VRM Intel Magazine Summer 2016 by Amy Hinote

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Summer 2016

VRM

News and Information for Vacation Rental Professionals

intel

Revenge of the Vacation

Rental Manager An Inside Look at

Booking.com Revenue Management

Communicating Success

Glossary

to Homeowners

Successful

Software Implementation

Under the Hood with

Blackcomb Peaks

Accommodations

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VRM Intel

VRM Intel Magazine | Summer 2016

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ions

Contents

| Business

od W ith

Under the Ho

Blackcomb Peaks Accommodations

On the Cover

58 An Inside Look at Booking.com

Standardization and Hotel-like Service in the Vacation Rental Industry

64 Revenge of the Property Manager 66 Under the Hood with Blackcomb Peaks Accommodations 76 Revenue Management Glossary for VRMs

Customer Service 24 Millennials, Mobile and Business Travelers: New Guest Trends and Lucrative Opportunities 38 Personalizing Reservations and Customer Service

Cover photography courtesy of TruPlace, Inc. and Brindley Beach Vacations, Outer Banks, NC

32 On the Road to Healthy Local Regulations

42 Independent Contractor or Employee?

20 Getting the Most Out of Events 36 Frogs, Kettles and Vacation Rental Management 37 Meet VRMA's Executive Director 90 Recap of May Conferences 94 Calendar of Events

VRM

48 Time to Roll Up Your Sleeves or Plan for Your Exit? 64 Revenge of the Property Manager 66 Under the Hood with Blackcomb Peaks Accommodations 84 What it Means to be "Additionally Insured"

intel

Business 40 In Memory of Paul Dobson

Education and Community

Rental Regulations

VRM Intel Magazine | Summer 2016

Like many vacation rental managers, Roy Wiltshire began his business as a vacation home owner trying to find a better way to rent his property.

An Inside Look at Booking.com “I purchased a vacation rental property in Whistler and realized, very quickly, that I was not happy with the service I was receiving from my property manager,” said Wiltshire. “I figured that there must be a better way and decided to do it myself. Soon, other homeowners were asking me if I would take care of their properties, as well, and Blackcomb Peaks Accommodations was born.”

As the business grew, Wiltshire set off on a two-fold journey his year, the online vacation to build a standardized, highly efficient operation and to create a rental marketplace has experienced numerous changes luxury hotel-like guest experience with all the space and amenities to the landscape including of a vacation rental. new pricing models, the addition of fees

David Mau, Director of Product Revenge of the at Booking.com, talks to VRM Intel about growth, pricing Market Conditions Shift In Favor of the Professional models, regulations and the Vacation Rental Manager…Finally! importance of professionally managed vacation rentals

| Business

Property Manager 66

VRM Intel Magazine | Summer 2016

“I

predict what I call the Revenge of the Property Manager,” said Carl Shepherd, co-founder at HomeAway, in an interview with VRM Intel last September. “Over the next few years, we will see property managers, as we say in Texas, in the catbird seat”

Did2016 Shepherd have a crystal ball? Because he could not VRM Intel Magazine | Summer have been more correct in his prediction.

“Screening guests, managing credit card payments, arranging for housekeeping, differentiating properties… all the related tasks and services that travelers expect are getting harder and harder to manage for individual homeowners, right at the same time that new and progressive property managers are looking to re-invent the PM business model,” continued Shepherd. In addition, 2016 had a few more surprises in store for the professional vacation rental manager.

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HomeAway’s Best Match algorithm and their addition of the service fee sent homeowners reeling.

Google’s changes to search engine results pages took OTA marketers to the mat.

to travelers, changes in sort criteria and cancelation fees, and an industry-wide transformation to a transactional marketplace. While the conversation is revolving around supplier angst at HomeAway and the regulatory chaos caused by Airbnb’s hosts, Booking.com is quickly and stealthily building its inventory of vacation rental listings, growing over 30 percent in the last year.

Besides the increase in the number of listings, what makes the vacation rental inventory of Booking.com unique is that it to is verified, bookable and related to Learning navigateinstantly a distribution strategy largely professionally managed. ad- levels of VRBO.com was faced by VRMs withInvarying dition, has not a own prosuccess andBooking.com angst. Many chose to adopted place their traveler managed (or service) fee to their pricing fessionally properties alongside for-rent-byowner properties on VRBO.com, causing a consequenmodel. tial expansion of the source of competition. Piggybacking on the success of VRBO.com, Christine Karpinski made Amazon’s Best Seller List with her book How to Rent Vacation Properties by Owner, which supplied owners with rental policy and confirmation templates, marketing strategies and instructions on maintenance and housekeeping.

In addition, when the real estate market collapsed, the number of rent-by-owner properties grew exponentially, and with double digit industry growth, the investment community got on board. Consequently, Airbnb advanced on the scene, and media outlets latched on to the growth and success of the owner-managed sharing economy while professional managers struggled to differentiate their offerings. But conditions are shifting. 08-Jul-16

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With the rising cost of self-management, sky-rocket-

VRM Intel

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Contents Technology

Marketing

26 Village Realty's Smart Home Integration

44 Diversifying Your Marketing Plan

28 RealTimeRental Adds TAP Tag Technology

52 Winning with Email Marketing

78 The Importance of an Open API

56 Winning with Google

82 Successful Software Implementation

| Marketing

Winning with Email Marketing

69 Beat the competition with great content 72 Revenue Management 101: Why leave money on the table?

Distribution

76 Revenue Management GlossaryÂ for VRMs

58 An Inside Look at Booking.com

VRM Intel Magazine | Summer 2016

62 Tansler's Reverse Auction for Vacation Rentals

VRM Intel

Owner Relations 70 What to Look for in a Vacation Rental Manager 74 Communicating Success to Owners Using RevPAN

Housekeeping

87 Managing the Washing Machine 88 Do's and Donâ&#x20AC;&#x2122;ts of Service Animals

VRM

intel

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VRM Intel Magazine | Summer 2016

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A Digital Agency for Travel, Tourism and Beyond VRM Intel Magazine | Summer 2016

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VRM intel magazine

Dear Readers, This summer issue wraps up a full year for VRM Intel Magazine, and what a year it has been! The vacation rental industry has seen significant changes and challenges. Increased competition, rising marketing costs, higher operational costs, changes in technology and a volatile regulatory environment are making it more and more difficult to grow revenue year over year.

Editor-in-Chief Amy Hinote

Director of Design and Production

Donato Berbelja

But some of these changes actually benefit professional VRMs, which is why we’ve titled this issue “The Revenge of the Property Manager.” In this issue you will read about how Google’s changes to their search engine results pages have hurt OTAs but can benefit local operators. You will also read that HomeAway’s traveler (or service) fee is providing an opportunity to increase direct bookings, and that advancements in technology are offering VRMs new ways to increase revenue. While many of the changes in the vacation rental industry are making it harder for OTAs and FRBOs, professional VRMs are in an enviable position to recapture market share and take business to a whole new level. However, the industry will not be able to grow if municipalities across the world continue to implement bans on vacation rentals. Just a few weeks ago, through a combination of efforts by a vocal minority of residents and hotels, the Anaheim City Council voted to ban all vacation rentals with an ordinance that gives owners and managers 18 months to end all short term rental operations. With one misguided city council vote, VRMs like Valerie Van de Zilver, who founded Zilver Realty Group in 1990, will be forced to close their vacation rental businesses in 18 months.

Contributing Writers Alexandra Anwyl-Davies Sarah Bradford Julian Castelli Mike Copps Carlos Corzo Steve Craig Matt Curtis Stan Earnshaw Ben Edwards Rod Fitts

Cara Goodrich Josh Guerra Evan Hammer Durk V. Johnson Sue Jones Doug Kennedy Doug Macnaught Amber Mayer Darren Pettyjohn Sherry Tomasso Brandon Zienowicz

"We are shocked by the decision this week by the Anaheim City Council where politics over principle prevailed," said Van de Zilver. "It is devastating for the community of dedicated, hard-working people who operate, service and rely on vacation rentals to support their families. The same will hold true for future families visiting Disneyland that are left with no option but hotel rooms rather than gather with family to share an amazing vacation home experience.”

Kelly Mutual

Cities, counties and states need to know that professionally managed vacation rentals promote safety, provide revenue, and maintain “Good Neighbor” policies that address noise, trash, parking and tax compliance.

Amy Hinote, amy.hinote@vrmintel.com

While we work to find new ways to attract guests and leverage industry changes to increase revenue, the spread of bans and crippling regulations is a threat to all. As an industry, now is the time to come together and work proactively to preserve the right to rent vacation rental accommodations for the next generation.

Advertising

Address VRM Intel Magazine LLC

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

Sincerely,

Amy Hinote Editor

Copy Editor

© Copyright 2016 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 Magazine LLC reserve rights of ownership. VRM Intel Magazine | Summer 2016

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| From Our Partners

How to Get the Most Out of By Alexandra Anwyl-Davies, HomeAway Software

very year, I organize HomeAway Software’s annual conference, RezFest. It is one of the largest events in the industry, bringing together property managers, suppliers and thought leaders from all over the world to learn and network. Over the years of organizing RezFest, I have discovered a group of attendees that we now call “power attendees.” They are the ones who make seemingly hundreds of new connections, somehow manage to sit in on every session and leave the conference with dozens of new ideas to incorporate into their business. Why are they so successful at events? Because they know that events follow the adage “You get out what you put in.”

3 ways

YOU AND YOUR TEAM CAN “PUT IN” TO GET THE MOST OUT OF EVENTS. B Prioritize events.

Power attendees recognize that not all events are created equally. They know their limited time and budget should be used strategically to support their core business objectives whether it’s new relationships, ideas or solutions. Is your team working with a new tool or technology? Productspecific training can help you more quickly realize the promised greater efficiency or lowered costs. Many of these training sessions are inexpensive one-day events with designated time for questions and individual guidance. If you’re hoping for solutions to a specific local concern, regional events can be a great resource. Other VR managers operating in the same geographic area are most likely to encounter problems similar to yours, and the smaller environment gives you more opportunity to speak with your peers one-on-one. 20

National events are the best source of information affecting the industry as a whole, including changes in the legal landscape or new technologies which can improve operations. They also provide great opportunities to meet new vendors or maintain relationships with your existing suppliers. C Budget for the most opportunities.

Events often pay for themselves by bringing new ideas that improve operations and boost the bottom line. Power attendees recognize this potential and maximize their time and money by budgeting for the most opportunities. What does budgeting for the most opportunities mean? It means that you are prioritizing funds for team members who stand to benefit the most or prioritizing events that will yield the most productive results. Sending team members who can benefit most from the event may mean you send those who experience the business problem you’re trying to overcome firsthand. They’ll be able to clearly explain the problem to their peers and also consider feedback to find the best possible solutions.

Bob Oakes, President of Village Realty and Management Services, budgets for the most opportunities by sending the team members who can learn the most to these events. This includes new hires (for whom a three-day conference is the best orientation he can provide) and team members who are working together for the first time and need to build relationships with each other.

VRM Intel

Networking hours are invaluable. Receptions and happy hours where you can share your experiences and listen to those of others can be the most productive hours of an entire event. Food and drink costs for networking events are typically not included in registration, but one idea from an opening party can return significantly more bottom-line value than the price of two cocktails.

Karen Bobe, owner of Sunset Properties, says that speaking with peers who share similar challenges and victories can be priceless. Bobe points out that events are a great place to find VR managers who have come up with creative solutions to the same problems you’re facing. D Remember to recap.

Power attendees understand the importance of formally discussing new ideas with their entire team. After attendees return to the office, schedule time for a wrap-up meeting where teams share what new ideas can be applied to the business. Bobe’s team does this religiously, discussing everything from customer service standards to revenue-generating opportunities. She says that every event her team has attended has yielded an economic advantage or new way to handle customer service and that the financial gain they see over time covers the cost of attendance.

What you “put in” to an event determines how much you (and your business) get out of it. Whether you are planning your quarterly budget or hoping to pitch an event to your supervisor, stick to the three rules of power attendance to ensure you’re getting the most out of each event: prioritize events that support your core business needs, budget for the most opportunities and remember to recap with your team.

VRM Intel Magazine | Summer 2016

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| From Our Partners

Millennials, Mobile and Business

Travelers

HOW VACATION RENTAL MANAGERS CAN TAKE ADVANTAGE OF NEW GUEST TRENDS AND LUCRATIVE OPPORTUNITIES

orldwide online travel sales are robust, with continued growth projected through 2019. For determined Property Management Companies (PMCs), striking while the iron is hot is imperative to take advantage of new guest opportunities. Emerging markets that could reap big profit rewards include Millenials and the mostly untapped business travel market. PMCs also need to gear their marketing strategies to a changing traveler mindset that includes mobile bookers and “Connected Travelers.”

Today’s fast-evolving vacation rental distribution landscape threatens laggard PMCs who are likely to lose owners to more dynamic PMCs who adopt new channels successfully. Many may lose owners to self-management with the growing ability to “go direct” with channels like VRBO. To combat this threat and tap into lucrative, new guest markets, LeisureLink offers PMCs the ability to provide state-of-the-art, integrated distribution programs to their property owners who cannot possibly replicate this on their own by using VRBO. Here are some valuable insights to help management companies take advantage of new guest trends with a broader distribution strategy and optimized rate and inventory management.

MILLENNIALS For all the attention Millennials receive in the travel industry, the generation is often undersold as wanting to travel often but not being especially big spenders. While they are still working on their full income potential, there are several reasons Millennials are more than worth targeting for PMCs. First, Millennials are the only generation increasing their budget this year. According to the 2016 TripAdvisor Travel Barometer, 40 percent of Millennials will spend more on travel this year than last. While Baby Boomers still have more buying power at this point, Millennials have some noteworthy, valuable characteristics. They have a distinct preference for experiential travel, which makes them especially well suited to vacation rentals, and though they are budget conscious, they are willing to spend on aspects of travel that support this endeavor. What to Know About Millennials:

Three-quarters do their own travel planning. 50 percent prefer booking on Online Travel Sites (OTAs). Millennials are the most likely generation to extend a business trip into a personal vacation (62 percent did so last year). Many will move to alternate accommodations to make it more affordable.

BUSINESS TRAVEL PMCs have traditionally given less consideration to business travelers than the leisure or group segment ‒ until now. Business travel expenditure is anticipated to grow 3.7 percent in 2016 and with the continued blurring of the lines between business and leisure, the opportunity for PMCs to capture business travelers has availed itself. Business travelers who use Airbnb, for instance, stay longer and spend 156 percent more than those staying at hotels. Some PMCs also note that business travelers are low maintenance and gentle on the property. What to Know About Business Travelers:

Over 50 percent of travelers bring a family member or significant other with them. Of business travelers who booked their own travel, 50 percent of business travelers ages 18-24 booked via OTA, and 45 percent of travelers ages 35-54 reserved on third-party sites.

MOBILE Though mobile is technically a sales avenue, it has an evolving demographic of its own and the potential to convert new guests is high among this segment. Mobile bookers are avid travelers, spanning multiple generations. 42 percent percent of travelers worldwide are what TripAdvisor calls “Connected Travelers” ‒ travelers who are twice as likely to book their accommodations on a smartphone. What to Know About Mobile Travelers:

Mobile travelers are frequent travelers, taking 3+ trips annually. 52 percent of luxury travelers are likely to book via mobile device vs. the 29 percent average of other travel segments. U.S. smartphone shoppers are three times more likely to shop for accommodations on an OTA rather than on a direct website.

For each of these travel segments, appealing to their quick pace, their desire for flexibility, and their movement across platforms during the planning and purchasing process is essential to capturing and converting their business. This requires a robust direct and third-party strategy, generous minimum stays and competitive (but not too low) pricing as well as an all-around mobile-friendly ethos.

“The best way to play these new opportunities is to be on the most cutting-edge distribution channels and partner with LeisureLink ‒ who delivers the tools to cater to the trends,” explains Julian Castelli, CEO of LeisureLink. “We offer solutions that drive bookings by providing integrated, easy-to-use access to all the key online distribution channels, so PMCs can increase revenue without increasing staff. The way many PMCs do this now ‒ managing siloed relationships with a variety of discrete online channel vendors manually or worse, with a tool designed for hotels ‒ is cumbersome and cost-prohibitive. LeisureLink offers a much better way with a more effective, more efficient approach to increase reservations, supported by industry experts, so managers can grow their business and deliver market-leading services to their property owners.”

Learn more about how to take advantage of emerging trends to win new guests by downloading the free ebook “7 Deadly Sins of Distribution” at leisurelink.com/7-deadly-sins-ebook.

VRM Intel Magazine | Summer 2016

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VRM Intel Magazine | Summer 2016

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| From Our Partners

Smart Home Integration By Stan Earnshaw, VP Sales and Marketing, PointCentral

Village Realty transforms business with Smart Home integration

unning a vacation rental management company is an operational challenge ‒ to put it mildly. For Village Realty, with 600 properties along 40 miles of beach on the Outer Banks, the challenges are greatly magnified, which is why they decided to look into Smart Home to see how it could help.

I spoke with Laik LePera, Director of Operations at Village Realty, who was intimately involved in their Smart Home project. I asked him why they decided to install Smart Home and what it has meant for Village Realty.

The Smart Home Vision “Two years ago, Village Realty had a mix of keyed and keyless locks," said LePera. "We saw the smart home movement on the horizon and decided we needed to have all of our property owners on a single platform for consistency and efficiency. As the management company, we needed to see all the locks and thermostats in real time so we could easily manage all of the properties we represent.” LePera added, “Homeowners were starting to install smart thermostats, and we could see lots of potential for complications with 600 individuals controlling the locks and temperatures. We were aware of several keyless providers in the market, but saw that the keyless lock was just the tip of the spear leading to an enterprise Smart Home solution. When PointCentral introduced us to the possibility of energy management and real-time status information for every property, we could clearly see benefits for our owners, our guests and efficient operations.”

Moving to Smart Home “Lower energy costs for our homeowners and more convenience for our guests were our goals. Asset management is an often overlooked part of a property manager’s responsibility and Smart Home gave us a platform to monitor and measure with future potential for a smarter house," said LePera. "The tipping point in favor of PointCentral was their use of the robust cellular system as opposed to the home Wi-Fi.” According to LePera, “Wi-Fi routers are a relatively frequent cause for a maintenance call. Connecting Smart Home technology to an unreliable device just didn’t make sense. Initially we thought we might be able to install everything ourselves, but we decided to bring in the PointCentral team to handle the install, and it was the right choice. PointCentral brought in a team for the north and one for the south and had over 550 properties up and running in two weeks.” 26

The Vision Takes Shape Village Realty wanted to take advantage of the automated notifications such as guest departure, cleaning and inspection status and early arrival for the next guest. Village Realty has been a leader in the vacation rental industry in customer service and next generation technology improvements that benefit our owners and guests, and the Smart Home platform holds a bright future.

Guest and Homeowner Reaction “Guests really enjoy keyless entry,” said LePera. “But the best feedback we’ve had is the automated notification when their home is ready early. Even if it’s just an hour, guests love being able to immediately go to the property and start their vacation because that’s what it’s all about.”

“Our homeowners enjoy the added security knowing there aren’t duplicate keys that haven’t been returned by vendors or guests. They love the online reports we give them that show who has been in their property and when. We really like how vendors and maintenance have their own closing codes so we can get a handle on how long work orders are taking and if the vendor really did go to the property. Our ability to measure energy savings for the property owner, along with providing convenience for the guest (and occasional owner) who is locked out of the home, is phenomenal.”

Real-Time Data Saves the Day “I was at our reservation desk one day when a guest called in to let us know the air conditioning wasn’t cooling properly. So we went online to look," said LePera. "This particular property has three thermostats. We could see that the downstairs thermostat was going up a degree every 30 seconds. The reservationist asked the guest to check the bottom level entry door. While they were on the phone, the guest went downstairs and discovered the door was wide open. Normally that would have resulted in a call to maintenance and a tech driving over there only to find the door open. But we were able to troubleshoot it over the phone, which wouldn’t have been possible without the real time data PointCentral provides.”

The Future Looks Smart Bob Oakes, owner of Village Realty added, “By implementing PointCentral Smart Home, we are able to track access information much more efficiently and quickly, we’ve eliminated the potential liability of physical keys, and we think we can save significant energy dollars for our property owners. We look forward to further integration with our HomeAway V12 and Glad To Have You software and the continuing benefits of Smart Home for our owners and guests.” PointCentral would like to thank Bob Oakes, Laik LePera and the Village Realty team for their contributions to this story.

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Smart Home Technology With Real-Time Property Status

Keyless Smart Home Solutions With The Cellular Advantage PointCentral.com

SMART HOME SUPPLIER-OF-CHOICE FOR MORE THAN 100 U.S. VRMS VRM Intel Magazine | Summer 2016

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| From Our Partners

RealTimeRental

Integrates

with TAP Tags

NFC CHIP TECHNOLOGY PROVIDES MULTITUDE OF COMMUNICATION OPPORTUNITIES WITH GUESTS

ealTimeRental is always striving to stay ahead of the curve with technology, innovation and strategic partnerships to help our clients be more efficient and successful. Our latest partnership is with TAP Tag Technologies LLC, a Near Field Communication (NFC) chip technology company. They are utilizing NFC chip technology in exciting new ways in the real estate and vacation rental industry with their new product called Targeted Action Platform (TAP) tags.

TAP tags are small NFC chip enabled items (think key chains, stickers, property sale signs, rental property signs, business cards and much more) that can display custom messages on guest’s phones with just a simple tap on an NFC capable smartphone. NFC chips enable two electronic devices to communicate. Using the same technology that is becoming commonplace in credit cards, TAP Tag Technologies uses top of the line NFC chips to facilitate communication between the TAP tag and the NFC capable smartphone. TAP Tag Technologies has a proprietary back-end platform which upholds a sophisticated infrastructure allowing the technology to manage and distribute a variety of data resources.

TAP tags are extremely customizable and are being used by RealTimeRental clients in a variety of different ways. In areas where potential rental guests physically look for vacation rental properties, our clients have placed TAP tags on rental property signs that display interior photos and the correlating property manager’s contact information. Clients hand out TAP tag key chains or waterproof bracelets to guests upon check in. These link to house rules, area attractions, event calendars and much more. Quite a few of our clients even have TAP tags on their exterior office walls which display business hours, phone numbers, featured properties, etc. RealTimeRental clients enhance their brand promotion by including TAP tags in their marketing campaigns. TAP tags create a simple and easy way for potential guests to view a company’s message from their NFC capable smartphones. They can also be programmed to open virtually any URL, direct guests to special deals on your company’s website or link to your social media profiles. Many styles of TAP tags can even be customized with your company’s logo on them.

