VRM Intel Magazine Fall 2020 by Amy Hinote

Customers Behaving

Badly

Professionalizing

Operations Data-Driven

Customer Segmentation

New Guests = New Demands

REVENUE MANAGEMENT: PROFITABILITY, ADJUSTING RATES, MID-TERM STAY PRICING, & MORE . . . VRM Intel Magazine | Fall 2020

You Can't Stop the Spirit of Hospitality : m o r f s g Greetin

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ce.com la P u r .T w w at w R Roadshow

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VRM Intel Magazine | Fall 2020

United We Stand We've weathered storms before. And this time is no diďŹ&#x20AC;erent. Despite these challenging times, we've witnessed vacation rental leaders display the true spirit of hospitality. This industry was built on human connection and experience, which is why you will come out of this stronger than ever. Know that your friends at NAVIS stand with you, always. 1-844-614-3157 | naviscrm.com

NAVIS CRM develops software applications that help VRM professionals drive more direct bookings through their websites, voice channel, & email. VRM Intel Magazine | Fall 2020

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FERNIE DIRECT & STAYFI Arthur Colker CEO & Founder, StayFi At the 2019 VRMA International New Orleans, Ryland Nelson was looking for a solution that would take his direct booking strategy to the next level. Ryland runs FernieDirect, an 80 unit short-term rental manager located in beautiful Fernie, British Columbia. With a new website launching, Ryland needed a way to ensure that frequent Fernie travelers came and booked with him directly, not with one of his competitors through an OTA. When he came across StayFi, he knew he found a solution that would deliver reliable, repeat guest bookings. With StayFi, Ryland was able to quickly create his own custom-branded splash page through their online portal. Now all of his guests, no matter what OTA they booked on, are introduced to the FernieDirect brand when they log onto the WiFi for the first time. In addition, StayFi is collecting an average of 6 guest emails per booking, instead of just 1 or 0. In early 2020, FernieDirect & StayFi partnered together to do an analysis of StayFi's results and a survey of past guests. Here is what they found:

Not only did over 90% of respondents indicate they would want to book direct for their next stay, many commented how much relief they felt booking directly with a reliable business vs. booking an unknown on an OTA. When Covid struck, Ryland was grateful he had a list of 1000s of past guests he could go to and advertise his units as a much needed escape from the nearby city of Calgary. In addition, his proprietary guest list has given Ryland a leg up in attracting new homeowners to his rental program. One added benefit Ryland did not expect is the drastic reduction in calls about WiFi issues in his rental units. There is now one set of WIFi instructions for all his properties, and all of the WiFi networks can be checked remotely on the cloud. For us at StayFi, we are grateful to work with fantastic rental managers like Ryland, and are looking forward to launching new products to further enhance VRM Intel Magazine | Fall 2020 7 his book direct business.

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Contents On the Cover

21 Customers Behaving Badly 24 New Guests Bring New Demands 51 Professionalizing Operations 90 Importing Data into New Software 94 Data-Driven Customer Segmentation 72-89 Revenue Management Special Section

Revenue Management

Sales and Marketing 39 Secure More Direct Bookings with Personalization

72 9 Key Revenue Management Basics

44 Tours and Activities: Offering a Complete Guest Experience

74 Managing Profit, Not Just Revenue

58 Post-Pandemic Photos and Descriptions

77 Dynamic Pricing: When to Adjust Rates

66 Online Property Detail Pages: Make or Break?

81 In-House Revenue Management

79 The Google Trifecta: Search, Paid, and the VR Portal

84 Adjusting Rates to Accommodate Longer Stays

83 Low-Cost Online Tools to Project Demand

89 Fast-Paced Pricing Changes: The 10-Minute, $10,000 Mistake

94 Data-Driven Customer Segmentation

100 Building a Vacation Rental Brand

VRM Intel Magazine | Fall 2020

100

VRM Intel Magazine | Fall 2020

Contents Technology

Business

27 The COVID Reset 28 Please, Don't Go! 31 Self-Care in the Middle of a Pandemic 35 Employee Retention Ideas for 2021 47 Factors in Forecasting the Winter Season

54 Selling Your Business? Know Your Tech Stack 57 NDAs and Confidentiality Agreements 64 Lessons Learned in Building a New VR Website 90 The Dreaded Software Transition: Data Imports

Customer Service

51 Professionalizing Operations in Travelâ&#x20AC;&#x2122;s New Landscape

21 Customers Behaving Badly

98 Getting Work Done Amid Chaos

24 New Customers Bring New Demands

103 Vacation Rental Women's Summit, December 2021

62 Broaden your Rentalâ&#x20AC;&#x2122;s Appeal by Repurposing Spaces

90 84

VRM Intel Magazine | Fall 2020

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Dear Readers:

Where should I start? Normally, I would tell you about all the great conferences we just had, what we learned from them, and about the upcoming Women’s Summit. But none of these happened. However, even without the conferences, we’ve learned a lot over the past eight months about the “alternative accommodations” industry, a sector that has come to include shared spaces, urban short-term rentals, and leisure-based whole home vacation rentals. It has been a story of haves and have-nots as this sector is having its own K-shaped recovery. Shared-space rental activity (renting a room in a primary residence) has all but died since March, as the idea of home sharing during a pandemic has lost its appeal. Further related to this market segment, major festivals and events were canceled, killing the possibility of primary residents renting their homes during these extreme demand periods.

Urban short-term rentals experienced a severe decline in activity with a hard stop in both business travel and leisure travel to cities. Even fallback events like sports, graduations, and weddings were canceled, forcing short-term rentals located in cities to pivot to cater to first responders, longer-term stays, and recently evicted/ transitioning locals. The drop in revenue was exacerbated by a widespread lease arbitrage model failure that imposed unnecessary risk on the property manager. However, traditional vacation rentals in leisure destinations held strong (once they were allowed to open). Last December, I wrote about why our industry is recession proof, and many of these characteristics enabled VRMs to survive—and in some cases thrive—during this crisis. Whole-home vacation rentals became the preferred accommodation choice for obvious reasons, and we’ve finally moved the needle in the percentage of travelers choosing a vacation rental over a hotel, as early projections show an astronomical increase from 30 percent to almost 50 percent. However, that sharp increase brought its own challenges including new guests coming with new behaviors (page 21) and new demands (page 24), remote working and staffing (page 34), and pricing (pages 72‒89). Even though our industry was already improving standards, COVID-19 has fast-tracked enhanced cleaning processes (page 51).

What does the future hold? In 2020, the idea of predicting the future feels like an exercise in futility. However, there are dynamics that are worth considering when forecasting (page 47). In addition to normal vacationing behavior, over the past few months we’ve seen elements of escapism-based travel, i.e., traveling to get away from somewhere or something instead of going to a place. The idea of traveling solely to escape is likely a short-term dynamic, which is why we cannot take the foot off the gas on marketing or customer service delivery. 2020 is teaching us tremendous lessons about ourselves, our companies, and our industry. We would be wise to document these lessons so that we can remember these insights as we face challenges in the future.

As always, thank you for continuing to read VRM Intel Magazine, and I look forward to hearing your feedback and ideas for our future. Sincerely,

Amy Hinote

Editor-in-Chief

VRM Intel Magazine | Fall 2020

VRM intel magazine

Editor-in-Chief Amy Hinote Director of Design and Production

Donato Berbelja

VP of Technology Rebecca Chapman, rebecca.chapman@vrmintel.com

Contributors Jane Babilon

Doug Kennedy

Heather Bayer

Lee Knauer

Amy Bradac

Rebecca Lombarto

Melanie Brown

Brian London

Paula Caballero

Matt Loney

Ali Cammelletti

Nancy McAleer

Carlos Corzo

Andrew McConnell

Jeremy Gall

Jennifer Perez

Ralf Garrison

Kristen Prinz

Wendy Glover

Heather Richer

Toni Henry

Ryan Saylor

Amber Hurdle

Margot Schmorak

Chris Johnson

Carlo Torrano

Cliff Johnson

Steve Trover

Justin Jones

Anurag Verma

Sue Jones

Dwight Yang Address

VRM Intel Magazine LLC

153 Old Mill Road, Fairhope, AL 36532 To subscribe to VRM Intel Magazine to request additional copies, contact info@vrmintel.com or go to www.vrmintel.com © Copyright 2020 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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VRM Intel Magazine | Fall 2020

Customers Behaving Badly

By Paula Caballero

The Psychology of Changes in Guest Behavior

f ter the flood of COVID-19 cancellations abated, property managers felt a renewed sense of hope as guests began to rebook vacation rentals destination by destination as lockdowns ended across the country.

But once they arrived, the guests seemed different. Some were fussy with ongoing demands, whereas others were destructive and aggressive. “We have seen a 247 percent increase in the number of party-house related complaints at short-term rental properties (this summer) versus the same months last year,” said Ulrik Binzer, general manager of the Host Compliance division of Granicus.

Stories range from guests defecating in sinks and hot tubs, to overloading properties with illegal events, to becoming irate at small problems such as leaves in the pool or a short outage of cable TV service.

Guests may have thought the change of scenery would help soothe their mental state after months of home-bound monotony. But, psychologically, many found out there wasn’t an escape, even in a new environment. “There is a lot of free-floating anger,” explained Margaret J. King, PhD, director of the Center for Cultural Studies and Analysis. “When you travel and are away from your home base, there is a lot of permission to express [emotions]—that’s one reason people travel. But part of the anger expression is that there’s no way to get away from [COVID-19]. There’s no place to go.” As a result, rule-breaking behavior abounded in ways few were prepared for.

“The guest mentality has changed, in that they feel entitled,” explained Jennifer Mucha, president of Arrived vacation rentals, which manages more than 300 properties in locations such as Palm VRM Intel Magazine | Fall 2020

Springs, Hood River, and Kauai. “They feel like the rest of life is hammering them, so this is their one opportunity to control something. They feel entitled to get whatever they want out of it.” This guest mentality was likely complicated by some airlines’ leniency to give credits and refunds, and the policy of platforms like Airbnb, which provided automatic refunds to guests, overriding existing host cancellation policies.

She said they began making it their mission to protect against events. They contact guests by phone and add strong, visible verbiage about no events in the booking confirmation, advertisements, check-in instructions—everywhere and anywhere guests could see the rules.

“Rules had been relaxed, so even though we were in quarantine, there were still other things that were now permitted,” King said. “Financially, relaxation about eviction, relaxed credit, you don’t have to go to work, you can work at your own home, you have a certain kind of autonomy.” King also hypothesized that people traveling during this time might be the most depressed, most strung-out, or most in need of an escape. Thus, they are most likely to act out when reaching their destination.

Binzer said that rural locations have been particularly overwhelmed by this phenomenon. Small towns with just a handful of vacation rentals recently have seen exponential growth in listings in their towns—and exponential problems, too.

“People who used to go to Europe and Hawaii are now traveling closer to home,” he said. “A lot of people who live in big cities are traveling to rural areas and then acting like they are in Cancun at an all-inclusive resort when they’re actually in a residential neighborhood,” Binzer said. And while industry professionals are well-versed in taking care of demanding guests and offering high-touch hospitality, the needs and behaviors during this period have caused many managers to retool their protocol for vetting and educating guests.

Paul Becker, president and founder of Bluewater Property Services, which handles luxury vacation rentals in the San Diego area, saw their already-strict processes failing. He worked with staff to create a higher level of screening to help avoid problems. Requiring signed rental agreements, copies of government-issued IDs, and the names, ages, and emails of all guests to receive the rental rules are now required on every reservation. Becker added that managers must also remember that the guest profile has changed. Many are first-timers to vacation rentals. He has staff send those guests additional information to give them a better idea of expectations.

“They don’t know much about what their behavior should be because they have never stayed in [a vacation rental], so it’s up to us to educate them,” Becker said. “You can’t call every day for new towels; you can’t call at all hours of the night like at a hotel. They won’t have the freedom that makes them feel like ‘no one is watching me’ like at a hotel.”

Mucha echoed Becker’s sentiments but said even with personal phone calls to all guests they have been exceedingly “sneaky.” She said that, although her company never allowed events at even their most spacious properties, guests tried to bring large groups to properties when their event venues were canceled due to COVID-19. “When weddings were canceled because they couldn’t have more than 10 or 20 people in their group, people began thinking, ‘Oh, we can schedule a private residence!’ Well, private residences can’t handle that. Just with parking and neighbors alone, you can’t have 30 cars coming in without making neighbors upset.”

VRM Intel Magazine | Fall 2020

She said it was successful sometimes, but nothing is foolproof.

“This year, it wasn’t enough. They were pretty clever. They say they were just meeting up with some family for the weekend, and then they show up with 300 people.” Many managers also named outdoor cameras of all types and noise-monitoring devices as required tools this year to help monitor occupancy issues.

“You hope to prevent [an event] before the other guests show up,” Mucha said. Yet, as complex as this COVID-19 travel period has been, it hasn’t exclusively been filled with problem guests.

Susan Doull, the owner of Commendable Rentals, said that while she did have more damage this year than previous years, she also saw more gratitude expressed by guests when they could reschedule their trip for future dates without penalty. Many asked for the option to reschedule from the start and never demanded a refund.

“Their gratitude was a nice statement about humanity, kindness, and consideration,” Doull said. “I don’t want that to be wiped out by the people who did travel and were careless.” Julie Davies, author of Vacation Rental Management 411 and educator of short-term rental certification, agrees, and she hopes these COVID-19-related experiences will not permanently tarnish the professional reputation of vacation rentals agencies and professionals. “Please just don’t judge our industry by the last six months,” she said. “The entire world is crazy right now.”

Paula Caballero has worked in the vacation rental industry for more than 15 years, managing and owning rentals worldwide, and is president and founder of the Nevada Vacation Rental Professionals, Inc. She was also a newspaper journalist for more than a decade.

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New Customers Bring New Demands Evolving to Meet the Needs of New Customer Avatars By Nancy McAleer, founder, FLARBO

s vacation rental providers are experiencing firsthand, consumer behavior in the travel sector has changed dramatically in 2020.

In a recent interview, Google’s head of vertical travel search, LauraMarie Arens, shared that vacation rental accommodations are recovering faster than hotels, adding, “Vacation rental is perceived safer, easier to practice social distancing, and you can manage your own food.” (“Google says private accommodation is recovering faster than hotels on a global scale,” Phocuswire, October 1, 2020) However, that does not mean it is business as usual, as the shortterm rental industry has experienced a whirlwind of change in customer behavior within that time.

If you have not already identified several emerging traveler avatars yet, you’d better hurry up, because second waves of the pandemic are being experienced around the world. New patterns in consumer behavior and ensuing new traveler avatars look like they may be here to stay, at least for now. Capitalizing on these changes will help rental managers and homeowners more quickly acclimate to this brave new world. 24

VRM Intel Magazine | Fall 2020

Emerging Vacation Rental Guest Avatars Newbies A new and widespread perception of the vacation rental as a safer choice for accommodation over traditional hotels has resulted in an influx of first-time vacation rental guests. Inexperienced guests coming from urban multifamily dwellings to stay in private vacation homes must learn to manage new amenities, such as pools and hot tubs. This creates a need for structured protocols to educate these “newbies,” as well as vendor maintenance protocols arising from more wear and tear. If expectations are properly set and met, these new customers can turn into repeat guests who give glowing referrals to their friends; and a recent study from Nielsen showed that 92 percent of travelers trust travel location referrals from people they know.

Digital Nomads The working world suddenly moved away from brick-and-mortar offices and schools to “work-from-home” and “web-learning” en-

vironments. With the ability to work from anywhere, a new group of vacation rental traveler was born, and longer stays have become common. However, this guest avatar has the need for high-speed internet, easy-access charging outlets, and workplace areas in the home. As a result, vacation rental providers are switching up marketing to showcase more in-demand amenities, such as home office spaces, free Wi-Fi, and high-speed ratings to meet the needs of the Digital Nomad.

often illegal under COVID-19 restrictions and sometimes result in disturbances. Rental managers and owners need to review their event policies (minimum age, maximum occupancy, parking, events allowed, damage deposits), and educate booking agents as to suspicious bookings (e.g., a renter booking a home, with a residence in the same city, for a short weekend stay). Smart home technology can help deter overoccupancy and parties with outdoor video cameras, noise monitors, and cell phone/Wi-Fi usage monitors.

Students Co-Living as Digital Nomads

New Demands

We can include college and university students in the Co-Living Digital Nomad mix; they are socially banding together in their own bubbles to learn remotely by day and enjoy an incredible vacation rental by night. YOLO!

Digital Nomad Families on the Move, Including Pets The rise of remote working and web-learning has created a new guest avatar: Digital Nomad Families opting to travel off the beaten path to rental homes, enjoying their time self-isolating, which includes bringing along the entire family, including their pets! A recent US Census Bureau’s American Housing Survey reveals “the share of households with kids stands at 27 percent, while the share of households with pets is at 68 percent.” (National Association of Realtors)

Demand for New Technology Pandemic safety protocols, combined with a new generation of vacation rental guests, have increased the demand and requirements for new technology. Instant and mobile booking with flexible payment options on all booking platforms is now expected. In addition, on-the-ground technology, such as keyless entry, noise monitors, and size-of-party monitors.

Increased Demand for Cleaning Protocols and Accreditation

Don’t rule out this opportunity to increase your income through pet premiums of up to 30 percent the rental rate.

Family Bubbles As families have had to sit back and take stock of what is important, there is an increase in demand for larger homes used for “family bubble” accommodations. This includes the extended family that has sheltered together.

First Responders and Frontline Workers Typically, this avatar is most prevalent during weather crises such as hurricanes, earthquakes, and forest fires. The 2020 pandemic forced frontline workers to isolate from their families and also forced first responders arriving in high COVID-19 zones to look for vacation rentals for short- and long-term periods.

House Partiers The absence of nightclubs, bars, and event venues has opened up the eyes of event promoters to the possibility of using vacation rental homes as bases for their special events. These large house parties are

Destination Analysts reported in its September 2020 survey that just 29.9 percent of average American travelers have confidence that travel is safe. Another national tracking poll survey revealed, “Lodging properties with cleaning and hygiene programs are sought by 55 percent of travelers, and mask-wearing requirements and/or social distancing policies are desirable for 47 percent of those planning their U.S. trips.” (“COVID-19 Travel Sentiment Study,” Longwoods International) The pandemic has forced both property managers and owners to come together with government agencies to develop actionVRM Intel Magazine | Fall 2020

able cleaning standards. Independent accreditation is on the rise, demonstrating to consumers and municipal and state governments that the vacation rental industry is professional and ensuring that vacation rentals are a safe option during a pandemic. Note: Check out VRMA’s SafeHome Campaign.

Fluid Situations Increase Demand for More Flexible Cancellation Policies As community spread pops up in one area and is fully under control in other regions, travelers are looking for special COVID19-flexible cancellation policies as an easy way to protect their vacation investment.

Price Comparison and Book Direct Demand Rising The unemployment rate in the United States was an astonishing 14.7 percent in April 2020, flattening out to 7.9 percent in September, when it historically hovers around 3.5 percent. Money is tight, and the average American traveler is more price sensitive than ever. Similar effects are evident across the globe. Price comparison shopping for vacation rentals is increasingly common. Once travelers decide on a rental home, they then search the internet for the best price for that home. Diversification in marketing portfolios will meet this demand with more distribution on book-direct regional sites, price aggregation sites, and business sites with rate/quote calculator information readily available. Expect consumers to ask for discounts; they assume the vacation rental industry is desperate for bookings after government shutdowns of short-term rentals earlier in the first quarter.

New Behavior Domestic Travel Skyrockets Border closures are common in 2020, as are travel restrictions within countries, so consumer behavior has completely reverted to domestic travel. Savvy owners and managers have collected data on their client zip codes to produce heat maps so that they can change marketing and advertising strategies to suit each new client.

International Travel Remains Bleak The International Trade Commission's data reflect a 93.6 percent decrease in international nonresident traffic into the United States from March to August 2020. As the United States continues to battle the pandemic, the international traveler stays away.

International travel is based, of course, on country recuperation and border reopenings. Rental accommodation owners may start seeing increases in travel as things slowly start to open in COVID-19–low and COVID-19–free countries.

Shortened Booking Window In regions where bookings typically take place one year in advance, short-term rental stakeholders are now experiencing more 26

VRM Intel Magazine | Fall 2020

last-minute bookings. Travelers are looking at the latest COVID-19 statistics to see if they want to visit an area. The lesson here is not offering last-minute discounts too far in advance.

Travel Insurance Consumers are looking for more detailed information on travel insurance such as how it works and what policies are covered during the pandemic. It is falling on the shoulders of the rental owner and manager to educate the traveler. Savvy stakeholders have incorporated some type of affiliate relationship into their booking processes to lower their risk and increase income in this category.

Longer Stay Demands With the increase of the new digital nomad avatar, the demand for longer stays remains evident. Florida Rental By Owners, a regional book-direct listing site, experienced a huge increase in longer stay searches year over year from March to September 2020: a whopping 135 percent increase in searches for vacation rentals offering one-month stays or longer. Do not rule out longer stays, specifically for urban market recovery.

Traditional Seasons Become Blurred Where the fall 2020 season would typically be considered low season for many areas, changes to home and school environments raise the demand for off-season travel. Interestingly, VRBO reported new family travel data this fall with a rise in the number of families booking trips in the third and fourth quarters. Florida Rental By Owners has also reported a 71 percent increase in inquiries year over year since vacation rentals reopened.

“Vacation rentals ranked first among types of vacations respondents say they want to take now through December, specifically to ‘spend time with family and friends (they) haven’t seen.’” – VRBO Flexcation Survey There is no doubt that the short-term rental industry has experienced disruptive changes to traveler avatars, preference, and behavior. 2020 has demanded an evolution among vacation rental stakeholders.

Rental guests are now looking for low-risk, predictable, and trusted local options. This includes the most important item on most of their lists: health and hygiene. The fear of potential quarantines and lockdowns alongside concerns about social distancing and masks will guide consumer behavior in the coming months. Innovation and new technology make up the impetus stemming from the COVID-19 pandemic. The good news is that many of the challenges and changes in traveler behavior of 2020, when analyzed carefully, can be converted into opportunity—and ultimately the building blocks of a stronger future for the vacation rental industry as a whole.

Nancy McAleer is the founder and CEO of FLARBO.com, and serves the industry as a vacation rental consultant. She is also a faculty member and contributing writer at the Vacation Rental Marketing Blog (VRMB), and a regular speaker at Vacation Rental Success Summit.

By Toni Henry, Owner, Worry Free Vacations

The COVID

RESET W

hen unique vacation home rentals from all over the world were added to sites such as Expedia and Booking.com, vacation properties became a recognized accommodations alternative, stealing market share from hotels. As demand for these homes increased, all indicators pointed to smooth sailing for the vacation rental industry. But then the COVID Reset happened, and the sector had to launch itself into the future at breakneck speed. Prior to the pandemic, everyone had their vacations planned for the summer. Families had already worked around school calendars, youth sporting events and summer camps to fit their vacation in their schedules. They also had arranged their annual family reunions, company gatherings, destination weddings, and engagement parties on the calendar.

