM Intel Magazine | Summer 2019

family oriented to the layout of the home before they all fall into bed for a welcome sleep.

Naturally, someone is going to get up in the night for a comfort break. They fumble around in the dark, trying to find a light switch, and then they stumble, half-asleep, down a dark hallway. It’s an accident waiting to happen that could be easily prevented with the use of mobile motion-sensing night-lights. Whether using a battery powered stick plugged in or holding it in your hand, this simple and effective remedy will show you are thoughtful and have your guests’ safety in mind.

D Hairdryer in every bathroom Inequality in sleeping accommodations is one area that gives hotels an edge over vacation rentals. Unless they are custom-built, most homes will have just one master bedroom with an en-suite bathroom, creating that “who gets the best room” decision when guests have arrived.

F Portable Bluetooth speaker The days of the boom box are over. Guests are bringing music on their devices and a Spotify account, not on CDs. Many people will pack their own Bluetooth speaker, but to be on the safe side and happify the ones who forget, providing this small extra shows you have gone the extra mile.

G Plug adaptors Most guests traveling internationally will think ahead and bring their own adapters to convert the power from UK/European voltage to US voltage. Providing a couple of these will endear you to those who haven’t.

H Hey Google! Earlier this year, Amazon revealed that more than 100 million devices with Alexa on board have been sold. This figure includes more than 150 products with Alexa built in, more than 28,000 smart

Knowing there are already mildly dissatisfied guests who are in the queen (not king) room and have to share a bathroom, you have to do your utmost to build up their satisfaction. The simple act of supplying a hairdryer in all bathrooms in the home may not propel them into the super-fulfilled category, but at least it won’t add to the “and another thing” list.

E Instant pot For those who remember Grandma’s old pressure cooker, you’ll recall the loud hissing, the wobbling weight valve that sat on the top, and the fear it was going to blow up at any moment. The thought of having one of those in a vacation rental might be enough to make an owner revisit the liability clause on an insurance policy and create a plan for reinforcing the kitchen ceiling!

Like everything else, however, the pressure cooker has seen monumental changes, and the current popularity of the Instant Pot is a testament to its quiet performance and amazingly quick results. It’s no wonder it holds positions #1, #2, and #3 in the “Most Gifted Small Appliances” list on Amazon with three of its top-selling models.

A ranking as one of the most popular small appliances across the US means that the majority of homes will probably have one. Because we strive to deliver a property that is as good as or better than a guest’s home, this is a great addition to the kitchen set-up. Give your property a gift, and your guests will love you. The basic model does just what the more costly models do, but without Bluetooth. Come on . . . who needs Bluetooth on a pressure cooker anyway?! 80

VRM Intel Magazine | Summer 2019

home devices that work with Alexa made by more than 4,500 different manufacturers, and over 70,000 Alexa skills. And that’s just Amazon’s figure for their Alexa brand. Google is likely to have equally impressive numbers.

Why is that important to us? Because our guests are used to talking to voice-activated devices. They want a recipe, a reminder of the internal temperature of a roasted chicken, a weather check, and some suggestions for local restaurants. They are on vacation and quite rightly lazy, so if you can make it better for them by delivering what they are used to at home, they will reward you with a great review.

I Large bath towels Setting your properties apart from hotels means doing what they don’t do. Easy, right? Doing this means investing a little more in the amenities understood to be standard in a hotel, like towels. You have to be quite close to the luxury brand of hotel to get a bath towel that will wrap an ample rump and come together at the front. That should not hold true in any self-respecting vacation rental.

Costco regularly has sales of bath towels that are generous enough to cover the modesty of the majority of guests, so give them a treat that will make them say, “This is why I don’t stay in hotels.”

anything your guests might forget. Include an inventory with a pen and checklist, and ask guests to check off any items they have used. Use a zip tie to lock the box, and let guests know they can only access the box by clipping the zip tie. That means your cleaner will be able to do a quick check to see if anything has been used.

Here’s some ideas of what you could put in the box.

