VRM Intel Magazine - Winter 2016 by Amy Hinote

Winter 2016

VRM

News and Information for Vacation Rental Professionals

intel

Expedia Purchases HomeAway for $3.9B Building a

National Brand

in Vacation Rentals

Vacation Rental Managers Win with

Traveler Fees Learning from the rocky relationship between

Hotels and OTAs

Evaluating your property management software

Vacation Rental

CRM 101

Marketing Regulations Reservations Housekeeping Customer Service

and More

VRM Intel Magazine | Winter 2016

Help your guests feel like locals with

Share property information and local insight in your own branded mobile app

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Ascent Processing Security - Service - Savings Specializing in the vacation rental industry for 20 years

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VRM Intel Magazine | Winter 2016

Contents

On the Cover 68 A Deeper Look Into Expedia's Acquisition of HomeAway 72 Traveler Fees a Win-Win-Win for Vacation Rental Managers 76 What VRMs Can Learn From the Rocky Relationship Between Hotels and OTAs 84 CRM 101 for the Vacation Rental Industry 90 Building a National Brand in Vacation Rentals

Business

Human Resources 48 Bring in the New Year with Great Hires

Customer Service

30 Vacation Rental Management Company Acquisitions

36 "Imagine This..." Storytelling is Key to Reservation Sales Success

66 A New Year, A New You, A New Approach To Your Business

38 Angry Guests Can Still Become Loyal

94 VRM Calendar of Events

40 How to Attract Families with Small Children

Housekeeping

Technology

51 Microbes: Unseen Dangers in Vacation Rental Housekeeping

80 The Best Property Management System for Your Company: Do You Already Have it?

52 New Developments in Housekeeping Technology for Vacation Rental Professionals

86 Technology: Reshaping Vacation Rentals

VRM Intel Magazine | Winter 2016

Contents From our Partners

Marketing 55 Online Marketing Components You Should Re-evaluate Each Year

20 The 7 Deadly Sins of Distribution for Vacation Rental Managers and How to Avoid Them

62 Utilizing Search Engine Marketing for Homeowner Acquisition

22 The Smart Home Tug-of-War Between the Property Manager and the Homeowner

60 Converting Web Traffic Into Results For Your Property Management Company

28 RealTimeRental's Tenant Portal Offers CRM Functionality, Integrated Trust Accounting and Increased Distribution

56 Brand Marketing Defining your Brand

Rental Regulations 34 Policymakers Urged Not to "Commercialize" Short-term Rentals

Owner Relations

24 3 Smart Marketing Habits to Establish in 2016 18 Latest Innovations in HomeAway's Software Support 26 Building a New Company in the Vacation Rental Market 32 NAVIS Releases 2016 Vacation Rental Trends

42 10 Things Vacation Rental Owners Look for in a Great Property Manager 44 Design Trends for your Vacation Rental

86 8

VRM Intel Magazine | Winter 2016

Ben Edwards, President ben@weatherbyconsulting.com 755 Grand Boulevard Miramar Beach, Florida 32550 888.304.1405

CONSULTING SERVICES FOR THE VACATION RENTAL MANAGEMENT INDUSTRY

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VRM Intel Magazine | Winter 2016

Lead Management Xtreme + Integrated Phone Control Trust Accounting Distribution Channels Auto Responders Custom Guest App Housekeeping Mobile App Maintenance Mobile App Owner Mobile App Responsive Websites Website Map Searching Electronic Signatures CRM / Guest Marketing Home & Lock Automation Yield Management Wordpress Plugin / API Dashboard / Advanced Reporting Guest Reviews / Surveys Social Media Automation Search Engine Optimization (SEO) Coupons / Gift CertiďŹ cates Concierge QuickBooks Integration Travel Agent Portal Point Of Sale

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VRM Intel Magazine | Winter 2016

VRM intel magazine

Dear Readers.

elcome to the second issue of VRM Intel! Since the last issue we’ve witnessed some interesting events in the vacation rental industry. On the technology front, Expedia bought HomeAway for $3.9 billion (which we look at more closely on page 68), LeisureLink raised $17 million, and Tansler raised $1.3 million for its reverse-auction vacation rental marketplace. We’ve also seen acquisitions of vacation rental management companies that you will read about on page 30, including TowneBank’s purchase of Dick Marshall’s Oak Island Accommodations and Vacation Rental Pros’ acquisition of Tom Ridgway’s Hilton Head Rentals and Golf. As you will read in George Volsky’s Technology: Reshaping Vacation Rentals (page 86) and Building a National Brand in Vacation Rentals (page 90), several companies are seeing fast growth in their pursuit toward creating a multi-destination brand, including TurnKey Vacation Rentals, Vacasa, Vacation Rental Pros and Wyndham Vacation Rentals. In other news, the Vacation Rental Management Association changed management companies from RGI to Washington D.C.-based Smith-Bucklin, which brings lobbying experience to the association. As we are seeing in Austin, San Diego and destinations from Florida to Washington, battling regulations has become an unfortunate new normal in the vacation rental industry. All of these changes are interesting, and it is our goal to keep you updated with a relevant, in-depth look at industry news and events. But we know you need more. In VRM Intel, in addition to the latest industry news, we have published articles about Housekeeping, Customer Service, Management, Human Resources, Owner Relations, Marketing, Technology and Regulations written by industry experts such as Sue Jones, Durk V. Johnson, Doug Macnaught, Ben Edwards, Doug Kennedy, Carlos Corzo, Kyle Beuher and many more.

Editor-in-Chief Amy Hinote

Director of Design and Production Donato Berbelja

Contributing Writers Nikki Woodson Blair

Doug Macnaught

Kyle Buehner

Larry Mogelonsky

Michael Charalambous

Dan Rourke

Carlos Corzo

Alanna Schroeder

Ben Edwards

Bill Schlosser

Joshua Guerra

Andew Vick

Durk V. Johnson

George Volsky

Sue Jones

Julia Whipple

Doug Kennedy

Kimberly White

Matthew Kiessling

Copy Editor Kelly Mutual

In addition, our partners have shared their insight on issues such as Smart Home Control, Inspections, Industry Trends, Software Support, Distribution and Online Marketing.

Amy Hinote, amy.hinote@vrmintel.com

Our goal is to provide you with the latest news, trends, information and events to help grow your vacation rental business. I sincerely hope you will find this issue helpful and informative, and I welcome your feedback on how to make it better.

Address

Thank you for reading!

Advertising

VRM Intel Magazine, P.O. Box 1644, Gatlinburg, TN 37738 To subscribe to VRM Intel Magazine to request additional copies, contact info@vrmintel.com or go to www.vrmintel.com

Amy Hinote Editor

VRM Intel Magazine | Winter 2016

© Copyright 2016 VRM Intel Magazine. All rights reserved. We cannot accept responsibility for any mistakes or misprints. Reproduction in part or whole is strictly prohibited without written permission from the publisher. We cannot accept responsibility for unsolicited manuscripts or photographs damaged in the post. Material sent on speculation, unless enclosed with a stamped addressed envelope, will not be returned to sender. VRM Intel Magazine reserve rights of ownership.

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VRM Intel Magazine | Winter 2016

Live by the code – Get fit with Kaba! Oracode Live lets you remotely issue guest access codes to any vacation property – anywhere in the world.

Send access codes directly to your guest’s smart phone or mobile device — there are no keys to pick up, lose, copy or drop off. Oracode also integrates with the BeHome247 Enterprise Property Control™ system, allowing you to remotely manage and monitor utilities and appliances, as well as get real-time property readiness. Convenient, simple, safe and secure, Oracode Live fits your guest’s vacation schedule – and yours. When you’re on the road, live by the code – get fit with Kaba.

Partners with BeHome247

Take Oracode Live for a test drive! For more information on our 60-day free trial and program qualifications, please visit www.kaba.to/VRMintel-TD.

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VRM Intel Magazine | Winter 2016

Corrections from October 2015 Wrong Website Winner Name In the last issue in the article titled VRM Intel's Best VRM Websites 2015, we made a mistake in referring to one of the winners. ParkCityLodging. com, developed by Blizzard Internet Marketing, made the top five best websites. We mistakenly printed the wrong company name. The winner was Park City Lodging, Inc., not Park City Vacation Rentals. We apologize to Park City Lodging, Inc. for our mistake and congratulate the team and Blizzard Internet Marketing for creating a great website.

And the Housekeeping Author is… In the October 2015 issue, we had an article titled Coaching Staﬀ: A Lesson from Vince Lombardi which was written by Durk V. Johnson. Johnson serves the vacation rental industry as both a leading independent consultant and the Executive Director of Vacation Rental Housekeeping Professionals (VRHP). We apologize for leaving his name off of the article. Please take a look at his article in this issue, Microbes: Unseen Dangers for Vacation Rental Housekeepers on page 51. We want your feedback. If you have any comments, suggestions or feedback, please email us at amy.hinote@gmail.com. Also, if you wish to write an article or recommend an author, we want to hear from you.

And the Road Trip Continues…

hile making my way back to Chicago, I decided to extend my road trip a little longer in order to avoid the harsh Midwest winter. Back in November 2014, when I started this 15 month road trip with a week in Deep Creek, MD, I received a letter from Christine Maltese, Executive Vice President and CFO at Jackson Mountain Homes in Gatlinburg, TN, saying, “You completely left the Smoky Mountains off your road trip plans!”

I realized she was right, so I drove from Orlando to Tennessee, stopping off in Alabama to see family for the holidays, and checked into a Jackson Mountain Homes cabin aptly called Great Escape. And a “great escape” is what this has been. This entire issue of VRM Intel Magazine was written from this cabin in the Smoky Mountains in front a fire. In fact, every future winter issue is likely to be written this way! The team at Jackson Mountain has been professional and attentive, and I have enjoyed every minute.

Michael Anderson and A.J. Bland founded Jackson Mountain Homes, Inc. in the summer of 1994 as a source for the finest Gatlinburg Cabins and Gatlinburg Chalets. Prior to this time both Michael and A.J. operated

successful businesses, Michael in the nuclear power industry and A.J. in the adventure cruise industry. Although Michael and A.J. had been friends since the early 70’s, as fate would have it, they both sold their Florida-based companies almost simultaneously in 1993. In 1994 the partnership was cemented. 22 years later, their professionalism is evident in everything they do. This cabin was spotless when I arrived with professionally laundered sheets and towels, a starter amenity basket, tons of area information and instructions for trash, the hot tub and for how to handle the bears! The cabin is located close to town but far enough out to be incredibly private. When the snow fell, cofounder Michael Anderson even came over to shovel the driveway. I decided to spend February here as well! Next stop…Outer Banks!

VRM Intel Magazine | Winter 2016

Latest

| From Our Partners

Innovations

In HomeAwayâ&#x20AC;&#x2122;s Software Support: What To Look For In Online Software Support

By Daniel Rourke

ost vacation rental property managers know how to evaluate the support for the software they need as far as the basics go:

l Is support available when I need it? l Is support fast? Do I get my answers quickly? l Is the person helping me resolve my problem effectively with the right solution? l If there is a problem in the product, can I get it fixed in a timely manner?

However, increasingly there is more to consider in the world of support. There are innovations in the delivery of support that can change what you should be looking for in a property management solution. Letâ&#x20AC;&#x2122;s briefly cover some of the latest thinking and newest technologies.

VRM Intel Magazine | Winter 2016

Just in Time Training

Finding the Answers You Need Quickly

The old model for training was to deliver a monolithic set of classroom sessions for all of your staff all at one time. While these classes were comprehensive, they suffered from several big limitations – enormous dedicated staff time, too much information, and from teaching tasks that will be forgotten by the time they are to be performed.

Now more than ever, getting quick answers is important to you. You still want a software support organization with involved experts for when you have difficult issues. However, when you have simple questions, you would likely prefer a fast simple way to find answers to them 24/7.

A modern training program breaks down that training into small bites that are available instantly, right when you need the training. There is no delay in signing up, scheduling, paying, etc. These solutions provide relevant, step-by-step education on the most important aspects of your software and using the newer advanced features. They are perfect as a refresher for those tasks that the staff performs occasionally along with comprehensive training for new staff members. In our HomeAway Software University offering, we’ve seen significant customer usage and positive feedback on our free online self-paced classes. In 2015, there were 700 online courses completed by clients with great satisfaction ratings.

Online Community Forums

Beyond just a simple searchable database of self-help articles, you should look for multiple ways you can access and locate what you need. For example, at HomeAway Software we provide multiple approaches to getting self-help. You can: l Search via a search engine when you are looking for specific help, but also extend your reach across both self-help articles and the discussion forums in our community that allow you to find more comprehensive answers. l Read our product-specific User Guides when you want to browse through a logical view to find what you need. l Have us do the searching for you. We perform an automatic search when you create a new case on our support websites, so you don’t waste time waiting for a case response when there is already an answer at your fingertips. If you add these three areas to your list of important support capabilities you need from your software providers, it can yield a more robust support environment that means you and your staff spend less time getting support for your software and more time focusing on your business. http://software.homeaway.com/vacation-rentals/support/training

In the past, your vendor was the sole source of information on using and optimizing your software. But with the explosion of online communities, you should now look for software partners that have a commitment to an online community of users. You can use that community to take advantage of your peers’ wealth of industry knowledge and share your own best practices for using the software and running your business. You can share your questions, not just with support experts, but with other vacation rental managers using your software to: l Get ideas on ways to apply the software to your specific needs. l Find out how others solved problems. l Choose between possible options for configuration and processes. In late 2015, we opened our new HomeAway Software communities and have enabled over 3,000 users to get online to share and learn from each other. One note: It does take a little time for a community to get started and grow, so you should look for the community and the commitment to it - not just volume of activity.

Dan is the Senior Director of Software Support for HomeAway Software. He has been a software and customer service geek for as long as he can remember. After a career in software development and management at IBM, Dan had his first assignment in Customer Support and has spent a long period in the trenches learning at the point of intersection of product potential and real world implementation success. Prior to HomeAway Software, Dan was Vice President – Global Customer Support and Training at Cadence Design Systems and had several planning, strategy, and software development positions at IBM.

VRM Intel Magazine | Winter 2016

| From Our Partners

The 7 Deadly Sins of Distribution for Vacation Rental Owners and Managers

and How to Avoid Them

FREE DOWNLOAD

By Michael Charalambous, Director of Business Development

voiding the “7 Deadly Sins of Distribution” will put vacation rental managers on the path toward smart distribution, which means optimal positioning on OTAs and increased bookings from the most profitable travelers.

Deadly Sin #1: The One-Week Minimum

The first of the seven deadly sins is often the biggest hurdle for vacation rentals, but it is crucial in the current online travel climate. It is time to move away from the seven day stay. In fact, it is time to consider a stay that can be as short as two or three nights. Some vacation rental companies have started treating their rentals more like hotels — and they are getting excellent results and are seeing increasing daily rates for shorter stays. An additional benefit of a shorter minimum is increased property visibility among travelers that are planning longer stays. Deadly Sin #2: Stagnant Rates

Flat rates may feel safe and comfortable for many vacation rental owners. However, a stagnant pricing strategy inevitably loses money with the lower ADR. Stagnant rates do not yield to the market. If inventory is at a premium,

When crafting promotions, there are four primary types from which to choose: • Percentage off | • Free nights • Money off | • Upgrades

Tip: Focus on percentage off and free nights; they perform best. While OTAs will make exclusive promotions available, offers do not have to be delivered to every channel, but in the interest of both rate parity and algorithm placement, it makes sense to widely distribute these promotions. Deadly Sin #5: Not Pooling Inventory

When it comes to OTA inventory, vacation rentals will find strength in numbers. While it may seem wise to break up inventory to spread across the channels, pooled inventory makes a rental much more compelling to the OTAs and affords more operational benefits such as: • Increased OTA rankings — and occupancy • Reduced manual updates and mistakes • Increased vacation rental revenue and decreased operational costs Deadly Sin #6: Too Few Travel Reviews

Travel reviews are among the ways vacation rentals can distinguish themselves from the competition. 95% of travelers use reviews to make booking decisions. In other words, reviews are an integral part of the booking process. Prominent and positive travel reviews can substantially increase the likelihood of better OTA rankings and increased occupancy. Deadly Sin #7: Not Yielding Rates

prices should increase. If inventory is not moving, promotions should be created to stay competitive. Checking local rates of similar unit types, as well as being aware of significant events in your area, is a start toward more fluid — and profitable — rates. Deadly Sin #3: Bad Photos

Travelers are visual. Not only are they inspired by imagery, but they also use photos at nearly every juncture of a travel decision. While rates may be the top decision-making factor for travelers, photos are the second factor. If the images do not speak to the guest, they move along. Use high-quality, high-resolution images that are well lit, showcase amenities, show the view and highlight images of the high season. Stick with what travelers love about the destination when drawing them in. Deadly Sin #4: Lack of Promotions

Distribution channels value promotions, and fortunately, so do travelers. According to a 2015 TripBarometer, 47% of US travelers report that special offers play a major part in booking decisions and 80% of OTA bookings include promotions. 22

VRM Intel Magazine | Winter 2016

Yield management benefits even the smallest vacation properties. In fact, in Hospitality Technology, Lin Grensing-Pophal suggests, “smaller facilities may feel the direct impact of revenue management even more than larger counterparts.” Though yield management can be timeconsuming, with revenue managers continuously monitoring the competition and inventory to set rates that maximize occupancy and profit, technology can handle the process from start to finish with minimal management. Systems such as LeisureLink’s Automated Revenue Management (ARM) incorporate competitive rates and demand, inventory levels and days remaining to determine the best rates. Properties using ARM have grown revenue at three times the rate and have grown bookings at five times the rate of those who do not. The complexities of yield management, including market considerations, demand forecasts, inventory levels and resulting rate strategies, are well worth the investment in time and technology. Learn more about engaging today’s travelers by downloading the free ebook “7 Deadly Sins of Distribution” at Content.Leisurelink.com/7-Deadly-Sins-ebook.

YOUR LINK to more bookings online, oďŹ&#x201E;ine, anywhere.

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Schedule a Demo Today at LeisureLink.com or visit our booth at any VRMA conference

VRM Intel Magazine | Winter 2016

| From Our Partners

The Smart Home Tug-of-War

Between the Property Manager and the Homeowner

90%+ Of Homeowners Opting In

Your Homes Will Become Smart Homes. . . One Way Or Another

magine this. You have guests staying in one of your rental homes, and the homeowner decides the temperature is too low, so she changes the thermostat remotely using the Smart Home product she bought at Home Depot. The guest notices it’s getting too warm in the house and cranks up the air conditioning, at which point the homeowner turns it down again. In addition to the home getting warmer, the guest is going to get pretty steamed as well. Unfortunately, this scenario is being played out all over the country, and not just in warm climates. Cold climates are seeing this same tug-of-war between the guest, the homeowner and the manager. It isn’t science fiction. It’s real. And if it hasn’t happened yet with your vacation rental properties, it will. It is just a matter of time. Smart Home Is More Than Just Going Keyless

It all started with the advent of keyless technology. Many vacation rental managers have discovered the security advantages of discarding their outdated mechanical keys which are prone to being stolen and copied. Keyless technologies solve a myriad of security problems and make guests and homeowners feel much better about the property. But Smart Home for vacation rental managers has taken us way beyond keyless technology. It adds an entirely new dimension of management with the addition of thermostats, pool temperature control, lighting control, security cameras, motion sensors and door access, all monitored and controlled remotely from a central location using an enterprise-grade system. Awareness Is Growing

Smart Home consumer-grade technology is quickly gaining a foothold with the public at large thanks to the hundreds of millions of dollars being spent on Smart Home advertising by Apple, Samsung, LG, Google, Staples, Philips and more. All of these companies are bringing a significant amount of Smart Home awareness to consumers. According to a Harris poll on behalf of Coldwell Banker and CNET, more than one in four U.S. adults have Smart Home products in their home. Among millennials, it’s closer to 50%. And 45% of Smart Home users say they are saving money on average of about $98 per month. Homeowners are going to their nearest Home Depot, Lowes, Apple Store or wherever to acquire consumer-grade Smart Home devices for their home – without telling you, their vacation rental management company. Once homeowners install their own system, they are going to be reluctant to install something new. So the longer you wait, the more difficult it is going to be to install Smart Home solutions across your enterprise. 24

VRM Intel Magazine | Winter 2016

It’s a whole lot easier to win a tug-of-war when there is little or no resistance on the other end. That’s why you need to act now. What you will find may surprise you. Because of the increased awareness, homeowners are very receptive to Smart Home. PointCentral research has shown that 90%+ of vacation rental homeowners are opting in to a Smart Home program offered by their management company. They recognize the security advantages, the energy savings “My first conversation with a VERY and the increase in hesitant owner took place this morning. guest satisfaction. It was a VERY easy conversation and In almost all cases, they are 100% on board.” these solutions will cover the cost of Scott Pence, Owner installation and the Sunriver Lodging monthly fee. Enterprise vs. Consumer Grade

With a DIY consumer-grade Smart Home system, control is limited to a single property. With an enterprise-grade Smart Home system, you can control ALL of your properties from a centralized location. With PointCentral, you can even control your properties from your smart phone or other mobile device, including your Apple Watch. The Cellular Advantage

There are a lot of Smart Home choices on the market, and nearly all of them use the Wi-Fi system installed in the property – an unreliable model. At PointCentral, we use the cellular network to monitor and control the Smart Home devices in the home. Every property gets an easy-to-install cellular hub that communicates with your local cellular provider – with no additional cellular costs – even if you only get one-bar service. Cellular is much more reliable than Wi-Fi and doesn’t require someone to go out to the property to reset it if there is a power drop or internet is interrupted. Take Control Before Your Homeowners Do

Many VRMs across the country are taking notice of homeowner interest and the cost savings of Smart Home and are rushing to install it for their properties – like Seaside Vacations, Bennington Properties, Bluewater, Florida Dream Homes, Fripp Island Resort, Hobbs Realty, Outer Beaches Realty, Plumlee Gulf Realty, Village Realty and Winter Park Lodging – just to name a few. They recognized the value of enterprise-wide control and led their homeowners to it. So do yourself and your homeowners a favor. Get Smart Home now before you lose control.

