VRM Intel Magazine Winter 2018, Issue 10 by Amy Hinote

WINTER 2018

Simon Lehmann

“This game is not over yet!”

Can Firing Owners Help You Grow? Unbundling the Property Manager Helping Guests Survive Vacation Brain Best Practices for Accidental Damage Repair 1

VRM Intel Magazine | Winter 2018

What’s in Store for 2018

VRM Intel Magazine | Winter 2018

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

“

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

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

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

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

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Contents On the Cover

74 What's in Store for 2018 65 Simon Lehmann: â&#x20AC;&#x153;This game is not over yet!â&#x20AC;? 38 Helping Guests Survive Vacation Brain 68 Unbundling the Property Manager 52 Can Firing Owners Help You Grow?

80 Best Practices for Accidental Damage Repair

Customer Service 33 Connecting with Challenging People 37 Verifying the Interplay of Voice and Online Channels 38 Helping Guests Survive Vacation Brain 77 Hospitality Wins

Property Care 88 Team Cleaning: Is it Right for You? 89 Cleaning Allergy-Friendly Properties

Regulations 25 The Uber-ization of Everything: How Local Governments View the Sharing Economy

Technology 78 Millennials and Technology: How VRMs Can Embrace Change and Ride Both to Success 84 PMS + CRM = ROI 86 Using Mobile Technology to Manage Inspections

Education 94 Calendar Of Events

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VRM Intel Magazine | Winter 2018

Contents Business

29 Key Employment Law Changes: Trends to Keep on the Radar in 2018

Marketing

21 Who, What, When, Where, Why, How Much? Examining the Travelerâ&#x20AC;&#x2122;s Decision Process

40 Have Hotels Become the Alternative Accommodations for 43 10 Tips for Vacationers? Successful Distribution 45 Steps to Consider When Preparing Your Vacation Rental Business for Sale 52 Key to Exponential Growth: Fire Owners Regularly 65 Simon Lehmann Discusses Industry Changes, Challenges and Opportunities 68 Unbundling the Property Manager 74 What's in Store for 2018 80 Best Practices for Accidental Guest Damage Repair and Bed Bug Infestation Remediation 90 VRM Intel Roadtrip

49 Using PR to Attract New Owners and Grow Inventory Organically 51 What Vacation Rentals Can Learn from The OTA Wars 56 Building Consumer Trust Through Digital Branding

58 10 Strategies for Finding the Right Balance in Your 2018 Marketing Plan 62 2018: Which Brand Will You Invest Inâ&#x20AC;&#x201D;Yours or OTAs? 72 Grow Your Email List with Lead Magnets

90 21 12

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VRM intel magazine

Dear Readers, I’m not sure how it happened, but it is 2018! For the vacation rental industry, 2017 was quite a ride. A few destinations had an amazing year while others struggled to meet revenue goals. But overall the industry showed a ton of resilience and stability in the face of shifting market conditions, policy changes at OTAs, more than our share of natural disasters, and what Skift founder Rafat Ali calls a state of “permanxiety” among travelers. The vacation rental industry is strong, established on a solid foundation that many of you have built over the last several decades. All the opportunities in the sector, the funding that is rolling in, the new startups, the young people building careers in short-term rentals, are here because you built this—a fact I am reminded of every time I write about the latest “disruption.” This issue contains 27 articles designed to help you grow your business in 2018. Matt Curtis shares his experience about how local governments are addressing regulations, and Sue Jones writes about important changes in employment laws. In addition, Laird Sager discusses best practices for addressing accidental damage repair, Tyann Marcink provides us with a humorous look at how to handle guests suffering from “vacation brain,” and Wes Melton lets us know that sometimes purging properties is the right thing to do. On the marketing side, Outer Beaches Realty’s Alexa Nota talks about managing an in-house marketing plan, and you will find articles about PR, managing distribution, branding, email marketing, and catering to the tech needs of millennial guests. As you will read in the three feature articles, What’s in Store for 2018, Unbundling the Property Manager, and our insider interview with thought leader Simon Lehmann, while the industry has seen many changes—and I know it is a cliché—the more things change, the more they stay the same.

Editor-in-Chief Amy Hinote

Director of Design and Production

Donato Berbelja

Contributors Tracy Adams

Heather Macnaught

Heather Bayer

Tyann Marcink

Ali Cammelletti

Amber Mayer

Carlos Corzo

Wes Melton

Steve Craig

Sean Miller

Matt Curtis

Alex Nigg

John Dalton

Alexa Nota

Ben Edwards

Brett Parry

Jessica Gillingham

Vince Perez

Sue Jones

Laird Sager

Doug Kennedy

David Thompson

Simon Lehmann

Heather Weiermann

While a lot of learning remains to be done in 2018 (and you will find all the upcoming educational events on page 94), the keys to success lie in a renewed focus on the basics: providing guests with amazing vacations, delivering clean and safe accommodations, and creating a work environment in which your employees can thrive.

Amy Hinote, amy.hinote@vrmintel.com

My hope in 2018 is that—despite the noise—vacation rental professionals do not lose sight of how much the vacations you provide mean to those lucky enough to take them.

Address

It is a privilege to be able to research and write about the vacation rental industry. Words cannot express my appreciation. I hope you have an amazing 2018! Sincerely,

Amy Hinote

Editor-in-Chief

VRM Intel Magazine | Winter 2018

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WHO, WHAT, WHEN, WHERE, WHY,

HOW MUCH? EXAMINING THE TRAVELER’S DECISION PROCESS By Amy Hinote

I keep six honest serving-men (They taught me all I knew);

WHO?

And How and Where and Who.

Who is going to go on the vacation? A couple? Family? Friends? Solo?

Their names are What and Why and When —Rudyard Kipling

What?

n grade school, we learned that who, what, when, where, why, and how need to be answered to fully understand a subject. Our reports, research papers, and essays were evaluated by how effectively we addressed these important questions.

It is not so different in the vacation rental industry. For guests making vacation decisions, finding answers to these core questions is critical in choosing the right lodging alternative. Who? Who is going to go on the vacation? A couple? Family? Friends? Solo?

What? What type of lodging do I want? A hotel? House? Condo or apartment? B&B? Hostel? Cabin? Shared space? Ship? Tent?

What type of lodging do I want? A hotel? House? Condo or apartment? B&B? Hostel? Cabin? Shared space? Ship? Tent?

When? When do I want to go? Do I have set dates? Do I have a date range?

When? When do I want to go? Do I have set dates? Do I have a date range? Where? Where do I want to go? Do I have a specific location? A region?

WHERE?

Why? Why am I going on vacation? Do I want to sit on a beach? Do I want to ski, fish, golf, tour a city, or go on a road trip?

Where do I want to go? Do I have a specific location? A region?

How much? How much do I want to spend on accommodations? Do I have a set budget?

In creating an online booking path, the vacation rental industry— and the travel sector as a whole—has made a key assumption that may or may not be accurate. This assumption is that guests know the when, where, and what before they know anything else.

Websites have been designed to allow guests to search by date, location, and accommodation type; and marketers pay big bucks for Google AdWords phrases such as “Corolla vacation homes,” “Chicago hotels,” or “Destin condo rentals.” For travelers who know exactly where they want to go, when they want to travel, and what type of lodging they want before setting off online to find a vacation, the current online booking path is becoming increasingly efficient. However, the reality is that many vacationers don’t know those three W’s when they begin their online research.

WHY? Why am I going on vacation? Do I want to sit on a beach? Do I want to ski, fish, golf, tour a city, or go on a road trip?

How much? How much do I want to spend on accommodations? Do I have a set budget?

VRM Intel Magazine | Winter 2018

Instead, travelers know the why, the who, and/or the how much before they know anything else.

For example, a family may know they want a holiday ski vacation but don’t know which destination is best. A group looking for a “girlfriend getaway” might be considering Sedona, Napa, New Orleans, or New York. A summer beach trip could be taken anywhere within a seven-hour drive of a family’s home in Atlanta. Golf trip alternatives might include South Carolina, California, or Alabama. This is true for fishing expeditions, leaf season outings, lakeside cottage getaways, whitewater rafting, or any number of potential trips. For these travelers, online research becomes much more challenging. If travelers know how much they want to spend but are flexible on location, the decision is extremely difficult. For the family who knows they have $1,500 for a week at the beach but doesn’t know which beach destination gives them the biggest bang for their buck, searching online is almost impossible.

Taking the Travel Agent out of the Online Travel Agency Those of us over 45 years of age likely remember the role travel agents once played for vacationers. They had offices with bright destination posters on the walls and racks of brochures for adventures around the globe. The traveler would set an appointment to meet with an agent who would to take inventory of all the things the traveler wanted to do on vacation. The agent then would research and provide options tailored to fit all these ideas and desires, creating a full vacation. These recommendations included accommodations, transportation, guided tours, and tickets for attractions and activities. In many cases, the travel agent also made restaurant reservations and included some special thank-you to be provided along the way (e.g., flowers in a hotel room). The idea that today’s online travel agency (OTA) provides the guest with the kind of service that travel agents of yesteryear offered is laughable. Today’s OTAs are merely lengthy catalogs of travel providers that begrudgingly pay for placement. If the traveler has not already determined specific dates and a narrow location, these sites are difficult to use for research. There is no travel agent to help you at an OTA.

The downside of using an OTAs is that travelers get boxed in to answering the wrong questions first, are fed results driven by OTA profits, and consequently end up with a travel experience that is not all that it could be.

OTA Booking Path Assumptions Currently, most vacation rental websites offer guests the option of searching by where, followed by when and what. On an OTA, travelers are expected to go the site and select flights, hotels, vacation rentals, or cruises. From there, travelers are steered to select dates and a location.

However, if travelers would prefer to search by why (fishing, beach, ski, golf, etc. or how much, there is no easy option. For example, if a traveler wants to find a cabin rental within driving distance of home for four nights for under $500, where does that traveler start? Herein lies the next opportunity in online travel search.

Why Is Giving Travelers the Option to Search by Who, Why, and How Much So Critical? The reality is that by the time travelers know where, when, and what, they have already decided who, why, and how much.

In other words, for guests to have selected a location, dates, and what type of lodging they want, they will have already determined why they are going on a trip, who they are going with, and how much they want to spend. The online travel sector will experience significant disruption when travelers are given a platform that efficiently allows them to search by who, what, when, where, why, and how much—or any combination of these considerations.

Ideas for a Head Start Vacation rental managers can get a head start and create a little disruption themselves by creating trustworthy, relevant, indexable content that helps their target market guests to conduct online research. Ideas:

 A vacation rental operator in Sedona might contact other companies in Sonoma wine country, Destin, and Key West to create an online “Guide to Girlfriend Getaways.”  A property manager in a value beach market might collaborate with like-type beach destinations to create “Family Beach Vacations for under $1,000.” Whatever niche a company is in—family, luxury, attractions, parks, fishing, battlefields, etc.—marketers could find it useful to combine forces with other companies in similarly focused destinations to target guests who know the who, what, why, or how much behind their vacations before they know the when or where.

“

The reality is that by the time travelers know where, when, and what, they have already decided who, why, and how much.

”

In the coming months, we can expect online travel technology and marketing to move toward targeting the traveler earlier in the decision-making process.

As the focus shifts from addressing the location and dates of a trip to addressing the intent or motivation for the trip, the game will change for all vacation providers. Vacation rental managers who are able to create innovative strategies to get ahead of this trend will see a significant competitive advantage.

VRM Intel Magazine | Winter 2018

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The Uber-ization

of Everything How Local Governments View the Sharing Economy By Matt Curtis

signed up for my first email address barely twenty-five years ago. It’s wild to imagine. The internet was young, and the ideas about what it would produce were endless. But we still did most things the old-fashioned way: we still did our own shopping, household work, and travel planning.

In those days, when we had to buy groceries we went to the store, and if we forgot something we were forced to go back. We asked friends and family for a ride to the airport and called a taxi if we couldn’t find anyone—and we hoped it didn’t come to that. And we

rented homes for our vacation through a property manager (whose name we got from a friend), who said, “You’ll like this house; you can walk to everything.” Today, the sharing economy has connected people and services around the world. People share experiences and leave ratings for the next potential user. They sell products and services, often the fruit of their own time and effort, and are able to make a little extra income or even a full salary. VRM Intel Magazine | Winter 2018

We can have groceries delivered quickly and efficiently by a woman who seems to really enjoy what she’s doing. We can press a button and find a hassle-free ride to the airport from a guy who loves his Toyota Highlander and is happy to tell you about some of the new restaurants in town. And we get to cruise multiple vacation rental websites to read reviews of past users, view photos, and read lengthy commentary about all the amenities and nearby opportunities of a home to rent through vacation rental managers who take pride in providing a great experience.

Some insist that this sharing economy is better described as the new economy, app-based economy, mobile economy, or peer-topeer economy. And a few companies are typically identified as industry leaders. Their names become ubiquitous with the activity, and their brand becomes a verb. And so the sharing economy has turned companies like Uber and Airbnb into the next Scotch Tape, ChapStick, or Kleenex, producing phrases like “I’ll just Uber to my next appointment.” But as we Uber-ize everything, local governments are grappling with the question of how to regulate this phenomenon. And arguably, these new regulations are touching people and activities that have been occurring for decades without concern—such as vacation rentals or hiring a handyman.

Mayors and city managers are struggling with finding viable regulations or best practice models in areas like mobility innovation (Uber, drones, autonomous vehicles), short-term rentals (Airbnb), and the gig economy (TaskRabbit, Thumbtack). And these city leaders are right to be struggling; there aren’t a lot of best practice models. In fact, in 41,000 cities in the United States, both industry and government leaders scratch their heads to point to a few small examples of what works. Technology changes are sweeping the world, and government leaders are perplexed about how to provide levels of safety, security, and reasonable understanding for their communities. And just when they think they’ve figured out the issue, the technology changes and activity is further transformed—often making newly adopted regulations irrelevant. What does a mayor or city manager think about how to regulate the new, Uber-ized world? Innovative technology has companies using drones that will make deliveries to your home. How does a city address airspace and privacy concerns?

Technology also provides an immediate solution for that clogged kitchen sink: one click on an app or a webpage and a handyman will come to your house to fix it. Is he licensed? Is he paying an occupational tax? How does a mayor wrap her mind around that?

New practices and technologies will generate even more questions such as these.

Policy makers are forced to try to answer these questions while a group of angry citizens is chanting outside city hall calling for rules and enforcement. At the same time, industry leaders are moving so quickly to provide a better product that the changes they’re creating don’t get transmitted effectively to the communities where their impact is felt.

The speed of industry growth and the rapid and continuous change in technology call for rules and enforcement from the community, but the lack of best practice models leads to serious challenges for local policy makers. Their world is a confusing buzz of new information around the sharing economy.

There’s no easy answer—and there never is when it comes to creating good, effective public policy. But there is a solution. There is a path that will lead local policy makers to find answers to their questions, provide data to their constituents and their staff, and build a regulatory framework. It starts with community and stakeholder engagement: understanding the needs and concerns of the community, the demands of the users, and the constantly evolving industry. Cities can choose to hire a professional or a team with experience in these areas—people who have been on the policy-making side, who understand the importance and the challenges of community and stakeholder engagement, and who have a long history with the industry. To help in this process, the local stakeholders and users should be prepared to share their experiences and the experiences of those who are affected by the industry. For short-term rentals, we recommend that traditional vacation rental managers, property owners, and users prepare to submit their stories to local government. Stakeholders themselves will benefit when they inform local government about their activities to help produce the best public policy. Governments don’t have to go it alone. With the help of engaged industry professionals, local government officials can better understand the subject they are discussing—essentially using a trained guide to help them better understand how the industry works, how to communicate to the stakeholders and the industry, and how to create regulations that will achieve compliance. Recognizing that local governments are struggling with how to address the new sharing economy is part of the battle. Helping them understand the industry in an effort to create a best practice model is the other part of the battle.

A lot has changed since we sent our first emails. And now, as we Uber-ize everything, we can also help local government address these changes so that everyone can win.

ADDRESSING SHORT-TERM RENTALS And what about those short-term rentals? Local policy makers often hear, “I’m happy to use a short-term rental when I go somewhere else, but I don’t want one causing loud parties next door.”

The discussion of how to regulate short-term rentals has accidentally scooped up the decades-old profession of the vacation rental manager. In some cities, vacation rental managers are the last people to know they’re now subject to significant restrictions. With little to point to as a best practice model, local policy makers are trying to grapple with the seemingly new phenomenon of the sharing economy. A flurry of questions runs through policy makers’ minds: “How do I address zoning, noise, parking, taxes, and complaints?”

VRM Intel Magazine | Winter 2018

About Matt Curtis

Matt Curtis is the founder of GPS Policy Group, a government consulting firm focused on assisting local governments to create effective regulations for the “New Economy.” Matt served for years as the deputy to two mayors of Austin, Texas, spent years as a leading voice in the “Sharing Economy” regulatory discussions, and sits on the board of the Vacation Rental Managers Association.

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KEY EMPLOYMENT LAW CHANGES TRENDS TO KEEP ON YOUR RADAR FOR 2018

eeping up with ever-changing employment laws is a struggle for all business owners. No matter the size of your business, or the number of employees you have, making sure that your company is compliant with local, state, and federal labor laws is an important yet daunting task.

Weinstein, Bill O’Reilly, Roger Ailes, Kevin Spacey, and many others have become embroiled in workplace harassment allegations at a rate we have never seen before.

This past year has been a busy one for legislators, especially for those at the state and local level. During the last year, there have been several laws passed that may directly affect your workplace policies and employee handbook at a more local level.

If you don’t yet have a sexual harassment policy, now is a good time to formalize one. If you have a policy that hasn’t been reviewed in a while, revise it now by adding examples of what is considered unacceptable behavior and what the consequences are for individuals who violate the policy.

If you haven’t already done so, now is the time to dust off your employee handbooks and update them to reflect changes in legislation enacted in 2017. Outdated handbooks may contain policies that could possibly violate these new statutes or regulations, exposing you to unforeseen liability.

How you handle a sexual harassment complaint or even a whisper of one can have a considerable impact on your organization. Failing to take the appropriate action at the right time comes with a steep price. Think about the damage to your reputation, your brand, your culture, and your ability to attract and retain employees. The cost of dealing with a sexual harassment charge is far greater than just the financial impact.

Heading into 2018, there are several trends in employment law that could potentially impact your business. Even if the following changes haven’t been enacted in your state yet, don’t breathe too easy. At the rate things are going, it probably won’t be long before one or more of the following trends are affecting your state and local regulations.

It is now more important than ever that you train your employees about sexual harassment and that inappropriate behavior will not be tolerated. Providing additional training for your supervisors and managers is key to ensuring that no complaints, or whispers of complaints, go undetected.

Here are some key employment law trends and policies to be aware of:

#MeToo: Sexual Harassment Policies Sexual harassment cuts across all industries, as recently evidenced by the #MeToo social media hashtag. Matt Lauer, Harvey

You can find more information and facts about sexual harassment at the following: • The Society for Human Resource Management website: https://www.shrm.org • The EEOC website: https://www.eeoc.gov/eeoc/publications/fs-sex.cfm

“Ban the Box” Fair Chance Policy Twenty-nine states, representing more than 150 cities and counties nationwide, have adopted what is widely known as “Ban the Box,” a part of the more comprehensive Fair Chance Policy. The intent behind “Ban the Box” is to provide applicants with a fair chance to be interviewed by removing conviction questions from the job application and delaying the background check until later in the hiring process. This doesn’t mean that you can’t ask about convictions, it just means you should wait until a conditional offer of employment is made and a background check has been completed. Using conviction information fairly is the backbone of an effective Fair Chance Policy. Simply stated, you should make your assessments based on individual circumstances instead of broad categories of exclusions. For example, if you are hiring an individual who had a conviction for VRM Intel Magazine | Winter 2018

shoplifting eight years ago, it is important to consider the length of time since the offence and the relevance to the position, rather than disqualifying the applicant because you “don’t hire anyone with prior convictions of shoplifting.” The following are some best practices to consider regarding “Ban the Box” and/or implementing a Fair Chance Policy:

 Remove inquiries about convictions from your job application. If you are using an automated recruitment system, be sure to remove any questions from the online application process as well as from any paper applications.  Remove self-reporting questions about conviction history. The best approach is to confirm any convictions with a background check.  Background checks. You do not want to take into consideration any records of arrest that were not followed by a valid conviction.  If an applicant is rejected based on a conviction record, inform the applicant in writing. Background reports, just like credit scores, can be inaccurate. Be sure to provide time for the applicant to verify or challenge the information.