 Band-aids

 Toothpaste

 Disposable razors

 Toothbrushes

 Tampons

 Hair mousse

 Hair spray

 Condoms

J Plentiful ice trays

 Hair elastics

 Mouthwash

This sounds like a no-brainer, but it’s a common complaint that there was no ice available when a group arrived at a property.

 Chapstick

 Lint roller

In a hotel, the ice maker is down the hallway—just fill the bucket, and you’re on the way to having a cold drink. Now imagine arriving at a rental home to find there’s either no ice at all or two tiny ice

trays that came with the fridge that will serve up enough ice for a couple of drinks but will also melt in minutes.

Perhaps you have ice-makers and that’s great. Problem solved. Otherwise you will need to make sure ice is in plentiful supply—at least one tray per person. Add a task to your turnover list: the trays need to be emptied into a freezer box and refilled. Just one minor addition that will ensure a satisfied customer!

K Emergency supplies box There’s been a theme to much of this list. Guests forget things. With the best will in the world and great organizational skills, something will still get left behind. You can send them a packing list, which is a nice touch, but that won’t guarantee they’ll remember the one thing that will make their stay problem free. Using a tackle box, fill it with travel-sized and single-use items—

This is not an exhaustive list. There’s probably many other things you can think of to make your guests’ stay smooth and trouble-free. And while each of these on their own might not solicit a "wow" reaction, the combined outcome of a memorable vacation with nothing missing could be just what is needed for that five-star review. VRM Intel Magazine | Summer 2019

| BUSINESS

By Justin Ford

Vacation Rental Dwelling

Danger Zones A

lthough he didn’t coin the phrase, US President Harry S. Truman had a sign on his desk with “The buck stops here” inscribed on it. This was meant to indicate that he didn’t pass the buck to anyone else but accepted personal responsibility for the way the country was governed. Each vacation rental dwelling owner or manager needs to make that same commitment to taking personal responsibility for their paying guests enjoying a safe rental. A beachfront rental with a pool on the coast of North Carolina may be completely unfamiliar to a family from Ohio who has never even vacationed by the ocean before. That Ohio family may have never seen a residential elevator, walked out onto a second-floor deck, or climbed into a hot tub. It’s up to the owners to prepare their vacation rentals for all kinds of guests—not just the ones they think will be as familiar with their rentals as they are. Some items in the vacation rental home are more dangerous than others.

Trip Hazards Falls account for the highest number of insurance claims against property owners of vacation rentals. Nearly one third of all

VRM Intel Magazine | Summer 2019

nonfatal injuries in the United States, according to the National Safety Council1, are caused by falls in or around the home. The risk of falls increases when renters are put in an unfamiliar environment such as a rental dwelling. In the United States, around 40 percent of people aged 65+ have at least one disability, with two thirds of them stating mobility as the biggest difficulty, and 18.3 percent of vacation renters are over the age of 65 according to Statista.com2.

Many vacation managers state that the highest number of reportable insurance incidents at rental properties come from trips and falls. The exterior of the rental dwelling must have proper lighting. Inexpensive solar lights are a great option here. Owners should visit their rentals after dark to ensure a renter has a well-lit path into the dwelling. Walkways leading around the property must be level and there can be no big cracks in the driveway. Inside, rugs and carpets should be smooth and have anti-slip grip under them. Corners that are peeling back must be taped down. Stair handrails must meet international building code standards. Furniture in the rental must be arranged or removed to allow plenty of room for walking.

Trees Trees on vacation rental properties present a common challenge. Wind from storms can push trees onto the dwelling, as happened earlier this year in Ocean Beach, CA, when a tree fell on a Vrbo.com rental home killing the two renters inside. Although a tree falling is dangerous, the branches of the tree can actually present an even greater hazard. In 2015, the modern vacation rental industry became acutely aware of safety at rentals after a tree branch with a swing attached fell on and killed a renter. The trees around the rental, and the branches of

those trees specifically, should be inspected every few months. Having a rope swing attached to a branch on any tree at a rental is probably not a good idea.

