VRM Intel Magazine Summer 2021 by Amy Hinote

VRM Intel Magazine | Summer 2021

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VRM Intel Magazine | Summer 2021

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VRM Intel Magazine | Summer 2021

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VRM Intel Magazine | Summer 2021

Contents On the Cover

26 Competing for Talent 40 An Inside Look at Casiola 49 Where Vacation Rental Management Is Heading? 56 The End of Property Management As We Know It 70 Using Social Influencers 72 The Truth About Vacation Rental SEO 65 New Vacation Rental Data Standards 54 3rd Annual Data and Revenue Management Conference Aug 17 -18, Charleston, SC

Cover photo taken by Kim Hardin at "Lazy Gator" in St. George Island, Florida. Courtesy of TruPlace and Collins Vacation Rentals.

Marketing 69 Email Marketing for Today’s Economic Climate 70 Using Social Influencers

People 22 Careerists: From Entry Level to Executive 26 Competing for Talent 30 The Front Line is Broken

Reservations 32 The Battle for Direct Bookings Is Hand-to-Hand Combat

72 The Truth About Vacation Rental SEO 76 Shift-Sharing in Distribution Channels 82 Vrbo's Quizzing for Travel Preferences Provides Zero-Party Data 84 Create Great Memories to Match Guests' Great Experiences

34 The Value of Asking Questions 10

VRM Intel Magazine | Summer 2021

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LET’S WORK TOGETHER VRM Intel Magazine | Summer 2021

VRM Intel Magazine | Summer 2021

Contents Technology

Business

37 Preparing to Sell: Staff and Management Contracts

21 Time to Tech Up Your Properties

39 Avoid Costly Mistakes When 63 Technology and the COVID Silver Lining Selling Your Business 40 An Inside Look at Casiola 47 Important Survey: The Industry Needs Your Feedback 49 Where is Vacation Rental Management Heading?

65 New Vacation Rental Data Standards 67 Adding IT to the Executive Team

78 Using Tech to Execute Revenue Management 52 Help Cut Your Homeowner's Strategies Taxes 88 Remote Control Exasperation 55 Training: Data, Revenue Management, Marketing & Education and Distribution 56 The End of Property Management as We Know It? 59 Connecting Your Business and Personal Goals with a Plan

Associations

54 3rd Annual Data and Revenue Management Conference, Aug 17 -18, Charleston, SC

60 Canadian Groundhog Day: COVID Shutdowns Continue

90 2021 Calendar of Events 92 Vacation Rental Women's Summit, December 1 - 2, 2021

88 14

VRM Intel Magazine | Summer 2021

Need an Extra Pair of Hands? Watching a property manager work is a masterclass in multitasking. Considering all the moving parts you keep aloft, it’s a wonder you haven’t evolved six arms. But spreading yourself too thin is a recipe for stress and mistakes. One’s bad for your health and the other’s bad for business. You can’t afford much of either. Our TRACK vacation rental software and ATLAS marketing suite take many day-to-day tasks off your plate through powerful automations, opening up more time to grow your business and tackle those back-burner projects like hiring, process improvements, and the occasional day off. If you feel like more of a juggler than a property manager lately, check us out.

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Dear Readers,

The year is shaping up to be record-setting for most US vacation rental destinations, but our industry’s narrative is still a story of haves and have-nots as several markets (such as Hawaii) have been slow to recover. The vacation rental industry has taken quite a hit outside the US with continued restrictions and a resurgence of COVID-19 cases and variants. In Canada, for example, property managers are experiencing yet another shutdown period (Heather Bayer tells us more on page 56).

VRM intel magazine

Editor-in-Chief Amy Hinote

As disruptive as the past year was, the vacation rental industry saw an enormous boost in interest from travelers. According to the inaugural consumer study, “Vacation Rental Barometer,” released in May from Generali, “71 percent of travelers indicated they would book a vacation rental in the next 18 months.”

This is a shocking number for those of us who have been in the industry for over a decade. We remember when that number moved from 10 percent to 30 percent, and we thought we had arrived! I still remember working on the first issue of VRM Intel Magazine in September 2015 when Doug Macnaught asked me if there would be enough new information about the vacation rental industry to fill the pages of a quarterly magazine. Now, I’m throwing myself a nightly pity party because I can’t keep up with each day’s news barrage. However, I realize I’m not alone in feeling unable to keep up. Staffing has become the most significant challenge in our industry. VRMs are working locally to execute strategies to source regional employees, but as an industry, we must come together to find ways to educate potential workers about the many career opportunities in this sector. In the previous issue, we started a series (continued on page 22) featuring people who started in entry-level positions and rose to high-level positions, building lucrative careers in the vacation rental industry. Imagine a national campaign highlighting career opportunities, starting with high school students. If you are interested in working on this, are already developing programs, or have ideas, please let me know.

A more positive challenge we face right now is revenue management. In the past, revenue management strategies largely revolved around discounting, but with the tsunami of demand this year, we’re looking at this discipline differently. Although it’s great that many companies are fully booked for months ahead, many have been able to raise rates, bringing in more revenue for homeowners. There is a great deal to talk about at the upcoming Data and Revenue Management (DARM) Conference in Charleston, August 17 and 18 (page 54). For VRM execs, marketers, and revenue managers, this is an event that will include more strategy sharing than any we’ve had in a long time. While on the subject of DARM, I cannot tell you how much I’m looking forward to seeing you in person again! It’s been way too long. In other news, we’re seeing another influx of outside investment in the industry, and we will be discussing Vacasa’s next move, new SPACs, consolidation, and roll-ups over the coming months. I’ll continue to try not to opine about Sonder’s recent public offering—but no promises. For those of you who have worked for decades to build this industry in consumers’ eyes, I want to offer you heaps of gratitude and hearty pats on your broken backs. Your tireless work has paid off, and the vacation rental industry is finally reaping a harvest from the seeds you have planted and nurtured. We no longer have to fight for recognition. Now, we just have to be smart about how we mature. Many thanks to you for reading, and don’t hesitate to let me know what VRM Intel can do to support your efforts. Sincerely,

Amy Hinote

Editor-in-Chief

VRM Intel Magazine | Summer 2021

Director of Design and Production

Donato Berbelja

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

Contributors Heather Bayer

Doug Kennedy

Gail Boisclair

Wendell Lansford

Jodi Bourne

Laik LePera

Melanie Brown

Lino Maldonado

Julie Byrd

Michelle Marquis

Paula Caballero

Jill Highsmith McGee

Ali Cammelletti

Sean Miller

Pete Comeau

Alex Nigg

Jon Cunningham

Jacobie Olin

Ben Edwards

Emily Pattillo

Jeremy Gall

Jennifer Perez

Wendy Glover

Chris Taylor

Dennis Goedheid

Steve Trover

Sue Jones

Bill Whichard John Woolard Address

VRM Intel Magazine LLC

153 Old Mill Road, Fairhope, AL 36532 To subscribe to VRM Intel Magazine or to request additional copies, contact info@vrmintel.com or go to www.vrmintel.com © Copyright 2021 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.

VRM Intel Magazine | Summer 2021

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now is the right time to tech up your properties

e’ve seen a rising wave of professionalization sweep across the vacation rental industry in recent months as property managers and owners have responded to traveler demand for heightened operational standards. The pandemic has undoubtedly pushed the notion of smart tech even further up the short-term rental management agenda, resulting in accelerated levels of technology adoption. Innovative developments in smart property automation, revenue management, CRM systems, PMS programs, and property operations can help property managers function more efficiently and effectively. Now is undoubtedly a good time to tech up your properties, get up to speed operationally, and impress your guests with smart home features.

Smart home tech benefits Smart tech has a broad range of applications for the vacation rental market, from keyless access and leak detection to noise monitoring, thermostat controls, and operational tasks such as knowing when cleaners enter and exit a home. According to Phocuswright’s 2020 report, 46 percent of property managers have integrated some type of smart technology into their properties. Applied correctly, smart tech can be an effective traveler experience differentiator. Today’s guests are digitally connected and demand a higher level of digital functionality throughout their booking journeys and stays. Direct-to-home check-in, keyless entry, and controlled thermostats are features expected by modern travelers, and they’re willing to pay for them.

Furthermore, tech can help address heightened guest safety concerns that have emerged during the pandemic and will continue to resonate as travel reopens. Automated and verified cleaning processes and contactless stays can go a long way toward reassuring guests that everything is being done to create safe, hygienic environments. Adoption of appropriate tech solutions also means greater operational efficiency. Savings of up to 23 percent on heating and cooling are achievable with the appropriate systems in place. Considering the asset protection that tech affords in terms of monitoring and reporting HVAC overuse, water damage, and protection of the property during the off-season, the benefits of teching up become clear.

Standing out from the crowd This past year has been plagued with travel restrictions and has been challenging for all property managers. Many drive-to destinations have experienced solid demand, but operators were hesitant to (or couldn’t) bring back full staff. Interestingly, tech has come into its own in this situation because managers have been able to run operations remotely and still meet (and often exceed) their guests’ needs. Operators with fewer than 25 properties have needed tech even more than before because they typically don’t have big support staffs. What does this tell us? Enterprising property managers can use exactly the same smart tech stack that larger, multi-destination

By Sean Miller, President, PointCentral

companies use to great effect. Size, in this instance, is irrelevant. In fact, tech can give you the edge as an operator whether you have 20 properties or 20,000. Your guests are demanding a contactless experience regardless (e.g., for check-in or grocery deliveries).

How to build the perfect tech stack As with any purchase, it’s always wise to do your homework. Choosing the right tech can seem bewildering at first, but here is a shopping list to consider:

Essentials:  Keyless front door locks: Direct-to-home check-ins save time and money and improve safety.  Connected thermostats: Smart thermostats make properties comfortable for guests’ arrivals and save owners money.

Nice to haves:  Pool control: Run the pool and spa heating system only when there is a paying guest in the property.  Water sensors: Devices can prevent costly flooding.  Noise monitors: Receiving noise alerts can help keep community relations friendly.  Monitored life safety sensors: Sensors protect the property and guests from burglary, smoke, and carbon monoxide threats.  Garage door controller: Remotes ensure guests can access the garage easily.  Lighting control: A connected porch light can add a nice welcome when a guest shows up after dark.  Voice assistant/connected speakers: Connected tech will delight digitally savvy guests.

New operating standards As managers of all sizes start building their own tech stacks, the bar for operational standards in the sector continues to rise. This can only be a positive development. The past year has shown that tech has the potential to improve your bottom line as well as your guest reviews—whether you have a small, growing portfolio or a bigger business. Tech is a great leveler in this respect; anyone can jump on board and reap the benefits. About Sean Miller

Sean Miller is president of PointCentral, a subsidiary of Alarm.com. PointCentral provides short- and long-term property managers with an enterprise-class property-automation solution that monitors and controls Smart Home technology across all properties in their inventories over a best-in-class secure and reliable cellular network, increasing property awareness, reducing operational costs, and improving guest and resident satisfaction. VRM Intel Magazine | Summer 2021

THE CAREERISTS

Three seasoned VR pros share how they have survived and thrived in the industry

By Paula Caballero

RM Intel is diving into the lives of the careerists among us: those managers who have made it over the river and through the woods of vacation rental life yet have still chosen to persevere in a business that is as rigorous as it is unglamorous and as challenging as it is heartwarming. This is the second installment of VRM Intel’s Careerists series, profiling leaders in the vacation rental industry who have stood the test of time—and have no intention of getting off the roller coaster!

This trio provides their individual insights into the industry as well as a few good laughs. One bucks all the trends, personally greeting her guests, eschewing OTAs, and sending all her emails personally. Another has developed strategies for hosting overserved guests. And the third, well, he can solve any guest lockout, so long as you’ll hold his baby while he climbs in a second story window. Dive right into the Careerists. They’re just crazy enough to inspire you to keep going.

VRM Intel Magazine | Summer 2021

Gail Boisclair Founder, Perfectly Paris Like so many of her colleagues, Gail Boisclair entered the vacation rental world haphazardly.

The romantic twist is what sets her apart: She moved with her boyfriend to Paris, France. Her company, Perfectly Paris, was born from that life change.

“I didn’t have a job or anything, and he told me I should start renting out the cottage he had purchased in Montmartre,” Boisclair explained. “I said, ‘Rent it to whom?’ and he said ‘Tourists!’” And I said, ‘People do that?’ It was 2001. I didn’t want to be a French landlady.” Boisclair didn’t become a French landlady. (She’s Canadian!) She did, however, end up building a very successful business, one property at a time, in an old-school, wordof-mouth fashion. And now, 20 years later, the French boyfriend is long gone, but she’s still at it. Named a Condé Naste Villa Rental Specialist since 2008, she is recognized as a leader in the industry. “It feels like a minute,” she said. “I don’t even know where those 20 years went.”

Boisclair didn’t have a mentor or a road map in creating her vacation rental business. But she did have diverse experience in her previous jobs, having worked as everything from a receptionist to a marketing manager to running the front and back of the house at a bar in St. Martin.

Along the way, she learned skills from website building to bartending to running payroll. “I’m always on a quest for knowledge,” she said. “I love to learn things and figure out everything, and in the end, that makes a good property manager.”

At its peak, Perfectly Paris had a stable of 35 properties. French government shortterm rental restrictions have cut that number almost in half. Still, Boisclair has never had more than one full-time employee, besides herself. Currently, with COVID-19 challenges, she’s a one-woman show. Yet all guests are still personally greeted in Paris. And she continues to do all her own emails, by hand, with the help of a simple Microsoft Word document with a few templates. She doesn’t use any property management software and also doesn’t use the

OTA platforms. In the very early days, she even cleaned the apartments herself. “I love my job. I want to continue doing my job until I get writer’s cramp from typing my own emails,” she said. It’s about as personalized as service can get. Case in point, she once was a little late to greet guests because she had been across the street finding out she was pregnant at the doctor’s office. She arrived a bit flustered and apologized to the couple, explaining her predicament. “I told them I was pregnant, and I had never even met these people,” she explained. “I proceeded to do my check-in, and they were so nice. At the end of their stay, they left a little teddy bear with a congratulations note. It was Yasmin’s first teddy bear, and Chuck and Joe (the guests) ended up becoming very close friends. They used to call themselves Yasmin’s fairy godfathers.” With a 65 percent returning guest rate, her methods clearly work. And her overall philosophy isn’t too bad either. “Hard work, no sleep, and lots of champagne,” she concluded.

VRM Intel Magazine | Summer 2021

Julie Byrd Vice President of Sales, Cabo Villas

ulie Byrd had always planned on a career in travel. But as fate would have it, she was selling ad space for a local newspaper when she walked into the CaboVillas.com office. Little did she know she’d find her vacation rental “family” and work with them for the next two decades.

“It will be 20 years in December,” Byrd said, who is now CaboVillas. com’s vice president of sales. “I started working for them when I had just turned 30 . . . and now I’m getting ready to turn 50. I’m going to have a big party in Cabo to celebrate these two big events.” Byrd started her career working for a handful of traditional travel agencies, honing her itinerary development skills. She has put that talent to good use at CaboVillas.com, where guests can reserve far more than just accommodations. “We offer guests really customized itineraries,” she explained. “We can have chefs come in, organize spa days, tequila tastings—a whole gamut of services.”

One of the reasons she began working with CaboVillas.com was its founder, Don Hirschaut, who passed away in a tragic accident in 2019. Byrd said he was a mentor who encouraged her to make decisions, even bad ones, if they resulted in her learning from her mistakes along the way. “He always had his door open,” she said. “We were able to look at the big picture together. With our different opinions, we’d dance around the issue, but always come to a really good conclusion.” 24

VRM Intel Magazine | Summer 2021

She also credits Hirschaut with helping her navigate cultural differences, which sometimes played a role in how she was perceived as a manager.

“His support of my leadership was always what helped me move forward with our company and move up within our company,” she said. While Byrd makes several trips per year to Los Cabos from her home in Northern California, the company has a full-time team on the ground in Mexico to handle all guest needs. They personally greet all guests, which can pose a challenge when they arrive intoxicated. “One thing we deal with a lot in Cabo is people start drinking on the plane,” she explained. “Then they get to the airport and are taking shots of tequila, so they’ve had a lot to drink by the time they get to the house, and we’re trying to explain to them how to use the Jacuzzi.”

The past three months, Byrd said, have been the craziest of her career. She calls the amount of business they are currently doing as “insanity,” and that’s paired simultaneously with a vacation rental software change. Still, she’s content in her journey.

“Knowing I can provide a full vacation, a safe vacation, with all the bells and whistles and the detailed itinerary for clients . . . when people have a really great vacation, they are better to everyone they deal with,” she said.

LePera, now director of operations at Village Realty, makes every step of his career path in vacation rentals feel like the Adventures of Huckleberry Finn. Enthusiasm and laughter fill his voice as he describes even the dirtiest work. “They are happy memories,” he explains. “It really got me to the spot I’m in today. I look back on all of it fondly.”

LePera first heard about vacation rentals in the summer of 2001. Shortly after, he decided to transfer to Temple University and change his major to tourism and hospitality management. At the time, he said there wasn’t much information on the industry. Most of his professors were familiar with hospitality as it related to hotels, which wasn’t LePera’s area of interest. “I was writing papers on vacation rentals, and teachers are like, ‘We know nothing about this,’” he said. “I was getting great grades!”

When it was time for an internship, he realized that the only way to meet the who’s who of vacation rentals was to attend the Vacation Rental Management Association (VRMA) conference. With a college-student budget, he approached the VRMA about interning at the conference in exchange for a hotel room. “Basically, they told me no five times,” he explained. “So I would go online and look for someone else in the office and call them. Then they would tell me no. And then I would call back the next day.” Eventually, the VRMA relented.

“They put me to work. I think I worked 10-hour days while I was down there,” he recalled. “But I met some key people in the industry.”

Tim Cafferty, then president of ResortQuest Outer Banks, was one of those people. LePera scraped together enough money to buy a car and drove down to start his internship with Cafferty in North Carolina. He rotated through all the departments, getting a little taste of everything. But when offered a job after his internship, he threw them for a loop: “I want to work in housekeeping,” LePera told them.

“They were like, ‘No really, ha ha ha, what do you really want to do?’ I’m like, ‘Dude! I want to work in housekeeping!’” His logic? He determined housekeeping was the only department that every other department complained about, and he wanted to change it. As a consequence, he helped create an international exchange student work program. Before he knew it, he had 30 students from Eastern Europe, and he created a cleaning team with them all.

Laik LePera Director of Operations, Village Realty Guest lockouts are a fact of life in the vacation rental industry. But climbing into a second-story window isn’t the usual solution. And with a six-month-old baby in the car, the challenge increases.

“Can you hold my baby?” Laik LePera remembers asking the guests at the time. “I’ve gotta climb up here to this second floor, and I’ve got to go in through this window. The guest was like, ‘Oh yeah, sure.’ So I gave them my baby, climbed up, and got them in.” “Thanks very much, have a nice night, and thanks for holding my baby!” LePera said as he let them in.

LePera stayed with Cafferty through his business transition from ResortQuest to Outer Banks Blue. LePera also served for several years as a member of the Vacation Rental Housekeeping Professionals board of directors. LePera’s adventures never seem to end. He tells stories of being the keeper of the “after-hours phone” for two solid years, answering calls for 200 properties spanning 400 miles of beach while having a young family at home. And then he took a break and shifted to working for Village Realty, overseeing small inns in the area.

Now, as Village Realty’s director of operations, he sits atop a company managing 650 vacation rental properties among other real estate ventures. LePera’s wealth of experiences seem to have only served to ramp up his energetic approach to his work and the industry’s future. “I like to think we’re just getting started here,” he said. “There’s a lot more work to do!”

Competing for Talent

Attracting and Retaining a Seasonal Workforce

he war for talent continues to plague businesses into summer 2021. Just one year ago in April and May, we saw unemployment rates in excess of 20 percent. Today the national unemployment rate is 6 percent (March 2021). Even with the high levels of unemployment, and more than one year after the pandemic began, many employers continue to report labor shortages and hiring difficulties. The extension of state and federal unemployment benefits continues to hinder employers’ ability to staff seasonal workforces. Weekly state unemployment benefits run anywhere from $275 a week in Alabama to $790 a week in Washington. Now add in the federal unemployment benefit of $300 per week, and you have individuals earning between $575 and $1,090 a week. This is the equivalent of $14.38 to $27.25 per hour. Although this benefit is less than the federal unemployment benefit of $600 a week provid26

VRM Intel Magazine | Summer 2021

By Sue Jones ed last summer, it is still a significant amount for people to walk away from, leaving employers struggling to find workers.

Recruiting in today’s environment is tough. Thus, it’s time to get creative and compete for talent through the following approaches:  Understanding the impact of the federal unemployment benefit of $300 for seasonal hires  Intensifying your recruitment activities  Implementing a “significant” employee referral bonus  Offering additional pay for hard-to-fill positions  Enhancing employee benefits  Focusing on what differentiates your business from your competitors

Seasonal Hires and the Federal Unemployment Benefit of $300 One approach to attracting applicants is to let them know that, because of the seasonal nature of the work, they may still be eligible to receive a small portion of their state unemployment benefit. What is important to note is that individuals who earn less than their maximum weekly benefit through the state will continue to receive the $300 federal unemployment supplement. At this point, people are not willing to give up a weekly supplement of $300 for a seasonal position. Finding ways to inform applicants that they may remain eligible for a portion of their state unemployment and all the federal unemployment benefit while taking on seasonal work is a key strategy to hiring your seasonal help.

Intensify Your Recruitment Activities One thing I strongly recommend is identifying one employee who is responsible for overseeing and managing your entire recruitment process. Having one point of contact will ensure timely follow-up and communication with applicants. As we all know, the early bird catches the worm.

One thing that we have seen in this economy is the first job offered is typically the one accepted. It is all about the response time. That is why it is so important to have one person managing the process. This is not to say this person should be the only one involved in recruiting. Interviews and hiring decisions may still be made by management; however, there should be one person managing the process, reviewing applications, following up with applicants, and maintaining timely communications with individuals in the pipeline. Another approach is to provide applicants with a snapshot of what the pay looks like for the position for which they are applying. It is important to illustrate what the potential earnings might look like so that you’re communicating the total pay potential. Besides hourly rates or piece rates, show other incentives you’re offering, such as mileage reimbursement, on-the-job training, logo gear, free breakfasts or lunches, incentives, and other on-the-spot bonuses. Make it visual. Do the math for people; make it easy to understand so that applicants can compare your snapshot of total pay to their current earnings. Apples to apples.

Employee Referral Bonuses Employee referrals remain your best recruitment source. Overall, 61 percent of employees have referred at least one employee and sometimes more. Employees typically refer people who will do a good job and reflect positively on themselves. Did you know that employee referrals are four times more likely to be hired? The Society for Human Resources recently shared research stating 45 percent of employees sourced from employee referrals stay with an employer for four-plus years, versus two-plus years for employees sourced through other recruitment channels.

Employee referrals are huge opportunities for employers. Competing for labor with an employee referral bonus of significance is key. I recommend a significant bonus because a $50 or $100 bonus is not enough to incentivize people to delve into the recesses of their minds to find candidates to refer. If you want to incentivize your employees to spend time thinking about possible referrals, make it worth their time by offering an employer referral of $250 or

more. There are several companies in the industry that are currently offering up to $500 for employee referrals.

You may gasp at $500, but remember how much it costs to hire employees. It is not just about the cost of job postings or the cost of background checks. The main component to your cost per hire is the cost of your employees’ time. Think about the time your team spends posting positions, reviewing applications, calling applicants, scheduling interviews, meeting with applicants, and conducting follow-up. When you add the cost of the time that your team spends on the recruitment process, more often than not it will exceed $500. You need not pay out the employee referral all at once; however, ensure that employees receive a timely payment up front to continue to incentivize them to refer more employees. For example, if you offer a $500 employee referral, you might consider a payment schedule such as $100 after the employee’s first month of work, $150 after the employee’s second month of work, with the remaining $250 at the end of the season. One last note on employee referrals: you do not need to pay the same referral fee for all positions. At a time like this, when demand is high and supply is low, you may want to pay more for those hardto-find and hard-to-fill positions.