New Year’s Eve 2019 symbolized the start of a new and better year. The new year would keep those annual traditions going; it would be a time to bring in more marketing power and grow businesses. Already year-over-year bookings were up, and 2020 held so much promise! Do you recall all these predictable events that everyone was looking forward to? They were part of our normal everyday life, and then it hit. It was something we have seen in many thriller movies—an outbreak of a virus with no vaccine that affects the whole world and changes the norm. But it wasn’t a movie. Hello to COVID-19. I remember the days in March 2020 when news of COVID-19 started to spread. I remember our concern for faraway nations affected as the virus spread across the world. I remember the spotlights on grocery store workers who were stocking shelves with what some believed to be the last stock for a while. The fear and anxiety seemed to level off as the months went by, but in the vacation rental industry, travel bans and talks of new hot spots continued to hit the industry hard. Though travel might not be essential for sustaining life, we all know that traveling and gathering with friends and family make up a big part of our happiest times and memories. Suddenly, however, we were stuck at home. Houses became schools and offices and, to some, a prison all at once. As we approach the end of 2020, we have adopted a new normal never previously imagined. The vacation and hospitality industries have had to get creative to join the COVID Reset movement. This reset has resulted in an explosion of innovation. The vacation rental industry has once again proven that nothing can disrupt

travel and vacation rentals for long. The vacation rental teams are always able to find their way around a problem. They worked together despite furloughs and job cuts, and companies worked diligently to keep as many employees as possible even though they were in uncharted territory.

This COVID Reset is what makes vacation rentals not just an industry but a family that spans the world. Lots of industries suffered changes in volume, but the vacation rental industry pooled their knowledge and teams to save the industry as a whole. They maintained a firm belief that the vacation rental world would be back in action for another season. The industry revamped customer service protocols to provide contactless check-ins, implemented CDC cleaning standards, and created a new virtual workforce.

How does this all look in October 2020? Well, even with all the COVID-19 rules in place, beaches and coastal destinations saw large numbers of visitors making the best of the new normal. Vacation rental companies set up ways for guests to arrive and depart without having to make contact with anyone, and they did so without sacrificing hospitality and service. For cleaning, standards were overhauled, and cleaning teams were taught safety measures that would keep the cleaning teams and guests as safe as possible. The CDC provided guidelines on what to do, and everyone in the vacation rental cleaning world embraced the new rules. Though cleaning costs have increased, the vacation rental industry has been able to offset the expense by sending staff to work from virtual offices at home. Where will the COVID Reset take us? Into the future.

The vacation rental industry is resilient and remarkably capable of adapting to changing conditions. The industry’s technology is constantly being revamped and upgraded to maintain top-notch abilities and meet the standard of excellence.

When vacation rentals started to become popular, nobody could have expected that they would move to the forefront of travel, but the COVID Reset has shown that there is virtually no part of the economy that cannot quarantine, work, or study in a vacation rental. Many are choosing vacation rentals for a change of scenery from their homes and prefer this to staying at resorts or hotels. “What is now proved was once only imagined.” —William Blake VRM Intel Magazine | Fall 2020

“Successful men and women keep moving. They make mistakes, but they don’t quit.” -Conrad Hilton

he vacation rental (VR) market is a powerful driving force in the tourism industry and is growing fast. Sadly, COVID-19 has impacted many VR businesses and professionals, and this controversial, global pandemic has been a game-changer in the vacation rental industry. It’s been a long, hard journey for many, but if you’re a VRM thinking of throwing in the towel, please don’t go! Although the dynamics of the travel industry are changing, we’re seeing a huge shift and demand toward vacation rentals as the preferred lodging option, globally. Being able to offer a homestay at a time when many are concerned with self-isolation is a huge bonus—for both the homeowner and the guest. Trending predictions show short-term rentals (STRs) could be the fastest-growing sector in the hospitality industry and could finally have the upper hand and attention they deserve.

COVID-19 and the subsequent border closures and travel restrictions have wreaked havoc on the travel and hospitality industry, bringing it to a grinding halt and changing the face of travel forever. With the tremendous strain the economic fallout has put on the industry, it’s not easy to say “please don’t go,” when for many it may seem the only logical option. As VRMs you’ve survived hurricanes, floods, fires, and so much more. With passion and purpose, the vacation rental industry rises stronger every time. There is good news and inspiring signs of healthy recovery for our industry. The following statistics show that the impact of COVID-19 has ultimately fallen in favor of the vacation rental and STR industry. 28

VRM Intel Magazine | Fall 2020

 Technavio’s latest market research report, “Global Vacation Rental Market 2020–2024,” forecasts that the vacation rental market will accelerate at a CAGR of almost 7 percent through 2020–2024, with predicted growth of USD 62.97 billion.  Booking trends show that travel is up 127 percent from early April, with the number of bookings on Airbnb and VRBO booming from 916,000 to 2.08 million in only two weeks (AirDNA).  Since the COVID-19 low, global vacation rental occupancy has increased 60 percent, and the average daily rate (ADR) has increased by 23.2 percent.  North America is seeing the fastest rebound in the STR industry worldwide, with leisure destinations seeing a rebound in rates of 322 percent.

So, please don’t go! While initial predictions were bleak, our industry is resilient and adaptable. With a change in consumer behavior and travel trends, and a “new normal” evolving, the recovery rate is faster in the vacation rental space than in the hotel industry, which is encouraging. There has been a surge in demand as travelers, work-from-home executives; and a new generation of digital nomads opts for destinations with more privacy and less risk, choosing staycations and drive-to destinations, avoiding crowded hotel lobbies, and opting to socially distance from the comfort of a vacation rental home.

By Steve Trover

PLEASE DON’T GO!

 STR Global and AirDNA compared the impact of the coronavirus crisis on hotels and short-term rentals from January 2019 through June 27, 2020, concluding that short-term rentals weathered the pandemic better than hotels, and ADRs were higher in July 2020 than in July 2019.

Are you prepared for change? In an industry based on relationships, hospitality, and creating lifelong memories, it’s imperative to keep up with the shifting market, stay innovative and anticipate higher guest expectations. Smart technology, promotional strategies, and staffing play a huge role in these positive industry predictions. As a successful property manager, it’s important to keep your finger on the pulse, which right now is beating fast. Now is a time of great opportunity for VRMs: a time to determine a game plan, monitor your data with solid data-driven decision-making, and plan for the future through strategic forecasting.

This is a time to build your brand, grow your inventory, add new homeowners, and find the right talent to build a strong team.

In this time of uncertainty, with industry rollups, small businesses shutting their doors, and staff layoffs, the need for experienced and passionate VR professionals is now greater than ever, and the available talent pool is overflowing. In the vacation rental industry, the best teams win, and it’s vital you’re all rowing in the right direction. Although things may never be the same again, our well-loved industry will make a strong return, and a strong band of vacation rental managers will have weathered another storm successfully and triumphantly.

Although there will no doubt be a return to the office for some, the work-from-anywhere trend has been accelerated by this pandemic. Vacation rentals make for the perfect remote work environment. The extension of the summer season into the fall that we are seeing across the industry may not be a one-year anomaly. This could in fact be an inflection point for the industry we know and love. If you are in leadership in the vacation rental industry, this is the time to acquire the talent to take advantage of perhaps the greatest growth period in our history. Take this opportunity to see who is available in the talent pool. It’s the deepest it’s ever been.

Alternatively, if you have been laid off or furloughed, or you’re just considering an industry change . . . we kindly ask you to reconsider, as a time of unprecedented growth is just around the corner. Please don’t go!

About Steve Trover

Steve Trover has been immersed in the vacation rental industry since 1997 and has been involved in most aspects of VR, including marketing, management, business development, product development, architectural design, interior design/decor, and VR software. He spent time on the board of several industry associations, including five years as vice president and then president of the Vacation Rental Manager Association. More recently, his focus has been on the people side of the business as a cofounder of vacation rental industry-focused talent acquisition firm, Better Talent by Laveer & Co. He resides in Orlando, Florida, with his wife Holly and their four children.

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VRM Intel Magazine | Fall 2020

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VRM Intel Magazine | Fall 2020

Self-Care during a Pandemic By Ali Cammelletti

absolutely love the hospitality industry and everything about it. Yet, it took me 30 years to learn how to love it and still thrive in it without burning out every two years.

As entrepreneurs, we know how draining building a business can be, especially being people-pleasers with perfectionist tendencies. When the pandemic hit in March, my business came to a screaming stop. Clients who had existing agreements with me and already paid asked to pause.

I was six years into my company, where I had worked second jobs for the first couple of years until I could do consulting full-time. Then my daughter came through adoption, with a phone call on a Tuesday afternoon. I had a full plate of business that I needed desperately to cover the Neonatal Intensive Care Unit (NICU) bills

and final adoption payments. I lived with friends three hours from my home in Bend, Oregon. I woke up at 5:00 a.m. doing coaching sessions for an east coast client five days a week and then went to the NICU to be with Chela for another 10–12 hours a day. My husband came for two days a week, when I then met with my other clients on the west coast. I did this for two weeks, feeling the adrenaline that came from the excitement of finally being the mom I had dreamt of while waiting in the adoption pool for four years. The year she was born was my highest revenue-producing year to this day. I called her my Irish lucky charm and did not say “no” to anyone who asked for my services. The next couple of years were still very busy, but I was getting tired and ready for a break. Then the pandemic hit. VRM Intel Magazine | Fall 2020

I embraced this time and knew business would resume at some point. I decided I would make the best of this time and see it as the maternity leave I never took. I leaned into self-care like I never had before, and it has been amazing and transformational! At the beginning of the pandemic, I met with Matt Landau for a podcast. He asked me, “Who is Ali Cammelletti?” I literally could not answer his question. I knew who I had been, yet I did not know who I was about to become. I felt like a caterpillar who was spinning a silky cocoon. I had goals of working on my book (that I still want to make happen), spending time with my daughter, and really being present with her. Little did I know that I would lean into my resilience and take selfcare to another level.

Like with any change, I struggled at first. Being home 24/7 with my daughter sounded fabulous, yet she is a strong-willed toddler, and there were days where we watched TV all day. Nothing like the 45 minutes a day of screen time that I strive for. Fortunately, I had a good foundation of self-care already that included the following: B Exercise: I know that if I increase my heart rate with a twomile jog each morning, I feel amazing. It improves my energy and mood like nothing else does. I sprinkle in walks with girlfriends throughout the week, where I get to connect and talk. C Food allergies: Over the last eight years, I have cut out cow dairy and gluten. I found cow dairy was making my brain foggy, and my stomach nauseous. A few years ago, I had headaches every morning along with nausea, and I could not get the extra weight off that I had built up. It was gluten, darn it! D Vitamins: I do a half-shot of apple cider vinegar every morning with some B12 and then vitamin packets of fish oil, calcium, magnesium, and zinc, along with oregano oil. E Essential oils: Lavender and peppermint on the back of my neck are my favorites when anxiety is building up. I have others, though, for muscle pain and digestion that are always on hand. F Massage: I get a massage once a month because my body needs it! It is not always relaxing since I go to a sports massage therapist. He works out different areas that come up for me, such as my neck from a past car accident and my back from lifting and twisting due to being active with a toddler.

completed a year. I attend almost every week and love this group of women like no other. I still enjoy a nice glass of wine. Yet, I know when I am numbing with emotional eating, alcohol, or Netflix binging. Having everything in balance is my goal. The steps above has been an excellent base for me as I have navigated being a new mother, business owner, and friend. When on Sarah and T’s podcast recently, they asked what a day of self-care looked like for me, and I said, “A six-mile hike, a float down the river, and closing with my women’s writing group.” During the last six months, I added in more self-care to navigate the loss of my marriage. I have camped in nature six times so far, floated fifteen hours on water, and added the following: • Being present with my daughter. This looks like dance parties, playdough, coloring, reading books, building fairy houses, doing puzzles, and anything else she is craving. • Guided meditation. I enrolled in a guided meditation via Zoom that meets twice a month. Meditation has been something I always wanted to do yet struggled with significantly. I am the woman in Eat, Pray, Love! I think about what I need to get at the grocery store, how I will build this tiny library, and what I promised to do—and forgot. You name it, my mind spins on it. I have been attending twice a month since May, and it has been amazing. I usually fall asleep, yet the instructor says deeper healing happens that way. I am hoping I will be healed in a year! Wouldn’t that be nice? This pandemic has had different effects for everyone. For me, it has been a time of transformation like no other. I have chosen to not numb through this time. But lean in, feel, and heal so I can emerge from my silky cocoon like a beautiful butterfly who will show her daughter how to love herself, her career, and love her life to the fullest.

“Keep taking time for yourself until you’re you again.” – Lalah Delia

G Gratitude journaling: I do 30 days of gratitude twice a year when I am starting to feel negative. I write down one thing I am grateful for every day for 30 days. Research shows it is searching for something new to be thankful for that changes the brain and is like taking an antidepressant. In the end, I love everything I see and feel so much gratitude. H Therapy twice a month: I see a therapist who does EMDR therapy to assist when past traumas come up. She helps me with everything, though, from raising a child to processing a childhood that didn’t resemble Beaver Cleaver’s family. I Woman’s Al-Anon writing group: I have been doing this for a year now, and it has been a game-changer for me. My family has addiction issues, and I have learned about controlling behaviors, perfectionism, boundaries, emotional triggers, and so much more. I pushed back on Al-Anon all my life, even though I was a perfect candidate. I have recently just 32

VRM Intel Magazine | Fall 2020

Ali Cammelletti of Cammelletti Consulting brings over 30 years of experience in the hospitality industry. She served in many capacities within the industry, from a front-line restaurant and lodging employee to building and owning a successful event planning business and now running a consulting company. Her current area of expertise is leadership and sales coaching with a relationship-building focus. Visit www.cammelletticonsulting.com for more details.

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“Ali helped me better my communication skills with staff through empathy and encouragement.” Lauri Clark, Captain Cook Resorts

“She inspires you and your team members to be great leaders.” Jessica Standley, Rosemary Beach Cottage Rental Company

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for 2021 and Beyond

ince the emergence of COVID-19, we have seen a massive shift in the way business is conducted. Each day brings a different situation to navigate, without much clarity. What is clear is the coronavirus pandemic will have a lasting impact on the future of work and how it gets done. Just think about how your business processes and policies have changed over the past 10 months: • Businesses were put to the test when they closed their offices and employees began to work from home. Figuring out who does what, how it gets done, and what gets measured is complex, to say the least. • Seasonal staffing has plagued everyone. For some property managers, federal unemployment and stimulus packages seemed to deplete the workforce during times when several markets had record reservations.

• The CARES Act and FFRCA Leaves remain in place through December 31, 2020. Coordinating the leaves is challenging and further complicates staffing for operations.

• Property managers across the United States have been affected by floods, fires, hurricanes, mudslides, and tornadoes. These disasters, along with the pandemic, have expanded managers’

roles to include supporting their employees’ financial, physical, and mental well-being.

• Business owners have become human resource managers, creating new policies, processes, and procedures to protect employees, guests, and homeowners to contain the spread of COVID-19. This has been no easy feat.

The events of 2020 have taught us how important it is for businesses to be flexible and agile to adapt and thrive. The events have also taught us how valuable our employees are and the importance of employee engagement and retention. Retaining talent today means three things: B Creating flexible ways to manage performance C Investing in training and development opportunities D Increasing remote-work capabilities

Creating flexible ways to manage performance Managers and supervisors in all industries have become more agile managing performance. They are finding that managing perforVRM Intel Magazine | Fall 2020

mance is not one-size-fits-all and are placing a greater focus on the overall well-being of their employees. Conversations are no longer limited to key performance indicators, performance metrics, and goals; they now include dialogue about employee experiences.

Managers are having real conversations with their employees, keeping lines of communication open, and building trust through real-time feedback. Whether working in the office or remotely, employees want to know when something is off or when they do something well. Throughout 2020, successful managers have learned that managing performance expectations with more flexibility, empathy, and leniency is key to keeping up employee morale, engagement, and productivity. Every day, they have been finding ways to recognize and show appreciation for their employees.

Today’s work environment is nothing like anything we have experienced. Quarantines, lockdowns, office closures, and working from home all require different performance measures. Today, managing performance requires redefining performance measures and their purpose. Ideas to positively influence employee morale and engagement:  Simplify your performance process  Keep responsibilities realistic  Encourage frequent conversations between managers and employees  Provide ongoing informal coaching and feedback  Adjust goals and objectives during “significant” business interruptions  Focus on continuous improvement  Develop future skill sets and competencies  Describe how you will invest in your employees

Investing in training and development Focusing on continuous improvement and staff development is key. By 2022, no less than 54 percent of all employees will require significant retraining or reskilling. (Future of Jobs Survey, 2018 World Economic Forum) Of these, 35 percent will require upskilling and training for up to six months. Finding ways to engage employees who know your systems and internal processes and also understand your brand is critical for employee retention. The cost of reskilling employees is considerably less than the cost to replace them. For example, it may cost $6,000 to hire an employee or $3,000 to provide additional training and education for an engaged employee who will bring more relevant skills to your business. Companies are starting to identify new skills their employees might be interested in and providing them with the educational assistance and time to obtain those skills. Additionally, they are creating internal programs to develop the talent they cannot find.

B Continuously focus on the talent you currently have in your workplace, and create opportunities to grow their careers and develop their knowledge and skills. C Keep employees engaged with varied, flexible responsibilities so they acquire cross-functional knowledge and on-the-job training. 36

VRM Intel Magazine | Fall 2020

D Find ways to encourage more diverse thinking among employees. With learning and professional development, investing in your employees is a win-win proposition.

Increasing remote-work capabilities This year has provided firsthand experience for many on the responsibilities and effectiveness of a remote workforce. While some tasks require someone to be onsite at your properties, laundry facilities, or offices, there are several other responsibilities that can be completed remotely before, during, or after standard work hours. Businesses now have greater insight into the responsibilities and effectiveness of a remote workforce.

A recent Gartner poll shows that 48 percent of employees will likely work remotely, at least part of the time, even after the COVID-19 crisis is over. (Nine Future-of-Work Trends Post-COVID-19, Gartner, June 8, 2020) Think about what percentage of your workforce is currently working remotely, and ask yourself what percentage of your workforce will work remotely on a more permanent basis. While some employees want to return to the office, a significant number of employees are finding it beneficial to work from home.

When COVID first hit, many employees began to work from home (for the most part), but with the same responsibilities as in the office. Now, businesses have learned to be more intentional about the work that can be done remotely in new ways:  Identify which responsibilities and tasks can be completed remotely and which need to be completed on-site in person, regardless of department, position, or individual.  Focus less on roles and more on skills. Group similar responsibilities and tasks together by critical skills (e.g., problem solving, collaboration, and agility).  Assign responsibilities around outcomes to increase agility and flexibility and to keep pace with changing processes and procedures.  Maximize remote-work capabilities to provide greater access. Head into 2021 with employee retention top of mind. Implementing flexible performance measures, investing in training, and increasing remote-work capabilities will go a long way toward retaining your workforce.

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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s most of my readers and clients in the vacation rental (VR) niche of lodging know, I have also been providing training in the hotel and resort space for even longer. In the late 1990s, my company, known at the time as HSA International, trained hotels on how to use this then-new concept we called “cybermarketing.”

Back then, Expedia was still owned by Microsoft, and Travelocity had just partnered with AOL. With the internet still in the dial-up era and computers chained to a phone cord, cybermarketing represented a “fenced” distribution channel that had yet to be discovered by mainstream travelers. After 9/11, the hotels we trained discovered that OTAs were a wonderful tool to sell distressed inventory, and deal-seeking guests soon spread the word. By the mid-2010s, hotel brands realized they had become overreliant and launched “book direct with the brand” campaigns, but it was already too late. Guest loyalties were rapidly shifting to the OTA brands vs. the hotel flag flying out front. The brands essentially conceded and simply proceeded to negotiate lower commission structures, which is perhaps the single most important benefit of being part of a hotel brand these days. In 2014, I was asked to return as a guest speaker to the VRMA conferences, in which I had been a speaker every year from 1996 to 2009, and I was shocked to see how far the OTA concept had already penetrated into the VR space. Part of me wanted so badly to grab a microphone and warn the industry of the perils of overreliance on OTAs; unless they were used correctly, OTAs would

siphon away top-line profits. Yet the owners of some of the fastest-growing VR companies were singing the praises of this model. So here we are in 2020, and an ever-increasing number of VR management companies are waking up and realizing that OTAs may represent the proverbial “wolf in sheep’s clothing.”

Now, I’m not saying that OTAs are the enemy, nor that VRMs should immediately pull all inventory. When managed correctly, OTAs are and will continue to be an integral part of a comprehensive marketing and distribution plan. OTAs are especially important, perhaps irreplaceable, for certain classifications of VR companies, such as those whose inventory consists mostly of condos, those who host shorter stays, and those in markets wherein guests return infrequently. For example, most visitors to Central Florida’s theme parks might return every five years and are therefore harder to convert into regulars than guests who want to rent the same beach house or ski chalet every season. The smartest strategy for all VR companies is to use OTAs to find new guests but then do all they can to convert those OTA guests into booking directly next time.

Not all of the following suggestions and tips will be feasible for your company, depending on your market demographics, but hopefully this list will spur the kind of creative thinking that will enable the VR industry to take back its power. Remember, VRMs, you control the inventory that powers the business model of all OTAs. They need you more than you need them. VRM Intel Magazine | Fall 2020

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VRM Intel Magazine | Fall 2020

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Work for more direct website traffic. There are so many self-study resources to help VRMs learn the latest about organic searches, pay-per-click, and especially the retargeting of website visitors on social media. Even if you rely on an in-house leader or an outside agency, every VR owner and director should stay abreast of the latest so they can at least ask challenging questions.

have booked, ensure they know who your local brand is and get a jump start on channel conversion for their next visit.

Embrace in-home messaging. Post pictures of the entire staff of your small business. Have a small poster that tells the stories of your company’s owners. Likewise, post your company’s emergency phone number with pictures of the people who answer, such as mainteSeek out listing and referral sites that have nance or housekeeping, in uniform. a critical mass to compete with OTAs for Consider moving to a Wi-Fi provider that organic and paid SEO but also drive traffic requires guests to give their email addresses to your website. A few that are well known to access it, presents a branded landing page to VR operators are vacationfinder.com, conupon accessing the network, and allows do-world.com, resortsandlodges.com, rentabeach. guests to opt in to future email marketing. com, findrentals.com, and northweststays.com.