VRM Intel Magazine | Winter 2016

| From Our Partners

SMART MARKETING HABITS TO ESTABLISH IN

2016

By Julia Whipple Director of Marketing, Bluetent

ome January most of us create New Year’s resolutions that are nearly impossible to sustain both personally and professionally. While the intentions behind our lofty vows are great, many times they are simply unsustainable. When we create unrealistic resolutions from a digital marketing perspective, we ultimately miss out on laying the groundwork to create lasting, effective changes, to execute best practice initiatives that become second nature and to keep honoring these marketing strategies even when we get wrapped up in the midst of a busy season. As we enter the second month of the New Year, now is a great opportunity to revisit your “digital marketing resolutions” and make adjustments that will achieve year-round success and ultimately convert more travelers to guests. By doing so, you will effectively leverage your marketing channels and generate the highest return on investment. With the vacation rental marketplace as competitive as ever, here are three tactics that will better establish your brand amid the endless number of OTAs and corporate entities, and they will keep travelers returning year after year. You will discover how to focus entirely on the guest experience and provide users local information that intrigues and excites. In order to successfully implement these tactics, you must first take a step back, understand your audience and what motivates travelers to book. Then use this information to hypothesize, test, analyze and make data-driven decisions to improve the user experience and increase online bookings.

1. Create Messages that Connect & Inspire Over the years, travelers have become increasingly savvy and the once traditional “batch and blast” messages are antiquated and no longer as effective. Now, travelers demand personalized, relevant information delivered at the most opportune moment. While the idea of segmentation may be daunting, we suggest starting simple, considering your ideal guest and creating content for this persona that will truly connect.

2. Put Yourself in Your Guest’s Shoes Envision your guests and the process they are subjected to when planning a vacation. They will no doubt research numerous sites before committing to a location, property and experience. That said, create a booking funnel that is clean, streamlined, easy to understand and captures their attention from the moment they land on your site. Be sure to ask yourself, “What would improve their planning experience?” You may want to cleanup property detail pages, provide rich photography, content and videos, enable favorite sharing so guests can plan collectively as a group, generate automated trip reminders, extend concierge or trip planning services or a myriad of other features that will improve the user’s overall experience and inspire them to book.

3. Tell Your Story About Bluetent: We are a digital agency and specialize in the vacation rental, resort and travel and industries, providing strategic consulting, brand design, web development, email marketing, social media and search/inbound marketing services. We build the best mobile solutions for the VRM industry, integrating fully with your property management software in a quick and organized fashion. And we’re here to help you create a killer marketing strategy for your vacation rental business.

VRM Intel Magazine | Winter 2016

To tell your story is to let guests know what you stand for and what makes your management company unique. Your story and brand will distinguish your organization from the hundreds of options accessible to travelers. The more streamlined you are with telling your brand’s story, the more it will emotionally connect and resonate with your guests. Your brand should be consistently reflected across every channel from print to digital marketing and from call centers to guest services. The goal is for guests to remember your brand long after they leave and continuously while they plan their next vacation. The three habits mentioned above will no doubt enhance your brand, make access easy for travelers and reinforce a user experience that invites guests to return directly to you. This is what will separate your management company from the intensely competitive landscape. The habits require planning and strategy but they will certainly improve the health of your overall digital strategy with an evident return on investment.

VAC AT I O N R E N TA L M A N AG E R S

Turn Your Booking Engine I N TO A

Hospitality Engine

Oceanfront

Pet Friendly

Bike Rental

Yoga Class on the Beach

Grow Your Business by Providing Complete Vacation Experiences to Your Guests. With our hospitality-powered websites you can package everything from tours, activities, transportation, and even yoga lessons, so your guest can plan less, and relax more.

Packaging doesnâ&#x20AC;&#x2122;t need to be hard. Contact Bluetent today and see what a hospitality-powered responsive website can do for your business!

Responsive Web Design Web Development Search Engine Marketing Email Marketing Design and Branding Social Media Online Advertising

bluetent.com | 877.704.3240

| From Our Partners

BUILDING A NEW COMPANY IN THE VACATION RENTAL MARKET Q:

What sort of problems did you encounter along the way, and how did you overcome them?

stablishing a startup in the vacation rental market is no easy task. Not only do you have to convince managers why they should buy your new product, but you have to convince them your company will be around next year, the year after that and the years beyond. There have been so many startups in this market that have come and gone that vacation rental managers are understandably reluctant to engage with a new company. We sat down with members of the executive team at eCleanit, one of the newest suppliers to the vacation rental market, to ask them about their company, how they intend to overcome this market reluctance and what it takes to build a successful startup.

eCleanit Executive Team Scott Kameron, CEO Nathan Brown, CTO Evan Garber, CFO

Q: How did eCleanit get started?

cott: Our founding is not the typical startup story. The three of us have been partners for a number of years with another company called EVS (Escape Velocity Systems) in Boulder, CO, which was established nearly 15 years ago. EVS develops enterprise Process Manufacturing and Warehouse Management software and has been a very successful business for us.

Etver since receiving a Masters Degree in real estate and construction management, I’ve always had my eye out for a product that would appeal to the real estate market, in particular, the growing vacation rental market. A friend of mine noticed the difficulty I was having scheduling a housekeeper to clean a rental property that I owned and she commented that it would be great if that process could be automated. That was what got us started back in early 2014.

athan: When Scott approached Evan and me with the idea for a housekeeping process automation system, we immediately recognized the synergy with our EVS business which requires us to understand processes, eliminate waste and be more efficient – what we know as Lean Manufacturing. We recognized that we could apply those same lean processes to other operational fields including the real estate and vacation rental markets.

cott: We knew there were existing systems out there to help VRMs schedule their housekeeping, but most of those were components of larger systems that many small and mid-size managers could not afford or were simply overkill. We developed a solution that, from start to finish, would only take the end user a couple minutes to setup before they’re ready to begin scheduling the first cleanings with little or no learning curve and no complex manuals to digest. 28

VRM Intel Magazine | Winter 2016

athan: We knew from the outset that we didn’t want to create another app that people would have to download and look after, so we set out to develop a web-based application, a non-app. Our biggest mistake was thinking that the housekeeping process is simple and straight forward. When we looked deeper into what it takes for a computer to have a conversation with a human, we quickly found that there are a lot of edge cases that you have to handle in the software which makes the automation complex. But with a lot of effort and some help from UX designers, we were able to overcome these issues and develop a product that not only automates housekeeping, but does so with the same technology that people are already using daily: simple SMS text messaging and email.

How can the vacation rental market trust that you will be around in the future?

cott: With EVS backing eCleanit, we are fully selffunded. We designed a system that has relatively low overhead and have financially capitalized for the long haul to see it through to success. Most of all, we are having fun – a lot of fun. Nathan, Evan and I have put together a great team that has helped us develop a great product that is robust and scalable. We’re confident our technology, our team and our commitment will resonate with the vacation rental market.

What can you tell us about the early acceptance of the product?

cott: We wanted to make this a “no brainer” type of decision, so we priced it accordingly, at just $2 per job. Our customers just forward their confirmation emails to us and the rest happens automatically – from scheduling to paying their housekeepers – while the manager monitors everything from his dashboard. We’ve heard comments from early adopters that eCleanit is a “cool product” and a “right-sized” product and that our price point is spot on. We’re also getting a lot of great suggestions for additional functionality, like exporting, reporting, integration, etc., all of which we’re building into our accelerated product road map.

Q: Where do you see eCleanit in five years?

cott: I see two products forming and evolving: first, our existing one, a housekeeping automation system for owners and small to mid-size VRMs with integrations to the systems they use, for example, Escapia. The second is a full blown, feature rich system for larger VRMs that integrates with the “big” Property Management Systems.

athan: I see us integrating the human-to-computer conversation with other service providers. eCleanit then becomes part of an ecosystem of service providers that works with the short-term rental industry.

VRM Intel Magazine | Winter 2016

| From Our Partners

RealTimeRental’s Tenant Portal Offers CRM Functionality, Integrated Trust Accounting and Increased Distribution RealTimeRental, the leading cloud based vacation rental software, has recently announced the launch of their new Tenant Portal. The RealTimeRental Tenant Portal allows vacation rental companies to give their rental guests online access to their vacation information and the ability to make online payments.

“K

eeping up with the current trends in the vacation rental industry, we wanted the RealTimeRental Tenant Portal to help Property Management and Real Estate companies offer their rental guests a secure and modern online travel experience,” said Sherry Tomasso, Co-Founder of RealTimeRental.

The lease history section of the Tenant Portal also features a rebook request form. Rental Guests can inquire about availability on their past favorite rental properties and send a message to the property manager right from within the RealTimeRental Tenant Portal.

Through the RealTimeRental Tenant Portal, rental guests can view the details of their bookings and access information about the rental property including photos and amenities. Rental guests can log in to their secure tenant portal account and make payments on existing bookings with credit cards or electronic check, if the rental company chooses to accept these payment types.

The launch of the Tenant Portal follows the successful release of www.RentalRetreat.com, RealTimeRental’s distribution portal that was launched earlier this year.

“Today’s traveler is used to planning their vacation online. In addition to RealTimeRental’s property links that integrate with existing websites and our property owner portal, we wanted to give RealTimeRental clients another way to interact with their rental guests online,” said Tomasso. “The Tenant Portal was designed with not only the professional vacation rental manager in mind, but also the overall rental guest experience.” Designed to be user friendly, the RealTimeRental Tenant Portal has a video tutorial menu that walks the rental guest step by step through the payment process. Rental guests can also update their personal contact information on the Tenant Portal, and it will be automatically updated in RealTimeRental vacation rental software. All payments received through the Tenant Portal are seamlessly integrated with RealTimeRental’s, industry leading, trust accounting package. “One of the main benefits of RealTimeRental’s trust accounting package is the fact that it is fully integrated with our comprehensive reservation system,” said Joseph Testa, Co-Founder of RealTimeRental. Whether payments are received through the tenant portal or processed through the rental office, RealTimeRental creates a full audit trail from the moment the money is received through payout. Rental offices can keep track of their finances all in one system without having to purchase or use additional accounting software. “Many RealTimeRental clients are vacation rental companies who have built lasting relationships with their rental guests and have repeat tenants year after year. Because of our client’s high guest retention rates, we decided to include guests’ past rental history in the Tenant Portal,” said Testa. The RealTimeRental Tenant Portal displays the past rental history of the guest, as well as details about the vacation rental properties that they have stayed in.

“It is very important to have an online presence in today’s vacation rental industry. We are constantly working to bring digital marketing opportunities to RealTimeRental clients,” said Tomasso. Unlike many other popular distribution channels, RentalRetreat exclusively hosts professionally managed vacation rental properties. “Our fifteen years of experience in the vacation rental industry has truly shown us the extra value and protection that professional vacation rental companies provide to travelers. Rather than letting home owners list their own properties, we wanted our distribution portal to exclusively host vacation rentals that are professionally managed,” said Testa. RentalRetreat has over 40,000 professionally managed vacation rental properties across the United States, Mexico, and Costa Rica. Travelers can have the peace of mind that every rental property hosted by RentalRetreat has been inspected and approved by a legitimate vacation rental company. RentalRetreat is a subscription based distribution portal, meaning that the Real Estate and property management companies who host their inventory do not pay by the lead or by a percentage of the transaction. “We are pleased with RentalRetreat’s lead conversion rates and how well the distribution portal has been received by the RealTimeRental users. We are looking forward to allowing any professional vacation rental company to participate with RentalRetreat, regardless of their rental software provider,” said Tomasso. Currently the ability to host rental inventory on www.RentalRetreat. com is only open to RealTimeRental clients, but the programming team at RealTimeRental is working towards allowing non users to host their inventory on the distribution portal.

About RealTimeRental RealTimeRental is the premier vacation rental software solution for 200+ rental offices in the United States, Caribbean, Mexico, and Costa Rica. As the first web based vacation rental system on the market in the year 2000, RealTimeRental has consistently provided a comprehensive reservation and accounting system for the past 15 years. As a cloud based application, RealTimeRental vacation rental software clients have the peace of mind that their reservation management system can be accessed 24/7 via the cloud. For more information about RealTimeRental, the Tenant Portal, or RentalRetreat please visit www.RealTimeRental.com or call 888-828-2303. 30

VRM Intel Magazine | Winter 2016

| Business

Vacation Rental Management Company Acquisitions By Amy Hinote

n 2015, the vacation rental industry saw a staggering $2.2 billion in disclosed venture capital injected, Expedia purchased HomeAway for $3.9 billion and Airbnb boasted a $26 billion valuation. In addition, the vacation rental industry is seeing investment, consolidation and acquisition among vacation rental management companies. “The new year is starting off where 2015 ended, with a flurry of new activity,” said Jim Olin, founder of C2G Advisors. “There is a chance 2016 will eclipse prior year activity by double.” With advancements in technology, the ability to mass market, improved abilities to centralize operations and a more thorough understanding of the vacation rental industry, several innovative business models have recently sprouted with the goal of being a leading national multi-destination vacation rental provider. The table below lists the acquisitions of vacation rental management companies in 2015 and 2016 at the time of publication. Over the last three years, the companies making the majority of acquisitions are Natural Retreats, Vacasa, Vacation Rental Pros and Wyndham Vacation Rentals.

Purchaser

Acquired

Units

Month Year

TowneBank

Oak Island Accommodations

700

Jan

2016

Oranj Palm Vacation Homes

Catalina Island Vacation Rentals

200

Jan

2016

Vacasa

Black Diamond Mgt, Sun Valley

Jan

2016

Vacasa

Quiet Creek Vacation Rentals, Idyllwild, CA

Dec

2015

Natural Retreats

Vacation Big Sky

Unknown

Dec

2015

Vacation Rental Pros

Hilton Head Rentals and Golf

230

Dec

2015

Natural Retreats

American Mountain Rentals

Nov

2015

Vacasa

Seaside Services

Nov

2015

Vacation Rental Pros

Five Star Vacation Rentals

Sep

2015

Vacasa

Chelan Vacation Properties

175

Aug

2015

Natural Retreats

Mammoth Front Desk

Jul

2015

Wyndham Vacation Rentals

ResortQuest Whistler

600

Jul

2015

Mike Harrington

Topsail Realty

170

Jun

2015

Wyndham Vacation Rentals

Vacation Palm Springs

450

Jun

2015

Wyndham Vacation Rentals

Corolla Classic Vacations

200

Apr

2015

Vacasa

Blowin in the Wind

Apr

2015

Vacasa

Mixon Properties

Apr

2015

Pacifica Companies

Sterling Resorts

1000

Jan

2015

“We continue to see increased purchase and sale activity within the vacation rental industry,” said Ben Edwards, Founder and President at Weatherby Consulting. “Having closed a number of large scale transactions in 2015, now is a great time to position a business for sale. In addition, we find vacation rental businesses that have sound financial practices and optimized operational efficiencies attaining purchase prices at the highest levels. A solid business platform and the market’s current level of demand can certainly result in significant profit for an owner.” Learn more about achieving a successful national brand in the vacation rental management industry in the article “Building a National Brand in Vacation Rentals” on page 90. 32

VRM Intel Magazine | Winter 2016

READY TO SELL YET? YOU GUEST

UNIT OWNER

WE HAVE BUYERS!

CONFIDENTIAL • DISCREET • 25 YEARS OF EXPERIENCE OVER $250MM IN VR TRANSACTIONS ALONE Brokerage Services • Consulting Services • Real Estate Services Start-Ups • Mergers and Acquisitions • Litigation Support • Restructuring and More

850-699-1828

Jolin@C2G Advisors. com

| From Our Partners

NAVIS Releases

2016 Vacation Rental Trends

By Kyle Buehner CEO, NAVIS

acation rental managers (VRMs) are in a uniquely challenging position going into 2016 â&#x20AC;&#x201D; a position with the potential for great success. An explosive market means VRMs must scramble to take advantage of increased traveler volume while simultaneously reevaluating business strategies to stay competitive. All of this sits alongside the need to serve and grow ownership. Understanding trends for the coming year is essential to effectively plan strategies and budgets. Trend #1: There is more demand for vacation rental management than ever.

According to the National Association of Realtors, last year vacation home sales were at their highest level since the organization began keeping records in 2003 (increasing 57.4 percent from 2013 to 2014), and most vacation home owners live over 100 miles from their properties. In addition, Inman News recommends these new property owners should surely have â&#x20AC;&#x153;property management options in place before they buy.â&#x20AC;? While DIY vacation owners have plenty of access to Airbnb, HomeAway and other online marketing options, the controversy over taxation and regulation as well as a consolidation of sharing sites and OTAs has made it more challenging. Most serious owners will defer to professional VRMs to ensure proper distribution and management in the coming year. In order to compete for these new owners, you should clearly convey the benefits of your particular approach to service including reservations, housekeeping, maintenance and front desk, as well as owner-specific offerings. 34

VRM Intel Magazine | Winter 2016

Trend #2: Traveler interest continues to grow.

TripAdvisor released a report on vacation rentals in March 2015, in which nearly 60% of respondents reported plans to stay in a vacation rental this year. With so much emphasis lately on “shared space” trends, clarity on the actual volume of interest in proper vacation rentals (as opposed to private accommodations) is harder to suss out. However, all signs point to substantial increases in awareness all well as a desire to book vacation rentals. For instance, recent research found growth in the rental of full homes in the shared accommodations market — from 8 percent of travelers in 2010 to 22 percent in 2014 (TravelWeekly). This means that in order to capture new travelers, especially in light of how many more third-party distribution sites are rushing in to capture vacation rental market share, your marketing strategies must be fine-tuned and prioritized according to profitability as well as long-term guest potential. Any activity that ensures that you own the guest and their data greatly increases the likelihood of converting that guest into a lucrative repeat guest. Trend #3: Vacation rental management service levels are getting a makeover.

Historically, travelers have identified lower rates as one of the reasons they choose a vacation rental over a hotel. The expanding awareness of, and confidence in, vacation rentals is changing this. The days of the value-based vacation rental purchase are slipping away as travelers adjust their expectations. For instance, MMGY’s Global Portrait of American Travelers suggests that more affluent travelers are turning toward home rental. Among those with a household income over $250,000, 21 percent used sharing economy accommodations on at least one vacation during the previous 12 months. Couple this with the increasing competition among vacation rentals, and service will become a deciding factor when travelers go to book. Providing superior service will be key in 2016, as will embracing reputation management. Both should be handled impeccably.

Trend #4: Guest acquisition costs are continuing to rise.

As vacation rentals are integrated into the traditional OTA ecosystem, VRMs are spending more on commissions. Listings site fees, such as those at FlipKey (which increased rates for both online and phone leads late last year) are on the rise as well. Recent reports suggest that the Billboard Effect, which served to drive direct bookings from third-party sites, no longer exists to balance out those hefty fees (Tnooz). While many VRMs still benefit from the marketing power of third-party sites despite the fees, long-term sustainability requires offsetting rising commission costs. To do so, you can shore up reservation sales to ensure the value of every booking is maximized. This includes implementing call tracking and regular coaching plus performance-based incentives to encourage the highest rate of conversions and maximum nightly rate. Trend #5: Vacation rental guests are continuing to use voice channels for more information and booking. Voice reservations traditionally have greater returns than online or third-party bookings. The opportunity to develop a relationship with a potential guest and to personalize the experience from the get-go often leads to a higher return — whether that’s a longer stay or an upgrade. Fortunately, vacation rental guests will continue to pick up the phone in the coming year. This gives VRMs an opportunity.