Offering Additional Pay Offering additional pay as an incentive is becoming common these days to attract and retain seasonal workforces. Listed below are key inducements I see companies offering in an attempt to staff appropriately.

Offer a hiring or sign-on bonus These bonuses are making a comeback as a competitive practice. Offering someone $500 to take a job may just be the incentive they need to sign on the dotted line. You can and should focus your hiring or sign-on bonuses on employee retention. One approach is to take the $500 and divide it by the number of weeks in the season and provide the employee with additional pay each pay period. For example, if you’re hiring a housekeeper for a 10-week season and offer them a sign-on bonus of $500, you could pay it out at $50 a week. You could also treat it like the employee referral and pay someone a portion up front, another portion at mid-season, and a final payment at the end of the season.

Increase seasonal wages with temporary adjustments Remain competitive with piece rates and hourly rates. When a position is in high demand, you might want to offer a temporary premium rate for specific days, shifts, or other hard-to-fill times. Offering shift premiums is a way to incentivize people to show up to work on key back-to-back days. For example: offering a shift premium of $3 per hour equates to $24 a day for someone working an eight-hour day. Right now, it is all about the money when it comes to attracting seasonal hires.

Offer incentives Some companies in the industry have found success by offering an incentive for each property cleaned. For example, for each property cleaned, employees get an additional amount ranging from $10– $25. It is important to communicate that the additional incentive is dependent upon certain criteria such as cleanliness scores, guest reviews, or other metrics you have in place. VRM Intel Magazine | Summer 2021

Consider retention bonuses When you think about a sign-on bonus, its intent is to incentivize someone to sign on with your company. You may also want to offer a retention bonus to employees who stay with you through the entire season. A retention bonus is a great way to retain workers. You could base the bonus on a monthly amount, such as $100 per month, or you could pay a set amount such as $300 at the end of the season. As with the other bonuses and incentives, it is important to tie the bonus to metrics to ensure that the new employees are meeting and exceeding your performance metrics.

 Paying your seasonal employees weekly is a competitive advantage. If you’re paying biweekly, consider increasing your pay frequency to weekly or setting up a weekly payroll for seasonal employees.  When recruiting for seasonal talent, think about transportation. There’s a population out there who may not have a driver’s license or a vehicle to get to and from work. Or there may be a workforce available 100 miles away. Think about how you might provide transportation to bring people to you. Hiring a driver, renting a shuttle bus, or whatever it takes may still outweigh being short-staffed through the season.  Housing is the biggest conundrum for employers today in travel destinations. Finding ways to house employees is another competitive advantage. Some companies are expanding their laundry facilities with a second floor to provide discounted lodging. Others are taking homes off the market to provide housing to workers. Companies close to universities and colleges are seeking space in dormitories to house seasonal workers. Other companies are providing a stipend for housing assistance to retain employees in the area.  Employee assistance programs (EAPs) have become popular over the last 15 months. An EAP is a voluntary, confidential program that provides your employees (and management) with access to counselors for personal or work-related concerns, such as stress, financial issues, legal issues, and family problems. Since COVID-19, these are the kinds of things that your managers are dealing with on a day-to-day basis outside their normal job responsibilities. Offering an EAP for your employees will reduce some of the personal or work-related concerns that your managers may not be fully equipped to deal with.

Focus on What Differentiates Your Company

Raise wages for hard-to-fill positions It’s simply supply and demand: the more demand for the positions, the higher the rate of pay. You may want to consider adjusting your pay rates to meet market demands. For positions in high demand, such as housekeepers, inspectors, laundry cleaners, maintenance techs, and other skilled laborers, you can pay a premium. If you end up providing a premium for a position, I would do it as additional pay. For example, if you were hiring an inspector at $13 per hour and wanted to pay them $15 per hour, I suggest keeping the pay rate at $13 per hour and providing additional pay at $2 per hour. This way the pay rate remains consistent throughout your company, and you can increase or decrease the premium as supply and demand changes.

Enhance Your Benefits Another sure way to attract and retain talent is to enhance and communicate your benefit offerings.  Today, one of the most important benefits to workers is flexibility with their schedules. Some people may only want to work one day a week instead of three days a week. Find ways to accommodate more flexible work schedules. 28

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Focus on what differentiates you from the company down the street so you can clearly articulate your advantages to applicants. Think about your culture, the different opportunities (e.g., yearround, full time) and the training you provide, flexibility with schedules, and incentives and employee bonuses. What is it that you do differently than your competition that attracts people to come to work for you? Figure this out, then communicate it through your job postings, job descriptions, and snapshots of pay (total pay illustrations) at every step during the applicant’s interview process. Finally, remember random acts of kindness go a long way with your employees. Providing food to go, logo gear, and on-the-spot recognition with gift cards will go a long way toward engaging and retaining your seasonal 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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The Front Line Is Broken By Steve Trover

he excited family pulls up to their rental home for a highly anticipated week of vacation. Everyone jumps out of the vehicle, and they rush through the front door to admire the amazing view as they split up to explore the property they have been dreaming about all year. Everything seems perfect! But upon further inspection, although the property appears as it was pictured on the website, it becomes obvious that there is a laundry list (pun intended) of unaddressed cleaning and maintenance issues. What seemed like a perfect location for a dream vacation has turned into what will most likely be a drawn-out process of trying to get the management company to make it right. Phone calls, maintenance techs, and housekeepers will disrupt their precious vacation time while working around them. Although the vacation experience can be salvaged, damage has been done.

While this is a nightmare for the seasoned vacation rental manager, it’s a regular occurrence for travelers out in the vacation rental world. In most US markets, the past year has shown record numbers of guests staying in vacation rentals. Early research shows that more first-time vacation rental users have come into the market than in any other twelve-month period in history. 30

VRM Intel Magazine | Summer 2021

The New Front Line There is no question that marketing, reservations, and business development are the primary drivers of revenue in a modern VRM. They are heavily reliant on experienced and technically capable team members who drive the business forward, and these team members typically are compensated accordingly. In the past, the front line for customer service was found at a company’s front desk or call center. However, with the advent and almost ubiquitous post-pandemic use of direct check-in at the property, guests rarely see the front desk. Add guest apps, texting as a preferred communication method, and even in-property artificial intelligence in homes (Alexa, Google Home, etc.) offering guests the answers they need, and it’s clear that guest service is becoming increasingly about technical logistics. Consequently, housekeeping and maintenance staff members are the first—and in some cases, only—” faces” a guest is likely to encounter for customer service. Without strong execution in these areas, the guest experience can suffer greatly.

Despite these new demands, housekeepers and maintenance technicians are usually the positions with the lowest salary ranges, the highest turnover rates, and the least amount of customer service training. The hardest service for a VRM to deliver is the consistent

production of high-quality cleaning and maintenance. This challenge can be attributed to the fact that it is exceptionally difficult to identify, hire, and retain team members who produce results effectively over a long period.

When talking to many VRMs, they consider this a given. They have come to the conclusion that the situation “is what it is,” and all they can do is try their best to replace those who come and go in the hopes that some team members will stick with them.

If you ask the guests (we did for more than twenty years), they will tell you consistently that the most important thing a manager can do for them is to make sure the property is clean and well maintained.

ing to administer, there are self-selection psychometric tests that take only a few minutes to complete. These tests are exceptionally accurate at identifying key attributes of a person’s behavior.

“Before using personality testing, we made a number of unsuccessful hires,” said Christina Thorenson, co-owner of Chattanooga Vacation Rentals. “We had the wrong people in the wrong seats, and the business suffered. After implementing behavioral profiling to survey all applicants, we have found our team growing in strength and abilities, and we are able to move the company forward faster. Imagine hiring a housekeeper who loves what they do, pays great attention to detail, and is excited about the result of a happy guest!”

The people who influence guest satisfaction most are given the least amount of consideration when it comes to identifying and hiring the best possible people.

With changes in who the front line includes, it’s clear that the ideal candidate’s profile may have changed as well.

Is High Turnover Really a Given?

Leveraging tools such as behavioral profiling is great—that is, if you have applicants to profile.

When we ask VRMs whether some cleaners and maintenance techs stick around, they almost always have a few examples of those who have withstood the test of time and have produced over the long run. In many cases, these employees are considered anomalies—unlikely to be replicated—and VRMs are simply happy to have that handful of unique folks who seem designed for the job. Wait . . . designed for the job? Designed for the position? But what if they are?

What if there is a way to identify the type of people who not only are great at providing these types of services but also are happy to do so for the long term? What if we could stop the revolving door and build an exceptional front line?

How Most Companies Hire Identifying the right person for a particular role is one of the most challenging things to do in business. Most companies heavily emphasize the résumé and interview process. Although solid experience in a particular role can be helpful, what someone has done in the past does not guarantee they will do it well within a particular organizational culture.

A well-structured interview should be part of the selection process, but there are other factors to consider. In two or three discussions, employers try to assess through mostly standard interview questions whether the person will be a good fit. The process can get even less structured than that when a company gets desperate to fill a role. At that point, it comes down to “Can they fog a mirror? Hired!” (which seldom works well as a long-term hiring strategy).

Behavioral Profiling Although résumés and interviews can provide some data points about a person, these methods aren’t enough to predict whether that person will be the right fit. Some companies benefit from preemployment screening techniques that provide far more information about the applicant.

We recommend behavioral profiling and cognitive testing as two such tools. Behavioral profiling is a form of personality testing. Although some personality tests take a long time and are challeng-

Filling the Funnel In today’s environment, there is more competition than ever for quality candidates. Building a front line that is capable and consistent is hard when getting people to apply can be a challenge.

Our company’s view is that VRMs market and sell three things in this industry. The first and most obvious is the property rental. The second revolves around a solid growth plan for new property acquisition. The third is identifying and hiring the best people.

We find that most companies have plans and budgets for the first two. They focus on driving occupancy and revenue on the rental side, there is a solid growth plan for new properties, and there is a marketing budget for both. But we rarely find a VRM who has a talent acquisition plan that comes close to what they have in the other two categories.

If you are growing rental revenue and property count but don’t have the team to execute, and if you don’t have a strong front line that makes sure those guests and owners you worked so hard to acquire are raving fans of the services you provide, then long-term success will be a challenge.

Although the front line is broken in many cases, it doesn’t have to be. A company doesn’t need to hire out of desperation the first person who walks in the door. Turnover doesn’t have to be a given. You can decide that this component of the business requires a renewed emphasis. You can and should reinvent your front line to better serve your guests and owners, which will enable you to be a market leader long into the future.

Steve Trover has been immersed in the vacation rental industry since 1997 and has been involved in most aspects of the business. 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 and their four children. VRM Intel Magazine | Summer 2021

The Battle for Direct Bookings Hand-to-Hand Combat, Not Aerial Strafing By Doug Kennedy

or years now, vacation rental companies have been fighting desperately to win back market share from third parties, such as online travel agencies (OTAs), and thus reduce the cost of customer acquisition. Huge sums are spent on strategic initiatives, such as email campaigns, improving organic and paid SEO, making sure that the website tells the company’s story, and ensuring a smooth journey from looking to booking.

All of these measures increase the likelihood that a prospective, web-surfing guest will engage directly with the rental company. In military terms, I would say that this approach is a bit like aerial strafing because the “ammo” has a mostly random chance of hitting its target. 32

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But too many vacation rental (VR) leaders overlook the real means by which battles are won, and history buffs know that wars are won one battle at a time.

Let’s acknowledge that the most important opportunities to encourage guests to book directly, and to rebook future stays, occur through human—not digital—interactions. Whether by phone, chat, email, or in person, it is the people who make the difference.

For too long, the lodging industry in general has been obsessed with digital marketing and distribution at the expense of focusing on human engagement. Perhaps this is because digital encounters make it easier to empirically measure and report KPIs to the boss, whereas the very nature of human encounters between staff and guests lends these types of engagement to anecdotal evidence.

The good news is that emerging tech has made it increasingly easier to measure these human conversations. For example, there are cloud-based phone providers that offer call recordings, enabling managers to coach-up their teams. A few of these phone systems allow agents to track “disposition codes” and turn inbound calls into transient leads worthy of follow-up. Engaged leaders can also peruse chat logs and email exchanges between staff and prospective guests.

Now, all of this takes a bit more time than glancing at a Google Analytics report or examining website conversion data. Yet marketing and operations leaders who are willing to do so will find a plethora of training and coaching opportunities to mentor staff. At my company, we have come to recognize these opportunities through the work my team does with remote call scoring, telephone mystery shopping, and training, but I also uncover opportunities during my consulting engagements. Here are some training tips from our programs and services.

Encourage Website Visitors to Call Direct  Post your company’s phone number prominently on each page instead of burying it in the “contact us” page.  Use a local, well-known area code instead of an 800 number.

 If using a vanity number, spell it out below and make it clickto-call on mobile.  Right above or below the number, post copy reading, “Call Now to Book Direct” or “Call Our Local Area Experts.”

Live Chat  Teach your team members that, although chat is wonderful for answering quick questions, they should look for opportunities to offer to call the guest immediately to complete the booking.  When guests start to ask questions, such as “What’s the difference between this home and that one?” or other specific questions indicating a strong interest, respond by saying, “If you like, I can call you right now to assist.”

 Remind your staff that chatting with guests is not like texting friends. They need to rehumanize the medium by reacting to what the chat sender writes. Example: “I’m thinking of booking the XYC Condo for our honeymoon, but I just wanted to make sure it has a full water view.” Instead of clicking back with “Yes, it does have a view,” instead write, “Wow, congratulations! And this one is perfect for a honeymoon. Would you like me to call you now to answer any other questions and complete this booking?”

Email  Similar to chat, prospective guests will often pose email questions about rates, bedroom configurations, and special needs. Staff should always personalize their responses.

 End with a sentence such as “Our onsite team would love to assist you personally with completing your booking. You can reach in-house reservations at [number] during [hours], or just reply to this email with your phone number and time range and we will call you directly.”

Phone  Today’s reservations inquiry calls are often disguised as “I just have a quick question about . . . ”

 Teach your team that after they answer an initial question they should follow up by asking, “Now that I’ve answered your question, may I ask what dates (or what home) you are looking at?”  Oftentimes callers simply ask about the total price including taxes and fees. This is because many OTAs display various rates differently than your website. Again, after answering questions, agents should ask, “Because we always offer our best rates here at in-house reservations, are there any dates I can check for you right now?”  When callers are obviously comparing rates they see online, train your team to ask, “May I ask what website you are on?” and then offer to check directly.  It is also important to coach your team on how to sell the advantages of booking directly. This pitch might include the timing of advance deposits, lower booking fees, and more personalized arrival experiences.  From what we see, vacation rental companies may find that it is the highest-rated/top tier inventory that sells out first. Therefore, train your team to “down sell” to less-desirable locations/views when that is all there is left. Replace “All we have left is . . . ” with “Fortunately, what we still have open . . . ”  Of course, it is also important to engage in reservations sales training and remote call scoring (or traditional mystery shopping) on an ongoing basis. Not only will this practice help your staff convert calls, but it will also promote a higher level of guest service excellence.

In-House Guests  Perhaps the best channel conversion “tool” of all is harnessing the talents and efforts of your entire guest services staff. Train them to engage guests whenever possible, such as when they stop by the reception office or when a maintenance tech strikes up a conversation while in the home for a minor repair.  Ask guests, “How did you hear about us?” When they say they booked through a third party, talk up the benefits of booking directly next time.  Whenever guests call the office, such as to reconfirm third-party bookings, recognize this as an opportunity to obtain email addresses. Use language that encourages guests to provide it, such as, “Oh, and while I have you on the line, can I grab an email address to put on file in the event we need to reach you, such as for any lost-andfound items?”  For higher-revenue bookings, use personalized video email messages to welcome guests and/or to send a fond farewell at departure.

Doug Kennedy is president of the Kennedy Training Network, Inc., a leading provider of customized training programs and telephone mystery shopping services for the lodging and hospitality industry. Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he been for over two decades. Since 1996, Doug’s monthly hotel industry training articles have been published worldwide, making him one of the most widely read hotel industry training writers. Visit KTN at www. kennedytrainingnetwork.com or email him directly. doug@kennedytrainingnetwork.com VRM Intel Magazine | Summer 2021

The Value of Asking Questions By Ali Cammelletti

uestions are a critical foundation of all relationships that we experience in life. They are said to create learning or liking, and, in the end, they accomplish both.

At a young age, we are groomed to either embrace question-asking or have it shut down. I think of my younger sister at three years old; we referred to it as the “why” age. At 13 years old, I probably gave inappropriate responses to my curious sister or begged her to stop asking by repeatedly answering, “because.” I am now experiencing the “why” age with my own daughter, and we have learned to ask Google when we do not know, because I no longer pretend to know everything, and she has a knack for remembering everything.

If we are shut down at a young age, sometimes that phenomenon carries over into our adult lives (not counting the teenage years, when the majority purport to know it all!). I remember being scared to ask questions early in my career because I thought my leadership team believed that I should have all the answers; isn’t that why they hired me? When we discuss how best to build professional relationships in sales or guest services, I spend a good deal of time talking about 34

VRM Intel Magazine | Summer 2021

the importance of asking two open-ended questions. Asking open-ended questions makes for the exchange of more information more efficiently than moving through a long list of yes-or-no and other types of questions that aren’t open-ended.  Pro Tip: A great exercise to conduct with teams is called “Sell Me This Pen.” It really helps teams appreciate the power of open-ended questions.

Some of my favorite open-ended questions for sales and guest services include:  What brings you to the area?

 What is most important to you?

 What did you previously enjoy most?

 What would help you most during this time?  How do you feel about the price?

 Can you share more details about what exactly happened?  How would you envision this being resolved?

The key is to build on the first question and then ask another open-ended question.

A few years ago, I was working with and getting to know a physical therapist who was new to me. I asked if he had kids. He shared that he had two boys, both 13 years old. It would have been easy for me to assume that they were twins. But I went in for the second question and asked, “How is that?” He opened up and shared with me the most amazing adoption story, including the fact that he adopted his boys in the same city where my adopted daughter’s birth mother is from. I felt an instant connection to him, and it allowed for deep conversations about open adoption and the vulnerability it requires.

I will always go for the second question and steer away from making assumptions. It would have been easy for me to assume he had twin boys, in which case I would have missed out on a story that felt validating and brought me to tears. Another time, I had been researching material about “asking questions” and came across a good amount of information asserting that people like you better if you ask questions. I decided to put that notion into play at an industry conference. Instead of focusing on making connections based on similarities, I asked questions and in just 10 minutes learned so much about the person with whom I spoke. At the end, this person knew my name and had my business card yet didn’t know much else. As we parted, I received a hug from this person who just minutes before was a complete stranger. I had a huge smile on my face as I thought, “Wow!”

The articles I had read were absolutely correct! People do like you better if you ask questions. People enjoy talking about themselves. All we need to do is ask. Another approach I use: When I start to feel like I am being critical of someone, I instead channel my energy into curiosity. Maybe the person has made a statement that I find offensive or misaligned with my values, but if I cut short my inclination to judge the person and instead ask the person for more information, I can better understand the context for such a statement and, ultimately, better understand the person. This technique promotes more generous thoughts about others and leads to more compassion for people who feel differently than ourselves.

Asking questions is the key to the difference between coaching and training. What I believe sets my coaching apart is that I am not afraid to ask, “why is that?” I remember meeting someone who had been a leadership coach for over more than 40 years. She was very passionate about not going to the “why.” However, I believe that when we understand why we behave as we do, it sparks our mindset and enables us to change our patterns of behavior and perception and perhaps understand their deep roots.

I had a one-on-one coaching session with an employee who was struggling with an interpersonal relationship in the organization. She had many judgments about this person and shared with me that she felt anxious when going to work and knowing that she was going to be working with the person. I felt sad for this employee because she was so triggered by this peer. I asked her what she did not like about the person. She ran through a huge list of criticisms, and then I asked if she had ever had someone else in her life who was similar. It took a bit of time for her to recall, and then she exclaimed, “Oh my!” It turned out that this peer reminded her of her foster mother, for whom she had unresolved feelings. When we have such experiences, it is a reminder that we have work to do in this area. Unless and until we dig in and do the personal work, we

will continue to experience such situations.

Now, when it comes to coaching others, a few favorite questions I use include:  What do you want to make sure we cover today?  What do you mean by that?  Why is that?  Can you tell me more about that?  What do you believe is creating this behavior?  What is getting in your way?  What is your vision, and how are you going to get there?  What is one thing you took away from our time together today? There are several different beliefs about why people do not ask questions, such as being egocentric, which is wanting to impress others with their own ideas. For some it is apathy, not even caring enough to ask, or they believe that the answers will bore them. And sometimes it is because they believe that they already know the answers. On the other hand, some people do not ask questions because they feel it will reflect badly on them because the very fact that they’re asking shows that they don’t know the answers. Once you have mastered the asking of questions and understand your obstacles, it is important to make sure you are actively listening. I will always remember a conversation I once had with someone who had been a salesperson for their entire career. This person asked me a question and then scanned the room looking over my head the entire time I was answering. If you are going to ask questions, it is critical to listen to what is being said and really demonstrate your interest.

As Dale Carnegie advocated in his book How to Win Friends and Influence People, make sure that the questions you ask are the questions that others enjoy answering. When asking questions, try not to guess or assume what the answer might be and what you will say next; such anticipation gets in the way of true listening.

I encourage you to go beyond the superficial and get curious by asking questions to learn more and create connections in our world, which has suffered so much from disconnection over the past year.

“Asking the right questions is as important as answering them.” —Benoit Mandelbrot

Ali Cammelletti of Spark Your Mindset (previously Cammelletti Consulting) brings more than 30 years of experience in the hospitality industry focusing on leadership and sales. Ali helps leaders build resiliency and improve performance by bringing awareness to opportunity behaviors and sparking mindsets. Check out Ali’s Snack Leadership podcast, where she shares bite-size pieces of leadership techniques and skills. Visit sparkyourmindset.com or snackleadership.com for more details. VRM Intel Magazine | Summer 2021

VRM Intel Magazine | Summer 2021

Preparing Your Company to Sell

Part 2: Staff and Management Contracts By Jacobie Olin, President, C2G Advisors

n the first article of this series in VRM Intel Magazine’s winter issue, we focused on your company’s financials as a way to prepare for the eventual sale. In this segment we will cover two other essential items: your staff and management contracts.

There is a plethora of buyers in the industry, and they all have different criteria when deciding which companies they want to purchase. One commonality, however, is a shared interest in a “clean” company. Both a strong staff and updated inventory management contracts are paramount for buyers.

Staff The majority of vacation rental companies are small- and medium-sized businesses, and the owners are intimately involved in the day-to-day operations. This is okay and expected; however, to make your company as appealing as possible, you should have employees in the following positions:  Homeowner Relations You, as the company owner, need to remove yourself from the dayto-day interactions with your homeowners. This can be achieved by hiring a homeowner relations employee or cross-training a few current employees. Because the management contracts are typically the “assets” of an acquisition, you will need another employee to handle these after you sell.  General Manager (GM) Hiring a GM or Director of Operations prior to the sales process is important for two reasons. First, many buyers will not already have a GM in place to take over after the sale. For this reason, your transition timing might be directly tied to the hiring of a GM. Second, this will create an easier way to find your true EBITDA during negotiations. There are two important reasons for focusing on your organizational chart prior to a sale. The first is to back up your argument for your true EBITDA. Finding a company’s true EBITDA is typically a subjective process, as the buyer and seller negotiate what expenses were allocated to the owners and whether they are to be removed

from the P&L. The second is to remove or limit some of the contingencies that a buyer would need to attribute to the acquisition price based on unit churn or another metric post-sale.