Equal Pay and Wage Discrimination: Banning Salary History Inquiries Asking for current or prior salaries on applications, or asking applicants during an interview about their salary history, is now off-limits in several states. Over the past year, many states and cities have significantly expanded their equal pay provisions to promote wage transparency and pay equity to close the wage gap. The Equal Pay Act requires that men and women working in the same company be given equal pay for equal work. The act refers to positions with the same scope and responsibility, not necessarily the same job title. It is a good practice to complete internal salary studies on a regular basis to determine if there are any instances of pay inequity in your organization. Pay equity includes all forms of pay, including things such as salary, bonuses, life insurance, and allowances for gas, phones, travel expenses, and other benefits. Another law to be cognizant of is the National Labor Relations Act, which protects employees’ rights to discuss their salaries and wages with other employees. If you currently have a policy that restricts employees from talking about their wages, now is the time to remove it from your handbook or associated policies. While none of this is “new” news, it is becoming more front and center and something to pay close attention to over the next twelve to eighteen months.

Protected Sick Leave Laws It is important that your employee handbook policies and employment posters reflect the latest federal, state, and local leave laws. As you review your leave policies, pay attention to recent leave laws enacted for paid or protected sick leave. While federal law doesn’t require private employees to pay sick leave, there is a fast-growing trend at both the state and local levels to provide this benefit. You can find more information and facts about paid sick leave at the National Conference of State Legislatures website: http://www. ncsl.org/research/labor-and-employment/paid-sick-leave.aspx.

In addition to reviewing your state leave laws, make sure your employment posters are up to date as well. Some states require you to 30

VRM Intel Magazine | Winter 2018

insert certain notices with regard to leave into your employee handbooks. You can find more information on what posting requirements you should comply with at the US Department of Labor website: https://webapps.dol.gov/elaws/posters.htm.

Addressing Violence and Weapons in the Workplace Workplace violence is an issue that can affect any organization, of any size, in any industry. Are you aware that the Occupational Safety and Health Administration (OSHA) requires you to provide a safe work environment for your employees? It’s true. Under the general duty clause, OSHA states that preventing and dealing with violence in the workplace is your responsibility.

Workplace violence includes much more than just the physical assaults with weapons we hear about so often in the news. Spreading rumors, swearing, verbal abuse, pranks, bullying, sabotage, theft, physical assaults, psychological trauma, and anger-related incidents are all examples of workplace violence. It is good practice for businesses to have policies in place to prevent workplace violence, addressing the actions referenced above. Although there is no federal law that regulates weapons in a private workplace, several states have enacted laws that specifically apply to employers with regard to carrying concealed weapons that include prohibiting the possession of certain weapons on their private property. As more states move to adopt or strengthen concealed-carry laws, employers need to keep pace with changes in the law and how they might affect the workplace.

For more information on this topic, Reed & Scardino Attorneys at Law have an informative brief titled “Providing a Safe Workplace When Employees are Licensed to Carry” on their website at http:// reedscardino.com/providing-a-safe-workplace-when-employeesare-licensed-to-carry/.

Changes in employment laws are relatively frequent. It is important to keep abreast of changes in the law at the federal, state, and local levels. Being informed about what’s on the horizon with regard to changes in the law, as well as any changes in best practices, is key. While the trends listed above may not be on your radar yet, they very well may be in your employee’s line of sight.

Here are some general steps you can take now to ensure you are in compliance and proactive about upcoming changes in employment laws: 1. Visit Your State Labor Office Website. For more information and updates on what is happening in your area, the following link lists all states and their labor office websites: https://www.dol.gov/ whd/contacts/state_of.htm.

2. Conduct an HR Assessment. HR assessments can help identify whether your HR practices or processes are adequate, legal, and effective.

3. Update Your Employee Handbook. The best practice for employers is to update their handbooks on an annual basis to ensure that their employee handbook is compliant with current laws.

4. Conduct a Salary Survey for Your Positions. Start being more transparent about how pay is determined in your company. A salary survey can assist you with determining internal and external equity, ensuring that your compensation is fair and consistent across the organization. 5. Provide Sexual Harassment Training. Be proactive. Training employees provides more awareness about the types of activities and actions that are considered unacceptable and can get them into hot water. Face-to-face training is the best approach to ensure that the message is received and understood.

6. Update Employment Posters. Laws are constantly changing; don’t be caught off guard. Visit the Labor Law Center’s website for specific posting requirements by state: https://www.laborlawcenter. com/labor-law-poster-updates/.

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

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VRM Intel Magazine | Winter 2018

Connecting with Challenging People By Ali Cammelletti

encounter challenging people or situations on a professional or personal level every day and constantly remind myself that I can’t change the person or situation at that moment, but I do have control over how I react and find the lesson.

For example, a client recently was faced with a potential guest who had a gift certificate but didn’t have time to use it before the expiration date and wanted a refund. In addition, the guest had a challenging year with the loss of a family member and was caring for other family members due to the loss. In this example, one employee didn’t want to refund the money and felt they were being generous by offering an extension of three months to use the gift certificate. This was not embraced by the gift certificate holder and emotions escalated.

My first question to the employee was, “How much empathy did you show this person based on the loss of their family member and their new responsibility? That is a good amount of grief for one year. Did this person feel understood? Were you able to connect with them about not being able to imagine how hard it has been and how truly sorry you are?” Grief brings out many things—anger, denial, bargaining, depression, and acceptance. We all experience these stages whenever we go through any major change. Some last longer, some are skipped over, and sometimes they are all revisited when we are triggered by something. If I could go back to this encounter and start over, the following are the steps I would encourage. VRM Intel Magazine | Winter 2018

Step 1: Listen to Hear, Not to Respond The first step is to listen to the gift certificate holder. Let her share her story of pain over the past year. Show active-listening skills through your tone and words. Allow her to vent as much as she needs. When a customer raises an objection or presents a challenging issue, those of us who work in a service position often find ourselves immediately thinking about how to respond and don’t really listen and connect to the pain that the person is expressing. Practice pausing after someone shares a concern to ensure they are done before moving on to the next step. You can even ask, “Is there anything else you would like me to know about?” Revisit the situation and ensure that all the issues are in the open and being handled. If you are a manager who has been asked to step in, simply state that you have talked with the different employees involved and would like to hear about the potential guest’s experience. This creates a sense of partnership and respect.

Step 2: Empathize Before Educating

being partners in the situation and ensuring that the person feels valued.

Now that you have followed the steps, keep emotions in check. Has your ego gotten involved? Do you care most about winning the argument, or are you coming from a heartfelt place where you want the person to feel understood and valued? When we get emotionally elevated during challenging guest situations, we only hurt ourselves. If you notice this happening, ask if you can research the situation more and get back to the person. This gives you time to cool down and return with a different perspective. There are times when people want to play what I call “emotional volleyball.” They are mad about something that can be totally unrelated, and they want to pass that negative energy to someone else. We have the choice to throw it back with tone and words, or we can take the volleyball, set it down next to us, and be a calm service provider. When we empathize, we set the emotional volleyball down and connect. This builds relationships and loyal customers that feel valued. “Life is relationships; the rest is just details.” —The DiJulius Group

Empathize, empathize, empathize. Acknowledge the person’s pain. You can simply say, “I am so sorry for your loss. I can’t even imagine how hard this has been for you.” Not everyone can tap into their own feelings if they haven’t experienced such pain, but you can acknowledge someone else’s pain and honor it. A good amount of my coaching time is spent talking about this topic. I hear comments such as, “I already explained this in a previous call or email, so why aren’t they understanding?”

Then we practice going to the heart and thinking about what the potential guest is experiencing. Maybe they are grieving right now and having a hard time focusing. There was recently a situation in which a wife handed off the rental agreement signing to her husband, and he challenged it. The employee didn’t understand why he didn’t know what we had talked about with his wife. My question was, “Do they have kids?” As new parents, my husband and I are often like ships passing in the night. We are lucky if we have time to talk about anything besides our daughter’s eating and sleeping patterns. This employee was surprised, and said she didn’t think of that because she didn’t have kids or the understanding of being a new parent with limited sleep.

Step 3: Educate and Offer Options The third step, educating on the possible options, is only done if step one and two have been tried and were not rushed through. If not, be ready for things to potentially go sideways. Referencing the example of the expiring gift certificate, gift certificates can be encouraged to be used within a year, but according to the Credit Card Accountability Responsibility and Disclosure Act of 2009, they must be honored for five years. There are exceptions to this, but companies should educate their employees about the law. An additional choice would be to find an alternative solution, such as suggesting the customer give the gift certificate to someone else if they are not able to enjoy it themselves. When we give people options, they feel empowered, which builds connection and sense of teamwork when coming to a resolution.

Step 4: Follow Through and Follow Up The last step is to follow through with the resolution and follow up to ensure everything has been handled as discussed and there aren’t any more challenges for the gift certificate holder. This speaks to 34

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

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Verifying the Interplay of Voice and Online Channels A

s I often say to participants in my on-site reservations training workshops, “You are not supposed to have this job, and I am not supposed to have a job training you, because it’s 2018 and no one is supposed to be calling anymore!” I’m quite sure that if we could go back ten or even fifteen years and show lodging industry marketers the robust websites packed with information, videos, and 3D floor plans, and simultaneously showed them the nifty smartphone devices we all carry around these days, and then asked them, “Do you think anyone will still be calling for a reservation when they have all this information at their fingertips?”—100 percent of the survey responses would be “definitely not.” Yet the phones still ring, and ringing they are! True, some VR companies have had a slight drop-off in calls; but if you take time to listen to those that are still coming in, you notice right away that most of the calls missing these days are calls we used to get regarding questions that no longer need to be answered. What’s missing is a lot of “service only” calls, such as those asking for directions (now available on GPS), local area information (now pushed out via apps), and details on what’s in the actual home (now viewable via virtual tours.) Despite all this evidence to the contrary, some VR marketers still holds onto the concept that there exists a “voice” client and, separately, an “online” client, when the truth is they are the same client.

One reason for this diehard belief is linked to all the vague generalizations we read about the “millennials,” who supposedly want to do everything online via an app and who never want to make a call. I personally know this is not the case. I provide voice reservations training to several “lifestyle” hotel brands that specifically target the millennial demographic—and I can tell you that many of those hotels receive up to 35 percent of all bookings via good old-fashioned phone calls. Also, as the lives of those millennials

(the oldest of whom are now 37 years of age) become more complex, such as when they have children and become the generation planning the annual vacation for extended family, they are indeed calling for assistance.

That being said, I’m sure many of you data-hungry marketers reading this are wanting proof. So allow me to suggest a way that you can measure the interplay of voice and online channels specific to your VR company.

First, run a report in your property management system showing the long list of bookings made directly on your own website. Chances are these are coded as a separate market segment, so this should be an easy task. Next, randomly highlight at least twenty-five bookings made on the website and the respective phone numbers, along with the date on which the reservation was made. Finally, check those phone numbers against the billing records of your provider for inbound 800-number service. This step might involve your working with accounting to log in to view this part of your phone bill online as a searchable record. Search the bill for each phone number, and when you find a match, note the date and time of the call or calls (many clients call more than once.) Then you can tally the results to find out a) how many of those who booked online called prior to booking, b) how many called after booking, and c) how many called both before and after booking.

Of course, if you have invested in call and lead-tracking systems from VRM Intel supporters such as TrackPulse and NAVIS, and therefore you are capturing the full names from all incoming leads, you could instead just pull a list of names of leads that did not close via voice and then check those in the property management system to see if they had booked online.

If you take time to do this, you will have empirical evidence of the interplay of voice and online channels. If you would be satisfied with anecdotal evidence, just ask your reservations agents how often they hear callers say something like, “Hi, I just booked online, but I have a few questions…” Ask those agents how often they recall talking with someone extensively, possibly even sending the caller a quote via email—and then seeing an online booking coming through with that person’s name on it.

By Douglas Kennedy, President Kennedy Training Network KennedyTrainingNetwork.com VRM Intel Magazine | Winter 2018

Helping Guests Survive

Vacation Brain By Tyann Marcink

“I can’t get in. The door won’t unlock.” “Did you turn the deadbolt after entering your code?” “No…I have to turn the deadbolt?” <Head slap> And another documented case of vacation brain is on the books.

Although the Urban Dictionary states that vacation brain is “the one to two days before vacation when you can’t get much work done because your brain is already on vacation,” vacation rental managers may observe this behavior for an extended period of time because it also manifests itself during travelers’ vacations.

Cases of vacation brain are not officially documented, yet you may see the evidence noted in a cleaner’s job report or scribbled as a note to call the maintenance guy. Here are a few more examples of vacation brain (yes, these actually happened): 38

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 The guest used the window curtain rod instead of the closet to hang up coats and bent the curtain rod.  Cleaners arrived at a property for a turnover and the guests thought their departure wasn’t until the following day.  Checkout instructions are to lock the door and place keys in the lockbox, but guests departed, leaving the keys on the table and the door unlocked.  Guest went out for the day without closing the patio door to the oceanfront balcony and left the air-conditioning running.  Guest checked out and left all the lights on, the front door wide open, and the shower running.  Guest parked a golf cart on the grass, fully aware of the “no parking on the grass” rule—but thought the golf cart was exempt because it “was expensive to rent.”  Guest built a ring of rocks in the front yard that looked like preparation to build a fire. Guest claimed it was for a turtle he found, not a bonfire.

 Guest overly scrutinized the rules and called for clarification. “Do milk caps get put in the recycling?” “Can tea bags be composted?” “You said to throw the food scraps in the compost bin at the end of our stay—can I throw them into the compost bin BEFORE then?”  Guest brought a portable fire pit and had an open fire on a wooden deck.  Checkout instructions remind guests to unplug all the small appliances when they depart, and they also unplugged the refrigerator.  Guests called to say that the entry code didn’t work. They were at the wrong house.

D Clearly communicate your expectations of how your property is

to be treated during a stay. Obviously, this is easier said than done when a guest has vacation brain. Repeated instructions in key communications will help alleviate the effects of vacation brain during a stay; however, there is still the possibility of property damage with severe cases of vacation brain. Key spots for communicating your House Rules, as the listing sites refer to them, include the following:  House Rules section of the property listing  Rental agreement/booking form  Arrival information  Welcome book or property guidebook  Posted list on the refrigerator

There are several actions managers can take to help their guests survive vacation brain and replace any negative experiences with pleasant memories.

Some managers and hosts have resorted to Post-it notes or laminated signs placed strategically throughout a property. This method may work against you as the guests with vacation brain have a history of their eyes glazing over, which effectively prevents them from seeing these multiple reminders.

B Clearly communicate how the entry

E Keep the checkout instructions as simple as possible and clear-

Each person absorbs information differently; don’t assume that all guests will read the lock instructions before arriving at the property.

A less-than-warm-and-fuzzy feeling at checkout can result in a less-than-5-star review, even when it is clearly a case of vacation brain and not any fault of the property.

door locks and unlocks with several methods of communication, including texts, photos, videos demonstrating how the lock works, and personal demonstrations when possible.

If you have self-check-in and you are not able to personally demonstrate how to use the lock, you may find that a demonstration video will be your best method of communication. Simply include a link to the video along with your written instructions.

Even the simplest locks apparently need explanation when a traveler is battling vacation brain. Guests will inevitably regress to the entry unlocking method of their daily routines, which may simply be pressing a button to open the garage door. Make your entry instructions clear enough that even the guests’ small children can understand them. They are likely the ones who will help their parents unlock the door.

C Clearly indicate both the arrival date and the departure date

in several communications and in both day and date form. For example, “Arrival is Saturday, June 2, 2018, and departure is Saturday, June 9, 2018.” The following are good places to repeat the schedule:  Beginning of the confirmation email  End of the confirmation email  Access information message  Checkout reminder Some people remember dates better than days, and others remember days better than dates. By repeating both the day and date of arrival and departure, you cover both types of people.

ly communicate them. If guests are suffering from vacation brain, a long checkout to-do list will be the last thing they want to deal with and will possibly cause them to end their stay with not-sogood overall feelings.

The most important checkout item for a guest to complete is to secure the property. You may or may not require anything else.

It is not uncommon to also ask the guest to perform tasks such as adjusting the heating/cooling, placing used towels in the bathtub, starting the dishwasher, and taking out the trash. The number and type of tasks required will depend on the location and type of property as well as the turnover method the cleaners use. Adding checkout requirements to the House Rules section of a property listing will help set the expectations from the very beginning. Do note that guests with vacation brain begin their symptoms early, which is clearly demonstrated by those who fail to read the House Rules provided in a property listing before they make a reservation. The most effective deterrent for vacation brain is simply clear and repeated communication. This will not prevent your guests from having vacation brain during their stay at your property, but it will help minimize the effects on both your property and your sanity.

Do note that vacation brain is exacerbated by small children, family members, and the use of alcohol. Tyann Marcink is the co-creator of the VR Mastered Vacation Rental Boot Camp, teaching social media marketing, best practices, and workflow in the short term rental industry. Considered the industry leader in vacation rental photography, Tyann has the advantage of the property owner’s viewpoint, as she owns properties in Branson, Missouri and a property in Union, Missouri (outside St. Louis) and has hosted more than 10,000 guests in ten years. Follow her adventures, photography tips, and vacation rental insights on your favorite social media: Facebook and Twitter @MarcinkDesigns, Instagram and YouTube @tyannmarcink.

VRM Intel Magazine | Winter 2018

By John Dalton

Have Hotels Become the Alternative Accommodations for Vacationers?

he year was 1951. The Wilsons—Kemmons, Dorothy, and their five children—took a family vacation. They left Memphis and headed for Washington, DC. The family could not believe the discomforts they encountered along the way. They were cramped in uncomfortable accommodations and charged extra for each child. Kemmons was so upset that when he returned home, he decided to reinvent the lodging industry and create a company that would cater to families vacationing across America. With the traveling family in mind, he developed features that would become hospitality-industry standards. He decided to have rooms that were twelve by twenty-six feet, far more spacious than those of traditional motels. Each room would have its own bathroom, differentiating it from the bed and breakfasts and other accommodations that offered shared bathrooms. And for families, he provided a swimming pool at every property to make their stays more enjoyable. As value-added items, he included free in-room televisions, a telephone, and ice machines on each floor. He added his own restaurants, making dining more convenient for the guests. Based on his frustrating family-travel experience, he vowed there would be no charge for children under twelve who stayed with their parents.

Kemmons hired someone to come up with a name and signage that would clearly identify his company for families to see as they approached in their cars. While working on the project, the man was watching a Bing Crosby movie and decided to brand the new hotels with the same name as the movie: Holiday Inn. 40

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In 1952, the first Holiday Inn opened in Memphis. A year later, Kemmons opened three more but ran out of funding. He then partnered with Wallace Johnson, and they decided to franchise all their new properties. Every property was to be the same. They wanted a consistent appearance and delivery of services. They mandated standardization, cleanliness, and predictability; each property had to be family friendly and readily accessible to road travelers. In the years ahead, they continued to innovate by forming a partnership with Gulf Oil Credit Card and exchanged consumer information. They created a referral agreement with Pan American Airways. Believe it or not, they had the first automated central-reservation system in the hospitality industry through a partnership with IBM.

In 1979, Kemmons retired with 1,759 properties in fifty countries. He had targeted the family vacation market as his primary business. Holiday Inn had paved the way for the many companies that have followed their model. Today, hotels continue to attract vacationing families and are considered “primary accommodations” whereas all the other categories are referred to as “alternative accommodations.”

Is the hotel model still suitable for families vacationing during the twenty-first century? Perhaps it is time to revisit 1951 and the Wilsons’ vacation experience to understand the frustrations families are experiencing with today’s hotels. Here are a few scenarios that demonstrate that hotels may not be their choice for next year’s vacation:

 Do you think families enjoy eating pizzas on the corners of hotel beds, or would they prefer having eating areas in a vacation rental?

 It’s time to watch the one TV in the hotel room. Mom wants to watch her favorite show, dad wants to catch a game, and the kids want Nickelodeon. How about multiple TVs in the vacation rental to satisfy everyone and avoid a family crisis?  The family returns to the hotel room with ice cream, Lots of ice cream. They better eat quickly as the mini refrigerator in the hotel can’t compare to a full refrigerator and freezer in a vacation rental or the one they have at home.  A family member is in the bathroom while another is frantically knocking on the door saying, “Please hurry, I really have to go!” Families don’t live in one room at home. They shouldn’t have to live that way when they vacation.