While confidence in vacation rentals has increased markedly, this guest segment is often planning a trip for multiple families and will require a greater level of confidence to make a final booking decision — one they can only get from speaking with an agent. In addition to training and performance incentives, ensure 24/7 call coverage. Travelers of all stripes expect to be able to have questions answered and make a reservation at any hour. It is now a fundamental service. Executive Summary

The vacation rental market will continue to boom in 2016. The shuffling among sharing sites, vacation rental platforms and traditional OTAs is simply a side effect of the desire travelers have expressed to have a different vacation experience, and it points toward the potential for thoughtful growth in the vacation rental market. While rising acquisition costs and marketing budgets may overwhelm VRMs, monitoring travel trends, measuring the growing interest in vacation rentals and prioritizing the value proposition will set apart the successful ones. About Kyle Buehner Kyle Buehner has been with NAVIS since its inception in 1986, investing more than 25 years developing the business. Kyle combines his knowledge of the telecom, software and hospitality industries with his entrepreneurial expertise to lead NAVIS in providing innovative sales and marketing solutions to the vacation rental management and independent resort markets. Kyle’s exemplary business and personal ethics are highly admired by the entire company and have played a key role in NAVIS being honored by the Oregonian as a Top Workplace three years in a row. From Our Partners

| Rental Regulations

Policymakers Urged Not To â&#x20AC;&#x153;Commercializeâ&#x20AC;? Short-Term Rentals A fresh approach is needed as legislators approach vacation rentals and the growing economic opportunity they provide.

VRM Intel Magazine | Winter 2016

By Matthew Kiessling Executive Director, Short Term Rental Advocacy Center (STRAC) of the Travel Technology Association

Short-term or vacation rentals are residences. Commercial enterprises are “open for business” on a regular basis. By contrast, a joint survey recently conducted by the Travel Technology Association (TTA) and the Internet Association (IA) found that nearly half (48.84%) of those who had participated in offering their home as a short-term rental did not expect to offer it again within the next two years. This statistic overwhelmingly points to the intermittent nature of short-term rentals as an accommodations option at the desire and discretion of the provider (the homeowner). Unlike hotel proprietorship, a commercial activity, short-term rental providers enter and leave the market as time and circumstances dictate. By forcing short-term rental properties into a commercial classification, states and municipalities would be casting aside the tremendous economic benefit that short term rentals bring to a given city or state. Shifting a home from the current residential use to a commercial one, if even possible, would require a significant upfront investment before an owner or host could even list their short-term rental for a short period of time.

f we learned anything about short-term and vacation rentals in 2015, it was that the growing popularity of these accommodations shows no signs of slowing down. Along with this growth has come increased attention from state and local policymakers, many of whom have quickly moved to attempt to regulate the activity through existing and often outmoded regulatory frameworks. Many of these laws fail to recognize and adequately address the new short-term renting economy, which has evolved significantly over the past decade. Short-term rentals are nothing new, but technological advances have allowed more short-term rental managers and owners to connect with a larger segment of the travel population. In reaction, local and state governments have moved to apply antiquated lodging regulations to short-term rentals, rather than recognizing the difference in the ever-expanding, peer-to-peer travel world in which they exist. Swayed by arguments about “leveling the playing field” by the hotel industry, policymakers have sought to apply existing lodging regulations – those designed for commercial hotels and motels – to homes being offered on a regular or intermittent basis by owners, managers or hosts. The result is a slippery slope that would make a person’s private residence a commercial property in the eyes of the law. Few regulatory concepts should be as concerning to vacation rental managers as the idea of forcing private homes into the same status and regulatory structure as commercial entities such as hotels and motels. First and foremost, the commercialization of short-term rentals raises enormous questions when it comes to local zoning. In many cities and towns, commercial entities are only allowable in areas already zoned for commercial or mixed use (both residential and commercial). By their very nature, short-term rentals are often favored by travelers looking for an economical and more authentic way to experience all that a city, town or region has to offer. A traveler’s desire to stay in a short-term rental rather than in a commercial establishment may be due to a variety of factors, but their desire to “live like a local” is near the top of the list. Moving to commercialize short-term rentals immediately threatens the existence of these accommodations in any area presently zoned as residential. By definition, if a city or state “commercializes” private residences being utilized for short-term rentals, those properties located in areas zoned as residential, would subsequently be disallowed as an option for travelers to stay in the future. We have seen the hotel industry use this as a public policy tactic as a means to regulate short-term rentals out of existence.

Furthermore, shifting local residences into the classification of a commercial status would inevitably lead to additional considerations of the regulatory structure that presently governs commercial accommodations. This could include necessitating a business license for each property’s owner or host, health and safety inspections, and even infrastructure upgrades for the purposes of ADA compliance or fire safety. That would mean requiring a local resident or homeowner to install handicap ramps, widening doors, remodeling kitchens and bathrooms, providing handicap parking in addition to fire sprinkler system in their home, at a cost of tens of thousands of dollars - simply to offer their home to travelers for as little as a few nights during a calendar year.

Smart regulation can only exist if policymakers are willing to acknowledge that short-term rentals are a noncommercial activity that should be considered under the same or similar guidelines and laws as those governing long-term residential rental properties, while also acknowledging the value of short-term rentals in providing flexible housing stock for travelers and economic benefit to communities. In the previously mentioned survey by TTA and IA, 61.6% of respondents believed that short-term or vacation rentals provided a valuable alternative to traditional options like hotels, while 47.2% thought that state and local lawmakers should ensure that they continue to be a travel option by legalizing and smartly regulating the activity. That’s quite a bit of support for short-term rentals among even those who may not be accessing them. According to the previous issue of VRM Intel, a much smaller percentage of the U.S. population (32%) have previously stayed in a short-term rental. Constructing a sensible regulatory structure that preserves the residential nature of a short-term rental, while formalizing and legalizing the practice will result in effective short-term rental regulation and greater compliance among providers. Applying existing regulations designed for traditional hotels and commercializing these accommodations will only result in the limiting of options for travelers, dissuading potential short-term rentals owners from sharing their homes, and worse, in some cases drive the practice underground, depriving communities of the tax money and economic opportunity short-term rentals provide. The solution for policymakers is to craft short-term rental policy that addresses the new market realities rather than trying to repurpose existing regulatory schemes and structures, hampering an industry with a very bright future. Rental Regulations

| Customer Service

“Imagine this…”: Storytelling Is Key To A

s marketing professionals across all industries know, the concept of storytelling is an integral component for success in today’s environment. You can see this approach playing out across all mediums from print to web to radio and television. Car ads are no longer about the features and benefits of the car, but rather about all of the places that car can take you. Soda ads are not so much about the taste, but about how happy you will be by sharing it with friends and family, showing bottles labeled with real names or “dad” and “grad.” Maybe the best example is the new Liberty Mutual Insurance advertising campaign where various spokespersons speak to you directly to tell a story about what happens when “you” have your first accident and the rates go up or when your current company says they will only replace ¾ of your car. Smart marketers know that storytelling is a great way to grab the attention of multi-tasking viewers, readers or listeners.

VRM Intel Magazine | Winter 2016

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

Similarly, vacation rental reservations sales agents should also incorporate storytelling into their toolbox of both written and verbal presentation techniques. As the reservations rate inquiry process has become increasingly automated, it is more important than ever to connect with the callers and email senders when there is an opportunity to do so. Being in the telephone mystery shopping business, I often hear recordings of reservations agents speaking with our KTN callers. Too many agents sound as if they think of their job as being a “technical support” role of simply helping the caller find out what rentals are available. As addressed in a previous article, it is important for agents to use a more conversational and less transactional sales approach. Kennedy, D. (2015, October). VRM Intel, Issue 1, 46-47. These days many reservations inquiries are coming in via email. Likewise, more often than not, today’s agents simply respond by sending back a list of links to the properties that are available that fit the sender’s dates and specifications. If anything, the response includes a template of standard copy, such as:

“Thank you for your inquiry regarding (insert name of property and/or dates requested.) Below are links to the properties that are currently available. You can book these online or call us directly…” If your vacation rental sales team responds in the same way as everyone else does, they are ensured only of getting their “fair share” of the business in the market. As I often say in my workshops, “If you want to get the same results as everyone else gets, just do the same things everyone else does.” If your goal is to get more than your fair share of results, you have to find ways to stand out from the competition. Providing a laundry list of what is available and sending the inquirer back online to continue their research will not help you increase conversions. Instead, make sure your agents are using an investigative sales process to engage the caller and “unmask” their story whether asking during phone conversations or when responding via email. Train them to ask the single most important question circa 2016: “As I’m checking availability, are there any questions I can answer for you such as about the location or amenities?” Thereafter, make sure your agents respond to the caller’s questions and that they sell to any comments, remarks and “clues” as to what caller is looking for by

Reservations Sales Success using a storytelling approach to selling the overall vacation experience. Do not just be a “unit renter.” Here are five training tips: B Engage callers (and senders) by beginning benefit statements with wording such as “Imagine sitting out on your balcony in the evenings and seeing…” Or “Imagine your family/participants enjoying…” thus grabbing their attention as you take them along for the ride. C Lead sentences with “you” as in “you will enjoy…” or “your family will experience…” instead of the normal tendency to lead with “we have” or “we offer” or worse yet – “it offers.” (Vacation rental homes should never be referred to as “it.”)

D Use these techniques to highlight the most relevant offerings. Of course

it is easier to focus on relevant benefits if you have taken time to connect with the caller or email sender and to investigate and discover their needs and preferences.

E Tell real-world stories about the past experiences of similar guests you have hosted such as “This is one of our most popular homes/locations for families like yours because…” Or “Our romance couples always comment about the (privacy, view, etc…)” F Paraphrase and restate in writing what you have discovered about their needs to lead into the stories of personalized benefits. “Since you had mentioned… your (family or party) will find this convenient because…” Customer Service

| Customer Service

Angry Guests Can Still Become Loyal By Larry Mogelonsky, MBA, P. Eng.

ngry guests with insurmountable problems…we’ve all encountered them. Rivalry, opposition, antagonism, conflict or whatever other synonym you deploy to convey obstacles in the workplace like this would be better viewed as helping your business goals instead of detracting. What doesn’t kill you makes you stronger, right?

Negatives are Not Necessarily Obstacles

When applying this adage to guest-staff interactions, it’s all too easy to deem livid, annoying, testy, arrogant, needy, rude or whining guests as enemies to your organizational goals which are likely to be high guest satisfaction scores and the pursuit of higher occupancies for heightened profits. When we are confronted with opposition of this nature, our first thoughts might run to something like, “This person is being unnecessarily irate; he’s asking us to perform tasks that are far beyond what we normally do for our guests.” It’s a little trickier, however, to identify how such opposition can actually improve your operations.

To start, a good practice is to view your negative-minded guests not as obstacles to your chosen path but as opportunities to learn, grow and better define the path that you are on.

VRM Intel Magazine | Winter 2016

To help explain this, I’m drawn to movies and television where, as you probably already know, conflict and its thespian equivalent, drama, are the essence of quality screen time. Without them, a show or film quickly becomes a yawn-fest. Drilling down to a specific film genre, take the buddy cop archetype for example. In successful movies of this type, the story usually finds two central characters with diametrically opposed outlooks on life, forced to work together for the same goal. They argue and they squabble,

for a staffer to apologize and leave it at that. It’s a whole other level when the staffer rises to the challenge, recognizing that the guest’s emotional state is temporary and that if they work together to solve the problem then their bond will become all the stronger. I’d even argue that the distraught customers whom you do give that extra oomph to ameliorate their grievances will become your biggest advocates. That’s where the “loyalty” part of this article’s title comes in. Very few people connect with a mediocre or above average experience at a hotel. But you would definitely remember a place where the team members gave it everything they had to solve a percolating crisis. The Chicken is Dry

To give you a comparative example, I have a friend who derives a mild sense of pleasure by testing the wait staff at new restaurants. He usually orders the chicken, and when the server returns to ask, “How is everything tasting?” he will automatically reply, “The chicken is dry.” Having cooked chicken myself consistently over my lifetime and knowing roughly what methods a professional chef might utilize (sous-vide, deep frying, 24-hour marinades, dry roasting at a low temperature and so on), I can say with certainty that chicken is quite hard to botch. But my interloping friend’s motivation isn’t to identify the chicken as dehydrated or not. He’s testing the server’s reaction. Do they simply apologize with a faux frown and walk away? Or does the server ask forgiveness then prod deeper with follow-up questions to generate rapport and find the actual issue at heart? Does the restaurant give him a little extra as compensation (a free drink, a complimentary dessert and so on)? Or does the server bring out the chef so that a real conversation can ensue? Corporate Culture

This thought process can help augment the way guests see your company, but it can also aid with your corporate culture. Competition at work should not be enveloped in negative energy; your rivals and their actions are simply more fuel for self-improvement. Moreover (and to build on a previous article on my blog lma.ca/blog), this affects your “intrapreneurs.” Often these are the people who ask a lot of questions, get emotional about having their way and are the designated devil’s advocates on proposed ideas. What might be perceived as rigidity to progress should instead be seen as a chance for enhancement. After all, this perceived antagonism is much better than the opposite whereby poor ideas may be implemented because everyone was too afraid or apathetic to raise their hands during the planning meetings. Silence in these instances, and when it comes to guest interactions, is never golden. Confront hard situations, get people talking and conquer adversity in pursuit of better operations.

but in the end, they realize that their commonalities outweigh their differences. In fact, their relationship is often on more solid ground because they went through hell and back to reach the finish line. It’s this adversity, and the fact that they conquered it, that helps form their solid and sincere bond. Conquering adversity makes their friendship stronger. Guest Application

Apply this paradigm to your team’s communication efforts with distraught guests. Both sides have more or less the same goal – the best experience possible for the guest – and yet they have vastly different emotional states of mind entering the interaction. The staff member is trained to be calm, attentive and perhaps even a tad subservient while the guest is more often than not irascible, demanding and more than a bit anxious. It’s one thing

Larry Mogelonsky (larry@lma.net) is the founder of LMA Communications Inc. (www.lma.ca), an award-winning, full service communications agency focused on the hospitality industry (est. 1991). As a recognized expert in marketing services, his experience encompasses Four Seasons Hotels & Resorts and Preferred Hotels & Resorts, as well as numerous independent properties throughout North America, Europe and Asia. Larry is a registered professional engineer, and received his MBA from McMaster University. He’s also a principal of Cayuga Hospitality Consultants, an associate of G7 Hospitality and a member Laguna Strategic Advisors. His work includes three books “Are You an Ostrich or a Llama?” (2012) and “Llamas Rule” (2013) and “Hotel Llama” (2014). Customer Service

| Customer Service

How to

Attract Families with Small Children to Your Vacation Rentals By Nikki Woodson Blair

hen it comes to planning a family vacation, every parent’s objective is to find a place where EVERYONE can relax and have fun, a home away from home. If the family has small children, planning a trip can be a chore.

3 Reasons to Market to Families with Small Children B Families with small children often take advantage of oﬀ-season travel. They often book outside of peak season to avoid crowds and save money. These families do not have to wait for the school holidays to travel and often choose to go on vacation during the shoulder season, when weather is milder and crowds are gone. What does this mean for you? It means more off-season bookings. A company based in Europe that specializes in vacation rentals for families with small children averages almost 65 percent of their bookings outside of peak season. 65 percent! That is a lot of extra bookings! More bookings mean an increase on your return on investment. C Family travel, including multigenerational travel, is leisure travel’s fastest growing niche. More and more parents and grandparents are traveling with their children and grandchildren. Like other travelers, families are looking for vacation rentals with amenities. If you have the gear that families need, you stand out from other vacation rentals that categorize themselves as “family42

VRM Intel Magazine | Winter 2016

friendly” but really don't offer much for families. Sadly, this is the case for most “kid-friendly” rentals currently out there. Ask yourself, “What are my guests’ needs and how can I help them?” Provide amenities for families and watch your bookings increase. D Many travel-related decisions are made by women, most of whom are mothers. Most moms trust other moms as sources when planning, and the vast majority of moms use social media and read blogs to help make decisions regarding travel. Dads, of course, make a lot of decisions too, but mom-blogging is a big business in today’s world. (Dad blogs are gaining steam though!) There are many family travel bloggers out there that have captive audiences: parents looking for places to go and things to do with their families. Target this demographic, provide for their needs and market directly to them. You will see more bookings and happy family reviews! For vacation rental shoppers, finding family-friendly accommodations – where both kids and parents can enjoy the vacation – is difficult and time-consuming. Any vacation rental can list itself as kid-friendly on most sites. No standards exist, so parents are left to sift through hundreds or even thousands of rentals looking for a place to fit their needs. (I know! I have done this! It’s insanity!) What do parents need and how do you attract families with small children to your vacation rental?

Think Safety

l Nightlights

An item that often gets overlooked. Simple, No parents can relax — ever — if they feel their inexpensive additions to your home’s amenities children are not safe. There are simple steps that can make a big impact. you can take to ensure the safety of children and l Toys, books and games provide an enormous comfort to parents. Fun games for a rainy day or toys for outdoor l Make stair gates available. fun are much appreciated by families. They are portable, lightweight and easily stored l Baby monitor out of sight when not needed. Mom and dad will be forever grateful not to have to spend If you have a large house or a nice outdoor their entire vacation chasing a toddler who space, a baby monitor can help parents relax wants to climb a set of stairs over and over while children are sleeping, knowing they can again. hear them if they are needed. l Provide outlet covers as a temporary solution for parents during their stay.

Simply having them available in case parents want to use them is enough. Babies remain safe and the covers can easily be stored away for the next guest’s stay. l Swimming pool safety is key.

Every private pool should be protected so that children cannot wander outside and easily access the water. This can be accomplished with a gated area, a pool cover, a pool alarm or alarmed doors accessing the pool area. Multiple barriers are best. Even without children as guests, for liability reasons, pool areas should be thoughtfully planned out.

Add Gear Parents don’t want to travel with “everything but the kitchen sink.” Provide gear that families need and you will have happy guests! These items are an inexpensive investment and increase the probability that your rental is chosen over others that do not provide such items. Adding amenities is a great way to make your home stand out from the crowd. If you have a lot of family bookings, focusing on their needs can not only increase bookings but increase guest satisfaction. Here are some things to think about adding to attract families with small children: l Kid-friendly bedrooms

Cute, comfortable kids’ beds or bunk rooms make for a fun environment for the kids. l Highchair

Happy mommy and baby! And much less mess than feeding baby on dad’s knee at your beautiful breakfast table. Invest in a fold-away highchair if you are short on storage space. l Crib or Pack n Play

Baby can actually sleep and parents can relax. Who can have fun on vacation if they aren’t getting a good night’s sleep? l Bed rails

Another great, inexpensive item that is easily stored away if not needed. Parents often worry about toddlers falling out of bed at night — did we mention how important sleep is?

Pump Up Your Marketing Once you’ve made your home safe and added family-friendly amenities, you’ll need to reach your target market. First, you can update your vacation rental website or listings. Here are three tips to help you do that: B Rewrite your listing descriptions. Make sure to include all your new gear in your listing. Let parents know that you have what they need available. Don’t leave anything out; even the smallest detail adds value to your home. C Add photos of your kid gear. Take pictures of toys in the pool or a game set up on a table. Include photos of the kids’ rooms (made as inviting as possible). Show parents what you have to offer. Let them envision their family in your space. D Include suggestions for family-friendly outings nearby. Can you recommend a great family-friendly restaurant nearby or a fun rainy day activity for little ones? Add recommendations specific to your target market. Give them the best of your area. Also, if your home is particularly familyfriendly, you might think about listing on niche websites that focus on family travel. Clanventure.com is the first vacation rental site that specializes in U.S. family travel. If your home is in Europe, Tots to Travel is a top familyfriendly vacation rental agency. By listing on these sites, you market your home directly to your target niche.

Nikki Woodson Blair is a family travel guru and admitted perfectionist. When planning trips for her family, she sifts through hundreds of homes, looking for just the right place for her family’s holidays. Realizing that most parents don’t have the time or patience for such insanity, she created Clanventure, aiming to amass the best and safest family-friendly properties available. Currently, Nikki lives with her husband, three kids, two dogs, two cats, a bunny and two hermit crabs near Austin, Texas. When not working, she can usually be found on a trail somewhere or planning the next family adventure. Customer Service

| Owner Relations

10 THINGS

VACATION RENTAL OWNERS LOOK FOR IN A

GREAT PROPERTY MANAGER

Alanna Schroeder owns and operates The Distinguished Guest, an online marketplace for vacation rental owners who wish to style their vacation rental with beautiful, simple, hotel-quality amenities and linens. Alanna and her family also own vacation rental properties in Lake Tahoe, California and Princeville, Hawaii. A special thank you to my vacation rental expert contributors Debi Hertert, owner of OregonShearwater and Donna Martinez, owner of Abalone Bay.