Management Contracts Because many vacation rental management companies have been around more than ten years, they may have gone through several versions of management contracts with different commissions, ancillary fees, and verbiage. This is okay, as it is almost impossible to maintain the exact rates for every single homeowner. However, there are two clauses that you will want in every single contract:  Auto-Renew Clause Whether your contracts are for one, two, or three years, you will want them to auto-renew if state law allows. In this way, you won’t need to get the contracts re-signed every time the term ends. The less you can “rock the boat” with the homeowners, the better. Homeowners can be fickle and are constantly being marketed to by your competitors.  Assignability Clause The majority of acquisitions are asset-based deals. Thus, you will be assigning the management contracts (assets) to the buyer. The largest obstacle results from the contracts having a clause that says something to the effect of, “this agreement shall not be assigned by either party without the written consent of the other.” If your contracts say this, you will likely need to have the homeowners sign new contracts with the buyer at closing. You can proactively reach out to the homeowners now to sign new contracts that either remove or reword this clause, allowing for assignability. This can be a challenging endeavor, so you will want to complete it sooner rather than later. Every state has slightly different regulations, so you will want to consult an attorney on this matter prior to making any changes. In the final segment of the Preparing to Sell series, C2G Advisors will discuss deal structures and other miscellaneous items while preparing your company for the eventual sale. VRM Intel Magazine | Summer 2021

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VRM Intel Magazine | Summer 2021

Avoid Costly Mistakes When Selling Your Business

By Ben Edwards, President, Weatherby Consulting

With many of us experiencing a pandemic rebound, operating cash and earnings are at all-time highs.

ach of us would be lucky to “go out” on top. Historically, that was a primary driver in determining whether to sell your vacation rental business. More recently, multiple external implications and industry dynamics have generated a flurry of questions for our M&A team. Of course, selling a business for maximum value is paramount, but other considerations are becoming increasingly material. We’ve been working through vacation rental transactions for more than 20 years, and this has been one of the most interesting years ever.

With unprecedented earnings recognized in many operations, determining a reasonable valuation has been difficult in recent years. Company owners obviously want to use 2020 earnings, but buyers are looking for more of an average or weighted average. It’s important to note that nearly all transactions are based on a multiple of earnings (if you’re considering a sale of the business where a market valuation method is not being used, you should be asking “Why not?”). If the sale of your business is based on a multiple of four-times earnings, prospective buyers are looking to realize similar earnings each year moving forward, hopefully over the next four years. However, if your business has had an extraordinary increase in performance, like many of us had in 2020, it would be difficult to model a successful investment in your business. It also appears that 2021 will be a banner year, but will 2022 or 2023? This is where a reasonable, weighted average of net income is a solid middle ground and may be the difference in finalizing a successful transaction. Other factors influencing the sale of businesses domestically were recently announced. The current administration has proposed an

over 100 percent increase in the federal capital gains tax rate, and while it remains to be seen whether business households making less than $400,000 per year will pay more in taxes, those exceeding $400,000 per year are expected to receive a tax increase. So, what does this mean for me as a VR business owner? For starters, it means less free cash flow. In the event you are considering exiting the business, I would strongly encourage you to look at selling in the 2021 tax year. While it’s not guaranteed that all these proposed tax increases will get passed, certain taxes will increase. The government will be forced to raise taxes to offset the increase in spending and programs being proposed. So, when you think about going out on top, don’t consider only the purchase price—think about the timing and tax consequences that may come into effect.

Another material consideration to the rising taxes and slowing economy is inflation. If the capital gains tax increase comes into play and inflation rises, we as business owners will expend more cash for the same goods and services. And if this is happening in your business, you can bet this is happening with each family that stays with your rental operation. Be mindful of changes on the horizon. There are major shifts at play that could dramatically affect your decision-making and/or business in 2021. Understanding the true cost of selling your business will help ensure the sale of your vacation rental operation is a success. The same is true for generating a material profit. If you have questions about preparing your business for sale, are curious about your vacation rental operation’s value, or have questions about increasing your company’s profitability, please do not hesitate to contact Ben Edwards with Weatherby Consulting via phone at (850) 496-7360 or email at Ben@WeatherbyConsulting.com. VRM Intel Magazine | Summer 2021

An Inside Look at Casiola

A relative newcomer to property management, Casiola founder Dennis Goedheid leveraged his technology and marketing background, along with a fresh look at the industry, to quickly grow and scale his Orlando-based vacation rental management company. By Amy Hinote

VRM Intel Magazine | Summer 2021

his past February, I pulled into the driveway of my Orlando vacation rental around 9:00 p.m. on a Saturday night. It’s always unsettling to arrive to a dark home at night, so it was a welcome relief to see that the front porch lights were on. I opened my text messages to find my keycode, entered the home, and found lights tastefully on, soft music playing from the TV, and curtains opened to the lit pool and patio area. Exhale. Finally, after a year of not traveling, my vacation had begun.

As many guests do, I set out to explore the home, both out of curiosity and to make sure everything was OK. I was happy to see that all the beds had fresh white hospitality bedding, tight-tucked corners, and white towels folded perfectly and stacked on the beds. The bathrooms were spotless, with white bathmats folded and ready for use. Moving into the kitchen, I opened the cabinets to find that all glasses, dishes, pots, pans, flatware, utensils, and potholders were matched sets and were placed intentionally and carefully on shelves or organized in drawers. After unloading the car, I put on a swimsuit, made a cocktail, and took a dip in the perfectly heated pool. The experience was so beyond my expectations that I had to call Casiola to find out more about the company.

Dennis Goedheid, Founder and CEO, Casiola Founded in 2014, Casiola is based in Orlando, has 35 full-time employees, and manages 300 homes in the Orlando area and 20 homes in Aruba.

Born and raised in Belgium, Casiola’s founder and CEO Dennis Goedheid is an intentional and savvy serial entrepreneur. After building and selling an online printing company in 2013, Dennis set out to find his next business venture. With a background in building complex and scalable technology, he headed to Silicon Valley and met with tech companies to scope opportunities. With the Bay Area’s high cost of living and fierce competition for talent, Dennis decided starting a company in that environment didn’t align with his dream for the family he was ready to start. After selling his last company, Goedheid wasn’t just looking for crazy multiples and a fast exit: “My goal was not to be traveling 300 days a year. I wanted to find a business that I could build, one in which I enjoy what I’m doing, am able to spend time with my family, and have the feeling that I can make a difference.”

Dennis initially believed he would be able to work more reasonable hours from home, leverage OTAs and listing sites for bookings, and build a stable of reliable contractors to take care of the properties. “I have to say that I didn’t know what I was getting into,” Dennis laughed. In 2014, Dennis and Liliana acquired FLCondos4Rent and its 20 management contracts, and the couple did everything: soliciting inventory, onboarding properties, answering phones, bookkeeping, communicating with homeowners and guests, marketing, managing cleaning and laundry, and much more. As the company grew, it wasn’t long before they found themselves working 16- to 17-hour days, which was the opposite of what they had planned. Dennis then returned to his roots and began developing systems and technology for standardization, automation, and communications that would help the company both scale and grow.

Ten years before selling his company, Dennis met his wife Liliana Rojas in Barcelona when she was traveling with her family from Peru to Spain on vacation. As fate would have it, her mother took a job in Barcelona, which brought Dennis and Liliana closer in proximity and able to date, get engaged, and eventually marry.

Liliana joined Dennis in Belgium, but between travel and time in the office while building the printing business, Dennis wasn’t able to spend as much time at home as he would have liked. His primary goal with his new venture was to build a business that would allow him to partner with Liliana and create a life for their future family. The opportunities he found in Silicon Valley didn’t fit that plan, but the short-term rental industry caught his eye during his time there, so he headed to the vacation rental capital of the world and “happiest place on earth”—Orlando—to start a property management company. Using his experience in marketing and graphic design, he began the company with a strong brand and professional collateral, which he then used to add inventory. Because many property owners in Orlando reside outside the United States, his European background and connections helped in building the business.

Custom-Built Technology System: Mobile First and Consumer Grade Although Dennis uses Escapia as his software for reservations and accounting, like many managers he found that property management systems didn’t have all the functionality he needed for operations and communications.

“We started out building everything around it that we didn’t find in Escapia,” he explained. “We have two rules [for development]. VRM Intel Magazine | Summer 2021

The first thing is mobile first. Everything we build has to work on a phone, so all functionality is built for a phone screen, but it also works on a desktop, of course. Second, everything we build has to be consumer grade, meaning the user experience (UX) doesn’t require training. You should not need a manual to know how it works. The software has to be plain and simple. It’s saved so much time for our team, not having to go through extensive technology training or click on 20 screens to access everything they need in a day. We have three sections—properties, reservations/guests, and owners—and all sections are interconnected within the app.”

Operations App

Homeowner App

The platform’s UX is extremely simple, with a dashboard for each role, intuitive color coding, a social-media-style feed format, and easy calendar views. All property photos that the guest sees are in the app, in addition to the standard appearance guides, housekeeping photos, checklists, and appliance guides.

One of the most unique parts of Casiola’s platform is the custom homeowner app, which presents performance insights and shows homeowners everything that has happened and is happening in their home. At first glance, homeowners see the number of future reservations, total annual revenue, occupancy rate, and how the home’s performance compares to that of the previous year. Scrolling down, the homeowner sees a “property timeline” that displays all the current and previous activity in the home, including arrivals, departures, status items, clickable links to reports, invoices, work orders, and statements. It even shows when the pool heat was turned on or off. “It started because I wanted to have a better overview of everything that was happening at a property. If you look at Escapia, you have a grid of all the reservations, but if you want to know what happened in maintenance or housekeeping, there’s just no place where it all comes together. What we created is like a property ‘feed’ so you can see in chronological order everything that happened.”

The homeowner also sees all reviews and comments as they are sent. “The owner can see how they’re doing and how we’re doing,” Dennis said. “Also, if it’s not good, they can view what they can do at their property to perform better with guests.”

Each role in the field has its own app view. For example, Casiola has a group of team members it calls “portfolio managers” who manage a portfolio of 20 to 30 homes, depending on size. These portfolio managers are fully responsible for every activity in each home in their assigned portfolio, including inspections and work orders. Their opening dashboard shows all arrivals, departures, outstanding to-do items, and all current and upcoming activity for the portfolio. They can view a chronological feed for all activity as a whole or by task type, property, contractor, or day.

Each part of Casiola’s technology is fully integrated with the others. One of the coolest features is that the app has its own search engine, so team members can do a quick search for any keyword (e.g., owner, property, guest, contractor). Every detail about the home can be found quickly, including door codes, Wi-Fi passwords, directions, reservation sources, all emails related to a reservation or property, work orders, maintenance requests, status reports, and reviews. All information and communications are stored and searchable within the app. Dennis has also automated much of the onboarding process, so he has been able to significantly reduce time getting new properties added.

Multilingual Feature in Beta With so many international homeowners, team members, contractors, and guests, many of Casiola’s app users do not speak English as their first language. Consequently, Dennis has developed a multilingual version currently in beta that translates all text in the app into the user’s language of choice.

High-Level Standardization As a Casiola guest, it was apparent that each room, closet, cabinet, and drawer in the home has a standard appearance guide and checklist for housekeepers and inspectors. Dennis shared that, shortly after the initial growth stage of the company, he set out to standardize bedding, linens, kitchen items, and their appearance at all Casiola homes.

I wondered whether Dennis was concerned that he was providing too much visibility, but he said that owners love it because they have insight into real-time performance and can see each action taken at the home. “When I first presented [the owner app] to the team, and especially the owner team, they all thought I was crazy. They were so afraid that the homeowners would yell and scream at them because they might see a bad guest review or see a service order and would want to know everything about it. In the end, it saved us a lot of time because the owner can see everything that’s happened, including photos and reports. Everything we know, they know.” 42

VRM Intel Magazine | Summer 2021

Standardized Bedding and Kitchen Packages Dennis explained that, in Europe, hospitality-quality bedding was a standard expectation. “I’ve always wondered, even before I got into this business, when I traveled here, for me the most disgusting thing ever is a comforter and a hundred pillows on the bed. The only thing you can do is throw everything on the floor before you can go to sleep. I’ve never understood it. And it was too much to manage; when there are stains on a comforter, you have to get a replacement and get it dry-cleaned. It just never felt clean to me, and if I don’t want to be in a bed like that, why would I expect my guests to sleep in a bed like that?”

Additionally, the app contains documentation and photos for large appliances, TVs, and remotes and shows housekeepers how each bed should be made and what it should look like.

As with operations, Dennis built a linen management technology platform that provides staff with quantities and linen types for each home and generates labels with scannable QR codes so management knows when linens are picked up and dropped off. Once linens are switched out and returned, they are scanned again and weighed to check for missing items. Casiola also has standardized kitchen packages with standard glassware, dinnerware, flatware, cookware, small appliances, utensils, and potholders for its homes.

Marketing and Revenue Management

Using his experience in branding and printing, Dennis carefully researched each aspect of Casiola’s brand creation, including colors, fonts, and design. With his passion for standardization, it isn’t a surprise that strict brand guidelines are used in everything that Casiola touches, including professionally printed signage for almost everything in the home. Reminiscent of a large, luxury hotel brand, standards carry over to the office, uniforms, brochures, email templates, the company website, guest and owner apps, and email signatures.

Vacation rental management companies in the Orlando area face a unique set of marketing challenges such as fewer year-over-year repeat guests, fierce competition from hotels, and astronomical PPC rates. Dennis explained, “When I hear from companies that have 70 percent repeat traffic, that’s something we don’t have in Orlando. We’ve stopped bidding on keywords, for example. It’s cheaper for us to get business initially from OTAs.” “Every single major hotel and hospitality brand is here, including Disney and Universal, and they’re all competing with each other,” Dennis added. “Most of our bookings come from OTAs because it’s the cheapest way for us to get those bookings. It costs us more to get a direct booking using SEO/SEM than through a third-party channel. For our homes in Aruba, it’s different. We’re already seeing top search-engine placement for our Aruba rentals after only a few months, and therefore we’re able to get more direct bookings.” Dennis worked with Durk Johnson to create each property’s standard appearance guidelines, and that information is communicated with housekeepers and inspectors via the company’s custom app. Each room, closet, cabinet, and drawer has a corresponding set of photos showing what it should look like, along with the quantity of each item that should be placed there. “We define how many of each item there should be in each cabinet and drawer, what it should look like, and how it should be organized,” Dennis said. “All these details are important, and it has to look nice, so we have pictures for each area of the property. That also tells us that each item has been inspected to make sure it’s clean.”

With its heavy use of OTAs, Casiola has dedicated resources to revenue and channel management. “In Orlando, there are submarkets like the convention center area where we have a lot of homes,” Dennis explained. “It’s a completely different market than the Kissimmee area, where you have people going to Disney. You need to have extensive local knowledge of each of these areas, be able to change revenue management strategies and channel marketing-even the channels themselves and your cancellation policies-for each area.” Emily Pattillo, who heads up revenue management for Casiola, optimizes each home’s pricing and merchandizing on each channel using a combination of channel managers, pricing tools, and manual overrides. Pattillo shared more about the company’s revenue VRM Intel Magazine | Summer 2021

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strategy in an article on page 78 and will be joining us at the Data and Revenue Management (DARM) Conference in Charleston, August 17–18, to discuss strategies.

ing months. This past January was our worst month ever, but then a tsunami of reservation activity hit us in February,” Dennis explained. “Now, we’re booked heavily for the rest of the year—all months—and we had the best spring break on record.” Dennis shared that his team struggled to keep up with the overwhelming email and call volume. The booking window was extremely short, which made it difficult to adequately staff, and Dennis said it has been impossible to find frontline workers.

“In February, it went from 0 to 100 in two to three weeks. I worked for three months straight, seven days a week, 16 to 17 hours a day to keep up. I was doing 300 to 400 emails a day, answering calls, and taking reservations. It was bad. Since spring break ended, it’s been more reasonable, and we were able to hire five more people. We also started working with Extenteam to hire people in the Philippines to help with guest email and call volume, and it turned out great! They’re now covering our night shift, and we can now start the day without a backlog, so it really makes a big difference.”

Staffing Challenges As with the majority of vacation rental management companies, Casiola is currently facing significant staffing challenges. Orlando’s low occupancy as a result of COVID-19 lasted longer than many other leisure destinations, but, when booking activity resumed, it did so in a whiplash fashion.

With the explosion of booking activity, reservations stretching well into 2022, and revenue optimization strategies that have brought ADRs up, Casiola is expecting a record-setting year.

Looking to the Future Over the past year, as Dennis networked with other property management company owners, he has seen interest from other companies regarding licensing his technology, branding, and marketing. As a result, he’s working on a model to partner with local operators, which he has successfully done in Aruba.

“It’s like someone announced in February that COVID was over in Orlando. January and February are usually our highest book-

“We’re trying to fine-tune that concept right now. We’ve learned that you have to have local partners with local knowledge and property knowledge. If you have good local operators who really care and who understand hospitality and guest satisfaction, and we can combine that with our marketing, branding, and technology, we have a really strong concept and combination.” VRM Intel Magazine | Summer 2021

GuestView Guide

The Industry Needs Your Feedback

2021 Short-Term Rental Industry Survey by Phocuswright By Pete Comeau, Managing Director, Phocuswright

hort-term rentals in the US have been on a steady growth trajectory over the past decade. Since 2013, Phocuswright, a leading travel industry research firm, has conducted several pioneering research studies to size the market, analyze consumer and industry trends, and explore the rise of digitalization in this segment. Phocuswright’s most recent study, “Here to Stay: U.S. Short-Term Rentals Move Mainstream,” showed that gross bookings increased at a CAGR of nearly 6 percent from $31B in 2017 to $34B in 2019. Furthermore, online bookings grew at nearly double the pace of the total industry. COVID-19 upended nearly all travel in 2020, and short-term rentals also felt the impact. Some companies operating in the sector shut down, while others downsized. Homeowners and hosts pivoted to serving long-term renters, taking short-term inventory off the market.

But as the year wore on and travelers sought to get out and about while avoiding

high-traffic areas to stay safe, they turned to vacation rental properties with social distancing baked-in. Short-term rental demand recovered as summer travel skewed toward rural, less-crowded destinations and drive trips.

With vaccines on the way and an expected recovery in travel to follow, will short-term rentals continue to prosper and outpace the greater lodging market? Will short-term rentals benefit from the behavioral changes the pandemic has wrought? Which trends are holding up? What new trends are emerging? Phocuswright is conducting a 15-minute survey of US-based short-term rental property managers to understand the marketplace and study key trends among PMs who offer their properties to travelers. The study will answer key questions, including the following:

 What was the impact of the COVID-19 pandemic on revenues, and how is the short-term rental industry projected to recover through 2025?

 How satisfied were travelers with how brands handled the COVID-19 pandemic?  How have travelers shifted their preferences in a post-pandemic world?

 How are homeowners and property managers evolving in a post-pandemic world?

 Which trends will be short-lived and which will be here to stay?  Which technologies will be most important as the market matures?

 What impact will short-term rentals have on the future of lodging?

What’s in it for you? If you qualify for and

complete the survey, Phocuswright will share the results of the study with you.

Survey Link:

http://vrmintel.com/pcw-survey All responses will be kept strictly confidential and will be used only to determine trends.

IMPORTANT EDITOR’S NOTE FROM VRM INTEL From Amy Hinote to VRM/PMC owners and GMs: It is incredibly important for you to complete this survey, as many significant investment decisions in our industry are based on this particular research presented by Phocuswright.

Our professionally managed vacation rental sector has been lumped under the broader short-term rental umbrella, and your participation is critical to ensure that Phocuswright is not hearing from other sectors disproportionally, (e.g., urban rentals, individual hosts, marketing platforms, and shared accommodations). If our sector is not accurately represented, then subsequent investment decisions will be flawed, bringing a continued and substantial influx of capital injected into bad business models.

When investors continue to pour money into bad business models, it makes it harder for all of us—VRMs, tech companies, and service providers—to compete as we are unfairly competing head to head with under-performing companies propped up by outside investment. And we’re not the only ones who suffer; guests and homeowners suffer from these poor business models as well. The professionally managed vacation rental sector needs to be heard, recognized, and represented in this study.

I implore you to have someone in your company accurately complete this survey. Your participation is critical and will directly help the entire industry. VRM Intel Magazine | Summer 2021

VRM Intel Magazine | Summer 2021

VRM Intel Magazine | Winter 2021

Where Is Vacation Rental Management Heading?

Jeremy Gall Discusses the Challenges and Opportunities That Lie Ahead By Jeremy Gall

hen we started Breezeway in 2016, few companies in the vacation rental ecosystem were talking about property care and operations. Managers were focused on maximizing bookings and acquiring owners as they were rightfully swept up in the rapid growth of the industry. “Property operations” wasn’t a well-known concept, which became clear to us from our conversations at industry conferences.

The growth of the short-term rental category over the past five years is well documented—not only with respect to the number of rentable homes and management companies, but also the identity of the operator and the pain-points and priorities that come with them. The pandemic accelerated the importance of property operations (now a ubiquitous term and distinct category within the business), changing processes and restructuring the daily lives of most vacation rental professionals. This was the impetus for hosting ELEVATE, the industry’s first-ever conference dedicated to property preparation that Breezeway held in March. Our mission for the summit was to strengthen the dialogue about operations, so we brought a variety of leading voices under one roof—voices from local housekeeping supervisors to leaders of multinational brands. Some 800 registrants listened as those experts shared insights and experiences about numerous topics that included the convergence of rental supply, new technology trends, and coping with more work and less time to do it.

In this article I share my perspective on where vacation rentals are headed. I’ll discuss how the current expectations of guests, owners, and regulators are creating new challenges and opportunities for professional managers, and why navigating the demands of each persona is critical for the industry’s future.

Expectations for Industry Growth Short-term rentals are no longer perceived as “alternative accommodations.” Instead, they are a preferred lodging category. The industry has been building toward this state for decades, and now travelers are embracing it. According to Key Data, bookings per rental have more than doubled since 2019, and occupancy rates in such vacation-rental-dominated markets as the Outer Banks and Cape Cod have risen more than 20 percent. Although attributes such as more privacy, ample space, and family-friendly amenities have positioned vacation rentals well amidst the pandemic, the expectation for elevated quality will be key to the industry’s sustained growth. “As companies build their brands, and are known for more quality, then we’ll reach new markets,” said Merliee Karr, founder and CEO of UnderTheDoormat. “There are new customers coming into our market, and whether we like it or not, we are going to be competing with hotels. Eleven percent of consumers are more likely to book a short-term rental coming out of COVID than they were going into it. This is our opportunity.”

For Consumers, It’s All About the Experience Travelers continue to demand more personalized and premium vacation rental experiences. Lingering sensitivity about safety and cleanliness are steering consumers toward rentals that deliver professionalism, a sentiment that 71 percent of operators believe will remain indefinitely, according to Breezeway’s 2021 Operations Survey. At the same time, millennials and younger generations are projected to account for 75 percent of travelers by 2025, a cohort of consumers that, according to Airbnb Report, holds higher standards for service and convenience. VRM Intel Magazine | Summer 2021

Operators are taking this “experience first” approach for their guests, from booking all the way through checkout, in innovative ways that have much more of a “hospitality” feel.

ALTIDO, for example, has implemented new services to deliver a more predictable and concierge-like experience. “We’ve started to offer guests a virtual tour of the property with a walk-in experience that gives them a great indication of how the property will look and feel,” said Anthony Lee, head of operations in London. “Expectations are as high as ever, and it’s all about convenience and experience. We offer pre-check as well as grocery delivery so that the fridge is stocked up upon arrival.”

The challenge extends beyond property preparation and doesn’t end after the guest checks in to the property. Expectations for in-stay experiences, such as mid-stay cleaning, late checkout, and surrounding amenities and recommendations, have stretched managers by increasing both the scope and depth of their work. Purposeful communication has become a core tenet of the job, a necessary means of facilitating VIP guest experiences so they can enjoy the property to its fullest extent.

operators to cope with more work and less time. The intersection between property operations and owner relations might just be the key to unlocking internal efficiency and controlling the narrative with owner clients.

“We use technology to update owner liaisons whenever there’s a maintenance issue, and within minutes we can notify the owner and deal with it internally,” said Eskin. Taking good care of a rental is one thing but, without communication, owners won’t know the full value you provide. Sharing property data and service interactions with owners will help highlight your professionalism and assure your clients that their home is in good hands.