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When you get guests’ email addresses, send Post your phone number prominently on personalized video email messages to reityour website on both desktop and mobile erate the welcome and send a fond farewell. versions with a line of text saying someThis is especially important if your company thing like, “Call in-house reservations now.” uses remote registration and self-check-in. Yes, it Update your after-hours voicemail greeting to reiterate that callers have reached in-house reserva- takes about 60 seconds per guest, but a personal video welcome message is a wonderful way to retions and promise a timely callback. humanize what has evolved into just another elecWhen communicating on apps, make it tronic transaction. personal. Explain that you are a local, small Organize a drip campaign of emails, business. Ask guests to stop by the rental oftargeting guests by dates relevant to fice. Entice them with free, local giveaway their anticipated rebooking cycle, and items, such as jams, honey, regional wine, branded make them as personalized to specific picture frames, or kids’ welcome gifts. guests as your CRM and PMS integration allows. Encourage everyone who interacts with Consider old-school postcards too, especially if guests to ask questions to uncover the sto- your CRM allows you to personalize them with ries behind guests’ travel plans, and then guest-specific details. recognize birthdays, anniversaries, military Create a “selfie station” at your office or furloughs, and memorial services. Stop by the lowelcome center, labeled as such. Include cal dollar store or stock up from Oriental Trading your company name but, more importo keep low-cost decorations handy. tantly, the destination name with a cute, Make your service staff aware that those locally themed background. shopping on OTAs who click the “manager” link might then contact your company directly by phone, email, or chat. When that happens, train everyone how to use a personalized, engaging hospitality style. If guests have not By Douglas Kennedy, President, Kennedy Training Network yet booked, work to channel-convert them. If they

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VRM Intel Magazine | Fall 2020

d n a s r Tou s e i t i v i Act The Time is Coming for VRMs to Provide a Comprehensive Guest Experience By Matt Loney, CEO, Xplorie

n life, the only constant is change. This year has seen disruptive changes and challenges for many, but none more so than the travel and tourism industry. Emerging business trends show evidence of the speed at which our industry is transforming and indicate that travelers are now searching for more personal, emotional, and immersive experiences as part of their vacation package. To successfully meet the evolving expectations of their guests, VRMs must embrace their local tours and attractions and be seen as more than simply providing a place to stay!

A New Age of Travel COVID-19 has redefined travel and shifted the landscape of the industry. Although many people have been affected on professional and personal levels, the good news is vacation rentals are now leading the recovery for travel and tourism.

Our new normal reveals a shift in both consumer behavior and needs because guest expectations have never been higher thanks to post-lockdown cravings for freedom and experience. The focus is no longer on accommodation alone but has shifted swiftly to a combination of a safe place to stay and a complete guest experience. With endless COVID-19 restrictions in place, guests are looking to plan their experiences online, book in advance, avoid lines, and reduce contact. Vacations that are contactless by nature are on the rise. Travelers are choosing outdoor activities over indoor attractions while opting for workcations and staycations: local travel, drive-to destinations, and remote locations such as mountains, lakes, and beaches.

Tours, Activities, and Experiences Tours and activities have, until recently, experienced consistent but slow growth when compared to many industry counterparts yet now stand proud as the third-largest and fastest-growing sector of global travel and tourism. According to Phocuswright, 80 percent of US travelers participated in a tour, activity, or ticketed attraction on their last vacation. 44

VRM Intel Magazine | Fall 2020

Although the success of tours and activities has generally been predicted by the market and location, in the midst of a global pandemic, there has been a shift in the types of tours and activities that are thriving and in how they are being booked. Trips that offer a naturally isolated experience, such as fishing charters, dolphin cruises, kayaking, horseback riding, wilderness adventures, and wellness travel are leading the way.

Tours and activities are moving quickly to implement online booking with digital ticket redemption, enabling them to manage capacity limitations and social distancing by avoiding overcrowding and guests waiting in line. With attractions starting to open and road trips on the rise, are you, as a VRM, able to offer your guests not only a safe home but a memorable vacation experience?

Why Tours and Activities Should Be Important to All VRMs Tours and activities are transforming the vacation rental industry as we know it, and value adds are playing a larger role in our industry than ever before. Property managers must use their knowledge of the market, guest behavior, and local travel trends to enhance the guest experience with customized offerings and personalized service. Return on experience is the new ROI, and although offering your guests tours and activities as part of their stay will not drive substantial direct revenue, the ability to increase your ADR and occupied nights (through both new reservations and extended lengths of stay) represents one of the best opportunities to increase your bottom line.

Building Your Brand Connect YOUR brand to your guest experiences. As many as 97 percent of millennials share their travel experiences on social media, with two-thirds posting at least once a day. These posts of â&#x20AC;&#x153;best-in-lifeâ&#x20AC;? moments and experiences are made throughout their vacations, as opposed to pictures of their rental homes, which are

86-89%

85%

An estimated 86% of travelers between the ages of 18 and 34 and 89% of international travelers participate in tours and activities while traveling.

Outdoor activities top the charts with 85% of families making it a priority on vacation. (Short Term Rentalz)

typically posted on the day of arrival. Are you part of their daily experience? Offer your guests incentives to tag you and let social media do the rest.

A One-Stop Shop Are you a one-stop shop for your guest? Ultimately guest experience remains at the heart of our industry, and customer loyalty lies in meeting all your guests’ needs. It’s time to take stock of your local treasures, tours, activities, and attractions to ensure your guest experience is complete. Take it one step further with a virtual concierge tailored specifically for each home and revolutionize your guests stay. “Alexa! Book me a sunset dolphin cruise, please.”

Repeat Guests and Referrals

90%

90% of travelers say they expect a personalized experience when they book their travel (Medium), and 67% of high-income travelers would rather spend their money on activities than a nicer hotel room. (Skift)

2018

Hostfully found that tours and activities were the number one service vacation rental managers wanted to add.

$183 billion

It’s predicted that the tours and activities segment will grow to $183 billion. (Phocuswright)

62%

A recent report by Arival shows that 62% of travelers consider private tours the most appealing as they look to travel again

45%

Google searches for “staycation” have jumped 45% YoY (Google 2020), and 56% have taken a staycation recently. (YouGov)

Perhaps one of the biggest benefits of offering tours and activities to your guests is that it drives more bookings. Customer loyalty and positive experiences can drive your bookings and lead to repeat guests and referrals while simultaneously reducing your guest acquisition costs. Although a vacation rental home offers comfort, an experience promises memories.

A Safe Stay With PPE becoming a necessity and new procedures for increased safety in place, offering your guests an experience with a preferred vendor gives guests peace of mind during the uncertainty of COVID-19.

One needs to look no further than Googles’ recent entry into both vacation rentals and tours and attractions to confirm this is a hot topic, and vacationers are looking for added value now more than ever when planning their vacations. Xplorie works together with VRMs to build the best guest experience programs in the vacation rental industry, with products ranging from a virtual concierge service to complimentary activities each day of a guest’s stay. In a recent guest feedback survey, 72 percent of travelers said attractions were a factor in their decision when booking accommodations. It’s time to join the guest experience movement!

Be more than a place to stay. Guests are seeking a seamless and hassle-free vacation experience to enjoy the best that their destination has to offer with no extra effort. The era of offering accommodation only is coming to an end. It is time to move with the shifting tide, enhance your customer experience, build your brand, boost your bookings, and transform your accommodation by offering memories and moments that will last a lifetime. After all, the experience is why we vacation.

83%

A survey conducted by Zapwater shows that 83% of Americans preferred to travel within the US for their first trip post-COVID-19.

revenge spending

Post-pandemic “revenge spending” indicates travel will be among the first to recover. (Forbes)

Mr. Loney was hired by Xplorie in May 2015. He is responsible for the team development, venture capital partners, operations, and strategic growth of Xplorie. Under Mr. Loney’s leadership, Xplorie has nearly tripled in size since 2015. Mr. Loney served as the CEO from 2009-2014 for ACG Pizza Partners, a subsidiary of Atlanta based private equity firm, Argonne Capital. Under Mr. Loney’s leadership, ACG nearly doubled its total unit count in less than four years, resulting in an approximate 51% increase to store-level profitability. He also served as Sr. Vice President & General Counsel for Homegrown Industries of Georgia, franchisor of the nationally acclaimed Mellow Mushroom franchise. Mr. Loney has a B.S from Iowa State University and J.D. from the University of Iowa College of Law.

VRM Intel Magazine | Fall 2020

Forecasting the Winter Season Forces at Play in a Pandemic Economy By: Jane Babilon, Ralf Garrison, and Brian London, Insights Collective

7 Key Drivers of Destination Travel Scenarios

5. Paradigm Shift for DMOs

How can destination resorts plan and prepare for the upcoming Winter 2020/2021 season when there are so many unknowns and so few reliable data sets or precedents?

The pandemic will change how—or if—destinations make a callto-action, which will change fulfilment volume, branding, and competitive advantages.

They begin by understanding where things stand for seven key drivers, which will then inform and shape the three destination travel scenarios.

SCENARIO

MIDDLE CASE

SCENARIO

1 BEST CASE

SCENARIO 2

WORST CASE

Forecasting for the Winter 2020/2021 season is one of the key challenges that Insights Collective, a pandemic economy think tank, reported on during VRM Intel’s recent Data and Revenue Management (DARM) Conference in a special presentation sponsored by Laird Sager and Red Sky Travel Insurance. We focused on the essential drivers of supply and demand, the two variables upon which revenue management is based and the keys to understanding pricing power during an unprecedented disruption of the economy.

To best project where things stand and where they might evolve, let’s define and discuss the seven key drivers for 2020/2021 scenario planning:

1. Virus Tracking and Management In both feeder and destination markets, this information will determine visitation ability and restrictions.

6. Federal Funding Funding has played a major role, from PPP to various loan guarantees. However as debt grows, the future is less certain.

7. New Realities Migration/urban exodus, changes in schooling, and working from home are prompting changes to visitation behavior within both local and feeder markets, creating opportunities. To understand why forecasting is difficult, we begin with how the crisis is categorized (i.e., a black swan event). An event of this type is disproportionately high profile, hard to predict, and rare; perhaps it is beyond the realm of normal expectations in history, science, finance, or technology.

Pandemic Economy The COVID-19 pandemic and its economic consequences are unprecedented.

Reliable data sets are not available. Results to date imply disruption beyond conventional business norms, but the new reality has yet to become clear. We can start to make sense of things by looking at the current economic situation. The most helpful lens is found in data for unemployment, consumer confidence, and the Dow Jones Industrial Average.

Key Economic indicators: 2019-2020 Courtesy: Inntopia/DestiMetrics

2. Reopening: Return of Demand Economics This will drive travel and may override local or feeder market conditions but may create fulfilment, image, brand, health issues, and ramifications of pent-up demand.

27,781

3. Changing Consumers and Impacts

Dow Jones

Particularly in the consumer marketplace, behavioral and demographic changes will create uncertainty on the fulfillment side and are not easily foreseen this time around.

7.9%

4. Local Sentiment

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VRM Intel Magazine | Fall 2020

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Destination residents who are “somewhat” or “highly” resistant to outside visitation will push back against publicly funded entities marketing the destination, having an impact on previously more independent destination marketing organization (DMO)/government directives.

Consumer Confidence

The Dow Jones has rebounded since the early spring arrival of COVID-19 in the US—a leading indicator that suggests Washington’s response was appropriate. Unfortunately, consumer confidence fell and has not yet recovered. Moreover, unemployment has increased; sharply at first, and now remaining at recession-level numbers. Wall Street cannot continue to climb while Americans are out of work and feeling lousy about their prospects—can it?

Virus Tracking The University of Washington’s forecasting model projects 410,000 US deaths by end of year, nearly double the approximate 200,000 deaths attributed to COVID-19 by the end of September 2020. The Centers for Disease Control and Prevention (CDC) has forecasted that 12 states and territories will see decreasing numbers of new cases per week, while virus spokesperson Dr. Anthony Fauci predicts we all need to hunker down this quarter, be mindful of flu season, and accept the reality that a vaccine will not be in wide use until the third or fourth quarter of 2021. With virus tracking, the first traces of predicting the winter season come into focus. Management and mitigation of local cases will differentiate winning destinations from losing destinations. For example, at the time of publication, in western ski destinations, Jackson (Teton) and Park City (Summit) lead the pack in terms of new cases. Crested Butte, Bend, and Steamboat, by comparison, show the least number of new cases. Destinations that become known as “hot spots” are at risk, while those with well-controlled local caseloads will be better positioned.

Consumer Trends and Considerations While there is inherent demand for leisure travel (21st century Americans consider it a birthright), taking cues from the economy has been difficult. Among the suggested recovery curves (V, U, L or W), a newly formed K is in play. In a K-shaped recovery, some segments will head upward seeing robust growth opportunities, and other segments will face a declining economic situation. As in any scenario, there are early adopters for travel, but at Insights Collective, we’re seeing pent-up demand as something that is now behind us; it has already occurred. New demand will depend on consumer trends and considerations.

KŰbler-ROSS model

Morale & Competence

Denial

Disbelief; looking for evidence that it isn't true

Frustration Recognition that things are different; sometimes angry

Shock

Surprise or shock at the event

VRM Intel Magazine | Fall 2020

What factors are helping to influence the consumer’s decision to travel for ski vacations?

First, we look at the top three concerns of mountain travelers: safe air travel protocols, potential COVID-19 hot spots, and the ability to maintain social distance once at the destination. Personal financial situations are a factor for only approximately one in ten travelers. This supports the K-shaped economic recovery model while acknowledging the increase in the unemployment rate. If those concerns are mitigated, resorts can then focus on providing the top two pieces of information that would induce travelers to visit a resort: health and safety measures implemented on property and in the destination and the ability to cancel trip reservations without penalty. Taking this approach can shift the demand/supply equation and help return pricing power to the property.

Conclusion We have outlined and expanded upon three of the seven primary drivers. Taking all seven together, potential scenarios for a particular destination starts to form. As forecasts become more clear, resorts need to focus on tactical responses—management and mitigation—to earn the trust of travelers until a widely available vaccine neutralizes the effect of the pandemic on our industry.

Insights Collective is an industry think tank focused on leading resorts and destinations through the new realities of management, marketing, and positioning. It is made possible by contributions from other civic-minded organizations, including Red Sky Travel Insurance.

Jane Babilon spent 10+ years working for DestiMetrics (later Inntopia Business Intelligence) in a variety of roles but primarily as an Account Manager focusing on Southeast clients. In this role she worked to ensure that clients were getting the most value out of their lodging research programs. Integration Ralf Garrison is a destination travel inChanges dustry veteran, generally recognized as integrated; a thought-leader, innovator and a serial a renewed individual entrepreneur resulting from the various Decision businesses that he has founded over the Learning years.

how to work in the new situation; feeling Depression more Experiment positive Low mood; lacking in Initial energy engagement with new situation

Time 48

To appreciate consumer sentiment trends more fully, we turn to the Kübler-Ross Emotional Response to Change scale. This scale tracks morale and competence across seven phases: starting at shock and concluding with integration. At the six-month milestone, consumers are shifting out of phase four, anger/depression, and toward phase five, experiment. Society is well past phase one, shock. We are a long way from the integration of phase seven. Changes are not yet understood or accepted, and there is not yet a renewed sense of normal.

Brian London is a respected research consultant, economist, and editor-in-chief of Travel Industry Indicators - Trends, Outlook, and Commentary. For further information, our resources can be found at: theinsightscollective.com

VRM Intel Magazine | Fall 2020

By Jeremy Gall, Founder and CEO, Breezeway

Professionalizing Rental Operations

in Travel’s New Landscape R By Jeremy Gall, Founder and CEO, Breezeway

oughly six months ago, I wrote an for VRM Intel from quarantine in Pawleys Island, South Carolina. The article offered predictions on how the pandemic would change the way in which travelers interact with physical space, and how their behavior would impact the approach to vacation rental property preparation and client communication. We also discussed the opportunity these changes presented and how rental managers who prioritize professional and responsible operations will separate themselves from the occasional, “on-the-side” operator and grow along with the market. Over the course of this most unusual and challenging year—which still has over two months and untold surprises in store—many within the vacation rental industry have navigated waves of cancelations, furloughs, executive orders, reopenings, and zero-to-sixty demand swings. While Airbnb passed the million booked-nights mark on July 8th for the first time in over 120 days, the predictability of future bookings is unclear; we aren’t out of the woods just yet with this global pandemic.

The new traveler persona has compelled nearly all (99 percent) of vacation rental managers to make changes to their property care programs concerning housekeeping protocols, internal communication, time allotted for cleans, items cleaned, and products used. Strictly adhering to comprehensive cleaning protocols between each stay has become an even more critical component of property care, given the health implications. Customizing checklists for each property is a popular way to help housekeepers cover the unique elements in the home and follow brand standards. Prior to COVID-19, 49 percent of vacation rental managers were using customized checklists and protocols, and an additional 30 percent of managers plan on doing so going forward, allowing them to add more control over how properties are prepared.

Better yet, 75 percent of managers are augmenting the items on their checklists to include guidance from health authorities.

What is becoming clear, though, is an acceleration of the shifting focus on quality within the vacation rental market and the lasting operational changes that come with it.

We surveyed hundreds of vacation rental managers to take the pulse of how professionals plan to strengthen processes across guest and owner communication, housekeeping workflows, compliance with cleanliness and safety standards, and internal tracking and reporting. This article analyzes the results from our survey and discusses how 2020 has solidified the trend towards quality in vacation rentals and the resulting need for controlled property operations and client services.

Cleanliness Beyond Reproach While professional vacation rental operators have always been focused on ensuring high cleaning standards for their units, cleanliness has taken center stage since March. This isn’t a surprise, and 97 percent of managers we surveyed think that COVID-19 has increased guest sensitivity regarding vacation rental cleanliness. In fact, 66 percent think this sensitivity will change booking behaviors, and that cleanliness and safety will be more important considerations than location and price.

Guest hypervigilance as to property preparation and cleanliness start well before check-in, pulling travelers towards professionally managed rentals with predictable and trustworthy brands; we see this trend across hospitality, as well, by the way companies are promoting and branding cleaning standards.

For those who smartly assign cleaning jobs to in-house and contracted housekeepers (even with prescriptive instructions for each property), having confidence in the quality of work is still not a given.

The managers we surveyed agree. Over 83 percent are strengthening their quality assurance programs, with the majority of operators independently inspecting every unit before the guest arrives. Using digital checklists for quality control not only ensures property preparation complies with brand standards but also makes it easier to store data on historical issues, conditions, appliance attributes, access codes, and Wi-Fi passwords. Rental managers have this granular property information at their fingertips on mobile VRM Intel Magazine | Fall 2020

phones to drive more predictive asset management and quickly diagnose issues, reduce repair time and costs, and prevent emergency maintenance issues.

COMMUNICATING Property and Guest Safety Safety was already a trending topic in the industry before this year, with managers paying more attention to physical safety features such as smoke alarms, carbon monoxide detectors, and trip-andfall hazards. Now safety—in terms of both cleanliness and property condition—is front and center for rental managers, guests, property owners, municipalities, and internal staff. Over 84 percent of managers we surveyed are taking steps to improve safety and maintenance procedures; these changes include increasing the frequency of safety inspections and routine preventative maintenance. Safety inspections are a growing trend that we expect to continue into 2021, and 13 percent of managers are taking additional steps to protect the safety of their owners’ assets by leveraging independent programs to certify rentals for safety and regulatory compliance.

The current environment has also stretched the meaning of “vacation rental safety” to include the hygiene and well-being of guests. The most direct strategy for protecting the safety of guests is adding a buffer period between stays. Implementing waiting periods has been a hotly debated topic in the industry in 2020, and 42 percent of operators surveyed in June planned to implement a buffer to comply with guidance from leading regulators and authorities.

Vacasa, for example, automatically blocks time between reservations to prevent last-minute bookings for locations where “rest periods” are required. The company has added waiting periods to their standard protocol and suspended early check-ins and late checkouts to afford housekeepers adequate time to complete enhanced cleaning programs. Performing work to safeguard your properties and guests is just half the battle, though. Communicating all the precautions you’ve taken is necessary to put guests at ease and sets the stage for a great in-stay experience.

Nearly three-quarters (74 percent) of the managers we surveyed plan to adjust their communication strategies before arrival and throughout the stay. This includes promoting enhanced programs on company marketing websites, sending details about contactless check-in procedures before arrival, communicating changes to in-stay concierge and maintenance services, sharing restrictions and closures in the area, and detailing safety and cleaning items provided for guest use (e.g., cleaning products, hand sanitizer, gloves, masks).

lenge with many moving pieces and increased demands.

In fact, more than 42 percent of professional managers we surveyed are manually plugging gaps in property care by scheduling tasks from reservation reports, using paper checklists to perform quality assurance, and communicating internally through ad hoc systems, phone calls, and text threads. Another 40 percent are using a combination of tools which include their PMS systems, and workarounds that increase the likelihood that work will fall through the cracks.

For many of these managers, though, COVID-19 has marked a shift in their technology priorities, driving the need for purpose-built property care tools to the front. In fact, the majority of managers feel that cleaning and operations are the most important areas of focus for their business over the next year, and 49 percent feel that property operations software will be the most helpful technology moving forward. The data show that the demand for service optimization is on the rise and demonstrates the continued evolution from “property manager” to “hospitality provider.” Once again, the market for vacation rentals is going through a shift, one partially accelerated by the demands placed on travel and hospitality by a global pandemic. Facilitating the booking process has taken a backseat to servicing and preparing the property and building more confidence in safe and high-quality properties has become the focal point of travelers, property managers, and regulators. Our survey results from this summer illustrate this trend and outline the enhanced approach that rental managers are taking to crafting predictable and service-first experiences as true hospitality providers.

We’ve spilled ink in other articles on the rise in guest expectations and its impact on the service demands placed on vacation rental managers. Vacation rental operators are well aware that the days of guests bringing their own bedsheets and toilet paper) are behind us.

And once again, the push for professionalism presents an opportunity for managers to meet the changing demands of their clients. Using smart programs and internal workflows eases the complexities that vacation rental managers navigate—high tough, rigorous compliance, fast turnover, and unique space—and can create scalable property operations for growth and a stronger brand within their market.

Now, as this same service is needed at vacation rentals, devoting detailed care and service across unique properties is a major chal-

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.

Popularity of Service Technology is on the Rise

But service is much more than the baseline essentials; as guests gravitate to more full-service rentals, managers are increasingly focused on how to optimize their service operations. Hotel operators, who have been forced to meet the ad hoc demands of room service and concierge, have long since adopted service optimization software separate from front desk, booking, and reservation management software.

VRM Intel Magazine | Fall 2020

BUSINESS CONSULTING | ACCOUNTING SERVICES | BUY / SELL ADVISORY SERVICES

MAXIMIZE THE VALUE OF YOUR VACATION RENTAL OPERATION OVER 20 YEARS OF VACATION RENTAL INDUSTRY EXPERIENCE IN OVER 200 RESORT MARKETS

Ben Edwards, President WeatherbyConsulting.com

Ben@WeatherbyConsulting.com

(888) 304-1405 VRM Intel Magazine | Fall 2020

By Wendy Glover

Selling your Business?

Know your Tech Stuff! F

or any vacation rental company considering selling, there are many areas of preparation needed to realize a successful sales process. This article will discuss what types of technology-related data an owner should be prepared to provide based on the type of sale.

Technology in vacation rental companies ranges from simple to very complex, depending on the tools and solutions that are in use and the extent of digital transformation that has been completed. 54

VRM Intel Magazine | Fall 2020

For example, some VRMs have housekeepers using printed reports while others have a mobile application on their personal phones. A larger, geographically distributed company may have a wide area network connecting its systems while a smaller company may only provide wireless Internet access and leverage a software-as-a-service (SaaS) solution.

These examples can extend to all areas of operations in a VRMâ&#x20AC;&#x2122;s technology ecosystem. No two acquisitions are exactly the same,

but there are common technology data requests depending on the sale type: contract buy (owner contracts/units), asset buy (stuff ), or a stock purchase (company). One of the sticking points in a VR sale is the sellerâ&#x20AC;&#x2122;s understanding of the technology systems involved. Frequently, VR owners do not have comprehensive documentation of the systems and assets that run the business. The diligence an acquirer pursues will greatly impact his or her success in ongoing operations. In my experience, one deal included acquiring a proprietary system but not the add-on connector for distribution because it was not discovered or divulged in the diligence process.