RealTimeRental is also leveraging the technology for our own business. Our team uses TAP tag key chains that serve as virtual business cards so they are never without them. When scanned with an NFC capable smartphone, the TAP tag displays all the information that would be included on a standard business card. We also have a TAP tag located outside of our office that displays office hours and links to our website in case some of our local clients pass by before or after business hours and are looking for information.

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With the coming launch of the new RealTimeRental mobile app and the TAP Tag Technology LLC partnership, we feel that RealTimeRental will offer the best experience for the vacation rental manager and their reservation team as well as the consumer in the vacation rental marketplace.

RealTimeRental has a fully integrated platform with TAP tags which gives our clients the ability to push rental property information directly from our software to the tag, displaying the information they want the guest to have. TAP tags also integrate seamlessly with the RealTimeRental Tenant Portal, Owner Portal and Service Vendor Portal.

By utilizing the Tenant Portal, rental guests can easily notify property managers, housekeepers and other contacts that they have checked out of their property by connecting their NFC capable phones to their TAP tags. After check out via TAP tags, guests can immediately be prompted to reply to a series of questions relating to their stay. TAP tags can be programmed to display virtually any message to guests, whether it is a reminder to take out the trash and recyclables before check out or a reminder to book their favorite vacation week and rental property for next season. Also, by leveraging the Service Vendor Portal, maintenance tasks and requirements can be transmitted to the servicing person on site directly by a tap on the phone. 28

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| Regulations

On The Road To Healthy Local Regulations By Matt Curtis Senior Director, Global Government Affairs and Public Policy - HomeAway/Expedia

used to weigh over 500 pounds. While my struggle with my weight was more extreme than most, there wasn't anything overly complex about it. I simply craved food. So much so, however, that for many years I allowed my health to take a backseat to my near-constant desire to chow down. But as much as I craved food, there was something I craved just as much – travel. I yearned to see new places and experience new things. Unfortunately, my weight made flying a miserable experience, so instead, I drove. And drove and drove and drove, all over the United States. Probably because I spent so much time just getting where I was going, when I arrived I always found that I was less interested in the traditional tourist routine than in really immersing myself in the place.

One of my heroes was Charles Kurault, the legendary CBS newsman who spent decades traveling across the country meeting the people and hearing the stories that made every little town special. And the key to having that kind of experience – a personal, intimate experience of America – was always skipping the hotel and staying instead in a vacation rental. 32

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Vacation rentals not only made me feel more plugged in to the place I was visiting – waking up every day in a real neighborhood rather than along a highway or beside a shopping mall – they also almost always connected me with a friendly, knowledgeable property manager or owner who could point me in the direction of the authentic local experiences I was after.

But at the time – nearly 20 years ago – just finding a vacation rental was almost impossible. The Internet was still in its infancy. Trying to figure out where to stay usually required extensive research, phone calls, and even (gasp) mail to track down leads. Reviews were non-existent, and feeling secure with my rental was a constant concern. But even in those days, there was a clear feeling among homeowners, travelers and locals that vacation rentals were a very good thing – that the entire community profited, even if the full scope of the upside was largely unknown. As one of my more colorful local managers said, it was all “just kinda loosey goosey.” But VRBO, HomeAway and others changed all that. The Internet and companies like ours brought vacation rentals to the world, and soon people in Saskatchewan could easily see photos and reviews

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of available properties in the Blue Ridge Mountains and choose the best option. Fast forward to today, and millions of vacation rentals around the world now list on sites like ours, meeting the increasing demand of families, couples and groups looking for a memorable travel experience.

But just as my ravenous appetite put my personal health at risk all those years ago, the rapid expansion of vacation rental regulations is now impacting the health of our industry.

The truth is that our industry is now literally under assault on what seems like a daily basis, by an onslaught of new regulations that can be so confusing, duplicative and even outright absurd as to suggest that the real goal is to drive vacation rentals underground entirely. Property managers and owners could be fairly forgiven for believing that the intent of some of the more onerous regulations has been to drive them completely insane. Fortunately, hard data, common sense and the demand of the traveler are on our side. Initially, government regulation of vacation rentals seemed to be an issue of concern in only a few cities, but those early episodes sometimes had such extreme outcomes – including outright bans – that they got a lot of attention.

Quickly, more cities began to pass more regulations. Some cities were focused on tax remittance, others were focused on specific nuisance concerns, and some were beginning to talk about significant restrictions or even full bans. In 2014, Galveston, Texas was one of those communities on the brink of banning vacation rentals. My phone began ringing off the hook. The people I was hearing from in Galveston simply couldn’t understand why the city council would want to shut down an industry that, they believed, delivered so much economic benefit.

I’ve loved Galveston since I was a kid. My family used to vacation there, and later in life I had good friends from the island who told me about the challenges the city faced after big storms including Hurricane Ike in 2008.

I made the decision to get personally involved in the Galveston debate and do my best to help the managers and owners make their case to the city. Together we looked at comparable communities, like St. Joseph, Michigan, where we found that vacation rentals had a local economic impact of $22.2 million per year. We also looked at Myrtle Beach, North Carolina, finding that vacation rentals helped support over 2,500 jobs and had a local economic impact of a whopping $200 million per year. The Galveston owners and managers thought their community was certainly somewhere in-between little St. Joseph and more sizeable Myrtle Beach. An economic impact study was commissioned, and the Galveston debate came to a sudden, screeching halt when the results were announced: Vacation rentals supported more than 3,100 jobs and had a local economic impact of more than $283.6 million per year.

But the owners and managers in Galveston also went a step further, commissioning a survey of local registered voters. They found that over 70 percent of the community supported vacation rentals and believed that operators should be allowed to register and pay taxes. In the end, that’s exactly what the city council in Galveston decided to do.

The story of Galveston is like the story of so many other communities around the United States. Time and time again, groups of property managers, owners and other supporters have been able to come together, create a local alliance and advocate effectively for fair regulations.

Around the world we have seen organized groups of stakeholders advocate for common sense vacation rental regulations. Over the past several years, I have worked with groups in Spain, France, Germany, Portugal, the United Kingdom, Australia, New Zealand and Dubai who have organized themselves into local alliances and have communicated with governments and found positive results. Some of these groups have used national policy suggestions and others have used best practices, studies or surveys to educate local officials.

In some communities, the policies suggested by the U.S. Conference of Mayors have helped guide local lawmakers: “…fair regulation of short-term rentals ensures greater compliance and greater receipt of local hotel taxes,” and “…onerous regulations of short-term rentals can drive the industry underground, thus evading local regulations and local hotel taxes.” Amen.

The U.S. Conference of Mayors also outlined the benefits for property owners, saying “short-term rental of homes can provide a flexible housing stock that allows family travelers spending longer periods of time in a community a safe accommodation while contributing to the local economy,” and “short-term rental of homes can provide homeowners an opportunity to hold property as an investment, for a better sales market, or for future planning”.

In fact, the U.S. Conference of Mayors went on to say: “…regulations of short-term rentals that establish a reliable way for a municipality to identify and contact the short-term rental owner, make the tax collection and remittance obligation clear, and treat the short-term rental owner the same as long-term rental owners can achieve the highest level of compliance”. Another group, the American City-County Exchange has said: “Short-term rentals fall under residential activity. No additional laws or ordinances regarding neighborhood or nuisance issues are necessary. Policies should be developed through an open and transparent dialogue among policymakers, industry stakeholders, property owners and the public”.

Despite the regulatory challenges, the growth of the vacation rental industry remains robust and the demand is strong. Families and groups are traveling more often and for longer periods of time. Travelers know the great memories they create when they use vacation rentals, and they know the benefits. The experiences are life-changing. Especially in urban areas, we hear about other types of experiences – for example, families who are traveling for medical stays or finding a respite from a home remodel, a divorce or another life-disrupting event. Various consultants and contract workers use urban VRM Intel Magazine | Summer 2016

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| Regulations

vacation rentals, including employees of the film, music, digital media and technology industries. In Houston and other cities, we hear about oil industry workers, and in cities with nearby colleges we hear about academic professionals. Obviously all of us involved in this industry want a healthy future for vacation rentals, and to get there I constantly encourage property managers and owners to gather supporters and organize a local alliance. New regulations are continuing to move quickly across the country, and a patchwork of local rules in many states is causing confusion, lack of compliance and a lack of tax remittance. That’s not good for anyone. I think it’s fair to say that the vacation rental industry is healthy today, but a healthy future demands fair and effective regulation. And I’m healthy, too. I’ve lost almost half my weight, and now fly comfortably so don’t have to drive across the country (although sometimes I still channel my inner Charles Kurault and take to the road).

But wherever I go, you’ll still find me staying at vacation rentals, because it continues to be the best way to have a unique, authentic and memorable travel experience. I’m also now married with a brand new baby girl. And I know that if our industry will simply work together to keep making our powerful case to regulators and other stakeholders, my daughter will one day be able to enjoy the same kinds of special travel experiences that we do today.

Matt Curtis serves as Senior Director, Global Government Affairs and Public Policy for HomeAway/ Expedia. There he works with governments and industry around the world to create best practices and effective policies. He sits on the United States Conference of Mayors Business Council, the National League of Cities Corporate Council, the Sharing Economy Advisory, the Travel Technology Association board and serves on the Vacation Rental Managers Association board. Curtis understands that communities can achieve fair and effective policies through effective stakeholder engagement.

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| Education and CommunityÂ

Frogs, Kettles and the Vacation Rental Market By Rod Fitts, President, Association of Vacation Rental Operators and Affiliates

he events of the past months have been pretty sobering. The media has picked up their coverage of vacation rental fraud as rental scams continue to increase and guests are now facing new service fees that are hard to understand and have added friction to the booking process. It seems that if there is one thing we can count on in the Vacation Rental (VR) market, it is change, and from my desk at AVROA, I see industry changes happening almost weekly.

Often when I talk to owners or managers, I hear them compare our market to the Wild West or the Gold Rush times of the 1850â&#x20AC;&#x2122;s, which is true in some ways. Companies and individuals are throwing themselves into the VR market hoping to stake a claim and strike it rich with a new product or listing. Many have no experience in the VR industry at all. The only problem with the Wild West is that no one would take their family there for vacation. The Wild West was a violent, lawless period known for card sharks and snake oil salesmen. The last thing we need is our guests thinking that we are the 21st century version of it, but that is exactly what we are at risk of. Right now our industry is being assaulted on four fronts:

B Guests are being cheated by unscrupulous people posting fake or misleading listings.

C Wall Street has targeted us as an easy mark from which to strip profits. D Local municipalities are passing misguided and punitive regulations. E Technology is expanding in our market beyond our capability to monitor it.

These forces are slowly redefining the message that is being sent to our guests. Just like the frog that found itself in a kettle of warming water, we are in danger of waking up one day to find that the traditional values that made this industry unique and successful have been lost forever. So what do we do about all this? First we have to change our attitude. We have to recognize that the external threats to our industry are much greater than the owner or manager that is competing with us for guests down the street. We all have to realize that the best way for each of us to protect our own interests is to work together to protect the interests of our industry.

Once we change our focus away from just ourselves and embrace our role as members of a larger VR community, we will quickly realize something wonderful, that we are one of the largest groups of people with similar business interests in the world. If we all come together as a group, we will be three times the size of the United Auto Workers. 36

We are a sleeping giant, and that is why companies and individuals are supporting AVROA. It is a place where we can focus the strength of our numbers to re-establish our message of quality and assurance and to dictate to our suppliers how we want to conduct business.

Have no illusions, time is not on our side. Guests are giving us the benefit of the doubt for now but this will not last forever. As an industry, we have to demonstrate our willingness and ability to manage ourselves and to assure our guests that they will have the best vacation experience.

So what is AVROA and what makes it different from the VRMA?

AVROA is a global trade association for the VR Industry, and we share many of the values of the VRMA. One thing that makes us different is that we support owners managing their own properties, as well as property managers. At the end of the day, owners represent a large part of our market, and they need to be educated so they can fulfill their role.

What AVROA has accomplished so far AVROA Property Listing Service

This full-featured property listing service is a free benefit of membership. We believe that the marketing of our properties is too vital to delegate solely to private industry. Our goal is not to be your only source of inquiries but to be a much needed counter balance in the market place to keep private industry from abusing the privilege of representing our properties.

Property Certification

Vacation rental scams are a growing threat to our industry and we need to demonstrate our willingness to address the problem. AVROAâ&#x20AC;&#x2122;s property certification program is designed to assure guests that the owner/manager is legitimate and that the property is real. This is just our first step towards developing a comprehensive guest assurance program. Property Certification is also a free benefit of membership

The AVROA Academy

There is a tremendous need for education. This need ranges from helping owners and managers who are entering our market for the first time to making new technologies understandable and accessible to seasoned owners and managers. We will be launching the AVROA Academy in 2016 and it will play a key role not only in member education but in expanding our guest assurance program by offering accreditation opportunities for owners and managers.

The VR Industry is facing serious challenges today but in all adversity there is also opportunity. We now have the opportunity to establish the tone of our industry for decades to come and I invite you to become part of this process and get involved. You can learn more about AVROA at www.avroa.org.

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Meet Mike Copps

Executive Director of the VRMA

s the new Executive Director for the Vacation Rental Managers Association (VRMA), I’ve had the opportunity to spend the first half of 2016 diving head-first into this fascinating, rapidly-expanding industry.

Through my conversations with key stakeholders, research in publications, tracking of issues at the local and state level, and in-person opportunities to connect with many VRMA members and non-members at our various events ‒ the European Seminar in Barcelona in March, as well as the Eastern and Western Regional Seminars in Atlanta and Denver, respectively ‒ I have learned about much of the history, current landscape and future of vacation rental management. I’ve also learned that there is much more to learn, from industry experts and subject matter experts as well as each other.

VRM Intel

keeping, pricing, advocacy and much more. We also will be announcing more educational offerings at our upcoming National Conference designed to elevate your skillset and advance your status within the profession.

As much as membership drives the association, it’s always important to recognize the needs of the larger industry. VRMA is comprised of a percentage of vacation rental managers; in reality, 100 percent of vacation rental mangers need to be working together to combat legislation that is popping up at the state and local level. That’s the other key component of VRMA’s strategic direction: advocacy.

This year, VRMA hired a full-time government relations professional to work exclusively on such issues. If you’re a VRMA member, you’ve likely heard from him already. His name is Greg Holcomb, and he is working every day to filter through all of the legislation out there and see how it affects you.

Mike Copps has been the executive director at SmithBucklin for the past seven years. He is educated in the business and trade industry practice and is very successful in growing associations. Copps has recently become the executive director for the VRMA.

VRM Intel and VRMA serve this very purpose to inform, educate and advocate. You’re all well aware of what VRM Intel does, as you’re reading the publication right now. If you’re not familiar with VRMA ‒ or haven’t been involved in a while ‒ now is a great time to familiarize yourself with the association and also to reach out and let us know what you’re looking for in a vacation rental association. Basically, how can we help you? VRMA belongs to our members. We are constantly striving to provide the tools and resources our members need to succeed in this rapidly-changing climate. The VRMA Board of Directors has developed a blueprint for the association’s success and built upon VRMA’s strategic foundation of education and advocacy.

The educational base is the true cornerstone of the association, as the events have been a hallmark of VRMA for years. But they’re growing and taking on a new level of professionalism and opportunity for attendees. The aforementioned events in Barcelona, Denver, and Atlanta saw all-time record attendance in 2016, and there is clearly a demand for this level of education and networking as well as a desire to stay on top of the latest industry trends.

Our upcoming National Conference in Chandler, Arizona, October 16-19, promises to be our biggest and best yet. More than 1,300 of your vocational rental management peers and colleagues will convene for three days of education with relevant keynotes, educational sessions, all the latest products and services in our Vendor Showcase, hours of networking opportunities and much more. Registration is open and much more information is available on the VRMA website at http://www.vrma.com/nationalconference.

Of course, VRMA education is about more than just our events. We strive to engage with our members year-round through proactive communication and listening mechanisms as well as the excellent work of our volunteer committees. Our Education Committee oversees an ongoing webinar series (free to our members) on the latest trends and best practices. Topics include marketing, house-

We’ve accomplished a lot in a short period of time. We’re building out an interactive toolkit that allows you to track pending legislation in your region ‒ by municipality and by state ‒ and are building tools to empower our members to engage with these policy makers to tell the story of what you do and how you contribute to your respective communities.

We need your help ‒ members and non-members alike ‒ to tell this story. Regulations can potentially affect all of us, at any time. We need to be on the offense and communicate the value of the professionally-managed vacation rental. Much of the issues that this legislation is trying to address don’t stem from this corner of the short-term rental world. We’re laser-focused on developing messaging, identifying the key players and reaching out. You can get involved right now at www.vrma.com/advocacy.

Also, I encourage you to reach out and let us know as you’re hearing of pending legislation or anything that could negatively affect our industry in your area. Sometimes issues pop up that we may miss; please send any our way and we will take the proper action.

Working together like this ‒ with communication and pertinent, relevant education ‒ is how we are going to succeed as an association and as an industry. We will continue to do our part and hope that you will join us as we adhere to VRMA’s mission: providing education and resources “to deliver exceptional guest hospitality and homeowner satisfaction, ultimately creating positive, memorable experiences.” VRMA is growing and we’re stronger than ever. This industry is not a by-product of the sharing economy or some recent technological innovation; it’s built on your day-to-day business, providing those exceptional experiences for guests. We’ll continue to represent just that and will work with you to keep growing and be even better. I hope you’ll join us. VRM Intel Magazine | Summer 2016

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| Customer Service

PERSONALIZING RESERVATIONS AND CUSTOMER SERVICE

VRM Intel

HOW TO CONNECT WITH YOUR GUESTS AND MAKE SURE YOUR VACATION RENTAL HOMES DO NOT BECOME A COMMODITY

ike the lodging industry in general, the vacation rental business is facing disruption from all directions. Online travel agencies are working hard to insert themselves between you and your guests. Major hotel brands such as Choice and Wyndham are nudging their way into the marketplace. Airbnb continues to expand its presence by focusing heavily on training its “hosts” to deliver authentic, genuine hospitality and telling its customers, “Don’t just stay there, live there.” Meanwhile, most vacation rental companies focus on automating the entire service cycle and eliminating traditional touch points. Too many reservations agents are saying, “Did you look online yet? Check it out and then call me back…” or, “What’s your email address? I’ll send you a list of what we have that is available.” 38

By Douglas Kennedy President, Kennedy Training Network www.KennedyTrainingNetwork.com

“The trick is to maximize the levels of personalization at each and every remaining touch point in the guest experience where we still have the chance to interact with and engage our guests.”

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9 WAYS TO CONNECT WITH GUESTS AND MOVE FROM RENTING UNITS TO SELLING THE VACATION EXPERIENCE Some companies even hide their phone numbers in small font at the bottom of the page, discouraging phone calls and theoretically encouraging online bookings. The migration to keyless entry offered by electronic locks eliminates yet another vital touchpoint as guests are sent straight to their accommodations instead of the company welcome center. Also, rather than encouraging guests to stop by for suggestions on local area restaurants and attractions, companies are pushing guests to an app to find such services. As a result, many guests these days have no idea who they rented from during their previous stay, even if it was just last year. This is even more likely to be the case if the guest initially inquired on a third-party website where one or more of your rental homes are listed. Although the entire lodging industry is fighting hard to differentiate their brand from the others, the challenge is greater in the vacation rental space because the accommodations are spread throughout the destinations. Also, multiple companies have inventory in the same buildings and developments.

What can we as operations and marketing executives do to avoid having our rental “units” become commodities like seats on airplanes? We can start by finding ways to personalize the sales and service experiences at each and every touch point by what we at the Kennedy Training Network (KTN) call “The Customer Circle of Life.”

Certainly, we as an industry need to embrace automation and technology. Many guests prefer to shop online, and everyone likes the comfort of being able to take virtual tours, see photos and even see the new 3D floor plans of their actual rental home. Keyless entry and automated check-in is absolutely a convenience for companies where accommodations are located far from the reception office and also in “Saturday to Saturday” destinations where traffic from the office to the rental can be brutal. We also need to find ways to use “high tech methods” in order to be “high touch” in an “old school” way of relationship building. While the front desk provides a tangible opportunity to connect with guests, many vacation rental managers offer remote access to the home with keyless entry. Here are a few ideas for connecting with those bypassing your office check-in:

Send personal handwritten

welcome notes on stationary with company logos.

Place logo signage encour-

aging guests to call with “concierge” type questions.

On heavy check-in days,

have “greeters” stationed in each region to stop by and welcome guests upon arrival and to explain the home’s features (such as how to work the thermostats, remote controls, kitchen appliances, hot tubs, etc.).

B Keep Shoppers on the Phone

Rather than sending callers back online to look at homes or emailing them a list of what is available, have your agents walk callers through the website. Or even better… C Use Screen Share

Utilize online meetings/screen sharing tools such as Join.me (which has a free version) or GoToMeeting.com. D Personalize Responses

Personalize the response to all electronic inquiries including chat and email. Many inquirers who send emails take time to provide hints about “the story” behind their visit. Train agents to paraphrase and restate “the story” in their response in order to show interest. E Dive Deep

When chatting, encourage agents to ask questions about the inquirer’s visit beyond just asking for their vacation dates and number in the party. F Respond With a Call

For both email and chat inquiries, encourage your agents to offer to contact the guest by phone especially if questions become complicated. This can not only save time vs. going back and forth via chat or email, but also provide the opportunity to connect personally. In fact, respond to all email inquiries with a phone call when a phone number is provided. Even if your agent only leaves a voicemail, it will differentiate your company from most of the others who will probably only email their response. G Consider Video Chat

Use Skype or FaceTime video calls. Ask the prospect to connect for a video chat. This is especially important for those who are planning more complicated vacations with larger parties, larger homes, longer stays or special needs. H Send Photos

Take and send cell phone pictures. While it is nice to send and share stylized professional photographs, send cell phone pictures in response to specific questions especially for homes with higher rents or for guests looking for longer stays. I Communicate Across Departments

Make sure your maintenance colleagues know that their job has little to do with fixing things and a lot to do with hospitality and relationship building. Often they spend more time interacting with guests than any other colleagues. J Host Events

In destinations with longer stays (and higher rents), consider company hosted social events such as mid-week cookouts, local band jam sessions, children’s activities or craft fairs. VRM Intel Magazine | Summer 2016

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| Business

In Memory of

Paul Dobson

(1955-2016)

By Amy Hinote

n May, the vacation rental industry suffered an enormous loss with the passing of Paul Dobson, president and principal broker of Maui Rental Group. Known for his intelligence, insight, kindness, friendship, bright smile and willingness to help others, Paul Dobson touched hundreds of vacation rental professionals and his legacy lives on in the industry that he loved. In 1988, Dobson founded Maui Condo and Home Realty after picking up everything and moving to Maui after only a brief visit.