For Ashley Kubiszyn, CEO of River Ridge Rentals, the key to resolving issues and delivering service in a timely matter is tying property operations and guest communication programs together: “As soon as our team is on the way [to fix the issue], we mark the task as in process, and the guest gets that update. Then, we close the loop with an ‘it’s been completed’ text, as this is so important.”

“Managing Up” to Homeowner Clients There are competing macroeconomic factors that have shifted the supply and demand of property management services. First, the low-interest-rate environment has catalyzed purchases of second homes, increasing the number of available vacation rentals for managers to compete for. But the number of homeowners interested in management services has leveled because the software ecosystem offers platforms and tools that have lowered the barrier for self-management, and that has increased the variance in the quality of vacation rentals. The playing field for marketing also has leveled, driving acquisition costs higher. Simply put, owner relations—both fostering existing relationships for higher retention as well as efficiently acquiring inventory—remains a challenge for vacation rental managers. Owners expect more visibility into how their assets are (and will be) managed. Such companies as Berkshire Hathaway Homeservices in Vail, Colorado, are addressing this challenge upfront by showcasing their process to prospective clients. “When I meet with new owners, I put technology forward and show them our operations platform,” says vice president and general manager Jon Eskin. “More than anything, owners want to see how you run your operations, so we show them how we do inspections, and they love that.” Detailed attention to and communication with homeowners shouldn’t be a one-time thing. Providing consistent visibility into asset management programs leads to healthier owner relationships that, in turn, drives higher retention, glowing testimonials, and word-of-mouth referrals. Each owner and property is unique, and many professional managers customize their method and frequency of communication to the personality and preference of each homeowner. Doing so creates a heavier operational burden, but the coming years should prove that managers are up to the task to monetize more service and deliver more client value. Embracing property services is a huge growth opportunity for managers, but it can be a double-edged sword because it challenges 50

VRM Intel Magazine | Summer 2021

What About Regulation? The growth in vacation rentals has caught the eye of municipal policymakers, increasing scrutiny and restrictive policies. But, according to Philip Minardi, head of public affairs at Expedia, the pandemic has altered the trend in regulation. Last year underscored the economic value that vacation rentals bring to the table, creating a unique opportunity for operators and cities to further the conversation about fair and effective policies.

“Consumer demand is driving the dialogue forward, and the industry recognizes the importance of putting our best foot forward, being proactive, and engaging in these discussions before they get vitriolic,” said Minardi.

As an industry, we need to come together to promote responsible hosting practices and minimize disturbances within our communities. A clear and cost-efficient way to achieve this aim is to use best-in-breed technology that delivers travelers more predictable and higher-quality experiences. If recovery continues to unify regulators and operators, then regulation shouldn’t hamper growth but, rather, elevate the professionalism of the entire industry. 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. Gall 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.

Noise Disturbance

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Resolved within minutes

Peace and Quiet

Go from Party to Peace in 15 minutes With privacy safe smart noise monitoring from industry leader NoiseAware, you keep the peace and the profits. Prevent rental rowdiness with automated test messages to guests when a disturbance is detected. With over one million nights monitored, evidence shows 85% of noise events resolved in less than 15 minutes, keeping neighbors happy and your property in good condition. With one third of property damage caused by noise events, a small investment in NoiseAware’s monitoring service saves time and money, eliminating trips to the property, repairs and missed rental nights. Boost your return on rental with NoiseAware.

www.noiseaware.com VRM Intel Magazine | Summer 2021

Homeowner Tax Topics SIX WAYS YOU CAN HELP CUT YOUR HOMEOWNER’S TAXES

By Jon Cunningham, CPA

roperty managers get all kinds of questions from homeowner clients, and sometimes these are tax and financial questions. Homeowners may share tax-relevant information with you. Listening for a few key topics or phrases may help guide them to a much better financial result—and that is what great property management is all about.

This guide introduces a few critical and advanced tax topics that often affect vacation rental owners. Vacation rentals are particularly complex from a tax perspective, so be sure you or your clients engage a CPA or other qualified professional for advice specific to their situation. This introduction is intended to help recognize potential opportunities and initiate a discussion rather than reach any conclusions or recommendations.

The article is written from the perspective of individuals who own property directly or through a single-member LLC (including LLCs owned by married couples). Partnership tax often has similar implications, but partnership taxation is even more complex, beyond the scope of this article. S corporations are not covered because, as you will read, real estate should (almost) never be held in an S corporation.

1. Should they be taxed as a business or as an investment? Believe it or not, property managers often make decisions and set policies that cause a vacation rental to be classified as a business instead of an investment. The tax implications for the owner can be substantial. A rental will be considered a business, and it will be filed on Schedule C in the following situations. Otherwise, they will be taxed as an investment using Schedule E. (See IRS Publication 925 for more).

Rule

Average Length of Stay (ALOS)

Nature of Personal Services Provided

7-Day Rule

7 days or less

Any

30-Day Rule

Open Rule

30 days or less

Any

Significant—Significant personal services would include things like laundry services, towel service, and cleaning and linen service during the stay. The more it “feels” like a hotel instead of a condo, the more likely the services are to be viewed as “significant.” Extraordinary—Extraordinary personal services generally cover situations like hospitals or dormitories where the lodging is incidental to the larger purpose of providing medical care or education.

VRM Intel Magazine | Summer 2021

Generally, vacation rental owners will fall under the 7-day rule or 30-day rule. The open rule typically will not apply to vacation rentals. Property managers can affect the tax treatment their homeowners face by setting the average rental duration to be over or under seven days. They may also adjust the service bundle to be significant or not. Generally speaking, owners of a property operating at a loss will prefer to be taxed as a business, whereas those reporting a profit will prefer to be taxed as a rental or investment. The difference can be substantial. Taxed as a Business (Schedule C)

Taxed as an Investment (Schedule E)

Loss Making

Losses reduce other income, including W-2 wages, dollar for dollar. Noncash expenses such as depreciation count.

Losses offset only other investment income. Losses greater than investment income, plus $3,000 of ordinary income, must be carried forward to a future year.

Profit Making

Profits are fully taxable at the taxpayer’s highest tax bracket. And the taxpayer must pay self-employment tax (15.4 percent of the first $137,700 in 2020).

Profits are fully taxable at the taxpayer’s highest tax bracket. Net investment income tax may apply for income over certain thresholds (3.8 percent rate).

2. Help Them Qualify For a 20% QBI deduction The 2017 Tax Cuts and Jobs Act created a significant 20 percent deduction for most income generated by entities other than C corporations. Rental real estate considered a “trade or business” qualifies for QBI, assuming the other general requirements are met. However, as discussed above, determining if a vacation rental is a trade or business is not always easy. In 2018, the IRS published regulations clarifying a QBI Safe Harbor that, if met, allows most vacation rentals to receive the QBI deduction. The safe harbor requires the following:

B The taxpayer (your client or you on their behalf ) must keep separate books and records of income and expenses.

C 250 or more hours of rental services are performed annually, by the owner or someone working on the owners’ behalf—such as housekeeping, property management, supervision, maintenance work, billing, booking, or collection of payment.

D The 250 hours must be documented with contemporaneous records showing hours of service, description of service(s), the dates of service, and the person(s) who performed the service. E Hours may be aggregated across multiple properties that have been designated in advance as a group by the taxpayer.

The QBI reduces taxable income by 20 percent. That’s a big deal for most people.

Consider helping your homeowners cut their tax bill using the QBI Real Estate Safe Harbor rules by documenting the hours spent on their property. This “extra mile” service might attract and retain clients, making it worth an extra fee in some cases.

3. Avoid S Corporations The best form of business for rental or investment real estate is frequently debated. Many owners of single properties or smaller portfolios hold them directly. Although direct ownership does not afford the same liability protection as an LLC or other legal entity, insurance products can mitigate that concern. LLCs are the most popular legal entity for holding vacation rental property. Any LLCs with one owner (or one owner plus a spouse) is called a “disregarded entity” by the IRS and taxed the same as sole proprietorships on Schedule C (or E). Any LLCs with additional owners will be taxed as partnerships by default. Any of these might be a good option for holding real estate.

The owner(s) of an LLC may elect to be taxed as a C or S corporation. Disregarded entities are also entitled to take a C or S corporation election. Usually the C corporation is a bad move because income will be taxed twice. And S corporations are never a good idea for rental real estate. There are four reasons why: B With extremely limited exceptions, appreciated property cannot be distributed from an S corporation without triggering capital gains taxes. C Tax-free exchanges under Section 1031 are complicated and may not be able to achieve the desired result. D Losses in basis step up upon the death of an owner.

E There will be a loss of tax shield for the owner’s loans against the property.

If your clients are considering what form of business to use for their vacation rentals, and especially if they are considering an S corporation, send them to a tax professional for guidance.

4. Eliminate Capital Gains Tax Many investors have a simple rule: “Never sell real estate!” That is probably good advice, but sometimes people have good reasons to sell. In some cases, listing and selling might be a good way to exit. For appreciated property, a 1031 tax-free exchange can be a smart move because it defers tax on the appreciation of the property (capital gains tax). This is particularly relevant in 2021 and beyond, given that real estate and other asset classes have appreciated quite rapidly.

But what if I told you there was a way not only to delay capital gains tax but to completely avoid it forever? For estates worth less than $11.4 million, appreciated assets, including appreciated vacation rental property, pass tax-free to heirs. And even better, the tax basis of bequeathed property is adjusted upward to the current market value. This means the heirs can sell it the next day at the current market value without owing a penny in capital gains tax. Yes, even if the bequeathed property was fully depreciated and carried at zero basis by the parent, spouse, or other benefactor, the sale of the inherited property is untaxed. Selling can cause the property owner to miss out on what may be the single greatest tax loophole in the entire US tax code: don’t sell! Property managers can share this nugget of information to help homeowner clients (or their heirs) who are considering selling ap-

preciated and/or depreciated real estate save a bundle on taxes and keep a property under management in the process.

5. Help Them Book “Paper Losses” Ahhh, paper losses are those wonderful tax deductions that you get but without spending any cash out of pocket (well, at least not that year). The biggest driver of paper losses in vacation rental real estate is depreciation. Generally, the cost of the improvements, but not the land, is divided by 27.5 years, with the resulting amount taken as depreciation each year. In some situations, it may be advantageous to separately depreciation equipment like ovens, range hoods, fans, and refrigerators. (If classified as a business, these costs and related depreciation will reduce taxability in the current year, including W-2 income.)

Note: The IRS requires that property used as a rental be depreciated: if it is not depreciated, the error can cause higher tax liabilities when the property is subsequently sold.

In some cases, repairs, restorations, and refurbishments, such as new carpet or replacement appliances, can be expensed in the year they are purchased. In other cases, these costs must be added to the original cost of the property and depreciated. Mistakes in depreciation (such as not taking it), can be fixed by filing Form 3115 to notify the IRS of a change in accounting methods.

Property managers who help clients with maintenance and repairs can provide good records not only of the amounts spent but also of whether the expenditures were upgrades, or maintenance; they can then ask homeowner clients if they are taking appropriate depreciation.

6. Avoid Using the Rental as a Residence One of the best things about owning vacation rental property is the prospect of using it yourself. Of course, that not only can displace billable rental revenue but it can also change the tax treatment of the rental. Here are the thresholds and the implications of each option: Personal Use

Expenses

Expenses Limited

Personal use less than the greater of 14 days or 10% of the number of days rented

Apportioned between the personal and rental use based on the number of days used

No limit

Personal use more than the greater of 14 days or 10% of the number of days rented

Apportioned between the personal and rental use based on the number of days used

Expenses greater than the gross rental income must be carried forward and cannot be used in the current tax year.

This is primarily relevant to homeowners who are booking paper losses and wish to use them to offset current income (e.g., average rental days less than seven). Property managers can alert clients who are booking more personal time than these limits allow that they may forgo some short-term tax benefits by doing so. Cunningham CPA is a boutique tax practice with offices in San Diego, California, and Fairhope, Alabama, serving clients nationwide. Cunningham CPA was founded and is solely owned by Arthur Andersen and PwC alumnus Jonathan Cunningham. Connect with Jon online at www.cunningham.cpa, or call him directly at 1 (858) 771–3845. Jon is always happy to speak with current and prospective clients about their tax matters.

VRM Intel Magazine | Summer 2021

A SPECIAL WELCOME AND THANK YOU TO THE

3RD ANNUAL DATA AND REVENUE MANAGEMENT CONFERENCE SPONSORS PRESENTED BY

PREMIER SPONSORS

EXHIBITING SPONSORS

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USE PROMO CODE “magazine” TO SAVE $100.

VRM INTEL INVITES YOU TO THE 3RD ANNUAL VACATION RENTAL DATA AND REVENUE MANAGEMENT CONFERENCE PRESENTED BY KEY DATA AND PRICELABS

Aug 17 – 18, 2021 at the historic Francis Marion Hotel Charleston, South Carolina

WITH EMCEES SARAH BRADFORD AND TIM CAFFERTY FROM THE PODCAST, SARAH AND T!

INTRODUCING DANIEL LEVINE AND SHAUN STEWART AS KEYNOTE SPEAKERS Revenue management is about delivering the right product to the right consumer at the right price at the right time on the right channel. This year’s education addresses all the factors in this equation with tracks for:

B Data and Technology

D Foundational Revenue Management

C Marketing and Distribution

E Advanced Level Revenue Management

This high-level conference is designed for vacation rental management executives, revenue managers, marketers, and technology providers. Our goal is to bring stakeholders together to move the industry forward in the disciplines and technology needed for vacation rental managers to grow and optimize revenue for years to come. It’s not easy. Full utilization of revenue management strategies, benchmark data, channel management, and technology is still new in our industry. However, in the last year, we witnessed many professional managers move the needle by executing revenue management strategies. As demand rose for vacation rental accommodations, these companies were able to significantly raise ADRs for homeowners, adjust channel pricing, close vacant windows between stays, and increase profitability. At DARM, we’ll learn what worked, what didn’t, and what our industry needs to advance in revenue optimization.

The cost to attend is $849, and the Francis Marion Hotel’s room rate is $129 per night when you use promo code VRM. You can also call the hotel directly at 843-722-0600. Space is limited. For vacation rental executives, revenue managers, marketers, and technology providers, this is an event you won’t want to miss.

A $70 Billion Difference

manager at one of the three big global listing platforms recently told me, “There is no doubt that rent-by-owner has become much easier during the last 10 years.” On the face of it, it’s an obvious statement: Without the help of a property manager, 10 years ago, I would have been largely relegated to market my property on my own, and I would have struggled. Today, in a few minutes, I can list on Airbnb, Vrbo, or Booking.com, which collectively generated about $70 billion in bookings in 2019. The listing platforms have been responsible for much of the value creation in our industry in the last decade, and much of that was due to Airbnb’s success. Today, Airbnb’s brand supports a market cap of more than $100 billion. That market cap is also supported by a belief that Airbnb alone will add another $60 billion in bookings in the next five years while also significantly improving its own economics. Crudely simplified, this can be good or bad for property managers (PMs). If those incremental bookings drastically shift the mix of direct versus indirect bookings for PMs, thus making PMs less relevant, it would decrease their appeal and their take rate.

Also, if the listing platforms improving their own economics is a zero-sum game shifting take rate from PM to the listing platforms, then over time the economics will deteriorate for PMs. The industry will continue to be massively fragmented, with small PMs increasingly eking out a living in the shadow of the listing platforms. If, on the other hand, the listing platforms drive the growth of the entire market rapidly, then worsening unit economics for PMs might well be more than made up for by the increase in volume.

The End of Property Management (At Least as We Know It) By Alex Nigg

VRM Intel Magazine | Summer 2021

Our industry is thus at an interesting juncture: Does the rising tide lift all boats, or are PMs relegated to wane in influence and take an increasingly smaller commission for their services as more bookings come from the listing platforms?

Which Model Is Winning? The market has been abundantly clear about which model it favors: Airbnb and its peers trade at a much higher multiple than PMs.

The largest vacation rental (VR) business in the world, Wyndham’s European portfolio (today Awaze), with some 110,000 listings, was sold in 2018 for a reported $1.3 billion. Stripping out other businesses included in the sale, the VR segment at the time likely generated about $200 million in sales. Assuming a 35 percent commission, this would imply gross bookings of about $600 million. Skift reported that the entire business sold for 10 times Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and assuming Wyndham’s VR business generated an EBITDA of 15 percent of revenues, the VR business would have been valued at $300 million, or 0.5 times gross booking value. These are rough estimates. Conversely, Airbnb is today valued at approximately three times its 2021 forecast gross booking value, and that’s despite the fact that Airbnb’s current take rate is less than half that of a typical PM, and Airbnb is not profitable yet. So clearly, the market believes that Airbnb and other listing platform’s business models are superior to that of a PM, likely on three counts.

B Scale versus Size Listing platforms have demonstrated they can scale. Conversely, PMs have largely been hyperlocal businesses that struggle to develop economies of scale beyond local markets. Indeed, successful PMs typically run highly local businesses that thrive because of the dominance of a local market and favorable local economics due to local density. They tend to have a large percentage of direct bookings from returning guests and from local feeder markets where they have built a local brand often over decades.

Exceptions to this rule are few and fall into two categories. First, there are those that grew by acquisition and strung together collections of hyperlocal markets However, it’s unclear they derive any scale effects beyond these local markets. Arguably, they have achieved size but not scale. Even large PMs tend to hit a “sound barrier” at 20,000 listings. AJL’s Simon Lehmann attributes this “natural law” to the founder of Interchalet, who decades ago observed that PMs struggle to grow beyond 20,000 units. It will be interesting to see if this law applies to Vacasa after its purchase of Turnkey. Contrastingly, there are those that have partially or fully let go of the non-scalable local parts of the business and focus on marketing and guest support, leaving the on-site operations to the owner or partners. Arguably, the latter looks more like listing platforms than PMs and might well scale, but the proverbial proof is in the pudding, and their long-term success will be defined by what percentage of bookings they generate directly and whether their unit economics improve as they grow. Listing platforms, in comparison, clearly scale, which is reflected in improving unit economics as they grow. Analysts expect Airbnb’s gross booking value to sustain a compound annual growth rate of more than 20 percent over the next 5 years; critically, this growth is organic.

C Shifting Take Rate When listing platforms generate tens of billions of dollars of bookings and add tools to make it ever easier for owners to list directly with them, this will shift the take rate from PMs to listing platforms. Many industry observers agree that PM commissions will continue to be challenged.

This effect will, of course, differ by market. As former PM Richard Vaughton points out, the effect will be much more pronounced in urban markets—that exist because of the listing platforms—than in traditional VR markets where listing platforms are still less important as a source of bookings. But due to powerful global brands, billions of dollars invested in digital marketing, an increasing share of business from millennials that grew up with the listing platforms, and an increased ability to leverage hotel traffic for VR, these effects of scale will increasingly be felt in traditional VR, too. Urban markets may be interesting case studies of what’s to come. As science fiction writer William Gibson said, “The future is already here—it’s only unevenly distributed.” Urban managers that depend largely, or exclusively, on one or two listing platforms have in general not fared well. They very much depend on the listing platforms, and although the listing platforms may see them as attractive enablers to get an owner listed (until the listing platform builds better DIY tools), it’s unclear how much long-term value they hold to the listing platform. What is generally clear is who holds the better cards in that relationship and who will extract more value from the guest over time.

PMs fundamentally do three things: they put heads into beds, they manage guest relationships, and they turn and maintain properties. Interestingly, some European PMs charge the same commission whether the homeowner chooses to deal with turns and maintenance or whether the PMs manage those. This is a clear indication of where they see the value: Although there clearly is value in dispatching cleaners and maintenance, a future of “glorified housekeepers” and erosion or disintermediation of the guest relationship is probably not in PMs’ interest. As marketing power and more pieces of the guest relationship transition to the listing platform, the take rate will shift with it. Analysts expect Airbnb’s take rate to increase from 13–15 percent to 21 percent in the next few years, and it’s unlikely that this will come out of the owner’s pocket: Everyone needs supply to grow. A manager at a listing platform said to me years ago, “PMs take too much money for what they actually do.”

D Profitability Not all listing platforms are profitable today, but all have clearly shown the ability to be drastically more profitable than PMs. It is estimated that hyperlocal PMs typically generate an EBITDA of around 7–25 percent of revenues. Conversely, analysts expect Airbnb to reach an EBITDA of about 45 percent by 2030 because it benefits from scale. This might seem like a pipe dream given that Airbnb has only ever achieved profitability once in its 10-year history, but it is not far-fetched at all given that the more mature Booking.com has demonstrated achieving EBITDA in excess of 40 percent already, and Airbnb looks even more scalable than Booking.com. Can the “wave of consolidation” that we have so long expected make PMs drastically more profitable? It is unlikely if consolidation continues to simply string together local markets without clear economies of scale. As Sykes’s Graham Donoghue commented to Phocuswire’s Jill Menze on the Vacasa–Turnkey deal, “The key will be value creation and the road to efficiencies—you can’t just keep collecting stuff as eventually you’ll get found out.”

Evolve in the US and Sykes and several others in Europe are pursuing models that resemble the listing platforms more than US full-service PMs. If they achieve a high percentage of direct bookings and exclusivity on listings, this model seems to be more profitable over time than a traditional PM.

A Red Herring? So, in summary, if PMs can’t scale, if their commissions erode, and if they slowly become less profitable (from an already low base), what will become of them? The future is likely not as bleak as the above suggests; we are also in a period of unparalleled optimism about our industry. Several industry observers expect Vacasa’s unstoppable streak of acquisition to drive toward a SPAC or IPO at revenue multiples comparable to Airbnb—even if their economics and business models couldn’t be more different.

This optimism might be based on one of three factors. First, the rising tide lifts all boats, and the growth created by Airbnb and the other listing platforms as well as pent-up demand will either negate or more than compensate for any deterioration in unit economVRM Intel Magazine | Summer 2021

ics. Second, the market believes that the “tech-enabled PM” indeed provides for superior economics. Third, Vacasa and Airbnb share at least one major investor, so before long, Vacasa, too, may well look more like Airbnb, or it may add highly scalable, unbundled services to its portfolio.

So What? So what’s a PM to do? Whichever way one looks at the future of our industry, it’s highly likely that the pace of change will accelerate, which will require adjustments for all industry participants.

B Focus on inventory acquisition. Supply acquisition will be the key battle of this year and the years to come, and being local, PMs have a competitive advantage (more so than with guests). So every owner of a PMC should spend as much of their time as they can on inventory acquisition.

The RBO market (i.e., the 50 percent of homeowners/hosts who don’t currently use a PM) is more attractive than just poaching homeowners from your competitors, but you have to be creative on how to attract those who don’t want full service (yet). The homeowner relationship is the key asset of a local PM. As Steve Milo of VTrips notes, as opposed to anyone else in the ecosystem, PMs have an exclusive relationship with owners, and once that’s in place, it’s a defensible competitive advantage.

C Get a piece of as many homeowners as you can rather than getting all of a few. The vast majority of the US market is focused exclusively on the full-service model. This is an unusual characteristic of the US market and is not shared with the rest of the world. Evolve has built a successful, scalable model unbundling this offering. Their success, and the experience in Europe, suggests that there is plenty of room for other models. Why not offer owners a wide range of services and thus leverage the core local strength in owner acquisition across a wider menu of á la carte services? For example, you could offer 1 percent for a DIY (white-labeled) owner tool and 3 percent for some basic remote services, offer access to unbundled housekeeping at a subscription fee plus a per-job charge, offer unbundled marketing and guest management at 10–15 percent, and then upsell all the way to full-service management. But each additional customer—even if it’s just a piece of full service—builds your local dominance and creates local scale on as much of the guest relationship as you can.

D Diversify your channels; focus on the ones that matter. In a world where increasingly more bookings come from channels, you should at least ensure you keep your channel mix diverse. In practice, focus on the ones that matter, and when practical, favor the challenger. If you are in Destin, give Booking and Airbnb a try; if you are in Tahoe, in addition to Airbnb, also list on Vrbo and Booking. Expect an all-out war to break out because Vrbo and Booking. com, as well as the entire hotel industry, are salivating over Airbnb’s market cap as a public company. The opening shots in this battle have already been fired, with Vrbo taking the fight to Airbnb and Booking.com chasing Vrbo. There will be pressure on each to serve 58

VRM Intel Magazine | Summer 2021

up bookings to newly signed listings, which should create an opportunity to diversify a PM’s channel mix.