Another purchase exposed the buyer to active network penetration and a resulting data breach because of a lack of focus on the current security in place. Failure to reveal a prior data breach resulted in fines that the buyer then had to recover from the seller in another deal. One website went dark for two days because it was not listed in the diligence data and lost connectivity to the PMS during system changes. Omissions can result in a financial loss to the seller, so it is important to provide all of the information available or requested.

Typical data requests in a diligence process are provided below. Depending on the size of the acquisition target and purchaser, the detail can be increased or flattened. Taking the time to develop this collection will prepare the target for a successful and productive engagement. When an acquirer requests data from a target, the promptness and depth of the response signals a professional, well-run operation and provides confidence in the deal. While acquirers typically have a data request template, your prepared information can be easily pasted in or linked by reference. If there are questions that arenâ&#x20AC;&#x2122;t clear or understood, it is important to ask for clarification or help to ensure full transparency and data validity. It is important to note that this type of information should never be provided until a nondisclosure agreement has been executed. Deal brokers and consultants are available to help with this work, including data extraction and documentation if the seller wants assistance or needs to focus on other areas.

Contract Purchase Implications In a contract purchase, the buyer typically does not need the current systems or technology services. The main focus is on the contracts and related data to be provided. Be ready to export data from your systems in a format the buyer can consume. The use of spreadsheets is common. Be sure to understand the scope of data the buyer will need and the date range. Two years of historical data is a common request.

Stock Purchase Implications In a stock purchase, the buyer needs as much data as possible to sustain current operations and to support the staff, owners, and guests post sale. More detailed information about your technology ecosystem is needed to support the value and operations of the business. Collect all of your active technology-related contracts. These will include software systems (on-premise or SaaS); hardware support agreements; telecommunication products including voice, data, and cellular services; and any vendor support agreements. The types of data needed are detailed below (but may not be fully comprehensive).

Tech Hardware Computers, servers, network equipment, telephone systems, company cell phones with full detail of models, purchase date or age, and contract or warranty status. An inventory or all phone lines and data circuits should be included. A spreadsheet schedule is an easy way to track and share this information if no other asset inventory is available.

Software Systems Include desktop software (Windows, Office, etc.), financial, HR systems, CRM, call center, PMS, housekeeping, maintenance, association management, collaboration tools, time tracking, payroll, point of sale, project management, website analytics tools, and source code of any proprietary systems. Be prepared to provide copies of all related contracts or proof of licenses, and verify the transferability of any that are needed.

Security Systems These could include IT operating tools, antivirus software, firewalls, VPN, SFTP, application patching, and intrusion protection systems.

IT Support Structure Provide current resource roles and reporting lines. If support is outsourced, supply the current agreement including the types of support it includes.

Network Diagram Have a diagram that details your network, including all sites, major hardware, and IP addresses.

Prepare a summary of all existing technology contracts to be used to terminate services no longer needed post sale. Plan to pay any early termination fees that may be required. Plan to maintain any systems or data needed to support any legal or financial reporting in the future, typically for three to seven years depending on the data type.

Asset Purchase Implications For an asset purchase, the buyer purchases some or all of your assets, such as computers, websites, data circuits, and technology vendor contracts and services. In addition to these contract details, additional data related to the assets to be conveyed is needed. Compile accurate data for any assets or services to be transferred. Verify that existing agreements allow a transfer, and clearly detail any that have unique requirements for transferability. VRM Intel Magazine | Fall 2020

Data Flow Diagram

SOURCE

DISTRIBUTION PARTNER

channel manager

SOURCE

destination

PMS

BRAND.COM Ecommerce website API

SOURCE

maintenance app

This will visually represent how your systems connect and which data elements are passed between the systems.

Payment Systems Provide details about your merchant identification, gateways, processors, and payment systems in use. This is an area many companies find complex to transfer. Leverage the vendors to support documenting this information.

Disaster Recovery and Business Continuity Plans Document the processes used to maintain business operations in the event of a disaster or outage. In the event of a fire or hurricane, for example, detail how you communicate with owners, guests, and staff, potentially without access to all of your systems or data. If there was an Internet or network outage, provide your operating processes for maintaining standard services for all guest and owner interactions.

Prior Breaches Provide full transparency on any data breaches that have occurred. This should include the scope of the breach, any notifications provided, and all corrective or preventative actions taken after the event occurred.

User Data Export a list of all application users from significant systems. Provide detail on any super users and/or system administrators. Additionally, any shared accounts or service accounts should be highlighted.

Social Media List all tools and accounts in use across your digital marketing tools. Include users and passwords.

WebsiteS Include a list of all owned domains, the domain registrars, and current status (active versus parked or redirected). Include relevant performance metrics that represent the level of engagement with the platform. If the platform is proprietary, provide full technology stack details along with support resources. 56

VRM Intel Magazine | Fall 2020

Channel Data For all your sales channels (direct, web, OTA, etc.), provide the percent of revenue per channel. A full listing off all OTAs in use should be included.

Compliance Status For PCI Compliance, present the prior four quarters of the required vulnerability scans, most recent Attestation of PCI Compliance, and inventory of all vendors with access to sensitive data, including credit card or personally identifiable information (PII).

Technology Projects Any projects in progress, critically needed, or future planned projects should be supplied with details on the effort, the rationale, and the impact. Provide available budgetary data and timelines for these efforts.

Technology Spend Present the total operating expense for all technology services in use, including systems, personnel, and vendors. Include the data as a percent of gross revenue. Provide historical and budgeted capital spending totals or percentages of gross revenue. This is meant to be a guide to help VRs when selling their business. Each situation is unique and varies in complexity. There are consultants and deal brokers who are willing to help with this type of data development for those who would need that type of assistance. About Wendy Glover Wendy Glover is the principal consultant of 30A Vacation Rental Consulting which provides technology consulting services to the vacation rental industry with particular focus on PMS migrations and M&A preparation. With a background in technology, Glover has worked in the vacation rental industry for over 20 years progressing in her career through the many management changes of Abbott Resorts, ResortQuest, Gaylord, Leucadia, Wyndham and Vacasa. Her experience covers leading teams responsible for technology infrastructure, operations, UI/UX, application support, website hosting, and support and agile development. While under management by Wyndham, she led a significant number of successful PMS migrations and was personally responsible for full-stack technology assessments of acquisition targets and the subsequent integration of the acquired companies. Wendy resides in Santa Rosa Beach Florida and enjoys the beauty of the Emerald Coast.

NDAs & Confidentiality Agreements What to Include and When to Enforce By Kristen Prinz, Founder and Managing Partner, The Prinz Law Firm

very business has intellectual property, be it a process, strategy, road map, trade secret, or any other idea providing a competitive edge. Protecting intellectual property can be critical to a business’s future. Many businesses use nondisclosure agreements (NDAs) or confidentiality agreements to prevent employees and associates from divulging privileged information. But simply having an NDA or confidentiality agreement does not ensure protection: their effectiveness depends on their enforcement language.

NDAs and confidentiality agreements are best used for partners, vendors, contractors, employees, or any working relationships that require sharing confidential information. Your industry and the type of relationship should influence the language and protections specified in the agreement. Employees will often sign broad restrictions that include noncompete terms, non-solicitation terms, and clear language dictating ownership of intellectual property in addition to the standard confidentiality language. The enforceability of an agreement significantly depends on the legal jurisdiction of the employment and how narrowly the restrictions are crafted. In a noncompete agreement, for example, a restriction on future employment lasting one year and applying to one city is more likely to be enforced than a four-year term with a wider geographical scope.

For nonemployee relationships, your business is best served by an NDA or confidentiality agreement that mutually protects the entities involved, clearly designates ownership of intellectual property, and restricts solicitation of clients, vendors, and suppliers. Make sure that shared information is appropriately designated as confidential and solicitation is clearly defined. None of the restrictions in an NDA or confidentiality agreement will mean anything without strong enforcement language. This includes specifying the remedies available and using a shifting attorney’s fee provision or prevailing party provision allowing for recovery of fees upon a judgment.

Once you have the right agreement drafted and signed, you need to decide when to enforce the applicable terms. The simplest policy is that agreements should be enforced when significant value is at stake. For example, a key sales representative who departs with your company’s confidential client list and joins your largest competitor presents a substantial risk to your business that would warrant litigation. Similarly, a prospective partner who steals your business plan may also present a strong case for enforcing an agreement.

Conversely, if the material stolen by a prospective partner is generic or unlikely to generate significant financial gain, you may not want to invest your time, money, and energy in a dispute. Keep in mind that a sternly worded cease and desist letter might best achieve the goals of an agreement by avoiding litigation altogether. The key is to be strategic by knowing when and how to leverage an agreement to protect your intellectual property. Kristen Prinz, Prinz Law Firm

Kristen Prinz is an employment lawyer, business counselor, and founder of the Prinz Law Firm. She helps protect businesses from liability in recruiting, hiring, onboarding, assessing, and separating employees. She has litigated employment law matters before state and federal courts and agencies including the Illinois Department of Human Rights and the Cook County Human Rights Commission. She’s involved with many professional and philanthropic organizations, including the YWCA, the National Sleep Foundation, The International Women’s Forum, and the Economic Club of Chicago. Kristen has been recognized as “One of the Most Influential Women Lawyers” by Crain's Chicago Business. VRM Intel Magazine | Fall 2020

Photos and Descriptions

How best practices have changed in 2020 By Rebecca Lombarto, VP, Sales and Marketing, TruPlace

VRM Intel Magazine | Fall 2020

BEFORE: AMATEUR GREAT ROOM

AFTER: FLOOR PLAN GREAT ROOM

BEFORE: EXTERIOR FRONT ELEVATION

AFTER: EXTERIOR FRONT ELEVATION

n article titled “Being Extra-Ordinary” in the Summer 2020 issue of VRM Intel shared photographs of clean, open interiors with decluttered surfaces and white bedspreads. Its purpose was to provide guidance amid COVID-19 concerns on how to communicate cleanliness to potential guests.

top of the apocalypse). And who could blame property managers for this when many of them spent their nights and mornings Cloroxing toilets and sinks themselves? For those coming up for air, right now is a great time to think ahead and employ these best practices to stay ahead of the curve.

These tips, it turns out, might not be so temporary.

Best Practices in Photography

According to an article from USA Today published August 26, 2020, “STR and Tourism Economics said recently that it expects average hotel occupancy of 40 percent this year, slowly climbing to 52 percent in 2021. That’s down from a healthy 66 percent in 2019.”

In one sense, best practices for property photography haven’t changed and won’t change even in this strange new world. If anything, these recommendations will continue to be emphasized in the future:

Best practices in photography and descriptions took a back seat to last-minute bookings, hard-to-find cleaning crews, chargebacks, and the sunsetting of V12 (which probably felt like the cherry on

Color: Hues and saturation within a photograph must be consistent, and that consistency ideally should continue throughout the property/properties. Imagine ordering food based on photos where

Meanwhile, some vacation rental companies in beach locations are booming at 80 percent occupancy during a shoulder season where they would normally be at 50 percent on a good year. In fact, one vacation rental company reported being at 140 percent of revenue from 2019 by mid-September. There doesn’t appear to be the same “slowly climbing” trend for property managers.

Clarity: Crystal-clear photographs that plainly show details within the room and clear views out the windows convey cleanliness and transparency, which builds trust—and trust wins bookings and increases revenue. It also prevents misunderstandings. This type of quality can be achieved using HDR photography and DSLR cameras.

VRM Intel Magazine | Fall 2020

the rice and chicken looked grimy. That’s the same visceral response guests have when they see yellowing tile in a kitchen or dark gray in a bathtub when those colors shouldn’t be there.

Composition: Although nicely framed-out shots are always important, one slight change recently has been to angle the camera’s view to capture how it would look to actually be there. In other words, take photographs where the viewer can easily imagine sitting at the kitchen table and admiring the views out the window. Instead of just photographing objects within the space, trigger an emotional response that transports the viewer into that space.

Best Practices in Descriptions People who had never (or rarely) booked a vacation rental property were suddenly searching feverishly online for any with availability within a five- to eight-hour drive of their homes. There was such a spike in demand that most TruPlace tour analytics saw a 25 percent surge in view counts during May. One property manager advertised a $40 discount for first-time Airbnb guests. “Drive-to” traffic wasn’t just a thing, it was the thing in May and June as families who were quarantining together wanted to escape their homes without getting on an airplane. Savvy PMCs, like one based in the Florida panhandle, increased their digital marketing spend by double last year’s amount. They bought Google Ads, boosted Facebook posts, and added specific keywords to their emails and website pages that helped their SEO.

On a Super September Florida VRMA panel discussion, Brian Hamaoui of Love Rentals recommended optimizing property titles for OTAs that feature amenities that draw in guests seeking a reprieve rather than factual descriptions like “Two Bedroom, Two Bath with Pool.” He advised leveraging the property’s unique aspects at the first opportunity.

Separating the Wheat During times of crises (or chaos), it’s not uncommon to see ambitious business owners jump on opportunities while others take cover; not many managers can stomach doubling their marketing spend while the economy is crashing. Historically, though, those who do usually gain an advantage.

What has changed during the COVID-19 pandemic thus far is that some companies have improved their brand equity and competitive position by prioritizing quality photography and updated property titles and descriptions, while others have struggled, having been swamped and short on workforce. Property managers have had 99 problems since COVID-19 hit, but photography wasn’t one. As competition increases next year because more properties were purchased and brought online, it will be interesting to see which companies are smart enough to reinvest in these visual marketing tools. Vacation rental companies in drive-to locations without a heavy dependency on foreign travel (sorry, Orlando) will look back on 2020 and see it as the Gold Rush. The trick for 2021 will be keeping that momentum going, which can be easily fueled by quality visuals and smart descriptions.

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VRM Intel Magazine | Fall 2020

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VRM Intel Magazine | Fall 2020

Repurposing Space

Broadening your Vacation Rental’s Appeal By Amy Bradac and Carlo Torrano

Work From Home Fatigue

Broadening Your Rental’s Appeal

s shelter orders persist across the country, many have started to experience fatigue associated with working from home. Similar to the “cabin fever” that has prompted parks, beaches, and other public spaces to swell to capacity on weekends (and sometimes weekdays), we’re finding that while there are many advantages to working from home, the monotony of our streamlined routines is starting to present challenges—both mental and physical.

If you own a short-term rental property, you may want to consider options for catering to the daily rental needs of remote workers desiring a workspace outside of their own homes. Depending on the market, travel patterns have changed rapidly in response to quarantine orders. Many rental properties—as well as hotels—are sitting empty, representing significant losses for commercial and private owners alike. However, owners of short-term rental properties are well positioned to capitalize on changing travel habits by broadening their target audience, thereby potentially offsetting losses.

Not only that, but background noise and Internet bandwidth challenges can also make focus and connectivity more difficult during crunch times and important meetings. In a reversal from the initial excitement that surrounded the prospect of working from home more frequently, it is becoming clear that some of the disadvantages are hard to overcome.

Whether because of lost productivity arising from other occupants or family members sharing the space, loss of motivation from living/sleeping/working in the same space, or simply an innate desire to add variety to a daily routine, alternatives to the individual home office are quickly gaining traction. And with recent announcements of further delays in reopening by large organizations in the Bay Area and beyond, creative solutions will be needed sooner rather than later. 62

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While those traveling for pleasure might be fewer and farther between, rental owners have an opportunity to attract the “business traveler” who is seeking either long- or short-term respite from the home office. Whereas these types of vacation spaces might have once seemed a luxury for the typical worker, they are quickly gaining traction because of their many advantages.

Planning Upgrades and Amenities These days, nearly all vacation rental properties provide the most basic infrastructure to support a remote workplace—Wi-Fi. With some additional planning, though, properties can be taken to the next level by layering on specialty amenities targeted directly at this

new breed of remote worker. While cost may be a factor when determining just how far your upgrades go, even just a few unique details can make a difference when it comes to a remote workflow.

Knowing where to start and what questions to ask before implementing any changes can be made easier by consulting a Project Manager (PM) who can guide both your initial exploration and ultimately manage implementation of any changes you wish to make. With their industry knowledge, they can quickly advise on suitable upgrades that would appeal most to someone looking for an extension of their office. Consider how the following technologies and amenities could be enhanced or incorporated at your property:

more convenience. Given that remote work can occur from many places within the property, look to incorporate enhanced power throughout—office areas, living rooms, bedrooms, and even the kitchen.

Desk stations

Connectivity

connectivity in all corners of the space?

Wi-Fi is the foundation of any remote office. Ensuring that connection speeds are adequate for seamless video conferencing and accessing remote workstations or servers is key. Do you need to install a repeater, extender, or other equipment to ensure

Video conferencing

A dedicated space with a webcam, mic, and neutral background will enable professional-level video conferencing suitable for casual work calls or more formal interviews.

Power Availability of several outlets for charging and powering devices is critical. Outlets with integrated USB connections provide even

Consider installing ergonomic and adjustable chairs, keyboard trays, sit-stand desks, large counters or workspaces for spreading out papers and larger projects, or any other equipment to improve the comfort of guests as they do their work.

Shared spaces If your property is part of a community or resort, learn how communal spaces can be utilized to increase remote work productivity. Whether these are larger, dedicated meeting spaces, a clubhouse with food and beverage services, or a pool or gym, each amenity expands your potential audience and increases your property’s attractiveness. In many cases, these unique workspaces can offer privacy and other conveniences, as well as a safer environment than a crowded office, at least until an employer is able to safely reopen. Combined with a vacation property’s existing advantages, such as online booking and management, parking, and overnight accommodations, the benefits are numerous. And given that many of these spaces are found beyond the city center, they are even more convenient for those who do not wish to travel far from home. While it may require some work to properly transition a property to accommodate a more business-minded “traveler,” the advantages to both owners and guests are clear. Planning for upgrades, or at least exploring the feasibility of them, can be made easier by working with a PM.

A PM’s access to industry contacts, as well as their budget and schedule expertise, will provide you with the necessary resources to evaluate how best to make use of your vacant or dormant space. Such spaces are bound to increase in popularity as many look for ways to supplement their home office experiences during the extended reopening period.

Bradac Co is a full-service real estate construction project management firm guiding clients in every discipline of a project from searching for space to designing, building, moving in, and support afterward. They can be reached at hello@bradac.co.

VRM Intel Magazine | Fall 2020

By Heather Bayer

Building a New Website?

Lessons We Learned While Rebuilding our VRM Website

We knew our website had passed its sell-by date.

t was looking old and tired and did not show well on mobile devices. In the years since it was built, mobile use has grown exponentially, and we were seeing an increase in the bounce rate by those users.

There was a lot about it we still liked because, like an old mattress, it was comfortable; and, despite its being worn and having seen better days, we just kept putting off the change. All that shopping around and research just felt too time-consuming and counter productive. Then the pandemic arrived, and the prospect of having to shut down for an extended period meant we would have the opportunity to really explore some options.

And . . . we got wind of a community grant for small businesses, which would pay a proportion of the cost for a marketing project, provided it was completed within a set time frame. That cemented the decision, and our website re-do got underway.

For property managers, personas are created based on what you know of your potential guests’ behavior when they are searching for a property. This knowledge comes from your current website’s analytical data as well as through observation of the needs, goals, and behaviors of your own or your competitors’ target audience groups. You will want to know:

 Do your avatars live on their phones and do all their transactions that way?  Are they too busy to read? What other media do they use?  Do they like to spend time researching a vacation or do they book on the fly?  How do they navigate around a website?  What do they enjoy most about a vacation?  What frustrates them about booking a property?

Although the process was relatively issue-free, we learned a few things along the way that made the process smoother, easier, and less stressful.

Getting to know this person will make decision-making for your site much more focused and accurately targeted.

Know your TARGET avatar

Research thoroughly

Creating a website is not about what you like and don’t like. It is what your avatar likes and does not like—it’s what your target market, or personas, will find attractive and appealing that’s more important. If you know them intimately, you can create a site that speaks directly to their dreams, needs, and wants.

One of the first questions your web developer will ask is what you like about other sites. They should provide you with a range of websites they have created and encourage you to share aspects of others that you find appealing.

Spending the time to identify the types of visitors who will come to the site, hang around, and then book is worth every minute. It helps to create a customized experience for the user.

UK-based customer experience consultancy Foviance defines the nature of this type of focus: “A persona is a fictional character who communicates the primary characteristics of a group of users, identified and selected as a key target through use of segmentation data, across the company in a usable and effective manner. This ultimately enables the company to design the best user experience for its customers at all touchpoints, which is a key success factor in today’s business environment.” 64

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From these, create a clear wish-list with screen shots of all the things your avatar will love, from such elements as the way the listings and photos are displayed to the way the content is organized and presented, to fonts, spacing, text colors, and headings. You cannot expect the web developer to get inside your head or know your avatars, so this detailed research allows you to drill down to the finest detail. Create a wish board in a media of your choice depending on whether you prefer digital or written planning. Identify the different parts of the site that will populate the navigation bar then drop the content pages below the headings. For visual creators, a sticky note system can be useful.

moving on from what’s comfortable and known.

Now you decide to build a new house and start afresh. If there was something you really loved about the old place you could try and recreate it, but in general you’d look ahead to all the upgraded features and amenities and over time find the changes were vast improvements. After all, if you wanted your new place to look and feel like your old one, why would you move out anyway?

Accept there will be some sacrifices to be made, and there will be users who let you know how much they hate the new site because it’s unfamiliar and doesn’t perform in the way they are used to. Over time they will come around.

Establish easy and effective lines of communication with the development team. You will need to build a good relationship with the development team and create some ground rules for communications.

Assign one person to be project manager “Too many cooks,” and all that. Creating a new site by committee is likely to lengthen the process as you sit through interminable meetings. Everyone will have their own opinions on what they like in a website, which is why creating the avatars is so helpful.

Once these are defined, it makes the process easier for one person to map out and create the site based on the jointly created personas. Share the plan as it progresses and ask for feedback, but keep it focused. Set up a Google doc or other shared space for other team members to comment and be disciplined about this system.

Just like trying to please all your end users, some of your team will not be happy with changes to a site they are familiar with. Some will have developed methods of using the current site to speed up their work processes and will demonstrate resistance to change, so it’s worthwhile considering this at the outset and finding out what works really well for them now and what could be incorporated in the new site.

Accept there will be compromises

If you don’t deliver content, text, photos, and anything else that is asked for on time, you could be holding up the project for weeks— even months—if the developer has other clients who have scheduled projects in progress. Most web design companies will have methods of sharing timelines, showing the different tasks that need doing and their due date, and it is important you meet those commitments. Find out how your web designer wants to receive your ideas and suggestions. Random emails every time you have an idea may not be the way to go (Spoiler alert: That is what I did, and I am glad my designer was very patient and responsive). In retrospect, we could have utilized a better method of communication—a Slack channel would have been ideal. Finally, never blame the designer for a project not being completed on time because you failed to communicate your needs effectively or meet deadlines. We launched our website on time, without much project creep, and on budget, and we credit good organization and planning for getting us there, together with a great web development team. The CottageLINK Rental Management website was designed and developed by RealTech Webmasters. Our huge thanks go to Sean McNeal for his patience and his ability to translate our needs into a polished and impactful site.