By Alanna Schroeder

or most vacation rental owners, a vacation home is the largest, most high-maintenance investment they’ll ever make (aside from their primary residence, of course).

For that reason, property managers serve a vital function. They ensure the vacation homeowner’s investment is worth all that time, money and effort whether the owners are returns-focused and looking for a hefty profit or simply looking to cover costs when they’re not using the home themselves. On top of that, the emerging vacation rental industry has seen a sharper focus on hospitality. “Customer service,” “guest relations” and “guest satisfaction” are the new buzzwords. For property owners who aren’t hospitality professionals, property managers bridge the gap.

VRM Intel Magazine | Winter 2016

And this is where it gets tricky for property managers. You represent both vacation rental guests and owners. Complicating things even more, owners also have wildly different expectations when it comes to the level of involvement they want from you, their vacation rental manager. And vacation rental managers have expectations on levels of involvement with property owners. How do we narrow that gap to create a more hospitable relationship between the owner and the manager?

As an active vacation homeowner myself, I wanted to share a few thoughts on what savvy owners are looking for in a great property manager. Hopefully this helps you see it from our side!

Customer Service

Listing Sites/ Websites

My number one focus as a vacation rental owner is customer service, and many of my fellow owners agree. We want to know that our manager is checking in with guests within 24 hours of arrival and departure. We’re also looking for a manager that will be there in our absence to address any issues in a timely, friendly and hospitable manner — no matter the request.

We love options! If we can, we might love to keep our existing listings with VRBO/HomeAway, Flipkey and Airbnb. If you aren’t open to shared responsibility, we get it. But in that case, make sure the listing is high-quality with good copy and high-resolution pictures. We also want to be sure that you are following up quickly on inquiries and converting them.

For properties in residential areas, maintaining good relationships with the neighbors is a high priority. Great property managers check in with those neighbors and keep communication lines open.

Housekeeping

Guest Screening

Steady Communication

A clean rental is a huge part of “hospitality.” It helps to know that our manager is contracting/ employing top-notch cleaners and that these cleaners are experienced, honest, trustworthy, supervised and being held accountable. As markers of this, I personally look for training, regularly scheduled meetings and a consistent cleaning process for each stay.

Owners want to know that there is a guest screening process in place. Please let us know if you have concerns about a potential guest. Driveby’s during guest stays are also much appreciated!

All in all, communication is the key to any healthy relationship including the relationships between vacation owners and their property managers. That means a property manager should appreciate an owner’s goal for his vacation rental home, and the owner should appreciate his manager’s unique expertise. That way both parties can work to create a strategy that fits!

Inspections/ Maintenance

Neighborhood Relations

Rate Management

As a homeowner, it brings me a lot of comfort when I know a management representative has inspected my property after each guest. Priorities include checking for damage, confirming that the cleaners have satisfied their obligations, inspecting for maintenance issues and replacing batteries, light bulbs, air filters, etc. as needed before the next guests arrive.

It is essential for owners that a manager is keeping a watchful eye on market dynamics. For example, if a property is 90% leased, it is probably time to consider a rate increase. We will come to you with our thoughts, but we appreciate knowing you are watching the market and making educated recommendations.

Supplies

Fees

Owners love good quality supplies! This is not a place to try to save a few bucks. Leave a roll of garbage bags, a new sponge, dish soap, a few extra rolls of paper towels and other amenities. If you provide linens, give owners options from which to choose.

Flat fees are a godsend. And no matter what, we are always looking at the absolute dollar amount of a management contract especially when it comes to percentage-based fees. Small and hidden fees lead owners to feel left in the dark and unhappy. We will also thank you for receipts for work that has been contracted or for supplies purchased as part of our monthly accounting package.

08 Owner Relations

| Owner Relations

VACATION IN STYLE 8 Design Trends for your Vacation Rentals

s vacation rental managers, we help our homeowners manage every aspect of their vacation rentals – and that includes interior design. We’ve found that a well-appointed, thoughtfully-decorated home earns higher reviews and more bookings than a home that hasn’t received the same attention. To help improve reviews and increase bookings, we’ve put together a list of design trends to keep in mind as you encourage owners to reinvest in their homes for 2016.

By Kimberly White Vice President of Home & Hospitality Vacasa Kimberly joined Vacasa in December 2010 and has since held multiples roles within the company, including setting the tone for the customer experience side of Vacasa that is so critical to its service today. As VP of Home and Hospitality, Kimberly applies her attention to detail and extensive design background to the interior design aspect of Vacasa, ensuring that the in-home experience maximizes both guest satisfaction and homeowner returns.

VRM Intel Magazine | Winter 2016

1. METALLIC ACCENTS Metallic accents have been trendy for a while, but they show no signs of fading. Whether you go for classic gold, sophisticated silver or even rose gold, metallic accents catch the eye and make your space feel luxurious. Look for metallic embroidery on a throw pillow, a burnished picture frame, or a sparkly tea light holder to give any room - living room, bedroom, dining room, or even the bathroom - a special, celebratory feel. One of the great things about metallics is that they function as neutrals, so you don’t have to swap out the other colors you’re using. Just remember that a little bling goes a long way. You’re not Liberace.

2. PATTERNED TILES AND CERAMICS Gorgeously patterned tiles for walls, floors, counters and backsplashes are on the rise again. If youâ&#x20AC;&#x2122;re planning a kitchen or bathroom remodel, consider the stunning potential of patterned tiles. Reluctant to commit to an overall pattern? Look for a design in neutral hues, or go with a patterned accent or border.

3. MIRRORS Because they make a space seem bigger than it is, mirrors are a designerâ&#x20AC;&#x2122;s go-to method for opening up small spaces and bringing in light. They also add utility by letting guests check their reflections in the bedroom or on the way out the door.

Owner Relations

| Owner Relations

4. WALL-MOUNTED BEDSIDE LIGHTING You know that a good bedside light is essential to creating a serene yet functional retreat for your guests. Wall-mounted bedside lamps will continue to be a growing trend - and super practical - into 2016. By getting the lamp off the night stand and onto the wall, you create more space for your guests’ personal items. You also give yourself room to add some distinctive decor, like a retro alarm clock or a shelf of books inspired by your home’s location. 5. GEOMETRIC PRINTS Stripes, chevrons, and other geometric prints always look clean and sophisticated. A piece of art, a throw blanket or a rug in a bold geometric print is a great way to bring color into a mostlyneutral space. Feeling ambitious? Try mixing patterns, like a floral cushion on a striped chair. Pattern-mixing is another big trend that’s not going anywhere. 6. LAYERING TEXTURES Layering rugs and bedding to create a sensuous blend of textures is another emerging trend. Think about layering an irresistibly soft sheepskin rug over a sisal rug in a bedroom, or piling silk, velvet and chenille pillows together on a loveseat. 7. UPDATED BATHTUBS AND SHOWERS Replacing the tub/shower combo in favor of a spacious walk-in shower or a separate soaking tub is a major trend in vacation rental design. A deep, stand-alone tub feels much more luxurious than the standard shower-over-tub design your guests probably have in their own homes. When people choose a vacation home, they usually look for one that’s a step or two up from their own home. If a bathroom remodel is in the cards for you, this is a big opportunity to dial up the luxury factor in your vacation rental. 8. SUCCULENTS Indoor plants are having a moment. In a vacation rental, though, they can be tricky. Succulents or air plants, which need only occasional watering, are the perfect solution. Plus, the widely-varying shapes, sizes and textures of succulents have made these plants a huge trend in interior design. If you’re feeling bold, look for bigger species, like snake plant or aloe vera, to add some structural interest to your rooms.

VRM Intel Magazine | Winter 2016

| Human Resources

Bring in the New Year with

Great Hires! By Sue Jones

re you struggling to find talent? Do your applicants lack proven experience? Do you ask yourself, “Why is this person applying?” If so, it might be time to rethink your recruitment strategy. Hiring successful people isn’t just happenstance. You can’t just post an ad on your website or Craigslist and expect to get the best hires. There is a method and a process to finding talent. Just as you have a plan to manage your operations, you need to have a plan to manage your recruitment activities. Whether you are hiring year-round or seasonal employees, the following three steps are critical components of an effective recruitment strategy.

Step 1: Create a Standardized Recruitment Process

Standardizing your recruitment process improves your ability to hire the “right” people. Identifying key components of your recruitment process and standardizing that process provides you with opportunities to gather objective data versus subjective data. The key to creating an effective standardized recruitment process is to make sure it is consistent, cost effective, easy to duplicate and sustainable. If you want people to follow a process, don’t over complicate it. Keep it simple. Here are some key things for you to consider as you create your process.

VRM Intel Magazine | Winter 2016

Create/Review Job Descriptions. If you are not creating a new job description be sure to review the current job description before you post it to make sure that you accurately reflect the essential functions of the position. Job descriptions define what employees do in their jobs and should include a general summary, essential functions, job requirements (education and experience) and physical requirements (complying with ADA regulations). Identify Key Competencies for the Position. Think about the key behaviors someone needs to have to be successful in the position. Competencies define how the employees do their jobs. For example, a key competency for a housekeeper might be “Detail Orientation” since a housekeeper needs to be accurate and methodical with following process and instruction. Think about and identify key competencies required for your positions as part of the process. Prepare Key Behavioral Interview Questions to ask Applicants. A great way to ensure a successful interview is to create standard behavioral interview questions based on key competencies identified for the position. Identifying “what to listen for in the answer” is equally as important as creating the question. Not all supervisors are experienced interviewers. Don’t assume they know what questions to ask or what answers to listen for.

Identify the Applicant Process. Before you post the position be sure you identify who will be involved in the process. Ask yourself questions like: l Who will prescreen/phone screen applicants? l Who will be involved with in-person interviews? l How many interviews will there be? l Who will make the final decision? Knowing the answers to these questions will help you plan time for the different parts of the recruitment activity. It also is valuable to understand the timeline so that you can communicate it to prospective candidates. Taking time to create a standardized recruitment plan is the first step to hiring successful people. Hiring is hard work. Like anything else, the more you put into it the greater the outcome.

Step 2: Create Job Postings that Attract Applicants

How many times have you posted a job and crossed your fingers that someone would apply? Finding applicants is challenging, especially in this industry where so many businesses are located in areas that have limited pools of applicants and low unemployment rates. Listed below are some approaches to consider as you create your next job posting to help you attract more applicants.

perspective of what the “applicant wants” not what “you need”. For example, you might say: l “Flexible schedule – you choose when you want to work” vs. “you must be available to work any day of the week between 6:00 AM–9:00 PM.” l “Our skilled professionals earn more than $600 a week” vs. “You will be paid an hourly pay rate between $15–$20 per hour depending upon your experience and education.” Start your job posting with a headline. What can you say that will draw applicants to your posting and inspire them to read more? One approach I recommend is to ask an intriguing question such as “Do you thrive in a high energy, sometimes chaotic work environment?” Or you might make a statement such as “If you love putting things in order and paying attention to the smallest of details, we want to talk to you.” These types of headlines grab the candidate’s attention enticing them to read more. Taking the time to create a compelling job posting that describes the opportunity from the applicant’s perspective is key to attracting more applicants. Find ways to be creative.

Step 3: Get the Word out About Open Positions

The key to attracting talent is to utilize as many channels for posting positions as you can so that you are reaching as wide of an audience as possible. The good news is there are a number of resources available to you for free, such as your website, social media links and local employment agencies. Other services such as career job boards typically charge a fee for posting your position. Where you post typically depends on the skills and experience required for the position.

Be clear about what you want in the job title. Don’t advertise a position for a Director of First Impressions when what you really want is a Housekeeper. While it is fun to be creative with job titles, more often than not, if people don’t understand what the position is they move on to the next position without bothering to read much more. Be concise when describing the job – don’t post the entire job description. Applicants typically just skim over job postings. Very rarely do they actually read the entire posting. If they did you would probably receive more cover letters or completed applications. Right? Highlight only a few key areas and competencies. Share your story. What is it about your company that makes it stand out from others? When there are more than a dozen jobs posted for housekeepers what is it that will draw applicants to your business vs. your competition? Make it personal, something applicants can identify with. Create a compelling marketing statement. You want to list the job requirements in a way that makes the applicant feel special and important. Think about what would stand out and compel applicants to look further at your opportunity. Figure out what motivates them, and then describe the opportunity from the Human Resources

| Human Resources

Eight Resources to Diversify Your Recruitment Outreach Your Employees: This is one of your best resources. Referred employees

Bhave higher retention rates and will increase employee engagement in

Niche Job Boards: Great news! There is now a job board

Ifocused specifically for the vacation rental industry www.

Cwebsite is the best place to showcase your culture and what it is like to

provrm.com that currently offers free job postings for employers in the vacation rental industry. Other jobs boards focused in hospitality include HCareers www.hcareers.com, Hospitality Online www.hospitalityonline.com, and Poached Jobs www. poachedjobs.com. The cost for postings jobs on these boards can run anywhere from $30-$450 per postings.

Social Networking Sites – Facebook, Twitter and LinkedIn: It doesn’t cost anything (except your time) to post jobs on the various social media channels associated with your company. These platforms are key to engaging a large multigenerational audience.

Hiring the right people is one of the most challenging parts of your business. While there is no magic formula for hiring great people, one thing is for sure, the more time you put into your recruitment strategy up front, the easier it will be to make the right decision.

your company.

Your Website: This is the first place to post your open positions! Your

work for your company.

Local State Employment Agencies: As an employer, your state’s official

EWorkforce Agency provides key services available to assist you with finding qualified employees. http://us.jobs/state-workforce-agencies.asp

Military Base: If you are close to a military base, retired military personnel and military spouses are a great source of talent. Most military bases have careers centers available for postings jobs in their community.

Colleges, Universities and Vocational Schools: Most colleges and

Gschools have job boards available for both students and alumni. Develop relationships with the placement office, faculty members and alumni to get information out about your open positions.

Craigslist: This is a well-known channel for posting jobs online in your

H local communities. Some areas are free to post, while larger cities might

run $25-$75 per posting. Craigslist www.craigslist.com is easy to use. It attracts a wide audience, so be prepared for a large response from both qualified and unqualified candidates.

VRM Intel Magazine | Winter 2016

About Sue Jones

Sue Jones, Founder and Managing Director of KLS Group, is passionate about creating strategic human resource programs and services to effect positive change in organizations. She is an innovative HR leader experienced with both large and smaller businesses. Sue has w o r k e d in many different industries and is adept with transferring her knowledge, skills and abilities across business channels. An experienced HR professional, Sue brings a fresh approach to her clients, addressing their needs in a personalized manner. Sue is a Veteran of the US Navy, holds a Master’s Degree in Business Administration from Northeastern University and is both SHRM-SCP and SPHR certified.

Microbes:

Unseen Dangers in Vacation Rental Housekeeping

housekeeper’s world is more dangerous than it appears. In preparation for the next occupant’s arrival, housekeepers are the front-line defense to sanitizing and cleaning a rental after a previous guest’s visit. Some of the microbes that a housekeeper must kill and remove can create flu-like symptoms, while other types of microbes, in some cases, can be as life-threatening as HIV. Here are several microbes that vacation rental housekeepers should be aware of:

Escherichia Coli Bacterium (E-Coli) • E-coli currently exists in our intestines.

• It comes from undercooked ground beef.

• In ideal conditions, one cell can regenerate into one billion cells within ten hours. • Most strains are harmless.

• Some strains can cause diarrhea, while others can cause urinary tract infections, respiratory illness, pneumonia and other illnesses.

Salmonella • Salmonella is transmitted through unclean surfaces. • Infections occur about 6-36 hours after ingestion. • It is very common.

• Symptoms include diarrhea, fever and abdominal cramps.

Staphylococcus Aureus (Staph) • Staphylococcus lives on our skin and can enter through a cut, hair follicle or crack in the skin. • Washing with soap is generally sufficient to protect against staph.

• Staphylococcus may cause “food poisoning” symptoms, Toxic Shock Syndrome (TSS) and pneumonia • 30% of people carry Staph in their noses.

Multiple-Resistant Staphylococcus Aureus (MRSA) • MRSA occurs naturally in the environment and is resistant to many antibiotics.

• MRSA lives on the skin and can be prevented by good hygiene. • It is currently a major problem in the healthcare industry. • Most MRSA infections are skin infections.

By Durk V. Johnson Industry Consultant and Executive Director, Vacation Rental Housekeeping Professionals

Hepatitis B or “The Housekeeper’s Disease” • Hepatitis B infection is transmitted through exposure to blood and other potentially infectious materials (OPIM), as defined in the OSHA Bloodborne Pathogens standard, 29 CFR 1910.1030. Proper personal protection and cleaning products.

• Hepatitis B can also be transmitted through needles and razors.

• Symptoms include: fever, fatigue, jaundice, dark urine, vomiting and abdominal pain.

he proper cleaning products must be used in order for our housekeepers to sanitize properties properly. If you are unsure about your cleaning products’ ability to neutralize certain microbes then ask your vendor for a list of what each product will terminate. If the cleaning products you are using do not serve their purpose then change your products immediately. Also, please make sure that your housekeepers are utilizing their personal protective equipment (PPE). Disposable gloves are a housekeeper’s best friend. Consistent use of disposable gloves is imperative in creating a protective barrier so that microbes (transmitted by touch) do not make contact with the skin. Gloves should also be removed in a precise manner in order to abstain from potential contamination. For more information on proper glove removal, please visit www.youtube.com/watch?v=A9ikC338BJc. A little knowledge goes a long way in establishing and maintaining a sanitized and protected environment for our housekeepers and guests. Be Safe, Be Clean, Be Happy!

Sources: http://www.cdc.gov/ecoli http://www.cdc.gov/salmonella http://www.cdc.gov/HAI/organisms/staph.html http://www.cdc.gov/mrsa http://www.cdc.gov/hepatitis/hbv/bfaq.htm#overview VRM Intel Magazine | Winter 2016

| Housekeeping

New Developments in Housekeeping Technology for Vacation Rental Professionals

With advancements in the areas of communications, GPS, smart home systems and database integration, housekeeping departments are beginning to see relevant technological improvements hit the market. By Amy Hinote

or housekeeping professionals in the vacation rental industry, innovation in technology designed to increase operational efficiency for housekeeping and maintenance departments has been relatively slow compared to advancements in other areas of technology, including revenue management, channel management and marketing tools. However, over the last year, new functionality in vacation rental housekeeping technology is hitting the market and will help lower costs, save time, enable housekeeping and maintenance staff to be more productive, and in some cases, provide additional revenue streams.

Five Areas of Development in Housekeeping Technology B Communications and Apps

The vacation rental industry has seen the development of technology systems and apps designed to provide real-time communications between staff, management, housekeepers, maintenance personnel, guests and property owners. LSI, Status Tracker and several of the property management software systems have launched tools that free housekeepers from relying on legacy technology so they can work smarter and faster. These new systems help housekeeping teams coordinate their tasks with real-time property assignment information to work more efficiently, and

VRM Intel Magazine | Winter 2016

mobile housekeeping apps aim to put clipboards and in-unit telephone reporting in the rearview mirror. They are easy to install and rely on the propertyâ&#x20AC;&#x2122;s wireless network without an internet connection. C Scheduling and Route Optimization

With advancements in reliable GPS mapping and tracking, Route Optimization is an area of technology that has rapidly developed in the last two years. Florists, housekeeping companies, fleet managers, moving companies and delivery drivers in a multitude of businesses have transformed their operations using route optimization software. In the vacation rental industry, we can expect to see several technology providers white label these solutions into their products. But you donâ&#x20AC;&#x2122;t have to wait. Ask your housekeeping technology provider about route optimization systems, and volunteer to work with them to beta test and integrate the functionality into your software.

D Keyless Locks and Smart Home Control

The introduction of smart home control has made a huge impact on the vacation rental industry by reducing the time and expense associated with key management, providing guests with safer stays, lowering property owner utility bills and providing real-time notification of maintenance issues in the home. For housekeeping departments, the benefits of using smart home control also help to lower costs and

increase guest and owner satisfaction. Using smart home codes, managers can track when housekeeping and maintenance staff members enter and leave a property without having to manage keys among cleaners and contractors. E Noise, Trash and Parking

20 Features Vacation Rental Managers Would Like to See Developed for Housekeeping:

For vacation rental opponents, the complaints most often raised at city council meetings are noise, trash and parking, which when left unaddressed can result in tightening regulations and restrictions. As a result, professional vacation rental managers are always looking for ways to be better neighbors and to encourage guests to be better neighbors. Here are a few ideas of how technology may be able to help.

B “We need a stand-alone linen management tool and customized

l Noise monitoring apps and devices are available which provide notifications for sustained high levels of noise.