“My first fond memory of Paul Dobson was meeting him in 1991 in Hot Springs Arkansas,” said Lucy Kawaihalau, founder of Kauai Vacation Rentals & Real Estate, Inc. “It was his first VRMA Annual Conference. Being the only two from Hawaii, we shared many things, including a cab ride to the airport returning to Maui and Kauai. This began a wonderful friendship.”

Tim Cafferty, President at Outer Banks Blue Realty Services, also met Paul Dobson at this time. “I joined the organization in 1991, and Paul was one of the first folks I met and really one of the first people I hung around with in the organization,” said Cafferty. “He was one of the ‘cool guys’ that everyone wanted to hang out with.”

Cafferty added, “In my view, Paul was always the smartest guy in the room, but never showed his hand. He let others talk, and he just smiled.” In 1997, Paul Dobson became the seventh President for the Vacation Rental Managers Association (VRMA). According to Pedro Mandoki, President and CEO at Mandoki Hospitality in Gulf Shores, Alabama, “Paul was the one who jumped in and took care of things when our president resigned unexpectedly. “Paul was on the Board of Directors and served as President from 1997 to 1999,” said Kawaihalau. “Paul was always interested in all things high-tech and was happy to report during his presidency that the VRMA website was developed.” In 1998, Dobson’s Maui Condominiums, which had 430 units under management, became part of the initial rollup in the forming of ResortQuest International, where he served as Founding Board Member through many ups and downs in the industry.

“Paul was one of the most fun people to just sit around and talk shop with,” said Jim Olin, who served as CEO at ResortQuest. “I would seek him out at every event we attended together, and we would find a quiet place and exchange war stories. He was a consummate professional who shared his expertise generously, and was a ton of fun to be around.”

VRM Intel Magazine | Summer 2016

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He was a very successful businessman and property manager on Maui and so well thought of by everyone. He was a wonderful, kind man, an awesome dad, and a loving husband. Paul was an inspiring coach and mentor – both in sports and for our vacation rental managers – and a good friend to so many. He is greatly missed, and I am grateful to have called him my friend all these years.” Lucy Kawaihalau, Founder, Kauai Vacation Rentals & Real Estate, Inc.

VRM Intel

Doug Brindley, owner of Brindley Beach Vacations, was also part of the ResortQuest founding board. “Paul was great to work with, always kind and insightful,” said Brindley. “He visited me and my family on the Outer Banks, and we had the pleasure to visit him in Maui. Paul was a classy guy all the way!”

Cafferty added, “We hung out a lot in the ResortQuest days, and whenever there was a meeting, Paul would be the person I would go to first to ask ‘so what do you think about what we just heard?’ Invariably, he was on point, and whatever he told me usually came true. Whenever I needed a straight answer about something happening in the industry (or in ResortQuest), he was the guy I called.” In 2005, after Gaylord Entertainment purchased ResortQuest, Dobson left the company and founded Maui Rental Group.

“He was always thinking out of the box and trying new things,” said Kawaihalau. “He was happy to share his discoveries with his associates. I would love receiving his calls. He would say, ‘Hey, Lucy, how are you doing?’ and then go on to say, “I have been thinking about...,” sharing one of his latest ideas.” Paul Dobson, while best known to most of us for his insight and contributions to the vacation rental industry, was a family man first.

“I remember when he met Kim and how happy he was to be married,” said Kawaihalau. “We all had many fun times at VRMA events over the years. He took great pride in raising Chandler and Myles. His family and their schedule took priority in his life.”

Cafferty agreed, “He was so personable, smiling all the time. He had this smirk he would have on his face when he had an inside joke, like he was 14 years old again and couldn’t wait to tell me what he was getting ready to burst out laughing about. He rarely had a bad day, and he really loved his family. Whenever we compared notes about children he just beamed when he was talking about his kids and wife. We both have sons about the same age, and it would always be our conversation starter about what our boys were up to.” “Paul was a friend above all,” added Cafferty. “I last spent time with him in San Diego at the VRMA conference in 2014. We had a blast, as usual. Some of the former presidents had sort of drifted away from the organization over the years and were really disconnected. Lucy gets credit for getting us all back involved. Lucy, Paul, Pedro, and some of the other old timers had about a four hour dinner together, and he was the same old Paul. Happy guy, content and still the coolest, smartest guy in the room. That’s the memory I will always have of Paul.” “He was a very successful businessman and property manager on Maui and so well thought of by everyone,” said Lucy Kawaihalau.

“He was a wonderful, kind man, an awesome dad, and a loving husband. Paul was an inspiring coach and mentor – both in sports and for our vacation rental managers – and a good friend to so many. He is greatly missed, and I am grateful to have called him my friend all these years.”

Paul is survived by his wife and his sons, Myles and Chandler. Our thoughts, prayers and appreciation go out to his friends and family.

VRM Intel Magazine | Summer 2016

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| Business

Independent Contractor Or Employee?

The Department of Labor may consider an independent contractor to be an employee more often than you realize.

he Department of Labor (DOL) says that most independent contractors are actually employees and that reviewing an employer’s use of independent contractors is their number one enforcement priority. The vacation rental and hospitality industries regularly use contract workers to supplement and even outsource entire departments. In light of the DOL’s renewed emphasis on misclassification of independent contractors, it is more important than ever that you be proactive and take another look at your contractors. Particular positions such as housekeeping, maintenance, landscaping, grounds keeping, security and IT services are at high risk. Consider the following scenarios:

 Jessica stopped by the laundry facility to refill her housekeeping supplies on her way to clean the next property.  James finished up a work order and called in for his next scheduled maintenance job.  Cindy invoiced the company for the cost to launder her uniform. Are these individuals classified as independent contractors or employees? How confident are you that your independent contractors are “truly” independent contractors?

While the vacation rental industry is well-suited for temporary or contract workers, there is a dangerously thin line between what differentiates an independent contractor from an employee. The Department of Labor says that most independent contractors are actually employees, and they are on a mission to ensure that workers get the wages, benefits and protections to which they are entitled. 42

WHY DO EMPLOYERS MISCLASSIFY WORKERS? Independent contractors are a great resource to employers in the vacation rental and hospitality industries especially for short-term periods of time or specialized project work. There are considerable economic and business reasons to classify workers as independent contractors making them appealing for employers to use. Some of the advantages of using independent contractors include:     

Reduced costs (e.g. benefits, overtime, payroll and other taxes) Greater flexibility Greater job focus from workers Supplementing workforce “as needed” during busy periods Contractors are easier to dismiss from work duties

While there is a strong upside to using independent contractors, there is also significant risk when it comes to misclassification. Be aware that if you are audited and have misclassified independent contractors then there are a number of potential pitfalls and expensive consequences coming your way ‒ even outside of the DOL’s arena. Some of the areas you may be held liable for include:  Income tax liability for employment taxes that should have been withheld from “wages”  Potential overtime pay and other wage claim liability  State unemployment insurance payments  Worker’s compensation insurance premiums (and potential liability for workplace injuries)  Benefits and coverage under existing employee benefit plans  Fines for failure to complete I-9 forms  Attorneys’ fees and costs

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 Other civil and criminal liability

THE DEPARTMENT OF LABOR’S INCREASED ENFORCEMENT PRIORITY Independent contractor misclassification is the number one priority of the DOL Wage and Hour Division (WHD). In fact, they have set up a misclassification initiative and have agreements with 29 states to combat the ongoing issue of misclassification of employees as independent contractors. In Fiscal Year 2015, the DOL found over $246 million in back wages for more than 240,000 workers in janitorial, temporary help, food service, daycare, hospitality and similar industries. To make this a bit more real for you, here are some recent examples of companies fined for misclassification:  June 2, 2016: Allstars Staffing LLC, an agency providing workers to local resorts and hotels in Tempe, Arizona, will pay more than $151k in overtime back wages and damages after misclassifying 275 hotel employees as independent contractors.  May 23, 2016: Perfect Service Excellent Benefits Services, a staffing agency in Kissimmee, Florida, misclassified employees working as housekeepers, launderers, maintenance and front desk personnel as independent contractors instead of employees which resulted in the Staffing Agency paying nearly 25k in back wages to 15 employees.  April 6, 2016: Investigators with the WHD found that Elite Energy Efficiency, an Idaho home energy contractor, misclassified employees as independent contractors and will pay $41k in back wages to 44 employees.  March 16, 2016: Tampa District Office found that Toria’s Support Care Services misclassified one maintenance worker and one care provider as independent contractors instead of employees and failed to meet minimum wage requirements with several other employees resulting in more than $56k in back wages to nine employees.

 Behavioral Control ‒ These factors relate to how the employer directs or controls how the independent contractor does the work. For example, who sets the work schedule? The employer or the contractor?  Financial Control ‒ These factors refer to facts that show whether or not the business has the right to control the economic aspects of the job. For example, does the worker have unreimbursed expenses that the employer pays?  Type of Relationship ‒ These factors refer to facts that show how the worker and business perceive their relationship to each other. For example, what benefits (if any) are provided to the worker such as uniforms, supplies, keys, business cards, phones, computers, etc.? It is important to note that no single factor automatically makes the worker an employee or an independent contractor. The IRS 20-factor test is only a set of guidelines. Department of Labor ‒ Economic Reality Test (FLSA) uses seven factors to determine whether workers are employees. The focus here is whether or not the worker is economically dependent on the business he is working for or if he is in business for himself. For example, can the worker make more profit or lose money depending on how he does the job? Is he in business for himself ? Can he document other employers? State Laws ‒ Beware. Some state laws may trump federal law in determining employee status. Many states (such as California) have laws that more specifically define an independent contractor status.

Once you have reviewed and considered the risks associated with the classification of independent contractors, you should review and modify your contracts and agreements as appropriate. If you decide to continue the relationship with your contractors, consider including indemnification language and other provisions to protect your company from liability. Don’t forget to review contracts with It is important to understand that an investigation isn’t completely your third-party vendors in the event that a government audit derandom and can occur based on any of the following: termines the contractor’s workers are actually your employees.  An independent contractor files a claim to receive unemployment or workers compensation benefits from your company  Your company issues a W-2 and 1099 to the same worker in the The DOL’s misclassification initiative is real. Don’t wait for an ausame year  The IRS has an unmatched 1099 to an individual’s income tax dit or an investigator to show up on your doorstep before you take action. Takes steps now to properly classify your workers. report  A government tax audit Resources:  An I-9 audit IRS Independent Contractor (Self-Employed) or Employee? https://www.irs.gov/businesses/  A formal review request initiated by the independent small-businesses-self-employed/independent-contractor-self-employed-or-employee contractor for misclassification ‒ the IRS has a form for this Employment Relationship Under the Fair Labor Standards Act (FLSA)

THE BOTTOM LINE

https://www.dol.gov/whd/regs/compliance/whdfs13.htm

WHAT SHOULD BUSINESS OWNERS DO NOW? Be proactive. Take time to compile a list of all the individuals you pay as individual contractors and for those whom you issue 1099’s to. For each individual on the list, you should review their working relationship and then evaluate the risk. In addition to your independent contractors, also review your outsourced vendors and examine each of these third-party relationships.

The best way to evaluate the risk for both independent contractors and third-party relationships is to review the working relationship based on the IRS Common Factor Test, the DOL’s Economic Reality Test and your state laws. Here are some key factors and information to get you started: Internal Revenue Service Common Factor Test ‒ The IRS uses a 20-factor test to determine independent contractor status based on:

VRM INTEL MAG - ISSUE 4-Summer 2016.indd 43

Department of Labor Wage and Hour Misclassification Initiative https://www.dol.gov/whd/workers/ misclassification/#stateDetails The Wage and Hour Division Resources for Workers https://www.dol.gov/whd/workers.htm

Sue Jones, Founder and Managing Director of KLS Group, is passionate about creating strategic human resource programs and services to effect positive change in organizations. She is an innovative HR leader experienced with both large and smaller businesses. Sue has worked in many different industries and is adept with transferring her knowledge, skills and abilities across business channels. An experienced HR professional, Sue brings a fresh approach to her clients, addressing their needs in a personalized 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 VRM Intelcertified. Magazine | Summer 2016 43

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| Marketing

Marketing Mix VRM Intel

3 Steps

By Amber Mayer

to Diversifying Your Marketing Plan

tâ&#x20AC;&#x2122;s not hard to fall in love with the vacation rental industry. You get to explore absolutely breathtaking real estate and meet adventurous homeowners and guests from all over the world. Every day is different, and as with any other young industry, there is constant change and innovation. Some of the changes are good, some are bad and some are just downright challenging. Iâ&#x20AC;&#x2122;ve learned that when we have a year of challenge, like 2016 is turning out to be for most vacation rental managers, we end up coming out better on the other side. This is a year in which we remember that our industry did not always have listing sites that drove 75 percent of our inquiries.

Salvaging 2016 and preparing for 2017 should be all about creating a strong, diversified marketing portfolio. It does not mean that you just abandon your listing site agreements, it means that those partnerships should be just one category of your marketing efforts.

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STEP 1: BUDGET The first step in diversifying your marketing plan is to budget appropriately. Brand new property managers who have not established any brand recognition yet should budget between six to eight percent of their gross rental income for marketing. More established vacation rental managers can pull that budget back to four to five percent of overall gross rental income. Rentals

Average Gross Rental Revenue Per Unit

Total Gross Rental Revenue

Marketing Budget %

Marketing Budget

$25,000

$1,250,000

$87,500

$50,000

$2,500,000

$175,000

125

$25,000

$3,125,000

$187,500

125

$50,000

$6,250,000

$375,000

250

$25,000

$6,250,000

$312,500

250

$50,000

$12,500,000

$625,000

Depending on whether or not a company is trying to grow and acquire more rentals, how you divide your budget will vary, but here is a template for any company that is in growth mode. EXAMPLE MARKETING BUDGET ALLOCATION BREAKDOWN: Percentage

$187,500 Budget Example

Listing Sites Subscription Fees Per Inquiry

25%

$46,875

Pay Per Click â&#x20AC;&#x2019; Google/Bing/Social/Other

25%

$46,875

Digital Ad Buys

15%

$28,125

10%

$18,750

PR/Collateral/Other

15%

$28,125

Merchandising

10%

$18,750

Category

D Does my website make it easy or frustrating to find rentals and book online?

E Do I have Google Analytics installed properly? Do I know how to interpret and use the data to make business decisions?

$1,000

$625

$250

TRADITIONAL LISTING SITES: This has been a tough year for the listing sites, but it does not mean that you give up on them. It means that you right-size their place in your marketing budget, meet with them regularly to go over your listing performance, optimize and enhance your listing as much as possible and keep going. To decide between Pay-Per-Booking and Subscription-Based models, consider how many bookings you want to get from these channels and how you are handling the costs. This is a simple math question for now, until one relationship is more heavily weighted than the other in the listing site search results. (see table below) Questions to Ask When Deciding Between Pay-Per-Booking and Subscription Models:

PAY PER CLICK/IMPRESSION

C Merchandising my rentals: incredible photos, descriptions and more are a must.

Annual Pay Per Booking Cost (Transact on Channel Website)

The key to diversifying your marketing is being flexible and willing to try new things, measure their effectiveness and implement what works. Create a plan, but be ready to change as needs and opportunities arise.

E Can I increase my rental rates on your channel to cover my costs?

B Is my website mobile friendly and transactional?

STEP 3: DIVERSIFY

D How do you bill for the commission charges?

Website Checklist:

# of Bookings Expected

C Do I have a process in place to capture your leads and not just your bookings?

C Do you charge a commission for bookings that occur from inquiries that you send me? Is the commission rate different?

Before you open the marketing diversification flood gates, take the time to make sure you have done everything you can to ensure the highest conversion rates possible on your website and in your call center.

$2,500

B Does my staff take orders, or are they a trained sales team?

B Do you charge commission on just the rent or do you charge commission on the total?

STEP 2: CONVERT

Avg Revenue Per Booking

Call Center Checklist:

This category includes channels like Google Adwords, Bing Paid Ads and Social Media Paid Ads. All of the search engines have made it much harder to tell the difference between an ad and an organic listing to consumers, which means that if you are not in the PPC game, your consumers may not be finding you at all, regardless of how well you rank organically.

Social media has also made it all but impossible to reach a reasonably sized audience without spending money. Having a strategy to boost specific posts and implement remarketing is imperative. PPC Checklist:

B Is anyone managing my account? PPC is not "set it and forget it." C Do you have remarketing turned on?

D Have you uploaded your database for ad targeting?

Annual Pay Per Booking Cost (Transact in Your Call Center or Your Website)

$1,250

$500

Annual Pay Per Booking Cost (Mixed 2 on Channel Website +3 in Your Call Center/Website)

$1,000

$400

Annual Subscription Costs

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$400

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| Marketing

DIGITAL AD BUYS

PR/COLLATERAL/OTHER

This is going really “old school,” but in a new way. Instead of buying classified ads or even just banners on news and magazine websites in your target markets, consider working with your top five to ten drive markets, finding the publication websites that are the most popular, and creating a seasonal campaign that includes using their email database and social media presence to drive relevant traffic to your website.

This category is one in which you spend money to have consumers fall in love with your company and not just your rental inventory. You want to spend money on public relations and print collateral like mini-brochures, flyers and postcards because you want consumers to tell other people which “company” they stay with, not just which “rental home” they love. Ask yourself if you want to be a company of commodities or a true brand.

Digital Ad Buy Checklist:

B How large is your email subscription list?

C Can I segment the list by my target demographics? D What kind of reporting do you provide? E Can I get a multi-insertion discount? F Who does the creative design?

EMAIL MARKETING This is the most effective, least expensive marketing you could be doing on a regular basis. You should be sending targeted, personalized emails on a weekly basis to everyone who has ever inquired, not just your past guests. It is a fallacy that sending too many emails increases your opt-out rate. In all actuality, sending irrelevant emails increases your optout rate. Email Marketing Checklist:

B Are you using a platform that allows you to segment your database on the fly?

C Are your email templates designed to be responsive so that they are easy to read on mobile phones? D What is your deliverability rate? Does your email platform give you this information?

E Do you have an email marketing editorial plan? Not every email should be about a discount. 46

VRM Intel

A powerful public relations strategy can kill multiple birds with one stone. Earned media placements create valuable backlinks to your website and brand mentions on high-quality websites which directly impact your organic search engine rankings.

Print has made a comeback. It brings authenticity to your brand and consumers like getting something creative in the mail that sparks their curiosity to go to your website. The keyword here is creative. This does not mean you have to go back and print the huge, difficult brochures. It means that you need to think about what you would love to get in the mail that would inspire you to start planning your vacation ‒ and build that. There is no marketing plan that is one size fits all. Depending on your goals for the year, unit growth, increasing off-season revenue or growing a specific subset of guests like group bookings, it is all about experimenting and finding the right mix. Once you have this done, you will feel much stronger about your marketing plan regardless of the changes that occur in the industry. Take control of your guests and your marketing by diversifying in 2016.

Amber Mayer is a self-employed technology and marketing consultant in the vacation rental and real estate industries who uses data to drive decisions. She is a marketing and eCommerce innovator with extensive experience in the Travel & Real Estate vertical including Master Planned Real Estate Developments, Hotels, Resorts and Vacation Rentals.

VRM Intel Magazine | Summer 2016

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Call us at: 949-333-0724

BookingPal offers a suite of products and services that allow property managers around the world to successfully distribute their vacation rental inventory on the worldâ&#x20AC;&#x2122;s most highly utilized online consumer travel websites including Airbnb, Booking.com and over 30 other travel portals.

New Customers

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BookingLInk

VRM Intel

Is a global distribution management platform built specifically for the vacation rental industry that provides seamless, real-time connectivity between most Property Management Software (PMS) systems and the worldâ&#x20AC;&#x2122;s most popular consumer travel websites to distribute your inventory, increase occupancy and grow revenue.

TravelAgentPal

Is a Vacation Rental portal for registered Travel Agents built by BookingPal to bring your inventory to Travel Agents around the globe

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myOptimize TM

Is a powerful reporting tool that assists vacation rental managers by scoring the way they have merchandised their vacation rentals and offers suggestions for improvements to maximize their presence online

myInquiry

Is a new service offered by BookingPal to assist vacation rental managers with responding to the volume of lead inquiries that can be expected with a successful distribution strategy in order to maximize lead to booking conversion rates

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VRM Intel Magazine | Summer 2016

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| Business

Responding to the Changing Industry Is it time to roll up your sleeves and work smarter? or is it time to execute an exit strategy?

VRM Intel

By Ben Edwards President, Weatherby Consulting 48

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â&#x20AC;&#x2122;ve often said, the only constant in the vacation rental business is change. It is clear that the vacation rental industry has seen its fair share of change this year, as much or more than any other year. With the myriad of changes currently facing the industry, Vacation Rental Managers (VRMs) can expect to see operating profits materially decrease over the near term.

As VRMs survey their operations, at Weatherby Consulting, we find that that many VRMs are at a crossroads, with two separate paths ahead. The first path is tightening up the operations, reorganizing and embracing these changes facing the industry. The second path is changing gears, focusing on financial management, preparing the business for sale and executing your exit strategy. As you determine which direction to drive your vacation rental business, weâ&#x20AC;&#x2122;ll explore the attributes of each route and how to get there.

How to sustain profit margins in a changing industry

VRM Intel

Currently, profit margins are under attack in the vacation rental industry. Numerous external changes to distribution, technology and the lack of progressive management are decreasing earnings. It is also apparent that many VRMs have operated their businesses in a sub-par manner. That is not to say that most businesses are unprofitable, but rather, that the operation has not been managed at an optimum level to maximize profit. In order to sustain or improve upon prior year profit in todayâ&#x20AC;&#x2122;s environment, VRMs must strategically review their operations and make well-informed decisions when allocating capital and resources within the business. As with most vacation rental businesses, payroll is generally the largest expense on an annualized basis.

In reviewing numerous companies across the nation, we find that many VRMs do not manage payroll in a well-organized or effective manner. Over the years, it has been easier to hire additional staff than to properly manage current team members. Conversely, training is non-existent in many operations, setting team members up for failure. The lack of management and process within a business takes a materially adverse toll on the business from an expense standpoint and prevents the business from operating at peak performance. Each team member in the business should have a clear outline of expectations. This outline will help measure the performance of each team member and will ensure that each team member is operating in-line with management expectations. For example, as it relates to reservations, a company should monitor the performance of each

agent to ensure proper reservations conversion and revenue production goals are met. The easiest way to perform this analysis is to assimilate that to a number of qualified reservations calls or inquiries received by each agent and compare that to reservations made each week. We prefer to produce these reports weekly, so as to have more immediate visibility into reservation agent performance. After a short amount of time, the business will have enough data to determine what an acceptable conversion rate for the department should be. Those reservationists who are operating below the agreed upon threshold should be coached up, counseled or further trained to achieve the desired conversion level. If a reservationist is not meeting expectations after a period of time and further training, it is time to transition that person out of the business or to another area of the operation that may better align with their skill set. This example is one of many in which performance management of team members will produce better returns for the business. And while this seems rather straightforward, many companies are not managing the performance of their team members to ensure company expectations are being met. Continual management of performance will ensure that the operation produces more revenue and increases overall profit. Generating more revenue is one component of increasing the profit of the business. The alternative method is to decrease expenses, but a VRM can only cut expenses so much before service levels are affected. The key is to find the right balance to ensure profit goals are met. An additional opportunity to generate more revenue is to consider acquiring another vacation rental business. Numerous synergies are created when two vacation rental businesses are combined, allowing the combined business operations to become much more profitable as a result. The fastest way to increase inventory is through acquisition, and with proper planning, it can be one of best investments in your company. In short, acquiring a vacation rental company presents a very low risk opportunity to create a more sustainable business, providing much higher returns than various other alternatives.