There are probably things you love about your current website. For us, it was the calendar that showed every property on one large chart. Our guests have always liked being able to see all our cottages’ availability in one spot, and the calendar ranked highly on pages visited. This was the one thing we would not compromise on, and we were thankful our web developer had already done a similar page for other sites.

While you may have features you don’t want to give up, there may be others that you will be happier to sacrifice; and it’s important you identify both of these at the start. Finding out in the middle of the development stage that something you relied upon in the past isn’t going to be available any more can be a tough blow. To put it into perspective, imagine you have lived in the same house for 15 years. When you moved in, you bought everything new, but now things are getting old and ready for an upgrade. Your children tell you it looks like Grandma’s place and you agree, but it is tough

Heather Bayer has been fully immersed in the short-term rental industry for over 25 years, first as an owner of multiple properties in the UK and Canada, and for the last 15 years 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 – with 270 episodes of interviews, owner and manager features, and her own musings on this great business. VRM Intel Magazine | Fall 2020

Elements of a

Property Detail Page How They Can Make or Break Your Bookings

By Chris Johnson, ICND

roperty detail pages (PDPs) on your website, as well as the vacation property’s assets you provide to your channel partners, are crucial aspects for a renter’s shopping and booking experience. Potential guests scour these pages one by one seeking the perfect lodging accommodations for their vacation destination. These pages serve as the fulcrum point between completing bookings and losing visitors altogether.

Key elements need to be in place. These elements are what either convert a looker to a booker or cause frustration and send them instead to an OTA listing or a competitor’s website.

Mobile-First Design and Avoiding Tension Points on All Layouts Whether you encompass all possible features or create a lean, mean PDP machine, the focus should be on how this looks and works on both mobile and desktop devices. Pay particular attention to each must-have and feature functionality on all devices, such as calendars, photo galleries, and so on. For example: • If the calendar is small and hard to use on a mobile device because of “fat finger syndrome,” you’re creating higher exit rates (visitors leaving the site) on your PDPs (as well as anywhere else calendars are utilized). • If your filtering mechanism is clunky and makes it hard to refine the results, you are losing people. • Is your pricing structure transparently stated? Are you showing the full price versus the base rates?

• Do you have a gallery player on your website that is unique to mobile use? Do your gallery images on the PDPs open and cascade down the page to allow users to easily thumb through (literally, with their thumbs)? Sounds neat, and it’s possible too! 66

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A Mobile-First Design Mindset should govern your creation of an effective PDP. If you make it a priority while evaluating your website, you will discover any tension points in your existing site or in one you hope to develop. Although users are not yet booking as often on mobile compared to desktop, the mobile experience is your first touchpoint as a company. Do not blow it.

The Must-Haves of a Property Detail Page (PDP) There is not one solution to the perfect PDP, and there’s plenty of opportunity to differentiate your PDPs from your competition’s. However, there are some cornerstone facets of a well-done PDP you should not ignore.

Quick Availability Search Your website should function at or above the level of an OTA website. This means the PDPs should allow for date selection, showing available dates and providing instant quotes. Calendars are one of the main tension points for website visitors using the website. Do not overlook this crucial aspect.

This client’s turn days are Friday, Saturday, or Sunday, and the calendar reflects that, with an inability to even select Monday to Thursday.

If you have specific turn days and length-of-stay requirements, make sure the calendar handles these aspects in a clear and user-friendly way that guides potential guests toward meeting those requirements.

your setup with your web developer or marketing company if you don’t agree. For the best results, indicate the true total, whatever that may be, including optional add-ons with checkboxes that change the total in real time.

If user inputs are not providing quotes, but instead are yielding errors, you need to revise your calendar functionality or at least have your website development team program in specific text to appear near the calendar to explain the policy.

Don’t forget, we are trying to convert the millennials who are using Airbnb into becoming direct bookers on our websites. They are generally searching for weekend stays, shorter stays, and even midweek stays. If your calendar gives them free range to pick any dates at will, and they are being hit with error messages of no availability, they will go elsewhere. In this example, the message is vague. “Why do I have to call? Why can’t I book this online? Is it not available? Are they going to try to upsell me? The office is closed right now, so I can’t call. Looks like I’m heading to Airbnb.”

Clear Pricing Breakdowns The quotes you provide on PDPs should provide the actual total of the rental for the selected rental period. Itemizing the different costs can potentially further achieve some pricing transparency, but too much itemizing can also be a deterrent. The main point here is that if you’re holding extra fees until a checkout page (the next step after the PDP), and if those fees are substantial, the guest may feel you are running a bait-and-switch scheme.

Property Names Property managers typically use the owner’s house name in a listing. Having a unique property name helps create a brand for the rental property. The more unique and appealing this name is, the more memorable (and able to be referenced). “Yeah, we stayed at The Painted Lady last summer! It was awesome! Ask for it!” “Yeah, we stayed at … I dunno… RD720 last summer. I think.” Give your properties names.

Most channel partners are not utilizing these names because they do not want to battle with property managers (we don’t have to wonder why). If the name appears physically on the home too, it could mean guests will seek the home directly rather than through a third party. Note: Check out the article, “Naming Vacation Homes: 10 Advantages to Naming the Vacation Properties in Your Inventory” on VRMintel.com for ideas and insights.

Property Descriptions

In this example, notice how the total price changes between the PDP page and the Checkout page? Yes, there is an additional pet fee; however, the potential guest must go back and forth to see the total prices. Move those checkboxes to the PDP! Not only that, you are forcing users to go back and forth constantly (on their phones, no less—remember that) to compare.

Leave the checkout page as a checkout page, not a “price check” page. Provide the final price (without optional fees) on your PDP. No one likes to see an acceptable rate or even a good offer only to have their good find turn into a fleecing during checkout. You may disagree with this proposed scenario, but your conversion rates on your website will speak for themselves. Try A/B testing of

Property descriptions will be utilized on your website along with your channel partners. To some, it may be a daunting task to create great property descriptions, but think about it as another opportunity to set yourself apart from the competition. Rather than regurgitating the vacation rental’s amenities, try to bring out some authenticity and uniqueness to your descriptions. What’s the best part of staying at this vacation rental that only someone who’s spent an evening watching the sunset knows? What do the kids immediately gravitate to when they arrive? Each vacation rental is going to have that special something—make it known here; it might tip the scales toward more bookings.

Property Images Perhaps the most important parts of a PDP are property images that stand out above the rest and can make the ultimate difference. Property photos are so important that you could devote an entire article about the dos and don'ts of vacation rental property photography, but let’s touch on some key aspects. VRM Intel Magazine | Fall 2020

The vacation rental’s leading image needs to be one that entices guests because it is not merely found on the PDP but also on the search results pages along with all other vacation rentals. Make this image a showstopper!

The leading image should capture the soul of the property. If it is the view from the vacation home, have an image that places both the home and the view within the image. If it is the architecture of the home, make sure the photographer knows how to shoot the perspective that best sets it off. If you are photographing an oceanfront condo, you will want that perfect shot from within the rental peering through the home with the view clearly visible. Believe it or not, we still see cell phone photos on websites these days.

The above image invokes much more emotion than the bottom, especially if a majority of rentals in the area have the same “view” up from the beach. Furthermore, a house with a distinctive name is more appealing than one with simply a generic identifier like Oceanfront House.

master to find alternative solutions. Slow-loading PDPs can mean the end of your visitors' interaction with the website, especially on mobile. Your mobile appearance can draw in even smaller images too because the mobile phone display is smaller.

Last, ensure that the galleries on your website are easy to use and are intuitive on both desktop and mobile devices. There are many examples where website developers have crafted well-thought-out ways for website visitors to browse images. Whether it is a car dealer website, real estate website, or another vacation rental website, there are some excellent ones. Your visitors will have experienced these optimal picture galleries, and if yours are outdated and hard to use, the visitor will lose some confidence in your website.

Features That Help Seal the Deal (Use features that drive guests to your site.) Now that we have got the must-haves of any PDP, what more can a great website provide to help drive home the booking? How about virtual tours, videos, availability calendars for the entire year, sharing links for social media users, map views, amenities, and more!

This is where you can endear a website to your user and ensure they book. Remember, booking a vacation rental home isn’t a decision always made alone, and it isn't made lightly. Your visitors are going to want to know what and where the amenities are, where the property is located, what the nearby attractions are, how bedrooms are furnished, what the view is like, and plenty more. The PDPs are the most shared pages among family and friends.

Map View You will have more success with a vacation rental property if there is a map view showing the location of the property. This is a standard in today’s online world, so it is not even thought of as a feature: it’s a must-have. Consider how your website visitors are able to interact with this feature. Does it display after the photo gallery, is it a tiny button obscured by many other features, or is it placed prominently for ease of use? Does the map show area restaurants, shopping, and activities?

Virtual Tours and Videos These two aspects of a finely tuned PDP are also becoming more common in today’s vacation-rental online landscape. Providing professional walk-throughs or third-party virtual tours is an investment that can make the difference. Whether you have one or both features on your website means you will stand out among the best competition. Well-done videos can do what pictures cannot and

In addition to the quality of images themselves will be how your website handles the images. The file size of these images is sometimes determined by your property management system (PMS) or your website. Either way, they need to be optimized so that your PDPs load quickly. There are lots of ways to ensure this happens— perhaps your PMS can do this, or you can work with your web68

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help seal the deal. Likewise, virtual tours can help visitors get a sense of multiple-family vacation homes for those considering a larger property.

Sharing A visitor seeking a vacation rental may be taking the lead in finding their choice vacation accommodations, and they’re going to want to see what their family and friends think about it. Certainly, they can use any website URL of a PDP (I bet many of you today don’t even share by copying and pasting the URL), but if you include noticeable social media-sharing buttons, they may get used. Apart from the convenience in bringing your visitor to your site, these sharing capabilities take your website into social media sandboxes. You may be helping provide some free organic advertising if, for example, they post these homes publicly and their friends see what they’re considering.

Cancellation Policy A sign of the times perhaps, but detailing any seasonal or rigorous cancellation policies is helpful on the PDPs. Tie these into your travel insurance provider information to show a transparent attitude.

Nearby Attractions There is a myriad of ways to promote a vacation rental’s proximity to fun things to do. Perhaps it’s linking to a “things to do” page or specifying exact walking or driving distances to nearby places of interest. Potential guests will appreciate this kind of information.

Reviews Should reviews be a must-have? Likely. Authentic reviews are helpful, and incredibly helpful in setting guest’s expectations, as their peers can say things about the property that you will not say in the description. There are now tools that aggregate reviews from multiple sources. You’ll want to control which reviews appear on your site, so a content management system that works for you will make this easy. You’ll be able to post those authentic reviews and be alerted when new ones come in. Moreover, responding to reviews provides an additional layer of trust.

send themselves a reminder about the property and dates they were interested in. They can have an email sent to them with the PDP of the rental they have chosen, allowing them to return to book more easily it later. This is especially helpful these days when so much shopping is done on mobile devices, but with a big-ticket item like a vacation rental, the visitor may feel more comfortable finalizing their decision later.

Urgency Features There are a host of ways to create some sense of urgency on your PDPs. Choose a tasteful way that reflects the fact that certain rental dates are in high demand. Include dynamic features like informing the visitor how many times a property was visited lately for those dates or stating the percentage of rentals available for specific dates.

Split Cost Calculator Once the price is displayed, having a way to allow potential guests to split the cost among families may be a welcome feature. It is the little endearing features like this that make your brand stand out among the sites they are looking at.

Your Marketing Attitude “We’re marketing our rentals in a destination where there’s more inventory than demand, and we must showcase our listings better than the competition if we’re to going to get the bookings. We’re not only going to be a rate hawk, but we also deeply care about separating our rentals from the competition.”

If this is the mindset you take in evaluating not only your PDPs but every aspect of your guests’ online experience, you will certainly move the needle on your online conversion rates.

Save This Property (Favorites) If you’ve managed to provide such a user-friendly platform that visitors feel comfortable navigating your site, a subset of these potential guests will want to save their favorites for later review. You may accomplish this by allowing visitors to create accounts and save multiple properties. You can then make their favorites shareable or enable them to tie the accounts to their Google or social media accounts.

Remind Me to Book Don’t lose your potential guests due to distraction or hesitation; don’t miss an opportunity for lead capture. A “remind me to book” feature works by providing an opportunity for your visitors to

VRM Intel Magazine | Fall 2020

About Chris Johnson, Digital Marketing Specialist

Chris Johnson has worked in online retail for more than 10 years with five years of experience in the vacation rental industry with ICND. His work covers many digital marketing aspects, including search engine optimization, search engine marketing, product photography, graphic design, and user experience.

VRM Intel Magazine | Fall 2020

9 Key Revenue By Lee Knauer and Dwight Yang, Richer Logic

Management BASICS

he economic landscape for short-term and vacation rentals is swiftly changing, bringing new challenges each day. The industry experienced a screeching halt in demand caused by the global pandemic and in many leisure markets, a summer with a blossoming revitalization of demand. Itâ&#x20AC;&#x2122;s easy to get off course with moving targets, unpredictable scenarios, and multiple versions of your unit or portfolioâ&#x20AC;&#x2122;s 2020 budget. Getting back to basics with revenue management fundamentals and reframing all of the levers available during periods of quickly shifting demand will help you regain your stride and plan for a solid close to the year. 72

VRM Intel Magazine | Fall 2020

Use Historical Performance

Review and analyze occupancy and rate performance for your portfolio by season, event, and day of week periods. Compare and benchmark against your historical trends and relevant market performance data. Determine if there is an opportunity to increase revenue for future periods by driving occupancy, rate, or both.

Analyze Current Booking Activity

Significant changes in booking pace can be caused by overall supply/demand volatility, a shifting booking window, the shrink-

ing/extending of traditional seasonal periods, or some combination of these. Analyze your pace and that of the market to determine if your pricing and availability are deployed optimally to address changing conditions.

er sort ranking. Configure discount pricing rules that encourage both early bookings and last-minute deals. Provide availability on as many channels as possible while maintaining a profitable rate structure.

Determine Supply Changes

Establish a process to periodically review changes in the amount and quality of supply in your market. Analyze relevant changes in competing destinations that may affect your local market and adjust strategies accordingly.

Leverage Your Systems

It may sound obvious, but if you’ve invested in technology to optimize performance, utilize those systems. Leverage the capabilities in your chosen property management system (PMS) and/or revenue management system (RMS) by spending time to configure your settings and enable automation properly, event triggers, alerts, and data that drive AI pricing/forecasting engines. Strike a balance between providing inputs that your system can’t learn on its own, against constantly overriding recommendations, which run counter to having the system in the first place. Strive to become a superuser as you will find that the most successful revenue managers in any organization are usually also the top system experts.

Review and Update System Settings

Understand Your Pricing Power

Configuration settings and automation in your PMS and/or RMS should align with your strategies and tactics, which will drive performance. However, don’t fall into the trap of “set it and forget it.” Establish a process to frequently review comp set definitions, stay restrictions, pricing rules, policies, discounts, and promotions to ensure that they correctly apply to high and low demand periods.

Analyze each home's baseline pricing as it relates to location, bedrooms, amenities, ratings, and overall quality for your market. Conduct a price/value exercise versus your competitive set to guide your ideal positioning. Define and apply varying premiums for your unit attributes during high and low demand periods.

Manage High Demand Periods

Manage Low Demand Periods

Ensure your pricing and stay restrictions will protect your peak nights and drive production to your shoulder and gap nights. Compression caused by special events, holidays, and local demand drivers are opportunities to maximize the rate as market availability decreases. Hold rates appropriate for the surge in demand, and position your units to sell later rather than earlier compared to your competitive set. Remove any length of stay or affiliate pricing rules that apply discounts, and peel back from less profitable channels.

Market your units attractively by having compelling rate value, reduced stay restrictions, and the most lenient cancellation and deposit policies your business model can support. Enable discounting by activating promotions from third-party channels that will turn on tagging, utilize slash through pricing, and help promote a high-

Forecast

To quickly and clearly understand when strategies should be adjusted, consistently reforecast using current data. Relevant levers that affect pricing, availability, promotions, marketing, and distribution should be on standby and ready to activate should thresholds in your forecasts be triggered. Whatever tool you have for forecasting should be easy to adjust and read, especially when sharing with other stakeholders within strategy and performance discussions. Invest time and effort in establishing forecast tools that work for you and not the other way around. There will always be market leaders and laggards. To seize the opportunity of maximizing rates while capturing your fair share of occupancy for your unit or portfolio, be nimble and invest the time to review your positioning.

The fundamentals are simple, yet it is easy to be led astray in times of uncertainty. We have an opportunity to lift the industry—if we collectively invest in analyzing the data and adapt our strategies to align with these times of massive change. Lee Knauer has directly managed pricing strategy and supported the analytics and system management for multiple lodging types and locations. She is currently head of project management and strategy for Richer Logic. She oversaw system migrations in her most recent role, specifically focused on revenue management, property management, and data system/BI integration projects for a global lodging company. Lee is HSMAI certified in both revenue management and digital marketing, holding her CRME and CHDM. Lee has a business degree from the University of Wisconsin-Milwaukee and a Cornell Product Management Certification. Dwight Yang has built tools, business processes, and completed system and data integrations for hotels, resorts, casinos, and restaurants. He has also supported short-term rental revenue management system development.

Dwight holds his bachelor’s degree in engineering management systems from Columbia University in New York, an MBA from the Hong Kong University of Science and Technology, and, to top it off, he has a masters in revenue management (MMH) from Cornell University. His professional experience spans across the United States and Asia and includes Marriott, MGM, Kimpton Hotels and Restaurants, and Viceroy Hotel Group. Dwight is currently the head of analytics and data strategy at Richer Logic.

Richer Logic provides revenue management and distribution services and support for short-term and vacation rental management companies and technology providers. Whether needing training or technology configuration to support company strategy or providing support as an extension to an existing team, Richer Logic helps companies capture market share and grow revenue. VRM Intel Magazine | Fall 2020

Managing Profit, Not Just Revenue By Andrew McConnell, CEO, Rented, Inc.

he Second Annual Data and Revenue Management (DARM) Master Class may be the quintessential illustration of the vacation rental industry in 2020.

After DARM’s incredibly successful debut in 2019, the vacation rental industry—if not the entire hospitality industry—eagerly awaited the second installment of what was certain to become an industry staple for the foreseeable future. And then, you know, 2020.

The conference, planned for Denver in August, moved to a digital platform in September. No big deal. Then the team that put so much work into planning and organizing the conference got hammered by Hurricane Sally, which knocked out their power and even their ability to participate in the second day of the conference.

But just like 2020 itself—with its roller coaster from “things are great” in February to “worst-ever” in March to “more-than-rebounded” in May—our industry responded. Conference planners and attendees did not sit idly by and wring their hands. Volunteers across the country stepped in to facilitate things for Amy Hinote and the team, and from where I sat, the results were extraordinary. Kudos across the board.

The Big Picture of Revenue Management Just as the conference team adapted to changing conditions in 2020, we have had to reexamine how we’ve used historic data to forecast booking patterns, predict ADR, and drive Revenue Management with a heavy reliance on pricing. Fortunately, many experts, includ74

VRM Intel Magazine | Fall 2020

ing Dr. Kelly McGuire, went out of their way to point out that setting prices is just one of many tools at your disposal—and at times not even the most useful or powerful one.

As the conference’s name implies, it is Revenue Management (with a capital “RM”) that is actually the critical discipline. Having the right data—and correctly using it—is essential to performing this function successfully. This naturally raises the questions: What data should you be looking at? And what should you do as a result of what you see?

Start Within The first place to start is your own business. Before you can understand the market, or the competing players, or other factors, you need to understand yourself. Specifically, you need to understand your costs and your cost structure.

Start with your fixed costs. These are the costs you will incur whether you bring in revenue or not. Fixed costs typically are mostly employee costs and rent for your office(s) but will also include items like insurance premiums, property taxes, and more. Understand not only what these costs totaled in the past, but what they are right now and how they might change for the upcoming month and year.

Knowing fixed costs is crucial because it sets your baseline for how much revenue you must bring in to keep the lights on. For example, if your fixed costs total $500,000 for the year, then you must bring in at least $500,000 in operating profit to stay in business. This is your break-even number.

Once you understand your business’s fixed costs, you can start digging into your variable costs. These are the costs you only incur when you are generating revenue. The biggest buckets are usually owner payments and cleaning costs, but your variable costs probably also include third-party booking fees, marketing expenses, laundry, and more. Calculating these numbers helps you determine how much each new rental costs—and thus how much you actually make. Your revenue, minus these costs, will give you your operating profit.

Let’s say that, on average, each of your properties brings in $40,000 in revenue over the course of the year—and, on average, you have $35,000 in variable costs to service those rentals. This leaves $5,000 in operating profit for each property (again, on average). Referring to the example above, if your fixed costs total $500,000, you would need to manage 100 such homes ($5,000 x 100 = $500,000) just to break even and doing so would earn you $0 in profit. If you only have 50 homes, or even 80, you are running a charity— not a business. Having a business serving only 50 homes, but with fixed costs scaled for 100 homes, will end in a financial disaster, no matter how happy you are making your owners and guests.

Understanding these numbers tells you whether or how much you need to cut costs—or how aggressively you need to grow.

Get Granular Once you have done the work above and you understand what your business needs to succeed overall, it’s time to dig a level deeper— because averages can hide wide variations.

For example, if you have 100 homes that average $5,000 in operating profit, it could mean that every home brings in just around $5,000. Or, it could mean that 50 homes each bring in $15,000 in operating profit, while the other half of your portfolio is losing $5,000 for you every single year. Or it could mean something else entirely. The average alone doesn’t tell you what you need to know to manage your revenue effectively. You have to do the more difficult work of property-by-property analysis. This means treating each home as if it were its own business, with its own profit and loss (P&L). You want to understand what your operating profit looks like: B Which homes are your most profitable? C Which are your least profitable?

D Are any of the homes actually losing money? Now you can begin the real detective work of figuring out why your operating profit looks that way and how to improve it:  Why are your most profitable properties so profitable?  How can you find more homes like them?

 How can you make your other homes more like them?  How can you turn around homes that lose money?

 Is it worth the time and effort, or is it wiser to say goodbye? Again, remember that you are running a business, not a nonprofit. (You hope.)

Then Go More Macro Once you better understand your business and your P&L at a per-property level, zoom back out for a macro-level view of how your business fits in the context of your market, your competitors, and the industry as a whole. In doing this, however, be careful to not “boil the ocean,” as consultants often say when a project’s scope starts to balloon.

Here’s the thing about using data to drive your business: You don’t need scraped data on 10 million homes to understand your market. What you need is real and accurate data on the homes that are actually relevant to your business and your properties. You may only need to analyze data for two to seven comparable properties for each of the homes you manage, and many of these properties probably overlap across your portfolio. As you dig in to understand your market, you should focus on quality over quantity. Filter the meaningful signal out of all the noise. Revenue management is not about having more data. It’s about having the right data.

Pulling It Together Compiling all this data—your business revenue, your operating profit, your per-property P&L, and your comparable market data— is just the start. You still have to decide what to do with the information you’ve gathered, based on your business goals, your industry experience, and your best judgment.

There will be times when it makes sense to quickly change course and adjust based on what the data is telling you (e.g., a big event moved its date by two weeks—so you drop prices dramatically for the original dates and raise them immediately on the new dates, before anyone books an unintentionally great deal). There will also be times when the data is informative, but you choose not to change your course (e.g., when others in your market are competing in a race to the bottom on nightly rent). This is why Revenue Management is ultimately a blend of art and science. The data—how you collect it, how you cut it, and how you analyze it—is the science. The choices you make as a result of that data? Those are subjective, based on your own experience and judgement. They are, in a manner of speaking, art.