E “Integrating software. For example, Escapia and IST should

l Apps can be used to alert and remind guests about trash days and parking restrictions.

l Smart home cameras can be used in exterior locations to monitor trash and parking areas. F Lost and Found VRMs work around the clock to improve guest satisfaction, so when they get a call from a guest who left his iPhone, grandmother’s ring, GoPro or child’s special pillow, team members jump to respond. However, keeping up with the many items left behind and matching these items with their owner can be overwhelming... especially during peak seasons. Technology has been created to help streamline and automate the lost and found process. One system being used by a handful of savvy property managers is called ChargerBack. This free tool has the following functionality:

l Sends emails to both staff and the guest.

l Generates pre-paid shipping labels to return the item to the guest. l Provides a way for guests to self-report lost items from your website.

l Makes it easy for staff to match those reports with items that have been turned in.

automated communications.”

C “Scheduling, Inspection Reporting, Ordering and Tracking Linens” D “Housekeeping and scheduling tools that show the number of guests

checking in and out, along with the next arrival. Right now, we have to run arrival and departure reports, and it is very time consuming.” be interactive…or…alternatively, each needs to provide a full suite of services so we only need one.”

“Owner CRM tools, process mapping, and metrics/data > harvest > F process > distribute”

“Tools to guide housekeepers to do their own inspections” G “A better setup for keyless locks” H “Control all from smart phones, including temperature settings, and I televisions.”

“Virtual clock-in/clock-out for housekeepers” J “GPS, scheduling” K “Mobile tools integrated with pictures of what the unit should look like, L including furniture placement”

M “Lost and Found Management and Linen Management” N “Inventory Management, i.e. kitchen inventory in the home, etc.” “Noise monitoring systems and a hot tub and pool scheduler” O “System that texts inspectors when a home has been cleaned, instead of P having to first update the dashboard.”

Q “Customizable surveys”

At the Vacation Rental Housekeeping Professionals (VRHP) Annual Conference in November, as managers investigated improvements in technology and explored the gaps in their current systems, we asked them to write on notecards what functionality they wish existed in their software system and what they want their software to do.

“Analytics and response tools for guest surveys” R

Here is a wish list of housekeeping technology functionality from attendees at the 2015 VRHP Annual Conference.

“We would like a tool that would time track and GPS track our U

“More operational metrics and business intelligence tools” S “Technology training!” T housekeepers and inspectors.”

Housekeeping

VACATION

JOIN

RENTAL HOUSEKEEPING PROFESSIONALS

VRHP

HERE ARE SOME

OF THE BENEFITS YOUR COMPANY RECEIVES AS A VRHP MEMBER

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Online Marketing Components

You Should Re-evaluate Each Year

By Andrew Vick Vick and Company President

n a personal level, the New Year often brings resolutions and promises to change, get better, do more of certain things like exercise and less of other things like eating cheeseburgers. From a marketing perspective, it is healthy to re-evaluate what is working and what is not. Here are a few tips and things to look for as we roll in to 2016: Start with Analytics

Evaluating where you’ve been and where you need to go has to start with Analytics. Hopefully your implementation of Google Analytics goes well beyond merely being able to see traffic and general trends, but if not, you still have something to start with. Is traffic up or down? Which sources are driving traffic to you? Paid or unpaid? Where are those sources geographically located? Does that align with where your guests are coming from? What percentage of your traffic comes from “mobile”? If you have a more advanced implementation, the questions become far more valuable. What sources of traffic are converting and at what rate? How does that compare to last year/season/month/week? Is the average online transaction up/down? Is the average stay longer/ shorter? All these questions and so little time, but if you can glean some value from them, they will oftentimes lead you to focus on some key areas.

higher level than those coming from general search, and if not, it’s time to take a look at the marketing initiatives that support those relationships. Are your emails relevant and segmented by audience? If not, work diligently to understand your audience and target appropriately. Are your posts on social media engaging and are you paying attention to your Weekly Page Update? Start there, and then consider the upgraded targeting ad features on Facebook. The retargeting and integrations within Facebook Ad Manager are powerful data driven features that typically drive great results. Serve ads based on retargeting, custom lists, actions, behaviors, page visits...the list goes on. Instead of continuing to focus on quick, short-term and often expensive conversions, concentrate on long-lasting guest relationships. D Content

Many people have the impression that content is only used for search engine optimization. While that is one of the main reasons you should be creating regular, original, relevant and engaging content, the following points tell a compelling story about other important roles for content. l Relevant

content builds trust and loyalty with your audience. If you can position your company either as the expert in your area, by types of accommodations or by any other defining aspect, you will win with both site visitors and search engines. l According

to SmartBug Media, 90% of customers find custom content useful while 78% believe that companies with custom content are interested in building positive relationships. l Content

marketing costs less than traditional marketing. According to Mashable, it is 62% less per lead. While this is by no means an exhaustive list or comprehensive strategy outline, it should provide food for thought. Discuss these items with your internal team, set up a strategy outline with your marketing partner or reach out to a trusted advisor.

Below are what I see to be the key areas to make sure you have a handle on, or at the very least, a strategy for. Hope isn’t a good strategy. B Mobile Web Strategy

As of May 2015, Google reported that mobile has officially passed desktop browsing in terms of search queries and volume. What does that mean for you? You’ve been told this for a couple of years now – a mobile strategy is required. Responsive web design is the buzzword you’ve become accustomed to. It enables your brand and calls to action in order to work across multiple devices. The entry point into this technology is attainable at a wide variety of budget levels, so make it a priority in 2016 to create a plan and market strategy for your mobile presence. Give your guests the access they crave from whichever device they prefer.

C Relationship Marketing

In my experience, this tends to be the most often overlooked, most cost effective way to drive cost effective bottom line revenue. Take a close look at your analytics and take note of those channels that are coming to your site because you have a relationship with them (email, social, etc.). Is that traffic staying on the site longer? Visiting more pages? Converting at a higher rate? Those channels should be performing at a Marketing

| Marketing

MARKETING By Bill Schlosser

First of all, I’m not talking about your logo. Let’s get that out of the way up front. Your logo is simply an icon of your brand. It can certainly instill the image you want your brand to communicate, but your logo is NOT your brand.

our brand is your promise to your customers. Deliver on that promise, or better yet over deliver on that promise, and your brand will soar. Don’t deliver on your promise, and your brand will suﬀer. A strong brand can give you a competitive advantage and

VRM Intel Magazine | Winter 2016

drive customer loyalty – two things cherished by all companies. That’s why most strong brands command a premium price and enjoy higher proﬁt margins. Their customers stick around longer, don’t demand discounts, and don’t require as much hand holding.

Bad Brands We’ve all seen brands that haven’t survived. The list is long and new members join the club almost daily. In most cases, it took a long time for these brands to develop, but a much shorter time for them to crumble. Here are just a few failed brands, some of which are totally dead while others are on life support: u Circuit City

u Atari

u Pets.com

u DeLorean

u Kodak

u PanAm

u Tiger Woods

u Lance Armstrong

The lessons to learn from their mistakes are many. First, building a brand is not for the timid. It takes planning, time, money, smarts, time, and consistency – and did I mention time? Each of those listed failed for different reasons – didn’t deliver customer service, didn’t understand what business they were in, didn’t adapt to the times, weren’t honest with their audience, etc. I won’t go into detail here on each one, but I’m sure you can figure it out for yourself.

Good Brands So who is doing it right? What companies can we look to as examples of brand excellence? Here are the Top 10 global brands according to Forbes (see full list at forbes.com):

All of these companies have invested and are continuing to invest heavily in their brand, to the tune of hundreds of millions of dollars annually. In their respective categories, more people think of these brands than any other. When you see these brands, what comes to your mind? What do you think their brand represents? Does a supplier or vacation rental provider have to invest hundreds of millions to build their brand? Well, it would certainly help. But what can be done to build your brand when you don’t have a bottomless budget?

Define Your Brand This is the most important step. What do you want your brand to be – to represent? It might be a particular strength you have, or something you do better than anyone else. Is it quality, speed, proximity to something, family, volume, inventory, price, fun, design, technology, convenience, installation, support – what is it? Not sure? Take a look at your mission statement (you have one, don’t you?). Often, your brand promise is the same or similar to your mission statement.

Get Your Team On Board Everyone in your organization needs to have a clear understanding of what your brand represents. Don’t just have one meeting where you dictate to everyone what your brand message is. Have an open discussion – often. Try and get everyone involved, to the point where they have ownership in your brand. Talk about it frequently with your team – daily, if possible. Have contests to see who can explain it the best. Print it on posters throughout your offices. Have pop quizzes when you see your employees and hand out cash awards to those with the right answers. Open every All-Hands meeting with an overview of your

brand message and ask random people what they did to help build your brand that week. Your goal should be to get everyone on your team totally immersed in your brand message and knowing it like the back of their hand. Anyone who has contact with your target audience can impact your brand – from the things they say, how fast they respond to an email, what they wear at a trade show, how they act at social events, their grammar, the cologne they wear, you name it. All of your employees are your brand ambassadors. Make sure they know how to express your brand personally, and you’re way ahead of the game.

Marketing

| Marketing

Be Consistent Whatever you decide is your brand message, you need to eat, drink and sleep it – in other words, be consistent. Stay with it for a long time. You can’t switch your brand message every two months and expect your market to switch with you. It takes a long time for your brand message to sink in with your audience. But you had better be able to deliver on your brand promise or your brand will NOT survive for long. You can certainly fool some of the people some of the time, but eventually people catch on and come to their own conclusions.

Focus On Brand #1 A lot of companies want to create a unique name for just about everything they offer – from their newest widget to their special sauce. Often, they even want a logo to go with those unique identifiers. My advice is to avoid “over branding”. When you create too many brands, you dilute your core brand, your #1 brand. It’s difficult enough to build one brand. When you try and build multiple brands, it’s nearly impossible unless you have deep pockets like Procter & Gamble. Instead, always tie your core brand to your sub-brands. So if your brand name is Bamster and you create a cool entertainment package called Fo’Fun, you should always refer to it as “Bamster Fo’Fun.” That way, your core brand is always being promoted. Because at the end of the day, you want people to remember Bamster. Whether or not they remember Fo’Fun doesn’t really matter.

Market Your Brand Don’t be afraid to boldly stake out your brand position with your target market. If you have the best service, then proudly proclaim that. And don’t just make the claim, offer some proof statements. These can be in the form of statistics, customer testimonials, visuals, expert analysis, reviews – whatever helps to solidify your brand position. Then communicate your brand consistently and frequently. Create a tagline that communicates your brand message. Of course, you will use all of the obvious media like social, ads, direct marketing and websites, but don’t overlook other elements that reach your target audience – email signature, invoice template, elevator pitch, business cards, voice menus and messages, proposal template, property collateral, vehicle signage, etc. Repetition is very important. The average consumer is bombarded with nearly 5,000 messages daily – from emails, direct mail, billboards, social media, TV ads, radio ads, you name it. To combat this, we’ve all created our own set of filters that help us to stop messages from getting through, or we just ignore them. So getting your brand message through is no easy task. You have to stand out. You have to be repetitive. You have to be consistent. And did I mention it takes time?

Measure Your Brand Unfortunately, no matter how hard you try to communicate your brand message, sometimes your target audience concludes something different. Just because you THINK your brand means “X” doesn’t mean your market thinks it means “X”. To them, it could mean “Y” or it could mean “?&%$” – something you may never have imagined. That’s why it is important to occasionally measure your brand. Find out what your target audience thinks of your brand. Ask them anecdotally. Survey them scientifically. Find out if your brand message is resonating the way you want it to. If it is, great. If not, you need to either adjust your brand message or change how you’re communicating your message. Then, after a while, measure again. Your brand is who you are. If you aren’t a brand, you’re nothing more than a commodity. So get your brand on!

VRM Intel Magazine | Winter 2016

Bill Schlosser Bill is the owner and brand master at Dr Brando – a brand marketing agency serving suppliers and managers in the vacation rental market. Bill can be reached at Bill@DrBrando.com.

President, Hatteras Realty.

VRM Intel Magazine | Winter 2016

| Marketing

Converting Web Traffic Into Results for Your Property Management Company By: Carlos Corzo CEO, Streamline Vacation Rental Software

ver the last 20 years, human communication has undergone drastic changes. The explosion of the Internet has revolutionized the way we connect with friends, family and even potential business clients. Through sites such as Facebook and Twitter, people have access to worldwide social interaction, and through internet ready devices such as cellphones, tablets – even smartwatches and tvs – interconnectivity has never been higher. It’s becoming increasingly apparent that computer literacy is a necessity to business in the modern world.

What Makes a Great Converting Website?

For property managers, the internet provides the perfect way to market their company to potential customers and clients across the globe. Of course, the first step is to create a website that appeals to the right audience. In the world of vacation rental management, this means targeting to two distinct groups: guests and owners. Oftentimes, you will find that these two groups have different views on what makes a great, user-friendly website.

What qualities are users looking for in a website? For guests, one thing stands above all else – speed. A little under 50% of users expect a website to load under two seconds. Even worse, according to statistical research, about 40% of them will leave the site if it hasn’t loaded in three seconds. Making sure all pages of your site run swiftly and smoothly helps you hold on to the traffic your site generates and boosts conversions (more on this later). Another important factor, which might seem obvious, is the usability of the site. Guests expect your website to be easy to understand and navigate. Craigslist is a popular website that takes user functionality to the extreme; the site is designed around pure functionality, requiring only a couple of intuitive clicks to deliver precise results – even though there are thousands and thousands of links to click.

VRM Intel Magazine | Winter 2016

If guests can’t quickly figure out how to find something, search or book listings on your website, they will leave. Also, keep in mind, few people go to travel sites with dates set in stone. On the other side of the coin, we have property owners. Your owners are very proud of their investments. When they look at your website and judge your business, they want to see cutting edge technology. Property owners expect the most beautiful website that they have ever seen, and want to see a website that shows their property in the most extravagant way possible. Vacation rental property management sites must strike a balance between these two competing interests. Your website must deliver concise, intuitive information with a sleek, engaging design, and the site should be lightning fast and not rely on a high technical level to access results. And don’t scare away users with too many bells and whistles. We also want the site to be usable from a variety of mediums: desktop, mobile and Smart devices.

Turning Traffic Into Conversions Now that we have a great website design, it’s time to talk conversions. On average, websites convert 2% of their first-time visitors. That means that 98 out of 100 people are using your website, but not engaging. We could have the highest traffic site in the business, but if your conversion rate is terrible we still end up with no customers. Here are four techniques we can use to boost conversion rate: B A/B Testing

Google provides a wonderful service called A/B testing. This lets you create two versions of your site, option A or option B, and when visitors load your site, Google will randomly load one of these options for them. A/B testing provides performance statistics for each option, allowing you to tell which changes boost conversion for your site. Compare designs, pick a winner and then rinse and repeat the process to find the perfect design. C Conversion Funnel

Another great tool Google provides is the conversion funnel. Think of a funnel – it is big at the top and it gets skinnier as it goes down. Now, imagine the same process of someone doing a search, clicking on a unit, clicking “Book Now”, entering their information, entering their credit card and clicking complete. This is the funnel created by your website.

The Google Analytics conversion funnel gives statistics traffic in this website funnel, Using the analytics tool, you will actually see where people are leaving. It could reveal that everyone leaves on the “Click to Continue” button during the checkout because it is not working on Firefox browsers. The results will surprise you. D Heatmaps

Heatmaps are a great way to see how visitors are engaging with your website. Heatmaps show where users are clicking, allowing you to make informed design decisions that direct their interactions on the site. You would not believe where some people click on websites – heatmaps are an entertaining way to gain optimization ideas. While it can slightly slow down your site to run a heatmap test, running one for a brief period can deliver tons of useful information. E Focus Testing

Focus testing is used throughout the sciences, and it can be applied just as easily to website design. First, we want to find a group of testers who know nothing about your website or your business. These people should cover a wide range of ages, technical aptitudes, and travel experience. Once we have our test group, we give them a simple set of instructions. First, specifically ask them to enter your entire URL into the Google search bar. It is amazing how many people don’t enter your website in the address bar. They enter your domain into the Google search bar. Then make a selection. Oftentimes the browsers make it very confusing. Some people don’t even know that they are truly doing a search, when they think they are entering a URL into what seems to be the address bar. Entering your URL into Google search will give them other options of related websites. It provides for a great test, because they might choose another site. If you don’t show up #1 when entering your URL into the Google search box, you will need to just give them your full URL and ask them to enter that into the address bar. Finally, ask them to make a booking at one of your homes in a specific location. Now, sit back and collect data. This testing will tell you a lot about how user friendly your site design is, as well as help you narrow in on any roadblocks or hiccups. Perhaps your test group can find your site and locate a listing, but they can’t figure out how to place their booking. Armed with this information, you’re ready to make changes. User feedback is one of the most important aspects for improving quality in your business both for your website and for your listings!

Good Web Design Is An Ongoing Process Building a successful vacation rental property management business means constantly evolving and adapting to changes in the market, and the same can be said for web design. Your site should evolve with your business. Never settle for second rate. Continually optimize your site to increase speed, improve clarity and incorporate user feedback. At Streamline, our clients - owners and guests alike - are our greatest resource. We provide opportunities for our clients to listen to their customer’s comments, learn from their criticisms, and above all, deliver an experience that is memorable. From the time they first visit your site until they leave the vacation home and head back to their daily lives, their experience should be hassle-free and engaging. In vacation rentals, we’re in the business of making memories – make sure that memory is exceptional!

Carlos Corzo founded and currently serves as CEO at Streamline Vacation Rental Software. Corzo regularly provides his valuable insight into the inner workings of vacation rental marketing and technology at https://www.streamlinevrs.com/blogs. Marketing

| Marketing

2016 Trend

for Vacation Rental Managers:

Utilizing Search Engine Marketing for Homeowner Acquisition

by Josh Guerra 64

VRM Intel Magazine | Winter 2016

n today’s cutthroat world of vacation rentals, property managers everywhere are working their hardest to find a new angle to get that extra edge on their competition. Unfortunately, as the industry has grown and the pond has gotten bigger and bigger, even the big fish find themselves struggling to find that perfect strategy to promote growth and set themselves apart from their competition. But as property managers continue to scramble for new strategies, many find themselves forgetting what really grows the business - Property Inventory. Inventory is truly what makes a property management company able to grow. However, this crucial building block is often forgotten amongst the scramble of keeping properties updated and keeping them filled. Attempting to make your company stand apart from the others in order to attract new inventory comes bundled with its own set of pitfalls and difficulties. This is why we’re here to introduce the newest online marketing trend for property managers in 2016: Using Search Engine Marketing (SEM) to help acquire new homes and increase inventory. With SEM, you can get your company’s services in front of thousands of interested parties, so you can start building your home inventory and improving your company’s profits. All you need to do is learn the right way to do it, and we’re here to show you just that!

General and Local Search Engine Optimization

When most people think about search engine optimization (SEO) and internet marketing, they think about links, getting listed on the most reputable sites in their industry, and other difficult stratagems that, frankly, every SEO company attempts to pull off with varying levels of success. However, what if we told you that there is a simpler, back-to-basics technique that you could utilize on your site right now? Fortunately, this is exactly the case.

Keyword Research

Regardless of what that overzealous SEO salesman tries to tell you, the first step towards building a successful SEO campaign is to determine the keywords you are trying to target in a process called Keyword Research. Though there are quite a few components of keyword research that are more complicated and technical than they might seem at first blush, choosing these keywords is one of the most important parts of an organic SEO campaign. Using tools such as the Google Keyword Planner in your Google Adwords account, you statistically find out how interested parties are searching for services in your industry and, more importantly, your area. For instance, if you offer property management services in Park City, Utah, people may be searching Park City Property Management. These tools will also help you determine how many people are searching for that term, and how much competition exists for the term. Remember these tips when searching for your keywords:

l Make sure keywords are properly targeted. It may be tempting to try to rank for the simple term Property Management. However, this is a very generalized keyword that can relate to a lot of areas and even a different industry (such as long-term property management). For your purposes, finding keywords related to your area will be much more useful, and – in most cases – will lead to a higher conversion rate once you are solidly ranking for them. l Utilize outside resources when learning how to perform Keyword Research. One article isn’t enough to learn how to perform Keyword Research. Fortunately, a high-quality SEO company – such as Bizcor – can help. You can find a small guide on what you should look out for when working on a Keyword Research campaign at Moz.com’s Beginners Guide To SEO: Keyword Research.

Content Development with Keywords

Once you determine which keywords you want to use, it is time to create content around these keywords. One of the strongest ranking signals Google utilizes is quality content. If you write interesting content about your services with keywords sprinkled throughout, Google will tend to see you as a more authoritative site than one that does not do the same. For example, if you offer property management in Panama City Beach, South Walton and Destin, try writing pieces about all three of these locations (and include your keywords within).