The second largest expense in most vacation rental business is generally marketing. VRMs are navigating numerous changes to the current marketing environment, as general marketing expenses, distribution fees and technology costs are on the rise. The same performance metrics from our payroll example will apply to further managing marketing initiatives. Using revenue production by source code and the expense associated with advertising, a VRM can determine the expense per booking for a particular marketing partner. It is paramount to have a well-balanced marketing plan, as too many VRMs are relying on a single source of online distribution for revenue. This is not a best practice approach to marketing available properties for rent and should be addressed immediately should your business rely too heavily on one particular channel.

By not understanding the expense and return on investment for each initiative, the business will be beholden to certain marketing partners and see significant increases in expense as several distribution providers modify their business model to add distribution fees across the industry. In an effort to operate more progressively, VRMs should get back to basics by developing a broad based marketing program and focus on more direct sources of business. While you understand these marketing plan revisions will not produce immediate results, the sooner a more comprehensive plan is developed, the faster your business will obtain its marketing independence. VRM Intel Magazine | Summer 2016

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| Business

One common theme that is apparent with progressive management companies throughout the industry is low overhead and properly managed expenses. With new technology on the rise, VRMs should be utilizing more efficient ways to deliver the same results. Fortunately, we are blessed with numerous vendors that provide invaluable services throughout the vacation rental industry. Many of these vendors serve as integral contractors and are, frankly, not used enough in vacation rental operations. An overriding factor in the quest to achieve higher profits and lower expense is the use of contractors. Contractors can be hired on a project or ongoing basis, often times at a fraction of the expense associated with internal staff. Many vacation rental supplier companies offer services such as automatic lead responders, marketing services, reservation services, business consulting, human resource management and financial reporting services. At Weatherby Accounting, our team prepares and manages the financial accounting process for a number of vacation rental companies throughout the United States and Caribbean. With the rise of web-based reservation systems and accounting programs, we have the ability to produce financial reporting packages for vacation rental companies that were previously not available due to their inability to hire high-level accounting staff in resort areas. In today’s environment, a smaller company can receive the same professional financial statements and visibility into the business as some of the most professional companies in the industry at a fraction of the cost, allowing VRMs the opportunity to operate more effectively and gain insight into the business that was not previously available.

The aforementioned areas signify one path or direction to take amidst the changing vacation rental environment. In order to successfully navigate these changes, a VRM must be diligent and adhere to shrewd business management, operating more progressively to achieve profit goals. It is clear that the business is becoming more difficult to operate, and while that presents opportunities for numerous VRMs, it is cause for others to reassess and decide if now is the time to execute an exit strategy.

Are you considering a sale of the business? We’ve worked with hundreds of companies over the years and have been involved in buy/sell transactions of all sizes throughout the country. Many VRMs are considering a change of pace due to a number of external factors in the vacation rental industry. Clearly, the business is more difficult to operate than in years past. These changes are forcing vacation rental managers to consider their long-term strategy. On one end of the spectrum, VRMs are being forced to change reservation software, restructure business models and become more progressive and skilled operators. On the other end, VRMs are being required to determine if an additional investment of time and money in the business will pay off in the long run. As you consider which direction to take your business and if selling the company is the right option for you, we’ll discuss a number of items to consider before making that decision.

terms are within market standards. As you move forward through the process, please consider the following points to ensure your operation is protected and your transaction is a success:

 Choosing to sell your business is an important decision and should be handled with the utmost confidentiality. Before entertaining any discussions, a Non-Disclosure Agreement (NDA) is imperative to ensure all conversations remain confidential.  A summary level Confidential Offering Memorandum (COM) should be created to provide more information about your business. The purpose of a COM is simply to illicit an offer.

 Once a formal offer is received, outside counsel should be consulted. Finding attorneys with prior vacation rental experience is preferred.

 Adhere to a formal due diligence process to ensure the transaction proceeds in a professional manner.  Utilize the service of a skilled attorney with prior vacation rental experience in preparation and negotiation of a Purchase Agreement.

 Finally, use a transaction advisor to help manage the process, deliver access to qualified buyers, provide access to market rate terms and ensure the closing happens in a timely manner.

The Bottom Line The Vacation Rental Industry is changing quickly, and you will need to run fast to keep pace and maintain or, better yet, enhance profits. Towards that goal be sure you are measuring the performance levels of employees, operations and marketing initiatives. Don’t be adverse to leveraging technology, consultants and contractors to effectively and cost-efficiently execute your strategy and stay ahead of the changes. On the expense side it can be easy for an operation to become bloated over time. Challenge yourself to progressively manage the business in a lean manner. If you want to stay in the industry long-term, consider strategic acquisitions to grow inventory and revenue while taking advantage of the synergies made possible by a combined organization.

VRM Intel

If your goal is to exit the market place in the short-term (one to five years from now) start planning now and executing on that strategy today! Again, understand the importance of leveraging professionals in the industry that have experience in the entire transaction process and can present a business in the best light. Maximizing the value of the business is just part of the equation. Securing terms that meet your goals and reduce your risk is just as important.

Hold on! The Vacation Rental roller coaster ride is far from over…

Running a progressive vacation rental company and preparing your business for sale are nearly the same. Having a sound financial management process, clear policies and positive trends in the business will make your company very attractive to prospective buyers. If you have determined that selling the business is the right path for you, you may want to engage the services of a transaction advisor to manage the process. In most cases, transaction advisors will generate a higher value for the business and ensure the agreed upon 50

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| Marketing

Winning with Email Marketing VRM Intel

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Joshua Guerra has been actively involved in Internet marketing since 2005 and the vacation rental management industry since 2009. Joshua’s knowledge and passion for Internet marketing has led his business, BIZCOR.com, to become an industry leader predominantly focused on helping vacation rental management companies.

An A to Z Guide for Email Marketing for Vacation Rental Managers VRM Intel

hile attracting more business, property managers often forget two of the most crucial streams of revenue there are: past customers and interested parties (i.e. those who have given you their email or signed up for a newsletter). In an industry dominated by distribution channels, SEO strategies and other oft-used profit drivers, it is easy to get caught up in what else is out there rather than what you already have. The grass is always greener, after all. Fortunately, it is never too late to jump on the bandwagon and do what you should have been doing from the very beginning: Email Marketing. With this extremely potent tool, you can reach out to interested parties and fill your properties with renters who you already know are going to have an amazing time. Plus, because these leads are almost always the most likely to convert, a well-run email marketing campaign is sure to provide you with more filled units than even the best manicured listing on VRBO. It’s truly an incredible way to keep your company’s good will high and your profits higher. But ‒ and there is always a but ‒ email marketing can be an extremely difficult strategy to simply pick up and learn and an even more difficult skill to master. This is precisely why we’re here to help you learn how to turn email marketing into your most potent weapon. Read on for more information about the “how-to’s” of email marketing, and begin increasing your company’s occupancy rates today! STEP 1: CHOOSING THE RIGHT EMAIL MARKETING PROGRAM Although this is just the first step to any successful email marketing campaign, it can be a bit overwhelming to figure out which one is right for you. That’s why you need to break it down into what your

company will need. In our experience, this normally comes down to a couple of crucial services including:  High Email Limits: Most email marketing programs offer high or unlimited emails, but you will come across some that don’t. Make sure that the program you choose at least offers the potential for high volume emails, so you don’t constantly find yourself hitting your limit.  Email Templates: Email templates give you the ability to preformat an email that you can use and then replace with your own content. This allows you to create custom email campaigns quickly, saving time in the long run.  Custom Auto-Responders: Auto-responders aren’t the best solution to ensure high conversion rates, but they are a necessary evil for after-hours responders. With that in mind, it’s important that the email marketing platform you choose allows for custom message auto-responders, so you can make your auto-response as personal ‒ and as high performing ‒ as possible.

 Google Analytics Functionality: This is an absolute must, so you can determine and track how well your email marketing campaign is performing. This also helps you keep all your other marketing data (website data, for instance) in one place.

 User Segments: Finally, and most importantly, your email marketing platform must provide segmentation. This allows you to separate receivers of your email blasts into different segments, so you can tailor the message.

However, functionality isn’t the only thing you need to keep in mind. The user-friendly nature of each program is incredibly important, as is how much you enjoy working with the one you wind up choosing. It is crucial to utilize the free trial of each program before making your decision. Constant Contact and MailChimp, in our experience, are both quality platforms that offer all of these functions and are quite easy to use out-of-the-box, but you may determine differently. It really is subjective, so set up the free trials and see what works best for your team. STEP 2: CREATING EMAIL MARKETING LISTS As a rental management company, odds are you’ve collected tons of data about your past and current renters. From addresses to times of year that they visit ‒ if you’re a really zealous data miner ‒ to their vacation interests. You have collected plenty of information to create marketing lists with a variety of messages and targets. Though your new email marketing software facilitates are creating these lists, it’s up to you to use that information correctly to make segmented lists that you can send to. Here are just a few examples:

Recurring Guests Your guests who have stayed in your rental certainly belong on your “Recurring Guests List.” This is a list of all the guests that you’ve had stay in your rentals. You can email previous guests one month prior to the date of their initial inquiry (the year before). They may be serial travelers to your destination without you even realizing it. By doing this, you can build your list of frequent guests and keep your properties filled. Nearby Guests Do you keep a list of all your previous guests’ address data? Knowing exactly where previous guests live helps, particularly if they happen to live just a couple hours away from your destination. This also helps you target guests who are more open to last minute deals VRM Intel Magazine | Summer 2016

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or cancellations ‒ making them more likely to convert. Just make sure you tailor your email correctly and keep the email list nice and segmented. This could easily become one of your more answered email blasts. STEP 3: CREATIVE STRATEGIES YOU CAN USE Just having a list of well-segmented targets isn’t all you have to do to implement a successful email marketing campaign. You also need to have a creative strategy that won’t send that email straight to the trash can. Fortunately, we have a few strategies that we’ve used extensively in the past that ‒ while not completely guaranteed to be a smash hit (depending on your market) ‒ can be quite effective if utilized in tandem with all the information you’ve collected via your CRM and past business deals.

 Last Minute Cancellations/Gaps: It may hurt to basically give away stays at your pricey properties, but even the newest property management companies understand that some money is better than none at all. With that in mind, crafting a campaign around a deal for last minute cancellations or unused properties can be a major success. After all, everyone loves a good deal, and the type of traveler who is open to these deals often provides a high conversion rate.  Holiday Deals: Is it the fourth of July? Christmas? Thanksgiving? Doesn’t matter. All of these are fantastic themes for your email marketing, and create a perfect opportunity to attract potential customers looking for a holiday excursion. Make sure to utilize plenty of catching graphics and offer a good deal!

 Residual Guests: If you are sending an email to guests who have been there before, try to play on the good times they had. Craft your message around good times and a great vacation while offering them a “welcome back” discount (if you need to book fast).  Make Me an Offer: People love to haggle, and even if your price margin isn’t moving that much, giving your guests the opportunity to reach out and try to get their own price is a great way to improve open rates on your emails. Priceline did it, why can’t you?

 Booking the Off-Season: Is it the off or shoulder season? If so, chances are you’re not booking too many reservations. That makes this the perfect time for blow out deals on all your rentals and an even more perfect time to let your segmented marketing lists know that’s exactly what’s going on. Send out your best deals in your email messages with a discount code and watch as the reservations fly in. STEP 4: CRAFTING YOUR EMAIL - SUBJECT LINE TIPS AND DESIGN The Subject Line Though the message of your email is certainly important, the subject line may be just as crucial to crafting a well-performing email marketing campaign. Unfortunately, everyone has seen the tried and true methods and almost everyone is sick of the same-old, same-old. That’s why it is up to you to let the creative spirit dictate your subject. However, there are still some rules you should keep in mind: B Keep your subject short. Lengthy subject lines get messy and lower open rates, so keep it smart and snappy.

C Be specific. Don’t be vague about the offer you are providing. Get straight to the point and make sure people know what they are about to open. D Make your offer immediately apparent. Try to put what you’re offering in the subject, but do it in such a way that avoids

buzzwords. The more you do to look less like a spam email, the better chance people will open your email. E Test, test and test again. If your email campaign has a low open rate, try again with a different subject. Don’t get stuck in a rut. The more you tinker, the better your results will be. The Design Unfortunately, there is no definitive design that will make or break your email. Obviously you want some bright and catching colors that immediately draw your target audience in ‒ without being too obnoxious ‒ but the rest is up to you. Just remember to make sure your emails are created with the 80/20 rule in mind ‒ 80 percent information, 20 percent offer. No one likes to open an email and be greeted by a 1000 word sales pitch. Also, you will certainly want to create different design templates based on the event or segment to whom you are marketing.

Is there a holiday and you find yourself trying to book some last minute reservations? Make sure to include some “Time is Running Out” text at the top with some holiday specific graphics. Trying to get customers to book a short running special? Then do all you can to let people know that the event (and deal you’re offering) only has a certain amount of time left. Regardless of your message, tailor your design around the message to make sure that message is received on all levels. STEP 5: EMAIL MARKETING VIA FACEBOOK? SAY WHAT? Facebook is known for collecting tons of information about each and every one of its users, which can be useful for an even more indepth email marketing campaign. Import your marketing lists into Facebook AdCenter’s “Custom Audience” section to find profiles. Then, with your new Facebook list, you can begin running the same campaigns you are offering with your email campaigns for potential double exposure.

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There are several benefits to using Facebook as an extension of your email marketing strategy:

B Facebook has a wealth of information, including interests, genders, emails, etc. that you can use to your advantage for an advertising campaign. C Emails need to be opened without the aid of well-crafted and eye-catching graphics. Facebook’s feed system allows you to craft an amazing ad that appeals directly to your target consumer, making them more likely to be clicked on and more likely to convert. D Sending these ads to your exact email lists provides you with double exposure, compounding the likelihood of conversion.

Just remember, Facebook “Custom Audience” email marketing is a tool all its own that has separate rules, tips, technical demands and even a completely separate hub that all need to be learned. STEP 6: EMAIL MARKETING FOR CUSTOMER SERVICE AND REVIEWS Improve Your Customer Service Many VRMs forget that the one thing that is near guaranteed to improve your rental occupancy and revenue is a quality brand name and a top-notch customer facing component. Surprisingly, email marketing can actually do plenty to improve both of these facets of your company. This impressive feat lies in the oft-maligned auto-email triggers that come packaged with almost all email marketing tools. All you need to do is set up these email triggers to send status checks to your current customers to find out what they have about

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their accommodations (these emails should be sent mid-stay and during checkout). This way, you can head off all potential complaints ‒ that might result in bad reviews later ‒ and show your customers that you care. You can even provide them with services to make sure their complaints are assuaged, allowing you to make absolute certain all your clients leave happy and come back again. Trust us, this is something we do regularly here in Park City, and it works like a charm.

Don’t Forget the Reviews In Park City, with each check-up email we send during mid-stay, checkout and post-checkout, we also include a link that sends guests to our pre-qualification review page. This review page prompts guests to leave a review if they’re happy or leave their comments (in a form not attached to any public review platform) if they’re angry. The benefits of this practice is two-fold: B Get more good reviews. By including this link in your emails (you should also include them in email marketing messages), we make it easier than ever for guests to leave their 5-star reviews when they’re happy. While these won’t result in dollars now, 5-star reviews signal to other internet searchers that your company/property is a good one. More importantly, one of the main ranking signals Google uses for local rankings is user reviews on the G+ and Yelp platforms, which means that having a high number of these reviews can improve your ranking on

Google, your internet traffic to your site and ‒ of course ‒ your profit margins. Plus, you will look amazing for property acquisition if you’re on the lookout for new properties to manage. C Avoid bad reviews. The review pre-qualification system may not be perfect, but it does give disgruntled guests a place to leave their angry thoughts in a forum that doesn’t get posted on the internet. Though many may leave that forum immediately to post a review on Yelp or Google, quite a few may find their anger spent and go on with their lives ‒ allowing you to keep your review average intact.

These practices will lay the groundwork that leads to even more quality leads in the future. As such, it’s important for you to do all you can to take full advantage of auto-email triggers and review prequalification.

Conclusion At the end of the day, email marketing can become one of the most powerful marketing and public relations tools at your disposal. Just one blast can be the difference between a good month and a month for the record books. Just take the time to follow the steps above, configure your campaigns correctly and put some TLC into your marketing message. You too may see that success! Look for “Setting up Your Email Marketing Analytics” in the VRM Intel, Fall 2016 issue.

VRM Intel

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| Marketing

Winning with Google After Years of Struggling, Vacation Rental Managers Can Take Advantage of Google’s Changes TO SERPs to Beat the Competition By Amy Hinote

B C

acation Rental Managers (VRMs) have waited a long time for good news related to Google Search. For several years, OTAs and big-name listing sites have been able to outperform VRMs for organic positioning on Google’s Search Engine Results Pages (SERPs). Prominent VRMs watched helplessly as their rankings slipped further down SERPs in spite of costly SEO initiatives.

However, the game has changed.

Google has made significant changes to their SERPs which are now allowing savvy VRMs to take back their rightful place on Page 1.

With a renewed and expanded emphasis on local search results, Google’s changes have caused OTAs and listing sites to scramble to improve visibility and explain substantial decreases in traffic to investors and shareholders. As a result, VRMs have a much awaited chance to take advantage of these changes and beat the OTAs in organic search, but proactive action needs to be taken. According to Google, there are specific steps you can take to quickly push up your rankings.

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First, assess your current visibility. Here is a step-by-step guide to see what users see in the new Google SERP format: B Go Incognito. Right click on the Chrome browser icon, and open “New Incognito Window.”

C Search for "[Your Destination] Vacation Rentals" (Repeat these steps for your top keyword phrases).

D Note the company listings that show up as an “Ad.” The companies that are displayed here are bidding for these search phrases using Google AdWords. Google recently eliminated the right column of ads and is now only displaying three to four ads in this section, which has resulted in an increase in costs. (See "Marketing Mix" on page 48 for a recommended AdWords budget).

E Below the ads, you will see a Google Map with Local Listings. Your primary goal is to work your way into the top three spots displayed.

E H

F Under the map and local listings, you will see another group of results that are based on the Google search algorithm with which you are more familiar. We previously referred to these results as the Top 10 Organic Results.

G Below the Top 10 Organic Results, you will also see three or four more ads from Google AdWords.

H Click on “More Places.” This will link to a map that shows local vacation rental company listings.

According to Google, these Local results appear for people who search for vacation rentals near their specified location, and you can improve your business’s local ranking by using Google My Business. 56

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5 ways

to Improve your Local Ranking on Google SERPS

B Can’t find your business? Improve your info.

Providing and updating business information in Google My Business can help local ranking on Google and enhance your presence in Search and Maps. Local results favor the most relevant results for each search, and VRMs with complete and accurate information are easier to match with the right searches. Make sure to enter all of your business information in Google My Business so customers know more about what you do, where you are, and when they can contact you. Provide information like (but not limited to) the physical address, local phone number and category.

C Verify your location(s).

Verify your business location(s) for the best opportunity to appear for users across Google products, like Maps and Search. Prioritize the location that is closer to the actual location of your rentals.

D Keep your hours accurate.

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If you provide 24/7 service, add it. While conducting research, you can easily see the phrase “Closed now” on many local listings. If you are open for extended hours for calls and/or service, make sure travelers on Google see it. Entering and updating your hours lets potential customers know when you’re available and gives them confidence that when they travel to your location, it will be open.

E Manage and respond to reviews.

Google has added a section on its reviews page that highlights reviews from other websites such as Booking.com, among others. For VRMs, this is an area that is rapidly advancing. Spreading out reviews over Google, TripAdvisor and HomeAway will provide enormous dividends in the very near future. Google’s goal in adding third party reviews to their search results solves the problem of travelers searching for reviews from multiple websites. And this new feature is linked with Google maps, which offers multiple benefits.

How Google Determines Local Ranking According to Google, local results are based primarily on relevance, distance and prominence. These factors are combined to help find the best match for a search. The following information is provided by Google.

Relevance Relevance refers to how well a local listing matches what someone is searching for. Adding complete and detailed business information can help Google better understand your business and match your listing to relevant searches.

Distance Just like it sounds – how far is each potential search result from the location term used in a search? If a user doesn't specify a location in their search, Google will calculate distance based on what’s known about their location.

Prominence Prominence refers to how well-known a business is. Some places are more prominent in the offline world, and search results try to reflect this in local ranking. Adding your proximity and partnerships with local landmarks or well-known brands that are familiar to many people can improve your prominence.

Prominence is also based on information that Google has about a business from across the web (like links, articles, and directories). Google review count and score are factored into local search ranking: more reviews and positive ratings can improve a business's local ranking. Your position in web results is also a factor, so SEO best practices also apply to local search optimization. For the first time in years, Google has made changes that favor the local VRM. With just a few steps, you can reclaim your rightful spot in organic search results.

Interact with customers by responding to the reviews, across all channels, that they leave about your business. Responding to reviews shows that you value your customers and the feedback they leave about your business. High-quality, positive reviews from your customers will improve your business’s visibility and increase the likelihood that a potential customer will visit your location. F Add photos.

Adding photos helps travelers see the type of homes you offer. Accurate and appealing pictures show potential customers you are professional and that your business offers what they’re searching for.

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An Inside Look at Booking.com David Mau, Director of Product at Booking.com, talks to VRM Intel about growth, pricing models, regulations and the importance of professionally managed vacation rentals 58

his year, the online vacation rental marketplace has experienced numerous changes to the landscape including new pricing models, the addition of fees to travelers, changes in sort criteria and cancelation fees, and an industry-wide transformation to a transactional marketplace. While the conversation is revolving around supplier angst at HomeAway and the regulatory chaos caused by Airbnbâ&#x20AC;&#x2122;s hosts, Booking.com is quickly and stealthily building its inventory of vacation rental listings, growing over 30 percent in the last year. Besides the increase in the number of listings, what makes the vacation rental inventory of Booking.com unique is that it is verified, instantly bookable and largely professionally managed. In addition, Booking.com has not adopted a traveler (or service) fee to their pricing model.