Candles

Zak Stone wrote an essay about the death of his father, who was killed when a tree fell on him while staying at an Airbnb rental in Texas.Credit: Monica Almeida/The New York Times

Barbecue Grills According to a recent report from the National Fire Protection Association (NFPA)3, grill fires on residential properties result in an estimated average of 10 deaths, 100 injuries, and $37 million in property loss each year. According to The Distinguished Guest4, 42 percent of vacation rental home owners say that they deep clean their barbeque grills twice per year, but just over one quarter only do this once. This is unacceptable and a recipe for disaster at vacation rentals. A barbecue grill at a vacation rental may get five times as much use as a grill at a normal residential home. A cleaning team must inspect and clean the grill after each rental. Removable grease trays underneath the grill must be replaced frequently. Although the majority of grill fires start in an open space, such as on the deck, a large amount occur in an enclosed space, according to the NFPA3. At vacation rentals, it is important to keep grills at least 10 feet from any combustible material. They must never be placed under the rental dwelling or under an enclosed porch. To ensure that a grill is located in a safe place to cook and prevent fires, a good idea is to chain it with a lock to a metal post or another other heavy/permanent item in the yard, 10 feet or more away from combustible materials.

Candles that support a flame and matches shouldn’t be provided in vacation rentals. There are several LED “flameless” candle products out there now that are safer. The NFPA6 also states that from 2012 to 2016, US fire departments responded to an estimated 8,200 home structure fires that were started by candles per year. These fires caused an annual average of 80 deaths, 770 injuries, and $264 million in direct property damage. A fire that killed an eight-year old child at a rental in Orlando, FL, in 2018 is just one example of unattended candles being potentially deadly in a rental. Owners who want to provide renters with a means of lighting fires in their rentals need to ensure it’s in the form of a childproof lighter stick.

Cooking Fires Cooking fires are the number one cause of home fires, causing 48 percent of home fires that resulted in 21 percent of the home fire deaths and 45 percent of the resulting injuries, according to the NFPA7. The leading cause of fires in the kitchen is unattended cooking.

Dryer and Washing Machine Fires Between 2010 and 2014, US fire departments responded to an estimated 15,970 home fires involving clothes dryers or washing machines each year. These fires resulted in annual losses estimated at 13 deaths, 440 injuries, and $238 million in property damage. Clothes dryers accounted for 92 percent of the fires; washing machines 4 percent; and washer and dryer combinations accounted for 5 percent, according to the NFPA5. There were several reported fires from vacation rental dryers in 2018. Some of these resulted from dryer exhausts not being properly cleaned and maintained. One in San Diego gained particular attention.

Frying dominates the cooking fire problem. Owners can help renters avoid these fires by providing proper lids for frying pans, mounting a fire extinguisher nearby, and keeping anything that can catch fire—oven mitts, wooden utensils, food packaging, towels, or curtains—away from their rental stovetop.

Heating Fires Heating equipment is also a leading cause of fires in US homes. Local fire departments responded to an estimated average of 52,050 such fires each year from 2012 to 2016, which accounted for 15 percent of all reported home fires during that time. These fires resulted in annual losses of 490 civilian deaths, 1,400 civilian injuries, and $1 billion in direct property damage, according to the NFPA8. If a vacation rental has a woodburning fireplace or stove, VRM Intel Magazine | Summer 2019

Dull Knives On average, 1,190 knife-related injuries are treated in the United States per day. Most knife-related injuries in vacation rentals are from kitchen knives. Dull knives can cause serious injuries, and they have in rentals around the United States, according to the US Library of Medicine10.

the chimney must be inspected by a professional prior to the start of every heating season and cleaned if necessary. Creosote, a chemical substance that forms when wood burns, builds up in chimneys and can cause a chimney fire if not removed through cleaning. Renters can be protected by being supplied with a sturdy fireplace screen when burning fires. Signage must be in place to tell renters how the fireplace or stove works, and they should be encouraged to burn only wood—never paper or pine boughs, which can float out of the chimney and ignite the roof or a neighboring home. Portable space heaters—either electric or kerosene—should not be provided in a rental. If the rental uses electric baseboards, renters need to be aware of them and combustible items should be kept clear of them.