This principle rings truer than ever as we adapt our goals, contextualize our data, and deploy our best judgement to navigate the shifting landscape of this year.

Balancing the science and art of revenue management will help us not only survive but thrive as our industry moves forward, through 2020 and beyond. Andrew McConnell is the Founder and CEO of Rented, Inc., the world’s largest Full-Service Revenue Manager for professional vacation rental companies. Rented’s Revenue Management Service is far more than a technology. It provides local managers with a dedicated team of full-time revenue managers enabled and enhanced by Rented’s best in class data and technology. Rented does not give you suggestions; we deliver bottom-line results. VRM Intel Magazine | Fall 2020

Tailored Revenue Management with REAL results

5X+

AVERAGE ROI ON THE COST OF RENTED'S SERVICE Our expert team not only builds a revenue strategy for your properties using our expertise and data access, but we also execute that

30%+

AVERAGE INCREASE IN MANAGER REVENUE

strategy on your behalf.

Your business is unique, is your pricing strategy?

VRM Intel Magazine | Fall 2020

www.rented.com

30+

AVERAGE MINUTES SAVED PER PROPERTY PER WEEK

By Cliff Johnson, COO, Rented, Inc.

Dynamic Pricing To Adjust Rates or Not to Adjust Rates

e just had an excellent and lively discussion at the Data and Revenue Management (DARM) conference hosted by VRM Intel last week about what strategy works best for pricing vacation rentals. The answer was decidedly equivocal: It depends. Like many decisions, determining whether to handle vacation rental pricing in-house or to outsource depends largely on three factors: time, passion, and skill. If you have the time, passion, and talent to do it yourself, you should. Suppose you donâ&#x20AC;&#x2122;t have all three of those things. In that case, you should be supplementing your work at a minimum with additional support, whether that involves hiring someone to do it in-house or using external tools or consultants to support your efforts.

Time The cruel reality is that there is no substitute for time when it comes to pricing vacation rentals. The data in this industry is highly fragmented. There are some major holes in data quality and relevant comp sets that make it impossible to automate optimized pricing for a single property fully. Unlike our friends in the airline and hotel industries, our vacation rental properties are snowflakes, and each one carries its own unique qualities. These qualities include attributes like reviews that change over timeâ&#x20AC;&#x201D;to move this snowflake analogy even further. Even the snowflake itself is constantly changing shape. Can you imagine if each room in a Four Seasons had its own unique reviews? The pacing of each property, as well as bookings, changes daily. VRM Intel Magazine | Fall 2020

Our estimate based on managing pricing for thousands of properties is that optimizing pricing tends to take an average of 30 minutes per property per week. The more commoditized the property, the more time savings you can get through automation. Even in highly commoditized property types, there is always incremental value to add through manual intervention. Most managers deprioritize this relative to guest issues and owner communications. With good reason—if you don’t have happy owners and happy guests, you are unlikely to have properties to price! All too often, we see pricing treated as one of many tasks assigned to a team member who doesn’t always give it the attention, and indeed time, that it requires. Are you dedicating 30 minutes a week per property of a team member’s time to pricing? If not, you should consider outsourcing or hiring someone with dedicated time focused on this activity.

is that each of us has our own skills. Building a successful management company is less about you possessing all the requisite skills than your company delivering on all the requisite skills for your owners and your guests.

“Building a successful management company is less about you possessing all the requisite skills than your company delivering on all the requisite skills for your owners and your guests.”

Passion Do you enjoy geeking out over analytics and data and using those insights to make pricing adjustments? If the answer is no, you shouldn’t be doing it. You should either hire someone who enjoys that or outsource to a company or consultant focused on that. Like many endeavors, people tend to perform much better on pricing when they get excited about getting the right rate at the right time to capture that perfect booking. Most managers get excited when they see that booking, but fewer tend to get excited about the work it takes to get the price right to enable that booking to happen.

Remember why you got into this business, and remember that it is yours. If you find yourself doing things you do not enjoy, change the things you are doing! This does not mean your company should or can stop that work entirely. It just means that you need to fill your days with the things you are passionate about, not ones you dread doing, and find others to take care of the work that is still necessary but that you no longer want or need to perform.

Depending on the market you are in, you may have a more challenging time finding someone passionate about pricing. If you have the passion yourself and the time and patience to train someone, that can be a viable option. When we launched Vacasa, Eric and I were obsessive over rates and spent a bunch of time every week, really every day, focused on this critical task. As we grew, and the company’s demands changed, so too did the demands made on our time. At that juncture, it was important for each of us to focus on those things only we could do and to hire and train people to take on things, including pricing, that required the time and attention we could no longer give it. Depending on your own size and stage of your business and your personal passions, such a transition may be overdue.

Skill This may be a slightly more sensitive topic in that it requires you to take a clear-eyed and objective look at your own skill sets. The reality is there are things that we may have and make time for, and which we are passionate about, that we just are not that good at. The proliferation of amateur bakers during COVID-19, and the dry and misshapen creations they post on social media with such pride, is a perfect illustration of this. You may love it, you may have the time for it, but in truth, you may not be very good at it. This is not to say anything bad about you as a person. In fact, recognizing and accepting your limitations are essential to building, scaling, and maintaining a successful business. The fortunate thing 78

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Depending on the skill itself, and your location, it may be more or less difficult to find and efficiently hire for the skill set internally. The truth is there are only so many data scientists, revenue analysts, data analysts, and so on in many vacation rental markets. Simultaneously, hiring full-time employees for each of these functions rarely makes sense for anyone managing fewer than 1,000 homes. This is not the end of the world. Fortunately, many companies, such as Rented, can outsource business-critical, but not inhouse critical, work. This gives you the best of all worlds: 1. The time to do the work you need and want to do

2. The ability to fill your time with what you are passionate about

3. The ability to efficiently access talent and skill sets you would not otherwise be able to tap into As a vacation rental manager, you always have a lot on your plate. As more travelers choose vacation rentals in preference to hotels, and the competition increases, these demands are likely to do anything but decrease. Understanding that your business must do more, and do it better, is not the same as defaulting to you having to do more and more. Following a structured approach to focusing on your own trifecta of time, passion, and skill sets you and your company up for long-term health and success. Good luck! Cliff Johnson is the Chief Commercial Officer at Rented.com where he leads the growth and revenue management teams by helping property managers optimize the revenue of the homes in their existing portfolio and execute on a sustainable growth strategy. Before joining Rented. com, Cliff served as the Co-Founder of Vacasa for almost a decade. He oversaw the expansion of the company's portfolio as the COO and later served as the Head of International as they grew to become the largest vacation rental manager in the United States and expanded to 16 countries. In addition to his role at Rented.com, Cliff is an active attorney licensed in Colorado and California and he serves as a board member for Eugene-based nonprofit MAPLE Microdevelopment. He is also an advisor to TripGrid, VirtualKEY, Vector Travel and Dweller all startups within the travel and housing space and he is an avid promoter of socially conscious businesses and innovation in travel.

By Jennifer Perez, Production & Content Specialist, Bluetent

THE GOOGLE TRIFECTA

Three ways to leverage the world’s most popular search engine

Ned Lucks, chief technology officer at Bluetent, likes to say, “If you’re not on the first page of the internet, you’re not on the internet.”

GOOGLE VACATION RENTALS

Bluetent’s development team worked side by side with Google to develop a connection to Google Vacation Rentals via Bluetent’s channel management tool, Rezfusion Boost™. This pioneering partnership enables vacation rental companies to place their listings on Google Vacation Rentals through Boost™.

“With a thoughtful, diverse marketing plan including digital advertising, SEO, and a connection to Google Vacation Rentals, it’s entirely possible for a vacation rental brand to appear three times on the first page of Google search results,” says Bluetent’s Marketing Services Director, Brynn Flaherty, “and that’s The Google Trifecta.”

As the newest component of the Trifecta, Google Vacation Rentals is still relatively untested. Even so, it’s poised to challenge the dominance of online marketplaces such as Airbnb and Booking. com. “The events of the last six months have shown vacation rental companies the value of retaining merchant of record status—keeping policies and rules within their control—and Google Vacation Rentals lets companies retain that authority,” says Product Sales Executive Matthew Pauls.

e’s right. With modern travelers becoming increasingly internet savvy and accustomed to finding accurate information quickly and easily, ensuring that your brand appears on the first page of Google’s search results is more important than ever. Fortunately for vacation rental companies, they now have three distinct opportunities to get their brand on that first page.

Why is this a big deal? Because Google is a big deal. According to recent statistics, it is estimated that more than 90 percent of internet searchers across the globe, whatever the device, choose Google.

Google’s commitment to providing quality search results has not only won a stunning market share, but it’s also influenced traveler behavior. If a traveler types “Hilton Head vacation rentals” into Google’s search bar, they trust that they will immediately receive the most relevant, accurate results possible. On their search results page, our example traveler will see three categories of results. First, they’ll see advertisements placed by vacation rental companies (known as paid results); second, a four-pack of local rental properties offered through the new Google Vacation Rentals feature; and third, links to vacation rental websites deemed most relevant by Google’s powerful algorithms (dubbed organic results). Senior Sales Executive Sam Campise states, “The Google Trifecta is just another great example of how leveraging the entire digital ecosystem is key to success.” Campise, who has worked at Bluetent for more than 14 years, has helped countless vacation rental companies with his team’s expertise, products, and services. “It all works together. You need a direct-booking website with a strong SEO strategy and great content so that you show up in Google’s organic results. You need a streamlined, deliberate digital advertising plan that targets your distinct markets and specific long-tail keywords so that you show up in Google’s paid results. And you need to put your listings where the majority of travelers are searching, which means listing with online travel agencies and, now, Google Vacation Rentals,” he says. References https://www.reliablesoft.net/top-10-search-engines-in-the-world/ https://gs.statcounter.com/search-engine-market-share

“It’s an exciting time,” Flaherty states. “Right now, your competitor down the street can’t just connect their properties to Google Vacation Rentals. There are really only a select few companies that offer a direct connection, and Bluetent is honored to be one.”

Campise adds, “It’s not just another channel. When you access Google Vacation Rentals using Boost™, you take control of the booking much further upstream, and you own your guest’s information. It’s your terms and conditions and your dedicated secure payment page.”

Although property managers signing on as early adopters of Google Vacation Rentals are taking a risk, it’s a calculated one. If the success of Google Flights is any indicator, travelers will change their behavior and adopt Google Vacation Rentals. “Many of our clients see more than 50 or 60 percent of their website traffic coming in through Google organic results—which shows there’s a large captive audience in Google. Travelers just need to become accustomed to seeing results in this form, as they did with Google Flights,” Flaherty says.

One thing is certain: Google will continue refining its ability to deliver the best search results to its users. Flaherty sums up Bluetent’s philosophy by saying, “Our team believes it’s in a client’s best interest to employ a diversified marketing strategy and keep adapting to ever-changing trends. Currently, utilizing all three components of The Google Trifecta—having visibility in the organic and paid Google search results in addition to listing on Google Vacation Rentals through Boost™—positions vacation rental companies where travelers are searching and has the potential to drive maximum traffic to their websites.” Are you ready to put the Google Trifecta to work for your business? Our experts are here to help. Contact Bluetent at 970-704-3240. VRM Intel Magazine | Fall 2020

By Ryan Saylor, Revenue Manager, Beyond Pricing

You Are Your Best Revenue Manager

f there is one thing to take away from VRM Intel’s 2020 Vacation Rental Data and Revenue Management conference, it is that there is a desire to understand and employ revenue management strategies and tactics across the vacation rental industry. Although it can seem difficult to assign responsibilities, find the right tools, and organize an entire strategy around the practice, becoming your own revenue manager does not have to be overwhelming. Most property managers are already fully prepared to own their revenue management strategy—in-house—even if they don’t have the resources to hire a full-time revenue manager. Follow these steps and considerations to become your own best revenue manager.

The first step in developing a revenue management strategy is to make it someone's responsibility—even if it is not your employee's full-time job. Consider the employee who already works directly with owners and has experience in your markets as the right person to execute your vacation rental revenue management strategy. Most property managers already have the tools to build and maintain an advanced strategy in an efficient manner. Knowing how revenue management can fit into your property management business does not have to be overwhelming, and you likely already have the tools and know-how to get started.

You Know Your Owners Although managing the guest experience from start to finish may seem like the only major task of vacation rental property managers, managing owners can sometimes be even more work. Owners can have a wide range of expectations regarding the management of their property, and each property owner has plenty of quirks and things that they look for when determining the success of their investment or home. Managing these expectations and keeping owners happy is a huge undertaking that is often passed to those who are responsible for revenue management and pricing strategies due to the fact that owners are frequently concerned about the financial performance of their unit. The ability to communicate current

strategies, market insights, and unit performance is best done by someone within the property management organization because owner communication is so critical to the core of a property management business. Starting with the owner acquisition process, it is important for the revenue manager or revenue management team to be involved from the beginning. Most owner onboarding processes typically cover property forecasting and performance expectations, something that is important for revenue managers to be aware of when implementing certain strategies. Some aspects of new owner onboarding, such as minimum rate and revenue requirements, directly affect revenue management and need to be communicated properly. The easiest way to ensure that revenue management stays involved throughout the owner onboarding process is to have someone on your team responsible for revenue management tasks. Although having a third-party revenue manager may seem more efficient and cost-effective, those inefficiencies can become invalidated with miscommunication and lag time between both parties.

You Know Your Listings/Market Similar to being familiar with property owners, it is important for vacation rental revenue managers to know the ins and outs of each listing and specific market. Due to the nature of selling unique property listings, there are characteristics and details about properties that someone controlling the revenue management strategy needs to be aware of. Most of that type of knowledge, especially for larger portfolios, isn’t easy to communicate quickly to new or outsourced employees. This is an added benefit to managing revenue in-house because most of a property management team is already in the know regarding unique listings, historical context, owners, and more. There are also added benefits to having a revenue manager who is familiar with, and may even live in, the same market where properties are being managed. Local market knowledge is priceless when it comes to revenue management, and knowing a portfolio backward and forward can add a lot of value to overall revenue management strategies. VRM Intel Magazine | Fall 2020

You Already Have the Tools Although the idea of revenue management may seem overwhelming at first, most property managers are already implementing revenue management strategies without even knowing it. There are many vacation rental software tools that are used as a part of property management operations that also have fantastic revenue management applications. Everyone in vacation rental management is familiar with property management systems, and there are com-

wonderfully simple. The past is history. Comparing YTD revenue performance may be important to owners, but it doesn’t help you make more revenue; it just quantifies what has already happened. Quickly scan the 30- and 90-day occupancy of each listing on your program to make sure none are at the extremes, and if so, act. Comparing future rates to historical rates does not matter if the property goes unbooked. Besides simplifying the metrics, look at simplifying your workload by offloading it to the software you have in front of you. Not having time for revenue management because of repetitive tasks should not be an excuse for not driving your revenue management strategy. If you sit down to do rates for next year, then stop, and start using rolling calendars. If you manually reduce minimum stays as time gets closer, utilize automatic gap filling. Searching and replacing rates on orphan days is not a good use of your time — automate it. And if you are constantly changing your last-minute discounts by hand, you are not prioritizing your time. Software and pricing tools can do the repetitive stuff for you and can also be set up in bulk so there is even no upfront time cost.

mon tools and capabilities in many of those systems that can be used as a part of a revenue management strategy. Inventory and pricing controls within a property management system (PMS) can help define a revenue management strategy alongside other distribution features that may be unique to specific systems. Any use of a channel manager is also directly related to revenue management because the distribution of inventory can sometimes be more important than something like pricing.

Dynamic pricing software has also become popular in the vacation rental industry over the past few years as managers look to gain competitive pricing advantages in their market. Dynamic pricing tools are the closest thing that the vacation rental industry currently has to a revenue management system, something that hotels and airlines use alongside a PMS to manage all the strategic levers available to revenue managers. These systems take a lot of the manual work out of pricing and reacting to market shifts in supply and demand, allowing property managers more time to focus elsewhere. Most property managers using a dynamic pricing tool are also able to use custom pricing settings and features to maintain a more advanced strategy in a more efficient manner.

It’s Not That Hard Revenue management can be difficult, but the benefits of having the owner, market, and tooling knowledge discussed above centralized in-house is what will make this challenge much more attainable. Data insights into market trends can prove or disprove owner expectations. Owner pricing demands can be effortlessly and quickly implemented in PMS and pricing tools. Data and comparison tools can reveal market and listing performance. The synergy of having this knowledge together makes a successful revenue manager for tens to hundreds of listings.

Focus on what matters most and where your time is most valuable. Our industry tends to think that unless a revenue manager has a wildly complex minimum stay schema or uses every customization available on all listings, then they are not doing their job, when in reality they should be focused on the bottom 20 percent of their listings that are going unbooked. Limiting yourself to a few basic metrics can simplify this whole process, so focus on the ones that are actionable! Consider forward-looking occupancy because it is 82

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Although tools will save you time, as a busy PM you will never have enough, and that is okay.

First, be proactive, reviewing September performance in October will tell you what mistakes you made (or hopefully didn’t make), but it won’t stop them from happening. Second, small, smart, and targeted pricing changes are effective when done regularly. Once a week, log into your data provider, see what listings are underperforming, and use the tools to take quick action to lower their rates 5 percent and then review next week. Later in the week, log back in again, review forward portfolio occupancy, and tweak up or down the dates that are passing too fast or too slow. If done regularly, that’s all you have to do to have a stellar year.

Conclusion Although everything that encompasses revenue management may seem daunting to tackle, there is a high likelihood that you or a capable member of your team is already doing part of revenue management even if they don’t have the title. Assign clear roles and be deliberate about leveraging that person’s knowledge of owners and markets.

No one outside your company will know your owners and how to manage and serve them better than you. Next, take the time to review your software toolkit to see how much time and effort you can save, as well as prioritizing revenue-generating revenue management tasks, not just reporting for reporting sakes. Revenue management in the vacation rental industry has come a long way to make you your best revenue manager. Ryan Saylor is a Revenue Manager at Beyond Pricing, the world’s first dynamic pricing platform for the vacation rental industry. Prior to joining Beyond Pricing, Ryan spent time in hotel revenue management after obtaining a degree from Purdue University in Hospitality & Tourism Management. His previous experience includes independent and branded hotel revenue management, as well as hotel digital marketing, web development, and strategic planning.

How to Use Website Traffic to Gauge Demand for Your Market

n owledge of supply and demand is critical to any business. It determines nightly pricing, minimum stays, marketing, and so much more. It is so important that there are companies that solely do research and studies to provide tourism-based business insights on supply and demand. I was astounded by the amounts research firms charged the first time I worked with them. I witnessed $80,000 being spent on research, even though 90 percent of the information could have been found for free or a much lower cost. While these firms can provide some clarity, for most small businesses, the hefty price tag is not an option.

So, how do we gather insights? My goal in this article is to give you some advice on how to use the data you already have, or data that is easy to access, to gauge demand in your market.

Search Volume How do you find out how many people are looking for vacation rentals?

For an example, let’s use Destin, FL. To see historical data for who is looking for “Destin FL vacation rentals,” you can use Google Trends, a free tool that shows the search volume over time in specific cities and states. You can even compare various destinations to see how this search phrase’s volume is growing or declining compared to that of others. Although you can think through similar terms or searches to narrow your results, such as “2 bedroom Destin, FL vacation rentals,” “Condos Destin, FL,” and so on, in Google Trends, I recommend using KeywordTool.io instead. It lets you search for a topic and quickly find related searches as well as see the demand for those searches as well. Overall, there is much less effort involved. The KeywordTool.io tool allows you to see related searches that are trending up and down. Therefore, you would be able to see, for example, that the search volume for “7 bedroom vacation rentals in Destin” was trending up, while that for “2 bedroom condo rentals in Destin” was trending down. This will help you think a little differently about your rates or specials.

Custom Alerts in Google Analytics Now, let’s talk about the people who are almost ready to make a decision to book. Assuming you use Google Analytics to monitor your website’s performance, you can set up custom alerts in Google Analytics by bedroom level and other highly searched pages on the website. For example, let’s say we have a page that shows all the two-bedroom vacation rentals on our website. Set an alert in Google Analytics to let you know if traffic to that page is up or down >10 percent so you can make adjustments to capture that traffic as bookings if traffic is up or make adjustments to improve traffic if traffic is down. This is huge if you are spending money on OTAs or Google Ads. For example, if you are seeing a huge organic traffic spike

By Justin Jones, CEO, IMEG

in Google, you would look at your pace and occupancy reports. If your pace is doing well, you could potentially pull back on Google AdWords spending or OTA inventory to avoid paying fees and focus on booking direct reservations for free through organic traffic.

However, if your pace starts to decline or the organic traffic decreases, you can increase your Google AdWords or OTA inventory to keep pace and overall occupancy high for your owners. Google Analytics custom alerts allow you to have a 24/7/365 system in place to monitor things in nearly real time. Here are some tools we highly recommend for research on demand or supply in your market :

Tool

Type

Notes

Price

Google Trends

Market demand

Google Trends can tell you what people are looking for historically and can com- Free pare markets.

KeywordTool.io

Market demand

Starts at Find out trends and see what people are $69 per looking for at a more granular level month

SEM Rush

Market demand and competitive data

Shows you what people are looking for and how you stack up against your Starts at competitors. Great tool for competetive $83 per insights on the market and your compe- month tition.

Google Analytics Custom Alerts

Market demand internal to your company

This shows you internal supply and demand data and allows you to set alerts to know what adjustments to make with rates and lenght of stays, what proper- Free ties you need more of or less of on your program, where to spend your marketing budget, and much more.

AirDNA

Market supply data

Starts at Great tool to find out what inventory is $19.95 available in a market by bedroom, bathper room, occupancy, and more. month

Key Data

Market supply data

Price Great for market-related trends, market varies. pacing, benchmarks, and to see where Worth your guests are coming from. every penny!

I hope this article helps to get you thinking about ways to improve your direct bookings. The power of the vast amount of data you already have could be incredible for your bottom line. If you have any questions, you can always email me directly at justin@imegonline.com. I would be happy to answer any questions you have. I offer a free 30-minute call to all VRM Intel readers where I make myself available to help you with any problem you may have in your vacation rental business. I love to solve problems! I know I can point you in the right direction, but if you feel that you would like a team of experts to consistently implement strategies and more, we would be excited for the opportunity to work with you.

VRM Intel Magazine | Fall 2020

Mid-Term Stays

Adjusting Rates to Accommodate Longer Stays By Anurag Verma, CEO, PriceLabs

8% 5%

6% 4%

Data from a mix of different markets around the world (including beaches, ski resorts, and cities) indicate that last year, depending on the month, extended stays had 5–10 percent of the share of occupied nights. Look closer, and you’ll find that the share of extended stays tends to increase quite a bit during lean times! This is in part a supply-and-demand dynamic:

SHARE OF EXtended stays (2019) 7%

hile extended stays or mid-term stays (these go by many names) have been a hot topic recently, they have a rich history of helping vacation rental managers through leaner times. The most common examples are destinations that rely heavily on snowbirds in Arizona, the Gulf Coast, South Carolina, and Florida.

because with shorter bookings already in the calendar, not many facilities have consecutive available dates to take even one.