In the most-visited vacation markets in the United States, hotels have fewer inventories than vacation rentals. On the Gulf Coast of Florida and the Outer Banks of North Carolina (as well as Myrtle Beach in South Carolina), the ski communities in the Rockies, and even Hawaii, hotels are in the minority. Vacation rentals are providing the primary vacation accommodations, and hotels are offering alternative vacation accommodations in the most-visited vacation communities. Several hotel chains have finally noticed that consumer preferences have changed and are migrating to the vacation rental side. Choice, Hyatt, and Hilton have positioned their companies to aggressively market both types of accommodations. It is interesting to note that Hyatt elected to go in a different direction. They have entered the all-inclusive vacation market in Cancun.

All these companies have expanded their reward programs. Corporate travelers can now apply their reward points to vacation rentals and hotels. This makes perfect sense. Corporate travelers spend many nights away from their families on business trips. They know their families deserve a great vacation, and taking them to a hotel is not the answer. Now they are using their points to book a spacious vacation rental, just like home! How long can online travel agencies (OTAs) continue to mix vacation rentals with hotel listings? As consumers browse their websites, they cannot tell the difference between a hotel and a vacation rental. They are being misled and are becoming more confused and frustrated; there should be a clear separation between the listings of hotels and vacation rentals. Come on, OTAs. Get with the times, become empathetic to vacationers, and make it easy for them to book. Every management company should be reassessing its website to provide the total vacation experience. We have to shed the concept of “We know what they need” and adopt the business practice of asking customers what they need and then providing it.

It’s time for vacation rental companies and their partners to recognize that the individual preferences of the vacationing public are changing rapidly. Holiday Inn catered to the frustrations of vacationers in the last century; it’s time to repeat the process. Holiday Inn never ceased in its pursuit to differentiate itself from all the others. When the competition started gaining ground, it introduced the “Kids Eat Free” program and continuously marketed itself as a leader in the hospitality industry throughout the country. It took years for other properties to begin offering free breakfast. Which brings me right back to the strength of the vacation rental sector. In most major hotel chains, the typical breakfast can’t even

begin to compare with those prepared, just like at home, in a vacation rental’s full kitchen. In the multiple bathrooms of a vacation rental, there are towels and amenities in abundance. In hotels, the last family member to shower can find him or herself in pursuit of the one unused dry towel and praying for just a few drops of leftover shampoo in that single bottle. Many experts are tracking online consumer behavior. I suggest we go back to the olden days to understand our guests’ everyday behavior. We need to survey guests to determine their lifestyles and combine that data with online behavior to really get to know the individual consumers’ perceptions. In the end, we will learn that their rental habits are no different than their behavior when purchasing other products and services.

It is evident that the new breed of vacationer is yearning for spacious accommodations similar to their own habitat. Each day more and more shoppers are obtaining information about vacation rentals online, but they are still picking up the phone to book direct. Why? Because they don’t always trust the information they have seen, and they need reassurance from the experts, those individuals who actually work at the vacation rentals. Satisfied vacation travelers can’t wait to return home and tell others about the great family vacation they experienced. Referrals are producing far better revenue results than the efforts of many vacation rental marketing departments. Those referrals normally do not include the price. When vacationers comprehend the value of the vacation rental, they don’t care what the hotel rate is. They know the VR price is worth it.

Hotels are the primary choice of families visiting major cities such as New York, San Francisco, and New Orleans. Now hotels are under attack by Airbnb in those markets. One almost feels sorry for guests checking into those populated cities and having to stay in one room. On the other hand, we, the VR sector of the accommodation industry, provide the primary accommodations for vacationing families in the mountains and on the beaches. In those markets, the VR sector dominates. Perhaps the biggest indicator that vacation rentals are already the primary accommodation for vacation travelers comes from the construction industry. Developers are building many more vacation rentals throughout America than hotels.

This is not a sign of our egos getting carried away. It is a testament of the inventory we represent, the revenue we generate, and the jobs we create in the communities where we are located. It is a result of the taxes we generate for those communities, counties, and states while providing the infrastructure to attract visitors. It is perhaps the first proclamation that the VR sector should no longer be referred to as the alternative accommodation sector.

So let’s wrap this up with a summary. It is becoming more inappropriate for families, their relatives, friends, and fellow workers to book their vacation accommodations in a hotel. They deserve something far better. They deserve a spacious vacation rental. If they were booking their vacation today, even the Wilson family would prefer a wonderful, spacious vacation rental over a hotel. John Dalton is currently the chief marketing strategist at OPMA. He was with TWA for ten years and worked at AAA headquarters before starting his own company. He is an industry consultant and conference speaker and has worked with most of the major hotels, cruise lines, tour operators, car rental firms, and numerous travel agencies.

VRM Intel Magazine | Winter 2018

10 TIPS N

early 70 percent of all reservations are driven by online channels1 , an incredible statistic from Phocuswright. From what we’ve seen, this change in user behavior provides endless opportunities for vacation rental managers, particularly with OTAs. To take advantage of the changing landscape, you’ll need a comprehensive distribution strategy. Here are a few quick tips to help grow sales, increase repeat business, and protect your margins:

F OR SUCCESSFUL DISTRIBUTION nue, and quality-assurance plans to protect owner assets. Owners may push back on commission fees, so be prepared to justify them with an understanding of your cost of acquisition and use tools to help you offset those commissions.

G Optimize Content for Each Channel High-quality content is essential to success for every OTA. Understand which content you can control and update, including the recommended length of property titles and descriptions, featured amenities, host landing pages, and the ideal file size for photography, videography, and floor plans.

B Understand Your Cost of Acquisition Identify the costs required to acquire new guests from distribution channels and how this compares to other marketing initiatives such as SEO, email, digital advertising, and social media. Once recognized, you’ll have a solid foundation to make further strategy decisions, including which channels to use and how to adjust your rates accordingly.

C Get to Know Your Market and Which Channels Are Most Prevalent It’s easy to make assumptions about the industry and which OTAs are the most popular. However, time and again we notice how different every market truly is. Understanding which channels with similar inventory are common in your area, as well as where your competitors are appearing, is critical. Investigating which channels aren’t as prevalent in your market can also be useful for your strategy. These channels yield low supply, which is where you can fill the demand.

D Learn the Costs, Engage Market Managers, and Understand Terms and Conditions Before starting on any distribution channel, understand the costs and how they will affect your overall booking strategy. Then engage with market managers. For each platform, there are strategists assigned to your region; get to know these market managers. They will share insights that are invaluable to growing your distribution strategy, and they will also save you time and energy navigating nuances of your region. Additionally, investigate the terms and conditions of each channel to avoid any complications down the road.

E Understand Dynamic Pricing and Opportunities to Optimize You may discover benefits to your business by adjusting rates from your standard published numbers. Dynamic pricing tools are excellent for adjusting your pricing based on real-time industry supply and demand. For channels that allow it, you may wish to consider channel-specific pricing. For example, if you’re just starting on a new platform, you may want to set your rates low to stay competitive, generate traction, and thereby drive positive reviews. Once your reputation is established, you can increase pricing, even above your previous rack rates. It’s important to note that if your prices are too high, you risk making your inventory uncompetitive.

F Communicate with Your Owners about New Opportunities We understand the importance of owner relationships and that communication is key to creating a thriving environment. That said, it is vital to communicate consistently the benefits of diverse distribution, insurance policies, factual guest data, potential reve-

H Update Your Website Assets If you’re distributing across multiple channels with different rates, you’ll want to have a nimble online strategy. Examples of updates include eliminating seasonal pricing (as you’ve hopefully adopted a dynamic pricing strategy), creating a landing page that communicates the value of direct booking, and running specials for repeat guests or direct reservations.

I Fill Last-Minute Availability and Shoulder Seasons OTAs provide excellent chances to fill specific periods of the year that historically produced lower occupancy. By using diverse distribution partners, you can increase reservations during the offseason, refill cancellations, or appeal to last-minute travelers.

J Create a Seamless Strategy to Stay in Front of Your Guests You have the local experience, on-site or nearby support staff, concierge services, and the innate ability to turn one-time vacationers into lifelong guests. To stay in front of guests throughout every stage of their lifecycles, develop a thoughtful strategy with automated email, social media messaging, and personalized communications both online and in-person.

K Stay Flexible The industry is constantly in flux. This dynamic environment yields opportunities for vacation rental managers, but the key is to adapt your business strategy to shifts in the industry. A diverse distribution strategy will provide the resources and processes to handle the fluctuations.

It may seem daunting to administer a robust distribution strategy; that is why our team is here to help. Bluetent’s implementation specialists have developed Rezfusion Boost, a distribution solution that automatically integrates professional vacation rental managers’ data with Airbnb and Booking.com. Our team provides free access to optimization experts, unparalleled support, flexible pricing, content automation tools, and full API connection with leading property management software, as well as accurate rates, rules, and tax collections. If you would like help with your distribution strategy, please don’t hesitate to contact us: sales@bluetent.com | 970.704.3240 | www.bluetent.com/rezfusion-boost. Source: Phocuswright’s “A Market Transformed: Private Accommodation in the U.S.” of your cost of acquisition and use tools to help you offset those commissions. 1

VRM Intel Magazine | Winter 2018

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VRM Intel Magazine | Winter 2018

Steps to Consider When Preparing Your Vacation Rental Business for Sale

f you are seriously considering selling your vacation rental business and you want to garner maximum value, there are several steps you should take before moving forward.

More time spent preparing the business for sale is certainly better than less, but there are a number of steps you can take within the months prior to posting your business for sale. The following information provides key points to consider to make the sales process a success:  The purchase and sale process should be a formal business transaction. Negotiations do not always result in the successful sale of the business. Always begin with a well-constructed nondisclosure agreement (NDA) to include a non-solicitation provision. Do not consider parties unwilling to execute an NDA, no matter the relationship. A transaction advisor can help navigate this process, ensure the business sells for maximum value, and provide access to market rate terms/deal points.

 When preparing your business for sale, it is important to smooth out any rough spots prior to marketing the business for sale. The key is to tackle those areas that diminish the value or could hamper the sale prior to going to market. In certain cases, vacation rental managers (VRMs) may be missing contracts, have poor assignment language, or have underfunded trust accounts. It is rare that a transaction advisor cannot help a seller work through a best-practice approach to remediate these issues. Disclosure is also important— prospective buyers will appreciate open and honest communication about these issues. No matter the issue, problems will surface, and it is always better to attack those issues versus sweeping them under the rug.  Vacation rental purchase and sale transactions are grounded in finance. Those companies with consistent and increasing financial performance fair better in the sales process than those that are unorganized and underreported. When creating and preparing finan-

By Ben Edwards President, Weatherby Consulting

cial statements, consistency and accuracy are paramount. The majority of vacation rental company owners generally prepare their financial statements with an eye toward reducing net income in an effort to improve the company’s tax position. This presentation, however, is at odds with what a business owner wants to depict in the successful sale of a business. The goal when selling the business is to maximize the net income of the operation, as vacation rental businesses are generally sold on a multiple of earnings. Therefore, it is imperative to normalize the income statement and add back those expenses that are germane to the business. This is one of the many areas where a transaction advisor can help in the sale of the business and ensure that everything is positioned for maximum value.

 Would you want to buy your business? Are there qualitative issues surrounding your business? Is your business too dependent on one distribution channel, one employee, or just a few homeowners? Although there is plenty of technology to help create efficiency, there is no substitute for hard work in day-to-day operations. Ensuring that your business puts forth a quality product is the center point in any operation. Conversely, being overly dependent on certain revenue sources or allowing a single employee to yield absolute control or leverage over the business or a potential transaction is problematic. Creating a well-rounded marketing plan and reviewing your organizational structure will ensure that your business is not painted into a corner when it comes time to sell. Selling a vacation rental business is a material event that you should thoughtfully consider before moving forward. Prior preparation, along with a focus on certain key areas in the business, will help ensure the business is poised for maximum value. If you are concerned or curious about positioning your business for sale, please feel free to give Weatherby Consulting a call today. We routinely provide valuations at no cost to business owners that may be interested in pursuing a business sale. VRM Intel Magazine | Winter 2018

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VRM Intel Magazine | Winter 2018

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VRM Intel Magazine | Winter 2018

Using PR to Attract New Owners and Increase Your Inventory Organically By Jessica Gillingham

hen having conversations with vacation rental managers about their PR strategies, on the surface it often looks like their primary objective is to use PR to grow their businesses by attracting new inquiries and converting guests. However, what is often overlooked is the power of effective public relations to help a property management business grow organically by attracting new owners and increasing or improving the quality of their inventory through building relationships, developing “thought leadership,” increasing visibility, and securing earned media coverage.

Depending on the market in which a property management business is operating, the challenges of acquiring and retaining properties will differ. For some managers in certain enviable locations, growing inventory is relatively easy, with little local competition and good business processes. However, for perhaps the majority of managers, having a steady stream of quality properties coming on board and offering consistently high yields is still a dream. In a busy market, there is much you can do to get the edge on your competition when it comes to attracting new owners, but how can adding PR to the marketing mix help you grow, and what tactics work best?

First, PR specifically designed to attract guests can help build your credibility and develop a positive reputation for your business with owners and investors. Gaining coverage in the travel press, being included in travel features as a call to action, and having a visible presence online over and above advertising are effective strategies for attracting owners and guests. All the places that your guests are searching when they are in the “consideration phase” of their accommodation purchase will also be the places that owners and investors are looking when they are thinking about switching property managers or using a property manager for the first time. Everyone wants to work with a business that is successful, and in the mind of the public, positive coverage on other websites, especially media ones, equals success. If your growth strategy involves penetrating new markets, PR can also provide support here by helping to show that you understand your new market as well as giving your business local visibility, perhaps even before you have acquired your first local property. A well-placed thought-leadership article in a regional or local business publication—for example, discussing the challenges in the local rental market—can help you connect with local owners. Communicating a clear message about the solution to these challenges takes the conversation a step further, enhances your credibility, and gives solid reasoning for why an owner should work with you over another business.

Thought leadership is also not just for developing in new markets. Providing business analysis articles and opinion editorials in the places that new owners may be searching helps to promote your reputation as an expert. Pick two or three local topics relevant to

your vacation rental business that would be interesting to your target audience and start to develop your expertise, understanding, and positioning. Offer to write an article for a local trade publication or “news-jack” a local news story with your commentary. These are effective ways to get your business name out there and synonymous with the vacation rental industry in the area you are looking to increase or improve inventory. Do not underestimate the power of LinkedIn and other social media for publishing your articles. Perhaps your owners might not be connected to you, but the individuals and organizations that they look to for recommendations and guidance may well be. As long as your content is relevant and you are consistent with your approach, the publishing tool of LinkedIn is a good way to self-publish articles, opinion pieces, and other thought leadership that will give you a competitive edge and show why your property management business is the right choice.

For building credibility with local owners, running a local survey or other participatory initiative that will highlight a specific issue or opportunity is worth considering. Press tend to love facts and figures, and so if through the research, you are able to provide some interesting insight into an issue, backed up by statistics, this will raise the profile of your business and provide some interesting and publishable content to build a story around.

PR is also an opportunity to talk about your successes. If you recently had a period of fast growth, talk about it. If you secured a new strategic partnership or have an otherwise interesting and newsworthy story to tell about any aspect of your business—tell it. Just make sure that the topic is relevant for the audience you are targeting and that you can shape a good story out of it that also fits with your own business objectives. Entering your vacation business in award competitions is another good way of gaining PR mileage. Often, it is not just the winning that can be beneficial, being nominated can be just as powerful and offers plenty of scope for coverage and conversation. Again, most people like to work with businesses that are successful, and participating in awards is a surefire sign of success.

These are just some of the ways that a solid and consistent PR strategy can help grow your reputation as a first-rate property management business, help give you the edge in a competitive market to be the first choice for new owners who will help increase inventory, and improve the quality by giving you more choice. About Jessica Gillingham Jessica Gillingham is the Director of Abode PR, a communications agency specializing in working with the international vacation rental industry, partnering with both B2B and B2C brands. Over the years, Jessica has worked with many brands, big and small (some travel and some not), and is a member of the Chartered Institute for Public Relations. www.abode-pr.com VRM Intel Magazine | Winter 2018

VRM Intel Magazine | Winter 2018

What Vacation Rentals Can Learn from the OTA Wars

By Amber Mayer, Vice President of Product at NAVIS

s there any end in sight to the booking battle between hotels and OTAs? Can we at least expect a change in terminology so that the situation shifts from a war to a treaty, even if the two don’t always see eye to eye? The short answer is not likely. Although many major hotel brands have launched pricey and fairly effective direct booking campaigns, OTAs gained about a percentage point while hotels lost about a percentage point of bookings in the past year (Skift). The difference is negligible, but this is the point: chipping away at the power of OTAs is a formidable task. Even major hotel chains struggle to negotiate better commission deals (see Hyatt and Expedia this summer). If we assume vacation rentals can learn something from the direct-booking wars, and we do assume this, then we can also assume that many hotels could have done things differently. So where did hotels go wrong?

When hotels initially began using OTAs, they did so as a way to put heads in beds, selling leftover inventory at lower margins. Perhaps this was before the industry acknowledged that filling a room with cheap business isn’t a sustainable strategy. And what did OTAs do? They built technology. They paid attention to how to use the internet, and they invested in understanding how travelers wanted to engage with them. They made this their business, and hotels focused on staffing the front desk and being hospitable. OTAs made the user experience better. First takeaway:

Let your technology work for you. As much as possible, invest in technology that will not only capture guests but also serve them while they are staying on site. This is more challenging for vacation rental companies because they’re generally smaller than the average hotel brand. That’s why we advocate not just for individual VR companies but also for the entire industry to harness resources toward this effort. Because OTAs invested in the guest experience and spent money on branding and marketing, they naturally wanted to own the guests. This is where hotels began to concede. Some of the problems were related to technology, and some were simply issues of training. Had front-desk agents been able to properly gather details from guests upon check-in, this situation may have looked different in the long run. Second takeaway:

O wn the guest data. Just because guests stay at your property doesn’t mean they are “your” customers. Not anymore. Third-party listing sites have a stake in making sure that the traveler is their customer and in the last several months have made their strongest push ever to make sure it stays this way. What you can do is ensure that you capture as much guest data as possible at every single touch point. For instance, NAVIS has technology that can track guests’ pathways and capture their data— despite the fact that third-party sites are making it more difficult for owners to connect those dots by withholding owner details from prospective guests until much later in the booking process.

Above all, what OTAs have done well is branding. They went all-in, and it has worked. Third takeaway:

Go all-in. Grab the branding torch and run with it. If you rely on third parties to keep your vacation rental in the spotlight, when the fervor over rentals starts to die down, you will end up in the same battle over your business. OTAs have invested in getting guests to choose them because they offer choices, provide guests with the ability to compare properties, and thrive on reviews. Travelers have responded by choosing OTAs, and those customers won’t easily be persuaded to jump ship, at least not without the deep discounts that hotels are currently losing money on to get guests to join loyalty programs. And OTA marketing continues to work even as hotels finally go all-in. See a trend? Late with technology, late to invest in marketing to compete, and late to develop competitive programs, many of which are coming at a significant cost to hotels. What if, instead of spending billions of dollars on advertising in an attempt to recover these guests, hotels had kept pace? Our final takeaway:

D on’t wait. Keep pace! When third parties make a move, rally your industry or company or property to keep pace. It may take an industry-wide movement in some cases, but it is better to do it now while you still have your own guests instead of later when you’re trying to recover them. Sure, you can try to make the case that hotels aren’t responsible for what has happened. Hotels sometimes feel like they’ve been beaten up by a bully, but this is how the market works. Vacation rentals have an opportunity to be innovative, keep pace, and stay on top of technology. If you take and maintain control, then you have a shot at a different, perhaps better, outcome.

VRM Intel Magazine | Winter 2018

Key to Exponential Growth

Fire Owners Regularly By Wes Melton, CTO, SmokyMountains.com

will never forget the way my coffee cup felt as I calmly ran my thumb around its rim. I sat there quietly while two owners who had previously been low maintenance lambasted me and my business partner for an hour in our main office conference room. Historically, their rental property had been a low performer; however, although it was small and below our typical quality, guests rarely complained, and the owners had been easy to work with until now. We signed the property in our early days as a company when any inventory was good inventory. As we grew, we assumed it was still a good decision to keep the property because it was producing incremental revenue and didn’t distract us from our core business goals.