Smoking Smoking materials, including cigarettes, pipes, and cigars, started an estimated 17,200 home structure fires reported to US fire departments in 2014. These fires caused 570 deaths, 1,140 injuries, and $426 million in direct property damage.

Why are sharp knives safer than dull blades? With knives, it’s all about control. Think about cutting a firm, slippery object such as an apple. When the smooth edge of a knife is applied to the slick surface of the apple, one of two things will happen: Either the blade of the knife will skid along the surface of the fruit, or it will cut into the flesh. A dull knife is more likely to slip than cut. Once the knife has slipped, it is a matter of luck and reflexes to prevent the knife from going through a finger. Yes, a sharp knife applied directly to the skin will cause more damage than a dull one—but it’s easier to guide a sharp knife away from the skin than a dull one. Owners who keep their vacation rental knives sharp have happier guests.

Pool & Hot Tubs According to the Consumer Product Safety Commission11, 350 children under the age of five drown in pools each year nationwide. An American drowns nearly every day in a bathtub, hot tub, or spa. This is often a result of drinking or taking drugs while soaking in hot water, according to the Centers for Disease Control and Prevention12.

Smoking materials caused 5 percent of reported home fires, 21 percent of home fire deaths, 10 percent of home fire injuries, and 6 percent of direct property damage in 2014, according to the NFPA9. The bottom line is that those who partake in smoking must be prohibited from occupying rentals. It’s not enough to say “No Smoking” anymore. Those who want to smoke where they shouldn’t will “sneak” a smoke and are more likely to cause a fire by stepping over to the edge of the property and putting out their cigarettes in bark mulch landscaping. A fire at an Airbnb rental in Sonoma, CA, in 2017 destroyed the dwelling, despite smoking being prohibited there. 84

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These drownings occur for various reasons, but all can be prevented by the vacation homeowner or manager. Every owner with a pool should thoroughly review and adhere to the US Consumer Product Safety Commission’s Safety Barrier Guidelines for Residential Pools13. The following is a list of common things owners and managers can do to prevent drownings or injuries at their rentals and avoid liability.

things that may pique the interest of children and ultimately lead to drownings or other accidents. Renters may bring their own pool toys if they wish to use them. Owners must be sure to remove any toys left behind.

 The pool must be completely protected by a fence with childproof locking gates.

 Pools should have a safety pole and other devices (ring buoy, first aid kit, etc.) to help struggling swimmers out of the pool. Built-in ladders can also reduce the likelihood of accidents by providing an easier way out of the pool.

 Pools and hot tubs should have warning signs posted. These signs should include all the hazards of using these facilities as well as quick access information like the address of the rental and emergency contact information.

Furniture Items

 Hot tubs and spas should have covers that are locked or secured by childproof straps at all times when not in use.  Pools should have depth markers posted on them. The largest lawsuit ever won by a vacation renter ($11.6 million) occurred recently when he became permanently paralyzed upon diving into a pool that didn’t have depth markers at a rental in Florida.

 Hot tubs and spas should not be pushed up close to an elevated deck railing unless they have extra protection to keep children from falling out.  Pool and hot tub chemicals should be locked away from guests.  The pool and hot tub water must be tested and treated between each rental.  All pool toys must be removed—many insurers of vacation rentals now require this. This includes any floating devices and other