10%

Some History

• During low seasons (or low-demand periods), managers are more willing to heavily discount the prices to get something on the books.

Coming Back to This Year

We should also note that extended stays are less common in high-demand periods partly because the prices are higher, but also

Coming back to present times and the buzz around extended stays, it’s not news that many destinations around the world are experiencing a low-demand period like never before. At the same time, more and more folks now have the flexibility to stay wherever they wish and work remotely. There are also other segments of demand

• Guests notice this, and the ones who have the flexibility to do so book extended stays during the low season.

VRM Intel Magazine | Fall 2020

in which the behavior has shifted toward needing longer stays, sometimes immediately. The needs might be different, but the outcome is the same, in terms of increased demand for extended stays. The data speaks for itself—the market share for extended stays in January and February (pre-pandemic) was about the same as in 2019, but since then it has increased considerably.

SHARE OF EXtended stays (2020) 32%

Market Analysis and Distribution 18%

18%

10%

17%

19%

28%

25% 14%

11%

But more than anything else, it is very important to be aware of the local regulations in your market; many markets have different tenant laws for longer stays than they do for short-term stays. This can take many forms. For example, if tenant laws apply, you might need a separate permit/license for those or a different contract with the guests. Please look into this; the answer will be different, depending on the location.

Regardless of whether the demand is from traditional snowbirds, families with remote work and school, or essential workers needing a place to stay, it’s hard to deny that extended stays play the steadying hand during low-demand periods. If you’re not already including extended stays in your revenue strategy, that might be something useful to look into. But before you do that, it’s important to understand some revenue fundamentals as well as some operational trade-offs.

If you have not been taking extended stays till now, it might be worthwhile to do some market research to find out a) if extended stays are common in your area and b) what booking channels they come through. For example, Tucson, Arizona, is a popular destination for snowbirds and shows fairly strong demand for longer stays during winter months. Galveston, Texas, conversely, is a popular weekend destination a short drive from Houston. Looking at the mix of bookings in forward-looking market data, it’s clear that a lot of snowbirds have already been booking extended stays through spring of 2021 in Tucson. On the other hand, in Galveston there is hardly any demand for extended stays right now; most bookings come for shorter stays over the weekend. TUCSON, AZ

STAY LENGTH 2 DAYS OR FEWER 3-7 DAYS 7-14 DAYS 14-30 DAYS 30+

Trade-Offs When Considering Extended Stays The most important reason to consider extended stays as a revenue strategy is to reduce your revenue risk: getting an extended stay for the coming months might mean a steady revenue stream—especially if you’re in a market with weaker-than-usual demand. The revenue might not end up being as high as previous years when there was strong demand, but if it can improve what you expect to make with lower short-term demand, then that’s a win! Equally important, extended stays come with lower risk of cancellations, due to the ever-changing dynamics of the ongoing pandemic. That said, if you’re in one of the markets where short-term booking activity is strong enough to meet occupancy goals without discounting rates heavily, extended stays might not be the right way to go. Like so many other things, this is something each manager should evaluate for themselves.

An important thing to consider: though the revenue from extended stays might be lower, the profitability might not be, because these stays have fewer operational costs than shorter stays. The wear and tear on the property also tends to be lower; guests who stay longer have some incentive to treat the property with care.

PROS

IONAL FEWER OPERAT COSTS TEAR LOWER WEAR & E RISK NU VE REDUCED RE

CONS

GAL CONTRACTS / LE D AN M RISK THAT DE CK BA CE WILL BOUN

GALVESTON, TX

NOV 2020

JAN 2021

MAR 2021

MAY 2021

JUL 2021

It’s not just important to know if your market has a demand for extended stays; you will also want to know how and where those bookings are made. Major OTAs like VRBO, Airbnb, and Booking.com have added focus on extended stays recently. Many markets get demand from boutique channels like Furnished Finder or Traveling Nurse Housing, and these might be worth exploring.

Marketing to repeat guests is always a great way to test the waters with guests you trust. It might also be a way to see if you can generate that demand even if market data sources fail to show strong indicators for it in your broader market just yet.

Revenue Risk and Profitability: Discounting Extended Stays Let’s say you’ve thought through the above, and the idea of extended stays checks out on multiple fronts. Before diving in, it makes sense to do some back-of-the-napkin math.

Let’s run through a couple of hypothetical scenarios to help understand this better. For easier math, let’s say you have a property that, on average, sells for $100/night during the upcoming season (some nights might be higher, some lower—we’re looking at the average VRM Intel Magazine | Fall 2020

GIVE YOUR PRICING WIZARDS A GOOD WAND! REVENUE MANAGEMENT MADE EASY 30-day free trial. No Contracts. Flat pricing

Hyper-local market data

Available globally

www.pricelabs.co VRM Intel Magazine | Fall 2020

Full control with customizations

Automated pricing

Great customer support

here). It’s tough to forecast anything right now, but based on recent history, let’s say you have some sense of how booked you expect to be in the coming months from short-term rentals. Expect to be 80 percent booked in the coming months: If you try and attract monthly stays with a 20 percent monthly discount, you’ll achieve about the same revenue. Expect to be 50 percent booked in the coming months: You can discount much higher (up to 50 percent) and still make the same revenue !

Expected occupancy Short stays

Extended stays

80 percent

50 percent

Expected revenue is

$100 x 30 days x 80% = $2400

$100 x 30 days x 50% = $1500

A 20% monthly discount gives the same revenue $80 x 30 days x 100% = $2400

A 50% monthly discount gives the same revenue $50 x 30 days x 100% = $1500

A few important caveats here: B Though a large discount means you might make the same revenue, it doesn’t mean you should discount all the way up. The amount you discount longer stays should depend on what kind of demand exists for those extended stays and what you’re comfortable with. You might get better revenue with a smaller discount that still makes your property attractive for longer stays. C Giving monthly discounts doesn’t mean that you will get a monthly booking—it just means that it increases your chances of getting one. D If you decide to increase or decrease your nightly rates to respond to demand, this might mean the expected occupancy will also change. You might have to revisit your monthly discounts in such a case. E Many platforms and distribution channels don’t allow for different monthly discounts each month. If you’re in a seasonal market, you might need to find ways not to have heavy monthly discounts apply for the high season next year (there are a few possibilities, such as using a maximum LOS for high-demand periods or setting monthly discounts to only apply to certain months, if possible). Finally, in this example we tried to find the highest monthly discount you should apply purely from a revenue perspective. If there are other considerations (peace of mind, fewer operations, reduced risk), you’ll have to think about how you value them. With an extended stay, you’re also losing the chance of getting those higher-value bookings when demand picks up again.

Segmenting with Minimum-Stay Restrictions One of the more advanced techniques used by managers who know their market and portfolio really well is to actively ensure that they don’t get short bookings when there’s a better chance of getting longer bookings and better overall revenue.

As an example, consider a slow month (say February) that gets two kinds of bookings: • Shorter bookings around Valentine’s Day • Extended stays from snowbirds

The catch? If you get one of those to book, you can’t get the other. And while the shorter booking comes at a good nightly rate, the extended stay fetches more revenue, given how low February occupancy gets in this hypothetical market. What if you could find a way to get that extended stay to book, while also having the option to fall back on the shorter Valentine’s Day booking if it doesn’t come through? This would require you to find some way to segment these guests; one of the most common ways is using the booking window. Many folks who book the shorter stays tend to book them last-minute with a short booking window, but some might plan ahead. If you get that rare far-out booking around Valentine’s Day, there’s no opportunity left to take a longer booking around it. Some managers use the following strategy instead: B Study when most of the bookings for Valentine’s Day start coming in. Say 90 percent of those come after January 1 (you can use your own data from past years or forward-looking market data). C Till January 1, keep the minimum stay for February higher— you’re effectively hoping for an extended stay and “rejecting” 10 percent of the Valentine’s Day demand that books early. D If you’re still not booked with the extended stay when the new year rolls over, drop the minimum stay requirement to cater to the remaining 90 percent of the Valentine’s Day demand. The booking windows and risk tolerance in this strategy will vary by location and manager, but the overall strategy works well. This is also something you can experiment with if you manage multiple properties.

Do remember not to do this during high season or during periods when the booking window is long, or you’ll be “rejecting” a larger portion of the demand for the shorter bookings, which might not be beneficial.

Balancing Short-Term Rentals vs. Extended Stays: Adjacent and Orphan Nights Suppose you get a few extended stays on your calendar. Depending on the season, and whether or not those extended stays resulted in awkward gaps in your calendar, filling those gaps could be challenging. There are a few reasons for this: • Days right next to an existing booking are usually harder to fill: someone should want to book a stay starting or ending right about where the existing reservations are. • Days between two bookings get even harder: anyone who wants to book longer stays won’t even find your property in a search. Effectively, the demand for those dates is lower. In such cases, it becomes even more important to be nimble with your prices and min-stays.

VRM Intel Magazine | Fall 2020

The minimum-stay (min-stay) requirement pose a “hard” constraint: if you have a six- or two-night gap and a seven-night minstay for those dates, there’s no way you’ll get booked (or even show up on a search in OTAs and your direct booking website). You (and property owners) might be okay filling longer gaps of three to six nights but don’t really want one- or two-night bookings, so for contractual reasons, min-stay will ensure those single-night guests don’t book, even when there’s a gap. If there’s no contractual reason to avoid shorter stays, managers often use one of these two pricing strategies for a more desired outcome on orphan/adjacent nights:

• Increase the price: this one is for operational efficiency. Sometimes you don’t want to fill short gaps unless the price you get is much higher than normal, to make it worth it, or on adjacent days, you might want to avoid back-to-back reservations unless the rate for those nights is very high. In either case, increasing the price will help. • Decrease the price: this is usually done for improved revenue. Gaps and adjacent days can be harder to fill during low-demand periods, so incentivizing bookings on those days can help. They will increase operational load (which should be low to start with during low season) but can improve revenue and profitability.

Conclusion Revenue management is a complicated process—there are so many variables that come into play: what the market is doing, what your operations can support, and what the owners prefer. Throwing extended stays into the mix might seem daunting, but when incentivized well, so as to not cannibalize revenue from short-term stays, this strategy can result in a win-win situation for both you and the owners. The strategies mentioned here might seem cumbersome but can be managed with a hands-on approach, automation, or a mix of both. If you manage many properties, these activities might be worth considering in some part of your portfolio.

Anurag Verma co-founded PriceLabs five years ago to bring revenue management automation prevalent in airlines and hotels into the vacation and short-term rental industry. He has spent six years designing and improving revenue management algorithms and systems at United Airlines in Chicago while working closely with revenue managers and data scientists within the company. He has a PhD in Operations Research, and loves all things numbers. 88

VRM Intel Magazine | Fall 2020

Fast-Paced Revenue Management

The 10-Minute, $10,000 Mistake By Heather Richer

“Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” – Ferris Bueller

lassic movie. Basic concept. When it comes to shortterm and vacation rentals, one of the most basic and important concepts is the price. Of course, elements of operational excellence, like cleanliness and safety, are a necessity, and having good content and images is a fundamental best practice. But pricing accuracy is what can take rental income from good to great.

Why is pricing accuracy so hard? We live in a fast-paced, on-demand, instant-gratification consumer world. As additional demand floods the short-term rental segment and shifts away from hotels, the revenue risk and reward is high, and we have to keep up. But how do we do it? I was so intrigued by why vacation rental revenue management was so behind compared to the maturity of this discipline for the hotel, airline, cruise, and car rental industries, and I did some research to connect the dots. By looking at the history of pricing technology and capabilities between vacation rentals and hotels, we can learn a lot about why revenue management is evolving as a new discipline and is still in its infancy. This timeline is a brief review of the lodging industry booking technology evolution. (HINT: Pay special attention to Instant Book.) VRBO

1996

HISTORY OF INSTANT BOOK

A Quick Case Study with Coachella: Though many concerts have been canceled, rescheduled, and canceled again throughout 2020, the demand impact of Coachella on the Palm Springs market has proven an exceptional story. In March, the original show dates in April were rescheduled to October. Most tantalizing about the announcement is that it wasn’t initially even posted on the official Coachella website! The day that the announcement was leaked on social, the market saw a massive booking volume spike for the new October dates. Because it wasn’t even official, and there was no warning, these dates were not priced correctly for any home in the market. Within 24 hours, there was a backlash of complaints and a desire to reject these bookings. There was A LOT of money left on the table, and nobody saw it coming.

Not every revenue management system is created equal, but a solid revenue management system could detect a burst of demand into a market and immediately trigger a price update or even a stop sell if it were better simply to hit the pause button for 24 hours. With many hotel reservation management software providers, these types of immediate optimizations are possible. Though we may have to wait for an overnight update to the current short-term rental PMS providers—I’m not aware of any that have developed a configuration for automated optimization based on real-time demand shifts—it’s still better than having days go by before reacting.

BOOKING.COM

VRBO launches. Guests can see content and a calendar of rates. Availability is not in realtime, and the inquiry and messaging process facilitates a booking.

1995

To expand on this further, we can share some real-life examples.

Hilton.com

AirBNB

Inspired by Hilton.com’s Instant Book, this site launches in Amsterdam, supporting all types of ledging inventory exclusively as instant book.

AirBnB launches with no ability to Instant Book.

2002

1996

Hilton.com launches instant 24/7 bookabillity for its global portfolio of hotels.

What we do know is that Instant Book has been the only way to book a hotel for over 20 years, and similar to airlines, hotel rates can change from minute to minute. Instant Book powers faster results, speeds up the guests’ expectations, and powers more dynamic market pricing power. It can move so fast that it becomes impossible for a human to keep up with all optimal rate changes for the next 365 days. As you look at your market, is most of the inventory Instant Book? If your market is mostly operating at instant booking speed, you may be more likely to leave money on the table if you are not practicing dynamic, daily rate updates. The 10-minute, $10,000 mistake is no joke. Whether you choose to update rates manually or use a revenue management pricing system to help you, the daily review of rates for the next 365 days can be a critical best practice to achieving your optimum revenue potential.

Hotels.com launched by Expedia, Inc.

Hotels.com launches as part of Expedia, Inc. and Instant Book for hotels is itscore product offering.

2014-2015 2008

AirBnB + VRBO Instant Book ...sort of

Expedia acquires Homeaway/VRBO and launches Instant Book, and AirBnB moves forward with the launch of Instant Book.

There are so many more examples of a 10-minute, $10,000 mistake, but you can easily see how Instant Book is a game changer, and our revenue management savvy and technology need to evolve to achieve optimal performance. Rates move pretty fast. If you don’t stop and review your rates daily, you could miss an opportunity to make some big bucks. Heather Richer has a broad background in lodging, with experience in both short-term rentals and hotels. She is passionate about revenue management; currently serves on the Revenue Management Advisory Board for HSMAI; and has been involved with AHLA, HEDNA, and VRMA. Heather is currently principal of Richer Logic Revenue Management Consulting and previously was CMO of RedAwning. Prior to that, she served as VP, Revenue Management and Distribution at Kimpton Hotels and Restaurants. She holds her Master’s in Tourism Administration from George Washington University VRM Intel Magazine | Fall 2020

The Dreaded Software Transition

By Carlos Corzo, CEO, Streamline

To import or not to import, that is the question

ou have spent months looking for the perfect new, modern software solution that can take your company to new heights. But wait! What are you going to do with years’ worth of data? What about your future reservations? For a property manager, one of the scariest parts of moving to a new software solution is the migration of data. As one prospective Streamline client put it, “I would rather poke my eyes out than have to do a software transition.” As you might guess, many of our new transition-ees have felt the same way. Unfortunately, although the process is indeed daunting, the benefits of having the right software with a stronger suite of functionality far outweigh the challenges implicit in a software transition. So, transition is a must. But what about that pesky data?

VRM Intel Magazine | Fall 2020

The Problem with a Full Transfer Although your first instinct may be to try and transition all your data, this is extremely problematic, particularly if it is automated. Remember, no two software systems are built the same, meaning any programmatic transfer would require accounting for a multitude of potentialities. Each brand of software has its unique way of dealing with fees, whereas their units and owners have different overall data structures. Even scarier, software often can have different ways of calculating taxes and dealing with rounding on percentage-based fees. Even a slight miscalculation or mistransfer could leave you in the worst spot of all: having your accounting be out of balance from day one!

So, is there any chance to programmatically import all your data, including room revenue, taxes, and fees?

The answer, of course, is yes. However, this is an involved project that would require the collaboration of senior engineering teams from both companies. I would go so far as to say an import of this level should be done by a company that specializes in data transitions. The reason for this being that by the time your unique import project has been designed and implemented and QA is complete, you may have spent as much or more money than you would going through all the reservations by hand. And, even if your business is at a point where the investment is feasible, you have to remember, if it is not 100 percent accurate, you will be haunted by accounting balancing issues for the remainder of your time with your new software. In other words, it can be done, but is it worth it?

The Case for Selective Data Imports

There’s an old saying that garbage in equals garbage out. Put simply, trying to transition every last scrap of data when you do an import is not the right way to go about it. In fact, a software transition is your opportunity to clean the slate and draw a line in the sand. This does not mean that your old data are not useful, but in terms of how you will move forward after your software transition, “cleaning” your data is smart for your business.

With this in mind, here are some insights for property managers going to new software, including what data are important and what – unfortunately – you may want to leave behind. It’s not an all-ornothing decision. Having done this for 15 years, I have experienced enough import variations to provide some valuable advice. Throughout the transition, remember that moving to new software provides the perfect chance for a new start. Take advantage of the import process to validate your new system functionality and tidy up data.

Approach it as an audit on your data. You may not like some of these recommendations especially considering how precious clean data sets are in this industry, but you will find that these recommendations are sure to save you a lot of time and hassle.

Data Pool Transfer Recommendations Owner data with Historical Information (Owner Statements!) Owner imports often match up well across software systems. In this situation, simple .csv files can do the trick. However, there are also components critical for an owner, such as historical statements, that cannot be ignored. Owners will want access to that information. Of course, like all data groups you’ll find in different property management software, these data sets too have their warts when it comes to transition. Owner imports tend to bring in old and outdated information. You can run into unique situations in which commission distributions have changed over time. This can create a problem during an import if the commissions from old reservations are not represented correctly. This comes down to the way your software stores and calculates commissions. The last thing you would want would be

for your owner to log into a portal where the commissions shown differ from those shown in past statements. Furthermore, some software solutions allow owners to run reporting from past reservations or fees paid to owners. This can be challenging because, when companies transition software systems they have used for 10-plus years, some older fees may not even exist anymore. Given that you will be forced to map these old taxes/fees to your new fees, this data could be completely useless to your owner.

Recommendation Even with these minor complications, importing owners is still fairly simple. The key is to take the time to review the data in your .csv import file before doing the actual import. Many times, we provide a specific template that must be followed, and the data that come back are a bit shocking. From years of using the old system, much of the data points being transferred are extremely poor and inaccurate. Take this time to update your owner information. It will pay dividends.

Other Things to Keep in Mind • As far as statements and past reservations are concerned, I would recommend showing only owners’ future reservations from the day you start on the new software. This is due to any possible commission split discrepancies from trying to import old reservations. • Historical statements and reservations should be shown to the owners by uploading PDF files generated from your old software system. Ideally, you would have an owner module or owner app that allows owners to access uploaded files. • You may consider doing this with old 1099s and 1042s, as well as with the 1099s and 1042s for the part of the current year in which you used your old software. • Don’t try to replicate past owner statements or recreate previous 1099s or 1042s in your new software. You will spend all your time researching why they don’t match.

Guest data This is your bread and butter. Guests represent your marketing arm, and they make up the one thing that you always need to export from your old software. There is no reason to enter these by hand; as long as you have an email, you will be able to send marketing materials. • When clients dump out data from one system to another, much of the guest data can be poor. As explained, at the very least, have emails in place. • Historical reservations are often difficult to match up because you can have the same name with a new email. There is also the possibility for errors during data entry by your reservationists. This would essentially create a different guest profile, so there are challenges involved in crediting reservations to an exact guest. This comes in handy when you are trying to identify the guests who have spent the most money with you in the past.

VRM Intel Magazine | Fall 2020

Recommendation Guest imports are a must. They make up the easier set of data to import and are extremely important to have. If you need to go back and do some clean up to make sure that the right reservations are credited to the right guest, you want to make sure to find software that will allow you to merge reservations under one profile after your import. If they donâ&#x20AC;&#x2122;t have this option, I would recommend spending some time sorting the data to look for variations of names, phone numbers, and emails that could be merged before you import.

Maintenance DATA Maintenance data is perhaps the most difficult pool of data to transfer when starting with a new property management software. This is where you will see the most variation in the logic used from one software to another, making full automation extremely challenging. This is especially true if you, like so many others, want to import labor and parts. You are now getting into the possible tax implications of parts, vendor payables, and special blocks on work orders in addition to matching the way vendors are managed and upcharge calculations. With all this, you can see how difficult transferring the data might be.

reviews the same way. In some cases, the reviews are done through stars. In others, the reviews are done through a numbering system. The trick is to identify the right mapping from the review scores in one system to the review scores in another.

Recommendation Reviews are must-haves because of their impact on conversions. I would make sure you can generate a .csv file with the minimum information needed for a review in your new software solution. What tend to be common and most important for your website are the reviewer name (if available), review, and rating.

Accounting DATA

Recommendation There comes a point where the import of old data is bringing in information that is not useful for reporting purposes. This is one of those points. Of course, in some cases, you may be able to take advantage of integrations with third-party software that already has your historical information and simply change the source of the data moving forward. This way you wonâ&#x20AC;&#x2122;t need to worry much about maintenance data.

Otherwise, my recommendation is to import the work order title and the responsible party (owner, guest, management company) and use the instructions area to merge all other fields that would be important to you if you needed to reference this work order in the future. Take any labor, parts, taxes, or anything critical needed from your old system, and merge that data into one entry that would become your instructions section. Instructions tend to be a global attribute among software providers.

Review data

In an ideal world, you could have your new system mirror all accounting transactions from your old system for past and future reservations. Clients often change software because of challenges and discrepancies with accounting. This strongly suggests that historical accounting transactions should be left behind.

Recommendation You should try to work something out with your old software so that you can continue to have access to your old data. You would not be using any of the technology moving forward, except for running some reports. For cloud-based systems, this is often a great way to have easy access to historical accounting information. If this is too pricey, you will have to download all the historical reports that would allow you to provide information on a possible future audit. You should never expect that an import into new software will clean up bad historical data from your old system. Remember, if you had garbage in the past and you bring that over, it will continue to be garbage. Leave the bad data behind, and start anew with your new software!

Reservation data

We definitely want to be able to import reviews. I am a big believer in the idea that more reviews bring creditability and trustworthiness to your product. However, once again, not every system treats

VRM Intel Magazine | Fall 2020

This was by far the hardest lesson for me. I insisted on moving clients from one software to another while matching the structure of their pricing exactly through imports. After all, we have the technology to do so! Still, something always came up; one little issue during an import would invalidate everything we did. My breakthrough came a few years ago. One of our employees with many years of experience with multiple software systems told me this: â&#x20AC;&#x153;You should not import taxes/fees. It is a big mistake, and it

will cause the client to be off balance from day one.” I thought she was crazy. And yet, as it turns out, she was absolutely right.