As the details unfolded, we learned that unbeknownst to us, the property owners had placed a “$500 duvet” (according to them) in the property during their last owner stay, and it had gone missing. As far as they were concerned, this was our responsibility, and we should be financially responsible for it. As a business owner it was difficult to rationalize how it made sense to put something that nice in a property that rented for $99 a night on average. It was even more difficult to rationalize how neglecting 52

VRM Intel Magazine | Winter 2018

the rest of my business, staff, high-value owners, and tasks for this conversation made sense. It was time to let them go. Not because I was emotional, and not because I was upset, but because the time-value equation of keeping them on the program no longer made sense.

How to know when it’s time to fire an owner When I travel and speak about my days as a property manager, one of the top questions I am repeatedly asked is, “How do I know it’s time to fire an owner?” What’s most interesting is that this question is usually preceded with a real, emotional story about how low producing the property is, how resistant an owner is to investing in improvements, and how incredibly high (read: unrealistic) the owner’s expectations are for the property’s financial performance.

While there is no perfect formula for understanding the timing of firing an owner, what I’ve learned is that there are generally four classes of property owners, and only one class of those that should always be let go.

High Proﬁt

My advice to him? Cut them loose soon. “Be professional. Give them notice,” I said. “Don’t get emotional or go into too much detail about why. Thank them for being a customer, serve them notice, and get off the phone. But do it soon.”

High Effort

Low Effort

Carl immediately had questions about how he would make up for the lost revenue these 10 properties were producing. I advised him that, in actuality, if these properties were as high stress and low profit as he was telling me, then his largest revenue losses were happening on the high profit properties that are being neglected right now that he may lose if he doesn’t redirect his focus. How should Carl fire the owner from this program? A few thoughts:

Low Proﬁt

B Do not do it in person. I know this is counterintuitive, but the point is to stop your losses. The last thing you have time for is a long meeting about why you can’t invest time in the owner’s property anymore. This is about rescuing time.

As shown in the scatterplot, owners typically fall into one of the following categories: • High profit/Low effort (ideal client) • High profit/High effort • Low profit/Low effort • Low profit/High effort So which one of these owner categories should always be on the chopping block? You guessed it: any owner who falls into the “low profit/high effort” category.

Have you ever thought about your owners in this way? It would be an insightful exercise to sit down with your team, make a list of all of your owners, and then categorize each one into one of these four buckets. The insights you will gain about your company, owners, and understanding of the burden to your business of carrying certain owners as customers will be enormously helpful.

Breaking up is hard to do I was talking with a property manager recently who we’ll call Carl. Carl explained that he had started a company 16 months previously and had already grown to 30 units under management (what an exceptional feat!), but Carl had a problem. As many new property management companies do, Carl signed any homeowner who would come on board to achieve the critical mass he needed to have an actual company. Unfortunately, Carl felt that about 10 of these homes were now falling into the “Low profit/High effort” category, and as a result, the relationship-management side of keeping these unrealistic homeowners satisfied was already wearing Carl thin and putting the higher earning, lower effort category of homeowner at risk.

C Pick up the phone, call the owner, and calmly and professionally explain that you are no longer going to do business together. Explain that financially it does not make sense to keep managing the property for your business. Thank the owner for being a customer and get off the phone. D Don’t have a change of heart. Some owners will promise to start investing in improvements or doing the things you have asked for. Don’t give in. Make your decision before you call, and stick to your guns. E Send an email summarizing everything you just said on the phone to the owner with the roll-off date clearly spelled out. Schedule maintenance to decommission the property. Walk away. Despite our hesitancy to cut properties loose, the reality is that intentionally pruning your list, on a schedule, with proper thought and strategy (not on a heated whim!), will actually set you up for success. The time you’ve rescued from poorly performing properties will free you to focus on the highest earners, sign new properties, and grow even faster with better inventory, making your bottom line stronger every year.

Said another way, it’s a common form of self-deceit that managing thirty properties is more profitable than managing twenty-five, or that managing one hundred properties is more profitable than managing eighty. Time is the only asset you can’t get more of. Put it where it’s going to be most effective at achieving growth and revenue goals not expectation management.

How to sign and keep more profitable owners Maybe you’re already processing your list of "low profit/high effort" owners and know it’s time to professionally part ways. But, what if there were a way to keep the "low profit/high effort" owners out of the roster to begin with?

One of the biggest mistakes property managers make when signing new owners is not level setting with the owner what expectations for the management experience will look like. They’re so excited— too excited—to sign another owner that they forget to qualify the client as the type of client who will help them grow and not get sucked into constant “crisis” management. VRM Intel Magazine | Winter 2018

One simple question to qualify a new owner: “Is this property an investment property or a dream vacation home?”

The response you receive will tell you everything you need to know about whether or not this is a relationship you want to be a part of. For owners who respond that it is an investment property, it is much easier to explain that investment properties take wear and tear, have things go missing, and have the ultimate goal of maximum financial production. You need to have this conversation before you sign them. For owners who respond that the property is a dream home, family inheritance, or similar, you have a decision to make. You can either refer them to another company, or you can set different expectations for them. For example, you may indicate that if they do not want it to be treated as an investment home, then you will intentionally keep rates high to keep nights booked low and that you wouldn’t anticipate having any conversations about financial performance because that isn’t their primary goal.

It’s amazing how many owners reevaluate their own self-categorization during this conversation and decide they’re okay with more wear and tear, items going missing, and so on if it means they can make a profit. Even if they don’t have a change of heart, it gives you something to point back to if they start complaining later about performance—a strategic move you took from day one.

Closing Thoughts The Pareto principle (also known as the 80/20 rule) would tell us that 80 percent of our managerial stress is likely coming from 20 percent of the units under management. Alternatively, 80 percent of revenue is typically coming from roughly 20 percent of clients. Wouldn’t we want to minimize the amount of time our low earners are stealing from the highest producing clients on our roster?

Even though it may be painful in the short term, firing owners who are high maintenance and low profit is always the right business decision. You will gain a new level of freedom and laser focus on your business that will make this temporary pain not only worth it, but it will pave the way for future growth and success.

Wes Melton is the co-founder and CTO of SmokyMountains.com. Previously he co-founded, grew, and successfully exited one of the fastest growing property management firms in the U.S. He now spends time growing his brand, traveling, speaking, building Legos, and spending time with his family in Gatlinburg.

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

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877.870.6510 THEOPMA.ORG 54

VRM Intel Magazine | Winter 2018

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

VRM Intel Magazine | Winter 2018

Customer Loyalty Versus Customer Trust

Building a Relationship Through Social Branding

Written by David Thompson, Social Media Director, InterCoastal Net Designs

rand loyalty rarely exists in today’s culture. In the vacation rental industry, we see people changing where they stay based on price, convenience, website ease-of-use, and when it comes down to it, the level of trust they have in the company. Millennials are more prone to look for new adventures, new companies, and new places to stay, and with the world of rentals at their fingertips, it is more difficult to twist their arms toward a repeat stay.

Be that as it may, a common misconception in the marketing world is the line between trust and loyalty. Many mistake trust for loyalty, or vice versa. Loyalty is choosing something—a product or ser-

VRM Intel Magazine | Winter 2018

vice—even though it may be a little more expensive or not perfectly in line with what you are after. However, because you are loyal to that brand, some would even say they feel “in debt” to the brand, so the scales are tipped in that brand’s favor. Trust is when you choose a brand based on complementary factors it exhibits in the marketplace. If it is enhanced by an easy-to-use website, allows people to make bookings without hassle, and provides them with the right information at the right time, that will build consumer trust. “Social proof ” is also a huge trust favor. “If it’s good enough for them, it’s good enough for me.” Another prime reason for trust is the brand’s ability to get as many reviews as possible everywhere it can.

So, why should we know the difference between trust and loyalty? There is a saying that goes, “Don’t mistake kindness for weakness,” and that is relevant in this case.

Many marketers think they have loyal consumers when, in actuality, the consumers just trust the brand. It is a sad fact that many of us see consumers opting toward cheaper, easier companies for their vacation needs when they feel like it suits them a little better.

How do we build and manage trust in the marketplace? A great place to start is by identifying your advantages in the industry. Ask yourself what the strong points are about your brand. Do you offer perks that others do not (i.e., keyless entry, bundled incentives like show tickets or free Wi-Fi, or maybe amazing concierge services)?

Being unique builds trust in a consumer’s eyes. Furthermore, think about what you do not offer that a consumer would like to see. Remember that we live in a digital age where the consumer has the control. They can choose your competitor over you with a simple Google search—that’s power. Take away steps: Ask yourself:

Step 3 Develop your “why.” Many companies can tell you what they do and how they do it, but most companies cannot tell you why they started or why they are better. Developing the why shows the passion behind your company and the values it stands on. Start selling the passion and show people that behind the brand are humans just like them who care about their vacation and their family.

Step 4 The little things. Empower your reservation agents to make decisions and get things done without the need for management to step in. If an issue gets addressed in a timely manner, that speaks volumes for your brand and your company. If a guest’s coffee maker is broken, and this goes more than 24 hours without being addressed, that leaves a bad taste in their mouth. The more cooks you have in the kitchen, the more that gets lost in translation. Have them follow up with the guests as well to make sure any issue is resolved. Many things can add to consumer trust, and the first step to building that trust is admitting that you must. Do not mistake trust for loyalty because, in the end, if someone can find it easier, faster, and cheaper elsewhere, they probably will! Treat your consumers like humans, engage with them, and start building those relationships.

B What does our company do really well for our consumers? C What do we not do really well? D What makes us unique?

One of the largest factors changing the way consumers interact with brands is the digital era. The dawn of the digital age has given the consumer the power to compare brands side by side to see which one suits them the best. What used to be private for brands is now public for everyone to see (reviews, social media, offers, etc.) The list goes on and on. So, why should we stay loyal to company A when company B is offering the same thing at a better price? This is why loyalty, for the most part, is dead. So, what steps should you take to build consumer trust?

Step 1 Start responding to reviews. Good or bad, you should be responding to reviews on all platforms. We know it is painful to see a bad review (and it is easier to ignore), but a consumer is more likely to forgive a bad review if the company has an apology or explanation rather than if they have nothing at all. And if someone leaves a good review for your company, thank them. This shows everyone who sees the review that real humans work behind the brand, and that speaks volumes.

Step 2 Have a functioning website. It is incredible that some companies still think they can get by with just a Facebook page. People want to see websites, and honestly, it is easy to create one if you have a little determination and guidance. A website allows you to track your audience, it displays your brand image properly, and it acts as a standalone location. If you don’t have a website—especially a mobile-friendly one—then you might want to start wearing parachute pants and listening to the Backstreet Boys because you are stuck in the 90s.

VRM Intel Magazine | Winter 2018

10 Strategies

for Finding the Right Balance in Your

2018 Marketing Plan By Alexa Nota

VRM Intel Magazine | Winter 2018

fter hitting an industry event such as VRM Intel Live or taking a VRMA webinar, it’s easy for marketing professionals to leave crackling with energy about all the possibilities for their 2018 marketing plans. Who wouldn’t?! But then you sit down at your desk, look at your calendar and your budget, and the electricity begins to dwindle. How on earth can you do social media marketing well and send the right number of emails and optimize your website and manage your SEO and SEM and analyze your data and so on? It’s exhausting, and if you’ve got a small marketing department as most of us do—kudos to those of you one-person marketing teams!—it seems nearly impossible to do everything you need to do and do it well.

Instead of designing your marketing plan around all the things you “should” do, or worse, focusing too much on every new OTA change that drives a wedge further between distribution and marketing functions, tailor your marketing plan to you, your team, your company, and your market. By making your tactics meet you where you are strongest, you’ll find a balance that allows you to be more effective and more efficient. The following ten strategies are certainly not the only ones at your disposal, but they are tried and true in this industry and many others; they include some personal favorites that have produced demonstrated results time and again.

 How guests interact with your website  Calls to your office(s)  What prompts your guests to book reservations (Assign every campaign, ad, email, and other touchpoints unique URLs for tracking in Google Analytics, as well as promo codes or other identifiers for your reservations team to designate in your PMS.)  Social media engagement (In most cases, each network’s builtin analytics combined with Google Analytics will give you a good picture, but if social is your jam, you can go even further with third-party social analytics tools such as Hootsuite or Edgar.) Once you have all of these metric systems in place, check in with them regularly, and make this process easier by having certain reports automatically generated and sent to you on a daily, weekly, and monthly basis.

Also take some time separately to dive deeper into your data that doesn’t necessarily change on a daily basis but can offer big insights for your campaigns. For example, this month, take a close look at your 2017 guest demographics, feeder markets, booking patterns by property size and amenities, reservation sources, and other trends, and compare this info to 2016 and 2015. This exercise not only creates a larger picture of the guest environment in which your company operates, it identifies areas where you can segment guest groups, homes, or geographical areas for targeted campaigns.

C Analyze your ROI, both of your budget and your time. When we talk ROI, we often leave out the time investment various activities require, but in many cases the time factor is just as important—especially when we don’t have enough of it. (Does anyone?!) For example, posting daily lunch-break social media videos may not cost anything in dollars, but maybe it takes your marketing specialist ten hours every week, which may or may not be worth the time investment, depending on your needs and goals. As you examine the ROI of all your activities, also consider the aptitudes you and your team have available. Rather than simply eliminating or scaling back activities, think too about shifting responsibilities between teammates when different talents lend themselves to better project efficiency.

“We are always looking for efficiencies as far as allocation of our time budget,” said Stacy Carlson, a twenty-year VR veteran and marketing director at Taylor-Made Deep Creek Vacations and Sales. As an example, “Quality visual content is in increasingly greater demand, so we recently brought on someone to focus on producing videos who can also fill in as a photographer. Just like our monetary budget, we hone in on what is driving reservations— vivid imagery of our area, appealing photos of our homes, and welltimed email campaigns with relevant content.”

D Weed out the activities that don’t speak to B Track (and take a dive deep into) your data. your market. Data analysis goes much deeper than the surface KPIs of reservations, social media engagement, and email opens. Before redesigning your marketing plan, make sure you have the data infrastructure in place to look closely at every step of a guest’s booking journey, including the following:

Just because certain channels work for other markets doesn’t mean they will work for yours, and it’s important to identify these so you don’t eat up resources. For example, if your target market is women from fifty-five to sixty years of age who are booking a home for a family vacation, it may not make sense to pour a lot of resources

VRM Intel Magazine | Winter 2018

into the newest social platform popular with Gen Z. A word of caution, however: just because something isn’t working for you now doesn’t mean it won’t in the future, so use your insights from strategy one to reevaluate this issue over time.

E Lean on what generates the most reservations and your own specialties. Now that you know what’s working for you and what isn’t, you can allocate your talent resources accordingly. Don’t get locked into job titles, forcing square pegs into round holes, and “the way things have always been done” (the enemy of progress—and my sanity). Instead, focus your team’s time on your individual strengths to yield the best and quickest results, and make sure that you reevaluate responsibilities periodically. Stacy Carlson echoes this advice. “In-house, we focus on the areas where we have expertise,” she said. “For example, I have a certification in email marketing, so we brought that in-house shortly after I joined the team, and we have two professional videographers/ photographers on staff to produce high-quality imagery to use everywhere from our website to social media.”

F Outsource to teams who specialize in the things you don’t. For those remaining activities that you need but don’t have the talent or time for, outsource them to an expert. There are, of course, many familiar faces and great industry vendors featured throughout VRM Intel, but don’t overlook other sources of help who may be a better fit for your market and budget, such as freelancers and small agencies. Need more content for your blog? Consider partnering with your Convention and Visitors Bureau (or other destination marketing organization) to host a group of travel writers to provide content to your site and publications your guests read in exchange for a visit to one of your properties, or hire a local writer. Want to leverage drone photography but don’t have a drone pilot on staff ? Hire a local specialist for a one-time project to create a library of beautiful images and videos you can use in all of your marketing materials. Caleb Hofheins, marketing director and the only full-time marketing staff member at Greybeard Realty in Asheville, NC, demonstrates this approach. “I think it’s really a matter of knowing what your marketing team is proficient in,” he said, “and then bringing in a third-party team to support the overall marketing effort as well as pinpointing specific areas of opportunity where the company would be best benefited by having a specialist focus on it.”

G Automate everything you can. Automation is a busy marketer’s best friend, and there’s more you can automate than you might think. You can–and should!–set up automated marketing campaigns such as emails based on lead or reservation triggers, drip campaigns to distribute blog posts, and social media posts with tools such as Edgar that will recycle your evergreen posts when your queue runs low. Going even deeper, you can automate your routine internal tasks (like your data reports from strategy 1!) with tools such as Zapier or Microsoft Office 365 Flows. These tools provide nearly endless ways to make apps do your work for you by connecting everything from Outlook to Dropbox to Google apps to Basecamp and many more to automate workflows. For example, you can set up an automation to add new 60

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MailChimp subscribers to Google Sheets or have a Basecamp task for a new property trigger in addition to your social media schedule in your Google Calendar. The more work you can make apps and software do for you, the better. Just don’t forget to check in regularly to make sure everything is working the way you need it to.

H Repurpose everything. Following the same principle as automation, make your work do double and triple duty. Give every new piece of content you make at least three jobs. For example, download your latest Facebook Live video, upload it to YouTube, and embed it on your website. Create every social post to be shared on any network. (Twitter’s new 280-character limit makes this seamless!) Turn your owner newsletter into marketing pieces for your recruiter. Create travel guides from your area directory and post them on your site, email them to incoming guests, and share them with your local CVB. The opportunities here are nearly endless.

I Capitalize on free information. There’s another important source of valuable data that can be overlooked: your colleagues, FAQs, and guest feedback. Google Analytics and Facebook Insights won’t tell you what your guests’ nonnegotiables are, but your reservationists will. Ask them! Consult with them regularly about what guests are looking for at different points in the year and what they ask about most often. You can use this info to create content and campaigns regarding sought-after amenities and better time promotions regarding booking trends as well as help address pain points to reduce friction between browsing and booking. Also ask your reservationists about marketing campaigns, both to generate ideas for new campaigns and evaluate past ones. Not only will doing this generate ideas and insight you might not have otherwise gained, it will foster interconnection, buy-in, and excitement for your shared activities. The same practices can be applied to owner recruitment and retention, too. Similarly, internal guest surveys and reviews on sites such as Facebook and Yelp aren’t just for your housekeeping and maintenance departments. Dig into your surveys and reviews to find areas where you can communicate programs, features, or even specific lease policies better to guests to uncover positive testimonials; you can share across all your channels to identify PR opportunities to turn unhappy guests into happy ones or to spot problem properties that could generate more reservations and returning guests with a few easy upgrades.

This sort of data analysis doesn’t necessarily need to take significant time or sophisticated reporting. One of our company’s favorite visual reports? A word cloud generated by dumping all of our Facebook, Yelp, and Google reviews into a free word cloud generator to show that what guests loved most are our homes and our staff.

J Continue to learn, and apply new strategies as you go. Once you have your newly refined plan and schedule in place, don’t stop there. Be sure to build in time for continuing education. You can do this any number of ways, but one of my personal favorites is to read one book or take a class or webinar every month, mixing up the subjects among marketing tactics, creative outlets, and general skills. Lynda.com, HubSpot, and Skillshare are some of my go-tos, but there are plenty of other continuing ed resources out there, such as YouTube, Udemy, Coursera, TED, and EdX. Think

creatively here, too! Don’t overlook resources provided by the tools and apps you already use, certifications from non-VRM-specific organizations or other areas, such as Google Analytics Academy, MailChimp’s resource center, LinkedIn professional groups, or LearnAirbnb. As you learn new skills, use your marketing plan as a case study and apply new tactics one at a time. If you follow the one-new-thingevery-month schedule, by the end of the year you’ll have at least twelve new tools in your toolbox.

K Leave room to experiment. “VR marketing is all about reaching the guest in the right places at the right time,” said Caleb Hofheins. “That is accomplished through experimenting, tracking and observing performance, and then learning from those results.”

Take a page from the growth hacking mentality and embrace an environment of continuous experimentation. You don’t know what works if you don’t try it, right? Dip your toes into VR with a trial of virtual walkthroughs on a select group of properties, such as underperformers who could use a boost. Need to fight back against Facebook’s ever-changing algorithms? Try using a 360o camera for dynamic photos and videos. Having a hard time keeping up with your chat support? Venture into the world of artificial intelligence and try a simple chatbot.