It may be “shabby chic” to lean up pictures and mirrors against the wall at a vacation rental, but they must also be secured. It takes little effort to knock over a 50-pound mirror and have it fall on a child. The same goes for dressers, TVs, and other large items. Many vacation rentals have lots of electronic items in them. The cords need to be coiled up and secured to prevent a child from pulling the electronics down on him or herself. Owners must check under beds to ensure the bed frames are in good shape. Pullout couches, often intended for child use, are some of the most dangerous items for them to use. Several news reports over the past decade point to deaths from children being accidentally folded up in them. Sharp edges from the metal material that hold them together and the large gaps at the head of them pose particular dangers. Owners should consider whether they really want to provide their guests with these furniture items. National Safety Council, “Fall-Prevention Measures Can Keep Older Adults Independent,” (Accessed June 28, 2019) 2 Statista.com 3 Marty Ahrens, “NFPA Research: Home Grill Fires Tables,” National Fire Protection Association, April 2019 4 The Distinguished Guest 5 National Fire Protection Agency, “NFPA Fact Sheet Research: Home Fires Involving Clothes Dryers and Washing Machines,” June 2017 6 Marty Ahrens, “NFPA Research: Home Candle Fires,” National Fire Protection Association, December 2017 7 Marty Ahrens, “NFPA Research: Home Cooking Fires,” National Fire Protection Association, November 2018 8 Richard Campbell, NFPA Research: Home Fires Involving Heating Equipment,” National Fire Protection Association, December 2018 9 Marty Ahrens, “NFPA Research: Fires Started By Smoking,” National Fire Protection Association, January 2019 10 GA Smith, “Knife-Related Injuries Treated in United States Emergency Rooms, 1990-2008.” US National Library of Medicine, September 2013 11 United States Consumer Product Safety Commission, “CPSC Reminds Residential Pool Owners and Parents of Precautions to Prevent Drownings of Young Children,” November 1998 12 Centers for Disease Control and Prevention, “Unintentional Drowning: Get the Facts,” April 2016 13 United States Consumer Product Safety Commission, “Safety Barrier Guidelines for Residential Pools: Preventing Child Drowning,” 2012 1

Justin Ford is the Founder and President of Dwell Safe®, the national expert on vacation rental safety, and a Co-Founder of On the Water in Maine Inc., the largest vacation rental agency in New England. He has a background in safety that goes back to his enlistment in the US Coast Guard where he participated in vessel safety enforcement. Later, he joined his local fire department where he was the training officer. Justin has an extensive background in rental property maintenance and safety through his 20 plus years in the vacation rental and safety industry.

VRM Intel Magazine | Summer 2019

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VRM Intel Magazine | Summer 2019

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

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

A “Speedometer”

for Housekeeping Performance

ast fall I spent some quality daddy–daughter time with my daughter driving her back to college for her junior year. It was a long trip, and I was constantly looking at the speedometer to know how fast I was going. My speed depended on the traffic, weather, and how anxious we were to arrive at our next stop.

We were on the last leg of our journey and within 120 miles of our destination. We were tired of being in the car and ready to walk on land. Because of this, the needle on the speedometer occasionally read more than the speed limit sign—oops! I would notice this and slow down. Later, down the road, I would check again and realize that I had unconsciously increased the speed again. This yo-yo effect continued for the next 90 miles. As we came over a tall hill (on the high end of the yo-yo speed cycle), we spotted a patrol car in the median. Just then I checked my speed and saw I was going too fast. I slowed down, but alas, it was too late. The officer had clocked my speed at 12 mph over the speed limit. He happily wrote me a ticket, and 45 days later I paid the fine and was $260 poorer. Ugh! (Insert unhappy wife scowl right here—I enjoyed my few days in the doghouse.) When we drive, the speedometer’s only job in the vehicle is to provide continuous feedback. It doesn’t factor in rain, school zones, or the officer on the other side of the hill. It simply states how fast the vehicle is going. It is up to the driver to look at the road conditions, follow the speed limit, and monitor traffic congestion to decide when to adjust speed. Housekeepers and cleaning professionals need continuous feedback to know how they are performing. They need a “speedometer” of sorts to provide information. If you think about it, the clean-

ing staff, for the most part, usually receives only negative feedback. What is the ratio of negative comments to positive—1 to 1, 5 to 1, or 30 to 1? This is tough on housekeepers! Their day is full of cleaning up other people’s messes, which may include pee, poop, or vomit. Fun! All cleaning professionals need to have scoreboards or scorecards that show how they are performing. The scorecard items might include the following:  Punch-in and punch-out times compared to the schedule  Actual clean time compared to the projected clean time  Number of back-to-backs started on time

 Guest comment card scores for the properties they’ve cleaned

 Inspector evaluations of cleanings the housekeeper’s performed The scorecard can be old-school pen and paper or compiled in the latest and greatest app. It does not matter how it is done as long as it shows how the individuals and departments are doing.