Meta Data

When you search on Google, meta titles and descriptions are the first things that pop up on those Search Engine Results Pages (SERP). This means two things: B Google leans heavily on these when determining what a site is about. C Meta data is the first thing searchers will see when performing a Google search. With this in mind, it is important not only to include your keywords in the meta data, it is also crucial to treat these technical aspects as the internet billboard for your site. Use industry buzzwords, interesting language and eyecatching phrases to try and attract those all-important clicks. Once that is done, you can let your – hopefully amazing – website do all the work!

Setting Up Your Local Strategy

Organic SEO is exceedingly important, but your bread and butter is going to be Local SEO because Google Local not only caters to people in your immediate area, but it also is located above the regular organic rankings. This is where your company is going to reap its most convertible rewards! Here are just a few tips to ensure your Google Local strategy is up to snuff: l Target local keywords. As mentioned before, always target the keywords that reflect your area. Panama City Beach Property Management, South Walton Property Management, Destin Property Management, etc. are all going to be the keywords that get you into that local carousel. l Set up your Google Local Business Page. A Google Local Business Page is your ticket to be included in the local carousel. If you don’t have one, you won’t be included, so set one up and make sure it’s completely optimized! l Manage all local directories online. There are hundreds of local directories online that list websites and their NAP Data (Name, Address, Phone Number). Google leans on these directories to make certain your company is actually located where you say it is, so find all the high quality directories you can, sign up and make sure your data is correct. l Maintain uniform NAP Data. If you have one address listed on your site and another listed elsewhere, Google can get confused. Make sure your name, address and phone number is listed on your site correctly and consistently, as well as every local directory you subscribe to, including Google My Business. l Attract 5-Star reviews. We’ll go over this later on.

Final On-Site Tips

If you have a poor looking website, or one that is slow, has 404 errors or improperly implemented 301 redirects, Google, along with your potential clients, are not going to like your site. Clean up your site, and potentially get a new one if you’re stuck in 1995. The site is your key to landing new properties, so make it show off your best side! Marketing

| Marketing

Paid Search Once you have your local and organic SEO set up and ready to go, another potentially powerful tool that you can utilize is paid search. Why paid search? Well, while organic SEO can take months of work and waiting for you to reach the top of the search engine result pages (SERPs), paid search can be a source of instant success, rocketing you to the top of the rankings while allowing you to obtain those homeowners that you so desperately desire! All you need to do is make sure your campaign is targeted, devote constant care towards your campaign and the keywords you choose, and make sure you are outbidding the other players in the game. Sounds expensive and difficult? That’s because it is, but don’t worry, it can also be the most successful part of your internet marketing campaign.

What is Paid Search?

At its core, paid search is targeting a different part of the search engine results than you may be used to. Instead of targeting the standard results that you might think of when performing a Google search, you are paying for priority placement and maximum visibility in Google’s Ad Spots (located at the very top and sides of every Google SERP). In other words, if you pay enough (and your ad is set up correctly), you can be the first result on Google in no time flat for your most desired keywords. This allows you to get your company and message in front of your most targeted demographic – homeowners in your area – in a matter of days, rather than months, so you can start reaping your rewards as quick as can be! It also gives you quite a bit of control over who sees your ad, so you’re only attracting clicks from those who you most likely will convert.

l It is expensive. Unfortunately, pay per click (PPC) and paid search are among the most expensive forms of online marketing. Because you bid on every click you receive – which can run up to 10.00 (or more) per click, you can find yourself running up an entirely unsustainable budget if you don’t know what you’re doing. l It takes a lot of work. Between choosing negative keywords, monitoring your budget, finding the correct keywords for your campaign and babying your results day in and day out, paid search marketing is almost a full time job that you might not have time to work on. That’s why most companies hire experts instead of running their campaigns themselves, which only adds to the expense of paid search. l Your campaign isn’t the only part you have to worry about. Even if you get your campaign set up correctly, you get tons of clicks, and the people who are clicking on your ad are legitimately interested in the services you provide, if your website isn’t set up correctly, this can be all for naught. At the end of the day, it is important to understand that paid search should only be implemented by someone who knows what they’re doing. After all, in the right hands, a properly run paid search campaign will make you a lot of money and attract a ton of homeowners. You just need to be patient, and make sure you have the right person doing the job.

Retargeting If targeting searchers that are most likely to convert sounds like something you are interested in – and it should be – then utilizing a retargeting strategy is an absolute must! Retargeting allows you to target consumers who left your website unconverted, all while working in tandem with other homeowner marketing strategies to attract new and past property owners. Of course, retargeting isn’t just one simplified idea. Implementing a retargeting campaign requires a variety of tools and a lot of hard work. Fortunately, we can provide you with exactly what you need to hit the ground running. Here are just a few of the most important retargeting tools and strategies you should use so you can get the most out of your internet marketing campaign:

The Downside

Even though paid search marketing has its definite upsides, paid search can also keep plenty of companies out of the running and even ruin you if you don’t implement the campaign correctly. Here are disadvantages of using paid search: 66

VRM Intel Magazine | Winter 2016

l Use Google and Facebook for retargeting efforts. If you follow our advice and start a paid search campaign, the Google Adwords Feature allows you to create target audiences that they will then display ads to. You can determine these audiences yourself with custom criteria, including users who viewed product pages, past users who have converted before but no longer use your service, and even users who visited your site but didn’t interact with the site at all! Facebook offers a similar tool, which you can read about at https://www.facebook.com/business/learn/facebook-adswebsite-custom-audiences.

l Combine retargeting with existing marketing efforts. Many Property Managers send mailers to nightly rental license or tax records. Ensure you send them to a landing page where you can capture their IP addresses for your retargeting campaigns. l Import emails into Facebook and Google Adwords: Facebook and Adwords both allow you to import emails so you can directly market to the people they belong to. Make use of this function with targeted email blasts and ads, so you can turn those emails into future customers. l Create your landing page. It is not just the message you send, it is the place your prospective customers are sent to once they click! You need to create a landing page that is appealing and conversion driven. Just make sure the property management landing page that you create: ü Is simple

ü Includes a video

ü Displays awards and media

ü Includes an above the fold and footer form ü Includes a call to action

Remember, so many customers visit your site, sign up for your newsletter, like posts on Facebook and otherwise interact with your business every day, but they wind up leaving before signing up for your service. Retargeting allows you to find those people, reach out to them and display a message that they find pleasing, giving you an even better chance to turn these “almost converted customers” into a done deal. With this in mind, if you want to have a successful internet marketing campaign for your property management company, do not forget these retargeting strategies. You will regret it if you do!

Reputation Management When Google decides who is displayed in the local ranking carousel, there are quite a few aspects they consider, including uniform NAP data (as mentioned before) and your presence in the Google My Business database. However, few local ranking signals are more important than the quality and amount of ratings you receive through services such as Yelp and Google My Business. This is one of the main reasons why reputation management – that is, currying online favor in the form of Google and Yelp ratings – is so critical to the success of your online marketing campaign. Though one of the most difficult aspects to influence, reputation management can improve your search ranking, your online appeal and even your property owner statistics if done correctly. Fortunately, our checklist for reputation management best practices can make sure you do precisely that: l Develop your post checkout review strategy. One of the worst things you can do is let your guests leave without giving them the chance to review your company. Though there are many reviewers out there that don’t need prompting, the vast majority of guests that stay at your property won’t even think about leaving a review. Therefore, it is important to set up an automated checkout email system that provides each and every guest with an opportunity to visit your review portal and let you know exactly how their stay went. Not only will this improve your review numbers, but it also will make you look like the caring property manager you want to be!

a viable option, this opens you up to suboptimal reviews which you want to do your best to avoid at all costs. Fortunately, while you can’t avoid all bad reviews, you can implement a pre-qualification review portal hosted directly on your site that will not only discourage bad reviews, but also encourage good ones. All you need to do is create a webpage on your site that has a simple “Thumbs Up, Thumbs Down” system. When the guest clicks on the thumbs up – signaling they had a good time – they will be transported to the review portal of their choice. If they click the thumbs down, they’ll be sent to an email form that allows them to sort out their feelings (read: lambast and criticize) in a private email that is sent directly to your customer service. By the time they are done typing out their angry email, for most angry reviewers, the moment will have passed, and you will have avoided the 1-star review that no one wants! l Create review business cards and teepees. If you leave business cards and cardstock teepees that include the URL to your review portal, you will be able to remind people who are currently staying with you to leave a good review. Remember, those who are in the midst of staying with you are most likely to interact, so don’t let these moments pass you by. l Keep in contact with happy homeowners. Of course, guests aren’t the only sources for reviews. If you have happy homeowners that you are always in contact with, make sure to ask them for reviews as well. Since reviewing your company directly effects their profits, they should be happy to leave a glowing review that bumps you up slightly in the rankings.

Utilize All Of These Strategies And Track Your Efforts Following just one of these paths is not enough to truly gain the success you desire. If you want to improve your stock of homeowners, increase your site traffic and put your business on the fast track to success, it is important to utilize all these strategies and follow them out to the end. And don’t forget to track your efforts to see what is working and what is not with services such as CallRail (a call tracking service), Convertable.com (intelligent contact forms that allow you to track all correspondence through your site), and even conversion tracking in Google analytics. If you do all this – and hire the services of a professional internet marketing agency to help you with the technical issues – you will find yourself on the path to property management and SEO success!

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

l Create a pre-qualification review portal. Though sending a link directly to Google Plus or Yelp with your checkout email is Marketing

| Business

RESOLUTIONS 2016: A NEW YEAR, A NEW YOU,

A NEW APPROACH TO YOUR BUSINESS By: Ben Edwards, Weatherby Consulting

We encounter many vacation rental managers who operate their businesses in a lax hospitality state of mind, similar to that of a relaxed, family-run operation. This type operation is generally service-centered, and that may be the only attribute. While providing great service is always key to any successful vacation rental operation, a professional vacation rental management company must be centered on properties, people and process. Access to third-party listing sites and the ease of setting up distribution channels has allowed numerous entrepreneurs the opportunity to establish vacation rental businesses. However, simply owning and operating a vacation rental business is a far cry from progressively managing a professional vacation rental business. In today’s ever-changing landscape, creating a consistent and meaningful profit for your business is more important than ever. It is also as challenging as ever. Sustainable profits and business operations require professional, prudent decision-making skills, grounded in fact based, data driven metrics and the application of strong financial management. The result is the dividing line between a vacation rental hobby and a progressive vacation rental business. The following business resolutions are designed to impact profits while creating a professional business operation. As we travel the country working with 68

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vacation rental operations of all sizes, we discover that the specific categories found below represent the greatest opportunities for the average vacation rental manager. Let’s get started. We will begin with the center point of every vacation rental operation and discuss macro-business operations and strategy, all the while working toward the more granular aspects of the business.a Properties, People and Process – At Weatherby Consulting, we’re huge fans of Marcus Lemonis, star of The Profit, which airs on CNBC. Marcus’ mantra is People, Process and Product. We’ve applied his over-arching strategy to the vacation rental business and developed Properties, People and Process as the macro center point for a professional, progressive vacation rental business.

Properties

very year millions of people make New Year resolutions in a positive effort to impact their health, personal relationships or other facets of daily life. Many also create a set of personal goals to achieve in the new year. With so much time, attention and thought dedicated to personal improvement, we want to shift the focus this New Year to Business Improvement or Business Resolutions for 2016.

Does your operation accept any and all properties or only specific segments of the market in which you operate? The most successful vacation rental companies we work with have a plan surrounding their property mix that leverages their operational structure and the market in which they operate. Having the right property mix ties directly into gross rental revenue and ensures that your business is not weighted in one specific area. It also protects your business from creating an inventory mix not suited to travelers seeking your destination.

Example: An excess of one particular property type such as a two-bedroom/two-bath condominium may work well if your market, like the Gulf Coast, is primarily condominiums, and if the average guest demographic presents a strong demand for condominiums. However, if you’re operating along the coast of the Outer Banks, condominiums are not as attractive to vacationers in that destination. Continual review of properties in your rental management program, or those desiring to join your program, focused on profitability and ease of management will ensure that your company has a balanced portfolio and is not overly weighted in inventory that does not generate a reasonable return. For too long vacation rental managers believed the number of properties correlated with increased profits. Even today, number of properties remains a primary benchmark in the industry. More often however, it’s not so much the number of properties, rather the right mix of properties, that drives increased profits. In today’s vacation landscape travelers are more discerning; their expectations are higher. Owners unwilling to properly maintain and upgrade their rental properties become a liability to your business and decrease the return necessary to operate a professional business model. Does your operation have proactive ways of keeping owners engaged in the proper care and upgrades necessary to continually and consistently deliver on the expectations of the guest?

PEOPLE

Jim Collins, author of Good to Great, preaches the procurement of the right people for any organization. The vacation rental business is no different. Having intelligent, service-oriented personnel is a must in any vacation rental business. Clearly communicating the company’s goals and objectives is imperative in leading a successful operation and getting not only the most, but the best, out of your personnel. The goals and objectives of your personnel are best managed when clear, measurable results are identified for all parties involved. If you can’t measure it, you can’t manage it! Providing your team clear direction will help ensure that each individual is pulling in the same direction and operating as effectively as possible.

PROCESS

This is where we get a bit granular. Assuming your vacation rental business has good inventory with a clear plan to maintain and grow your properties, and your business has the personnel capable of success, then the devil is indeed in the details. Or in our case, the Process. In any vacation rental business we can draw distinctions between processes relative to Accounting, Operations and Marketing, but to manage a professional vacation rental business progressively, you must leverage the results in each area for combined decision-making and solutions that benefit the overall business. Financially managing your vacation rental business with sound, generally accepted accounting principles is as critical to the evaluation of everyday operations as marketing initiatives are to the generation of gross revenues. Does your vacation rental business produce a monthly financial package that succinctly ties revenues and expenses to items such as budgets, bank accounts, trust accounts and cash flows? If so, is the financial package properly reviewed to assist in making shortterm and long-term decisions necessary to maximize profits? If the answer to either question is no, you have your first business resolution of 2016.

environment in which the employee knows specifically what is expected and has the tools to properly execute his responsibilities. Examples of these processes include: Inspection forms for inventory, routine maintenance checks with detailed results for owners, proper evaluation of housekeeping fees versus expenses and revenue-orientated goals for reservations employees. Operational work flows and tracking mechanisms can leverage an ever-increasing array of software solutions or may simply require a proven and streamlined checklist. Understanding the profitability of certain tasks or departments often requires a simple evaluation applying proven formulas utilized throughout the industry. As your second business resolution, make 2016 the year you review, initiate and/ or improve your operational work flows and the systematic forms behind each process and evaluate each process for profitability. Of course, no conversation on progressively managing a vacation rental business is complete without a look at revenue generation and the marketing behind it. As we mentioned earlier, with the wide variety of electronic channels available, almost anyone can “grab” a few units and set up points of distribution. But is this really effective marketing? For most, participating in distribution channels is not an option but a critical part of overall revenue generation. We certainly understand this, but is your business leveraging your tools and processes to determine the best return on your investment? Could marketing dollars be shifted from one initiative to another to increase revenue without increasing expense? Understanding how to evaluate performance of marketing initiatives and implementing the processes to routinely do so, drives top-line revenue while minding the associated expenses. In addition to distribution channels, how strong is your ability to market directly to your target guests and owners? Having a website that is completely compatible and responsive — one with mobile platforms that provide full online booking capabilities — is critical in today’s technology driven landscape. A cutting edge web presence can also provide some of the most effective marketing initiatives at the lowest price points. For example, a website with excellent content and search engine optimization drives substantial traffic volume directly to your business at minimal cost. Routine email marketing and/ or triggered email messaging, to both former and prospective guests, provides a cost effective way to reach a targeted audience. As with any other process discussed, applying the same structured evaluation and tracking procedures to marketing efforts will create a clear picture of your business’s return on investment and how that contributes to overall profitability. Your third business resolution for 2016? Evaluate your marketing platforms, such as websites, and ensure you have the processes in place to properly track the performance of specific marketing initiatives.

2016 is a New Year

In addition to the typical goals associated with self-improvement, we hope we have inspired you to consider goals and resolutions for your vacation rental business. Carry the mantra of Properties, People and Process into the new year with the intent of leveraging all three aspects to enhance your vacation rental business and increase your profits.

Ben Edwards,

President Weatherby Consulting

Operationally, a progressively-managed, professional vacation rental business sets itself apart from others by utilizing work flows, systematic forms and quality rules that create successful and consistent guest and owner experiences through accountability. In addition, having a clearly defined organizational structure as an operational process creates efficiencies in leadership. Setting the proper expectations for personnel and having the processes in place to track results and establish accountability creates an Business

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A Deeper Look into Expediaâ&#x20AC;&#x2122;s

Acquisition of HomeAway E

xpedia completed its purchase of HomeAway on December 15, 2015, in an acquisition worth $3.9 billion in cash and stock. Though the transaction will dilute Expediaâ&#x20AC;&#x2122;s earnings per share in 2016 (the first year of ownership), it will be accretive over the long run. In contrast, on September 17, 2015, Expedia completed its acquisition of Orbitz, including all of its brands, for a total purchase consideration of $1.8 billion.

VRM Intel Magazine | Winter 2016

2 HomeAway Acquisition Timeline

Expedia and HomeAway Brands Besides Expedia.com®, Expedia owns the following brands: Hotels.com®, Hotwire, Travelocity®, Egencia®, Venere. com™, trivago®, Wotif Group, Expedia Local Expert®, Classic Vacations®, Expedia® CruiseShipCenters®, CarRentals.com™, and now Orbitz Worldwide, a global travel portfolio including Orbitz, ebookers, HotelClub and CheapTickets, Orbitz Partner Network and Orbitz for Business. The HomeAway portfolio includes HomeAway.com, VRBO. com, VacationRentals.com, HomeAway.co.uk, OwnersDirect. co.uk, HomeAway.de, Abritel.fr, Homelidays.com, HomeAway. es, Toprural.es, AlugueTemporada.com.br, Stayz.com.au in Australia and travelmob.com in Singapore. HomeAway also owns a majority interest in Bookabach.com.nz, BedandBreakfast.com, HomeAway Software for Professionals and Glad to Have You. According to Expedia CEO, Dara Khosrowshahi, in the initial announcement, “Our welcoming HomeAway is a winner in two ways. First, it brings industry leading vacation rental brands, traffic and unique inventory to the Expedia family. All of us have witnessed not only the incredible growth of the sharing economy, but also the substantial growth of alternative lodging in particular. Last year according to PhocusWright, one in four U.S. travelers went to private accommodations for their leisure travel. We’ve been very clear that the next chapter of our growth is supply bed, and we think HomeAway will accelerate that growth in the fastest growing segment we see out there.” Khosrowshahi continued, “Second, HomeAway has been undertaking a challenging transition…that of a listing based model to an online transactional marketplace. The HomeAway team was working on this challenge on a stand-alone basis,

but together we believe we can get there much faster and with greater certainty. As many of you know, we’ve been working with HomeAway for some time, and very much respect their capabilities and at the same time are super excited about working together under a single corporate umbrella.” By bringing HomeAway’s brands under its umbrella, Expedia will strengthen its presence in the vacation rental market and gain competitive advantage against Airbnb. HomeAway CEO, Brian Sharples, added, “This will allow us to – one – aggressively accelerate demand growth for our suppliers, and – two – reinvest in products and services with a particular focus on making HomeAway the easiest to use and most trusted marketplace for vacation rentals in the word, all while accelerating revenue growth and margin expansion for the business.”

How will the Expedia purchase of HomeAway affect the distribution landscape for vacation rental management companies? BookingPal CEO, Alex Aydin, whose company provides a Global Distribution System (GDS) and centralized booking platform for vacation rental properties, explained, “Expedia's acquisition shows their belief that the vacation rental market is exploding and they need to be involved in it. So now they are opening up all of their other brands to display vacation rentals such as Orbitz, Hotels. com, Venere, Travelocity, and trivago.” Aydin added, “This is a huge opportunity for property managers to be exposed to Expedia platforms and generate more bookings. Distribution

| Distribution

We have property managers that we have connected to specific Expedia brands and they have started generating bookings right away. I think that you will see a gradual shift of focus from HomeAway away from the pay per listing model to the more lucrative pay per booking model, so property managers will need to adjust to this and handle real time bookings.” LeisureLink CEO, Julian Castelli, whose company closed a $17 million round of funding in January of 2016 to grow their distribution, reservations and technology services, agreed. “Expedia was one of the first to introduce online travel and bookings, and today is a world leader in e-commerce for all travel categories,” said Castelli. “We expect their interest in vacation rentals to accelerate the transition of the vacation rental category away from offline bookings and more towards online bookings. HomeAway was already moving aggressively in this direction, and we expect to see more incentives, tools and marketing benefits used to encourage suppliers to make their properties online bookable.”