If these ideas seem too out-there for you right now, experiment with what you’re already doing. For example, if you want to try a

new advertising platform, negotiate a trial period before making a full commitment. This year, I negotiated six-month ad trials with a certain well-known review site and a smaller OTA during our busiest booking season. If they didn’t perform during that period, we wouldn’t renew. In both cases, they didn’t perform or actually performed worse than before we gave them money, so starting with a trial saved us six months or more of wasted expenses. Whether you try one of these strategies, all of them, or some of your own, remember: there is no one-size-fits-all marketing plan. Each marketing professional, company, owner group, and market is unique and should be treated as such; use smart data to uncover your strengths and efficiencies and make constant improvement. How will you capitalize on your ingenuity in 2018?

Alexa Nota has worked in travel and marketing for nine years, including two years as Outer Beaches Realty’s Marketing Manager in NC’s Outer Banks. She is also the co-founder and Editor of Travel Well Magazine and the founder of Canary Design, a boutique marketing and design studio.

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Which Brand Will You Invest in During 2018 By Vince Perez

Let’s just get this out of the way . . .

hether you have been in the vacation rental business for ten years or ten months, we all face the same OTA challenges going forward. Something to think long and hard about as we enter 2018 is how prepared you are to compete—I mean, really compete.

We are witnessing a confluence of fragmentation and consolidation that will see some businesses shutter, get sold or grow stronger. Some would argue that this is the natural evolution of the vacation rental industry. Perhaps. But what is certain is that businesses that do not adapt to changes and make adjustments to benefit their brands will find it difficult to compete because more upcoming policy changes will make doing business even more cost prohibitive. You seriously don’t believe the policy changes stop here, do you? May I suggest you add disintermediation to your 2018 plans? Your level of dependency on the OTA does not matter. What does matter is your ability to make investments in areas you may not have considered—areas that the OTAs will find difficult to compete with such as local, content, and social. Unbranded properties (no brand presence) and property managers who continue to forfeit their inventory blindly with zero diversification are low-hanging fruit for OTAs.

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Opportunities in the marketplace to diversify your distribution do exist, but they are not silver bullets. However, having a combination of levers to pull and a solid retention strategy in place to capitalize on those investments will yield tremendous benefits. Set a goal to reduce your dependence by five percent and then reinvest in your brand.

Market Maker or Money Maker . . . What Side Am I On? Most of us have been given the pitch on the value of HomeAway’s Market Maker. As a former hotel guy, I get it; as a stakeholder in the vacation rental industry, I’m not so clear.

A very important question to ask in any transaction is, “Who benefits?” That question opens up our critical thinking and makes certain we are wearing our business hats with eyes wide open. We have seen this movie played over the years on the “benefits” of free. It always starts by giving away your data for free—fool me once, shame on you . . .

Keep in mind, this approach to pricing will become even more convoluted when Airbnb and HomeAway data collide. . . and they will. Much like our own businesses, each property is unique and has a story. We are being sold the idea that comparing our properties apples-to-apples benefits us. Your pricing should always be based on

the expected value provided, and the market is the sole determining factor, not an algorithm that is tweaked by the expected value programmed into it. Pro tip: those value indicators never point in your direction.

The fact remains that your ability to provide customer excellence is the best outcome for the guests and the true value of your business. YOU are the best price guaranteed based on the value you deliver or until you give that away to an algorithm.

What Is the Value of Your “Supply”? Going forward, it is vital that business owners understand what type of supply they represent. Factors will include inventory, location, seasonality, traffic patterns, quality services, and the commitment to brand. For those who do not have any brand representation and/or lack the technology or ability to adapt, the choice will be made by default; expect your distribution costs to increase.

If you have read any of my past articles or attended my presentations, you are familiar with this mantra: If you give up control of your brand, guest communications, or merchant of record, you will find it more expensive to operate your business. Two out of the three are now in place. If your brand has been around for years and your strategy is still based on hope—or if you think just increasing your rates will solve the problem—then guess again. If the OTA’s strategy is to drive down your rates (and control them) while your acquisition costs continue to increase, does it not make sense to have a counter strategy in place? Don’t succumb to the law of holes. If you find yourself in a hole, stop digging. For those who do understand how their supply fits into the value chain, the future is bright. The advantages of offering a valued product come from the unique value your brand offers the traveler. It does not matter how many properties you have—travelers will find you.

You Are Not the OTA’s Customer: You Are the Product Complaining about OTAs does nothing but waste valuable time and energy. Have a plan in place for alternative distribution of your

properties. Look to leverage social media and develop unique content that travelers will engage with. Your owners are banking (literally) that you figure this out. You can either invest in your brand or the OTA’s brand. From a business perspective, there is mutual benefit to having your owners’ fiduciary responsibilities aligned with those of your brand. Your owners understand the value you create by giving them predictability. This forward domino effect is what sets the stage for both internal (talent acquisition) and external (owner acquisition) growth.

It comes down to working with the OTAs while developing a retention strategy to use once you get them in-house. The strategy should include delivering on customer excellence while educating the guests on the value of booking directly. Watch any commercial today and you will see hotels communicating these same values. Vacation rentals are a far more intimate experience, and that is one of your many competitive advantages.

Key Takeaways The road ahead will be challenging in 2018. Stay engaged and look for opportunities to better position your brand in the new year. Last, but not least, understand the value of your vacation rental professional community at both local and regional levels. They are no longer your competitors; they are your allies, and there is power in numbers. Hotels do a great job of competing with their neighbors, and doing so pays handsome dividends. Wishing you all a very successful 2018 campaign!

Vince Perez's expertise spans across multiple disciplines in the hospitality and technology fields. Prior to his technology ventures, Vince served in executive leadership roles in operations, sales and marketing for Japan Airlines, Nikko Hotels and Hyatt Corporation. Vince is a partner in California-based Beach House Rentals. Perez founded Fetch My Guest, an Intelligent Marketing Automation Platform that increases direct bookings through higher conversions while dramatically reducing marketing costs.

VRM Intel Magazine | Winter 2018

game is, by far, â&#x20AC;&#x153; This not over yet.â&#x20AC;?

Simon Lehmann discusses the future of the vacation rental industry, Airbnb, HomeAway, and upcoming challenges and opportunities By Amy Hinote VRM Intel Magazine | Winter 2018

hen researching the vacation rental sector, it doesn’t take long to encounter the name Simon Lehmann. Over the years, Lehmann has made a name for himself as an expert in the online travel and vacation rental industries. He has worked closely with companies in all sectors of travel and has held several key positions including CEO of Interhome from 2005 until 2014, president of Phocuswright until late 2017, CEO of Biketec, deputy CEO of the Hotelplan-Gruppe, and various high-level management appointments at Swissport International, a worldwide leading company in airport ground handling and a former Swissair Group company.

Additionally, Lehmann has been involved in strategic planning with many of the leading and up-and-coming players in the vacation rental sector, has served as a board member for Inntopia, and has held a position as a nonexecutive board member for HomeAway prior to its purchase by Expedia. Lehmann is passionate about identifying new talent and mentoring founders of industry startups, and has invested in many of them. He currently serves as a board member for Vacasa Europe and as an advisor to Rented. com, Transparent, Properly, HelloHere, and Travelnews.ch.

He is frequently invited to speak at online travel events worldwide. In October of 2017, Lehmann stole the show at the Vacation Rental Management Association (VRMA) National Conference in Orlando, where he discussed the direction of the market and led an animated panel discussion with industry leaders Ben Edwards, Steve Milo, and Jodi Refosco. He will be headlining the VRMA European Conference in Paris this March.

Lehmann lives in Switzerland with his wife and five children and recently celebrated the holidays in Spain with extended family, which is where we caught up with him to discuss the industry’s trajectory, Airbnb, HomeAway, Wyndham, and the challenges facing the vacation rental sector in 2018.

AH: What overarching trends do you see impacting the way the vacation rental industry is shaping up today? SL: A massive convergence is taking place, and the entire hospitality vertical is becoming one. As always, the consumer is shaping the industry, driven by a changing behavior and available technology. Customers have diverse needs that must be fulfilled. At the end of the day, consumers are looking for accommodations based on their immediate needs. One minute they’re looking for a hotel and the next a private room in an urban location or simply a vacation rental to holiday with friends and family. This means that the shopping funnel will change dramatically, and we will see the supply side melting into each other and consumers will be harder to catch.

AH: In your career, you’ve led Interhome as CEO and Phocuswright as president and served on many high-profile boards including HomeAway, Vacasa, Rented.com, Inntopia, and more. You’ve had an up-close look at the industry’s many iterations. What are the biggest challenges this industry has faced over the years? SL: First of all, the industry had to be lifted out of its “Tupperware” phase. Vacation rental was perceived as a secondary industry with bad inventory, and it had a reputation of being unprofessional. It has never been recognized as a huge industry on its own, which by the way has been around for decades. It needed organized supply, online distribution with bookable inventory, and a clarification of 66

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the value proposition for consumers. Then Airbnb showed up, and all of a sudden, a ton of money went into startups that basically verticalized the industry again, similar to what happened in travel. Everybody wanted a piece of the value chain from the consumer side to the owner side. Therefore, the immediate and largest challenge has been to be recognized as a professional, vertical industry that offers a great proposition to consumers as well as owners. Secondly, it will have to overcome its fragmentation globally. The challenge that remains is to standardize the business. The ultimate owner of the product is in most cases still an individual home owner. So, the business needs to become more professionalized overall, and the owner needs to recognize what drives value for consumers in order to maximize occupancy.

AH: While you were at Phocuswright, the vacation rental industry got wrapped up in a broader sector labeled “private accommodations.” Do you think traditional vacation rental managers, hosts, and urban operators will come together in a more cohesive way? SL: As mentioned in one of the earlier questions, inventory will become more cohesive to satisfy consumers’ needs. This is no longer private accommodation—it’s all hospitality now, in a broad sense. The guest experience as a whole is key and not simply the accommodation. Let’s not forget that consumers spend only 40 percent of their travel budget on accommodations. People expect an experience regardless of whether they book a hotel, an apartment, or a vacation rental. Therefore, the industry will have to come closer together and think about it in overarching fashion. Let’s remember what happened in the hotel industry and how they are trying to accommodate consumers’ needs and behaviors. They have not yet figured that out yet, and yes, we have seen some movements by Hyatt and Accor, but I think that is only the start. One thing we should not forget is that the consumer is looking for value, location, and experience regardless of the type of accommodation.

AH: Airbnb has been moving in many directions with acquisitions, property management, and movement into multiple sectors of travel and hospitality. What do you think are their larger aspirations? Do you think they will move forward on their IPO in 2018? SL: I guess the investors of Airbnb are getting nervous to justify valuation. What is Airbnb now and what is Airbnb going to be in the future will not be the same. The value proposition as a marketplace for primary or secondary home is not enough anymore. The brand has already huge consumer value and it is tempting for them to reach out in to all different directions. I guess Airbnb needs to find its place, but the company has the opportunity to become an OTA for the next-gen traveler in addition to being a valuable channel for the vacation rental industry. Offering local activities and the opportunity to live like a local will not move the needle—that’s not what the traveler is looking for—but leveraging its brand value across other verticals will be far more compelling. But let’s not forget the regulatory issues that are looming out there and need to be tackled in cooperative fashion. Airbnb is in a great position for an IPO but needs to become clear on its strategy going forward.

AH: HomeAway has made significant changes regarding fee increases and policies. Looking at the OTA landscape, do you think HomeAway’s moves will prove to be successful for them longterm while competing with Airbnb and Booking.com?

SL: Looking at the distribution landscape today, we can say that it has narrowed down to four large platforms in the vacation rental space. Once you build a brand and generate a great amount of traffic and demand, you are tempted to maximize revenue streams. But as we have seen in the hotel space before, this will start to backfire midterm.

We have not even spoken about Google yet and what role they are going to play. They have made some announcements to build a platform like Hotel Finder for the vacation rental industry. So, increasing fees will not help the long-term game. Investors are applying pressure on OTAs right now, trying to leverage their consumer reach and massive inventory to squeeze the lemon a lot more until it’s dry. Playing at the top of the funnel is an expensive game, but VRMCs will look for alternatives to find their guests at lower costs. This game is, by far, not over yet.

AH: Do you see any room for or evidence of an upcoming disruption in the OTA landscape? SL: Alternatives exist such as metasearch, content aggregators, and other intermediaries. We have seen many different startups in various places that are trying to get a piece of the pie, but I’m skeptical about how successful they are going to be. But yes, there will be disruption in distribution, and perhaps even the large hotel companies might play a game in that going forward. Focusing on building loyalty and repeat customers might be a game-changer, too, for companies that have enough inventory to cater to guest requirements. VRMCs are not well equipped with CRM technology and therefore are not very strong in building loyalty and repeat customers. We will see a lot more disruption in this game especially as Google moves closer to the a product for distribution.

AH: Why do you think Wyndham is selling now? Do you think they will sell their North America business, too? SL: I can’t comment on this question, except to say that it makes sense that during a strategic pivot you would review your portfolio and think about what makes sense and what doesn’t. With their spinoff of the hotel business, it makes perfect sense for them to divest their European VR asset to focus on the timeshare and hotel industries. What they will do with their North American VR asset remains to be seen.

AH: We are seeing a lot of consolidation in the industry. What is driving this trend, and do you think it will continue? SL: You need to control the product and therefore the inventory. If you want to be a serious player who can invest in distribution, product, and guest experience you need to have scale because you need to reach your guests in an economical fashion. If we compare this to the hotel industry, it is clear that you need scale to be successful. In Europe, hotels are under massive threat by the large OTAs because hotels have become too dependent. Therefore, the industry will continue to be consolidated to build serious inventory; only then can you leverage operation costs and build a business at scale.

AH: What are your predictions for the vacation rental industry? SL: Consolidation, standardization, and commoditization, and therefore professionalization. This business is here to stay, and it will make a lot bigger impact in hospitality than everyone thinks.

OPEN A CAN ON YOUR COMPETITION INCREASE RESERVATIONS & INVENTORY

VRM Intel Magazine | Winter 2018

roperty managers (PMs) traditionally provide a wide range of activities, including listing preparation, competitive benchmarking, pricing advice, marketing, distribution, guest screening and communications, reservation services, payment management, operations management, property care, emergency support, and owner services (e.g., tax and compliance and trust accounting). The dominant model in the US is the full-service property management company in which all of the above services are delivered as one all-you-caneat package and is typically priced between 15 percent and over 50 percent of rental income. There have been departures from this model in the US: most notably, Evolve Vacation Rental Network, which charges a 10 percent fee for marketing, distribution, and some listing preparation services, but does not provide on-the-ground property care services or operations.

Is the full-service, all-you-can-eat manager the only viable model or are there attractive, unbundled models? Is the idea of unbundling a threat or an opportunity for a PM? Will the listing platforms that drive unbundling change how the pie is divided? How should each of the components be priced? Is unbundling a “gateway drug” that can help ease DIY homeowners into using a PM or a margin killer that will relentlessly drive PMs’ margins down?

All-you-can-eat vs a la carte One common economic argument for bundling is to package a key service with several services of lower value, and hence drive a higher take rate than what could otherwise be obtained. Arrangements like this typically do not last very long, as competitors are likely to unbundle in an effort to gain market share. From this perspective, Evolve’s progress will surely be closely watched because its entire strategy is centered on an unbundled, low-cost product. Much will depend on whether Evolve correctly identified the key value driver.

By Alex Nigg, Founder and CEO, Properly

Unbundling the Property Manager 68

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David Angotti, a former PM and cofounder of SmokyMountains.com, who first explained his vision of an unbundled PM to me, is on the other side of this debate. In his view, selling a home owner exactly what he or she wants—unbundled guest management, distribution, property care, or revenue management—should have two positive effects: one, it should increase the addressable market by offering something for everybody (e.g., the Gen X empty nester with the million-dollar second home may not want to relinquish screening guests, but he or she may not want to deal with the daily operational hassle of managing cleaning staff or revenue management). Second, as long as the “sum of the parts” is priced significantly higher than the bundle, the initial unbundled service might just be the prelude to an evolving, full-service relationship.

The European example The European market is quite different from the US market, and its much larger traditional PMs—Novasol, Interhome, Interchalet, and Belvilla—are mostly master-distributors: a significant majority of their inventory has on-the-ground services either managed by the owner or by a local third party. In other words, they look much more like Evolve than Vacasa.

This likely explains why European enterprise PMs are larger than their US counterparts: offering listing, distribution, guest support, and owner services without directly providing on-the-ground services allows them to focus on source markets—which is important in Europe, where a different language is spoken every few hundred kilometers—while covering much of Europe for destinations. So, this unbundling was likely driven by necessity due to relative-

ly small source markets and distributed destination markets, but it seems to have had the side effect of increasing some European PMs’ scale. Simon Lehmann, former GM of Interhome and president of Phocuswright, argues that the different dynamics of the European market are also due to the greater maturity of this market. Whichever the reason, the European example demonstrates that unbundling is viable at a significant scale.

Pricing each component If one was to unbundle a PM’s services, how much would each component be worth? This is a difficult question to answer, but here is an attempt. Let’s assume a full-service manager charges an effective commission of 50 percent including guest fees. A good proxy for a PM focused on listing management and distribution only is Evolve in the US, and Novasol, Belvilla, Interhome, and Interchalet in Europe. Commissions for this group cover a wide range: from Evolve’s 10 percent to the European’s commissions in the low- to mid-thirties.

What explains the discrepancy? The fact that European PMs control a significantly larger share of direct bookings through more complex distribution arrangements likely explains this discrepancy. A typical European “master distributor” likely captures a much higher share of its bookings from direct channels: direct mail, catalogs, CPC, its house list, and its own website. Even master distributors’ third-party distribution is likely more complex because thousands of travel agencies still play some role in Europe. Conversely, Evolve’s bookings are likely more concentrated across the three large listing platforms. This likely caps the opportunity to increase master distributers’ commission rate in the short term until direct distribution is significant. One additional distribution component that can be priced separately is the channel manager; there are several available, and charges typically hover around the 1 percent commission mark.

How attractive are the margins for a master-distributor? As reliance on listing platforms is increasing, these margins are likely shrinking. This is first because the listing platforms are bidding up the price of advertising, especially online. Second, the effective low rates charged by most listing platforms are probably not going to last; a master distributor like Evolve can’t distribute on a platform like Booking.com because a 10 percent commission can’t cover a 15 percent booking fee. The other platforms are still viable because they simply pass the cost onto the guests via the guest fee. However, the listing platforms’ effective booking fees (combining guest and booking fee) are already well above 10 percent; this begs the question of whether guest fees will last. The success of vacation rental metasearch engines—Tripping and others—might make charging guest fees more difficult.

The urban PM and Airbnb’s cohost The urban PM presents an interesting case study: many urban PMs focus on on-the-ground services much more than on distribution; and as such, they are a good proxy for an unbundled PM focused solely on operations and property care. This is particularly the case for Airbnb-only PMs and Airbnb’s cohost program. Many urban PMs and Airbnb’s cohost program charge between 15–20 percent commission (typically without guest fees other than a pass-through cleaning fee). This implies that a 15–20 percent range is a good guess for the stand-alone value of setting up the listing, managing guest communication, and most importantly, coordinating local services.

Guest communication is an item that can be further isolated; as a technology component, (unified inboxes, auto responders, and templates), this is typically priced at 1 percent or below. Companies like Guesty have long operated stand-alone services. Similarly, there are several outsourced call center services available, which are also typically priced at 1–2 percent. Interestingly, the listing platforms are encroaching on this domain both by offering tech solutions and services (such as guest call center support). This implies that a 10–14 percent commission is a reasonable proxy price for the component of a PM’s job that relates to managing— but not providing—local services. The services themselves are typically either charged to the guest (e.g., cleaning) or to the owner (e.g., maintenance).

The tech-enabled PM Revenue management is another feature of the service stack offered by a PM that can be priced out separately: stand-alone charges for these services typically hover around the 1 percent mark or lower by wholesale providers. This, together with guest service apps, is often a feature of the so-called tech-enabled PM.

The “tech-enabled PM” label is often used in conjunction with a small group of typically US-based PMs who hope to derive efficiency, better distribution, or more accurate pricing through technology. More likely, we will find the tech-enabled PM elsewhere: with the listing platforms that are truly offering more and more sophisticated technology to both owners and PMs. These platforms include HomeAway’s MarketMaker, Airbnb’s unified mailbox or check-in help, and Airbnb’s increasingly extensive integrations with local government to account for and collect taxes; there is no doubt who has the required scale in a technology race between PMs and platforms.

So even the aforementioned owner services, when unbundled, may be under pressure from parallel offerings from the listing platforms.

Gateway drug or margin compression? So, is an unbundling of property management services a smart strategy to bring in a wave of new clients, or is it a necessary evil as the listing platforms start chipping away at the services traditionally offered by a PM?