For many staff members and departments, this is going to be a huge cultural shift. There will be anxiety, fear, and tears as they encounter feedback (positive and negative) on a more frequent basis.

Remember, just as the speedometer provides information about a vehicle’s speed, the scorecard or scoreboard will do the same for your staff. Knowing their work performance scores will help them be able to make adjustments successfully to meet the standards the company has set. When staff anxiety and stress subside over this new system, they will begin to understand and appreciate its great value, and you will hit another level of success in your business. VRM Intel Magazine | Summer 2019

| BUSINESS

AscentPay

acation costs can burden guests’ finances, regardless of their budgets. Paying up front for accommodations and transportation can result in abandoned carts and lost bookings. Ascent Processing, an independently owned payment provider with deep roots in the vacation rental/lodging industry, recently revealed a new consumer travel finance product called AscentPay, powered by Uplift, that helps guests pay for their vacation rentals over time. Tom Talley, VP of credit products at Visa USA, spoke to card-issuing banks about Visa’s extensive research on Gen Z and millennial buyers. Their research shows these buyers want 1) everything in real time instantly, 2) personalized services, 3) transparency and control, and 4) to stay engaged through experiences. Millennial spending habits tend to reflect the generation’s priorities: convenience, a focus on experience (travel) rather than things, and a delayed start to home ownership and starting a family. According to Forbes.com, traditional lenders are tightening their requirements for loans and credit extensions, so helping these guests leave their existing credit open for experiences and other vacation expenses not only solves these issues in real time, but it allows vacation rental managers to capture the additional revenue increased bookings provide. 88

VRM Intel Magazine | Summer 2019

Skeptics such as Amrita Jayakumar, author at NerdWallet, argue that financing a trip may be more expensive than charging it to a credit card, saving up ahead of time for vacation, or going on a more affordable trip. But according to Gui Costin, author at Forbes.com, the majority of millennials, currently the largest generation with 83.1 million young people positioned as our economy’s next big spenders, have an average of less than $1,000 in their bank accounts, and more than 65 percent do not have a credit card. Millennials, roughly defined as those born between 1981 and 1996, do want to travel, so guest-financing products like AscentPay are well-positioned for this generation to take advantage of the new experiences and travel they crave, with a payment plan they can handle. “Buy now, pay later” technology is changing the e-commerce payment landscape, according to Grace Cary, author at SmarterCX. com. AscentPay is the first product designed specifically for the short-term rental industry. Guests get the instant gratification of booking a trip now and paying it off later, while property managers get paid in full at the time of booking and can rest easy knowing they are not liable for chargebacks or fraud. The vacation loan, is-

sued instantly at the time of booking, indemnifies both property managers and homeowners against these risks.

The #BookDirect movement shows that providing benefits to guests that encourage booking directly is important to virtually every property manager. Often the OTA or channel manager with access to the technology brings new and innovative options to guests. AscentPay allows property managers to keep firm control of their own revenue, with direct access available for large property managers and access for small-to-mid-scale PMs available through partnerships with VR web-hosting industry leaders. To further support independent growth in the industry, AscentPay was designed to be processor agnostic, working seamlessly with the property manager’s existing credit card processor.

Ascent partnered with Uplift, the premier provider of short-term travel financing, to develop the vacation loan service specifically tailored for the short-term vacation rental market. Here is what spurred Ascent to to design a completely different payment option for our industry:

“We are thrilled to have partnered with Uplift to bring this modern payment option to the vacation rental industry,” says Dawn Yeskulsky, vice president of business development and partner programs. “Our expertise in the VR payments industry, coupled with Uplift’s technology, has allowed us to create a game-changing payment alternative that solves a multitude of issues for property managers and lodging providers. Instant financing is a widely accepted payment alternative in the retail and e-commerce markets, and we knew that this option would be just as widely embraced by alternative lodging guests as it would be by the property managers looking to offer stateof-the-art booking solutions. After consulting with many of our trusted property management partners, we concluded that any new payment solution we brought to the market must include reduced liability for chargebacks and fraud in addition to tools to help significantly increase direct bookings and revenue. The fact that we pay property managers 100 percent of the total reservation immediately at the time of the booking was an added bonus.”