In addition, consider new entrants. Homes & Villas by Marriott International has by all counts been highly successful. Their success will likely inspire other traditional lodging providers to throw their hats in the ring (as well as other travel providers, such as airlines). In the past, these offerings have had mixed success, but Marriott seems to have cracked the code, and others will likely follow. Successful regional or niche listing platforms may also round out your mix. And then there’s Google. This currently requires more work, and success very much depends on where you are. But reaching your customers via Google may be more cost-effective for some, and doing do certainly diversifies your channel mix.

Conclusion So, will property management really end? PMs provide highly valuable services to many homeowners, and that won’t change. But short-term rental property management as we know it may well change drastically over the next few years.

This article might sound odd this year, which promises to be the best on record for many PMs. Not only is the industry likely to benefit from both pent-up demand and longer-term favorable dynamics in 2021, but this year, at last it seems the power balance between PMs and listing platforms is shifting in favor of PMs. Many PMs are booked out, with some of the highest levels of direct bookings ever, and listing platforms are competing ferociously to woo PMs. PMs barely have time this year to consider the deals listing platforms are throwing at them. But this year is likely to be an exception, and shrewd industry observers are setting their sights on 2022, when the battle for both guests and owners will escalate. The biggest surprise of the last 10 years has been just how slow change in this industry has been for traditional PMs in traditional VR areas. The pace of change is likely to accelerate sharply over the next few years.

Urban managers have seen this change more than their colleagues in traditional leisure VR. Although these two markets have fundamentally different dynamics, urban managers are an interesting case study of a market with high dependence on listing platforms. There are few certainties other than that the pace of change will continue to accelerate. If I had to bet money, I’d bet that those PMs that get good at acquiring and retaining owners while maintaining a high percentage of direct bookings will fare the best.

Alex Nigg is the founder and CEO of Properly, an operations platform for short-term rentals connecting thousands of properties across North America, Europe and Australasia with their service providers. Nigg is a frequent speaker at industry events in North America and Europe. Prior to finding his passion for the vacation rental industry, Alex was a management consultant at Bain & Company, an entrepreneur, and a venture capital investor in Silicon Valley.

Connecting Your Business and Your

Personal Goals with a Plan By Bill Whichard and John Woolard

ost successful business owners have a plan for their business, and quite often they have a mission statement. Mission statements usually spell out a business’s core values, its purpose, and vision for how employees and customers should be treated. In many cases this statement is a guide for employees and spells out expectations as to how they should perform their duties. Future goals are often expressed so that employees and customers know how the business hopes to develop over time. The mission statement and the business plan help drive the direction of the business moving forward.

However, we often find that while owners have a vision for their business, in many cases, they lack planning that ties their business to their personal financial goals. We have interviewed many VRM owners, and a common theme we hear is that they are so focused on running the business and making sure the rooms are cleaned, repairs are made, and amenities are in order that they neglect personal financial planning. Therefore, there is no plan in place to help them understand how to one day unwind their business ownership when all their personal goals can easily be met. The formation of a personal financial plan starts with a conversation that will help your advisor understand you, your situation, and what is important to you. How much monthly income will you need in retirement to live the life you want to live? Are there children or grandchildren you want to benefit from your success, and if so what is the best way to structure? Many business are tremendous supporters of their communities. If it is important for this legacy to continue, have plans been made? If selling to a third party, are there key employees you would like to protect or to benefit from a sale? If transitioning to family members or key employees, when should the process start?

All these questions can be addressed with planning. In many cases, the best strategies take years to implement. The earlier that goals are identified, the better the odds that strategic moves can be made to accomplish these goals. One of the most important areas of personal planning is understanding future retirement income needs. At the end of your career, you want to maintain the lifestyle you have been accustomed to or even increase spending with extra time for travel and fun. Having a clear understanding of your income goal can help you identify how

much you will need from the sale of your business. Industry experts tell us that many sales are missed because owners don’t understand what the other side of a sale will look like. They aren’t sure what their needs will be or how much income can be safely produced from the proceeds of an offer. This fear of the unknown can cause paralysis, and if this occurs at the top of a business cycle, it might cause the owner to miss the best offer they could hope to receive.

Understanding retirement cash flow goals can also help you identify which areas of the business you might not want to sell. For example, if the business owns income-producing property, you might want to negotiate to keep it and rent it to the new owners if that helps you meet your income needs. Knowledge is power, and the more you understand about what it will take to meet your goals, the better position you will be in to negotiate.

Last, identifying your goals can motivate you to make adjustments so the business is more attractive to prospective buyers. This can be the difference between running a business that you “live out of ” versus managing the business for eventual sale. In other words, you should manage your business in a way that will increase the multiple you receive when your business is sold. A higher multiple could be a game changer during the golden years! It all boils down to having a plan that ties your business ownership to your personal goals. When you identify what you want to achieve and create a written plan that will be monitored and adjusted along the way, your odds of achieving your goals will dramatically increase. You worked too hard not to stack the odds in your favor. Bill Whichard and John Woolard are the managing partners of Whichard & Woolard Wealth Management Group. Having both grown up in the Outer Banks area they specialize in helping owners in the VRM industry plan for their financial future. With over 100 years of combined industry experience, Bill and John are both Private Wealth Financial Advisors and have a seasoned team of six professionals including a Certified Financial Planner. VRM Intel Magazine | Summer 2021

Canadian Groundhog Day

After yet another government-ordered shutdown of cottage rental activity, Canadian property managers are left asking, “Will this ever end?”By Heather Bayer

omeone once told me that, to the majority of our US friends, Canada is like the attic in their homes. They know it’s up there, but very few people actually know what’s in it.

So, as Canadian property managers, here we were with cottage rentals banned for six weeks, with caution tape around playgrounds and recreational areas, patio areas closed, and lines outside grocery stores extending around the block. The not-in-my-backyard (NIMBY) full-time residents were complaining that property owners should not be visiting their places at all, let alone advertising them for rent.

That was late April to early June 2020 in Ontario, Canada, and we were juggling the repercussions of all of this for our 170 properties. Like everyone else in the vacation rental business, it was a tough time to be a property manager, and there were big decisions to make. Which staff should be furloughed, and how would they manage? What should we do about cancellations and the fear that was driving them? Could we survive without a summer rental season when the bank reserves would need to tide us over a full year until the next travel season?

Then June 5 arrived, and the province reopened. We celebrated, brought our staff back, and commenced the busiest summer season ever—at one point with more than 1,000 families on a waiting list. It was a story that echoed across the US, with less fortunate exceptions in Hawaii and in urban areas. But in general, it felt good, and we had the highest revenue in our 18-year history. 60

VRM Intel Magazine | Summer 2021

Over the next six months, there was a lot of fallout. We lost nearly 25 percent of our inventory as homeowners took advantage of soaring real estate prices for lakefront homes and cashed out. Other homeowners, fatigued by neighbors’ attitudes and the fear and wariness triggered by media accounts of “city folk” bringing sickness to their rural idyll, decided not to rent anymore.

Then along came Groundhog Day. Do you remember that movie? The one where the jaded weatherman is forced to cover the emergence of Punxsutawney Phil, the celebrated Pennsylvania groundhog, as he predicted when winter would end. After a blizzard forces him to stay in town overnight, Phil Connors, the presenter (played by Bill Murray), wakes up to a time loop and experiences the same 24-hour period over and over again.

When Phil realizes he is destined to stay in the time loop forever, he begins to play with it—acting out—as he realizes whatever he does in that 24-hour period will have no future impact because he’ll wake up to the refrains of “I Got You Babe” every day anyway. After committing suicide on multiple occasions and attempting to drive himself and the poor groundhog off of a cliff, Phil accepts the inevitability of his situation and begins to use his knowledge of the time loop as a blessing instead of a curse and an opportunity to foster positive change. So when Boxing Day (December 26, 2020) arrived and we were forced into another six-week lockdown, it felt like Groundhog Day. We’d been there and done that, and we used the knowledge gained from the earlier experience to ride it out. We dutifully cancelled all those wonderful winter rentals that pay for things like staffing and monthly expenses. We absorbed the costs of cancellations and the ire of guests who couldn’t understand why their trip to cottage country to live in splendid snowy isolation was so darn risky.

Then for a few glorious weeks in March, as we were able to reopen, it really looked like we were back on track and out of the woods. At 100 percent occupancy for July and August and around 70 percent occupancy for June, it almost seemed safe to look back on the long year of COVID-19 and see it receding into the distance. But that wasn’t to be.

Canada’s COVID numbers rose, ICU capacity diminished, infection rates soared, and expressions such as “variant of concern” became common.

Regions were given color codes; and your color determined whether you could go into a store, eat out on a patio, play a game of golf, or you guessed it rent a cottage. Properties in gray and red were canceled again, and those in orange and green were OK until someone sneezed and they changed once more.

It was a dizzying time of reacting each day to changing notifications. Until Groundhog Day came around again and it was almost comforting to at least know that a complete province-wide lock-

down had some consistency. We may have entered a Stockholm Syndrome situation.

So here we are in April 2021, with cottage rentals banned for yet another six weeks, caution tape around playgrounds and recreational areas, patio areas closed, and lines outside the grocery stores extending around the block. The not-in-my-backyard (NIMBY) full-time residents are complaining that property owners should not be visiting their places at all, let alone advertising them for rent. Like the determined Phil Connors, we’re looking for something positive and doing some outside-the-box thinking. We’ve decided to capitalize on our travel agents’ designation and look for other products to sell that are not so regulated.

Oddly enough, while you cannot book a short-term rental, it’s okay to rent a houseboat on one of our waterways, so guests can now go to our website and rent a cruiser in Ontario and maybe look ahead for a cruising vacation in Europe. We haven’t furloughed staff this time. They all have projects to keep them busy, so when we do put this behind us, we’ll come out swinging. We hope that June 5 will roll around again and allow rentals to proceed for another summer. If they don’t, you might find me on a cruiser on the Rideau Canal!

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 cofounded 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 | Summer 2021

ANYTHING FROM ANYWHERE

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Technology and the

COVID-19 Silver Lining By Lino Maldonado, President, BeHome247

he COVID-19 pandemic has placed hardships on many throughout our society over the past year. Yet some of us might admit in hushed tones that there has been a silver lining in how we now see the world.

The simplification of life at home has driven an appreciation for what is most important in life and at work. This focus allows us to move forward with improvements that might otherwise have languished in procrastination or denial. We have learned to do more with less, at a distance, and by using more technology than ever before to deliver and delight our guests as they seek respite from the new reality. As the property technology, or PropTech, boom continues to reverberate through our industry, we can apply these principles of simplification and focus on the most important outcomes to drive better results, guest satisfaction, and profitability with our vacation rental properties.

Distance Has Been Reduced During COVID-19, people have grown accustomed to using technology to bridge distance and time. Video calls have moved from the exotic to daily occurrences. Hopping in a car or golf cart to check a unit’s HVAC, locks, or other statuses makes little sense when one can access the same information from anywhere.

Cobbled-Together Point Solutions Are So 2019 Guests expect technology to work seamlessly and in a coordinated manner. Having a different computer program for discrete functions is inefficient and frustrating. Accustomed to using programs that work together as one experience, such as the Microsoft Office Suite, property employees and guests alike will resist using standalone or poorly integrated systems for discrete purposes.

Expectations Have Increased

Seize Opportunities to Enhance Revenue

During the pandemic, many future vacationers took advantage of the time at home to invest in their own primary residences. For many, that included installing home automation products such as smart locks, digital thermostats, security services, and sensors of various sorts. These same homeowners will expect similar amenities at vacation rentals. Properties perceived as technologically outdated will suffer reputational decline and unfavorable online reviews in the same way that dated décor, frayed carpets, or poor wall coverings can detract from the guests’ satisfaction.

With a modern, unified property management platform, revenue enhancement opportunities can be automated to include early- and late-checkout offers, upsell discretionary amenities, sell mid-stay cleans, and offer additional nights to bridge orphan nights between reservations. As we all recover from the COVID-19 recession, most property managers are eager to maximize every opportunity to grow revenue per stay.

Rival Properties Are Stepping Up

As 2020 began, who could have foreseen the challenges that the rest of the year would bring? We learned that flexibility and the ability to develop and execute contingency plans is vital. We must avoid getting boxed into one technology. A modern, open, and unified property management platform will grow with a client’s property so that new software tools and hardware products can be seamlessly integrated when the time is right. This season’s project may be adding smart locks and digital thermostats. Next year, the property might add leak and noise detectors. Closed systems require management commitment in such an inflexible manner that they are an anathema in the face of uncertainty. Unprecedented times require flexible systems that grow with opportunity and respond to change.

Just as primary homeowners are investing in automation, so are your competitors. Guests expect a digital property book, updated physical and Wi-Fi access codes, local information, and other details on their phones before they arrive. They will consider having to call the front desk an intolerable inconvenience and a sign of the property manager’s indifference.

Labor Shortage Is Real Although reported nationwide unemployment is still high because of COVID-19 shutdowns, many vacation areas are desperately short of labor. Effective property managers will be looking for technology solutions that allow for the efficient deployment of labor throughout the property. Time spent by the front desk, maintenance, or housekeeping traveling to units across town or to other floors constitutes hours not spent on more important customer-facing interactions. A modern, unified property management platform will give the property managers real-time access to asset and personnel status, saving multiple person days every week.

Openness and Flexibility Is Key

Everyone knows that technology boosts revenue and drives efficiency. The COVID-19 experience has taught us that simplicity, focus, and flexibility can be harnessed to make achievement of those goals both possible and probable. “Life is short” is a cliché for a reason. Now is the time to take the steps to secure the future, whether we return to a new normal or continue to live in crazy but interesting times. VRM Intel Magazine | Summer 2021

The #1 Trusted Data & Analytics Provider Key Data is the trusted data & analytics provider of real-time vacation rental market data for the short term rental industry. Through seamless integrations with property management systems, Key Data provides business intelligence tools which replace hours of compiling spreadsheets and provides property managers with accurate, reliable data that is anonymized, confidential, and trusted.

1,600+ Property Managers Track & Improve their Performance with Key Data

KeyDataDashboard.com 64

VRM Intel Magazine | Summer 2021

Sales@KeyDataDashboard.com

Data Lessons from the Pandemic

AND New Vacation Rental Data Standards By Melanie Brown, Key Data

xperts in many fields, from economics to health care, have referred to COVID-19 as an accelerator that escalated shifts in societal behavior. The pandemic has certainly accelerated the growth and maturation that was already happening within the vacation rental industry.

The pandemic also sped up the sector’s increasing dependency on vacation rental performance data. VRM Intel’s first Data and Revenue Management (DARM) conference in 2019 marked a significant change in the industry’s reliance on and attitude toward data. In March 2020, vacation rental managers realized that access to comparative benchmark data is essential. The increasing use of data in important business decisions means data providers must reliably provide actionable and high-quality information. Using examples from around the United States, below are the new standards for vacation rental data.

ing a reservation and arriving was 57 days. For the same weekend in 2020, that window dropped to 12 days. This influx of bookings caused the weekend’s paid occupancy rate to increase by 11 percent in just three days.

When performance changes this quickly, you need up-to-date data as soon as you sit down at your desk in the morning.

Overnight Changes in Gulf Shores and Orange Beach, Overnight Changes in Gulf Shores and Orange Alabama upon Beach Reopening Beach, Alabama upon Beach Reopening Daysbetween betweenBooking Bookingand andArrivaL Arrival Days 57

27%

1. Updated daily Until recently, hospitality data sets were reported on a weekly or monthly basis. But when travel advisories, local regulations, and renter sentiment change overnight, the five-day wait before your next data update seems like an eternity. One example is how quickly reservation activity for Gulf Shores and Orange Beach, Alabama, changed when the beaches reopened on May 1, 2020. New reservations immediately spiked for the following weekend. For the first weekend of May in 2019, the average time between a guest mak-

Adjusted Rate AdjustedPaid Paid Occupancy Occupancy Rate

16%

Week of 5/4/2019

Week of 5/2/2020

Week of 5/2/2020 as Week of 5/2/2020 as of 4/29/2020 of 5/2/2020

VRM Intel Magazine | Summer 2021

2. Insight into actual occupancy rates Old-school vacation rental revenue management tended to prioritize high occupancy rates. Now, most revenue managers have shifted to balancing the Big Three: occupancy, average daily rate (ADR), and revenue per available rental (RevPAR).

The pandemic also accelerated the need to have a deeper understanding of what “occupancy” means. Calendar occupancy shows how many nights are unavailable to book. What it fails to show, however, are the non-revenue-generating nights such as owner stays, nights blocked for maintenance, orphan nights between stays, or even cancellations.

should give you the ability to look at market data by segment or even by custom competitive sets.

RevPAR Increases for Houses, Decreases for Condos R evP A R Inc reas es for Hous es , Dec reas es for C ondos Summer 2020 vs. 2019 S ummer 2020 vs . 2019 RRevP AR evPAR F lorida - Hous es

RRevP AR evPAR F lorida - C ondos and Apartments

Florida - Houses

Florida - Condos and Apartments

$183

$108

$106

Summer 2020

Summer 2019

Summer 2020

$172

During the pandemic, historically safe assumptions about how often a unit would be used by the owner, hold nights, or cancellations are no longer relevant.

During April and May of 2020, the owner occupancy rate in Big Bear, California, was 41 percent, up from 14 percent the previous year. Hold occupancy rates in Telluride, Colorado, increased from 20 percent to 47 percent. The number of canceled nights in Nashville increased from 20 percent in 2019 to 79 percent in 2020. If you intend to use market-level performance data to benchmark your inventory against your competitors or create revenue estimates for potential owners, make sure your data source considers the nuances of the overall occupancy rate.

Owner Occupancy, Hold Occupancy, and Cancellations

Owner Occupancy, Hold Occupancy, and Cancellations April April and May 2020 vs. and 2019May 2020 vs. 2019 Owner % Owner Occupancy Occupancy % Big Bear, CA

Big Bear, CA

Hold % Hold Occupancy Occupancy % Telluride, CO

Telluride, CO

41%

% Canceled Nights Nights Nashville, TN

Nashville, TN

79%

47%

20% 14% 20%

April and May April and May 2019 2020

3. Market segmentation The past year has reminded us that just because one segment of the market is performing well does not mean that every segment is. As the perception of risk, group size and composition, and destination activities have evolved, the variation in performance between types of units has grown.

One of the most acute examples of performance differences in segments of the market can be seen between single-family homes and condominiums. During the early stages of the pandemic, booking activity for condos was much lower than for houses. Most likely, this was caused by renters assuming that single-family houses reduce the amount of contact with other people. In Florida, between June and July, RevPAR increased by 6 percent for houses and decreased by 2 percent for condos and apartments compared to the previous year. Overall statewide RevPAR increased by 3 percent. If your inventory is primarily condos, looking at data for the entire market could lead to false expectations for your units’ performance and to poor revenue management decisions. Your data provider 66

VRM Intel Magazine | Summer 2021

Summer 2019

4. Hyperlocal data Similar to performance differences between unit types, performance differences between markets have also increased. Local regulations, changes in travel preferences, and shifts in traveler activities have benefited some destinations while harming others. Even for similar markets within 20 miles of each other, year-over-year changes in performance vary considerably. Breckenridge, Keystone, and Vail are all relatively close together in Colorado. However, their changes in ADR versus last year are quite different. For December through February, the ADR for rentals in Breckenridge was $15 higher than the prior year. Keystone increased even more, by $32. But in Vail, the ADR declined by $14. Although it might be tempting to group all three markets together (which would show an increase of $21 for the region), that would not reveal the dramatic differences between the destinations. To help you stay competitive and make informed revenue management decisions, you should be able to track data at a number of different levels, including your own town or neighborhood. As the vacation rental industry continues to become more sophisticated and make headlines, so should our expectations of our data providers. At a minimum, expect your reporting tools to include daily updates, insight into types of occupancy, market segmentation, and hyperlocal data. If they don’t, you won’t have the information you need to stay at the top of your game in an ever-changing environment.

Changes in ADR for Colorado Ski Markets

C hanges in R ates for C olorado S ki Markets December - February 2020 vs . 2019 Dec ember - F ebruary 2020 vs . 2019

Breckenridge $393

Keystone $336

$408

Winter 19 20 Winter 21-20

Vail $629

$615

$304

Winter 19-20 Winter 21-20

In-House IT?

Why You Should Have an Information

Technology Leader at the Table

echnology growth and consolidation in the vacation rental industry have exploded over the past five years. In a market where there were only five to ten core property management system (PMS) providers, there are now over a hundred. Some older players have left the market, while others were acquired or sunset. There are also multiple providers who offer only pieces of the comprehensive functionality that legacy enterprise PMSs provided in the past. What the current systems do (or do not do) is diverse and complicated. Understanding how all the different solutions integrate and knowing who to call when something is not working is no easy task. With technology playing an increasingly strategic role in the vacation rental marketplace, it is important that companies make the right technology decisions.

Many companies grew with a core team of operators and made their technology decisions along the way based on what was available at that time rather than on a long-term business and technology plan. Hiring an IT lead as a permanent member of your business team is an important and strategic decision that can help your company grow to the next level.

An issue for small- and mid-sized businesses is whether they are making the right technology decisions and making the best use of their current technologies to grow their business while increasing efficiencies and improving employee, owner, and guest experiences. Growing technologies like mobile, cloud, robotic process automa-

By Wendy Glover

tion, and artificial intelligence can provide opportunities to serve customers in new ways—and those opportunities are easier to spot with an IT person embedded on your team.

An IT leader who understands your business, not just technology, is imperative. They need to be part of the budgeting process, involved in developing your strategic plans, engaged in marketing and business development projects, and fully versed in how your business operates day to day. They should map the entire customer journey (guest and owner) and work with you to determine the areas for improvement. A dedicated IT leader can help you navigate all the options and work with cloud providers, vendors, and outside contractors. Someone once told me that their PMS system took only 1 percent of their time to support but 100 percent of their time when problems arose. Are you willing to step away from running your business and serving your guests to fix an outage? An IT leader will know how to negotiate a contract with a cloud service provider that includes all the uptime, redundancy, failover, and security requirements to support your operations with penalties for outages or breaches.

How much should a property manager spend on technology? According to a Flexera 2020 survey, the average IT spend across all industries is 8.2 percent of revenue, with an average of 18 percent VRM Intel Magazine | Summer 2021

SOFTWARE

24.7%

TECH HOSTING

15.9%

financial services weighted average services retail & ecommerce

10.0% 8.20% 6.7% 6.2%

consumer products

5.9%

transportation & logistics

5.3%

healthcare

5.0%

industrial products

IT SPEND BY INDUSTRY % of revenue

4.1% Source: Flexera 2020 State of Tech Spend Report

of that spent on cloud-based technologies. Compare that to your spend to see if you are investing enough in your company’s success.

What Type of Role Should You Hire? IT has almost as many disciplines as medicine. When you are sick, do you need a general practitioner, a physical therapist, or an orthopedic surgeon, and how do you know? Your business might require the assistance of these technology roles: end user support, help desk technician, network technician, network engineer, systems administrator, systems engineer, database administrator, telecommunications technician, developer, cybersecurity engineer, IT manager, and more. A senior lead on your team will know which type of support your company needs and who to contract or bring onto your team.

Suggestions for Finding the Right Leader Hire Someone Who Speaks Both Languages A pure information technologist will not understand your business. Someone who has worked in the vacation rental industry in technology or technology consulting will be a better fit.

Hire a Senior Role The position needs to have an equal voice on the management team. They should be able to communicate well and explain technology in a nontechnical manner, including the benefits your operations will gain. They need to be able to negotiate with vendors, maintain strong vendor relationships, and possess a strong customer service mentality. Hiring someone in the $40–$50K salary range, depending on your location, is not going to get you the skills you need. Use Salary Monster or other online hiring tools to find the appropriate salary range for your market. If this level position is not in your budget, consider a part-time role who still sits at the executive level. This is sometimes called a virtual CIO.