Transferring reservations is a challenge, but matching up the taxes and fees in the exact manner of your old software is almost impossible. It can also be quite problematic, even if done correctly.

After all, even a small rounding error can compound infinitely, depending on a variety of factors. For instance, it is extremely common for companies to have hundreds of taxes/fees that they created to get around limitations in their old system. If you are not aware of all those taxes/fees and how they functioned historically, you can run into problems when trying to modify a future reservation because your new system will not understand how these calculations were made if it doesn’t know the logic behind the taxes/fees. Does that structure have the same behavior as your new software? Does it round taxes/fees the same way? Does it calculate the taxes/fees in a certain order? All these questions can be extremely difficult to answer, and what’s more, you shouldn’t even need to answer them! Importing old reservations from your old system means you are trying to conform your new system to the logic and restrictions of your old system. Instead of doing this, embrace the new freedom your new software offers, and ditch the old tax structure problems (as well as the headache you’ll undoubtedly get by trying to match everything up perfectly).

Recommendation Moving over data is your opportunity to clean your system, train your staff, ensure you don’t run into any early disbursements that were not accounted for, and most importantly, ensure that your tax/ fee configurations work exactly like your old system. Put simply, out with the old and in with the new. The ideal solution is to create reservation shells with payments. In

some cases, you can enter the room revenue, and the system will divide that by the number of nights. After the shell and the room revenue are imported, you allow the system to calculate the remainder of the price of the reservation. Once that is done, you can compare the new calculated price to the exact price that was in your old system. This is where you are able to fine-tune your new system. In addition, this allows you to look for any early disbursements that were done in your old system in relation to future reservations. Most common is travel insurance or taxes on certain fees. For those who want to have the nightly pricing match your old system, you would again let the system calculate the reservation pricing and compare that to your old system. This is also a great way to make sure your pricing setup is correct. This is an additional layer of work but essential if you review historical nightly rates for revenue management. This begs the question, why import any pricing? Import the shell and compare the individual values that were calculated by your new software, given the rules that are in place for pricing, taxes, and fees. This is doable for future reservations. However, it is not likely to work for past reservations, and you will spend most of your time doing modifications.

Conclusion Overall, starting with a new software means you have an opportunity to make sure that your system is running exactly the way you expect it to run. Yes, it is possible to move all your data the way you want it and Streamline will surely do this, if you simply cannot part with your data. However, starting fresh can solve training issues, reporting issues, pricing strategies, tax/fee accuracy, and charging rules verification. It may seem difficult to part with your old data, but if you truly want your business to grow, and you want all reporting to be simple and easy going forward, this is the way to do it!

VRM Intel Magazine | Fall 2020

Customer Segmentation By Melanie Brown

ustomer segmentation is the foundation for hotel revenue management, but it’s not talked about as much in the vacation rental industry. Although most vacation rental guests fall into the “leisure” category, hotels now segment far past the traditional transient/corporate/group categories we’ve seen before—and we should, too. Below are a few ways to segment your customer base to better target pricing and marketing: • Booking window • Booking channel • Feeder markets • Length of stay (LOS) • Seasonality Using 2019 data for a variety of destinations, let’s take a look at each of these segments, how they interact, and what they mean for your revenue management decisions. You may not find clear distinctions for each category in your market or company. For example, some destinations only have one primary season, while others see visitors coming mostly from one large city. Regardless, this should give you some ideas for how to segment your company’s customer base.

Booking Window How far before their stay is a guest booking their vacation? The answer to this question likely influences a number of other factors, such as rate and stay length.

In Breckenridge, a popular ski area in Colorado, 39 percent of 2019 stays were booked within 30 days of arrival. For those stays, the average daily rate was $217, and the average stay length was 3.5 days. Compare that to stays booked more than 60 days in advance, whose average daily rate was $370 and stay length was 5.1 days. Many of those more last-minute trips were weekend ski trips with smaller groups looking for smaller units, rather than long getaways with extended family or friends. Understanding which potential customers are searching for rentals at which time allows you to target marketing campaigns more effectively.  Pro Question: Looking at your data, does it make sense to advertise a small rental for a weekend stay 30 days in advance and a large rental for a week-long stay at least two months before arrival?

Guest Stays Segmented by Booking Window

Guest Stays SegmentedCO by Booking Breckenridge, 2019 Window, Breckenridge, co 2019 % of Guest Arrivals 39%

Average Daily Rate $370

37%

Average Stay Length (days)

4.0

0 to 30 Days

31 to 60 Days

3.5

$217

60+ Days

0 to 30 Days

31 to 60 60+ Days Days

0 to 30 Days

31 to 60 60+ Days Days

Booking Window 94

VRM Intel Magazine | Fall 2020

3.1

5.1

$305 22%

Average Bedroom Size

2.3

0 to 30 Days

2.6

31 to 60 Days

60+ Days

Guest Stays Segmented by Booking Source

Guest Segmented Booking Source, Gulf shores and orange beach, al 2019 GulfStays Shores andbyOrange Beach, AL 2019 Average Stay Length (days) 6

Average Booking Window (days)

Average Stay Value $1,213

71 5

$1,072 61 $776

$528 2 16

Airbnb

Booking. com

Direct

Vrbo

Airbnb

Booking. com

Direct

Vrbo

Airbnb

Booking. com

Direct

Vrbo

Booking Source

Booking Channel

Feeder Markets

Not only are different customer segments booking at different times, they are also booking on different platforms.

The Alabama Gulf Coast vacation rental market in 2019 demonstrated the importance of understanding differences in consumer behavior on different booking channels.

Guests who booked through Booking.com did so, on average, 16 days before their arrival date in 2019. In contrast, guests who booked directly through the property management company booked almost eight weeks earlier at 71 days before arrival. The average stay length for reservations made through Booking. com was two days (mostly weekends), compared to almost a week for direct reservations. As a result of rate and stay length differences, the average stay value more than doubled with direct bookings versus Booking.com.

ď&#x2C6;&#x2018; Pro Question: Do your value proposition and your unit descriptions on different channels reflect the different consumer segments?

Where your guests are arriving from is also important. For example, out-of-state guests may stay longer and spend more than in-state guests. This is the case for Telluride and Mountain Village, a ski destination in Colorado. In 2019, 32 percent of guests for this market came from within Colorado.

However, these in-state stays contributed only 16 percent of total rent because the guests stayed only for a long weekend and booked at a lower rate. On the other hand, guests from Texas formed 12 percent of arrivals but contributed 18 percent of total rent because their stay length was almost two days longer, and their average daily rate was more than twice as high. ď&#x2C6;&#x2018; Pro Question: Are you marketing to close-drive-to feeder markets differently than to guests traveling longer distances?

Guest Stays Segmented by State

Guest Stays segmented by state, telluride and mountain Telluride and Mountain Village, 2019 village, 2019 % of Guest Arrivals

% of Total Rent

32%

18%

Average Stay Length (days)

Average Daily Rate $620

4.8

16% 3.8 3.0

10%

$264

12%

11%

$339

Guest State VRM Intel Magazine | Fall 2020

Guest Stays Segmented by Season

Guest StaysIsland, SegmentedFL by SEASON, Marco 2019 MARCO ISLAND, FL 2019

28%

29%

Average Booking Window (days)

% Made for Houses 62%

158

26%

Average Stay Length (days)

48%

47% 41%

111

Seasonality

Summer

Spring

Winter

Fall

Summer

Arrival Season

For example, beach markets in the Southeast may see large numbers of families arriving for a week-long stay for Spring Break but may rely on snowbirds staying for three or more weeks during the winter. Marco Island, Florida, shows the seasonality of guests.

For vacation rentals in the area, 28 percent of guests arrived during the winter. They booked their trips an average of 158 days before the arrival date, and they stayed for an average of 20 days.

In contrast, during the summer, 26 percent of guests arrived after booking an average of 78 days before arrival, and they stayed for an average of eight days.

In 2019, summer guests traveling to Marco Island were more likely to stay in a house than in a condo: 62 percent of summer stays were in houses compared to only 41 percent of winter stays. Though winter and summer guests contributed to a similar number of reservations, winter guests stayed for 2.5x as long and booked 2.5 months earlier.

VRM Intel Magazine | Fall 2020

Spring

In many markets, your guest profile may vary by season.

Winter

Summer

Spring

Winter

Fall

Summer

Spring

Winter

Fall

17%

Fall

% of Guest Arrivals

ď&#x2C6;&#x2018; Pro Question: Are you paying attention to seasonal booking windows and adjusting your messaging to target the correct audience? In the case of Marco Island, marketing for the winter season should begin the previous July.

Guest Stays Segmented by Stay Length

Guest Stays Segmented by Stay length, oahu, hawaii 2019 Oahu, Hawaii 2019 % of Guest Arrivals 47%

Average Daily Rate $410

Average Booking Window (days)

% Made for Houses 42%

109

$357

$309

26% 14%

12%

$143

18%

16%

4% 1 to 4 5 to 8 9 to 14 14+ days days days Days

Length of stay (LOS)

1 to 4 5 to 8 9 to 14 14+ days days days Days

Stay Length

As we’ve seen, LOS is one reason it’s helpful to segment by booking source, booking window, or season. However, as a metric for customer segmentation, it also stands on its own.

On the Hawaiian island of Oahu, 47 percent of 2019 stays were between five and eight days long—unsurprisingly, as it’s a long trip for many. That renter segment booked an average of 82 days in advance. In contrast, stays between one and four days formed a substantial segment of reservations, 26 percent, but were booked much closer to arrival at 48 days away on average.

The biggest bombshell here is that 42 percent of stays between one and four days long were made for houses, compared to 18 percent of five-to-eight-day stays. At other destinations, you may see couples booking weekends relatively close to their trip dates, while extended families book a full week six months out. The rates, type of units, cancellation policies, and amenities they’re interested in are all influenced by these factors. We’ve covered segmenting your guests by when they’re booking (booking window), how they’re booking (booking channel), where

they’re arriving from (feeder markets), when they’re arriving (seasonality), and how long they’re staying (LOS).

There are market-specific relationships between these variables that will guide your marketing and pricing strategies. Dive into your historical data and compare it to what is currently going on in 2020 to determine which way works best for you. A good rule of thumb is that a group should form 8–15 percent of your guests before it is segmented on its own. Once you understand your customer segments, you will be able to more effectively market, price, and drive more bookings for your company and for your homeowners. About Melanie Brown

Melanie Brown is the director of data and analytics at Key Data. Melanie’s team tracks trends in the global vacation rental industry to help property managers and destinations better understand what’s happening in their markets. She loves data analysis, but more than that, she loves making data easy to understand through writing, presenting, and data visualization. Melanie lives in the Denver area and enjoys hiking, lifting weights, and cooking. VRM Intel Magazine | Fall 2020

How to get work done

in chaos

“Our task is not to bring order out of chaos, but to get work done in the midst of chaos.” – George Peabody, American financier and philanthropist

In the short-term industry, chaos has reached a fever pitch.

irst it was the tsunami of industry change driven by the rise of Airbnb, Booking.com, and Vrbo. Then it was the headwinds of anti-vacation rental regulations fueled by hotel lobbies. Now, we are in the midst of a global pandemic with practically no flight travel, coupled with a fiery political climate. No matter where you stand, you simply cannot avoid the chaos.

I thrive in chaotic and high-adrenaline situations. As a young girl, I used to daydream about being an EMT and rescuing people from crazy accidents (unfortunately, I am not athletic enough to do this). 98

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By Margot Schmorak

Now, I am the CEO and cofounder of Hostfully, a fast-growing startup, while also a mom to three young kids. It is a busy, chaotic life, and I love it. But I’m weird.

Most people do not like change and chaos. It is unnerving and scary. So, in the first few weeks of lockdown, my company and I spent a significant amount of time thinking about how we could best support our customers and employees. It all came down to this: We will do whatever we can to help other people know what to expect. In a chaotic world, knowing what can be expected is a source of solace and security and is thus how we can help other people do their best—by helping them know more about the future. Telling people about the future might seem grandiose and “Steve Jobsy.” But in actuality, everyone knows a little more about the future than we typically share. At Hostfully, we started small, by creating lists of “what we don’t know” and “what we do know.”

Examples of what we did not know:  How many people would be so severely affected by COVID-19 that they would sacrifice their desire to travel  How and when local regulations might affect how vacation rentals could operate  How many of our customers would close down because of financial reasons Examples of what we did know:  People love to travel.  Vacation rental accommodation would be more desirable than hotels.  Many customers found our products valuable whenever they had bookings.  Future bookings rates, while depressed, would not be zero.  Consumers were still hopeful that they could go through with their travel plans.

We started sharing the “what we do know/what we don’t know” lists more broadly. (They were included in “How Travel Will Be Forever Changed and Why Vacation Rentals Will Bounce Back First” in a blog called Strange New Normal.) We told our team, our investors, and our customers. We even found data partners— Beyond Pricing and All the Rooms—and began analyzing future bookings across the United States. More people started reading, reacting, and doing more planning. Everyone started feeling better, even in the midst of the 2020 chaos. Here is what we generally can expect for US vacation rentals in the next two quarters: B Domestic travel will continue to be strong. C Occupancy rates will be slightly down compared with last year (–2 to –10 percent). D Average length of stay will be up versus last year (+10 to +20 percent). E Average daily rates are about 5 percent lower than last year. F Travelers will want to know more about the safety of their experience. G Travelers will prefer a contactless experience. All in all, the US market will earn approximately 4.5 percent less revenue than in previous years. Travelers will want a more handsoff but information-rich experience. That is what we can expect. That is the future.

You can tell the future, and you should. Help your staff and your owners by sharing the future you see.

Make your own lists of “what we do know” and “what we don’t know” about the future of your company. Use these lists to make

decisions more quickly about a plan. Explain how and when you will reconsider your plan. Tell your employees about it. Tell your owners, too. Create two or three scenarios and use the more conservative one to define your staffing plan for the rest of the year. This will help your team and owners know what to expect, and they will appreciate the sense of security. Don’t forget about telling your guests about the future, too.

More than ever, guests need extensive information about what to expect in the bookings process and in the rental. Communicate up front any cancellation policies you have. Tell guests about any changes or updates to protocols that you have made to enhance their safety and security. Give many details about what they should expect when they arrive at the rental, including what you can and cannot provide. Explain what new limitations are in place. Give them a way to access additional information or to have their questions answered without being in person. On the Hostfully digital guidebook platform, we have seen a big shift in how and what property managers are sharing with guests. Here are a few examples of what they are doing:  Sharing information focused on cleaning protocols—before the guest arrives  Adding creative videos instructing guests how to use a remote lock  Instead of a three-ring binder, having a QR code to scan with a mobile so that guests touch as little as possible (similar to what restaurants are doing with menus) These special touches are forms of “future-telling”—otherwise known as setting expectations. These are the details that help managers convert the booking lead, build confidence in what to expect, and assuage the concerns of a nervous guest. Even if it is not all rosy, your understanding of the future is a gift that you can share with others this year. Let’s do more of that to help each other get the work done in the midst of chaos.

About Margot Schmorak

Margot Schmorak is CEO and co-founder of Hostfully, a company that makes property management software and a digital guidebook platform for vacation rental and short-term rental managers. She is Minnesotan, Jewish, Chinese, a mom, and a wife who loves swimming, travel, data, food, and music. Previously, Margot worked at Apple, launching the iPhone Developer Program, and led Marketing and Strategy for the $200M business unit at ServiceSource. Margot has an MBA from the University of Michigan and a BA in Economics from Vassar College. VRM Intel Magazine | Fall 2020

Building

Your Vacation Rental Industry Brand By Amber Hurdle

uilding your brand can be a challenge in uncertain times, particularly when every week seems different, making it difficult to stand confidently by your experience, convictions, and foresight. Add that to the relative youth of the vacation rental industry that does not have decades upon decades of well-established standards, and it may at times feel like a free-for-all. A foundation of consistently communicating your distinct value creates a well-designed brand promise. To compel people to think of you as an expert, you must be able to communicate not only the problems you solve but also the way you solve them uniquely. The formula is simple: your brand name + solves this specific problem + uniquely this way + for these specific people.

Your Brand

SOLVES X

Uniquely This Way

For These Specific People

However, filling in the formula with your details is not so easy. In fact, most people get stuck on “uniquely this way” and “for these specific people.”

Some of the vanilla answers business professionals provide in an attempt to differentiate themselves include claiming to have “exceptional customer service” or to be “very experienced” as their unique way of solving problems and identifying “anyone who wants a vacation rental experience” as their ideal customer.

The reality is that countless professionals in your market—let alone the country—could likely claim those same things. So they’re neither unique nor specific. It is essential that you dig deeper, evaluating who your best customers are and what they all have in common. 100

VRM Intel Magazine | Fall 2020

When you find that sweet spot—your most profitable customers with whom you also enjoy working—it is time for you to study those people and seek more like them through your branding and marketing efforts.

A Tale of Two Brands To illustrate how a clear brand promise can increase your reach and revenue, consider the power of two high-end brands that consistently gain market share, despite their substantial price tags and limited audiences: Rolex and Louis Vuitton. You will never see them market nor advertise in the same places as Walmart or Dollar General. Spending time and money advertising to those who are only interested in budget-friendly retail is not in their best interest. They clearly define who their ideal customers are so that they can accomplish the following:  Share their brand promises through compelling storytelling to emotionally trigger their ideal customers

 Visually uphold their brand promises in a way that delights their ideal customers  Deliver on their brand promises in a way that meets the high expectations of their ideal customers

How to Share Your Brand Promise Through Compelling Storytelling The personal stories of you or your founders hold all the clues you need to differentiate yourself from other brands. By following the breadcrumbs you have left behind in life, patterns will emerge that combine your personal satisfaction and your ability to effectively contribute to people and situations. Consider your professional and personal experiences when reflecting on what makes you unique.

For example, if you have served in the military, it communicates that you possess a special kind of discipline and dedication. You are likely to attract others who have or currently serve in the military as well as those who particularly respect those who have military service. Does serving your country have anything to do with selling vacation rentals? Not exactly, but it’s a piece of your story that can create an emotional connection between you and your ideal customer. Perhaps you have political experience, empowering you to navigate the law and key stakeholders involved in a deal. Or perhaps you are the third or fourth generation in your family to work in the hospitality industry. How do you think that stacks up against a rookie when you can reference a lifetime of multigenerational hospitality conversations at the dinner table? Be intentional about telling such stories while networking; participating in media opportunities; or speaking through your blog posts, videos, social media, website copy, or any other marketing activity you pursue.

How to Visually Uphold Your Brand Promise Rolex and Louis Vuitton both have visually compelling brands that invite prospects and customers into their story of luxury, prominence, and success. They share a glimpse of what it feels like to sport their products. Their visual branding is designed to evoke an emotional response to trigger a purchase of their products.

Of course, another reason it is important to understand your target market is to gain insight into what other brands they enjoy and thus give you a road map of how to visually stimulate your ideal customer. You can simply ask your previous and current guests what their favorite brands are via a survey, or you can simply observe along the way. For example, if your ideal customer wears an Apple Watch, has an iPhone, and is concerned about how close the nearest Whole Foods is to the property, you can do a quick scroll through those websites and social media profiles—of Apple and Whole Foods—for inspiration. Whether it’s the font style or color selections, the amount of white space, or the style of images, you can easily use those visual cues to help you craft your own visual brand. Remember, you cannot illustrate a book until you write the story, so ensure that the visuals for your unique visual brand represent your unique brand story.

The visual side of your brand is merely an aid for telling your brand story. Importantly, your branding should always be consistent, so be sure whichever path you choose is the one you remain on day in and day out through all marketing channels.

How to Deliver on Your Brand Promise If a Rolex watch or Louis Vuitton purse had any issues, undoubtedly its owner would know that the respective company would fix it in short order. These companies are trusted to deliver on their brand promises of quality, excellence, prominence, and more. In the same way, you must make it clear that you will always deliver on your brand promise. First, you must do good work. While that seems obvious to the experienced vacation rental professional, it is unfortunately not the norm. Simply doing what you say you will do will go far for your brand reputation. Furthermore, be sure to obtain secure testimonials as soon as you delight your guests. Allow your customers to toot your horn for you and then reap the powerful benefits of con-

sumer reviews. Note any awards, certifications, education, or media coverage you have received, as appropriate, which are also forms of social proof that you are great at what you do. While you may feel like you’re bragging, any such announcement is a small blip on the radar of the average person who consumes an incredible amount of content each day. If you do not share your successes, how do you expect anyone to choose you instead of a less worthy company who may not look out for its customers’ best interest? Save your potential guests from a lazy or less reputable VRM company by simply sharing the proof that you will have their best interest at the forefront of all you do.

Clear Branding Equals Clear Marketing When you are clear about your brand, you become clear about how to strategically market your brand for results. Understanding who you serve, what problems you solve, and how you solve them uniquely empowers you to position yourself through targeted campaigns and strategic networking. You can’t be everywhere, all the time. Not every social media channel is for you, nor is every magazine, conference, or website somewhere you should invest time and money, as your ideal customers are not everywhere, either. Furthermore, when you are clear on your brand, you can be clear on your internal processes and train your team to uphold your brand promise as well. Remember, no one wants to be sold to, but your ideal customer does want to buy from someone who attracts their business. If you effectively share your brand story and its results, you will become the only option in your ideal customer’s mind, eliminating competition altogether.

Strong brands are led by strong leaders! Enroll in Velvet Machete Leadership Academy, an eight-week, virtual leadership certification course, to become a driving force of influence and fortify against underperformance, turnover, inconsistent guest experiences, and more! Registration is October 23–28, 2020, and the experience begins November 2. VRM Intel secured a $500 discount for its community with the code VRMINTEL. Visit https://amberhurdle.com/velvetmacheteleadershipacademy for more information. About Amber Hurdle

Amber Hurdle helps leaders confidently define and position their value by leveraging both science and branding principles to maximize their influence and results through her proprietary five-step Velvet Machete® Leadership model. Amber understands how to accelerate success as a teen mom turned powerhouse businesswoman, having worked with celebrities, executives, and Fortune 100 companies alike. She was recently recognized among the “Top 40 Under 40” by the Nashville Business Journal, by the Nashville Area Chamber’s Nashville Emerging Leader Awards (NELA) as the winner in the Business Services category, and by Global Gurus as being among the top 30 brand professionals for 2020. Amber Hurdle Consulting’s clients have included large brands such as FedEx Ground, Marriott Hotels, and Stella & Dot as well as small businesses who want to play big—all of which have led to an A+ rating with the Better Business Bureau. Amber lives with her family in the Greater Nashville area, where she is known for being a gym rat, hot wing snob, and an unapologetic dog mom. As a professional speaker, talent optimization certified consultant, podcast host, and founder of Velvet Machete® Leadership Academy and the Velvet Machete® Leadership Society, Amber loves uniting the power of unified personal, employer, and business brands. VRM Intel Magazine | Fall 2020

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THE FUTURE OF DATA IS THE DASHBOARD. THE FUTURE OF THE DASHBOARD IS KEY DATA.

PERFORMANCE ANALYSIS

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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.

Donâ&#x20AC;&#x2122;t set it and forget it. Optimize instead. K E Y DATA DA S HB OA R D. C OM

S A L E S @ K E Y DATA DA S HB OA R D. C OM VRM Intel Magazine | Fall 2020

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