“Ascent is a leader in payment processing for lodging and rentals, and our partnership will provide an immediate positive impact for the company’s property managers throughout North America,” said Tom Botts, chief commercial officer at Uplift. “We’re thrilled to deliver instant financing within Ascent’s own offering, which enables the company to increase their value to their property managers within a seamless customer experience.” Property managers and lodging providers also like the impact on average reservation dollars. In similar lodging markets, Uplift has seen lodging providers enjoy an average revenue increase of 26 percent thanks to a pay-monthly option from upgraded trips and longer stays. Guests book their stays further in advance and add more upgrades and other ancillary services. For example, Uplift has seen a 50 percent increase in consumers choosing travel insurance protection with the pay-monthly planning in similar markets. Seeing their monthly payment change by only a few dollars as they add on additional services is more palatable to guests and their monthly budgets. Moreover, because guests are only required to make their first vacation loan payment before check-in, they don’t have to come up with as much money up front. Guests are more comfortable booking sooner, which explains the 41 percent earlier average booking window identified at Uplift.

Ken Willis, COO of Peace Vacations, decided to offer this new payment alternative. “This is by far one of the most innovative ideas to come to the vacation rental industry in a very long time, and it makes perfect sense,” Willis said. “I can now offer my guests a payment plan that allows them to book nicer properties and extend their payments past their departure date. Plus, no prepayment penalty! And then I found out that I have no risk for chargebacks or fraud, and they pay us the full booking amount immediately after booking, I thought it was too good to be true. What was the catch? No catch. I love this product.” “I am excited about AscentPay being part of our company,” said Patricia Denny, owner of Holiday Isle Properties. “I feel the added payment option to guests will be an industry first and will drive more conversions than ever before. It also allows me to have a more stable revenue forecast as I know I am getting paid upfront and not having to deal with chargebacks or fraud,”

Property managers may be concerned about offering payment options that could be considered predatory, for good reason: as of June 5, 2019, the average annual percentage rate (APR) on new credit card offers inched even higher, according to the CreditCards. com Weekly Credit Card Rate Report. The national APR recently climbed back to 17.73 percent. But not to worry—the average APR through AscentPay comes in around 15 percent and can go as low as 4.99 percent with good credit. This is a simple interest fixed-rate loan that has no prepayment penalties. While not all vacation rental managers enforce the same terms, Ascent finds that the most common reservation requirement is a 50 percent deposit, due at booking, with the remaining balance due 30 days before check-in, leaving most companies locking up their property availability having received only 50 percent of the income. In states such as North Carolina, where disbursements to owners are allowed before guest check-in, this only leaves more risk of guest cancellations or chargebacks. AscentPay pays the PM or lodging provider the full amount of the total booking immediately, regardless of when the stay occurs. Ascent’s partnerships with website development, rental software, and listing site companies such as Bizcor, Blizzard Internet Marketing, ICND, and Bluetent have facilitated this technology’s entrance into the vacation rental market. Brandon Sauls, CEO of Intercoastal Net Designs, said, “It was a no-brainer for us to offer this to our client base. It’s a powerful solution that benefits both vacation rental managers and guests. The product is a valuable match in that both ICND and AscentPay work to drive direct bookings and increase revenue for our clients. We bumped this to the top of our development queue as we knew this would be in high demand from our vacation rental clients.” Peter Scott, president of Bluetent, added, “The ability to give guests an option to finance their trip was something many of our partners wanted to include with their services. So many professional managers are working to grow their brand and offer a unique way to do business. We see this option as one of those bricks in ‘brand building,’ and we are excited to see this roll out.” Software and web development companies that integrate AscentPay are adding a feature that will differentiate them from their competition. There is already strong demand from property managers who want to make ethical vacation loans easily accessible to their guests and to partner with the software and development companies who agree with them. VRM Intel Magazine | Summer 2019

| education

 Austin, TX  Austin Central Library Events Center  www.smartcitypolicysummit.com

 Tel Aviv, Israel  Venue TBA  www.guestyval.com

1819

SEP

SEPTEMBER

SEP

GUESTYVAL

SEPTEMBER

1618

SKIFT GLOBAL FORUM

 New York City, NY  Jazz at Lincoln Center’s Frederick P. Rose Hall  forum.skift.com