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We reached out to David Mau, Director of Product at Booking.com, to find out more about Booking.com’s technology, growth initiatives, their views on working with professionally managed properties and why Booking.com chose not to follow the market with addition of traveler fees. Q: Booking.com has seen a 30 percent growth in vacation rental listings since last year. To what do you attribute this growth, and is it in line with Booking.com’s expectations?

DM: At Booking.com, our aim is to connect travelers from all over the world with their ideal stay in the most seamless and enjoyable way possible, whether it’s a five-star hotel in New York City, a vacation home in Florida or a cozy apartment in San Francisco. As with every move we make to improve our product offering, we listen to our customers. In recent years, we’ve seen the demand for vacation rentals, homes and apartments steadily continue to grow. To make sure we’re providing the best possible range of options, we’ve been busy building relationships with as many different kinds of accommodation providers as possible and adjusting our platform to meet all of their unique needs. To that end, as of today, we offer more than 460,000 vacation rentals on Booking.com that have over 2 million bookable rooms. In fact, more than 70 percent of the accommodation options we feature on our website are something other than a traditional hotel. Our customers are hungry for choice and new experiences ‒ and that’s great news for the vacation rental industry. We’re definitely pleased with the growth that we’ve seen on our platform, and we keep building new partnerships so that we can continue to inspire our customers with the diversity of choice they demand. VRM Intel

Q: Booking.com is seeing much of its growth in professionally managed listings. In your earnings call last quarter, CFO Daniel Finnegan said, “We’ve got teams of people at Booking. com that are continuing to innovate and grow (vacation rental) business. Right now, it's mostly through property managers.” Can you share some of your objectives in working with property managers?

DM: We believe that the best way to scale the growth of vacation rentals, homes and apartments on our website, and thus scale what we offer to consumers globally, is to keep a dedicated effort on

professionally managed properties. This helps to ensure a seamless, professionalized experience, rather than the constant unknowns of dealing with individual property owners who may not be as wellversed in the vacation rental business.

As with all of our accommodation partners, our primary objective with the professionally managed sector is to make sure that our working relationships run as smoothly as possible so that our partners can continue to deliver great stay experiences to travelers and grow their businesses through Booking.com. We want to make it as easy as possible for them to sign up and manage multiple listings with us, so we work hard to provide the flexibility and insights that will help them grow their businesses. Managing a portfolio of several vacation homes with different owners can come with a unique set of challenges. We get that and so we are innovating our interface to better meet those needs, including the addition of a more robust system to help facilitate payments for those partners that require it, as well as a messaging system that allows partners to quickly and easily chat with their guests to arrange key pick-ups or special requests from their mobile phone in one handy interface. Q: As you add more vacation rental homes to your sites, do you see differences in working with property managers vs. individual homeowners?

DM: We’ve learned over the years that a one-size-fits-all approach doesn’t work for every partner, but investing time in understanding their different needs does. One of the things we know from working with property managers is that they’re typically industry professionals who are doing this full time. Because they’re managing multiple properties, we see a lot of synergies in terms of the scalability of their processes and an understanding of e-commerce and online travel booking. The key is to align our processes and provide solutions which make their management of multiple properties on our platform as easy as possible. While we also work with lots of super savvy individual homeowners who’ve been in the business for years, we also find that many people who are renting out a single apartment or vacation home for the first time aren’t doing this as a full-time job. They simply have another set of needs and require a different level of support. Meeting all these different, unique needs is certainly challenging, but it’s also one of the aspects of our work at Booking.com that drives us to keep innovating.

2,000,000

1,800,000

Vacation Rental Listing Growth 2011-2016:

1,600,000

1,400,000

1,200,000

1,000,000

TripAdvisor HomeAway Airbnb Booking.com

800,000

600,000

400,000

200,000

2011

2012

2013

2014

2015 Q2

2016 Q2

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Q: With all of the discussion about regulations involving vacation rentals, how does Booking.com “vet” homes as they are added to the site? Do they need to be legal or registered?

DM: When accommodation providers sign up to list with Booking.com and agree to our terms and conditions, we ask them to verify that they are operating in full compliance with local laws and requirements. We will immediately remove any property that is found not to be in compliance. Further to that, we have very robust measures and dedicated teams in place to guarantee that only legitimate properties are allowed to list on our site. Q: Do you require all homes to be instantly bookable? How do you handle varying cancellation policies?

DM: As our goal is to make booking any type of accommodation anywhere in the world online as seamless and as easy as possible, providing our customers with instant confirmation for all bookings is the cornerstone of our product offering. Our customers love this about Booking.com, and it’s one of the key features that sets us apart from other companies operating in the vacation rental space. This ease of booking translates directly into more bookings for our property partners, so we think it’s a win-win-win. From our point of view, this all has to do with customer expectations, which are constantly evolving. With the leaps forward in technology over the past decade, we’re all getting more and more used to being able to shop online and get instant confirmation of our purchases no matter whether it’s groceries, a TV or an upcoming vacation. We believe that having to engage in a discussion with a property before ever confirming the stay is something that adds friction to the travel experience. We’re committed to a more streamlined experience for customers.

With regards to varying cancellation policies, this is something we have been managed from the very beginning of our business. We’ve purposefully built up our tooling over the years to be able to accommodate a wide range of unique cancellation policies over which our partners are in total control. Our goal is to enable our partners to run their businesses as they see fit and to make sure that these policies are crystal clear to our customers at every stage in the booking process so that there are no surprises later on. Q: HomeAway, Airbnb and TripAdvisor have implemented traveler (aka service) fees while Booking.com is continuing with a commission model. Is Booking.com considering a traveler fee? And do you believe that this pricing model of charging travelers is optimal and/or sustainable?

DM: At Booking.com we have never charged a booking fee to customers for our service, and this is something we are extremely proud of. From our point of view, charging travelers is neither optimal for the customer, nor sustainable as a long-term business model. We believe that a commission-based model, which we have used for the past 19+ years, is not only fair for our partners who can choose to list on our website or not, but also results in total transparency for consumers. We are an extremely cost-efficient marketing channel for properties, connecting them with customers from all over the world for a fee that is far, far smaller than other marketing channels like, say, TV advertising. Important to note, we only collect commission when a guest stays at their property. This means that partners only pay for our services when it results in additional business for them ‒ and travelers can continue to book with us with the confidence of knowing that there are no hidden booking fees and that we offer a best price guarantee.

Our vision is simple ‒ offer the widest possible choice of stays in the world and make it easy for people to find, book and experience the properties that are right for them, whether it’s a hotel, vacation rental or any other type of property. Our current model enables us to do just that. We view charging booking fees as a deterrent for consumers. Why would you pay a booking fee for a vacation home when the resort down the street doesn’t charge one? We understand that this is not how the vacation rental industry has traditionally operated, but we do believe that it is the way forward. Empowering customers with the same ease of experience they’ve grown accustomed to in booking traditional hotels is what will help the vacation rental industry continue to grow and prosper well into the future. We’re looking forward to continuing to innovate our business together with our vacation rental partners to do just that. Q: When Expedia purchased HomeAway, Expedia took on HomeAway’s software division that provides property management software to vacation rental managers. Historically, EXPE hasn’t gotten into leveraging software, but PCLN has. Do you believe having vacation rental property management software provides an OTA with a competitive advantage in this space? Are you considering other acquisitions in the vacation rental industry?

DM: Different partners have different needs. While some partners don’t rely on software, or have their own processes and solutions, we do see many that find it more convenient to have a one-stop-shop solution to leverage to run their businesses smartly and efficiently. Many properties prefer not to work with several different companies to get all of the tools they need to operate on a day-to-day basis. We invest in understanding the varying needs of our partners and take a customer-focused approach to creating tools that best meet these needs. For these partners, providing them with access to property management software does bring extra value to our working relationship and makes their lives easier. At the end of the day, that’s simply our goal. Q: In light of the volatile regulatory and technology environment for vacation rental managers, are there any industry trends or predictions that you see in the coming two years for vacation rental managers?

DM: We see a huge appetite from consumers around the world to explore a wide variety of accommodation experiences. More and more travelers are seeking out local and authentic experiences at a lower cost and with more freedom and enhanced privacy. Vacation rentals fill this niche perfectly. In general, we find that vacation rentals are growing in popularity with travelers from a wide variety of profiles, but especially with families, couples of all ages and groups of friends who are travelling or going on holiday together. As technology brings us all closer together and it gets easier and easier to travel, we believe that the vacation rental industry is only going to continue to grow, but that also means that some changes and innovation will be required. Yes, there are some regulatory questions underway, but this is a natural part of the emergence of any new marketplace. Ultimately, we believe these will work out because consumers demand this product, vacation rental owners benefit from the industry’s growth, and local governments benefit from increased tourism in their regions. In the end, we believe that smart partnerships and the right technologies make the next two years and beyond look very bright. By Amy Hinote

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WINNER Most Innovative Travel Company Phocuswright

2015

Receive binding offers on your properties from renters immediately! What is Tansler? Tansler is an innovative vacation rental marketplace where renters name their price and make binding, nonrefundable offers. Tansler helps you fill unoccupied nights, last minute bookings and low season vacancies.

Why List on Tansler? “Priceline meets Airbnb” 1

It’s Free

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Earn up to $1,000 just for listing your properties! To sign up or learn more, visit www.tansler.com/vrmintel, call 646-687-5526 or email hosts@tansler.com

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“Tansler shakes up Vacation Rental Industry”

@tansler

info@tansler.com

www.tansler.com 08-Jul-16 1:06:06 AM

| Distribution

Tansler’s Reverse Auction Site for Vacation Rentals interview with tansler ceo jeremy bernard

ansler was founded in 2013 by Jeremy Bernard, a successful entrepreneur and internet veteran who pioneered streaming user generated video content in the very early days of the internet. As a husband and father of two, he felt vacation rentals were the best option for “quality time vacations.” However, with every vacation, he became more annoyed and frustrated by the time needed to invest in booking a home and the continuous back and forth with owners. Bernard decided to create a solution that simplified and accelerated the process of booking a vacation rental, and Tansler was born.

TANSLER, an anagram of RENTALS, is currently the only vacation rental marketplace that allows renters to name their price and submit one binding offer to multiple homes. Property managers participate in a 24-hour Reverse Auction, and the first manager to accept the offer ends the auction and confirms the reservation. Tansler eliminates the haggling and endless emails between renters and managers making the rental process simpler, faster and more transparent. To execute on this vision, Bernard teamed up with other industry veterans, such as Ken Hamlet, ex-CEO of Holiday Inn Worldwide, now an investor in Tansler and its Non-Executive Chairman, and Walter Buschta, former CMO of the vacation rental giant Interhome, who now serves as COO and who brought a beta release of Tansler online in the end of 2013. This triggered an overwhelmingly positive response in the marketplace and significant press. 62

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Encouraged by this feedback, Tansler hired PayPal’s number two engineer, Troy Saxton, as the new CTO to elevate the product to a market-ready and scalable level. Previously, Saxton was head of payments and credit engineering at PayPal. A month before the planned relaunch of the Tansler platform in 2014, Troy tragically passed away in a plane crash. For the team at Tansler, it was a huge challenge to move on after this tragic loss, pick up the pieces and start all over again. But after persisting through several ups and downs, Tansler finally relaunched in the fall of 2015. We reached out to Jeremy Bernard, Tansler’s founder and CEO, to find out more about how the platform works, how technology is shaping the vacation rental industry, and where Tansler is heading in the future. Q: On the Tansler’s “reverse auction” platform, travelers enter their dates, specify how much they want to pay per night, and Tansler displays results with the listed rate, the offer rate and the discount off the retail price. For a Property Manager (PM), how does it work? JB: Once the consumer submits their binding offer (secured by a credit card) and starts a “reverse auction,” the PMs of the selected properties receive an email notifying them of the offer, trip details and, in the spirit of a true marketplace, listings of other properties that have been selected by the consumer. The PMs have 24 hours to decide if they want to accept the offer, and the first one that does consummates the transaction and ends the auction. If no PM accepts, the offer expires after 24 hours. There are no penalties for ignoring or declining offers. Tansler was built to send real offers to

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PMs to “take or leave” instead of the many “hollow inquiries” that traditionally PMs have to field.

If a PM accepts the offer, they receive the renter’s contact information and Tansler pays the PM the full amount of the rental within 48 hours (less a percent service fee that we charge to cover credit card processing fees). Tansler can pay property managers immediately because transactions are binding and non-refundable. Q: Are you currently working primarily with property managers or individual homeowners?

JB: We generally have a two-pronged approach whereby we work with both PMs and individual homeowners. The majority of our properties are currently professionally managed as it allows us to scale faster and provides us with peace of mind by having quality, vetted properties. Working with PMs provides greater safety assurance and reduces the opportunity for fraud which is obviously a big concern for all listing sites. Q: How is the platform integrated with property management software systems?

JB: We currently have several direct integrations with some of the largest property managers, property management software systems and listing sites. For example, PMs who are listed on HomeAway/ VRBO or use a PMS like Kigo or CiiRUS can simply integrate and list their properties on Tansler with a simple click of a button. We have a pipeline of integrations in progress and are always open to new partnerships and integrations that improve the industry ecosystem. Q: What were some of the challenges you faced early on in development?

JB: For us, it was a “chicken and the egg” issue. We strongly rely on user feedback (aka reviews) and word of mouth. Naturally, that only grows over time. This also applies to data and our focus on improving the experience for both renters and PMs. That means bringing quality offers to property managers based on their occupancy and revenue expectations and guiding renters to creating “smarter” offers that are likely to be accepted.

We had the primary objective of building awareness. Travel startups are always challenged by marketing as a result of the advertising goliaths like Priceline, Expedia and, of course, Airbnb. Additionally, hotels are now dipping their toes into the industry which brings more advertising dollars to compete against but also creates new opportunities for partnerships. We also needed to familiarize PMs with the product. Although Tansler is very simple to use and has been created to improve the booking process, the “reverse auction” feature is somewhat foreign to many travelers that are familiar with traditional OTAs and vacation rental booking sites. As a startup, it is essential to make the product intuitive for its users. Q: Six months ago, Tansler received $1.3 million in funding. Will the injection of capital be primarily used for technology or for marketing?

JB: It’s a combination of demand generation, product development and acquisition of supply. We have been conservative on our marketing spend and believe that a number of startups have been far too dependent on venture funded marketing budgets. Having built a startup during the first tech bubble, I understand that capital is not unlimited and you need to employ out-of-the-box techniques to build your brand.

Q: Do you see Tansler as a market disruptor?

JB: For sure. We have a unique, patent pending process that solves real pain points for renters, property managers and individual owners. No one else is currently doing what we’re doing. Q: Looking to 2017 and beyond in the vacation rental industry, are there specific challenges in technology that you see being solved?

JB: Currently, we have identified four key technology challenges in the marketplace.

Big data, which allows for intelligent pricing/yielding, CRM/ loyalty marketing, and other areas of advancement, is only accessible to the more sophisticated PM. Customer service can be greatly improved with bots and AI. Customer service is now expected to be available through Twitter, Facebook, live website chat, phone, on site, etc. There are great opportunities to leverage these channels to provide great customer support. Hotels are focusing on maximizing revenue by offering rooms by the hour, offering conference space as shared working space, etc. This will eventually cross over into vacation and shared housing. There is a growing focus by PMs on yield management and RevPAR/RevPAN. Q: Recently, HomeAway has been more selective about allowing new API integration with several technology providers (including VRM Intel’s Benchmark Reporting Tool). At the same time, Airbnb's Brian Chesky hinted that he anticipates publishing an Open API in the near future. From your perspective, what are the advantages and implications of Open APIs in our industry?

JB: For both homeowners and PMs, if data is available to third parties, distribution and innovation gets easier. Smaller and larger distribution networks and channel managers have better access to property descriptions, prices, availabilities, etc. which allows them to sell the product in their specific markets and niches that an owner or PM might not otherwise be able to access (i.e., different geographical regions, innovative sites like Tansler, etc...). In my opinion, the real owner of the data should have the right to decide if the content should be shared, not intermediaries such as listing sites or PMSs, which merely serve as a platform for maintaining the data but have no right of the intellectual property. Airbnb has built a massive brand and has the opportunity to build on its brand and ecosystem by opening up its API. There are great implications if Airbnb allows developers to build products that benefit users, hosts and the Airbnb brand. Q: Looking to Tansler's future, what are your near term objectives and growth plans?

Considering Airbnb’s colossal success, the rise of the share economy in general, and the gradual consolidation in the vacation rental space, we believe that the sky's the limit. Near term, we are looking to expand our supply in major vacation and urban destinations in the US to provide both PMs and renters with a great experience. We are also aiming for a global presence, particularly in “pristine” markets such as South America and Asia (which are growing at an enormous pace, but still very low penetration of Airbnb and HomeAway), where we believe Tansler’s concept is a perfect match with the deal seeking culture that is inherent in these regions. VRM Intel Magazine | Summer 2016

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08-Jul-16 5:15:21 PM

| Business

Revenge of the

Property Manager Market Conditions Shift In Favor of the Professional Vacation Rental Manager…Finally!

“I

Google’s changes to search engine results pages took OTA marketers to the mat. Regulations and tax compliance measures in multiple markets forced individual owners and “hosts” into unfamiliar territory.

Increasing awareness of vacation rentals as a lodging option brought new hotel customers to the vacation rental market…with hotel expectations. Airbnb recognized the advantages of adding professionally managed inventory and launched integrations with property management software systems.

It’s been a Long Time Coming The professionally managed vacation rental industry has been waiting over a decade for the pendulum to swing back in their direction.

Before technology and communications allowed for remote management, vacation home owners were heavily reliant on VRMs to manage their properties. The full service approach was beneficial for property managers, homeowners and guests which made the relationship a win-win-win for all. And then came VRBO.com.

As internet usage increased, VRBO.com, the listing site which allowed individual vacation home owners to effectively market their own properties, truly disrupted the vacation rental industry.

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Learning to navigate a distribution strategy related to VRBO.com was faced by VRMs with varying levels of success and angst. Many chose to place their own professionally managed properties alongside for-rent-byowner properties on VRBO.com, causing a consequential expansion of the source of competition. Piggybacking on the success of VRBO.com, Christine Karpinski made Amazon’s Best Seller List with her book How to Rent Vacation Properties by Owner, which supplied owners with rental policy and confirmation templates, marketing strategies and instructions on maintenance and housekeeping.

With the rising cost of self-management, sky-rocketing marketing costs, more regulations, higher customer expectations and changing technology, professional VRMs are finding themselves, as Shepherd predicted, in the cat-bird seat.

Capitalizing on Market Conditions to Build Long Term Success While things are finally looking up in the industry, success is never guaranteed. In order to leverage the changes in the marketplace, action is needed.

In the article “Winning with Google” (page 56), VRMs will find steps to take to jump ahead of OTAs in organic search results. In addition, here are suggestions to take advantage of current market conditions.

Optimize Listings on Channels and OTAs In eCommerce, it has been widely proven that consumers would rather buy direct unless a third party channel provides significant advantages (i.e., Amazon Prime). As a VRM, there are several ways you can use channels to lead travelers directly to your company. Besides using signage in photos, text can be added to photo captions and descriptions with verbiage like “Rest assured that when you rent with XYZ Vacation Rentals, you will have 24/7 service” or “Go straight to your rental with

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XYZ Vacation Rentals Keyless Locks”. There are many creative ways to add bread crumbs to your listings to steer travelers to your company.

The addition of traveler/service fees offers VRMs another advantage. Rate parity does not currently exist in a meaningful way in the vacation rental space, so you are able to offer Best Rate Guarantees to encourage guests to book directly with you. Also, consider enhancing the descriptions on your own website with local information and extra content. Why should your best content be duplicated on channels and OTAs? Besides SEO advantages, by enriching your proprietary content, you can establish your company as a trusted thought leader.

Reach Out to New Homeowners The owner managed vacation rental community is struggling with recent changes in the industry. A quick look at the HomeAway Community Forum or the many VRBO hate groups that have sprouted on social media will offer your team valuable insight into their angst.

Now is a great time to revamp your owner acquisition strategy. Rewrite marketing materials to reflect current market conditions and invest in a creative outreach initiative. New multi-destination companies, such as Vacasa, TurnKey, InvitedHome, and Evolve, are primarily acquiring inventory from homeowners who are self-managing and owners who are new to renting, instead of owners who are working with other PMs. Taking a fresh look at messaging and marketing programs for new inventory can help get a running start over your competition as FRBOs begin to move back under professional management.

Reinvent Customer Expectations The increase in awareness of short term rentals has brought many first-time vacation rental guests into the market. These travelers approach vacation rentals with hotel expectations.

While individual owners and “hosts” are struggling to meet these expectations, VRMs are in a great position to convert these first timers into repeat vacation rental guests. From the time travelers click on your website or contact your call center to the time they check out of one of your rentals, you have many opportunities to convert new guests into repeat guests.

One of the most under-utilized opportunities is through education. By asking the simple question, “Is this your first time staying in a vacation home?” you can take several key steps that will remove anxiety from the booking process and create a long-lasting relationship with the guest. By utilizing pre-stay communications letting guests know what to expect ‒ and that you are available to them 24/7 ‒ you can reform their expectations. (See Doug Kennedy’s article on page 38 for more customer service tips.)

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Proactively Work with City, County and State Officials If you are not already doing so, it should be a top priority in the coming months to take proactive steps towards working to preserve rental rights and develop regulations that are community-friendly, promote safety and provide revenue streams for the destination. As we approach election season, take time to get to know the candidates. As a business owner, your opinion is valuable to people seeking city, county and state positions. Consider taking time to set up meetings to share information, such as the number of jobs you have created, the amount of tax revenue you generate, and your company’s contributions to the community.

Use Media Interest in the Industry to Your Advantage The subject of vacation rentals and the shared economy is red hot in the media right now, providing your company an opportunity to promote your services and differentiate professionally managed vacation rentals. Consider creating press releases and story pitches about regulations, new service fees, and the importance of renting through a professional. For example, Nomadness Rentals in Mammoth Lakes recently issued a noteworthy press release outlining the struggles hundreds of professional vacation rental management companies have been experiencing as a result of Airbnb’s reckless push into the regulatory environment in cities and destinations around the world. You can find it on vrmintel.com.

If you are a member of an association, ask about ways to combine resources to create articles, solicit interviews and pitch stories that differentiate professionally managed vacation rentals. While it is a huge relief to see favorable market conditions, as an industry, we need to capitalize on these changes to use channels to attract direct bookings, differentiate our services, deliver a better customer experience and work with government officials. We don’t know how long this will last, so now is the time to seize the comeback of the property manager.