Check Their References This is so simple but people often forget to do this. An IT résumé 68

VRM Intel Magazine | Summer 2021

may look impressive, but the reality may be different. Talk to prior employers or customers. Technologists can be great on systems but hard to integrate into a team. Look for experience in both areas.

Give Them Some Rope Even a seasoned professional will need to learn your unique business model and operations. They need time to watch and learn. If you can, put them through a two-week boot camp during which they work a few days in each department. Do not expect big results immediately.

Measure What Matters Each department has different goals. IT is not going to have a business development goal. Track project successes, on-time or under-budget delivery, cost savings, and new efficiencies. How they control and contribute to change management (which is a whole other article) should be a priority. Employee satisfaction with IT services is a good measure as well.

Strategic leaders at growing companies know the challenges they face and the outcomes they hope to achieve, but they may not know all the options for getting there. Technology is now central to building a strong company, but the technologies themselves have become more complex and difficult to understand. To keep pace with fast-moving solutions, you need a technology leader on your business team. 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, technology recommendations, custom reporting solutions, M&A preparation and staff supplementation. With a business degree and a background in technology, she has worked in the vacation rental industry progressing her 20-plus year career through the many management changes of Abbott Resorts, ResortQuest, Gaylord, Leucadia, Wyndham, and Vacasa. She lives in Santa Rosa Beach, Florida, where she takes full advantage of the beauty of the Emerald Coast.

THINKING OUTSIDE THE (IN)BOX Email marketing ideas for today’s economic climate

Jennifer Perez, Production & Content Specialist, Bluetent

he world of travel is opening again. With COVID-related restrictions lifting and vaccine distribution expanding, the public is hungry for travel—and they’re booking vacation rentals. Our industry is seeing record numbers of reservations. To ensure your brand is in front of today’s eager audience, you need a strong marketing strategy. But to address our new economic climate, you also need to shift your marketing message. Ryan Austin, Bluetent’s director of email marketing, and his expert team have helped clients successfully pivot their email strategy for the new challenges presented in 2021. Austin has identified two marketing concepts that all vacation rental brands should consider implementing for the summer—and beyond.

Shift your focus to book remaining inventory and promote engagement. In recent months, Austin’s team has worked with many managers whose inventory is almost fully sold out. Often the remaining inventory has been lower tier: properties that aren’t particularly photogenic or suitable to feature in an email newsletter. However, having only little (and possibly unattractive) inventory left to book doesn’t mean you should stop sending emails; it’s important to continually keep your brand in front of potential guests. With a slightly different approach, one concentrating on experience and amenities instead of on actual inventory, Austin’s team has developed email campaigns that have garnered reservations for his clients’ remaining available properties. Instead of typical monthly e-newsletters, the team has launched single-message postcard emails playing to the fear of missing out (aka FOMO). “Book Now, Inventory is Filling

Fast” and “Summer 2021 Vacation Alert” emails are driving bookings successfully, regardless of their listing desirability. And although it sounds outrageous, emails promoting future vacations—for the 2021 holiday season and even into spring 2022—are yielding transactions.

Another email strategy to drive engagement and keep your brand in front of travelers is to revisit the inspirational messaging that proved so successful in 2020. Invoke nostalgia or excitement with email postcards featuring rich photo and video content that reminds potential guests that “the beach is waiting” or “the mountains are calling.” Educate travelers about the beauty and recreational opportunities in your region by linking to in-depth articles or blog posts. Encourage subscribers to “give the gift of travel” with special offers and rewards. Run a photo contest. The possibilities are endless, so be creative!

Drive owner acquisition efforts with automated email campaigns. Given the current popularity of vacation rentals and the scarcity of inventory, Bluetent’s client base is increasingly turning its marketing efforts to acquiring more properties. A successful owner acquisition campaign starts with driving traffic to the property management page on your vacation rental website, but it certainly doesn’t end there. Capturing homeowner contact information comes next, and most importantly, capturing their attention must follow. Capturing homeowner information can be as simple as including a contact form link on your property management web page. However, Austin and his team have seen consistently higher conversion rates by using carefully deployed “pop-ups” to request contact information. Although frequently disparaged, pop-ups can be incredibly effective when used thoughtfully. Ensuring

your pop-up doesn’t interrupt users who are actively viewing your site is key. Providing relevant content—a pop-up associated with your property management page might offer additional information about partnering with your brand—increases the likelihood that a user will provide their email address.

After the email address is collected via a form or pop-up, an automated email journey kicks in to capture homeowner interest. Although every campaign is different, Austin’s team recommends an initial confirmation email followed by a series of educational emails (sent at regular intervals) that highlight your value as a property manager. This is your time to shine. Each email’s content should reflect your professionalism and feature one clear value in terms of partnering with your unique brand.

The opportunity to connect directly is a critical component to include in each email. Provide a link to schedule time with a company representative—and remember, the easier it is to schedule an appointment, the higher your conversion rate will be. Note that scheduling a conversation should stop the homeowner’s automated email journey. The automated campaign not only captures the homeowner’s attention but also provides you with essential data for refining future campaign messaging. A review of engagement via open and click rates for each email yields information regarding which of your value propositions are most important for potential homeowners.

Keep engaging! Remember—building your subscriber list will always be of utmost importance. Cultivating and nurturing an audience that sees you as a trusted advisor and inspirational host will never go out of style. Are you interested in fine-tuning your email marketing strategy? Our experts are here to help. Contact Bluetent at 970-340-4400. VRM Intel Magazine | Summer 2021

Influencer Marketing

Is Influencer Marketing the Right Tactic for Your Vacation Rental Business? By Jodi Bourne

crolling through online vacation rental marketing and management forums will quickly reveal the story of what many professional owners and property managers think of influencers—freebie seekers and scam artists who want a free stay.

Although there are thousands of freebie seekers who have no motivation in mind except to stay at a vacation rental and post a few photos, there are also plenty of influencers out there who will do exactly what they say—get eyeballs for your rentals, add bookings to the calendar, give you thousands of interested social media followers and email subscribers, and provide excellent lifestyle images and videos to use in your marketing. In other words, if you are receiving multiple partnership requests on Instagram from influencers, it is worth the time to investigate this marketing option for your rental business. These requests mean these influencers see photo opportunities and a chance to increase the value for their own brands by using your vacation experience as a backdrop. It could be a win-win for both of you.

Influencers are people who have authentic social media followings of fans who like and trust them and see them as experts. The relationship they have with their followers is so powerful that they can “influence” their buying decisions. You can compare it to celebrity endorsements, but in today’s world, influencers are celebrities to their audience, even if their audience is small. Yvette Strange, of Spoon Mountain Glamping, recently used an Instagram influencer who solicited her through her direct messages (DMs). She worked with the influencer, who specialized in food and unique stays, to help launch her three glamping tents in the Texas Hill Country. In less than a week, the 10-percent discount code given to the influencer had been used more than 45 times— nearly twice as often as Yvette’s own email waitlist. The influencer was able to use the content for a TikTok video that would help her build a TikTok following. When the TikTok went viral, the influencer and Spoon Mountain Glamping received even more followers and attention on both platforms. At last count, Spoon Mountain Glamping had increased their social media following from around 1,800 to more than 17,000, and their email list expanded by nearly 1,000 subscribers. More important, they booked 70

VRM Intel Magazine | Summer 2021

more than 150 nights, including every weekend for two months.

One common mistake people make when thinking about an influencer partnership is assuming the influencer must have millions of followers for it to work, but that’s not true at all. Many influencers, called micro-influencers, have fewer than 10,000 followers in specialized markets. What’s important is not the number of followers, but the relationship they have with their following and what they can persuade them to buy—or book! There are definitely some strategies for choosing the right influencer and knowing what to offer, how to pitch your property, and what to ask for in return. But first it’s important to understand what types of properties influencers are looking for and whether yours fits the bill. In my experience, most travel influencers are looking to work with properties that provide great visuals for their photo and video “stream.” They prefer a property that is in the right destination and price range for their followers and that is part of a unique experience they cannot get right down the street. You may consider working with other local travel brands to provide a full experience with your property as the home base.

Using influencers requires a partnership, and a good influencer will only partner with a business that is right for their audience. Remember, they have an image to uphold with their followers.

Choosing an Influencer There are influencers in all niches, and travel and food are two of the biggest, so you shouldn’t have any problem finding an influencer to work with. Think outside the box when choosing influencers, and most important, be sure to find an influencer who has a following consistent with your target audience. When an influencer reaches out, or you start searching for one on your own, first look at the number of followers and assess how much engagement they have. Typically, I wouldn’t choose an influencer with an audience of fewer than 10,000, though there are exceptions. Look for influencers who specialize in your region, type of property, or type of experience or those who have followers made up

of people likely to book your home. There are travel bloggers, YouTubers, and influencers for almost every region of the world. Some specialize in certain locations; some specialize in the type of experience, like Glamping; and some specialize in the type of travel—such as beach travel, family travel, historical travel, and foodie travel. You may also want to look for influencers who can speak to the experience you provide or the target market you are trying to attract. For example, if your Alaskan cabin is perfect for fishing, find a fishing or outdoors influencer on YouTube who will appreciate and share your experience—you may even want to partner with a local fishing guide. Last fall, Martie Jobe, cofounder at Happy in The Keys, worked with a mommy blogger to highlight opportunities for social distancing, remote work, and home schooling in her rentals. The goal of the partnership was less about bookings and more about the content she would get from the influencer—videos and still images of a family of five enjoying time in the water, taking lessons, and having lots of family fun in her amazing luxury properties. The influencer you choose should have an engagement rate of at least 10 percent on most of their posts—this means likes and comments. Likes can be purchased, so if you see someone with hundreds of likes, but few comments, they aren’t engaging with their followers—they are just providing entertainment. You want to see authentic relationships, which means comments back and forth.

Scroll through their post feed, stories, story highlights, and reels, and look at photos and read captions on Instagram. On YouTube, check the comments and replies as well as the total number subscribers; for TikTok, look at likes and comments on their videos as well as the follower count. If they are a travel influencer, make sure they are sharing photos of the spaces they are staying in. You want to see images of properties that look like yours—usually this means a special place or experience they can’t find right down the street. For example, if you have a luxury penthouse condo in the downtown area, you should look to see whether they have worked with the same type of experience. If their feed is made up of beach houses or ski condos, yours wouldn’t be the best fit. Next, inspect the photo and video quality. Do they have great photos of the places they have visited? Do they have lifestyle images of themselves or others enjoying the space? Are there too many photos of themselves and not enough photos of the property? What is their visual aesthetic—does it match or complement yours? One of the best reasons to invest in a top-notch influencer is the visuals they can provide, so look at their product and ensure it captures your brand’s vibe. Finally, read captions. How are they selling the places they are promoting? Are they providing calls to action? Are they asking questions and inviting people to comment? Are they tagging the property in their photos and mentioning them in the captions?

Once you have decided you like the look and feel of the influencer or influencers you’ve chosen, reach out to them or reply to their inquiry and ask for a media kit. Most influencers will provide something that details their monetary expectations, reviews from other businesses, their follower count and engagement rate, and previous brand partnerships. If they can’t provide this, don’t think it is a deal breaker. In fact, if they don’t have this in place, they may be an influencer who is willing to do more for less because they are trying to build their own influencer brand.

Working with an Influencer Remember, an influencer relationship is a partnership. You are giving them great content for their followers. You are the one with the amazing experience that will allow them to grow their following. They will be providing you with access to their following and with a seal of approval. First, make a list of what you want out of the relationship and what you are willing to give up. A professional travel influencer is not looking for a free weekend getaway. They are looking for partnership opportunities with brands that will appeal to their target market because they want to provide their followers with a great stay.

You should be willing to give up at least one night and day at the rental to give them enough time to photograph and video the property in different lights. If one free night interrupts your normal booking schedule and you have it to give, offer a second night as well. However, a professional influencer will usually want to be paid beyond the free night. Remember, they aren’t on vacation—they are working. You will also want to provide them with all the extras you usually give your guests, so they can share that experience with their followers. Usually travel influencers are great photographers, so make sure photos and/or videos are part of the negotiation. You need lifestyle images and different shots of your property, and they will provide you with views and angles that you may not have thought about before. Get something in writing stating that they will provide images and videos and that you have the rights to use them commercially.

Should you pay an influencer? If the influencer can provide you with evidence of solid numbers of bookings at similar properties and has references you can verify, then yes! Work together on how you will evaluate the value they provide. Give them a special link from bit.ly, a WordPress Plugin, or a Pretty Link, or give them a discount code, and—as always—be sure to ask guests when they book how they heard about you. Once you’ve worked with one influencer, you may be hooked! AnnTyler Konradi of Yurtopia Wimberley has worked with several influencers on both Instagram and TikTok and sees her bookings go up significantly after each stay. With a waitlist of more than 18,000 subscribers, she may not use an influencer for a while, but she is open to new ideas if approached.

Influence is a growing industry, and vacation rental owners and property managers should think about how they can add this exciting tactic to their arsenal. Although it isn’t right for everyone, and not every vacation rental will provide the requisite experience, if you have something unique and know it provides great visuals, it might be something you want to try this year. If not, think about ways you could partner with other local businesses, tourism boards, or CVBs to get your vacation rental in front of new eyes! Jodi Bourne is a digital marketing strategist, web designer and content creator with a passion for tourism. As the owner of a small consulting and web design agency in the Texas Hill Country, Jodi helps vacation rental owners market their destinations, attract better guests, and put more heads in beds. Learn more about Jodi at jodibourne.com VRM Intel Magazine | Summer 2021

The Truth

about Vacation Rental SEO

Sifting through Website Audits to Get to the Important Stuff By Jill Highsmith McGee

This website, with all its “errors” and issues, is one of the highest-ranking websites in our arsenal for a very highly competitive area. It not only ranks in the top three positions for the destination itself (many number-one rankings), but it also ranks for individual communities, condo complexes, and other areas—aka the money keywords, as we call them.

With over 3.5 billion Google searches per day, we know SEO is important. We know it drives traffic to your website “naturally.” However, the mystery is the how. SEO is not an exact science. It’s a compilation of experience, algorithms, and adapting to feed Google the right information so it favors your website. There are many misconceptions about SEO, and I'm here to answer the how (and how not) for vacation rental companies to help you evaluate your marketing efforts, both internally and externally.

The Old Tactics Still Work

hen I tell people I’m a search engine optimization (SEO) specialist, I see their eyes glaze over. I often resort to a short response of, “I get companies to show up at the top of Google.” We all know SEO is a vital part of every vacation rental company’s marketing strategy, but due to its technical nature, it is often left out of the water cooler conversations. Cut down to its basics, SEO is the discipline that increases your website's visibility in search engines for terms that are relevant to your product. When executed properly, it will increase qualified organic traffic, which will contribute to a higher click-through rate and more conversions.

You Can’t Rely on Tools to Do Your SEO The vacation rental industry is a unique niche when it comes to proper SEO practices. It does not follow the same road map as, say, a clothing company or restaurant, because the product being purchased is more of an experience than a tangible good, and its value is more heavily reliant on the demand of the consumer rather than the value of the product itself.

However, no matter what type of product you have, we consistently see PMs and other agencies rely on “scores” scores for page speed, scores for site audits, and scores from Google Search Console. These scores are guides. That’s all they are. They won’t make you rank better. Site auditing tools are extremely valuable to help you pinpoint your website’s strengths and weaknesses. However, fixing errors alone cannot make your site rank better. They should be used as a helpful guide, nothing more. It’s the interpretation of that data by a seasoned SEO specialist and the application of those methods to your website that increases your rankings.

Think of it this way: you are improving your “score” in order to pass a test. However, that “score” may only constitute 20 percent of your overall “grade” with Google. There are many important items to work on to rank.

 Action Item: Challenge your agency when they are solely working on “getting you a better audit score.” These are vanity metrics. Solely increasing your score is a waste of time and money. While audits are important, chances are, SEO pros should be working on something else to better your ranking unless they can specifically tell you why that particular item is important. For more info, check out http://www.icnd.net/scaretactics.

When optimizing a vacation rental website, there are three key factors: content, links, and accessibility but it all starts with keywords.

Define a Goal, and Start with Keywords

The first question to ask yourself is this: What is the intent behind my website? For vacation rental companies, it is to see conversions through bookings. The second question is this: How do I achieve this goal? The answer is by defining your audience, developing a strategy to attract them, and making sure your site is set up to allow for a seamless booking transaction when they do find you.

Although “rentals” or “vacation rentals” may be the biggest terms, they are market-dependent. For example, if you have a rental property with a water view on the Gulf Coast, it’s a “beachfront rental.” If it’s on the east coast or west coast, it’s an “oceanfront rental.” What about finding a rental in the mountains? That term is “lodging.” More quaint mountain town? “Cottage.” Let’s not forget about “cabin.” Are you Australian or trying to appeal to the Australian market? You use “accommodation” as opposed to “vacation rental.” Each of those terms has a different intent behind it, and each term has a different conversion rate. Finding the right one for your niche is vital.

These seem like small changes, but if your primary audience is searching for an “Oceanfront Beach Condo,” and you’re optimizing for “Beachfront Villa,” you will miss out on that traffic because you have it labeled differently. Yes, these terms all mean “vacation rental,” but keep in mind that the way travelers search largely depends on both the destination and where THEY are from.

Finding the perfect group of keywords to optimize your site for is potentially the most important component in your SEO strategy. 72

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When your marketing agency provides you with a list of keywords, make sure they are focused on your audience and what your brand is selling and not just your brand name.

Long-Tail Keywords

For smaller companies, the best strategy is to find a specific niche in the market (also known as long-tail keywords) that you can rank for, rather than focusing on broad, highly competitive words.

Once the niche is defined, create a dedicated landing page on your site. As an example, if you have several houses with private pools, build a page dedicated to that. Use tools like SEM Rush, Ahrefs, and Keywords Everywhere to create a list of long-tail specific keywords that carry a high search volume. For example, “large vacation rentals that sleep 30 or more” is extremely specific, but it has as much volume as some of the broader terms and optimizing for these keyword phrases will get yield high conversion rates. Keyword

Seed Keyword

Volume

large group vacation rentals

large rentals

480

cabin rentals for large groups

large rentals

390

cabin rentals for large groups near me

large rentals

320

large family vacation rentals

large rentals

320

large vacation home rentals

large rentals

320

large vacation rentals that sleep 30 or more

large rentals

320

large family reunion rentals

large rentals

260

When creating site content and doing keyword research, consider both desktop and mobile users. Long-tail keywords are becoming more valuable as speech-to-text technology becomes more popular.  Action Item: Ask your agency what keywords they are focusing on and "why." Are they going after any long-tail keywords? Ask them to research those you think would be good and report back with the search volume and your brand's current position.

Link Building: External and Internal

In the world of SEO, the one thing that shows a search engine crawler the value of your website is links from other high power authority sites pointing back to your site. Each quality link counts as a “vote.” The more quality “votes,” the higher you will rank. Creating diversified backlinks from various websites can sound like a grueling task, but it is not impossible.

External Linking

A great way to build domain authority and increase your Google ranking is to develop relationships with local businesses. Find local businesses where your content and audiences overlap, such as attractions, shops, restaurants, and so forth. Reach out to them to establish a mutually beneficial relationship where both websites and audiences benefit from the exchange of an external link. Your SEO agency should be working on establishing links to your website from other avenues such as articles and large publications, but local external link building can be done in-house and is extremely beneficial for your website's growth.

Internal Linking

Internal linking is vital to show search engines what content on your website is valuable. It is also important to keep users clicking around on your site, which increases session times and helps with ranking. With the right internal linking strategy, you can guide Google and your site users to your most important pag-

es. In addition, interlinking can also increase the SEO value of pages. Many times the homepage of a website carries the highest link weight because it has the majority of backlinks. When you add internal links to a page that has a high link value, that value is shared between all the links found on that page, and the link value inherited from that page will then be shared with all the links on the next page. Interlinking helps search engines (like Google) and users navigate your website to find the most valuable content.

EAT In the era of misinformation, EAT is quickly becoming a top-ranking factor in the Google Algorithm. EAT stands for “expertise, authoritativeness, and trustworthiness” and is referenced in the Google Rater Guidelines numerous times. Satisfy “expertise” by creating quality content users want and need. Answer all the questions they may have about your company or your rentals. Satisfy “authoritativeness” by building internal and external links. Remember, these links count as votes. The more votes you have, the more authority you have. Satisfy “trustworthiness” by getting reviews reviews on your website, reviews on Google, reviews everywhere you can! Diversify your review portfolio as well.

Properties Themselves Need SEO Love, Too “Because it is MY name!” Arthur Miller, The Crucible

This is crucial and can make or break a booking. First things first: naming the vacation rental home. Over the past two years, we've seen an increase in property pages as organic landing pages. This happens when potential guests type the property name into Google. Consumers are learning to Google the home names they see on Airbnb, Vrbo, and other OTAs. The #bookdirect education is working, and it’s important to leave breadcrumbs within your OTA listings to help potential leads find that book-direct connection.  Action Item: Google the names of your properties (with and without your destination name) and see where you stand. Your property pages should always be first. If they aren’t, you may need to structure those pages better or work with your agency to get them to rank better. URLs, meta titles, and page content (and plenty more) all play a role in ranking your property pages. Discuss these with your agency.

OG (Open Graph) Tags Optimize Your Social Channels

OG tags are specifically important for property description pages because they are shared on social media. These tags can be found in the source code and control how URLs are displayed when shared on social media. Have you ever shared something and seen the wrong photo come up or that the title is incorrect? That’s because the OG tags on the page are misconfigured or just plain missing. When you share a property page through your social channels, and the preview image pops up, showing consumers the content in an eye-catching glance, that is due to the proper OG tags. Without OG tags on your property pages, there is a good chance that an unrelated image will appear when your website is shared on social channels or that the description will be inaccurate, decreasing your click-through rate. If you want to test your OG tags, you can use the Facebook debugger tool: https://developers.facebook.com/tools/debug/ VRM Intel Magazine | Summer 2021

Proper Niche Keywords with Property Results Pages If done correctly, custom property results search pages within your website will become your main source of organic traffic. To rank for anything, you need to have a dedicated landing page. Remember how it all starts with keywords? Creating dedicated pages for popular search terms like “Pet Friendly,” “Oceanfront,” and “Ski-In SkiOut” will not only strengthen your site for those keywords but also give your website more authority as a whole.

Creating multiple search results pages for high-volume keywords is the ideal strategy to rank higher organically for those high-volume keywords. For example, if you have a lot of pet-friendly homes, you should have a dedicated search results page geared specifically to pet-friendly homes. Within this page, you will want to create pet-friendly specific content and link out to other popular amenity pages or helpful pet-friendly vacation landing pages you have created on your website.  Action Item: Make sure you have dedicated pages with related content for your top keyword variations.

Not All Traffic Is Created Equal We’ve seen agencies in the past tout the increased traffic numbers they have achieved, sometimes doubling or even tripling the organic traffic from the previous year. An increase in traffic does not always mean an increase in conversions. Ranking for “Best Ice Cream Shops in <your area>” or “Weather in <your area>” is great, but it does not bring in qualified leads to your website or increase your conversions, which is the goal. Think of the user who is searching for these queries: they are likely already in your destination and don’t need a vacation rental. It is important to create content for your guests’ experience, but keep in mind that this type of traffic does not equal more bookings. More site traffic doesn’t always equal better rankings. In 2021, all traffic is up everywhere. Evaluate your traffic-to-conversion ratio to determine how qualified and engaged your traffic is with your product. landing page

users

bounce rate

12,531 (21.17%)

19.95%

6,156 (10.40%)

70.71%

/blog/myrtle-beach-vs-north-myrtle-beach/

3,307 (5.59%)

89.97%

/north-myrtle-beach-vacation-rentals

3,008 (5.59%)

41.60%

/north-myrtle-beach-rentals

2,459 (4.15%)

47.47%

/oceanfront

1,911 (3.23%)

41.10%

/?_ga-ft=undefined

1,336 (2.26%)

15.57%

/blog/places-to-stop-while-traveling-fromohio-to-north-myrtle-beach/

1,180 (1.99%)

88.16%

/specials

1,077 (1.82%)

57.81%

834 (1.41%)

89.88%

/ /north-myrtle-beach-condo-rentals

/blog/towns-near-myrtle-beach/

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Blog posts are an excellent source of traffic and help build up authority, but looking at bounce rates and conversions, they aren't breadwinners. If you look at the property search results pages for condo rentals and oceanfront, you will notice a higher conversion rate.