How can VRMs leverage their position with an Expedia-owned HomeAway? As VRMs look toward working with an Expedia-owned HomeAway, managers are investigating ways to leverage the multi-channel relationship. One way is to invest in listing quality on third-party channels. “Property managers need to ensure that they are focusing on merchandising their products well with great imagery, content and a solid pricing strategy,” said Aydin. “This will help them take advantage of the combined strengths of HomeAway and Expedia. 72

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At BookingPal, we have developed tools such as myOptimize that will help PMs optimize their merchandising to take advantage of the new OTAs entering the vacation rental market.” Castelli pointed out another another way for VRMs to optimize their use of these channels. “We encourage property managers to be early adopters of all the promotion, features and exposure that Expedia and HomeAway are offering to suppliers,” said Castelli. “The industry is changing, and change means either a threat or an opportunity for property managers, depending on how they react. Suppliers who adapt to change early will have a fantastic opportunity to gain greater reach with consumers faster than their competitors. Those who resist the change risk being left behind as the industry evolves.” Castelli added, “To be clear, we understand that adapting to change is not easy. Successful e-commerce with Expedia/ HomeAway could mean difficult changes for property managers like learning how to provide online availability and connectivity, dealing with channel commissions and rate parity requirements, and providing enhanced content and merchandising features that encourage online conversion.“

What trends in pricing and marketing costs can VRMs expect to see over the next one to three years? According to Aydin, “The rise of OTAs and distribution in the vacation rental market will allow property managers to diversify their marketing and reach new customers at a much faster rate. With distribution channels transitioning to sharing the channel cost directly with customers, this should help more property

Reference: Expedia Inc. (2015). Form S-4 Registration Statement. Retrieved from United States Securities and Exchange Commission.

Castelli added, “Those concerns are valid, and we are seeing rising marketing costs across the board. SEO is harder to maintain and becoming less effective, PPC costs are going up every year, HomeAway basic listings are providing less exposure. Those were the main sources of customer acquisition over the last 5 years. Now big distribution players like Expedia, Priceline Group and Airbnb are making huge investments in the sector and gaining market share and customer loyalty. This disrupts the old channels and drives marketing prices up for property managers trying to drive traffic to their own sites. We expect those types of marketing costs to continue to rise.” However, there is opportunity with the growth and consolidation of these channels. “On the flip side, the opportunities to generate bookings growth from distribution channels has never been greater for property managers,” said Castelli. “There are more channels than ever available to vacation rental suppliers. They are expanding their reach, and they are adapting their platforms to be more accommodating to the vacation rental category. Even more exciting, commissions for many of these channels are trending down. Airbnb's entry into the market with three to five percent commissions is driving commissions at competing OTAs down. We expect to see continued reductions as some of the larger players adopt new models to make their platforms more attractive to the vacation rental category.”

Vacation Rental industry,” said Milo. “The opportunities include true global distribution of vacation rentals using the best practices of HomeAway with the worldwide distribution expertise of Expedia. The surprises could include higher costs to property managers in more competitive advertising areas, spin-offs or sales of certain assets, brands or divisions, and personnel changes. But, considering the marriage has just consummated let's hope that it is a win-win for Expedia, property managers and HomeAway employees. This positions four powerful well-funded companies in the vacation rental space now with Expedia, TripAdvisor, Airbnb, and Priceline all attempting to compete for supply in the core vacation rental resort market." Castelli added, “Expedia is the biggest name in travel. The fact that they are investing heavily in vacation rentals will have a large and positive impact on the industry over the long term. With Expedia's marketing reach, vacation rentals will be introduced to new customer segments and we expect overall awareness, trial and adoption of the vacation rental lodging category to grow as a result.” By Amy Hinote

managers participate that once did not have the margins to do so previously.”

A New Reality Steve Milo, founder of Florida-based Vacation Rental Pros, is cautiously optimistic about the acquisition. “The new marriage between HomeAway and Expedia will bring new opportunities and unexpected surprises for professional managers in the Distribution

| Distribution

Traveler Fees: Afor Win-Win-Win Vacation Rental Managers By Amy Hinote

acation rental managers get unexpected wins as TripAdvisor and HomeAway add traveler fees to keep step with Airbnb. “We are going to be free to travelers,” said Brian Sharples, co-founder and CEO of HomeAway, to shareholders in November of 2014.

“TripAdvisor and Airbnb have chosen to charge big fees to travelers,” Sharples continued. “Well, we’re going to have a pretty sizeable marketing budget in the next few years. And we’re going to be letting everybody know, when you come to our platform, you don’t pay a fee, and we think that’s a big deal because if you look historically at the travel industry, those competitors who adopted no traveler fees first are the ones that ended up being the big winners in that business.” But that was 2014. One year later, Sharples announced that, not only was Expedia purchasing HomeAway, but that HomeAway was following the lead of competitors Airbnb and TripAdvisor and incorporating a fee for travelers. “We do plan to introduce a traveler service fee in mid-2016 on transactions through our platform,” said Sharples in HomeAway’s Q3 2015 Earnings Call. “We’ve been preparing for these changes for most of the year and have already decided prior to this combination that launching the service fee is the best way forward for our marketplace.”

VRM Intel Magazine | Winter 2016

How the Traveler Fee Started In 2009, AirBed And Breakfast rebranded as Airbnb. TechCrunch reported in a March 2009 article Y Combinator's AirBed And Breakfast Casts A Wider Net For Housing Rentals: “As AirBnB here is also a monetary benefit to opening up the site," says Chesky. "For each rental, AirBnB takes a 7 to 10 percent cut of the traveler’s payment (as the rental price of the accommodation goes up, AirBnB will take less of a cut) and also takes a flat 3 percent cut of what the seller receives.”

In 2010, Forbes published an article entitled “Airbnb: The Ebay for the Entire House,” stating Airbnb “gets 6% to 12% of guest fees (and an additional 3% from the host to cover transaction fees).”

According to an Airbnb.com help page in 2011, “This service fee is what actually goes to the site's operation, enables the platform that we provide, and allows us to offer great customer support before, during and after travel. We charge travelers a 6-12% service fee, depending on the total of the reservation. The higher the total, the lower the percentage of the fee. The reason we scale the fee is so the traveler can save money when booking large reservations. Airbnb also charges the host a 3% fee for every booking that is completed. This fee covers the cost of processing the guest's payment."

In early 2015, TripAdvisor began proactively targeting Airbnb’s hosts and adding a pricing model for individually owned rentals that mimicked Airbnb’s. However, TripAdvisor had not offered that pricing structure to VRMs. In an August letter to VRM Intel, Tracey Zhen, then GM of TripAdvisor Vacation Rentals, said, “While property managers always have and will remain a fundamental part of what we do, another key change this year and last has been our increased focus on homeowners as demand to list independent properties continues to rise sharply in the vacation rental market. Property managers – which have sometimes thousands of properties and require account managers, custom technical integrations and more – have different requirements to independent homeowners. We’ve set our rates to match these requirements, and these rates are very much in line with industry standards."

Then came the November 2015 announcement that Expedia was purchasing HomeAway along with HomeAway’s decision to follow Airbnb’s lead and add the traveler fee. Sharples maintained they thoroughly vetted the decision to add a traveler fee. “We have done, and our suppliers who are listening should understand this too, we’ve done enough research and testing on this to know that it isn’t going to substantially change conversion rates on bookings,” said Sharples. “We have unique inventory and unique products, and when somebody goes to rent that particular house in Martha’s Vineyard with four bedrooms, they want that house. We’re going to have caps on fees. It’s not going to be some extraordinary thing that’s going to be a huge burden to travelers. We’ve really thought this thing through, and we believe it’s going to be a big success.” One month later, TripAdvisor Vacation Rentals announced they had made the decision to add the traveler fee for professionally managed listings – as well – saying, “As of December 9th, the fee for managers will be only 3%. This covers the cost of processing credit cards. In exchange, we will charge the traveler a fee to make a booking.”

Why a Traveler Fee Works Airbnb’s inventory grew from shared accommodations and urban accommodations not previously listed in the marketplace. It was new inventory, so consumers could not compare pricing on other channels. A traveler fee was effective because consumers were not able to find a better price elsewhere. Even as late as mid-2015, in HomeAway’s Q2 2015 Earnings Call, Sharples said, “We've been doing some research in the U.S. and looking at property overlap for Airbnb, we were surprised that how low it was, we actually did a very thorough job of looking at that. And so think about that kind of in the 10% range in the U.S. We're doing a similar study in Europe, we do have an expectation the overlap will be higher in Europe, probably not substantially, so maybe at the outset could be 2X of that so maybe 20%.” With only a 10% overlap in vacation rental inventory in the U.S. between the two largest marketplaces in the industry – Airbnb and HomeAway – in June of 2015, the pricing structure for Airbnb’s rentals arguably hasn’t been tested against competition. But Airbnb is quickly moving into professionally managed vacation rentals. “Airbnb is a very dynamic and exciting company, and they are moving into the professionally managed vacation rental industry very quickly,” said Julian Castelli, CEO at LeisureLink. “We started providing property managers integrated access to Airbnb in the second quarter of 2015, and have seen very strong growth from this channel. We are working hand in hand with Airbnb to help them tailor their offering to the needs of property managers, and have seen great progress. As you know, their original offering was designed for urban hosts, so there has been a learning curve for both Airbnb and property managers as they learn to work together. We are excited to facilitate the acceleration of this learning curve by helping both sides understand the needs of the other, and providing tools and services to bridge gaps when they arise.” With Airbnb’s technology integration with PMS platforms, including LiveRez, BookingPal and Kigo – as well as LeisureLink – the amount of overlap of inventory between the marketplaces is expected to grow quickly. Fortunately for Airbnb, now that HomeAway and TripAdvisor have adopted their pricing model, consumers will not see a substantial pricing difference when comparing identical homes between these third-party channels. Distribution

| Distribution

better accommodate property manager economics. These channels want to work with property managers, and they are getting a better understanding of the economic constraints that property managers face. Since vacation rentals are not generic, and are not often listed on dozens of sites, there is an opportunity to shift some of the cost of distribution to the consumer in exchange for the convenience and selection being offered to them. I think this is a good effort, and I look forward to seeing how it is received.”

VRMs Win with Rate Parity Eye for Travel defines rate parity as “maintaining consistent rates for the same product in all online distribution channels – Expedia, Orbitz, Hotwire, etc. – regardless of what commission the OTA makes.” When hotels partnered with an OTA, the OTA required hotels to agree to rate parity, and the hotels were not allowed to undercut the rates they display for your rooms on their own websites. But rate parity agreements are changing. According to the Chicago Tribune, “In the United States, a recent court decision in a class-action antitrust suit upheld the legality of parity agreements: The court held that they represented ‘rational business interests rather than anti-competitive behavior.’ Several European governments, on the other hand, are actively trying to loosen them, with some success: Responding to pressure, Booking.com has agreed to make its standard agreements less restrictive, and the pressure is mounting from several governments.” Perkins, E. (2015, April 28). Rate parity: The battle to determine how you buy hotel rooms. Chicago Tribune See more at “What We Learned About Working with OTAs From Hotels” on page 80

In the vacation rental industry, OTAs are not currently enforcing rate parity of any kind. This allows VRMs the flexibility to make sure the best price available is the price customers receive by booking directly through the management company.

VRMs Win VRMs Win Because with Better Pricing on Third-Party Channels Consumers are Smart “In conjunction with the new traveler service fee, we’ll be lowering commission rates for most of our pay per booking suppliers and providing meaningful incentives to our subscribers based on the bookings they do through our platform,” said HomeAway’s Sharples. “All in all, we expect these business model changes to be a huge win for our suppliers and travelers while providing an engine for accelerated and sustained growth well into the future.”

The TripAdvisor email announcement of their move to add a traveler fee and lower commission rates for VRMs said, “We’re excited to announce this because it makes it easier to be part of the largest global travel website. Why this change is good for everyone: As a property manager, you will pay less commission, the fee will be just 3% for accepted bookings, Managers will pay the same fee as individual owners going forward, and we think this will create a stronger marketplace with more managers able to participate.” According to Alex Aydin, CEO at BookingPal, “With distribution channels transitioning to sharing the channel cost directly with customers, this should help more property managers participate that did not have the margins to do so previously. This is an opportunity for many additional property managers to participate in these powerful distribution channels.” LeisureLink’s Castelli agreed, “This represents both innovation and a legitimate attempt by these distribution channels to adopt new pricing models that can 76

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“Consumers are also very savvy so I would imagine that we will see a resurgence of the billboard effect where consumers check the direct property management website prices and may end up booking directly after seeing their inventory on a distribution channel to avoid the above the line fees charged by the channels,” said BookingPal’s Aydin. “This could be a big win for both the channels and the property managers.” Today’s consumers are extremely knowledgeable in performing online comparison pricing shopping. By simply copying part of the property description in a search engine or by doing a quick image search, vacation rental shoppers can easily find the property management company that originally listed the home. With additional traveler fees being added to HomeAway, Airbnb and TripAdvisor transactions, potential guests will quickly figure out that they can save money by booking direct, and VRMs have an opportunity to speed up this discovery with a little consumer education about traveler fees.

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What VRMs Can Learn from the Rocky Relationship between Hotels and OTAs

ome might argue that the unprecedented success of Priceline and The relationship between hoteliers Expedia has forever changed the balance of power between hotels and online travel agencies (OTAs). Hotels feel violated as what began as a and OTAs has been a troubled one. reciprocal relationship has turned one-sided via escalating commissions and restricted to guest data. As VRMs sprint to add their vacation As the influence of OTAs grows in rental propertiesaccess to Airbnb, TripAdvisor, Expedia’s HomeAway and Priceline’s the vacation rental industry, are there Booking.com, will the VRM’s fate parallel that of hoteliers? ways VRMs can avoid the same How Hotels Became mistakes? OTA-Dependent

By Amy Hinote

When OTAs came to the marketplace, according to Executive Vice President at HeBS Digital, Jason Price, in Tnooz’s Was Hotel Marketing Always This Complicated?, “Hoteliers had relied primarily on others to put heads in beds and applied the same thinking with the web. Hotels gave net rates to their favorite agencies, tour operators and hotel consolidators so the same practice was applied online to the third-party vendors.”

VRM Intel Magazine | Winter 2016

According to the landmark 2011 study Distribution Channel Analysis: a Guide for Hotels by Cindy Estis Green & Mark V. Lomanno, sponsored by AH&LA and STR and published by HSMAI, “By the end of the 1970s, the travel agency channel used the global distribution systems (GDSs) provided by the airlines to facilitate airline bookings…Travel agencies found electronic booking less costly to their operation and began to insist that all products be available for them

through these channels. In the early 1980s, GDS volume was less than 2% of all hotel volume and by 1999, had grown to more than 20%.” Microsoft saw the opportunity for consumer-driven OTAs and launched Expedia in 1996. Expedia would prove to set the pace for countless clones (many of which are now Expedia-owned) in both the leisure and corporate travel industry. In 1998, Larry Page and Sergy Brin launched Google which indexed web pages based on popularity with other users and websites and it changed the way travelers searched for accommodations. According to Tnooz founder Kevin May, “It was the beginning of a love-hate relationship with the industry that continues to this day.”

“Many travel figures now point to the 9/11 tragedy as a pivotal moment in the history of online travel,” said May. “As the industry evaluated how it would deal with new security measures and cope with a downturn in both leisure and business trips, web brands became the marketplaces for air and hotel suppliers trying to offload huge amounts of unfilled inventory – a strategy that has pretty much continued to this day.” By 2005, e-commerce had matured, and hotels processed so many types of online booking with wildly varying fees that tracking per-channel cost per acquisition was unfeasible. In addition, hoteliers struggled to build and maintain branded websites with the functionality that customers wanted and the content that search engines wanted. Moreover, paid search budgets skyrocketed with OTAs driving up costs in the PPC bidding war. By 2008, an underlying foundation of consumer-generating conversation for OTAs was growing quickly. Distribution Channel Analysis: a Guide for Hotels explained, “There was still plenty of e-commerce, but it is in the context of shared experience, particularly when examining the travel networks. Many sites entirely driven by e-commerce in 2005 were now hurriedly adding community elements to encourage visitors to expand their information gathering and talk to each other.” In 2011, consumers’ use of OTAs began to climb sharply. “OTA share increased 108% for economy and midscale hotels from 2011 to 2014; 52% for uppermidscale and upscale hotels; and 33% for upper-upscale and luxury hotels,” said Rebecca Bucnis, Kalibri Labs’ executive VP and chief commercial officer to HotelNewsNow Editor, Patrick Maycock, in Study: OTAs continue to steal market share. ( July 2015) The same study showed that “Expedia, The Priceline Group and others claimed 15.8% of total guest-paid room revenue for hotel chains with fewer than 30 properties. Their share of revenue among chains with more than 30 properties was 10.2%. OTA commissions play a part in the above. For smaller chains, commissions averaged at 19.8% of total guest-paid room revenue. For larger chains, commissions were 15.8%.” According to research carried out by Digital Key in 2014, one in three leisure bookings and one in two business bookings are now made through OTAs. As a result, vacation rental operators are asking themselves, “What would it mean to my business if one out of every three bookings came through a commission-based third-party channel?”

Why Consumers Choose Booking with OTAs Instead of Booking Directly with the Hotel In theory, customers prefer to eliminate middle man channels and work directly with a supplier when possible. However, when the user experience, trust level, selection and price are better when using a third-party channel, customers will opt for an indirect purchase. Tnooz Editor-in-Chief, Sean O’Neill, reported on a study that suggests that the often-cited “billboard effect” for hotels listed on OTAs may no longer exist. The study was sponsored by the AH&LA’s Consumer Innovation Forum, and the data was analyzed by P. K. Kannan, chair of the department of marketing at the Robert H. Smith School of Business at the University of Maryland. (Tnooz, “The Billboard Effect is dead, says a study of hotels listed on OTAs,” July 30, 2015) Kannan told O’Neill, “Between 2012 and 2014, the number of people who exclusively visit hotel sites has come down from 12% to 10%. Whereas people who visit exclusively intermediary sites have gone up from 48% to 60%. People who go to both types of sites have dropped from 40% to 30%. Why are travelers choosing to book on OTAs rather than directly on hotel websites?

PRICE In The Street’s consumer-facing article Should You Book Hotel Rooms Directly or Through Online Travel Agencies? Author Robert McGarvey tells travelers, “Start by recognizing that if the lowest price is key to you, always check the OTAs, if not directly, then through tools like Kayak and TripAdvisor that gather up multiple quotes. Don’t be surprised, but prices may vary significantly – price parity requirements notwithstanding. That’s why even bargain hunters who intend to buy directly at the hotel always glance at a roundup of prices, just as a double check.” (November 11, 2015)

SELECTION AND COMPARISON With rate parity agreements in place, hotel shoppers have been conditioned to know that they will not get a better rate by booking directly with the hotel, leaving them with one clear decision to make: choose a one-stop shopping experience with the OTA or choose brand loyalty with the hotel. The convenience of using an OTA enables travelers to search and compare a variety of hotels, and once it's time to book, travelers can have confidence in knowing they're getting the same price as they would find on the hotel's own site.

TRUST AND CONSUMER-GENERATED REVIEWS Booking a hotel in a destination never visited can be a scary experience. Consumers don’t know much about the location, the cleanliness or the safety of a hotel. OTAs serve to alleviate consumer fears. Full refund cancellation policies, PCI compliance and credit card security and the ability to see ratings and reviews from other travelers give guests confidence in their purchasing decisions. Distribution

| Distribution

4 Challenges Hotels Face in Working with OTAs

Strategies VRMs Can Implement in Working with OTAs

Currently, hotels are in a constant state of strife in working with OTAs as they face four key pain points:

B Make an internal company-wide decision, implement processes and empower reservation agents and front desk staff to ensure the best price guests receive is the direct price.

B Soaring Commissions: The major chain hotels are paying over 20% commissions, perhaps 25%, and independent hotels are easily paying 40%. C Marketing Costs: Online marketing costs associated with reaching travelers is being increasingly funneled through paid online advertisements to the OTAs thereby making hotel’s direct access to new customers much more costly.

Who Spends the Most on Google Adwords?

$157,700,000

C Invest in company websites and improve the guest experience on brand.com. D Prop up, invest in and work with channels which are more favorable for vacation rentals. E Look for ways to work directly with metasearch platforms. F Commit to capturing and storing every one of your guest's and potential guest’s email addresses. G Display and encourage customer reviews. H Find opportunities in both online and voice channels to reassure customers and create a trust-centered, transparent booking experience.