08-Jul-16 1:06:30 AM

| Business

od W o H e h t r e d n U

ith

Blackcomb Peaks Accommodations Standardization and Hotel-like Service in the Vacation Rental Industry

ocated in upscale Whistler, British Columbia, Blackcomb Peaks Accommodations was founded by Roy Wiltshire in 1997, and currently provides property management and marketing services for 80 high-end condominiums, townhouses and private homes. Like many vacation rental managers, Roy Wiltshire began his business as a vacation home owner trying to find a better way to rent his property.

“I purchased a vacation rental property in Whistler and realized, very quickly, that I was not happy with the service I was receiving from my property manager,” said Wiltshire. “I figured that there must be a better way and decided to do it myself. Soon, other homeowners were asking me if I would take care of their properties, as well, and Blackcomb Peaks Accommodations was born.”

As the business grew, Wiltshire set off on a two-fold journey to build a standardized, highly efficient operation and to create a luxury hotel-like guest experience with all the space and amenities of a vacation rental. 66

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Luxury Hotel Service PLUS Advantages of a Vacation Rental Roy Wiltshire holds the belief that guests choose vacation rentals over hotels for space and amenities. However, guests also want the 24/7 service of a hotel. Wiltshire’s Blackcomb Peaks Accommodations operates under the premise: Why choose between the advantages of a vacation rental and the service of a hotel when you can have both?

“When people go to a hotel, they like certain hotel things. What they don’t like is that things are small and there is no space,” said Wiltshire. “What we have created at Blackcomb Peaks is a hotel-like atmosphere with the space and amenities of a vacation rental. For example, we have high-quality gas grills in each vacation rental that always have propane, and we have 24/7 maintenance to ensure that requests are quickly fulfilled.” Other hotel-like services that Blackcomb Peaks Accommodations offers to guests are airport pick-up and drop-off at the Vancouver airport and keyless locks at all of their properties.

“We have been using Kaba Oracode locks for many years and have recently transitioned to the wireless version,” said Wiltshire. “This door system alerts us when a guest arrives by text and email, which gives us the opportunity to call the guest upon their arrival, welcome them and offer to help them out. This is a great feature that allows us to assure our guests that they have not been dropped in a place and left alone. We find most questions arise upon arrival at a unit.”

Wiltshire added, “When you rent through a homeowner, you are left alone. Many times, the homeowner is hundreds of miles away. At Blackcomb Peaks, we don’t leave you. If you are cold at night and need another blanket, just call. We will bring you one. We are trying to provide hotel service in the comfort of a vacation home.”

Bringing Standardization to Vacation Rentals One reason Blackcomb Peaks Accommodations is able to respond quickly to issues as they arise is because they have standardized most aspects of the vacation rental. In fact, Blackcomb Peaks operates one of the most efficient and standardized management companies in the vacation rental industry.

When staying at a Blackcomb Peaks property, guests find freshly laundered white duvet covers embroidered with the Blackcomb Peaks Accommodations logo on all of the beds. When you open the bathroom cabinets you find standardized towels ‒ and plenty of them. In the kitchen, you find the same dishes, glasses, pots and pans that are in the other units under management. “When we reached around 45 properties, I began to realize that, by stocking different kitchen inventory, bedding, etc., it was becoming more and more difficult to maintain the quality and guest experience we were striving for,” explained Wiltshire. “When kitchen items would break or go missing, we would end up with unmatched dishes and messy looking cupboards. Also, duvet covers were getting washed ‘as needed’ or only when the rooms had a gap between bookings.” For Blackcomb Peaks, standardization means that duvet covers are changed at every check out, so they are always crisp and fresh. It also means that kitchen inventory is checked after each stay and that missing items are replaced before the next stay. How did Roy Wiltshire get buy-in from his homeowners to add wireless keyless locks and standardize bedding and kitchen inventory?

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“I spoke with each property owner personally and discussed the necessity and benefits of standardization, including increased guest satisfaction, more positive reviews and more repeat business, as well as better management of their costs,” said Wiltshire.

installing Kaba door locks, upgrading to wireless, switching to standard inventory and duvet covers, and adding BBQs and air conditioning in our properties, all things that set us apart from our competition.”

Looking to the Future “There is both a time and cost savings to the owners. They no longer have to replace entire sets of dishes and glasses when things break or duvet covers every time there is a stain. They now have a fixed annual cost and no worries. Once they understood this, buy-in was not an issue.” By standardizing operations, Blackcomb Peaks is able to manage 80 homes with a staff of five full-time employees and two to three part-time team members.

Technology While operations at Blackcomb Peaks are now fine-tuned, it didn’t start out that way. In the beginning, Wiltshire found he had a lot to learn, especially about technology.

“I started with nothing but my Commodore 286 computer and an Excel spreadsheet,” said Wiltshire. “I had no insight or direction regarding PM software and no experience with marketing. Everything was new to me! Now, I am a huge fan of technology. Without the invention of the internet I would still be a mechanic!”

Wiltshire grew to 45 properties before converting his systems to the Escapia software platform. “The introduction of Escapia allowed us to grow from 45-75 units quickly and efficiently, and we were the first in our market to launch a mobile application, Glad to Have You,” said Wiltshire. “I also work closely with Bluetent to ensure that my website is keeping up with the latest technology, and I am always looking for the next new thing to set me apart from my competition.” However, Roy Wiltshire knows that service, standardization and technology are only parts of the equation. The vacation rental industry is still primarily a business that relies on relationships and trust. “A key advantage is that I truly care about each of my owners, and they believe in me and what we do,” explained Wiltshire. “When other companies are having trouble getting their property owners to upgrade, our owners support my ideas and allow me to move forward and supply a premium product by making decisions like 68

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“In this industry it often seems that the greatest challenges also present the greatest opportunities,” said Wiltshire. “The two key areas of focus for Blackcomb Peaks in 2017 are retaining inventory and increasing organic bookings.”

“The real estate market in Whistler is very strong at the moment, prompting many owners to list their properties. Every sale presents the potential of losing a home to another management company or a permanent resident. It also provides the opportunity to add new units through referral. It is critical to stay involved at every step of the sales process to ensure retention of the new owner and to focus on building strong referral relationships for the opportunity at new properties.” In addition, over the coming year Blackcomb Peaks is focusing on creating independence from OTAs.

“Unfortunately, buyer behavior has changed in the past several years and more and more people are booking with large OTAs rather than on individual company sites. It is no longer an option to avoid these channels if we want to maximize occupancy for our homeowners,” said Wiltshire. “The fact that everyone is in the same boat provides an opportunity. If we can leverage our great service and strong repeat customer base to tip the scales toward more organic bookings, we will have a definite advantage over our competition.” What advice does Roy Wiltshire give vacation rental managers looking to increase standardization in their operations?

“Develop a strong owner base that trusts and believes in you,” offered Wiltshire. “This requires a lot of personal communication, not just group emails advising what is going on. Don’t nickel and dime them, and do your best to ensure you demonstrate a return on the investments they have made based on your recommendations.” By Amy Hinote

08-Jul-16 1:06:54 AM

Catching The Traveler’s Eye HOW TO SET YOUR BRAND APART WITH GREAT TRAVEL CONTENT By Brandon Zienowicz, Bluetent Digital Marketing Account Manager

here is a trend most of us in the vacation rental industry are intimately familiar with ‒ OTAs and listing sites (HomeAway, VRBO, Airbnb, TripAdvisor, etc.) have an increasingly stronger presence in organic and paid search. Their inventory is extensive, marketing budgets massive, and they are well-established brands directly sought out by travelers.

The growing awareness and use of vacation rentals as alternatives to hotels has offered room for small property managers to continue to grow inventories and revenue. When it comes to ROI-centered marketing, focusing on the bottom of the funnel (when users are ready to book) has historically worked well and is where most hospitality companies spend marketing dollars.

VRM Intel

However, as travelers continue to go straight to big name brands, search activity transitions more to mobile devices with less screen real estate and PPC competition increases. Focusing on the (less competitive) top and middle of the funnel may prove to be a longterm strategy that pays dividends. Creating high-quality content is the best way to bring users to your site at that stage of the lifecycle.

5 REASONS TO INVEST IN CREATING EXCELLENT CONTENT B Travelers are spending increasingly more time researching and planning trips before booking. C Content helps vacation rental managers digitally showcase local knowledge and convey the authentic concierge component that differentiates them from big listing sites.

D Content affects site performance on search engines as their algorithms are looking for content-based signals to determine the value a website/company can offer users, and thus how prominently the site should show in organic search results. E High-quality content (that focuses on answering queries higher in the funnel) provides rental managers a chance to earn early brand awareness and affinity which can nurture travelers as they approach the booking phase of their planning. F As rental managers continue to leverage more marketing channels, content can feed those channels (email, social media) and keep engagement high across all marketing initiatives.

ELEMENTS THAT CONTRIBUTE TO STRONG CONTENT  Unique information, tips, insights or perspectives that don’t exist anywhere else  Input from experts/authorities on the area

 A level of detail for the given topic that doesn’t exist elsewhere

 High-quality visuals (images, videos, maps, infographics, iconography)  Curation of only the best information from around the web for the given topic

 Accurate data conveyed in a new and useful way that might not exist anywhere else

TIPS FOR CREATING GREAT CONTENT We get it. Resources are an issue when it comes to getting this stuff done. No one said content creation is easy, but for organizations who are creative and agile, it is possible to create great content.

Your Team: Assign roles/responsibilities, send internal surveys, employ interns or local college students and provide a budget for content creators to experience local events, restaurants, tours, etc. Business Partners: Use your existing and new relationships (and build new ones) to gather unique insights, exclusive interviews and discounts that competitors won’t have. Local Experts: Whether it is a local food writer, reporter, politician, real estate agent, tour guide or long-time resident, there are people with the information you need.

Guests: Have conversations with guests about their experience, send post-departure surveys, run contests/giveaways based on content or photo submissions and use your social channels to poll guests on questions that can drive content. Digital Professionals: While the best content is going to come from those with feet on the ground in your destination, digital marketing professionals can help research, plan, organize, optimize, polish and promote your content for maximum impact. Compelling content that targets the topics travelers are searching for has the potential to drive consistent organic traffic, feed your marketing channels, contribute to brand awareness and improve your perception in the eyes of search engines and travelers. The time is now. Airbnb is tapping into homeowners and local photographers to create high-quality neighborhood pages and HomeAway made a $20 million investment in Gogobot in 2014 to scale area content across their destinations. That being said, it’s not too late to make an impact on your business and start building content equity now that can benefit you long into the future. For more information, download The Case for Great Travel Content. www.bluetent.com/white-paper-download

Brandon Zienowicz is an account manager at Bluetent, working remotely from Chattanooga, TN. With a depth of experience in SEO, he enjoys digging into the variety of pieces that are critical to modern day business success. From technical SEO to analytics, content strategy, user experience, conversion optimization and brand positioning, he is focused on helping clients grow and stay relevant in today’s fast-changing marketplace. VRM Intel Magazine | Summer 2016

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08-Jul-16 1:07:12 AM

| Owner Relations

Shopping For A Vacation Rental Manager?

Sarah Bradford Owner, Winter Park Lodging Company

TOP QUESTIONS TO ASK WHEN CHOOSING A VACATION RENTAL MANAGEMENT COMPANY

arah Bradford founded Winter Park Lodging Company in 2007. After growing to over 150 properties, Bradford has recently expanded with the opening of Steamboat Lodging Company and manages one of the most cohesive teams and positive company cultures in the vacation rental management industry.

In acquiring new inventory, Bradford uses a multi-channel strategy including search engine marketing, direct mail and cultivating realtor relationships by providing resources and offering rental projections for area real estate agents to use with buyers. One of these resources is a handout outlining key questions homeowners should ask when shopping for the right vacation rental management company.

“We have seen several owners sign on with unproven companies just because they lured them in with low commission rates,” said Bradford. “Owners aren’t knowledgeable enough about our industry to ask focused questions that will prevent them from choosing the wrong company to manage their home, so we created this set of suggested questions to help them.” While the format will vary depending on each VRM’s strengths and objectives, these questions provide an easy-to-follow guideline for a proven, effective tool to add to your inventory acquisition strategy:

From Winter Park Lodging Company’s Top Questions to Ask a Property Manager Company Culture and Focus: It is important to find out what makes the company tick. Is their main concern about in-and-out transactions or long-term guest relationships? Finding out if the company has a low turnover rate and satisfied team is key ‒ or you will be reintroducing yourself a lot.

B How would you describe your company culture and what makes your company different from others in the Winter Park area? C What is your company’s mission statement and values? 70

Property Mix and Guest Demographic: As an owner, you will benefit from finding a vacation rental management company that focuses on guests who are looking for a property like yours. For example, if the management company relies on tour operators to bring the bulk of their visitors, they fill low-end condos, not luxury homes. B What type of property makes up the bulk of your inventory? What’s the mix: older condo complexes, base area properties, large luxury homes? C Is your travel market focused on Denver weekenders, ski groups, families from out of state? What is your demographic breakdown?

D How do you reach your guests? What percentage of your guests book directly vs. third-party operators? Property Care and Guest Experience: There are several multi-destination companies popping up lately trying to get a piece of the vacation rental boom. Ask pointed questions to be sure they have adequate staff located in Winter Park that can give your property and your guests exceptional service. B Where is your company located and how do you staff for on-the-ground issues?

C What are your hours of operation and level of 24/7 service?

D If guests call with an issue like a plugged toilet, what’s your service level response time?

E Does your housekeeping and maintenance staff work for you or do you have independent contractors? F Are housekeeping, inspections and maintenance provided? How is maintenance performed and charged?

G What is the quality of your linens and towels? What guest supplies do you provide? H Do guests access my property with a key, lockbox or an internet connected keyless entry lock that is monitored?

Marketing and Sales: This is the key to your success. Ask pointed questions to be sure the VRM you choose has adequate marketing staff in Winter Park to promote the local area and has a local sales team to answer questions and provide information specific to Winter Park.

B Describe your in-house reservation center. Do you answer all calls live? What are your hours of operation for your reservation team? C How do you track your marketing efforts? Do you track where and how bookings and leads originate? D Do you have online chat on your website? E Do you have a mobile-friendly site? How much traffic do you get from mobile?

F What amount of your bookings are made online vs. phone and booked from third parties (tour operators) vs. directly to you? Do you charge us for the third-party booking fee?

G Where do you market our properties? VRBO, Airbnb, Homeaway, FlipKey, Ski. com, etc.? H Will my listing include an interactive floor plan?

Owner Reporting and Communication: It is vital that the company you choose notifies you of bookings when they are made and gives you access to all of your financial information about your rental income. B How do I book my personal stays?

C What notification do you give me when a booking is made? Do you inform me of the reservation details?

D How do you set rates and communicate them to me? How much of a discount are you allowed to give without my approval? E Are there any restrictions to me using my property? F How do you pay me? Monthly? By check or ACH? Please show me a sample statement.

G Do you have a specific staff member or team that is assigned to me to help me seven days a week if I have a question or issue?

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08-Jul-16 1:07:12 AM

VRM Intel Magazine | Summer 2016

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08-Jul-16 1:07:16 AM

| Marketing

Revenue Management 101 Why Leave Money On The Table? By Cara Goodrich

Lessons from Cara Goodrich, Revenue Management Expert, Castle Resorts & Hotels

t Castle Resorts & Hotels, we have developed a vacation rental pricing model using all the best practices of hotel and condominium resort pricing by adding the best and most flexible technology for vacation rentals to a customized all-inclusive revenue management solution, complete with a vacation rental rate shopping tool. This includes, but is not limited to, a dynamic pricing platform with derived qualified rate pricing by unit type and by individual unit amenities, a flexible fee structure, flexible deposit/cancellation policies and a strategy to maximize our homeowner’s return based on the quality of the unit and the guest reviews.

We have a multitude of distribution channels and the most stellar, robust opportunity for success for revenue optimization. So why do some of our homeowners struggle to get the returns they are expecting? Read on…

Wrong price? Wrong time? Two wrongs don’t make a right. You’ve done your homework. You know that your units ‒ and the unit type/category ‒ are priced competitively to the market. You’ve checked your pricing against the market as shown in your chosen revenue management platform.

But what happens when the customer sees another price of a unit in the same complex or community priced so low that they can’t help but to freak out? Here is an example. Your property is priced to the market selling at $168, and the competitive set average is $214, strategically exactly where they should be. However, in looking on VRBO, the lowest unit is $129. There is a big difference between $168 and $129; $39 or 23 percent less!

Cara Goodrich is the Vice President of Sales and Revenue Development at Castle Resorts & Hotels. She has expansive experience in strategizing and deploying initiatives that lead to the development of company culture, processes and infrastructure.

from these best practices, and if applied correctly, can significantly increase profitability and provide a better return for owners. Here are some basics that we, at Castle Resorts & Hotels, would like to share. Homeowners can apply these concepts in a smaller scale and it will work just as well.

Start out with a Rate Strategy. What is your floor rate (the lowest price you are willing to price your unit) and what is your ceiling rate (the best estimate based on market conditions without price gauging)? Know how much it costs to maintain the unit such as housekeeping and maintenance, fees and any other costs that should be considered. For homeowners not using a management company, include the value of your time.

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Write down simple tactics. For example, if the market is soft, meaning that business in not coming in, I will start with my lowest price, and when occupancy increases to 30 percent, I will raise my price. When the unit is at 50 percent, I will raise it again. When the unit is at 75 percent, I will be at my highest price.

Also, consider adding simple things like reducing your deposit and cancellation policies or reducing minimum length of stay (MLOS) requirements. Engage yourself in learning Revenue Management. The basics of Revenue Management is about getting the right price at the right time to the right customer on the right channels.

We can only worry about what we have control over, and we don’t have control over a next door neighbor’s pricing, so let’s talk about pricing and how we can overcome some of these challenges. Revenue Management 101 Airlines have been using Revenue Management for decades, which is the reason consumers see fluctuations in airfares depending upon travel dates, the day of the week, the time of day and the ancillary fees various airlines charge, from baggage fees to extra space on the plane.

Hotels have adopted many of airline industry’s best practices, applying Revenue Management best practices, and for the most part, perfecting the practice. The Vacation Rental industry could learn 72

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Pricing severely lower than everyone else in a complex, community or area leaves a lot of your money on the table, not to mention the potential negative impact you will have by creating a strong perceived value of what your unit is worth to the vacation rental traveler, thus affecting their repeat visit.

which is not always identified as “Vacation Rental Customers” and would just as well purchase a two bedroom, two bath as a room type versus buying your specific unit. There is a whole world of customers just like these.

And the next time the guest visits and wants your unit, they will want something around $99 and think that $199 is too high! Without getting the price right, getting the right time/right customer/right channels become tough.

Free Stays? Offer complimentary nights to travel writers, vacation planners and your management company’s Sales and Marketing department. Offer these nights during the slow periods. These nights will not generate revenue during the time they are occupying your unit, but if hosted correctly, you will be the center of these professionals' attention, get word of mouth and online advertising and generate leads that will reward you multi-fold. This really works!

For example, if everyone is priced at $199, and your beautiful unit is priced at $99, you will get the business first, but you will also leave $100 on the table.

Airlines, hotels and car rental companies are all using Revenue Management best practices. As the industry expands and marketing channels mature, Revenue Management will be an indispensable skill set. Invest in training sooner than later.

You are only as good as your dumbest competitor. A cliché, but true. There are many owners and managers who are less savvy than you and do not mind pricing themselves under the market. They might not even know that they are priced “too low.” I would say that the way to handle this (and the reason for this article) is to join forces to educate owners and managers on how to price (not what to price) their unit so that they don’t leave money on the table, they maximize their return on their time and effort, and they keep the rate integrity of the complex, room type and the individual unit. If you are savvy on pricing for your units, you will maximize your returns. Pay attention to perceived value and hold your pricing. Every time your next door neighbor, another owner in a complex or a house in your area prices cheaply and under what the market is priced, it damages the perceived value for your properties from a consumer standpoint and diminishes your ability to make more revenue both short and long-term. Sometimes, you even choose to price to the lowest competitor and then competitors follow. You don’t have to do that! Let that low rate sell first, unless you are really desperate. Price to the market. Over the years, hotels have learned the importance of pricing to the market and, consequently, have worked tirelessly to perfect their pricing strategies. Watch what big brand hotels and the bigger condominium resorts do. There is a lot you can learn from their strategies.

Closely observe the fluctuations in your destination’s airline prices. By watching airline prices in your destination, you are able to understand pricing strategies, especially if you are located over water or your customers travel from a far distance. If airfare prices are favorable, this means no compression and chances are your prices need to be competitive (not cheap, but competitive). Conversely, if airfare prices are high, this means there is compression, and you need to price your unit(s) higher. There are tools that can shop this for you or you can simply go online and shop these prices yourself. Educate your fellow neighbors. Without getting into price-fixing, you can educate your neighbors by sharing articles, such as this one, or by including information in newsletters, community papers, etc.

There is strength in numbers. For homeowners, there is value to having your unit in a pool. First, it allows the management company to represent your unit within room types and/or categories which maximizes your customer base,

Don’t forget added value. Instead of degrading your price perception, you can add such amenities as car rentals, activities, restaurant discount coupons, and arrival amenities, which add value.

Use a Professional Management Company. For homeowners, if you are using a professional management company, it doesn’t necessarily mean that they are using revenue management best practices in the marketplace. It is okay to question and understand how your management company prices your unit(s) and what distribution channels they are using. Make sure you are working with a reputable company that maximizes market demand. Also, please, please do not put so many restrictions on your unit that make it difficult to manage and maximize your returns. Some of the restrictions that dramatically lessen your ability to get a better return are: Rate thresholds

Amount of people (less than what your type of unit usually accommodates) Minimum lengths of stay (less than market comparisons) Excluding niche customers (i.e. “I don’t want locals”)

Excluding certain demographics (This is still an issue among homeowners.) The travel community is complex and cluttered, and professional vacation rental management companies are experts in managing your investment. To summarize, it is a crazy environment with the world of travel changing constantly. However, there are opportunities to navigate your way through all of this. Build your rate structure and foundation. Know your seasons and plan for them ahead of time. Don’t include a lot of restrictions. Watch your neighbor’s prices. Watch airline prices, if applicable. Educate your neighbors. Communicate to your owners through newsletters and individual reports. Offer free nights to worthy professionals to get wordof-mouth advertising and referrals. If you find that you have priced a unit too low and it got snatched up too quickly, learn from your mistakes. Engage in some type of Revenue Management training and best practices. VRM Intel Magazine | Summer 2016

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| Owner Relations

Communicating Success to Owners Using Revenue Per Available Night REVPAN: The Most Important Metric

t is up to you to demonstrate your value to homeowners. By choosing the right metrics, educating your owners and providing consistent reporting, you can quickly earn their trust and loyalty.

There are two common ‒ yet problematic ‒ choices for metrics which you communicate to your homeowners: Occupancy Rate and Average Daily Rate.