There is also an argument out there that “content is king,” and having a lot of it strengthens your website as a whole. This is true; however, it needs to be the correct content. If your blog posts are primarily about attractions, for example, you are sending mixed signals to Google. We once removed an entire blog for a client as it was filled with short blog posts that weren’t related to the rental industry. Without any other work, within a few weeks, rankings started improving for rental-related terms. The website “as a whole” is more about rentals now.  Action Item: Ask for a year-over-year (YOY) landing pages report, or get it yourself in Google Analytics. Head over to Behavior > Site Content > Landing Pages. Look through what is there. You will see a mixture of blog posts (with no bookings) and your top search results pages (with bookings). You can do a YOY comparison as well. If most of your traffic comes from blog posts, look at the transactions you received from those posts and decide if it's worth the effort.

Does Having More Inventory and Availability Affect Your Ranking? This is a great question, and like most SEO questions, the answer is, “It depends.”

Post-COVID-19 travel has shaken up the vacation rental industry, and we can see those changes firsthand within the search engine results pages (SERPs). Every search engine has unique algorithms, but they all revolve around the same ideal, which is to provide the most accurate and actionable results to a searcher using their platform. Pogo-sticking is a coined marketing term that refers to a searcher quickly hopping back and forth between the SERP and the results it provides. In 2018, this ranking metric was debunked, but more recently, UX, or user experience, has surfaced as one of the top-ranking factors for 2021. One way for Google to quantitatively measure this metric is by collecting data on whether the user’s query has been successfully met by measuring how many times the user returned to the SERP to find a better source.

A recent trend we are seeing within the industry is volatility within the SERPs, which could be due in part to a rapid shift in rental availability on vacation rental websites. Google’s crawlers are not intuitive enough to know if your calendars are full, but they are intuitive enough to use contextual clues to determine if you have low inventory. This means if a consumer clicks on the link in the SERP to go to your website and hits the back button to go back to the search results page to continue searching, Google records that interaction as one wherein the “content/products” on your page did not satisfy that searcher’s query. We see this primarily in larger, competitive markets. The underlying ranking factors are still there and play a large role, however; with users bouncing back and forth between sites constantly, the “intent” algorithm is shaking things up. Although we can’t say that having more inventory will affect your rank on Google, we can say that longer session times and satisfying the searchers’ query do contribute to your rank.

It’s important to keep this in mind when looking at your data. If you have a large amount of organic traffic coming to your website but no conversions, first look at your availability. If everything is booked, do some comparative analysis with your competitors to isolate the variables.

SEO Is Like an Onion SEO has many layers, from creative to technical. Each business is unique, with multiple variables that affect its success online, which is why there is no one-size-fits-all digital marketing strategy.

 Action Item: Make sure your marketing agency is focused on both prongs of your business from generating vacation rental leads to property management leads. Work on optimizing your site for UX; these action items include page speed, a variety of well-organized inventory, an easy online booking experience, and an interactive live calendar that shows availability. Think of ways to keep them on the site, rather than pogo-sticking.

 Don’t let a site audit that emphasizes one small negative aspect of your site scare you. It’s perfectly fine to have errors (as long as the important ones are corrected).

Google My Business can be the first impression a consumer has of your brand, which makes it an extremely valuable tool. Optimizing your business listing on Google should be in the top five in the “How to Optimize Your Vacation Rental Website” handbook. To optimize your Google My Business listing, add geotagged photos, fill out all your information, post regular updates, and use keywords when possible. Google My Business is often overlooked but can increase your ranking to page 1 by earning a spot in the local map pack.

Reviews

If you have reviews that use keywords you’re trying to rank for, you will show up higher in the map pack. Solicit Google reviews by adding links in your email exchanges with previous guests.

The Technical Stuff We have only scratched the surface of SEO, but trying to explain the following items would require a much larger article.

Here are just a few technical items that your SEO specialist should apply in the strategy:

 XML sitemaps  Canonical tags  Crawl budgets  Thin content  Site architecture  Core web vitals  Structured data  301s, 302s, and 404s  JavaScript rendering  Toxic backlinks If I’ve already lost you, that’s okay; these things are boring, and you don’t need to know how to fix them, but your marketing agency should. We have seen websites tank due to one single line of code on a page that made Google think twice about its decision to serve it up as a top result.

Pro Tips

Google My Business and Maps

 Question everything every angle and more importantly, ask why. Why is the traffic like that? Why did you change that? Why do we need to focus on x instead of y?  Want to vet your potential marketing company? Ask them how much time they spend in Google Webmaster Tools (Google changed its name to Search Console a few years ago). Veterans in the industry should know that.  If your agency doesn’t allow you access to your own data, that is a red flag!

There are multiple factors that play a role in the optimization of a website, including website health, page speed, keyword usage, useability, location, linking, meta tags, site structure, and domain authority. A good marketing agency will handle all aspects of optimization from the technical to the creative.

The Bottom Line Everyone wants to show up on page one of Google, but as the market grows more saturated, that goal becomes more difficult to achieve.

By knowing these basic SEO tips and knowing what to ask your marketing agency, you increase your chances and give your prime audience a better chance at finding your products.

Jill Highsmith McGee is a digital marketing SEO specialist with almost a decade of experience in the vacation rental industry. She grew up in the world of property management in Florida, where her parents owned a small rental business, which helped shape her understanding of the challenges property managers face within the industry. After earning her bachelor’s degree in marketing from the University of West Florida, she moved to the Outer Banks of North Carolina. Her love of analytics, unique perspective, and industry experience brought her to her current role with Intercoastal Net Designs, where she works on multiple nationwide accounts within the vacation rental market. VRM Intel Magazine | Summer 2021

Vacation Rental Distribution

Are Third-Party Distribution Channels

Your Foe, Friend, or Frenemy?

M revenue.

y experience on this topic began with a foundation in the hotel industry where I saw distribution, revenue management, and use of online travel agencies (OTAs) become a big part of how we planned

When joining the vacation rental industry, I brought that experience with me. Initially, I ran my revenue budgeting and planning very similarly as I did when I was a hotelier because I simply did not know any different. However, I soon discovered the things I had learned from my hotel days also worked really well for vacation rentals. One of the biggest lessons that transferred was thinking about distribution as not just how much business is “allowed” from each channel but at what price and when. To create an effective revenue plan, distribution is a necessary part of that plan. 76

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By Michelle Marquis

In general, distribution channels include: B Voice C Your branded website D SMERF (not little blue people, but an acronym for Social, Military, Educational, Religious and Fraternal groups and refers to group business that falls into a social category) E OTAs, including several platforms and models (although we will only cover two)

Hotel-Style and Industry-Specific OTAs All OTAs are marketing platforms; they market your products to consumers who might not otherwise find you. In addition to the

reservations made through the OTA, property managers will also see a lift in direct bookings if they market and brand properly on these platforms.

those channels. Shift-sharing allows PMs to shift attention and marketing dollars to the most profitable channel(s).

What I like most about using these platforms for vacation rentals is that you can access exposure to new guests because the shoppers on these sites are typically hotel guests, meaning that the product is in front of someone new to the category of vacation rentals.

Part of their advantage is that they—Vrbo and Airbnb—understand their audience (your guests) even better than most of us do. Millennials want to stay in vacation rentals but also want to have an easy way to search, compare, and book. Their selection is larger, and their websites (including mobile sites and apps) are easier to use.

Traditional OTAs include Expedia, Booking.com, and TripAdvisor—let’s call them hotel-style OTAs. This is not an inclusive list, and many of the other OTAs are owned by one of these larger entities. Hotel-style OTAs charge a 15–25 percent commission.

In our industry, the industry-specific OTAs that we are most familiar with are Vrbo and Airbnb. Vrbo started as a listing site that delivered leads for guest stays, and then converting those leads was up to you. Some PMs still use this model with Vrbo, but most of the industry has transformed to a commission model where you pay part of the commission, and the guest pays part of the commission (via a fee). It is no secret that both Vrbo and Airbnb have started rolling out a commission fee of 12–15 percent to be paid by the property manager. What was once a very low acquisition cost is rapidly increasing.

I am unsure about whether these platforms bring new guests who were not already interested in vacation rentals; however, with their brands being so strong, it is imperative to include them. Luckily, these marketing platforms are fairly inexpensive (for now). Understanding acquisition costs related to OTAs is both essential to the business and to understand the rest of this article.

The last year has been an “E” ticket for the vacation rental industry. Approximately one year ago, I had conversations with a PM who believed that they were going to lose the business they loved. Many companies laid off team members they considered family and loyal employees, which meant that marketing budgets were slashed not only for PMs but also for OTAs. During the pandemic, travelers felt more comfortable driving someplace and staying in a vacation rental home or condo, which resulted in phones ringing off the hook with much of the industry seeing record-setting occupancy rates. Because most hotel-style OTAs’ revenue is derived from the hotel industry, they could not invest in marketing to the levels that they had invested previously. This was a coup for the vacation rental industry. The year 2020 was very profitable for rental managers in drive-to destinations that were allowed to have visitors, which led to record business combined with lower acquisition costs.

Bookings for vacation rentals in 2021 continue to outpace those in any previous year. Demand is higher than available supply in many markets (for various reasons, including more owner use), which leads us to wonder how property managers continue to capitalize from this environment. The answer is that PMs can capitalize in two ways: more inventory and lower costs (specifically, acquisition costs).

A Good Time to Shift-Share Acknowledging that obtaining more inventory takes time, PMs must do something I call “shift-share.” Shift-share means focusing on shifting from a more expensive channel, such as some of the more expensive OTAs, to a less expensive channel. I will admit that this is a slippery slope because many OTAs offer benefits for having availability year around. Strategic channel management will help keep inventory yearround but lower conversion on those sites by increasing rates for

The vacation rental industry also has another headwind; Expedia, Airbnb, and Vrbo specifically have returned to investing in marketing—including performance marketing and TV advertising—taking the lead position on where to book vacation rentals. The foot race to own the vacation rental category is ongoing, and the budgets of these brands are substantial.

The vacation rental industry is unique. Every destination is different, and in most cases, every home is unique, which is not something that can easily be commoditized. We do have the upper hand regarding our product and brand.

So how does a professionally managed vacation rental company compete with Goliath? B Plan in advance how much from each channel you want to capture. Understand your true costs for each channel. C When you list with OTAs, ensure you are branded at every opportunity. D Once guests from a channel stay with you, own them for all future stays. E Own your brand in your market. Most vacation rental destinations are in drive markets, which means you can carefully target (without huge expense) those potential guests. Ensure you are well represented at your brand and destination levels. F What does conversion look like on your website? What can you do to increase that? Does your marketing company work with you on strategies to improve conversion? G If you are still not mobile-friendly (not mobile-first), you will lose bookings. Make mobile search and booking easy. H When you are investing in PPC, ensure that you truly understand how you are investing every dollar. Dig into each campaign, and make sure you are not overspending on keywords that are not converting. This is an ongoing effort. Many destinations are already full for summer, so ensure that you are utilizing, targeting, and booking through the most profitable channels for any remaining inventory. Next, start working on the future. I hope 2022 is another record-breaking year for all of us, but I suggest that everyone look at their channel costs this year to make sure next year is as profitable as possible by participating in shift-share. As a former hospitality operator, Michelle has first-hand insight into the challenges facing hotels, resorts, and property managers. This gives her the background to understand how technology can help give operators a more scalable, profitable, and efficient business. Michelle helped to create the industry’s use of lead management and CRM, and her work has made a tremendous impact on many of the fastest growing and most respected hospitality organizations. She joined TravelNet Solutions in 2021 where she heads up revenue and marketing. TravelNet's ascension from a single product company, many years ago, to a market-leading technology company that offers a complete solution from creating consumer demand to managing all of a property’s operations, supported Michelle's personal goals to help the vacation rental industry to see all its potential.

VRM Intel Magazine | Summer 2021

Revenue Management Execution & Technology Vacation Rental Managers Find Themselves Having to Piece Together Technology Systems to Execute Revenue Management Strategies By Emily Pattillo

n business and life in general, they say to avoid extremes. Make a solid plan, make corrective adjustments, but stay the course and “fly in the middle.” Because 2020 was a year of extremes, it did not afford us that option. The pendulum swings were both swift and wide. Extremes in bookings, demand, staffing, politics—you name it, we experienced it. As we reflect on this past year and get excited to see each other in person again at the upcoming Vacation Rental Data and Revenue Management (DARM) Conference, it’s important to really take a look back internally and identify our biggest challenges so we can ask the right questions and get the answers that we need. We all have experiences to share. We all have had horror stories, success stories, and likely plenty of aha moments along the way. We all have something to offer, but more importantly, what do we want to learn from each other? What do YOU want to learn the most? 78

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Revenue Management Strategy Revenue management in the vacation rental industry is an amalgamation of many different moving parts including distribution, pricing, digital marketing, and reputation management. Throw in the seemingly infinite metrics and data points, some of which the industry can’t even agree on, and vacation rental revenue management gets complicated pretty quickly. But how do you eat an elephant? One bite at a time. So, we’ve been breaking down and analyzing our strategies and processes to find out what worked this year, what stood the test of time in extreme climates, and what we completely abandoned. Like you, we learned a lot at Casiola this year. Some lessons were forced out of necessity, some were happy accidents, some were intentional wins that knocked it out of the park, and others were failures we had to abandon quickly. We learned that no matter how

much we think we know, we have to stay humble. If something is working, exploit it. If something is not, quickly move on. At the DARM conference in August, we’re looking forward to sharing our experiences and hearing what strategies worked (and didn’t) across the industry.

Execution Each of these strategic components is fundamentally important to the revenue management process. However, the best strategies in the world are only as good as a company’s ability to execute them efficiently.

gies and our ability to execute them, we do not evolve as a company or an industry.

“Whether it is your website, booking engine, pricing technology, PMS, channel manager, or the channels themselves, now is a great time to take a hard look over the past year and evaluate your weakest links.”

More often than not, I find myself creating strategies around my ability to implement them, which feels like uncomfortably working backwards.

We are only as fast as our slowest component and only as strong as our weakest link. From a conceptual perspective, this is true for almost any category in any business. To use an analogy: What purpose does it serve for a restaurant to create the fairest seating arrangements for their servers if the hostess isn’t properly trained on table numbers? Everything we do, start to finish, we should do with intention. However, even with the best intentions, failure occurs. Evaluating each and every step of our processes—and our tools— and their effectiveness is paramount.

Careful Evaluation of Technology For vacation rental revenue management, we have recently experienced incredible technological advancements, but we also still have significant limitations. It is no secret that, with so many moving parts and our industry’s relative youth, software systems have yet to come up with a full solution, start to finish.

How many metaphorical “hands” does one reservation go through from start to finish? Until product evolution produces a more comprehensive solution for our processes, most of us find ourselves piecing various components together. And what happens when one of your software components doesn’t completely align or integrate with another? Layer in a workaround!

The more complicated your strategy or process, the more layers and even additional software products need to be added. A perfect full solution is something we just do not have. Instead, it feels like there are an overwhelming number of “perfect partial solutions,” almost to the point of tech fatigue.

Whether it is your website, booking engine, pricing technology, PMS, channel manager, or the channels themselves, now is a great time to take a hard look over the past year and evaluate your weakest links. What parts of the process didn’t hold up under pressure or with rapidly changing dynamics? Were there components that required a disproportionate amount of company resources? Maybe you had to contact support too many times, sacrificing resources from your reservations team, which resulted in lost revenue from missed booking opportunities. Find your weakest links and cut them out, replace them, or fix them. In my experience, most technology vendors are more than willing to collaborate with property managers and value their input regarding product features. If part of their product isn’t working for you, tell them. There are brilliant minds out there eager and willing to build and adapt their products to your needs. Sometimes it takes longer than we want or requires a bit more nudging. Sometimes the squeaky wheel gets the grease, and sometimes it requires a ton of persistence. However, if we don’t constantly try to better our strate-

Here’s a great example. Our pricing software supported a dynamic minimum LOS (length of stay) strategy we wanted to implement, but our channel manager did not. Again, what good is developing a strategy if there is no way to execute it? We had two options: abandon the strategy or try to collaborate with our channel manager to find a solution. After tons of troubleshooting, together we were able to find the core issue, and they agreed to write the software fix. Had we not brought this up, we would have had to abandon our strategy. Had we not pushed so hard, it might not have been known that this issue existed for us.

Collaboration with Other Property Managers As we all navigate through the pandemic, collaboration is key. This includes collaboration with our vendors and among ourselves. Is there another property manager that has the same technology mix that you do? Just like vendors, most property managers, so long as they are not direct competition, are willing to share pain points and solutions. How often do we listen to someone speaking and immediately tune them out because “they don’t use our PMS” or “my channel manager doesn’t have that issue” or “that’s a great solution, but my PMS won’t connect to it”. If you find someone who uses your same software mix, the conversations become infinitely more advanced and useful.

I recently had a one-hour phone conversation with another property manager who asked me to explain my pain points. Thirty seconds into my spiel he said, “Now, I’ll just stop you right there. This is your problem . . .” He had cultivated relationships with all the same vendors I had and had exactly the same issues. He told me how he solved the problem, potentially saving me months of trying to figure it out on my own. We were able to compare what worked and what didn’t and take each other through each of our processes start to finish to get fresh, yet experienced eyes on it. That’s the beauty of networking, folks! Now that we have conferences again, take every opportunity to get to know as many other people as possible and look for similarities in tech usage.

OTA Channels and Mix This year was perfect for both highlighting and exposing what did and did not work. However, what did and did not work might be different than what is and is not working. For some markets, it was a climate of feast or famine. It is important to document which processes, including all of the technological applications involved, worked and did not work in each scenario. We might be feasting on bookings now, but let’s not forget how we navigated the famine. VRM Intel Magazine | Summer 2021

This is a great time to take a look at our distribution strategy and evaluate what changed in our channel mix year-over-year. Are you happy with your distribution matrix and the process involved? Have you taken a deep dive into each channel and analyzed the costs and benefits of each? Was there a certain channel that outperformed? Was there a channel that fell short? How did this affect your channel mix ratios? Were you able to execute revenue management strategies and take advantage of promotions on each channel? At Casiola, when the pandemic hit, we were quick to leverage what was working on each channel and what was not. Whether it was a cancellation policy change or a channel promotion, we evaluated what was driving bookings and focused our energy on the levers we could pull to increase them. It forced us to look at our metrics on a granular level, focus on what brought in the volume, and thin out what did not.

However, this was a double-edged sword that created a problem for us over time. By forcing a disproportion in our distribution, we put too many eggs in one basket. It was necessary at the time to find bookings wherever we could, but when the dust settled, it was imperative to move back to a healthier channel mix. Too much leverage in any one channel creates vulnerabilities because having too much third-party influence over your revenue simply is viciously dangerous territory. It was important to create a healthier mix. As long as we maintained a healthy ratio, we could put effort into growing each channel more. With a combination of our pricing software and channel manager, we were able to throttle back bookings in the overactive channel but not cut them off. This afforded other channels access to our inventory the other was previously taking up.

Did you have a channel that outperformed the others in your market? Which ones did not, and why do you think that is? Was there a strategy that you used that had an impact on a certain channel? How do you reestablish a healthy balance when the scales tip too far to one channel? What do you consider a healthy balance and why? These are all questions to reflect on.

Data Usage We could fill an entire VRM Intel Magazine issue discussing data alone. After all, data is the cornerstone of revenue management. Our industry’s challenge is not with the lack of data, but with using it effectively, determining what is quality data and what is not, translating that data across multiple platforms, and having systems that are on the same page about metric calculations. I would simply implore you to find out where your data comes from. If someone provides you with data, where are they getting it from? Are they transparent about the sources? How granular are the metrics?

For example, when looking at the technology platforms you use for determining competitive (comp) sets and benchmarks, really find out whether you are comparing apples to apples. Perhaps the identical seven-bedroom home down the street is in your comp set, but it has a pool and yours does not. Is it truly a comp? Comps are most 80

VRM Intel Magazine | Summer 2021

certainly determined by more than data alone, but it’s important to understand what data is being used nonetheless.

If you use pricing system and they make a change in ADR for a certain time period, how do you know what has and has not been already calculated? Is there transparency? Or maybe they are only using market data to calculate your pricing, but you are already outperforming the market. Understanding what is being used will help you make better-informed decisions. Perhaps the most important question is whether you can access this data outside the platform and access it with ease. I recently heard this referred to as “data liberation,” which could not be more accurate. In a world of so many technological layers, we need to have a constant: our data.

In some scenarios you might not need to liberate your data because it has no use outside the platform. However, what if you are using more than one platform to make informed pricing decisions? Perhaps you use one tool for benchmarking, one tool for internal pacing, and another tool to implement pricing changes. It becomes daunting really quickly. What if that platform doesn’t have the ability to perform a function on its UI, but you know it’s fairly simple to do in Excel? How easy is this process?  Pro Tip: First determine the quality of this data and then determine if it will be held hostage.

Looking Forward This has been an interesting year with many curveballs. We were forced to face issues we didn’t expect. Processes involving everything from operations to technology to strategy were tested almost to the breaking point. Many of us had to develop entirely new processes or find creative ways to optimize our current ones. Tons of good came out of such a stressful time; it forced evolution in many ways. However, we are not out of the woods. Not even close.

It’s no secret the vacation rental market has become a dominant vertical in the travel sector during this time. Travelers have come to see STRs not just as a viable option for lodging, but in some cases, a preferable one. However, a substantial increase in market share for one vertical almost conclusively means a decrease for another. We will have a target on our backs, and we must continue to evolve both individually as companies and as an entire industry.

We must collaborate, educate, network, develop, and strategize, and we must not stop learning. I’m looking forward to seeing you at DARM and sharing our battle stories and experiences! Emily is a UCF alumna with over seven years of revenue management experience specifically in the shortterm vacation rental industry. With 300+ properties in central Florida, along with a new expansion to Aruba, Emily heads the Revenue and Listing Management Department for Casiola Vacation homes. Her department focuses on optimizing the company's revenue by leveraging technology, working with OTA partnerships, and developing reliable metrics for quick and reliable decision making.

@cbizvri

cbiz.com/vri 888-883-5696

Quizzing for Travel Preferences

Vrbo’s Vacay Finder, Facilitated by Wyng, Shows How Big Brands Are Collecting Zero-Party Data

By Wendell Lansford

hat day of the week is it again? With so many of us staying home because of the pandemic, it can be hard to keep track. A change of scenery to a tropical destination, a winter wonderland, or a temperate weekend getaway sounds pretty nice right about now.

Recent vacation rental booking activity shows that quarantine has given travelers a bit of cabin fever. Families are dreaming about their next big trip, and many are looking to plan a safe, stress-free getaway sooner rather than later.

The experience features unique answer displays, including both images and text to highlight answer choices. For example, the quiz starts with a map graphic of the US, with the names of each region overlaid on top. The visual aesthetic makes answering the questions less of a chore and more like a game.

Recently, Vrbo tapped Wyng to help keep its customers engaged during the pandemic and learn more about their future travel intentions. Enter the new Vrbo Vacay Finder, a micro experience built on the Wyng platform that provides individualized vacation destination recommendations based on a traveler’s personal preferences.

VACATION IDEAS FOR EVERYONE’S NEEDS Vrbo’s Vacay Finder, facilitated by Wyng, is a single-page quiz that starts with a series of four questions to gather personal travel preferences, including:  Regional location within the US  Desired season for a vacation

 Type of destination (city, beach, etc.)

As travelers answer questions, Vrbo gets a deeper understanding of their unique travel preferences and interests which then enables Vrbo to provide highly relevant, personalized trip recommendations both in the moment and in future interactions.