Several PMs have pointed out that some segment of owners may only want to give up control of certain aspects of managing their property: for instance, Gen Xers who do not currently rent their second home may want to maintain control over screening who gets to stay at their home but may not want to get involved with the day-to-day hassle of organizing turnovers.

Similarly, an RBO may not want to take on a full-time manager just yet, but it might be willing to pay a fee for after-hours maintenance support. Viewed this way, unbundling services may act like a “gateway drug”: once owners start realizing that it is advantageous to give up control over some aspects of managing their property, they may ultimately gravitate towards adding on other services. Based on the calculations above, not all components of a PM services bundle have the same margin. Viewed like this, it could actually be beneficial for a PM to let go of certain services. Also, David Angotti makes the argument that owners rarely understand just how many services their PM provides to them. Once services are unbundled, the sum of the parts may quite well cost more than the bundle—and this alone guides owners back to service bundles. VRM Intel Magazine | Winter 2018

The local service conundrum

Conclusion

Tobias Wann of Europe’s @Leisure maintains that a linchpin in the relationship between PM and owner is still the local relationship—the on-the-ground-services. This idea makes sense because ultimately, the asset value of the property dwarfs the annual revenue stream; thus, good stewardship of the asset is likely to feature prominently in an owner's priorities.

The full-service PM has long been the dominant model in the US. With the emergence of the urban, Airbnb-only PM, there is now an emerging case study of a set of US PMs focused mostly on local services. This group of PMs sets a benchmark for how operations, listing management, and guest management, unbundled from distribution, would be priced; a prevailing price point is around a 15– 20 percent commission.

From the back-of-the-envelope calculations above, it also seems that local services are a meaningful revenue component inside a PM services bundle; because the actual cost of the service is typically passed on to the guest (or owner for maintenance), management of these services should carry healthy margins. Lastly, PMs should not expect margin pressure over local services from the listing platforms because this is not an area of strength for them. Indeed, a country manager for a leading listing platform told me recently that, from his perspective, control of the relationship with local service providers was the leading reason why owners chose PMs vs rent-by-owner. Of course, this critical local component has traditionally also limited PMs’ ability to scale beyond their original service area. Combining technology that helps manage and deliver local services more efficiently with building an advantage in sourcing high-quality, local service providers is an attractive path toward building a sustainable competitive advantage for PMs.

Conversely, Evolve has unbundled a package of services focused on distribution and including listing management and guest management. Large European PMs offer similar hybrid models. These bundles are typically priced between 10 percent and 30–40 percent, depending on how much distribution clout the PM has. As the listing platforms continue to drive more traffic to PMs, distribution-focused bundles will see margin pressure; the more a PM’s distribution is proprietary, the stronger the position of that PM (but margin pressure will continue because the significant spending of the listing platforms are bound to drive traffic acquisition costs up).

In most markets, a significant number of homeowners still choose a rent-by-owner model over a PM, and millions of second homes have not entered the rental market yet. Offering property management services a-la-carte, versus only bundled full-service packages, can provide an introduction to property management services for both RBOs and latent supply. Starting from local services may be more defensible in the long run and likely carries higher margins.

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. 70

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

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

VRM Intel Magazine | Winter 2018

Grow Your Email List with Lead Magnets By Heather Bayer

ou have a great website you’ve spent many hours and dollars creating. You’ve worked on the content and post consistently to your blog. You monitor your Google Analytics account to track site visitors and check the bounce rate and time that’s spent on the site. You set goals and use advanced Google Analytics features to track conversions. You also know that email marketing is still one of the best ways to convert fans into buyers, so all your past guests are on a list, and you send them special offers and new listings regularly. What you may not have is an irresistible incentive to encourage new site visitors to part with their email addresses. That is the tough part, but it’s essential if you want to create a relationship and show them your local knowledge and expertise. After all, if you’ve worked hard to get new visitors to show up, you should want to give them a reason to come back.

Most companies have a sign-up form on the website offering a newsletter as a reward for subscribing. Guess what? That’s not enough to get people to share their email addresses. You need something of much greater value such as answers to your potential customers’ questions or something that alleviates their pain points. And that’s what a lead magnet is.

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A lead magnet, or sign-up incentive, is an inducement for someone to give up personal details in exchange for a piece of information. It’s not a lot different from filling in a coupon and sending it to a company in exchange for a free product sample. If your free sample is good—I mean truly good—the customer will remember you and will come back when the time comes to make a buying decision. In travel, lead magnets can take many forms, but they all have the same goal: to answer a pressing question or provide insightful information that can’t easily be found elsewhere.

What makes a good lead magnet Companies used to produce lengthy ebooks and reports to collect email addresses, but that isn’t necessary any more. In fact, a brief single-page document can have as much effect if the knowledge it imparts is valuable enough. Lead magnets can take the form of checklists, travel guides, lists of activity ideas, or anything that will help your guests plan and execute their dream getaway with a minimum of effort.

what’s available locally. This is more important if they are planning an event—a wedding or a reunion—or organizing a group of people to come to a location. Offering a comprehensive packing list or a series of specific checklists for different groups makes a handy and desirable resource.

Travel Guides There are plenty of generic guides guests can find online, so you’ll need to get creative to deliver information they cannot find elsewhere. This could be a hiking guide showing off-the-beaten-path hikes that are only known locally or a list of dog-friendly beaches and parks.

Tips and Hacks Everyone loves helpful advice whether it’s about saving money or learning about the best ways to access attractions or events. It doesn’t matter where you are located—there will always be something unique you can offer.

A good subscriber incentive will offer the following:

Promoting Your Free Resource

Value

Although it’s great to have created a top-notch lead magnet that guests are going to download like crazy, there’s not much point in it unless they can find it.

Years ago I paid $10 for a list of little-known hikes in Sedona. The presentation wasn’t great, but the information was exactly what I wanted and helped us have a wonderful stay. We hiked off the tourist path for a week, and it was really special. Nowadays, most people would expect to have that same information as a free download in exchange for an email address, but the value would remain the same.

Authority Customers are signing up to access your local experience, so make it good. Demonstrating your expertise and knowledge of your area is the easiest way to gain trust and loyalty and gets you recognized as the go-to authority.

Specific Information General travel information is easily found online, so make sure your resources offer specific information to resolve a problem or answer a pressing question. This one is too vague: “A Guide to Enjoying Destin with Kids”

This is more focused: “What to Do on a Rainy Day in Destin—15 Ideas to Keep Your Kids Occupied.”

Types of Lead Magnets Finding ideas for resources your site visitors will find desirable is as easy as looking at the inquiries and questions you receive. These show what your customers’ pain points are and the information they are seeking. Once you have a list, choose the type of lead magnet that will best suit them.

Checklists Traveling to a vacation rental takes planning. People have to decide what to bring and what to leave home, and they need to know

Pop-up boxes are annoying, and there are many other ways to get your opt-in offer seen.  Promote via social media: Use Twitter and Facebook to drive interest for your free content. Create an image for the posts and drive traffic back to the opt-in page on your website.  Mention the resource in relevant blog posts telling readers this is where they can get more (and exclusive) information.

 Pin an image and description of your lead magnet on one or more of your Pinterest boards.

 Create relevant site content with answers to questions guests ask and include an opt-in form for them to get additional information. Ensure every lead magnet you create is professionally presented using your branding. A good resource will be shared, so it’s important that at a minimum you include your logo, web address, and contact information.

The effort you put into developing a suite of opt-in resources will be rewarded by increased subscriber numbers to the email list. Providing that list is fed with quality follow-up information and offers, it should become a reservoir of direct bookings over time. It’s well worth it.

Heather Bayer is co-founder of The Vacation Rental Formula and host of the Vacation Rental Success podcast. She is also CEO of CottageLINK Rental Management, a property management company based in Ontario, Canada. She will be speaking at VRSS18 in San Antonio in May.

VRM Intel Magazine | Winter 2018

| Business

What’s in Store for 2018 D

uring the movie Draft Day, in the moment just before decision time, fictional Cleveland Browns general manager Sonny Weaver Jr., portrayed by Kevin Costner, looks thoughtfully at his colleague and love interest, played by Jennifer Garner. "No one can stop a ticking clock, but the great ones—the great ones find a way to slow it down," Weaver says. She looks calmly at him and says, “So, slow it down, Sonny.”

With all the noise, industry shifts, consolidations, and changes in technology, the great leaders in the industry will find a way to slow down the clock and execute a strategic plan that meets their company’s goals, vision, and mission. So let’s slow it down and look at the market conditions facing the vacation rental industry and how these changes affect vacation rental professionals. 74

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The industry will see further consolidation and more acquisitions of VRMCs In 2017, the industry saw another round of acquisitions of property management companies. In the interview with Simon Lehmann on page 67, Lehmann said, “If you want to be a serious player who can invest in distribution, product, and guest experience, you need to have scale because you need to reach your guests in an economical fashion.”

We are seeing some larger players grow through acquisition. For example, Vacasa purchased several companies in 2017, including Accommodations Unlimited of Moab; Montana’s Best in

Whitefish, Montana; Mountain Memories Cabins in Ellijay, Georgia; Gail’s Island Rentals in Key Colony Beach, Florida; and Blue Ridge Cabin Rentals in Helen, Georgia.

Regional vacation rental managers are also expanding their borders. Florida-based 360 Blue acquired neighboring St. Joe Club and Resorts’s vacation rental operations. Oregon-based Meredith Lodging acquired five management companies in 2017, including Manzanita Rental Company and Oregon Shores Vacation Rentals. Washingtonbased Sea to Sky Rentals purchased Mysty Mountain Properties.

In addition, private equity firm Tregaron Capital added Carolina Beach Realty to its portfolio, and TowneBank acquired Railey Mountain Lakes Vacations, reporting that the “purchase price for the transaction was $8.93 million in cash” (TowneBank, FY17-Q3 Form 10-Q for the Period Ending September 30, 2017). With readily available capital, a stable market, and a large number of smaller management companies who are tempted to cash-in, ambitious vacation rental managers and private equity firms are more able than ever to take this opportunity to grow. And as more vacation rental management companies see a path to sell at acceptable multiples, we can expect the acquisition environment to continue to heat up through 2018.

Data will tell a different story In 2018, the vacation rental industry will get the gift of comparative data. Within the next three months, VRM Intel will launch its Dashboard for all markets, which will allow property managers to compare their performance with those of local and regional markets, and other data platforms have recently been created to analyze comparative analytics specifically on OTAs. For the last several years, the only market data that was reported came from online marketplaces and paid surveys. However, in 2018, as accurate, real-time data is analyzed, the vacation rental industry narrative will change. For example. early data points show that average daily rates (ADRs) and occupancy rates for professionally managed properties are higher than for owner managed properties. The data are also expected to show that professional management companies that receive less than 20 percent of revenue from OTAs have higher occupancy rates within their markets. Additionally, while it is still early in the gathering of the data, early market data reports show that vacation rental revenues in destinations that are heavily reliant on OTAs were negatively impacted by the addition of traveler fees in 2017.

With accurate data from professional management companies compared with OTA data, the vacation rental industry will have the tools to tell a different story to homeowners, guests, and the media.

Professional VRMs will take responsibility for their inventory In the podcast Sea to Ski with Sarah and T, Sarah Bradford made a prediction for 2018 that property managers will begin to take full responsibility for their inventory. “No more blaming the homeowner,” said Bradford. Tim Cafferty added, “The [customer] expectations are off the charts. We keep chasing the hotel industry, and this is what they do. They keep raising the bar, and we have to do the same thing.” Accurate comparative data will also give VRMs the ammunition they need to encourage owners to finally update properties by demonstrating the financial benefit of property improvements. In addition, new technology, such as Breezeway and other housekeeping and maintenance tools, will make it easier to facilitate upgrades and provide proactive maintenance. Comparative data will also allow VRMs to easily see which properties are underperforming and help managers make data-driven decisions about purging properties from their inventory.

Traditional VRMs and newgen VRMs (e.g., Vacasa, Turnkey, etc.) will learn from each other While barbs are being traded between traditional VRMs and new-generation multi-destination VRMs, these companies can learn several things from one another. As the industry begins to converge, we will see a combined set of best practices emerge.

What traditional property managers can learn from the new-gen multi-destination companies  Owner Acquisition: The new companies treat their inventory acquisition efforts like true B2B sales departments, complete with lead generation teams, sales and marketing infrastructure, business development executives, quotas, and performance-based compensation packages. These sales teams identify new homeowners, homeowners who are renting for the first time, existing RBOs, and homeowners currently working with other PMs. They also use B2B marketing automation and CRM tools to nurture leads from cold calling and emailing through an identified sales funnel to the sale that business development professionals are highly incentivized to close. The new-gen management companies also craft marketing materials to promote innovative technology, revenue management, OTA utilization, and high occupancy rates. Their messaging implies they are the “new generation” of tech-enabled property management. In many cases, the new-gen company is not providing a service that an existing company is not already offering. They just do a better job of telling the story. These new sales and marketing efforts are effective, and traditional PMs could benefit from examining these strategies.

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 Scalability: While the new-gen companies admittedly fail more often than they would like, they are constantly looking to scale every process from housekeeping to onboarding to marketing to revenue management. They are continuously learning, adapting, and revising processes with the goal of creating efficiencies across destinations. They do not have a “we’ve tried that before and it didn’t work” mentality. Not to be cliché, but the only efficiencies they are not attempting are the ones they have not thought of yet.

What the new-gen property managers can learn from traditional property managers

began paying and offering deeper discounts for higher placement, and became unnecessarily reliant on OTAs for bookings. What we don’t address, however, is what lessons OTAs learned from working with hoteliers.

With short-term rentals, OTAs are getting somewhat of a “doover.” These online giants have had a chance to reexamine how they aggregated, distributed, and monetized hotel inventory; and now they are applying the lessons learned to short-term rental inventory.

FIVE Lessons OTAs Learned from Working with Hoteliers

 Repeat Guests: While the new breed of multi-destination PMs is focused on scalability and optimizing their presence on OTAs, they have not yet experienced the stability that a strong set of repeat renters adds to the mix. Traditional PMs recognize the importance of repeat guests, and they know something that new-gen companies do not: that having a foundation of repeat stays is not only attainable, it is critical to sustainability.  Community Involvement: Helping to build the community as a destination pays dividends. In traditional vacation rental destinations, a ton of work has been done by destination marketing organizations to build events, activities, and new sources of revenue. Working directly with the DMOs increases a company’s awareness of new destination activity, helps in revenue management, and provides additional marketing opportunities. But more than that, it shows a willingness to contribute––not just take. Through the relationships gained from working with the community, newgen companies can gain referrals, source acquisitions, and improve reputations.

OTAs are applying what they've learned from working with hotels At industry events, including VRM Intel Live, we often talk about what hotels learned from working with OTAs and how VRMs can leverage this hindsight to gain an advantage and not repeat mistakes. We note that hoteliers gave up needless percentage points,

B The agency model is preferable to the merchant model in all ways but one. First, let’s look at the difference between a merchant model and an agency model. With the merchant model, hotels give OTAs a net rate, to which a mark-up is applied to determine the sell rate to consumers. Consumers pay the OTA, and the OTA pays the hotel after check-in. With the agency model, the guest pays the hotel and the hotel pays the OTA after check-in. The hotel industry, especially in international markets, reacted better to the agency model, giving Priceline a competitive advantage over Expedia. However, OTAs preferred carrying the money between the booking date and the arrival date.

When Airbnb came along, it decided to take the best of both worlds, adding an agency-style commission—split between the guest and the supplier. It also became the merchant of record, taking payments, carrying the money, and remitting net payment to the supplier 24 hours after check-in. TripAdvisor followed suit in 2015 for its performance-based listings, and HomeAway now uses this model for its PPB listings. C Once suppliers are reliant on an OTA, the OTA can make changes to monetize supply. OTAs learned that once hoteliers were reliant on the channel, the OTA could adapt policies to further monetize the platform. As a result, Airbnb, HomeAway, and Booking.com have found ways with their core supplier base to facilitate reliance by delivering a number of bookings to the vacation rental supplier without which they cannot operate. This strategy has been even more effective in the vacation rental industry because a significant number of homeowners and managers got into the rental game as a result of OTAs. These companies were built on OTA platforms. Their primary—if not only—booking channel is one or more OTAs. In these cases, the OTA is not merely delivering supplemental revenue, but it is actually generating the majority of

4,500,000

4,000,000

Vacation Rental Listing Growth 2011-2017

3,500,000

3,000,000

TripAdvisor HomeAway Airbnb Booking.com

2,500,000

2,000,000

1,500,000

1,000,000

500,000

2011

2012

2013 TripAdvisor

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2014 HomeAway

2015 Airbnb

Booking.com

2016

2017 Q3

SOURCE: SEC FILINGS AND EARNINGS CALL TRANSCRIPTS, SEEKING ALPHA

revenue, which enables the OTA to make a multitude of drastic changes without losing inventory. D Consumers will go where they can find the largest selection at the best price. One way OTAs captured market share from hoteliers was by aggregating supply on a mass scale at a lower rate. Using net rates and rate-parity agreements, OTAs were able to undercut pricing, which proved to be key in gaining a following among consumers.

OTAs learned that establishing pricing levers is paramount to establishing a market-leading position, and it will be even more important when creating barriers to entry for newcomers. As a result, Airbnb, Booking.com and HomeAway have launched and are further developing revenue management systems. In addition, OTAs are adding “offer strength” into their ranking algorithm, which rewards discounting with higher rankings. HomeAway even implemented a “pledge” a supplier must sign to become a Preferred Partner. This pledge says the supplier will “keep their rates equal to or lower than rates listed on other advertising websites for the same property.” By maneuvering pricing, OTAs can swiftly gain market share and a substantial competitive advantage. E Own the guest. Over time, OTAs learned that hoarding guest contact information from the hotelier led to less communication between the hotel and the customer and reduced the hotels ability to make direct marketing offers and run loyalty promotions. OTA contracts often stipulate that hotels can’t market to customers who booked directly with the OTA. Last year, Booking.com stated that they will no longer provide hotels with customer emails. Neither Airbnb nor HomeAway share customer information until after the booking has been confirmed. In addition, HomeAway recently announced a “match-back” policy for PMs using integrated software solutions that charge the PM 10 percent for any booking done with a guest who previously searched for a rental with similar dates on HomeAway’s family of sites. From working with hoteliers, OTAs learned that if they can own the guest, the guest is less likely to move outside of the platform. F Don’t just aggregate brands; become the brand. OTAs found out the hard way that a strong brand name is hard to replace. In the last two years, Hilton, Marriott, Hyatt, and the AHLA have worked to educate consumers about the benefits of booking directly with the property. In turn, OTAs have begun offer their own loyalty programs, rewarding guests who make repeat bookings regardless of the hotel—competing directly with hotel loyalty programs. When it came time to look at how to display vacation rental brands, OTAs decided they have a unique opportunity to eliminate the supplier brand altogether and actually become the brand. Brand names, links, and videos are being eliminated from the platforms, and we can expect to see more of this over the coming months. Note: OTAs know if they can keep the supplier market fragmented, their ability to grow is unlimited. Repressing the potential growth of big brand names in the vacation rental industry is in their best interest. While we’ve seen no direct evidence of OTA activity that seeks to stunt the growth of big brands, it will be an interesting area to watch for movement in the coming months. OTAs have learned other lessons, as well. They have learned to leverage their high ad spends on Google to create extensive barriers to entry, and they’ve learned that smart acquisitions can move the needle to gain market share. They’ve realized that Instant Booking that is integrated across channels is necessary, and that gaining

global market share is key to sustainable growth. They’ve also been testing revenue models and have found that there is a 15–30 percent take rate on the table—even if they have to split their cut between the supplier and the guest.

Most important, OTAs have the freedom to act on the lessons they have learned to further advance their platforms. Vacation rental managers must do more than study the mistakes hoteliers made using OTAs along the way. They will also need to find a way to come together as an industry to collectively push back on changes that harm their businesses.