Occupancy Rate is the percentage of nights you have rented. For example, if you rent out a unit for 20 nights in August, its occupancy rate is 65 percent for the month.

Average Daily Rate (ADR) is the average nightly price for which you rent out a unit. If you have two reservations for August, one for five nights at $123 per night, and the second for three nights at $179 per night, your average daily rate is $144 per night. Your owners might have a sense for historical occupancy rates and average daily rates for each season. A common pitfall is to try to increase these values year over year, often at the encouragement of the owner. 74

But neither metric determines revenue, which is the measure of your business.

Increasing occupancy rates could lower revenue if you’re discounting too much to get those higher occupancy rates. And increasing average daily rates could lower revenue if you lose too many bookings because of your higher prices.

Why not just measure revenue? Because revenue does not account for owners' stays. If last August you had 31 nights available to rent out, but this year the owner has reserved 14 of them, revenue will have decreased for the month, even if you have improved. Do measure total revenue, but do not make it your top metric when speaking with your owners.

The solution is Revenue Per Available Night (RevPAN). RevPAN is the amount of money you have collected each night that a property is available to rent out. The hotel industry uses a similar term, Revenue Per Available Room (RevPAR). But as a vacation property often has multiple rooms, the hotel term is confusing.

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In the vacation rental industry, it is optimal to stick with the RevPAN metric. You can measure the performance of a single property or your whole inventory, and you can easily compare this metric for the current year against the previous year(s) or this month against last month. RevPAN Formula RevPAN =

Total Revenue Available Nights

WHAT IS AN AVAILABLE NIGHT? Available nights are all the nights you are allowed to rent out in a specified time period. Take the total number of nights for a given period and subtract the off-market nights. The most common off-market nights are owner stays. Available Nights equals Total Nights minus Off-Market Nights.

Protip: Should you count “out of order” days? Typically, you should count changeover days as available. That’s the standard set by the hotel industry. But if a property is undergoing maintenance, marking those nights as off-market will help you communicate to the homeowner that you are not responsible for renting them out. Example: Let’s calculate the number of available nights in May for a single property. “Total nights” is 31. The owner has reserved seven nights in May, and there will be roof repairs for two nights after that. The total number of off-market nights is nine. This leaves 22 available nights. VRM Intel

(31 Total Nights - 9 Off-Market nights = 22 Available Nights.)

WHAT NUMBER SHOULD I USE FOR REVENUE? You are demonstrating your value to your owners, so only include rental revenue (the rental revenue that you use to calculate your commission). Exclude additional guest fees that you keep (i.e. cleaning, pool heating and pets). Example: Let’s go back to the May example above, with 22 available nights. We’ve gotten three reservations for the month: Reservation A: $1,000 for 5 nights Reservation B: $800 for 3 nights Reservation C: $1,350 for 7 nights Rental Revenue equals 15 nights for $3,150. Protip: When calculating your RevPAN for your owners, you should not include additional guest fees. But when you’re calculating it for your business, you should. These fees are an important part of your company’s revenue.

and indicative metric of your company’s performance, and unlike the total revenue for the month, you’re not penalized for the nine off-market nights.

REPORTING REVPAN TO A HOMEOWNER When we bring on a new customer at Smart Host, the first thing we do is send them a revenue report. It includes RevPAN, Occupancy Rate, Average Daily Rate and Total Revenue. Break out those metrics both monthly and annually to establish a baseline. Each month, compare your performance to the previous year’s numbers, typically as a year-over-year percentage change. Using our example, let’s say the previous year’s May RevPAN was $122 per night. We would report that May 2016 RevPAN is $143 per night and has a 17 percent year-over-year increase. Now, let’s fill out a few more details of our example to see why RevPAN is the best performance metric. EXAMPLE:

MAY 2016:

MAY 2015:

RevPAN:

$143

$122

OCCUPANCY RATE:

68%

73%

AVERAGE DAILY RATE:

$210

$166

AVAILABLE NIGHTS:

OCCUPIED NIGHTS:

$3,150

REVENUE:

Was 2016 an improvement over 2015? Yes! The manager was more effective.

Even though they had four fewer available nights available to rent, they earned the same revenue. This win is reflected in the RevPAN growth of 17 percent. It is much more difficult to see this positive change by looking at Occupancy Rate and Average Daily Rate alone. Did ADR go up by enough to make up for the decrease in occupancy rate? You’d have to compare percentages to find out. Instead, just look at RevPAN.

As a vacation rental manager, there are many variables you don’t control: owner stays, weather, repairs and travel trends. As you respond to these variations, many metrics ‒ occupancy rates, average daily rates, total revenue ‒ will only hide the success of your work. Make RevPAN the first metric your team uses to demonstrate performance. You’ll make more money and your homeowners will know it.

HOW DO YOU CALCULATE REVPAN? Here’s the formula again:

RevPAN equals Rental Revenue divided by Available Nights.

By Evan Hammer, CEO of Smart Host

Continuing with our example, we have $3,150 in rental revenue and 22 available nights, so RevPAN is $143 per night.

Let’s compare that against average daily rate, which is $210. RevPAN is significantly more useful because it combines both average daily rate and occupancy rate. It is a more comprehensive VRM Intel Magazine | Summer 2016

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Revenue Management

Glossary of Key Terms

BOOKING PACE

evenue Management in the vacation rental industry is a discipline that is growing and developing at a fast pace. As savvy VRMs know, the rules for Yield Management differ from those being applied in the hotel industry. At VRM Intel, we collaborated with Julian Castelli, CEO at LeisureLink, and Evan Hammer, CEO at Smart Host, to identify key terms and metrics utilized in the vacation rental industry. As Revenue Management tools continue to mature, establishing a base line of vocabulary will help us advance as an industry. The following glossary is a first step at establishing a common understanding of the terminology necessary for successful Revenue Management in the vacation rental marketplace.

ADVERTISED PRICE The nightly price that a VRM is presenting to the consumer.

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

AVAILABLE NIGHTS The total number of nights that the VRM is authorized to rent out. Typically, this is the total number of nights less owner reservations and maintenance-related down-time.

AVERAGE DAILY RATE (ADR) The calculated average nightly rate for a property or group of properties. Calculated by dividing the total rental revenue by total nights sold. It is one of the most common financial indicators to measure performance in the vacation rental industry.

AVERAGE LENGTH OF STAY (ALOS) Calculated by dividing the total number of nights by the number of stays in a property or group of properties during a specified time period.

AVERAGE RATE INDEX (ARI) A vacation rental KPI that measures the performance of a VRM's Average Daily 76

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

Rate (ADR) compared to a competitive set during a specified time period.

BEST AVAILABLE RATE (BAR) The lowest available unqualified rate, representing the fair market value for a property for each day.

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

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

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

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

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

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

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

COMPETITIVE SET, OR "COMPS" A defined group of competitive properties that have a similar type, target market, location and/or concept.

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

CONDO-HOTEL Also known as a hotel-condo or a Condotel. A building which is legally a condominium, but which is operated similar to a hotel with a front desk and onsite staff and services.

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

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

DEPTH OF INVENTORY

traveler’s credit card and sends the supplier a net rate. (e.g. Expedia, Orbitz, Priceline)

MERCHANT OF RECORD (MOR)

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

The party that charges the traveler’s credit card.

DIRECT BOOKING

NET RATE

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

The total amount received from a merchant distribution channel which is the amount the traveler paid, minus the commissions and/or fees charged by the 3rd party distribution channel.

GLOBAL DISTRIBUTION SYSTEM (GDS) A network that enables automated transactions between VRMs and third party distribution channels.

GROSS REVENUE, GROSS BOOKING REVENUE (GBR) Total revenue the VRM collects, including Guest Fees.

GUEST FEES Fees that the VRM charges the guest and are not part of the Rental Revenue. Examples: Cleaning, Booking, Pet, Parking and Pool.

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

KEY-LEVEL LISTING, OR KEY-LEVEL

MINIMUM LENGTH OF STAY, MINIMUM NIGHT STAY (MLOS) A restriction dictating the lowest number of nights a guest can stay at a property.

OCCUPANCY RATE (OCC) B The percentage of total available nights that have been rented for a property or a group of properties over a specified time period. C The percentage of all rental units that are occupied or rented at a given time.

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

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

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

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

PROPERTY

MANAGED DISTRIBUTION

RACK RATE

A service that helps VRMs optimize online distribution. Includes channel managers and additional service providers such as consolidated contracting, consolidated accounting and reporting, additional content syndication services, revenue and yield management tools with consulting, analytics, transaction processing and payment services.

MERCHANT CHANNEL A distribution channel that charges the

A vacation unit or home of any type.

PROPERTY GROUP For revenue managers and channel managers, this is a group of similar properties in a VRM's inventory that are priced together. The full price at which units are sold to customers before discounts.

RATE PARITY Defined as maintaining consistent rates for the same property across all channels.

REPRESENTATIVE STYLE LISTING, OR REP-LEVEL A listing that represents a certain lodging type in a multi-unit building or complex.This

listing might have “Depth of Inventory” and different unit types. Example: 2BR/2BA Ocean View (a.k.a., Hotel Style Listings, By Unit Type, Allocate on Arrival).

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

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

REVENUE PER AVAILABLE NIGHT (REVPAN) The revenue collected each night that a property is available to rent out. RevPAN is calculated by dividing rental revenue by the number of available nights for a property or group of properties.

REVENUE PER AVAILABLE ROOM (REVPAR) A performance metric in the hotel industry that is calculated by dividing a hotel's total guest room revenue by the room count and the number of days in the period being measured.'

THIRD PARTY DISTRIBUTION External channels such as Online Travel Agencies (OTAs), e.g. HomeAway, Airbnb and Booking.com. Third Party Distribution channels also include Tour Operators, Wholesalers and Global Distribution Systems (GDS).

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

VRM COMMISSION A predetermined fee charged by the VRM to the homeowner, as a percentage of Rental Revenue.

YIELD MANAGEMENT See Revenue Management. The process and discipline of making frequent adjustments in the price of a property in response to certain market factors, such as demand or competition. VRM Intel Magazine | Summer 2016

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| Technology

Vacation Rental Software and Open APIs Huh?

Though crucial to the future of our industry, Open APIs are anything but a beginner’s level topic. Unfortunately, even the most seasoned of property managers may have a difficult time discerning what an Open API is and how it pertains to their business. Regardless of the fairly high level programming knowledge it takes to implement, Open APIs are not as hard as you may think to understand. In fact, with just a little bit of guidance – and a quality programmer at your disposal – your property management company can take advantage of this powerful tool and bring your business to new heights! All you need is just a little direction, and we’re here to give precisely that. What is an Open API?

Before you run off and begin building business plans around this exciting technology, it is important to understand exactly what an Open API is.

By Carlos Corzo CEO | Streamline Vacation Rental Software

f you pay attention to technology news in our industry, it is likely you’ve heard plenty of talk concerning Open APIs and how critical they are to pretty much every vacation rental management company out there. And, if you are like some of the property managers I’ve talked to, chances are your reaction was something along the lines of this:

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At its core, an API is an Application Programming Interface that provides developers with access to the data housed in your vacation rental management software system. Even more impor78

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What is an OPEN API and is it right for my business? tantly, however, Open APIs provide a secure communication stream to utilize any information you would like to share with third party vendors and often your internal programming staff.

In other words, it is a system that potentially allows you to share the information governed by your property management software – such as property information, amenities, inventory, calendars, reservations statistics, maintenance management info, etc. – with anyone that you desire in a safe and secure manner (programmatically, of course).

To break this down even further, let’s imagine that you have a black box filled with a handful of items. Normally, only you have access to this box. No one else can look inside unless they have the proper credentials to do so. However, because you want to show other people what your black box contains, you create a special language that allows outside parties to ask the box questions pertaining to the box’s contents. Now, people can ask questions about the contents of your box, so they may use that information to their advantage. For example, knowing that the black box contains shoes, they could ask questions such as:  What shoe brands are in the black box?

 How many pairs of shoes are in the black box?  What are the shoe colors available?

Even though they were not able to go inside the black box, they were able to access critical information about the contents of the box.

At its most basic, this is what an API does – only the black box is your business’s data, and the outside parties are other technology providers, such as your website provider, BookingPal, LeisureLink, Homeaway.com, FlipKey.com, Booking.com, and any other tools that you might want to use in the future. How can an Open API help your business? The flexibility afforded by an Open API is crucial to a growing business, allowing you to reach new horizons with your technology capabilities, business and marketing efforts. Here are just a few of the major benefits your company will experience when using an Open API platform:

 Share your inventory data easily and quickly. In today’s industry, sharing your inventory with companies, like Homeaway, AirBnB, Flipkey, Booking.com, Expedia and many others, is critical to your success.

 Expand your boundaries. No one knows your business better than you do. That’s why being restricted to your data due to a lack of an Open API can be frustrating. Having your data locked in a box is a thing of the past. After all, it is your data. Shouldn’t you have access for possibilities that could revolutionize your property management company? Whether it is reservations, maintenance, housekeeping, CRMs, revenue management tools or whatever category in which you need data to meet your objectives, Open APIs give you the access you need – and allow you to come up with the next groundbreaking idea that revolutionizes your business. At Streamline, even though we believe we have the best reservations technology in the industry, even we don’t know everything you might need to improve your business. However, we also believe by offering our software users an Open API, the road is paved for new innovation and free and creative thinking to transform your business and the industry as a whole.  Easily work with the developers of your choice. Do you have a favorite web development company? With search engine optimization becoming more challenging every day, you want to find an expert. An Open API gives you the flexibility to make a choice. VRM Intel Magazine | Summer 2016

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 Open data for all. Historic data gives you the ability to analyze performance, identify methods of increasing revenue, and see trends in your business. But just being able to see that data yourself can be a hindrance that you need to avoid. Fortunately, Open APIs allow you to give access to your data to any third party company you wish (like VRM Intel’s Benchmark Reporting), making it easier than ever before to integrate with analytics – for goal and conversion tracking – or simply improve your marketing efforts. At the end of the day, the key to improving your marketing strategies is data, and having open access to it puts you one step closer to striking gold. Is there a downside?

Though having an Open API is important, there is one major downside that you need to keep in mind… cost.

Yes, Open APIs are massively powerful platforms that can put your business on the fast track to success, but in many cases, access to an Open API can cost a pretty penny. There are vacation rental software providers that offer an extensive and advanced set of API functions at no cost. However, there are also software providers that

have APIs, but they pick and choose which developers with whom they will work.

With that said, if you have your heart set on an Open API but you are restricted by API access cost, limitations or software companies that just don’t offer this fundamental feature, it might be time to start contemplating a more advanced software solution. Not having access to all of your data, all the time, is simply something you should not stand for in today’s technology environment. Pay the extra cost, if necessary, or move on to greener pastures. The future is now.

At the end of the day, our industry is facing many changes, especially in technology. In fact, it is tough to speculate what will happen even six months from now. As a result, it is more important than ever to seize on any technology that will allow for ingenuity, creativity and fewer restrictions, and an Open API is precisely that. Allow your company to reach new heights by considering vacation rental software that offers an Open API. Good luck, and see you at the VRMA! Carlos Corzo founded and currently serves as CEO at Streamline Vacation Rental Software. Corzo regularly provides his valuable insight into the inner workings of vacation rental marketing and technology https://www.streamlinevrs.com/blogs.

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Changing your property management software? VRM Intel

The consequences of a bad decision can last ten years. Let us help you make the right one.

Software Selection  Buy/Sell Transactions  Marketing Technology  Management Consulting 

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| Technology

Successful Software Implementation

What To Consider When Implementing New Software in Order to Ensure a Smooth Transition

o you have bitten the bullet and decided which software you will be installing for your company; now comes the most important part ‒ implementation.

There are many facets to the implementation process such as system setup, training, data entry and conversion and parallel running in order to go live. In this article, we will discuss some points to consider as you go through the transition.

MANAGING THE PROJECT Having a project manager (PM) is key to the successful implementation of the software. The software vendor should assign someone from their team to be the PM, and you should do the same internally. When selecting your internal staff member, prior experience of managing a company-wide project is helpful, but not necessary. However, the PM should be involved in the selection process and be very familiar with the way your company works. The most important thing to do for your internal PM is to empower him with the authority to get things done.

CREATING AN IMPLEMENTATION TIMELINE The software company should provide a timeline for you including setup, training and data conversion target dates. By using this pro82

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cess, you can set your desired date for the new software to become your primary system and then work the dates backwards in order to generate a master timeline. Things to consider include: How much data entry will I need to do? How long will it take to have my website converted to get it up and running? What partner integrations will need to change and how long will they take? Once this has been established, you can set milestones within the timeline and measure your progress toward each one which will help configure your ultimate “go live” date.

SYSTEM SETUP The setup process is normally where you configure the software business settings to match your company’s processes.

Unless you are a new company installing software for the first time, you will have to ignore the way you use your existing software. Remember why you are changing and consider adapting and evolving your practices to best fit the new system. This is a great time to change the convoluted procedures that you have been following forever even though you can’t remember why you began using these procedures in the first place. Take your time with this process. Understand all the options that the new system will provide and make decisions based on what you want to achieve and not based on what you have done in the past.

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TRAINING I am a great believer in on-site training where feasible. Often, this is not financially or logistically possible, but if you can get it and afford it, take it. You can expect the training to be broken into logical modules and spread out over many sessions. It is imperative that all staff mem-

To convert or enter? Do not attempt to convert financial transactions. This is a nightmare and should not be considered. You should expect to enter this data when the time comes. Ideally, you will open a new bank account to handle the money in the new system and leave any unaudited money in the old one. This is the cleanest and safest way to handle the transition of financial data. Note: If you are converting mid-year, you must bring in suf-

to Ensure a Smooth Transition bers are adequately trained and conversant with the new system before you go live. Data entry is often a good way to become familiar with parts of the system, but it is not enough to just be able to “hit the ground running” when the time comes. Ask for a training or test environment where your staff can practice and try out different scenarios. Run role-play sessions with your staff, using real world examples, and make sure to understand the process before you encounter pressure situations with real guests.

Training is a big part of the success and you should not skimp on it. Provide good staff cover to ensure a good learning environment and allocate practice and follow-up time to reinforce what they learn.

DATA ENTRY AND CONVERSION VRM Intel

There are four categories of data to consider when thinking about data conversion and data entry: static, dynamic, financial and historical. Each one has different elements when deciding whether or not to convert or enter the data. Static Data This includes data such as unit information, owner details and information, vendor details, descriptions and images, unit features and marketing information, and your guest database.

To convert or enter? Typically, this information does not change frequently and you should look to convert as much of it as possible to help minimize time and potential errors. Most software companies have mechanisms to import this type of data (even if it is from spreadsheets populated from your old system).

Dynamic Data As its name suggests, this data is dynamic and changes regularly. Examples include reservations, work orders and leads.

To convert or enter? Ideally, the reservations (at a minimum) will be converted for you, although, do not expect more than the guest, unit, total charges, arrival and departure dates and status. You may get additional information, but you should plan on reviewing every reservation and adding charge and payment information to get the two systems balanced. The timing of the reservation conversion is critical to the success of the transition between the old and the new system. Expect to hire extra staff and pay overtime to your existing team to verify and enter the missing data for each reservation. This can be a long and laborious process and is prone to human error, so checking one system against the other is critical. Financial Data

This includes data such as owner charges, vendor invoices, statement transactions and reservation payments, or to put it another way, the money in the system.

ficient detail to be able to produce the end of year 1099’s for owners and vendors. Historical Data This is historical reservation, work order and financial data. Not all companies have the capability to import this into your new system without impact on your other data, however, if it is possible to do so then it can be very useful to bring historical information, especially reservation data.

PARALLEL RUNNING Once your reservations have been converted, you are in the parallel running phase of the conversion process. You will need to enter all new reservations in both systems. Start by putting them in the “Primary or Live System,” and then enter them into the secondary system.

All existing reservations will need to be reviewed. Post charges and payments and make any changes to notes or data that occurred during the conversion. Changes to existing reservations will also need to be duplicated in both systems. A daily change log report is a great way to track and verify them. Ideally, you will be able to switch the primary systems over as soon as everything is verified and balanced. Double entry is a necessary component of any transition, but it can be very demoralizing to the staff who are having to pull double duty.

GO LIVE So now you have switched the systems over and you are live. How long do you run your old systems in parallel? Most issues don’t show up immediately. Instead, they are associated with weekly or monthly tasks that you haven’t yet practiced or reviewed.

Some companies decide to cut the cord immediately, while others like to run a month in both systems to make sure that the money is correct on owner statements, etc. Whatever you choose, be sure to have a contingency in place to handle problems. Pausing or going back is not an admission of defeat ‒ it can be a wise, short-term strategy until you resolve the issues…then try again.

In summary, the process is a painful one. Expect issues and roadblocks throughout. Work with your software vendor; they want you to succeed and should be able to help you through the issues with guidance and additional resources where required. Doug Macnaught, co-founder of Instant Software and creator of PropertyPlus software has worked in the vacation rental industry for decades to implement integrated technology solutions that allow large vacation rental management companies to operate efficiently and effectively. He is a founding member of The VRM Consultants.

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| Business

Additional Insured Requirements Saying goodbye to the idea of the additional insured requirements for Vacation Rental Managers By Darren Pettyjohn

very day, we receive the same calls from property owners asking, "I need an insurance policy for my vacation rental, and my vacation rental manager has asked to be additionally insured. Can you do that?"

this particular insurance topic works. Who is considered an Insured?

Our answer is always the same. “Yes, we can insure your property, and yes, we can add your property manager as additionally insured."

The first thing to understand is that every insurance policy must define "who is an insured.” It is also important to know that coverage is extended beyond the primary named insured on a policy.

This may seem like a confusing topic of discussion, but it is actually fairly simple, so I’m here to ease the confusion and explain how

Question: Does John need to call and ask his agent to add his wife and son to the homeowner’s policy as additionally insured and then

However, there is actually no need to add a property manager as additionally insured because they’re already a named insured. Unfortunately, there is confusion about this which can cause friction between the homeowner and the property manager.

Example: John gets a loan from a bank and buys his first home. He also purchases homeowner’s insurance and is listed as the named insured on the policy. John also has a wife and a ten year old son who live at the home, but they are not listed on the policy.

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request a certificate of insurance showing proof of coverage? No. Any spouse and children under the age of 21 who are in the care, custody and control of the named insured are automatically covered for personal liability as defined under the homeowner’s form. Standard homeowner’s forms define an insured as, and extend personal liability to: named insured, spouse, children and other residents.

Note: By “forms,” I mean policy forms. Virtually all insurance companies use the same standard forms approved by the Insurance Services Office (ISO), including homeowner's forms, landlord forms and commercial forms. You are probably thinking, "I don't see a property manager or real estate manager listed there."