 The ideal level of activity

After finishing the quiz, users are asked to provide their names and email addresses and to opt-in to receive marketing email messages. 82

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The key to a successful quiz strategy is to continue to optimize, learn from the data, adjust to evolving restrictions, and adapt to the ever-changing digital consumer. Micro experiences like this allow brands to get to know their consumers better and provide them with the best possible experiences at each interaction.

THE ZERO-PARTY DATA (ZDP) OPPORTUNITY FOR HOSPITALITY BRANDS

The footer beneath the form is clear and easy to understand, and it includes a link to the Vrbo privacy policy.

Finally, the results page outlines a user’s personalized vacation recommendations based on how they answered the quiz questions. They can then share their outcome with friends and family via Facebook, Twitter, or email. The results page also includes a dynamic “Trip Board” section that allows friends and family to collaborate to create a vacation itinerary together. It then hyperlinks out to the Vrbo website, so users can finalize their travel plans and begin booking their trip.

As travelers scroll down the results page, they find a gallery containing all potential destination results. This allows users to explore other destinations without having to retake the quiz. Users can select filters or click on destination images for more vacation idea inspiration.

The clickable tags facilitate a continuous journey of discovering more local vacation opportunities. This unique section proved powerful, as the results showed that, on average, users explored two additional vacation experiences before leaving the page.

IMPACT AND THE FUTURE Vrbo found that Vacay Finder resonated with would-be travelers during the pandemic as nearly 80,000 consumers took the quiz in the first three months.

Vrbo Vacay Finder Micro Experience (80,000 in the first three months) 23% of visitors completed the quiz 25% of those who completed the quiz clicked to book on Vrbo.com 27% of travelers clicked “related recommendations” in the gallery

Data deprecation is a hot topic for marketers in hospitality. Waves of privacy regulations (like GDPR in 2018, CCPA in 2020, and CPRA, which takes effect in 2023) and tech platform restrictions (like the demise of third-party cookies and Apple’s IDFA) are cutting off traditional sources of data and disrupting widespread marketing practices. Vacay Finder points to a privacy-friendly solution: zero-party data (ZPD). Generally, ZPD is all of the consent-based personal context data—preferences, interests, tastes, favorites, plans, etc.—that customers intentionally and proactively share with a brand to improve their experience with it. By engaging travelers directly and asking them for their personal preferences and interests, along with consent, Vrbo obtains the data it needs to personalize customer interactions.

Forrester Research’s 2020 report, An Illustrated Guide to Collecting Zero-Party Data, stated, “ZPD gives brands a unique opportunity to not only learn more about a customer, but also folds that customer's input directly into her immediate and long-term experience. Tellingly, 49 percent of marketers say zero-party data is their most favored solution to data deprecation risk, according to Econsultancy.”

With the Vrbo quiz in mind, here are a few quiz idea starters for vacation rental companies:

Quiz Concept

Personalized Result

Travel personality quiz

Travel inspiration and destination discovery

Resort finder

Find the right resort for you

Itinerary planner

Personalize your stay

Depending on the concept, quizzes can reveal ZPD like who is actively planning travel, when they are looking to book, who will be traveling, the purpose of the stay, and preferred destinations and activities. Some of the data may be long-lived (e.g., the number of family members), while other data may be short-lived (e.g., timing for a family vacation). Hospitality companies can collect ZPD by creating quizzes, surveys, preference centers, and other interactive experiences—and then use the ZPD to provide highly relevant and personalized content, recommendations, and offers to customers.

Wendell Lansford is Co-Founder & CMO of Wyng. Wendell was previously COO & SVP at Systinet through the acquisition by Mercury Interactive (now HP), and CoFounder & CEO of Sitebridge through the acquisition by eGain and subsequent IPO. Wendell was also Director of Technology at Conde Nast Digital where he launched Epicurious.com and other early web properties. He started his career as an engineer at Bell Communications Research. He holds a MS from Carnegie Mellon University.

VRM Intel Magazine | Summer 2021

Memories Matter

By Chris Taylor

HELP YOUR GUESTS CREATE GREAT MEMORIES TO MATCH THEIR GREAT EXPERIENCES 84

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guest’s memories of a vacation can be different from their true experience and are sometimes shaped by a single event. That is why it’s critical to understand the guest’s journey and how you can help shape it.

Daniel Kahneman, Nobel laureate and creator of the theory of behavioral economics, spoke in a TED Talk about the riddle of experience versus memory. Mr. Kahneman tells the story of a lecture attendee describing his experience of listening to a symphony recording. It was glorious, but at the end there was a dreadful screeching sound. The person said, “It ruined the whole experience.” But it hadn’t. It ruined the memory of the experience. He’d had 20 minutes of beautiful music, but because he was left with a ruined memory, they counted for nothing. “The remembering self is a storyteller. Our memories tell us stories, that is what we get to keep from our experiences,” Mr. Kahneman said.

of others are thinking the same thing. We can give you advice on how best to manage the crowds.” Feed that enthusiasm, and make the inquiring traveler feel that they’re making a great decision by staying with you.

BEFORE THEIR ARRIVAL In the Netimperative article, “Consumer frustrations with travel marketing: Gen Z want more tailored offers,” 25 percent of consumers said they would be more loyal to travel experience providers if those providers understood consumer needs. Lauren Boyer, marketing manager for Holiday Beach Rentals, personalizes the guest experience, in part with prearrival emails that get their guests excited and ensures they know about the special things that will make up their experience: “7:00 p.m. on your balcony you’ll see an amazing sunset” and, “Don’t forget the wet bar.”

UNIQUE AND DELIGHTFUL MEMORIES FUEL GROWTH Vacationers want to have a happy experience on their trip, and vacation rental management companies want their guests to have happy experiences during their stay. This seems like a perfect match, right? Well, experiences and memories can be a funny thing. Marcel Proust wrote, “Remembrance of things past is not necessarily the remembrance of things as they were.”

Simon Lehmann, one of the foremost experts on short-term and vacation rentals, said in a Slick Talk podcast with Wil Slickers, “30 percent of US travelers rent a [vacation rental] property for their vacation.” He goes on to say, “Uniqueness needs to be lifted. If we want to address the 70 percent of US travelers who don’t rent, then we need to deliver something better than just a furnished place.” That means a unique property and an experience that you will not get anywhere else. What can you do to help your guests have great experiences and make great memories? As you think through the guest’s journey, examine each of your interactions with them, and consider how you can minimize the screeches and maximize the glorious music.

HELP YOUR GUESTS CREATE GREAT MEMORIES ON THEIR JOURNEY THE RESEARCH AND BOOKING STAGE The study, “Vacationers Happier, But Most Not Happier After a Holiday” in Applied Research Quality Life found that vacationers experience a significant boost in happiness during the planning stages of their trip because they’re looking forward to the good times ahead.

As travelers research, they are deciding between different locations through a mix of big-listing sites and local property managers. They are researching pricing, excursions, attractions in the area, and flight or driving information. How can you delight guests at this stage? Provide engaging images and content on your website and listings that make future guests feel as though they’re already there. The customer journey and the overall experience with your brand begins here. Start building your rapport now. Feed their enthusiasm with honest information. “What’s it like during Christmas?” is surely a common question for vacation rental managers (VRMs) in Florida. Confidently describe the good and the bad: say, “Yes, Christmas is the best time to come, everything is decorated, and you’ll have an amazing holiday experience. But a lot

Get your guests excited as their vacation draws near. Boyer says an open line of communication for last-minute questions is important. There are so many common questions that guests have: “Do I need to bring my hair dryer?” “Do you provide sunscreen?” “How deep is the pool?” “How far is the beach? I want to know if it will be a problem for my elderly mother.” Determine the best way to communicate with your guests. At Holiday Beach Rentals, for example, Boyer explains, “Guests don’t want to talk live with anyone. They’re used to texting or online chats.” Matthew and Angela Tesdall, owners of Family Time Vacation Rentals and Sisters Vacation Rentals, have almost 200 managed properties. Their motto is, “Family memories made here.”

Matthew says, “Guests want to spend time as a family or as friends. They want an experience that’s solid, with easy arrival instructions, a door code, someone to provide support if needed, a clean and sanitized place that is CDC compliant. Otherwise, they just want to enjoy their time.”

VRM Intel Magazine | Summer 2021

listed on Yelp near or on International Drive in Orlando, Florida. Of those, 115 have 4.5- or 5-star ratings. How does a guest decide? A list of your recommendations with short descriptions can make the selection process a lot easier and guide your guests to the places you know will create a great experience. Which places are best if your guests have young children? Or are they looking for a fun Thursday night happy hour? How about celebrating a special anniversary? It’s all about the memories!

Another way to help create a great guest experience is by offering services that enhance their stay. These can be services you control, such as late checkout and mid-stay housekeeping, or third-party services such as boat charters, personal chefs, yoga classes, and more. By offering a variety of services, you’re helping create more experiences and memories that guests are happy to pay for. Sometimes creating positive memories means avoiding negative experiences. The most common complaint in negative reviews is a dirty property. Another problem can be finding addresses in rural areas where Google Maps doesn’t work. In these cases, you need to provide specific driving instructions. They may be nervous if it’s really dark in the surrounding area, so let them know in advance, and make them feel comfortable. Making sure lights are on, for example, provides a welcoming introduction to the home.

DURING THEIR STAY Albert Einstein said, “I love to travel, but I hate to arrive.” Unfortunately, that might be true for many travelers. Once they arrive, the exciting expectations during the research and booking phase collide with reality and don’t always match. But you can help. A guest’s overall first impression is the first memory of their vacation. It can set the trajectory of the rest of the stay. If it’s negative, it’s likely to linger and affect the impression of everything else. This may be reflected in a lower rating or negative comment in a review. You need to find out if there are any problems by reaching out shortly after they’ve arrived, whether through an email, text, phone call, or greeting in a digital guidebook. A negative experience can be turned into a positive memory if you take care of it quickly. Combine that with a personalized greeting, and you’ve really created a great first memory. Guests don’t always know how to find or use everything on your property, they don’t want to call or text with every question. But even if they do, trying to explain an issue on the phone isn’t always easy. They want to know there’s someone there if they need help, but they’d prefer to be self-sufficient, troubleshooting issues on their own. Provide information on the property and the local area to make them feel at home and capable of finding what they need. More and more vacation rental managers are turning to digital guidebooks like the wall-mounted GuestView Guide interactive concierge from Sharp NEC Display Solutions. Tim Justynski, director of business relations for Kissimmee Guest Services in Florida and a former board member of the Florida Vacation Rental Management Association, has a great hospitality approach. His company doesn’t just provide a great deal on tickets to attractions, it provides the road map to great memories. This includes ways to avoid traffic, the best strategy to navigate your park visit, how to cool down on hot days, and more. Tim says to always smile when talking with guests whether in person or over the phone. Tim also talks about the importance of providing recommendations to guests about restaurants and activities. There are 240 restaurants 86

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Take advantage of these memories to build your brand. No, they’re not staying in an Airbnb! They’re staying at one of your properties. So continuously brand your company before, during, and after the stay. Once at your property, this can include digital signage.

DEPARTURE AND AFTER THEIR STAY One of the best ways to create a memory for your guests is to take advantage of that last impression. Amber Carpenter, co-owner and chief marketing officer of ACME House Company, is in the process of creating gift baskets for departing guests that will include allergy-friendly road snacks, bottles of water, and hand wipes, all packed in a branded backpack. The backpack is especially important because it keeps their company name with the guests until they’re ready to book their next vacation or share their experience with friends. That last positive impression as they’re leaving is likely to create a memory they won’t forget.

Following up after the stay via email or text message is a sure way to stand out from many of your competitors. Travelers want to be heard, whether their experience is positive or negative. And if it’s negative, this is another chance to turn a bad memory into at least a neutral one. It’s also a perfect time to emphasize the value of a rating and a review. Positive reviews build your brand.

GUESTS REMEMBER YOU AND COME BACK Studies have shown that less than 20 percent of travelers remember the company they stayed with 60 days after checkout. If a guest feels they were taken care of and listened to, you increase your chances of being in that 20 percent and building a relationship. As Amy Hinote says in a recent VRM Intel Magazine article, “In 2021, rebooking is vital. Strategize incentives and messaging—like locking in rates or creating reward programs—and create a foolproof plan to ensure guests who booked on third-party sites book directly with you in the future. Set a goal to increase rebooking by X percent, and track progress weekly.” Some of the most successful vacation rental management companies have rebooking rates of 30 percent or more, which helps lower marketing costs. It’s often the least expensive way to grow. Remember, it’s about the memories as well as the experience. About Chris Taylor

Chris Taylor heads up marketing for the GIS Group of Sharp NEC Display Solutions of America, which is the creator of GuestView Guide, a wall-mounted digital concierge for vacation rental managers that provides guests with a more delightful experience, saves time, and helps increase revenue from each guest’s stay.

GuestView Guide

Remote Control Exasperation

Of all the problems our industry has solved with technology, the remote control conundrum is still a pain point for VRMs By Paula Caballero How can something so small be so infuriating? No, we’re not talking about mosquitos. At least you can kill those.

emote controls are the ultimate frenemy of the vacation rental manager. Not unlike mosquitos, they continue to multiply, controlling not just televisions and cable boxes, but spa heaters, ceiling fans, air conditioners, garage doors, and even window shutters.

“Why can’t we just have one gigantic remote that controls everything?” lamented Katie Bien, director of business at Chattanooga Vacation Rentals. These tiny bars of plastic torment property managers and guests alike, and solutions remain hit-or-miss.

“I almost get anxiety,” said Stephanie Coughlin, broker at SMS Realty Group who manages 20 vacation rentals in the Las Vegas area and takes calls personally from guests. “I may not know how 88

VRM Intel Magazine | Summer 2021

to resolve this problem, and I can’t just call my handyman because he’s not tech-savvy either.” Welcome book instructions? Check. Labels on the remotes? Check. Instructional videos? Check.

Laminated sheets with arrows showing which buttons to push? Check. Went over it in person with the guest at check-in? Check. Nice try. Cue the property manager’s phone ringing.

“’I can’t get the TV to work!’” exclaims Gail Boisclair, mimicking the typical guest phone call. Gail is the owner of Perfectly Paris and has managed properties in France for 20 years. “‘Is it on the right source?’ I ask. It’s almost always related to the source button. ‘Well, I didn’t change the source!’ the guest will say. ‘Maybe you acciden-

tally hit the button? Maybe a child playing with the remote control accidentally hit the button?’ Let’s blame it on somebody else. Because it’s almost always related to the source button.”

thing was corroded. It was still wet inside—someone had dropped it in the pool or spa. Come to find out those spa remotes run $200 bucks. How do you create a spa remote that isn’t waterproof ?”

“I asked housekeeping to tip over the sofa,” Bien said. “Four Roku remotes came out! I knew they were in there, but we just couldn’t get to them!”

“There are four TVs mounted on the wall,” she explained. “One of the TVs has cable, and the other three just have Roku. We have four different remotes . . . It was a cool idea, but the execution is not so easy. Needless to say, we don’t have multiple TVs on one wall at any of our other houses.”

Several managers said Roku remotes are a particular horror because they are so small and also slippery. Guests often end up inadvertently putting one in their suitcase. Or, they get “eaten up” in the depths of a sofa. Bien said that when she found herself ordering a new Roku remote each week, she turned to housekeeping to help solve the problem.

Now, Bien has ordered a clever cover for all Chattanooga Vacation Rentals’ Roku remotes. They’re not just colorful and silicone (making them less slippery), but they also glow in the dark and have a long “tail” attached. This inexpensive solution has helped keep the remotes in plain sight—and out of couches and suitcases.

Coughlin confirmed firsthand experience with the wet spa remote trauma, so she’s started mounting these remotes, and others such as fan remotes, on the wall. She has found that wall-mounted remotes have solved many of her woes. However, she still does not have a solution for the sports bar TV setup one of her owners created in his vacation rental.

Coughlin also added that they’ve stopped providing garage remotes to guests because too many of them ended up being returned with the guests’ rental cars. Putting a sticker on the back of the garage remote with a phone number may help locate the remote with a rental car company after the guest has checked out, managers said. Another pain point is the mysterious loss of the small plastic panel that covers the batteries on the back of the remote. This issue also results in having to purchase a replacement remote. Two managers mentioned wrapping remotes in fresh plastic for each guest to avoid losing that part and in hopes of keeping the remotes clean. It also prevents guests from removing the batteries to use in another device and never replacing them.

Apparently some homeowners have even attempted to remove remotes altogether, which is not a very convenient solution, according to Thompson. He stayed at a property where he had to ask the host to turn on the spa remotely when he wanted to use it, which became rather inconvenient. “You’re up late with your lady, you’ve got a bottle of Prosecco, and you say ‘Hey, let’s go in the hot tub!’” Thompson said. “But you feel bad, and you don’t want to bother them. ‘Sorry for waking you, but can you turn the spa on please?’”

Managers can find similar covers for Apple TV remotes, which are even smaller and slipperier than Roku remotes and, as Al Thompson points out, cost $50 to replace.

“They are very tiny and very sensitive, and if you’ve never used one before, well, it could be a nightmare for someone over 70,” said Thompson, who manages a handful of his own rentals in New York City. “They are pretty slick. A little too slick.”

Thompson has the interesting perspective of being on the other side of the remote control battle because in addition to managing his properties, he spends several months a year living in vacation rentals. He estimates he’s stayed in at least a dozen in the past two years. He said he tried to be a good guest at one property and replace the batteries for a spa remote because the remote was not working. “I took it to Home Depot because I didn’t know what battery it used,” Thompson said. “So the guy uses a tool to open it and every-

And while one might imagine remotes are a problem money can solve, it turns out even luxury rentals suffer from the same dilemmas. Laik LePera, director of operations for Village Realty in North Carolina, which manages more than 650 vacation rental properties, said that problems only escalate with fancy home theaters and integrated sound systems. He had a tech-savvy maintenance staff member overhaul the setup in one property, but he also had to get the owner’s approval to spend approximately $1,200 to do so.

“We concentrate on trying to simplify [the theater systems],” he said. “We provide instructions, and that brings the calls down a little. Does it solve it completely? No. But when we reduce remotes, we have reduced options.” At the end of the day, Coughlin may have found the easiest overall solution: Rent to families.

“I never have questions about remote controls or Wi-Fi when the guests have kids with them,” she said. “I think the kids figure it out and show the adults how to work it.” 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. VRM Intel Magazine | Summer 2021

Calendar  VRM

Live!

  Virtual Event  live.skift.com 90

  V irtual Event  bookdirect.show

 Scottsdale, Arizona  The Phoenician  streamlinesummit.com

THE BOOK DIRECT SHOW – LONDON CONFERENCE

VRM Intel Magazine | Summer 2021

 London, England  Tobacco Dock  bookdirect.show

SEPTEMBER

SEP

1516

FVRMA XTRAVAGANZA

 Orlando, FL  DoubleTree by Hilton Hotel at Seaworld  vrmxtravaganza.com

SEP

STREAMLINE SHINE SUMMIT 2021

EUROPEAN SHORT STAY SUMMIT

 London, England  Tobacco Dock  shortstay.show

1617

VACATION RENTAL WORLD SUMMIT

 Annecy, France  Imperial Palace  vacationrentalworldsummit.com

SEP

0810

SEP

THE BOOK DIRECT SHOW – ONLINE EVENTS

SEPTEMBER

0110

SEPTEMBER

PRESENTED BY KEY DATA AND PRICELABS

SEP

SKIFT DESTINATIONS AND SUSTAINABILITY SUMMIT

VACATION RENTAL DATA AND REVENUE MANAGEMENT CONFERENCE (DARM)

SEPTEMBER

AUG

 London, England  Tobacco Dock  www.urbanlivingfestival.com

AUGUST

SEP

URBAN LIVING FESTIVAL

1618

 Charleston, SC  Francis Marion Hotel  vrdarm.com

SEP

0708

SEPTEMBER

PHOCUSWRIGHT EUROPE

SEPTEMBER

2830

SEPTEMBER

JUNE

APR JULY

JULY

SKIFT HOSPITALITY AND MARKETING FORUM

  Virtual Event  phocuswrighteurope.com

APR JULY

JULY

  Virtual Event  live.skift.com

APR JUNE

JUNE

APR JUNE

intel

2123

SKIFT GLOBAL FORUM

  Virtual Event  forum.skift.com

GUESTYVAL

 San Antonio, Texas  La Canterra Resort  barefoot.com

NOV

2021 NWVRP (NORTHWEST VACATION RENTAL PROFESSIONALS) ANNUAL CONFERENCE

 Seaside, Oregon  Seaside Convention Center  nwvrp.org

1719

VRMA EXECUTIVE SUMMIT

 Rancho Palos Verdes, California  Terranea Resort  vrma.org

NOV

2426

NOVEMBER

OCT

LIVEREZ PARTNER CONFERENCE 2021

NOVEMBER

BAREFOOT USER CONFERENCE

1113

 Boise, ID  Boise Centre on the Grove  conference.liverez.com

OCT

3002

OCTOBER

NEXT OPTIMIZE 2021, HOSTED BY TRAVELNET SOLUTIONS

OCTOBER

2628

 Minneapolis, MN  Hilton Hotel Downtown  tnsinc.com/next21

SEP-OCT APR

SEPT/OCT

2224

 Tel Aviv, Israel  Trask  guestyval.com

APR SEP

SEPTEMBER

SEP

SEPTEMBER

of Events

2226

SHORT STAY WEEK

  Virtual Event  shortstayweek.host-b2b.com

 VRM

Live!

 San Antonio, TX  Henry B. Gonzalez Convention Center  vrma.org

THE PHOCUSWRIGHT CONFERENCE

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

DEC

1517

DECEMBER

VRMA INTERNATIONAL CONFERENCE

NOV

0306

NOVEMBER

APR OCT

OCTOBER

intel

0102

VACATION RENTAL WOMEN’S SUMMIT PRESENTED BY RENTED AND VRM INTEL

 New Orleans, LA  The Ritz-Carlton New Orleans  vacationrentalwomen.com

VRM Intel Magazine | Summer 2021

2021 Vacation Rental Women’s Summit presented by Rented and VRM Intel

December 1 – 2

Ritz-Carlton New Orleans

Join us for this epic holiday celebration designed to inspire, educate, and support the women of the vacation rental industry.

New Keynote Announcement We’re excited to welcome keynote speakers, Drs. Emily and Amelia Nagoski, authors of the best-selling book, Burnout: The Secret to Completing the Stress Cycle. Featured on Brené Brown’s podcast, the Nagoski twins show us that women experience burnout differently than men, and they provide a simple, science-based plan to help women minimize stress, manage emotions, and live a more joyful life.

“This book is a gift! I’ve been practicing their strategies, and it’s a total game-changer.” — BRÉNE BROWN, PHD, author of the #1 New York Times bestseller Dare to Lead

The cost to attend is $849, and the Ritz-Carlton’s room rate is $249 per night. Visit website for hotel group code.

Our goal is that you and your team will leave this special event feeling celebrated, educated, inspired, rejuvenated, and ready to take on the future and embrace all the opportunities it has to offer! Tickets and hotel rooms are going fast. Sign up soon to secure your spot.

vacationrentalwomen.com

TRUST BAREFOOT TO HELP YOU

GROW YOUR BUSINESS

“I spend 90% of my day inside of Barefoot. It is integral to the operation of my company.” Jeremy Grogg, CEO, Kees Vacation Rentals

“Bottom line, Barefoot makes me money— we leverage upsell opportunities for our guests, we have one place to manage our OTA relationships, and we support owner retention and growth through the owner portal.” Jim Leavitt, Principal, Grand Cayman Villas & Condos

Discover how Barefoot can help your grow your business with a customized demo— connect with us at www.barefoot.com/vrmintel or 877.799.1110

Offer your guests the MOST COMPREHENSIVE destination specific TRAVEL INSURANCE available in the VACATION RENTAL MANAGEMENT INDUSTRY. Coverage is underwritten by Arch Insurance Company (a Missouri corporation, NAIC #11150) with executive offices located in New York, NY. Not all insurance products or coverage are available in all jurisdictions. Coverage is subject to actual policy language.

VRM Intel Magazine | Summer 2021

866.549.5283 redskyinsurance.com