Hospitality is key to success for VRMs What is hospitality? The dictionary defines it as “the friendly and generous reception and entertainment of guests, visitors, or strangers.” The Bible points to hospitality as a spiritual gift, with instructions such as, “Treat the stranger who sojourns with you as the native among you”; “Show hospitality to one another without grumbling”; and “Do not neglect to show hospitality to strangers, for thereby some have entertained angels unawares.” Buddhists hold a similar view of hospitality, a.k.a. sakkàra, which is described as the act of being welcoming and helpful to guests, strangers, and travelers. In the travel industry, service and hospitality are often interchangeable, but, according to hotel marketing consultant Brenda Fields, the two are different concepts. “Service can be defined as the ‘act’ of providing a service, whereas ‘hospitality’ is the ‘cordial attitude’ of the person providing the service.” Being hospitable is easier for some people than it is for others. In the vacation rental industry, property management companies that have one or more hospitality-minded executives among their top leadership have a higher chance of success as the industry continues to shift. With a hospitality-minded leader, the company is laser-focused on its core mission of providing great accommodations and experiences for guests. These leaders operate with a clear vision of why they are in business, what service they provide, and how they want to provide this service. With this clarity of vision, the team can eliminate much of the industry noise and focus on making guests comfortable and providing them with clean and safe vacation accommodations. This also allows the team to focus on maintaining the properties in the program. Hospitality is a gift and—for many—a passion. If a company doesn’t have hospitality-minded leadership, its mission tends to focus on getting guests in and out the door. These properties are not matched to guests, and the guests’ experience suffers. For RBOs and Hosts, hospitality is a key differentiator. Hospitalityminded RBOs and Hosts who genuinely enjoy sharing their homes generally have different goals and motivations from RBOs and Hosts who are only renting for the income. Income-driven homeowners who would not rent otherwise are sensitive to who is staying in their homes and tend to be more critical of cleaning and management. Any business that is working with or trying to attract RBOs or Hosts will benefit from segmenting its prospects by motivation. The more closely a company can align its hospitality-oriented goals with its owner base, the more successful the company will be in the face of marketplace shifts. VRM Intel Magazine | Winter 2018

MILLENNIALS AND TECHNOLOGY

HOW VRMs CAN EMBRACE CHANGE AND RIDE BOTH TO SUCCESS

illennials, people between the ages of 18 and 34, are currently America’s largest generation, numbering 75.4 million and rising, passing baby boomers at 74.9 million and falling.

With such a large chunk of the population becoming bigger influencers, we are all curious about what makes millennials tick. The good news is that millennials love to rent! They have been key contributors to the rental market, with 36.6 percent of current US households headed by renters, the highest since 1965 when it was 37 percent. Plus, 74 percent of millennial travelers have used a vacation rental service such as Airbnb, compared to 38 percent of Gen-Y and 20 percent of baby boomers. Technology is on a similar growth curve. There is more tech in our lives today than ever before, and it’s increasing exponentially. From desktop to mobile to “things,” technology is embedded in virtually everything we do. Consider this: 78

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 Of the entire world’s population, 46 percent have access to the Internet–that’s 3.4 billion people.

 Over half of all web searches start directly on Amazon, which accounts for $4 out of every $10 spent online in the United States. Netflix, with 100 million subscribers, owns one-third of the home entertainment market in the United States.

 Of all US households, 15 percent own at least one Internet of Things (IoT) device—a connected thermostat, a smart lock, or a light control. In millennial households, that number jumps to 24 percent.

Technology is growing at an increasing rate. It’s been ten years since Apple revolutionized the phone industry with the iPhone— the first smartphone. Now, 81 percent of US households own a smartphone. Until recently, technologies that revolutionized how we live and work took decades, if not generations, to penetrate enough of the population to change behaviors.

PROJECTED POPULATION BY GENERATION ( in milions )

It took decades for the telephone to appear in more than 50 percent of households, while smartphones accomplished this in less than ten years. And with current IoT forecasts predicting 22.5 billion IoT by 2021, up from 6.6 billion in 2016, home automation is on a faster growth curve than the smartphone was.

Want proof ? Voice assistants such as Amazon Echo and Google Home debuted in 2015, and 35.6 million Americans already use one at least once a month—that’s 27.5 percent of smartphone users in less than three years. Why are they catching on so fast? Voice recognition accuracy is over 95 percent, which enables better and more convenient control of lighting, temperatures, and favorite music. By now, your brain is about ready to explode. You probably knew these trends were occurring, but you probably didn’t realize the enormity and acceleration behind the millennial and technology waves. The good news is that these changes are both disruptive and creative. For vacation rental property managers, these changes present new questions and opportunities:

control of music, lighting, and temperature in unit, etc.) and better manage your properties (keyless work order control, HVAC savings in unoccupied properties, fraud prevention, etc.)?

 How has the development of the mobile web and the importance of review sites changed your online strategy to attract guests?

 Millennials and on-demand technology are driving new demand for short-term stays, but millennials aren’t driving most of the household decisions today (28 million millennial HoH vs 35 million Gen Xers and 43 million baby boomers), so this trend is incremental to traditional vacation rental business that is already there. Depending on your occupancy and average rate, are these new opportunities right for business?  How are you engaging millennial or multigenerational renters with experiences (print vs. digital guidebooks, selfie location recommendations, etc.)?

The good news is that these changes are not doing away with business as usual but are instead presenting possibilities to further differentiate yourself while opening new opportunities. The responsibilities for vacation rental managers are to look at your business, identify areas you would like to improve, and then find ways to leverage these technology and demographic changes to enhance your business. Either way, it’s a win-win for the vacation rental manager. Sean Miller President, PointCentral

 In the case of millennial renters, 86 percent are willing to pay more for a property outfitted with home automation technology. The same is true for 65 percent of baby boomers, not to mention the operational benefits of home automation technology for property managers. How are you embracing this demand to deliver a better guest experience (direct to house check-in, voice VRM Intel Magazine | Winter 2018

Best Practices for Accidental Guest Damage Repair and Bed Bug Infestation Remediation By Laird Sager, Founder and President, Red Sky Travel Insurance

nsurance products are among the variety of solutions available to vacation rental management companies (VRMCs) for the remediation of accidental guest damages and bed bug infestations. Security deposit waiver and bed bug remediation insurance programs reimburse VRMC users the expenses incurred to repair accidental guest damage and personal property damage and treat for bed bug infestations. A careful assessment of the frequency of these events and the expense of repairing such damage suggests that the use of these forms of insurance is not the best solution for VRMCs.

Rather, the best strategy for the repair of accidental guest damages and the remediation of bed bug infestations is a VRMCprovided homeowner and guest service. VRMCs offer several valuable homeowner and guest services, including deep cleaning and end-of-stay housekeeping, linens and bedmaking, keyless entry and security, winterizations, prearrival inspections, and concierge. Accidental guest damage repair and bed bug damage remediation are best provided as another valuable homeowner and guest service. The benefits of providing accidental guest and bed bug damage repair as a service rather than an insurance product are fourfold. It is extremely profitable, far less administratively burdensome, and exponentially more efficient; and it increases the market value of the VRM business by an average of 4.7 times every dollar added to a VRMC’s bottom line. 80

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Insurance companies are businesses. They offer products and services that generate net profits after operating and administrative expenses and users’ claims for reimbursement are paid. If an insurance company offers a product to a VRMC, it is always because that product yields an attractive profit for the insurance company. An analysis of the frequency and the expense of accidental guest damage repairs and bed bug damage and treatment remediation provides insight into an insurance company’s profitability from security deposit waiver and bed bug remediation insurance. A survey of nine large VRMCs generating 82,830 reservations in 2016 identified 39 bed bug infestation incidents—an infrequent .05% of total reservations. The cost of repairing corresponding personal property damage and providing treatment was $84,820, an average of $2,175 per incident. One of the bed bug remediation insurance programs currently available to VRMCs includes a fee of $30.00 for every reservation. VRMCs retain $10.00 and forward the remaining $20.00 per reservation to the insurance provider. If the previous survey respondents had used this particular type of insurance program as their solution for the expenses of their 2016 bed bug damage repair and treatment, they would have remitted $1,656,600 in premiums and incurred only $84,820 in remediation expenses. With the frequency of personal property damage and treatment from bed bug infestations occurring at a negligible average of .05% of total reservations and the average expense of

remediation being $2,175 per event, the insurance product solution is expensive and unnecessary. It is not the best practice for VRMCs. A careful analysis of the frequency and expense of accidental guest damage and repair yields the same conclusion.

Insurance providers enable VRMCs to offer a variety of security deposit waiver insurance benefit levels ($500, $1,500, and $3,000) for a “sell-for rate” of $49.00, $59.00, and $69.00, respectively.

From the sell-for rate, VRMCs forward a net premium amount to their insurance providers. VRMCs retain the difference between their sell-for-rate and the net premium. An average offering may be a $3,000 security deposit waiver benefit with a sell-for rate of $69.00 and a net premium amount of $19.00 paid to the insurance provider. The VRMC retains the $50.00 difference between the sell-for rate and the net premium paid to the insurance provider. This is an attractive source of revenue for the VRMC, but there is more. Insurance companies that provide security deposit waiver insurance products make a handsome profit from the $19.00 net premium amount remitted for each policy sold. This is essential because they are in business to make a profit, too! The following table summarizes actual security deposit waiver insurance product programs used by several VRMCs.

captured the profits previously earned by their insurance provider. It is easy to determine the potential profit of creating an accidental guest damage repair service: Simply calculate the amount of premium remitted to the security deposit waiver insurance provider in 2017 and the amount of money the insurance provider reimbursed to the VRMC for accidental guest damage repair claims in 2017. The difference between the premium paid and the amount reimbursed is the profit a VRMC can earn by creating an accidental guest damage repair service. These same VRMCs also enjoy the ease and efficiency of managing an accidental guest damage repair service, which is like any other maintenance service, rather than struggling with the burdensome, time-consuming administrative exercise of using an insurance product. Filling out and filing claim forms and supporting documentation; taking and submitting photographs, answering follow-up questions; addressing guest complaints when insurance providers directly contact guests about damage that supposedly occurred during their stay; following up on claims payments; and receiving, accounting for, and depositing claims payments are exhausting, expensive, and unnecessary burdens. The best practice for repairing reported accidental guest damage is to simply generate a work order for repairs, have the repair work done, pay the work invoice, and move on to the next task.

potential profit - accidental guest damage repair service Reservations / Sell for rate / net premium to provider

Net premium to provider

3,330/$50/$19

$63,270

( actual )

10,061/$69/$19 ( actual )

14,482/$69/$19 ( actual )

$191,159 $275,158

claims paid ( # / avg $ ) $23,094 ( 198/$116.37 ) $88,507 ( 782/$113.18 ) $114,741 ( 1016/$115.64 )

The first column describes the actual number of reservations made, the sell-for rate per reservation for the security deposit waiver insurance policy, and the net premium forwarded to the security deposit waiver insurance provider. The second column identifies the total net premium forwarded to the security deposit waiver insurance provider. The third column identifies the actual claims paid by the insurance provider, the actual number of claims, and the average cost per claim. The last column identifies the actual profit made by the insurance provider—that is, the net premium paid minus the claims paid. Security deposit waiver insurance products are profitable for insurance providers; however, an accidental guest damage repair service provided by VRMCs for their homeowners’ and guests’ benefit is profitable as well. The highest loss ratio for any Red Sky Travel Insurance security deposit waiver user is 46.3%. Almost $0.54 of every premium dollar remitted to Red Sky Travel Insurance for security deposit waiver insurance is gross profit. Hundreds of VRMCs have created accidental guest damage repair services for homeowners and guests, and each of these VRMCs has

LOSS ratio

36.5% 46.3% 41.7%

potential vrm profit ( value @ 4.7 multiple ) $40,176 ( $188,827 ) $102,652 ( $482,464 ) $160,417 ( $753,959 )

The most important advantage of creating accidental guest damage repair services and bed bug damage and treatment remediation services for homeowners and guests is the market value this best practice adds to the VRMC. The average value of a professionally managed VRMC is about 4.7 times EBITDA. Every dollar that a VRMC captures and delivers to its bottom line enhances its value by 4.7 times that dollar. There is no easier, quicker way to increase the profitability of a VRMC or enhance the VRMC’s market value than to adopt these best practices. VRMCs that create and provide these valuable homeowner and guest services capture the profits formerly forwarded to the insurance provider and increase their value by 4.7 times the added profit. Laird Sager is the founder and president of Red Sky Travel Insurance, a provider of trip cancellation/interruption, Security Deposit Waiver, (SDW) and Bed Bug Remediation insurance products for the vacation rental industry. Even though Red Sky offers SDW and bed bug insurance products, Laird strongly discourages their use, they simply are not the best solution for VRMCs. For operational, administrative, and accounting assistance in creating an accidental guest damage repair or bed bug remediation service for homeowners and guests, contact Laird at laird@redskyinsurance.com or 252-202-3292.

VRM Intel Magazine | Winter 2018

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PMS+CRM

= ROI W

hy do people settle for mediocrity? Why do people tend to take the path of least resistance? I suppose it could be a matter of “hard-coded” personalities based upon genetic dispositions and the complex balance of logic and creativity within the miraculous human brain; or maybe these are learned behaviors through sociological influences acquired from friends, family, and lifelong experiences? The truth is there is no perfect answer. Every single person is unique and driven to act by two pillars of human development, “nature” and “nurture.” The entire make-up of a human character can be so multifaceted that people may hardly know themselves. Yet, my most essential message here is that you absolutely must get to know them.

 Guest database, profiling, and reporting  Owner database, profiling, and reporting  Guest lead management system  Owner lead management system  Reservation quoting  Loyalty programs  Reservation management  Promotion and coupon management  Email and text messaging  Two-way guest communications  Two-way owner communications  Automatic notifications (email, text, push)  Integrated phone system  Call recording and monitoring  Coaching and scoring  Customer notes  Marketing Source Tracking  Conversion Tracking  Advanced Reporting/Dashboards  Reservation Sales Management  Guest Interface/Mobile Application  Owner Interface/Mobile Application

The GUEST “Hospitality is making your guests feel at home, even if you wish they were.” – Anonymous

Ideally, and based on how important guest loyalty and the guest experience has become in the vacation rental industry, we would have a real friendship with all our guests. We would know our guests by name, and we would greet them face to face. We would invite them to dine with us, we would know their family, and we would take them golfing or skiing, etc. If you are in a position to personally know your guests, kudos to you because your guest retention is going to be through the roof.

How does this relate to a CRM? That will be revealed soon, but first let’s discuss what CRM stands for—customer relationship management.

The key word to focus on here is relationship. Building and maintaining relationships with customers (guests and owners) require having the right tools and technology. Ask yourself, “Exactly what type of relationship do I want to have with my customers and/or potential customers?” Once you have that question answered, you can begin to strategize on how to achieve this initiative. Before going any further, let’s look at some of the primary technological components of an effective CRM system: 84

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For the rest, for whom this is not at all practical, you have to create a different strategy. This strategy will be based on resources, time, and simply how much you care about your guests. Defining the guest experience from the first step (first exposure) to the final steps (checkout and beyond) should be a very specific, fine-tuned, calculated process. Defining each stage of the guest experience and breaking those stages down to their micro-elements can be the difference maker between that guest remembering your company and achieving that highly sought-after guest loyalty. Many of the fundamental components of the guest experiential stages can be handled by technology. There has always been a philosophical struggle between automation or being hands-on—the person or the machine.

Should we be the boutique company or the large company lacking personalization? I believe that this is a flawed argument; property managers should be focused on finding ways to let technology save

time by providing all the basic information so the property manager can go above and beyond by freeing up staff for personalization. If it takes 30 seconds to send a quote because of better technology, the property manager now has the ability to call and follow up with the quote. The new generation of travelers expects a hightech experience. Having a quality CRM is essential when building an advanced guest relationship strategy because a CRM builds the relationship with guests and lays the groundwork for intelligent automation and future marketing campaigns.

The OWNER “Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” – Steve Jobs

Good news! While you likely can’t make friends with each and every guest, you certainly can with your property owners. Optimizing your communication and your relationships with owners is paramount in owner retention. While a guest has entrusted you with a weekend stay, an owner has entrusted you with his or her property and financial future. Owners deserve a certain amount of care and sacrifice with such a commitment to your company. It is beneficial to make the time to gather, organize, and utilize data to deliver an optimal owner experience. A quality CRM, especially for larger companies, is at the forefront of optimizing long-term relationships through a committed owner strategy.

It is my opinion that a company should always build its service/ relationship strategy around the best customers, not the bad apples; instead, let the bad apples learn to love you. You will be surprised how well some of your more challenging customers respond if you treat them the same way you treat your best customers, despite a natural inclination to reject them. Every owner needs to have a unique strategy because everybody responds differently to certain types of interactions, but in general, positivity, care, and patience are a recipe for success, regardless of the personality type. It is important to educate owners. Provide a professional marketing piece about why your company is the best in its class. Talk about your technology, mission, commitment, plans for guest retention, distribution, and stance on wild guests. Let them know how important keeping the property in good shape is to you. As always, the best salespeople in any organization are its customers. Get a list of testimonials. Overall, build the relationship, establish trust, and be real.

Back to the basics To jump back to the initial paragraph in this article, the first lesson is that the human psyche is highly complex; thus, to emotionally trigger your customers into a desired buying behavior, spend the time and effort to get to know who they are. Learn what makes them tick, and catalog this information. The second lesson is don’t settle for mediocrity with a CRM—not now, not in this industry. Make an effort to know your customers inside and out, and this must be a company-wide commitment. Gathering and organizing data on your customers—whether its demographic, geographic, or psychographic—is essential. Do not compromise on a CRM when choosing your technology because it really is the key to your future.

Consolidate your technology We are living in the age of connectivity. Our entire planet is networked and intertwined on levels that are nearly unimaginable. We are connected through airways, highways, railways, subways, waterways, satellites, cellular networks, the web, and the grid. We can share more information and more data in one second than our

entire species has in the history of our existence prior to the 1900s. The vacation rental industry in particular is experiencing a boom in technology and a significant shift into the world of extreme connectivity. This is most obviously seen through OTAs and online booking channels, but it goes far beyond that. Property management systems are the main technology hubs for property managers with connections to lock companies, credit card processors, home automation providers, website builders, travel insurance agencies, floor plan companies, lead management solutions, phone systems, distribution channels—the list goes on. What is this craziness? Well, it’s an attempt to have the most well-rounded, efficient, and profitable operation possible. The goal really should be to bring as much technology under one roof to minimize costs and inefficiencies while harnessing third-party platforms. There are many great external product extensions, but the first objective should always be to consolidate. After all, maximum efficiency often translates into maximum profitability.

How does putting time, money, and energy into a CRM translate into ROI for my business? Whether using your PMS for your CRM or an external system like Salesforce, the answer stays the same. You invest consciously into getting your customers through the door, but it is critical to understand the value of keeping that customer inside the door. It is essential to begin to evaluate the lifetime value of the guest or owner. Once a guest has stayed with you or an owner has signed up with you, he or she is your customer to lose. If you make all the right moves, there is little your competitors can do to reel in that business. When speaking of return on investment (ROI), let’s focus on the investment part. You are investing a great deal of resources to get people in the door. You are investing in employees, costs per click, SEO, branding, OTA fees, your website, etc. A successful customer retention plan would start by tailoring a personalized experience, which is possible with a quality CRM for both guests and owners. Create an experience through technology that makes customers feel like they can trust you and that you care about them. With an automated approach, you are providing the foundational/functional necessities and using the gained staff time to cater to and personalize the relationship on a whole new level.

Once you have the data, get creative. Categorize your guest as a golfer in the CRM and set up a notification that automatically goes out to all “golfers,” saying, “We remember you like to golf, so here are the courses in this area; we recommend this one.” Delivering an experience like this is entirely possible, but you have to get the data, know the customer, and find the technology and CRM to create such an experience. Think how creative you could be! You could build tailored experiences for skiers, or fishers, or VIP clients, or foodies—the list goes on. These same concepts are true for owners. Owners are really your most valuable customers, and their experience with you should be highly tailored as well. There are many ways to go above and beyond for owners. If you invest the time and resources into the right CRM and customer experience, your one-time guest can become a lifelong guest, and your success will be ensured.

By Brett Parry CMO | Streamline Vacation Rental Software

VRM Intel Magazine | Winter 2018

The Ultimate Inspector Gadget

Using Mobile Technology to Manage Inspections

e’ve all heard the horror stories. Travelers arrive at their dream vacation home only to find it covered in refuse left behind by previous guests. At the beginning of the online travel agent boom, this was one of the complaints heard loudest and most often: Homes looked abandoned on arrival, and the crestfallen vacationers had to wait for their home to be properly cleaned. As property managers, we hear these stories and cringe. No one wants guests to have a bad time, and this is the definition of a bad time.

Fortunately, most of us have moved beyond this problem; inspections now are standard, so this horror story is told less frequently. However, we still are not going far enough as property managers. With today’s technology and so many actionable points of contact at our fingertips, we can—and should—transform the simple inspection from a standardized necessity into a reason for your guests to come back time and time again. Just ask yourself, are you giving your guests an experience they’ll never forget at all levels of your rental business? If not, this may be the way to give your guests an unforgettable vacation.