That is because the homeowner’s form does not define and extend liability to real estate managers, and a property manager wouldn’t want this because homeowner’s policies carry personal liability. Landlord Insurance Forms In Landlord Insurance Forms, who is defined as an insured? This is very relevant, as many vacation rental owners carry a landlord policy which covers premise liability, which would be a big upgrade from personal liability. Standard landlord forms define an insured as, and extend premise liability to, the named insured, family members and employees of the named insured in regards to the premise. The landlord insurance form does not define and extend liability to real estate managers. Commercial Insurance Forms Many vacation rental owners are seeking commercial insurance for their properties as a result of maturation of the industry, the broader coverage and new regulations across the country. Standard commercial forms define an insured ‒ and extend commercial liability to ‒ the named insured, spouse, volunteer worker and any person or organization acting as your real estate manager in regards to the business. There it is. And I will state it again, “any person or organization acting as your real estate manager.”

What this means is that, instead of property managers requiring to be added as additionally insured onto their owner’s policies, they should simply require proof of Commercial General Liability Insurance. That’s it.

With that proof of insurance, property managers know that they are defined as an insured and that the commercial liability is extended to them and their company. There is no need to be added.

Proof of this coverage is provided through a standardized document that all insurance agents use called “Certificate of Insurance (COI).” Just make sure this includes commercial general liability and not premise or personal liability. Advantages of having this proof of insurance for property managers: B There is no longer a need to use the dreadful words “added as additionally insured.” It is human nature for owners to think they are purchasing insurance for their property manager, but now you can explain the coverage thoroughly. C Commercial General Liability is far superior coverage to premise and personal liability. It extends beyond the premise by covering

things like sexual assault, invasion of privacy, slander, dog bites and much more. Plus, it does not fall into the gray area of “business activity exclusion” found in premise and personal liability. It is also the highest level of liability insurance offered to a business.

As the industry continues to mature, it is beneficial for property managers to make adjustments to owner contracts to reflect the changes and correct verbiage. This commercial requirement is already starting to show up in communities across the county.

Commercial liability insurance for vacation rental owners is not as expensive as you would think and is actually comparable to the other forms. I’d like to tell you Proper Insurance is the only firm to offer this coverage to vacation rental owners, but then this would just turn into a PR piece. The truth is that there are many carriers currently offering commercial general liability to vacation rental owners, and I imagine there will be more coming as the industry continues to grow and more regulations come our way. Currently, the main three insurance companies are Proper Insurance, CBIZ Insurance and Propel Insurance. Insurance is not a secret thing. Insurance policies should be examined, dissected and fully understood. Every carrier has slightly different enhancements and exclusions, but the base forms are the same.

Many property managers have already adopted this practice, and they often ask how much should be required. Most require $500,000, but $1,000,000 is the standard limit for commercial general liability and what most carriers offer. It is actually more difficult for an owner to purchase $500,000 versus $1,000,000. The industry requirement should be $1,000,000, and that is what I recommend.

You often hear that insurance companies try to deny and wiggle out of claims, but this couldn’t be further from the truth. Sure, there are exclusions and certain things are not covered, but the bottom line is that an insured pays a premium for a contract. In that contract, it clearly states what is covered and what is not. This contract also defines who is considered an insured. The recurring problem here is that oftentimes these policies aren’t read and understood ‒ leading to false expectations. The insurance companies aren’t trying to scam you. In fact, they do exactly what they say they will do in the defined policy. It is time for change in the vacation rental industry. Property managers, you can use this information to your advantage. When it comes to insurance for vacation rental owners, remind them that you are on their side by having the knowledge to help them dissect their policy. If your owners carry commercial general liability, then you are an insured on their policy as a real estate manager. Period. It is in the contract written in black and white, so say goodbye to the idea of the additional insured requirement. Disclaimer: Personal and premise liability do not define a “real estate manager” as an insured. A property manager would need to be added to have coverage extended. Only commercial general liability defines a “real estate manager” as an insured. A property manager would want to verify coverage via a COI showing commercial general liability. Darren Pettyjohn is the Co-founder of Proper Insurance Services, offering custom-penned, all-inclusive insurance designed for vacation rental owners. www.proper.insure

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Managing The Washing Machine Is it merely science or is it also an art? By Durk V. Johnson

Industry Consultant and Executive Director, Vacation Rental Housekeeping Professionals

he best part about working in housekeeping and maintenance is being able to learn so many things. One of my favorite learned trades is in laundry chemistry, taught to me by a laundry soap vendor. He taught me that washing sheets and towels is as much science as it is art. While the chemistry portion is in how the time, water temperature, mechanical action and chemicals work together, the art comes into play when any of the four components are adjusted. Any slight change can create an imbalance that has to be leveled. Being able to properly correct the components becomes like an art form.

I won’t bring up the terrible memories of high school chemistry, but below is a general guide on each of the four factors that directly affect wash loads and cleaning linen. In order for linen to come clean, each one of these must be in balance. VRM Intel

TIME There are many steps that add to the total wash time. Each step has a specific purpose and may be used several times.

Initial Flush is used to wet and raise the temperature of the laundry load and rinse any loose soil from the drum. Break (Suds) are used to break soil from the fabric. Alkalies and/or detergents are added to loosen and suspend soil from the textile. Carryover provides additional mechanical action. Flush(es) are used to remove suspended soils and washing chemicals from the load. Bleach removes stains, whitens and creates hygienically clean fabric, and is usually used when there is no loose soil in the drum. Rinse(es) reduce drum temperature, remove residual chemicals and prepare the load for removal. Antichlor is added to deactivate any residual chlorine bleach in the drum to avoid damage to the textile. Sour is designed to neutralize alkalinity in the drum and leave the product slightly acidic, leaving the linen more compatible with the skin. TEMPERATURE When deciding which temperature is best to use in the wash cycle, the following items need to be taken into account. Chemicals Soil Quantity

Operation pH Levels Fabric Care

Soil Type

Operation Type

Operation Time

For instance, if you are washing linen that has protein-based stains, the initial flush should be 95-105 degrees Fahrenheit (approximately body temperature) to help loosen the protein. Suggested temperature ranges include: Sheets/Pillow Cases Towels/Wash Cloths Diapers

Polyester/Cotton Uniforms

120-140 degrees 120-140 degrees 160-170 degrees

140-150 degrees

MECHANICAL ACTION This is performed by dropping the product in the drum, forcing the water and chemicals through the textile. There are several factors that affect the mechanical action: If the water level is too high and there are too many suds then the linen will float and not have enough dropping action.

Loading the drum with too much linen will not allow the linen to drop because there is no room to do so. On the other hand, if the drum is under loaded then the product will not fall and stay against the wheel, reducing the mechanical action. Depending on drum size, there should be enough space (either the size of a football or basketball) to fit from the back to the front of the drum when it is fully loaded. The drum design and number of ribs affects how the linen falls in the drum.

Rotational speed is how quickly the drum turns which affects the dropping of the linen. Also, if the drum pauses between rotations then it will decrease the effectiveness of the mechanical action. CHEMICAL ACTION This is the proper use of chemicals in each stage of the wash cycle. The wash cycle depends completely on what is being washed. Different fabrics have different chemical formulas. It is important to remember that chemical action is defined as the interrelation of the chemicals, time, temperature and other mechanical action and must be used in connection with each other in order for the chemical action to work. Here are two examples: If the operation time is increased, the beating action will go up, increasing mechanical action. If a cold water valve is stuck open, water will continue to fill the drum, diluting the chemical and reducing the water temperature which will reduce mechanical action. Managing a washing machine and cleaning laundry is not only a science, but an art. It requires a certain skill set that can’t be found in just anyone. You must be able to not only have all the scientific facts of how and why these components work together, but you also have to have artful mind in order to be able to adjust what could be a disaster and create a perfect balance. VRM Intel Magazine | Summer 2016

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| Housekeeping

The Do’s and Don’ts of Service Animals VRM Intel

By Stephen R. Craig Pro Resort Housekeeping

any people in the vacation rental industry are confused and frustrated by the subject of service animals. I do not know of any company that has an issue dealing with a true service animal (like a trained guide dog for a blind person). However, confusion and frustration sets in when companies are forced to deal with guests who claim their pet is a “service animal” when it is not. Issues occur when these abusers demand to rent “no pet” properties and refuse to pay pet fees. This causes companies to become frustrated because they feel they cannot question these claims for fear of potential lawsuit reprisals and subsequent bad publicity.

As you probably know, many people claim their pets are service animals because they provide emotional support, comfort and companionship. They can even go online and get documentation for an animal. Try it.

Google the phrase “buy service animal documentation” and you will be stunned at the proliferation of sites selling vests, certificates and special leashes. You can get a service dog ID card for $55. You can register a “therapy” dog for $39.99 and can even get a “complete emotional dog kit” for $129. Banner ads claim, “Take your dog anywhere” and, “Never pay a pet deposit when renting.” Even the names of some of these agencies are quite impressive: Service Animal Registry of America (SARA), United Service Animal Register, National Association of Service Dogs, etc. 88

How to Determine and Properly Accommodate ADA Approved Service Animals in the Vacation Industry None of these agencies are of any value. Just because these agencies may send a certificate saying that a dog is a service animal doesn’t mean that it is true.

Most of the rules surrounding service animals are based in the Americans with Disabilities Act (ADA). According to the ADA, “A service animal is defined as a dog that has been individually trained to perform tasks for an individual with a disability. ” The dog must be trained to take a specific action when needed to assist the person with a disability. For example, a person with severe depression may have a dog that is trained to remind the individual to take his medicine. An epileptic may have a dog trained to detect the onset of a seizure.

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A diabetic may have a dog to alert the individual when his blood sugar levels reach extremes.

Emotional support, therapy, comfort or companion animals are not considered service animals under the ADA. Here are answers to the questions that I have been asked most often when pertaining to service animal regulations:

Is the dog considered a service animal if it calms a person when he is having an anxiety attack? The key is whether or not the dog has received specific training. If the dog has been trained to sense an oncoming anxiety attack and is trained to take specific action, it is considered a service animal. However, if the dog’s presence is the sole provider of comfort then it is not considered a service animal under the ADA.

Can a guest with a service animal rent a property even if a “no pet” policy exists for the property? Yes. They cannot be restricted to solely “pet friendly” accommodations.

Can a pet cleaning fee be charged? No. A charge to clean pet hair or dander is not permissible. However, if the service animal causes damage to the accommodations, a fee can be charged as long as it is equal to damage fees charged for other guests. Can the service animal be left alone in the accommodations? No. The dog must be under the handlers control at all times.

Must the service animal be on a leash? Yes, unless the leash hinders the service animal’s work. What if the guest makes claims about his service animal based on the Fair Housing Amendments Act of 1988 (FHAA)? The FHAA only applies when a guest rents long-term. (In some cases emotional support animals are allowed.) What questions can I ask as a company to prove the dog is a service animal? You can only ask two questions: Is the service animal required because of a disability? What work or task has the dog been trained to perform?

You cannot request any documentation for the dog or ask that the dog demonstrate its task. You also cannot inquire about the nature of the person’s disability. Therein lies the rub.

If the person says the dog has been trained for a specific skill but the company is not allowed to pursue “proof ” of that fact, then the claimant almost always gets his way. I hope this article has been helpful in determining which pets are considered true service animals (as defined by the ADA) and which ones are not. The government has a detailed FAQ that is accessible on the U.S. Department of Justice’s website which can be found at www.ada.gov.

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| Education and Community

May Conferences Provided Top-Tier Education for the Vacation Rental Industry S

everal conferences were held in May in Washington, Denver, Florida and Ontario, which provided top-tier education and networking for vacation rental providers at every level, from individual vacation rental owners to large onsite condominium-hotel operators. Over 800 vacation rental professionals attended these conferences, walking away with new information to improve their operations.

VRMA of Washington, Leavenworth, Washington Over 100 property managers in Washington, California, Oregon and Canada gathered at Sleeping Lady Resort in Leavenworth, Washington for the VRMA of Washington (VRMWA) Annual Conference. “This year’s conference was held in a great location,” said Betsy LaBarge, President of Mt. Hood Vacation Rentals. “I will go back to Leavenworth and the Sleeping Lady Resort anytime. The venue was small and intimate, and there was a lot of good networking.”

This year’s theme was “Delivering a World Class Vacation Experience” and sessions and discussions included customer service, owner acquisition, housekeeping, technology, big data, website design, channel optimization, marketing automation, reviews and working as a community to affect change.

LaBarge added, “There are several smaller businesses like ours attending, so the educational value for employees is very relevant. The VRMAWA members really put their heart and soul into this event, and it shows.” "The issues confronting our industry are common in all regions; regulatory, standardization and distribution to name a few,” said Vince Perez, founder of Fetch My Guest. “VRMAWA leadership has created a unique setting that is focused, educational and actionable. The many attendees represented came from all over the 90

Pacific Northwest, from Canada to Northern California. The level of participation in these settings is invaluable. We came away with new friends and expanded our own community boundaries.”

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Perez added, “I see the future of our industry in these highly focused communities coming together for the common good of the professional manager. We are looking forward to next year’s program!" For information on joining VRMA of Washington, go to http://www.vrmawa.org/

Florida VRMA’s 2016 Xtravaganza, Orlando, FL Each year Florida VRMA brings together members from all over the state of Florida to converge on one location for several days during our Annual VRM Xtravaganza conference.

This year’s conference not only exceeded all expectations for the hundreds in attendance but it also marked the first VRM Xtravaganza since the merger between CFVRMA and FVRMA this past January. A tremendous amount of industry activity has transpired since that merger which has only added to the excitement during this annual conference. Just prior to opening the conference, the Florida VRMA Board of Directors convened to approve its third regional Florida chapter. With chapters now established in the northwest Panhandle, along the northeast coastline of Florida and in the southeast from Palm Beach to Miami, the regional participation and partnerships continue to grow. In just a few short weeks, the Tampa Bay area is poised to submit its chapter application becoming the fourth addition within the state. As regional participation has grown, so does interest in FRVMA’s events such as the 2016 VRM Xtravaganza. With over 70 local and national industry exhibitors, 18 presentations and several key networking opportunities this year, the VRM Xtravaganza delivered bigger and better than all past shows. In this year’s general

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| Education and Community

sessions, many presentations exceeded capacity leaving standing room only during marketing panel discussions and also during two keynote presentations from three-time Paralympic Gold Medalist Oz Sanchez and Florida TV personality Chad Crawford. Chad is in his seventh season hosting the award winning show “How To Do Florida,” but Chad was asked to change it up a bit and educate VRM’s on “How To Sell Florida” to their guests. This interactive destination marketing presentation outlined a great way to develop your own customized guest experience packages. The conference received exceptional feedback from attendees in the VRM legal contract session, the pricing strategy workshop with George Volsky, as well as various theatre presentations highlighting vendor technology products and software. Overall the 2016 VRM Xtravaganza covered almost every topic imaginable. The 2017 VRM Xtravaganza planning is already underway and is close to securing a solid date for May of 2017. Please continue to join FVRMA throughout the year for other events listed on www.fvrma.org and stay tuned for more information coming soon regarding the 2017 conference.

OPMA Executive Summit, Denver, CO The Onsite Property Management Association (OPMA) held its Spring Executive Summit May 18-20 at the Inverness Hotel and Conference Center in Denver, CO. OPMA is made up of onsite vacation rental property management companies and targeted service and product suppliers and provides education, advocacy, and the promotion of the value of the rental experience through onsite property management. Here are a few of the key takeaways from the summit. Partnership with DestiMetrics: The OPMA ratified a partnership with Ralf Garrison and DestiMetrics to initiate a Joint Destination/ Lodging Research Program. This research program is designed to measure the OPMA lodging category to inform and educate local destination resort communities and to empower OPMA member companies with “non-hotel” metrics. The research program will be funded by each Destination Marketing Organization (DMO) with the next market implementation in Panama City Beach.

According to Paul Wohlford, OPMA President and Vice President at The Resort Collection, “The DestiMetrics program and forecasting tools can take the professionally onsite-managed Property Management sector to the next level by quantifying what our segment represents in the entire travel industry. We have never been able to appropriately quantify our financial impact in the travel market that benefits all the destination stakeholders including retailers and local residents. The partnership will help educate both owners and consumers as to why they should travel to those properties managed by professionals.” Phocuswright Talks Industry Growth and Airbnb Impact: Pete Comeau, Senior Vice President, Research Sales at Phocuswright, presented research about the vacation rental industry, beginning with the finding that – in just three years – the percentage of U.S. travelers who have rented a whole home or apartment has more than doubled, from 10 percent in 2012 to 22 percent in 2014. Comeau discussed demographic shifts among vacation rental guests and the motivations of next-gen travelers before taking a deeper dive into Airbnb’s impact on the industry and the building blocks which contributed to their success, including Airbnb’s website design, their online booking path, their engaged community, the implementation of two-way reviews, and their attention to the Host (Phocuswright’s The Airbnb Traveler, March 2016). It also

provided a roadmap for how OPMA members can leverage these research findings in their respective market areas.

Regulations at the Forefront: For VRMs, regulations and tax remittance remain hot-button issues in 2016. A panel session which included Paul Wohlford, Vice President at The Resort Collection, Lino Maldanado, Vice President at Wyndham Vacation Rentals North America, Dean Brookie, Mayor of Durango, CO, Dennis DiTinno, CEO at Liberte Management Group, and Jim Olin, Founder and President at C2G Advisors, addressed regulations, tax compliance, and the financial impact of vacation rentals to the destination. The panel engaged the audience with in-depth discussions about working with both city councils and DMOs to demonstrate the category’s economic value to their communities and to identify ways to bring illegal rentals out of the shadows. The discussions reiterated the importance of continually working with elected officials and DMOs to consistently communicate the economic impact of rental income and partner with destinations to facilitate the conversion of illegal vacation rentals to tax compliant vacation rentals. The summit also addressed customer relationship management, guest surveys and loyalty programs. The next OPMA Executive Summit will be held November 9-11, 2016 at the Sandestin Golf & Beach Resort. For more information on joining OPMA, go to theopma.org.

Vacation Rental Success Summit 2016: A Conference for Owners by Owners, Toronto, Ontario It began with a lofty ideal. Bring together the cream of vacation rental and subject matter experts, with over 100 passionate, motivated and independent owners and property managers. Add to that, top-class presentations and interactive workshops in a dedicated learning environment, with plenty of networking and social opportunities, and a movement will be created. And over a weekend in Toronto at the end of April, the inaugural Vacation Rental Success Summit did just that.

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From the outset, the goal of VRSS was that it would be an event staged by owners, for owners, free of sponsor or promoter influence. While there are numerous other conferences we can attend through the year, they tend to be biased towards the organizer’s agenda. They can be tremendously useful, but not so much if what you want is a free-range of information and support.

Attracting delegates from all over the world including Australia, New Zealand, Brazil and the Cayman Islands, it seemed the combination of the great venue, fabulous food (included in the ticket price), on-site accommodation, and high quality training and presentations was just what the audience wanted. “Brilliant, brilliant, brilliant” was the feedback, from one attendee while others were a little more detailed in their survey testimonials but equally effusive. There was a packed house for keynote presentations from Matt Landau of the Vacation Rental Marketing Blog; Lead Pages Chief Educator, Bob Jenkins and motivational speaker and vacation rental owner, Matt Ward, while the wide choice of workshop topics gave something for everyone. All the sessions were professionally filmed and included as part of the ticket price. Planning for VRSS 2017 is now underway and details will be released soon. To get onto the mailing list and be the first to register for the Early Bird rate, go to www.vacationrentalformula.com

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

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

VRM Intel

www.fvrma.org or call us at 407-218-6600 THE OPMA DIFFERENCE Constant focus on the future and the shaping of the lodging industry Controlling our own destiny through leadership initiatives and not simply relying on advocacy and secondary support roles Targeted growth and strategy: Aggregating the most condo hotel rental inventory in the most popular vacation destinations. REPRESENTING

THE BEST OF BOTH WORLDS

CONDO ACCOMMODATIONS

& HOTEL AMENITIES

877.870.6510 THEOPMA.ORG

Assisting our members in measuring and delivering their collective economic impact in the local markets they serve Develop and introduce training programs that provide uniform messaging and that enhance the sales and service levels and the proďŹ tability of the membership Minimize the number of suppliers in any product/ service category translating into more signiďŹ cant long-term relationships with OPMA onsite managers VRM Intel Magazine | Summer 2016

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| Business

 Scottsdale, AZ  Call for venue details  www.software.homeaway.com

 Kona (Big Island), HI  Call for venue details  www.software.homeaway.com

2123

SEP OCT

SEPTEMBER OCTOBER

AUGUST

AUG SEP

HOMEAWAY BREAKFAST SEMINAR

STREAMLINE SUMMIT

1013

LIVEREZ PARTNER CONFERENCE

 Austin, TX  Lost Pines Resort  www.liverez.com

REZFEST

 Orlando, FL  Renaissance Hotel  www.rezfest.com

2830

 Chandler, AZ  Sheraton Wild Horse Pass  www.streamlinesummit.com

OCT

HOMEAWAY BREAKFAST SEMINAR

OCTOBER

AUG

HOMEAWAY BREAKFAST SEMINAR

 Maui, HI  Call for venue details  www.software.homeaway.com

SEP

 Park City, Utah  The Blind Dog Restaurant & Sushi  www.mindanddine.com

SEPTEMBER

AUG

AUGUST

MIND AND DINE

SEPTEMBER

 Jackson Hole, Wyoming  The Wort Hotel  www.mindanddine.com

AUGUST

MIND AND DINE

AUG

AUGUST

Calendar of Events 1619

ANNUAL VRMA CONFERENCE

 Chandler, AZ  Sheraton Wild Horse Pass  www.vrma.com

VRM Intel Magazine | Summer 2016

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VRM Intel

OCT

VRM INTEL LIVE!

NOV

VRHP NATIONAL SEMINAR

 Destin, FL  Sandestin Golf and Beach Resort  www.theopma.org PHOCUSWRIGHT CONFERENCE

1417

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 Los Angeles, CA

Resort, Baytowne

1417

PHOCUSWRIGHT CONFERENCE

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

DEC

www.vrmintelLIVE. com DECEMBER

OPMA EXECUTIVE SUMMIT

 Sandestin, FL  Sandestin Golf and Beach

 Las Vegas, NV  Excalibur Hotel and Casino  www.vrhp.org

NOVEMBER

NOV

0911

VRHP NATIONAL SEMINAR

NOV

0709

 Las Vegas, NV  Excalibur Hotel and Casino  www.vrhp.org

NOV

VEMBER

NOVEMBER

 Kauai, HI  Call for venue details  www.software.homeaway.com

 Wilmington, NC  Wilmington Hilton Riverside

0405

NEVRMA

 Lincoln, NH  Mountain Club on Loon Resort & Spa

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VRM Intel Magazine | Summer 2016

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