1820

STREAMLINE SUMMIT

 Scottsdale, AZ  The Phoenician  www.streamlinesummit.com

2427

HOMEAWAY REZFEST

 Las Vegas, NV  Red Rock Casino Resort & Spa  www.homeaway.com/l/rezfest/

OCT

SEP

VRM Intel Magazine | Summer 2019

VRMA CONNECT COLORADO

OCTOBER

SMART CITY POLICY SUMMIT

 Breckenridge, CO  Beaver Run Resort  www.vrma.org

SEP

SEPTEMBER

VRM INTEL DATA AND REVENUE MANAGEMENT CONFERENCE

SEPTEMBER

AUGUST

0607

 Atlanta, GA  Atlanta Airport Marriott  www.vrdarm.com

APR AUG

AUGUST

AUG

August 6-7, 2019

AUGUST

AUG

Calendar 0506

VACATION RENTAL WORLD SUMMIT

 Lake Como, Italy  Teatro Sociale  www.vacationrentalworldsummit.com

 Memphis, TN  The Peabody Memphis  conference.liverez.com

0406

NOVEMBER

NOV

 North Falmouth, MA  Sea Crest Beach Hotel  www.vrma.org

WORLD TRAVEL MARKET

 London, UK  ExCel London  london.wtm.com

THE PHOCUSWRIGHT CONFERENCE

 Ft. Lauderdale/Hollywood, FL  The Diplomat Beach Resort  www.phocuswrightconference.com

NOV

VRMA CONNECT NEW ENGLAND

NOVEMBER

OCT-NOV

OCT / NOV

NOV

1921

2022

OPMA FALL 2019 EXECUTIVE SUMMIT

 Palm Coast, FL  Hammock Beach Resort  www.theopma.org

VRMA CONNECT NORTH CAROLINA

DEC

LIVEREZ PARTNER CONFERENCE

HOST 2019

DECEMBER

2830

3101

 London, UK  Business Design Centre  www.terrapinn.com/exhibition/host/index.stm

NOV

VR MASTERED BOOT CAMP

NOVEMBER

2428

NOVEMBER

VRMA INTERNATIONAL CONFERENCE

 St. Louis, MO  Union Station Hotel  www.VRMastered.com

OCT

OCTOBER

1316

 New Orleans, LA  Hyatt Regency New Orleans  www.vrma.org

OCT

OCTOBER

OCT

OCTOBER

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

VRM Intel Magazine | Summer 2019

Coming October 2019 Ornacor.com and Second Home Quarterly

SECOND HOME QUARTERLY www.shqmag.com | @shqmag

It’s time to level the playing field. Vacation rental providers—both managers and homeowners—have been witnessing the shortterm rental industry fundamentally change before our eyes. While many changes have been positive, disruption is causing chaos for managers, homeowners, and guests. We believe it is time to come together as the powerful vacation rental ecosystem that we are and use our collective voice to address industry changes and provide education for guests and homeowners. Second Home Quarterly Magazine and Ornacor.com are being built to:  Educate homeowners about industry changes, guests expectations, and best practices.  Create a comprehensive vacation rental ecosystem directory to help everyone in the industry find professionals who provide services, technology, and products specific to the vacation rental industry.  Provide much-needed PR initiatives to educate guests about how to find and select vacation rentals and educate the investor community about the reality of our industry.  Aggregate the supply side of the vacation rental industry to bring all stakeholders together to battle nonsensical regulations and push back on major policy changes at OTAs. Let’s join hands to secure the vacation rental industry for generations to come.

ornacor.com

shquarterly.com

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

866.549.5283 redskyinsurance.com Coverage is underwritten by Arch Insurance Company (a Missouri corporation, NAIC #11150) with executive offices located in New York, NY. Not all insurance products or coverage are available in all jurisdictions. Coverage is subject to actual policy language.