Why Improve the Inspection Process? When property managers attempt to find new business, they often look to outside sources. Many spend thousands of dollars on marketing agencies, SEO, and advertising campaigns to increase their 86

VRM Intel Magazine | Winter 2018

visibility and bring new vacationers into their homes. The one thing these property managers don’t seem to try, however, is improving their own processes so their current guests—the ones most likely to choose them again—return. Existing customers have already given you their trust and need less convincing that you are the company for them if you give them the time of their lives.

This means current and previous guests can be your biggest potential revenue source. It also means that you need to do everything you can to perfect their stays. This starts with ensuring the vacation rental is in excellent shape by providing not just a proper inspection but a little something extra. After all, anyone can do an inspection. Can everyone provide guests a new experience? This is the key to retaining guests for future bookings.

How You Can Make Your Inspection Process Unforgettable Of course, to make a splash, you must stand out from the competition. That often means being creative and tapping into the latest and greatest technology. So, let’s break down the power we have at our fingertips.

If we link inspections to text messages, we can text guests when their house is ready for check-in. To keep that guest coming back, however, you must go above and beyond: be unique and show off

what you have to offer. Why not utilize your inspections to send the arriving guest the actual unit inspection results? Don’t be afraid to share your high standards with your guests. With a well-thought-out process and flashy implementation, this strategy could be a game changer that provides guests that unforgettable experience you want so badly to deliver. Imagine receiving a text or email letting you know that your vacation home has been thoroughly cleaned and inspected and is ready for your arrival. Include a simple message, such as “Click here to view some exciting photographs of your upcoming vacation rental.” When guests click the link, they’ll see a beautiful PDF report that walks them through the house, proving the home they just spent money on is ready for their stay. It may sound like overkill, but this is customer service. You’re simply showing guests you care about the quality of their stay.

You can take it a step further. Why not send them a photo of the soap, shampoo, and conditioner brand to prove you only provide the best? Many property management companies take great pride in the brands they offer, and showing that off can be a way to garner trust and make your guests seem just a bit more welcome!

Again, all of this may seem superfluous or downright difficult to implement, but if you take the time to show your guests that you want them to have a great time, they’ll repay you in kind with future stays. This is just one of the many ways that improving your inspection can make your business soar!

Inspection Reporting to Improve Homeowner Retention and Relations Although quality at the inspection level can be a great boon for guest retention, it is arguably even more crucial to homeowner relations and retention.

Even the most hands-off owners want to be in the know when it comes to their property. They may not want to know all the interior machinations, and you may not want to give them that much insight, but a thorough monthly or quarterly inspection with all the bells and whistles can easily catapult you to rock star status.

One way you can implement these inspections is by having someone go through a property as infrequently as twice a year to take photographs of every item on your customized fifty-point inspection plan. A/C units, water heaters, refrigerators, dishwashers, and other appliances all need some TLC as the years go by, and offering a service that keeps your homeowners in the loop about the conditions of your units can be both welcome and practical. In fact, if you design your inspections right, you could add suggestions for improving old or rusty machines, which can be a great revenue generator during slower times of the year. Make sure you don’t overdo it. No owner wants to receive emails or texts on a weekly basis detailing what needs to be improved. Owners are proud of their homes, and they do not take negative comments lightly. Still, seeing is believing.

Building an Inspection and Cleaning Plan How far should you take an inspection? Many of our clients have several steps in their cleaning process and force inspections at each

stage; however, this isn’t always the case. In our industry, quality control is lacking at many levels because companies often do not have the time to implement quality inspection plans. However, the use of smartphone technology and tablets has made quality control and notification infrastructure based on inspection results much easier and less time consuming than ever. Let’s walk through a simple cleaning flow:

B Printing out a linen kit lets the houseman know exactly what he or she needs to bring to the home for cleaning. C We have companies with dedicated linen delivery teams. These companies have a kit inspector who goes to the home to ensure all necessary materials are there prior to the housekeeper’s arrival. If items are missing, a notification is sent to the linen delivery team. D Once the linen inspection is finished, the housekeeper receives an automatic text, email, or push notification indicating that the house is ready to clean. E Once the unit is clean, it’s inspection time. Don’t assume that the units were cleaned to your standards. External cleaning companies don’t do the same work as internal cleaners. This inspection is critical because it could trigger a unit reclean, and it will tell the guest a lot about you. F If the unit passes inspection, it is considered ready for checkin If it needs to be recleaned, return to step 3—automatically notifying the housekeeper that the home needs to be recleaned.

Remember, even with a quality inspection process, it’s important to keep your staff accountable. You want to have copies of any photographs or notes entered during housekeeping inspections. Furthermore, try to send housekeepers a report of their inspections so they, too, can see their work. Sometimes, people just don’t realize the quality of their work until they see it for themselves.

How Technology Can Help Push and text notifications may sound like amazing additions to your program, and you may be wondering how you can make this all a reality. Fortunately, technology systems like Streamline offer functionality that supports all of these tasks and more. We’ve built APIs that not only enable clients to communicate with inspection tools but also support user communication. That is the true flexibility of open APIs. Possibilities are not restricted to our software platform development schedules.

Don’t Let Guests and Owners Slip Through Your Fingers—Improve Your Inspection Process Today! Whether you are a Streamline customer or you are utilizing other software, don’t wait. Guest retention is more critical than ever. While OTAs are doing your marketing for that initial booking, you need to be working on the guest experience. If you treat guests right during their vacations, they will come back, tell their friends, and leave glowing reviews. Give them a memorable experience and remember: be different and unique. By Carlos Corzo CEO | Streamline Vacation Rental Software

VRM Intel Magazine | Winter 2018

TEAM CLEANING IS IT RIGHT FOR YOUR VACATION RENTAL MANAGEMENT COMPANY?

he biggest challenge in the vacation rental industry happens between checkout and check-in.

From the time that a departing guest closes the door to the time the next guest opens the door, the clock is ticking. Sheets and towels are changed, floors are scrubbed, furniture is moved, sand is swept away, and snow tracks are wiped up. Kayak paddles are recovered, pillows are retrieved, glasses make it back to the kitchen to be washed and returned to their shelves, and lost items are collected. Inspectors scan, scrutinize, survey, and sign off. In the four to five hours between departure and arrival, staff accomplish miraculous work and the consequences of missing a step are substantial. Many companies turn over hundreds of properties each Friday, Saturday, and Sunday during peak season.

With the flood of work that staff need to accomplish, many vacation rental managers use teams instead of individuals to clean properties. We reached out to industry expert and founder of Pro Resort Housekeeping, Steve Craig, to find out more about the pros and cons of using housekeeping teams. Below, Craig describes the reasons property managers opt to use cleaning teams and the potential disadvantages to consider.

Advantages and Disadvantages of Using Cleaning Teams The following are the reasons most often given to justify team cleaning: B More than one person is needed in a unit to be able to safely move heavy furniture. C More than one person is needed to haul all the linens and supplies to the units without making several trips. D Teams clean units faster. E Units may be too large for one person to clean. It is too much to expect. F “We have always done it this way.” G Housekeepers like teams better than working by themselves. H It is safer. There is always another person to call for help in case of an emergency.

Opponents of team cleaning cite these arguments:

B For a typical cost-effective departure cleaning, there are not many—if any—items that must be moved. For items like sleeper sofas, safe techniques for cleaning the area can be taught that do not require two people. C The housekeeper need not be the one hauling linens and supplies to the unit. Consider developing a system that places this task safely and efficiently with other personnel. Even if several 88

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trips are needed, saving time doesn’t justify the waste of the labor time spent cleaning. D Units do not get done faster when cleaned by teams. Study after study has shown that there is a myth about speed. For example, if one person can clean a unit in an hour, two people should be able to clean the unit in thirty minutes or less to justify the use of a team. E Teams don’t tend to clean as fast as individuals involved in time experiments that we conducted. Every company that agrees to split its teams uses fewer people to complete the units, resulting in lower payroll costs. F It is challenging for a team of any size to divide the work so that all team members finish at the same time. Team cleaning requires that the workers advance from unit to unit together. If one finishes first, what are the options?

 Sit and watch.  Help others finish. This penalizes those who finish first by requiring them to do more. This results in the early finisher slowing down in future units.  Slow down intentionally to finish about the same time as the other team members.

G There are variable and nonvariable units of work. By definition, a variable unit of work can be done with a favorable productive factor if more than one person does the task. In other words, if one person takes ten minutes for a task, two must be able to perform the task in less than five minutes to create a favorable productive factor. Bedmaking and vacuuming (with multiple vacuums) are the only variable units of work in most properties. Everything else is a nonvariable; no matter how many people are assigned, the work for that item does not get done any faster. Why is a toilet a nonvariable unit of work? Two people can’t fit there. How do two or three people clean an oven? H Although some units are so large that one person cannot clean them between the checkout and check-in time, team cleaning is not the only answer. Zone cleaning, where someone preps the unit for the housekeeper or where someone helps with beds only, is another option. Other than with very large unit, why should the idea of a unit being “too large” or “too hard” for one housekeeper be a factor? Housekeepers are being compensated based on the size, after all. I Although many housekeepers like teams, in my experience, the less efficient housekeepers tend to be the ones who like teams the best. This is because on teams there is always someone to help. If you examine each team closely, one person consistently does more work than anyone else. The best housekeepers you meet prefer working by themselves.

J Having a second person in a unit is almost never cited as the main factor in the prevention or discovery of an emergency. K There are other disadvantages to teams:

 When work is criticized, it is often hard to affix responsibility: “I thought she did that” or “I didn’t see any ring.”

don’t want to clean with Betty—she’s too slow,” and “I want to work with Ellie. We work well together” usually means that Ellie does most of the work.

 On a piecework pay system, sharing the piece-rate makes any personality conflict even more difficult to deal with.

 Team cleaning may lead to squabbles and backstabbing behaviors, which are frustrating for managers. Comments like “I

By Stephen R. Craig Pro Resort Housekeeping

Cleaning Asthma/Allergy-Friendly Properties

ollowing the tips outlined in this article does not guarantee that guests avoid all symptoms of asthma or allergic reactions, but these tips are the best practices we have developed to minimize exposure to allergens. Of course, the departure cleaning fee is much higher with these standards, but guests who have purchased this service have been happy. Note: Never try to put asthma- or allergy-sensitive guests in a pet-friendly home (described as such either by guests or owners). Clean the unit to normal departure standards with these exceptions and/or additions:

 Change all air conditioner filters and mark the date of the change on the filters immediately prior to guest arrival.  Clean all blinds and ceiling fans—and all edges (baseboards, crown molding, window sills) using a damp rag moistened

with a pH neutral cleaner that is a germicidal to gather the dust rather than spread it. Use this same chemical on the floors. We recommend Green Solutions Neutral Disinfectant Cleaner by Spartan Chemical. It has no color or fragrance.  Use a vacuum with a certified HEPA filter. Vacuum all hard-surface floors; do not sweep.  Launder all linens in Spartan’s No Dye-No Fragrance laundry detergent #7013, which is totally free of volatile organic compounds (VOCs).  Use hypoallergenic pillows.  Mop floors with a pH neutral floor cleaner that is 100 percent free of VOCs. Spartan Neutral will do the trick.

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Staff Accountable Jun - Holding Sta Aug - SWOT Analysis Sep - Getting Ready for the Budget Oct - How Data Helps You Succeed Nov - Product Demonstration

2018

Dec - In House Carpet Care Program

FOR MORE INFORMATION NAVIGATE TO VRHP.ORG

Feb - Outer Banks, NC Feb - Myrtle Beach/Wilmington, NC

Mar - Specialty Chemicals

Jul - Managing Different Personalities

On Location Seminars

HOUSEKEEPING EDUCATION Come learn with VRHP!

May - Gulf Shores, AL May - Destin, FL Oct - Orlando, FL Nov - Park City, UT Nov - Steamboat Springs, CO Dec - Maui & Oahu

VRHP Headquarters

PO Box 1883, Kill Devil Hills, NC 27948 We’re coming to a city near you, with webinars and seminars for info@vrhp.org 252-455-4121 VRM Intel Magazine | Winter 2018 89

everyone in your organization!

January Alabama Beach Getaways Summer House Orange Beach, Alabama

VRM Intel Roadtrip 2017

e love vacation rentalsâ&#x20AC;&#x201D;so much so that our team stayed in a quite a few in 2017. From Florida to Oregon, we had the opportunity to visit several vacation rental managers throughout the year, and we want to offer a huge thank you to these managers for the hospitality along the way. The industry we all work in and love is one that offers travelers truly unique vacation experiences, and it is a unique and appreciated privilege to experience it first-hand.

February Resort Realty Queen Elizabeth Nags Head, North Carolina

MARCH Oak Island Accommodations Yaupon Beach Oak Island, North Carolina VRM Intel Magazine | Winter 2018 90

APRIL

Tybee Vacation Rentals Berniewood, Tybee Island, Georgia

JUNE Beachcomber Vacation Homes

Ecola Haven Cannon Beach, Oregon

Quail Cove Cannon Beach, Oregon VRM Intel Magazine | Winter 2018

JULY

y, Utah Rentals t i n C o i k t r a a c P y, y Va b Getawa Park Cit u l C t e u y Racq Park Cit

September

tion Homes n, Florida a c a V n io n u e R anor, Reunio Homestead M

Magical Vacation Homes, The Hangar, Four Corners, Florida

August Seaspray Condominiums Perdido Key, Florida

VRM Intel Magazine | Winter 2018

Southern Comfort Cabin Rentals Choctaw Mountain Lodge, Blue Ridge, Georgia

OCTOBER 360 Blue Watercolor Santa Rosa Beach, Florida

St. George Island

Resort Vacation Properties of St. George Island B&Dâ&#x20AC;&#x2122;s on the Beach St. George Island, Florida

NOVEMBER Cabins for You, Smoky Mountain Manor Pigeon Forge, Tennessee

Follow the Sun Vacation Rentals Champions Gate Resort, Ch ampions Gate, Florida

VRM Intel Magazine | Winter 2018

Calendar

| Business

JANUARY January 23 Vacation Rental Housekeeping Seminar with Steve Craig Helen, GA Holiday Inn Express www.proresort.net

FEBRUARY February 5 VRM Intel Live! Orange Beach, AL Perdido Beach Resort www.vrmintellive.com

February 6 HomeAway Breakfast Seminar Point Clear, AL Grand Hotel Marriott Resort software.homeaway.com/education/events

February 8 HomeAway Breakfast Seminar Panama City Beach, FL Courtyard Panama City software.homeaway.com/education/events

February 14, 2018 HomeAway Breakfast Seminar Outer Banks, NC Hilton Garden Inn Outer Banks software.homeaway.com/education/events

February 21 Vacation Rental Housekeeping Professionals (VRHP) Seminar Outer Banks, NC www.vrhp.org

February 28 - March 2 NAVIS Leaders Conference St. Pete Beach, FL Tradewinds Island Grand www.thenavisway.com/navis-leaders

MARCH March 4-8

April 10

VRMA European Conference Paris, France Le Meridien Etoile www.vrma.org

Vacation Rental Housekeeping Professionals (VRHP) Seminar Gatlinburg, TN www.vrhp.org

March 8

April 14

Vacation Rental Housekeeping Professionals (VRHP) Seminar Paris, France www.vrhp.org

Australian Home Hosting Expo Melbourne, AU Melbourne Showgrounds Epsom Road www.australianhomehostingexpo.com

March 9

April 16-17

VRM Intel Live! + VR Tech London, England www.vrmintellive.com

VRMA Eastern Regional Conference Miami, FL Hyatt Regency Miami www.vrma.com

March 13 HomeAway Breakfast Seminar Charleston, SC software.homeaway.com/education/events

March 14 HomeAway Breakfast Seminar Hilton Head, SC software.homeaway.com/education/events

March 15 HomeAway Breakfast Seminar Savannah, GA software.homeaway.com/education/events

March 26-27

VR Mastered 1 Day Mini Boot Camp New Orleans, LA www.vrmastered.com

VRMA Western Regional Conference Portland, OR Portland Marriott Downtown Waterfront www.vrma.org

Vacation Rental Housekeeping Professionals (VRHP) Seminar Myrtle Beach/Wilmington www.vrhp.org 94

VRM Intel Magazine | Winter 2018

April 8-14 Mountain Travel Symposium (MTS) South Lake Tahoe, CA Heavenly Mountain Resort www.mtntrvl.com

February 23

February 27

APRIL

March 29 Vacation Rental Housekeeping Professionals (VRHP) Seminar Seaside, OR www.vrhp.org

April 18 Vacation Rental Housekeeping Professionals (VRHP) Seminar Miami, FL www.vrhp.org

April 23-25 Northwest Vacation Rental Professionals (NWVRP) Annual Conference Blaine, WA Semiahmoo Resort www.nwvrp.org

April 26 Vacation Rental Housekeeping Professionals (VRHP) Seminar Blaine, WA www.vrhp.org

MAY May 1 HomeAway Breakfast Seminar Kauai, HI software.homeaway.com/education/events

of Events May 3

June 5

October 27-30

HomeAway Breakfast Seminar Oahu, HI software.homeaway.com/education/events

VRM Intel Live! Breckenridge, CO www.vrmintellive.com

May TBD

June 7

VRMA National Conference Las Vegas, NV MGM Grand Las Vegas Hotel & Casino www.vrma.com

OPMA Spring Executive Summit Florida TBD www.theopma.org

HomeAway Breakfast Seminar Carlsbad-Oceanside, CA software.homeaway.com/education/events

May 15

June 13

Vacation Rental Housekeeping Professionals (VRHP) Seminar Gulf Shores, AL www.vrhp.org

HomeAway Breakfast Seminar Park City, UT software.homeaway.com/education/events

May 15-17 Phocuswright Europe Amsterdam Beurs van Berlage www.phocuswrighteurope.com

May 17 Vacation Rental Housekeeping Professionals (VRHP) Seminar Destin, FL www.vrhp.org

May 18 VR Mastered 1 Day Mini Boot Camp San Antonio, TX www.vrmastered.com

May 19-20 VR Success Summit San Antonio, TX The Westin Riverwalk www.vacationrentalsuccesssummit.com

May 22-24 FVRMA Xtravaganza Orlando, FL Westgate Lakes Resort & Spa www.vrmxtravaganza.com

JUNE June 5 HomeAway Breakfast Seminar Palm Springs, CA software.homeaway.com/education/events

AUGUST August 14-15 Vacation Rental DTM Summit (Data, Technology, and Marketing) TBD www.vrmintel.com

SEPTEMBER September 10-12 Streamline Summit Phoenix, AZ www.streamlinesummit.com

September 25-27 Rezfest Marco Island, FL software.homeaway.com/education/events

OCTOBER October 2-4 LiveRez Partner Conference TBD www.liverez.com

October 9 Vacation Rental Housekeeping Professionals (VRHP) Seminar Orlando, FL www.vrhp.org

NOVEMBER November 13-15 Phocuswright Conference Los Angeles, CA JW Marriott at L.A. Live www.phocuswrightconference.com

November 27 Vacation Rental Housekeeping Professionals (VRHP) Seminar Park City, UT www.vrhp.org

November 29 Vacation Rental Housekeeping Professionals (VRHP) Seminar Steamboat Springs, CO www.vrhp.org

DECEMBER December 4 VRM Intel Live! Maui, HI www.vrmintellive.com

December 4 Vacation Rental Housekeeping Professionals (VRHP) Seminar Big Island, HI www.vrhp.org

December 6 Vacation Rental Housekeeping Professionals (VRHP) Seminar Oahu, HI www.vrhp.org

VRM Intel Magazine | Winter 2018

You’ve been told you have to change software by 2019. Virtual Resort Manager is your superior alternative. • • • •

Superior Software System Superior Installation Procedures Superior Websites and Marketing Services Superior Customer Service and Support

Before you sign the line, visit our website and schedule a demo. www.VirtualResortManager.com 252-241-9533 | sales@virtualresortmanager.com

Compare Your Business KPIs

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VRM Intel Magazine | Winter 2018

we come through when plans donâ&#x20AC;&#x2122;t...

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

re dsky insurance .com â&#x20AC;˘ 8 6 6 .5 4 9 .5 2 83 VRMisIntel Magazine by | Winter 2018 Coverage underwritten Arch Insurance Company (a Missouri corporation, NAIC #11150) with executive offices located in New York, NY. Not all insurance products or coverage are available in all jurisdictions. Coverage is subject to actual policy language.