$82,300,000

$81,900,000

I Unite to pressure OTAs to provide guest data with the booking. J Incentivize direct bookings by adding more value to your guest experience. K Consistently measure the effectiveness of each channel.

$71,600,000

D Restricted Access to Guest Data: Many OTAs withhold some or all guest data from hoteliers. For example, according to NAVIS, “Booking.com announced last year that it would cease to provide hotels with the guest's email when it sends guest confirmation. When hotels do not have ready access to their guest data, and the OTA ‘owns’ the guest rather than the property, it severely hampers the ability for hotels to capture new and repeat guests with the highest value.” E Guest Satisfaction: Guests booking through third-party channels often arrive with very little or inaccurate information regarding the hotel. The negative reviews which follow are rarely directed at the OTA handling the booking, and hotels find themselves in a defensive position.

Steps Vacation Rental Managers Can Take to Work More Effectively with OTAs In Distribution Channel Analysis: a Guide for Hotels, Marriott International VP eCommerce and Strategy, George Corbin, and VP eDistribution, Larraine Voll, said, “In principle, the ‘smartest moves’ are those that protect and reinforce your direct connection with your end-customer. If you give that up, you mortgage your future by surrendering your ability to manage your product, your brand, your profit margin, and your relationship with your customer.” While investigating the factors that led hoteliers to have a less profitable relationship with OTAs than they had hoped, VRMs are looking for opportunities to approach OTAs differently.

VRM Intel Magazine | Winter 2016

L Stay in continuous contact with past guests. M Unite as an industry to push back on rate parity agreements.

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| Technology

The Best Property Management System for Your Company:

Do You Already Have it? A

question I am frequently asked is, “What system should we buy?” In VRM Intel’s “Changing Your Technology Provider: What You Need to Know” (October 2015), Tom K and I outlined some in-depth methodology to finding that answer. However, it is also quite possible that the answer to that question is – The one you already have! By Doug Macnaught Founding Member The VRM Consultants

VRM Intel Magazine | Winter 2016

Getting the Most Out of Your Existing System When you purchased your current property management system (PMS), hopefully, you went through a thorough process to select the best one for your needs following with a comprehensive Installation and Training process. You fully understood the capabilities of the software and were using it in the best possible way for your business.

Check to see what new integrations your software vendor has and see how they may benefit you. In my experience, integrated tools can add significant value to your business and fill gaps in your main system capabilities without the need to change the core PMS.

Continual Staff Training

What about now? Let’s explore some of the ways you can maximize the benefit of what you already have.

If you are a real estate agent or broker, you are required to attend continuing education classes to stay current with changes in rules, regulations or best practices. Consider the same with your

Come Out from Under the Rock and Get the Latest Release

PMS and the staff that uses it. How many of your current staff were trained by the software vendor? When the existing software was installed the staff made decisions on how to set up the system based on the conditions at that time. Are they still valid?

It may be surprising, but most companies never evaluate the systems they have once they are installed. They “do it this way because that’s how the system has to work.” Many companies have been saying that for more than a decade, yet the new versions of their product have evolved beyond recognition.

Use the resources provided by your software vendor to get your key staff trained again. You will discover that things have likely changed, and this will give you the opportunity to better use the system.

Come out from under the rock, take a look at the latest version of your software and see what it does. It probably won’t save you money on your car insurance, but you may be pleasantly surprised at what it can do for your business.

Seek Out New Features Some of my most successful clients were the ones who met with us every year to evaluate the new things that had been added to the system. These clients made a point of trying to stay up to date on how the software was evolving and adapted their business practices where relevant. You will go through this process whenever you change software because a new system will not work exactly the same way. Why not consider an annual review of your current system to see how it can benefit you in areas you had not thought of before? The cost of doing this will be significantly less than buying a new system.

New Tools & Add-Ons One of the fastest growing segments of technology innovation in the vacation rental industry is coming from third-party vendors in the form of tools and add-ons for Email Marketing, Price and Yield Management, Mobile Guest Apps, Housekeeping and Inspections (to name a few). These third-party tools are typically very specialized and can add tremendous value for the money.

Selling to Your New Staff When new staff members come in to the business, especially at middle and senior management levels, they often lobby to change the core system. This is usually because new managers are unfamiliar with the system’s capabilities and see the system as inferior. This is not a good enough reason to change. Reach out to the software vendor and have them arrange a presentation to the new managers as if they were selling the system. The vendor should be happy to do this so that he won’t risk losing a client.

Find New Sources for Information and Pick Their Brains Whether it be new staff or friendly companies that use the same products, find out what they like about the systems and see how you compare. One of the best ways to enhance your systems is with a breath of fresh air from other perspectives. A number of companies that I know developed relationships with other users of the same system in “non-competitive” markets. Technology

| Technology

They would meet twice a year and have an exchange of staff ideas and knowledge. This was immensely useful in maximizing the use of their systems. Each company has very different solutions to the same issues that challenge all companies, so consider this as a way to help all aspects of your business and not just the software component.

Requesting New Features Software companies rely on feedback and suggestions to continue

to develop their products. This is mostly received during the New Sale process and less from existing clients. If you have a need for a new feature or a change to an existing one, rather than migrate to a new system, use whatever mechanisms are in place with your existing vendor to have it added to your product.

User Conferences Not to be confused with Industry Conferences, User Conferences are held by technology providers and can be the most valuable use of your training and travel budgets. The advantages to you and the vendor are that they are product specific, offer training sessions for your staff, allow you to meet their new partners, and you can attend networking events with companies that are using the same systems. It is a great venue to suggest new features, learn existing ones and share knowledge of your implementation. If you are a user and your vendor has a conference - attend! If they don’t - encourage them to start one - then attend!

Industry Events Over the years, industry conferences have undergone significant changes both in size and relevance. In the last couple of years, product-specific education opportunities have also increased. 84

VRM Intel Magazine | Winter 2016

At recent conferences there have been User Events and Product Specific education tracks for sponsors. Reach out to your vendors to see if they are able to provide education either before or after the events. This can save on travel costs for the both of you.

Professional Evaluation There are many consultants operating in the industry. Ask your software company to recommend one that has an in-depth and current working knowledge of your system. It is important that the knowledge is

current, otherwise you will be wasting money and time. If you get the right one, software consultants can be very useful and generate a great ROI in terms of productivity and efficiency, not to mention increases in guest satisfaction.

It’s All About the Relationship Changing the key PM Software is a traumatic experience for any company. Most medium to large companies keep their systems for at least five years simply because it is so disruptive to change it. Keeping a good relationship with your existing vendor is the best way to get the most out of the system. They should be eager to tell you about their system and what it can do for you as well as resolve any issues that you have.

Getting the “Mist” Out of Your Existing System (DYAC) When I was first asked to write this article, DYAC (Damn You AutoCorrect) got in the way and changed the title from “Getting the Most Out of Your Software” to “Getting the Mist Out of Your Software.” But, on reflection, there is no way of getting rid of mist other than to be patient and wait for the sun to shed some light on it. My suggestion to you is to open the doors and let the sun in. Shed some light on your existing system and see what it can do for you. Hopefully you will be pleasantly surprised. Doug Macnaught, co-founder of Instant Software and creator of PropertyPlus software has worked in the vacation rental industry for decades to implement integrated technology solutions that allow large vacation rental management companies to operate efficiently and effectively. He is a founding member of The VRM Consultants.

Decades of experience Hundreds of success stories Industry-speciﬁc consulting services for your toughest decisions. Software Selection  Buy/Sell Transactions  Marketing Technology  Management Consulting 

VrmConsultants.com VRM Intel Magazine | Winter 2016

| Technology

Customer Relationship Management and the Vacation Rental Industry

By Amy Hinote

book area activities. Other technology providers have created apps like HomeAway's Glad to Have You that can serve to capture data. NAVIS has also built its Reach CRM which integrates lead data into the database. Some vacation rental managers are reaching out to non-industry platforms, i.e. Salesforce and Marketo.

If your acquisition strategy is largely built on the use of third-party distribution sites, such as VRBO, FlipKey, Booking.com and Airbnb, then – as a vacation rental marketer – you will need an effective customer retention strategy in order to justify the escalating marketing dollars spent on these channels. Creating a process to collect and utilize customer data will necessarily be part of your customer retention strategy.

Developing a CRM Strategy

t has been fifteen years since Bain & Company reported that increasing your customer retention rate by 5 percent increases profits by 25 to 95 percent. Yet most vacation rental marketers are still more focused on guest acquisition rather than retention.

With rising customer acquisition costs related to third-party distribution sites, implementing a full-scale customer retention strategy is quickly becoming essential for marketers tasked with growing the bottom line.

CRM is a powerful tool that empowers vacation rental marketers to better engage with their guests, but CRM technology requires being led by company strategy. CRM technology is not a standalone solution. It requires a strong, well-conceived plan to guide its use.

Technology platforms have been slow to help VRMs accomplish this objective. In the vacation rental industry, technology centers on the reservation transaction, not on the guest(s). In addition, vacation rentals, on average, have more than four guests per reservation who are partially responsible for the travel decision. Most of the current PMS systems and processes only track the payer, leaving out large amounts of guest data that marketers need to implement a comprehensive customer retention strategy.

What is a CRM strategy? It is easy to confuse a CRM strategy with a CRM implementation plan. The CRM strategy is the blueprint for how to turn new guests into repeat guests. The goal is to move your guest from a “folio” to an emotional relationship which recognizes that your guest is your guest through any channel. CRM is not solely a marketing function. Your CRM strategy will include every department that has interactions with customers including reservations, front desk, service and marketing.

New CRM solutions and technology tools are being introduced to help marketers gain access to the data they need to collect in order to establish a successful customer retention strategy. Guestbook, for example, is a web-based tool for VRMs being launched in the market in March that provides a CRM tool for capturing data from all of your guests along with the ability to offer and

When formulating a customer retention strategy, involve people from all customer-facing departments. The CRM strategy articulates a plan to put your guest at the heart of your business and to develop an ongoing "relationship" with each guest. It is up to you to find out what's important to guests who choose your homes.

VRM Intel Magazine | Winter 2016

As customer retention plays a larger role in the long-term success of a vacation rental management company, property managers look to create a foundation for customer relationship management (CRM) strategies.

How to Collect Data on All of Your Guests As a result of the challenges unique to the vacation rental industry, property managers have to get a little creative with how they are going to collect data from all of the guests (not just the name on the folio). Here are some ideas of ways to collect data from guests not on the reservation. B Reservations Agents

Decide on a policy/process to capture this data at the time of the reservation. For example, you could say you need it for security or to email important information or key codes — the fastest and easiest way to capture the data is at the time of reservation.

C Apps with Key Codes

After the booking, many tools provide other ways to capture additional guest data for smart home access.

D Internet Access

Another tool for obtaining guest data is to add a landing page to the guest’s access point for Wi-Fi. Similar to a hotel, you can use this type of landing page to collect the data. Silicon Travel is one company that provides a solution for internet access landing pages.

E Activities Promotion

Like the Guestbook platform, providing guests access to activities and area information offers an alternative way to collect data.

F Surveys and Reviews

As you reach out to guests for surveys and reviews, find tactics and incentives to reach out to all the guests who stayed at the property.

G Pool Passes, Parking Passes and Amenity Access

Many condominiums and communities require passes of some type for shared amenities and parking. One idea is to require a record of guests' name, email, city and home state in order to receive passes/access.

H Loyalty Programs

While not the easiest process to implement, guest loyalty programs are both an incredible way to collect customer data and a great tool for your overall CRM strategy.

Determine the Data You Want to Collect

Decide What You Want a CRM Platform to Do

In order to get the most out of a CRM, after settling on your objectives, determine which data you want to collect. Collecting data in the vacation rental industry is different from any other. In most destinations, the average party size is over four people per reservation. This creates a unique challenge because a vacation rental CRM strategy must find ways to collect data on all of the guests, not just the one who made the reservation.

Like determining which data to collect, when deciding what you want your CRM technology to do, keep it extraordinarily simple. The technology you use for CRM will be your number one source of customer data.

Because of the complex challenges facing the vacation rental industry, we suggest starting very small. Eventually, you will find ways to expand customer profiles by capturing more data (for example, do they have children or pets, what are their ages, when are special occasions, etc.) It is much easier to implement tactics to get more data once you have your guests’ basic data. The following fields are all you need to get started: u Name

u Email Address u City

u State

Using the CRM platform of your choice along with your PMS, connect this data to the property the guest booked, the folio number and the date they booked. In the future, you will find ways to expand this data, but this combination of data will allow you to create a solid foundation for a CRM strategy.

u Easy list import/export with assigned data fields u Basic email functionality u Automated emails

u Segmentation tools: If you start small in your data collection, you will only need segmentation based on booking date, booking window, stay date, preferred property type and geo-targeting.

Choose Which Technology You Will Use as a CRM Ideally, if your PMS has the ability to tie multiple guests to a reservation, then in most cases you can simply use your PMS and/or third-party tools that are integrated with your PMS. Customer relationship management is about people rather than technology – and your CRM software is simply the supporting act. The main objectives in laying the foundation for a guest retention strategy are (1) to get multiple departments working together to implement a CRM plan and (2) to start ongoing, targeted communications to your past guests. Once you’ve built a simple CRM foundation, you’ll be able to craft creative messages designed to build customer trust, loyalty and repeat business. Technology

| Technology

Technology: Reshaping Vacation Rentals

Recapping 2015:

Our Snow Globe World – Shaken, Dissolving, Reforming

Highlights: 2 New VRM Categories Technology is creating environmental conditions that will support two new VRM categories: B Virtual VRMs: Third-party booking sites that are morphing into “virtual” VRMs. C Next-Gen Mega VRMs: VRMs that can centrally manage homes in multiple destinations.

Upturning Sacred Precepts We must also focus on another critical development that is shaping the vacation rental industry. The drivers of commercial success are flipping from a historical emphasis on pleasing homeowners to a conflicting goal of catering to the needs of renters. In vacation rentals, inventory has traditionally been King. Vacation homes offer great value. A VRM with good inventory can rent any home. The traditional path to inventory growth and retention has been to answer homeowners’ calls, care for their homes and maximize their revenue.

This need not be true for virtual VRMs or OTAs. As they gain control of large pools of loyal renters, VRMs/OTAs gain power to force homeowners to use their services. No love or superior rental income required.

Vacation Rentals Before Recent Technology Traditionally, our industry allowed mom and pop companies to compete because rental management operated well as a cottage industry, i.e., one whose labor force consists of family units or individuals working at home with their own equipment.

Special editorial by George Volsky

This is tacitly confirmed by the 2008 PhoCusWright study, the first authoritative sizing of the industry, which concluded that more than two-thirds of vacation rental homeowners managed their homes themselves and that the vast majority of vacation rental management companies were small. (PhoCusWright, 2008, "Vacation Rental Marketplace: Poised for Change") The reasons why small companies could historically compete are simple: l Vacation rental homes were a great value relative to hotels.

uring 2015, technology fueled nine trends that are disrupting the structural forces that traditionally dictate who makes money in the vacation rental industry. The question here is what these trends mean for legacy vacation rental managers (VRM), our communities and industry associations. B The emergence of next-gen VRM business models servicing multiple destinations; C The growing power of third-party distribution;

l So renters proactively searched for vacation rentals, and marketing budgets were only needed to help renters find them.

l VRMs’ core value proposition was, “We clean it, fix it and take care of guests and homeowners.” l The industry’s largest expense was labor (which didn’t come cheaper in bulk).

The table below illustrates how a husband/wife team might have eked out a living by managing just ten homes. After homeowners paid listing fees, and the property manager paid telephone and supplies (tax deductible), the manager can

D Declining prices, as next-gen VRMs and listing sites compete for renters;

VACATION RENTALS AS A COTTAGE INDUSTRY

E Hijacking of VRM renters by third-party distributors;

F A meteoric rise in marketing costs as more renters use third-party distribution; G Airbnb’s emergence as a “virtual” VRM; H Expedia’s acquisition of HomeAway;

I New revenue models, where fees are the sole defense to Internet-driven pricing; and

J The evolution of smart home technology as the key to large scale economies and survival. 88

VRM Intel Magazine | Winter 2016

Metrics $ 1,700

Revenue Calculation

Average Weekly Rent

Per Home All Homes

Average Rental Weeks

Gross Rent

$ 30,600

$ 306,000

4.3

Average Stay (Nights)

Listing fee

$ 600

$ 6,000

# Reservations

Net Rent

$ 30,000

$ 300,000

$ 50

Res Fee Per Booking

Commission

$ 6,000

$ 60,000

20%

Commission (%)

Fee Income

$ 1,465

$ 14,651

# Homes

Manager Revenue

$ 7,465

$ 74,651

match the typical family income, which was $53,657 in 2014. (CNN Money, 9/16/2015 “The U.S. Census and Poverty Income”)

Why Structural Forces Limited VRMs to One or Two Destinations VRMs historically limited operations to one or two destinations where homes fell within 25 miles of a central service office.

This is because VRM operations had to be extensively tailored to local conditions which varied widely. Local service offerings depended on the economic status of renters and homeowners. Within each market, market share was likely rooted in history and depended on delicate differences in each competitor’s service. ResortQuest International’s rise and fall as a public company confirmed how local managers can win or lose homes by modifying payment due dates, security deposits and scores of other policies. (See page 90, “Building a National Brand”)

It was both administratively difficult and prohibitively expensive to centrally monitor, analyze and manage multiple locations.

The Emergence of Next-Gen VRM Business Models In recent years, a number of companies have sought to break through barriers that traditionally discourage VRMs from operating in multiple destinations. (I have compiled a list of these companies included in the table located at the bottom of the page.) Wyndham dove into vacation rentals after managing timeshare rentals worldwide. They believed guests preferred hotel-branded vacation rentals and would pay more for them. (Wyndham Vacation Rentals, 2012 “Vacation Rentals: Do Brands Matter?”) Vacation Rental Pros and Vacasa were started by executives who brought internet marketing know-how and aggressive pricing to regions too sparsely populated to support leading VRM competitors.

TurnKey Vacation Rentals similarly began in Austin, but raised investment capital based on its commitment to leverage emerging smart home, mobile, scheduling, pricing and other technology to create a more efficient VRM business model. They outsource housekeeping and have 150 full-time employees in 24 markets.

Airbnb is a unique listing site that is winning renter and homeowner loyalty through unique inventory, transaction ease, reliability, guarantees and processes that personalize the vacation rental experience by:

l Helping renters find lodging in cities where hotels are full or too expensive. l Facilitating room rentals while residents remain in the house. l Enabling a home to be rented for a few days while residents travel. l Opening new lodging revenues to homeowners as well as non-owners who sub-rent. VRM

Markets (10/2015)

The Growing Power of OTAs Within the vacation rental industry, the internet spawned online booking. This confronted professional managers with seemingly hostile rent-by-owner sites that were rolled up by HomeAway, which subsequently embraced managers after buying Instant Software (the leading provider of reservation software for professional VRMs).

For the rest of the world, online booking prompted investment in OTAs (with the most prominent being Priceline and Expedia) whose aggressive acquisitions allow them to control as much as 95% of U.S. OTA bookings, according to the American Hotel and Lodging Association (AH&LA).

Expedia recently acquired HomeAway, cementing its initiative to book vacation rentals. Expedia’s brands include Orbitz, Travelocity, Hotels.com, Hotwire, CheapTickets and Trivago, while Priceline owns Booking.com, Villas.com and Kayak.

Airbnb: Threatening to Replace HomeAway as the Face of Vacation Rentals Airbnb has the largest U.S. growth in short-term accommodations. The site is generating thousands of new urban vacation accommodations, and its popularity is luring homeowners and renters in non-urban areas, as well. This could turn Airbnb into the world’s most visible, trusted and influential lodging provider, which would continue to put pressure on HomeAway to adopt Airbnb’s business practices.

Airbnb is not dependent on VRMs and does not compromise to solicit their listings. Because many of its lodging hosts are new to the marketplace, Airbnb is not encumbered by old processes. It is shaping its business model to be consumer friendly. In contrast, the policies of HomeAway listing clients favor homeowners and VRMs.

Airbnb was the first listing site to successfully charge renters a fee for booking vacation rentals. Homeowners pay just 3 percent, which covers credit card costs, while the renter pays 6 to 12 percent. Airbnb’s influence is obvious. It even generates more bookings than leading hotels. Though privately held, its $26 billion valuation is higher than Expedia’s current market cap ($16.7 billion) and Airbnb enjoys enviable esteem among Wall Street analysts and urban homeowners and renters. This puts pressure on HomeAway, which has announced it will also begin imposing traveler fees on renters in 2016.

Implications for Our Industry, Community and Institutions OTAs took root by offering valuable services to lodging suppliers. For example: l OTAs bailed out a then grateful hotel industry from the 9/11 travel slump. l VRBO.com helped homeowners save money by bypassing professional managers.

Growth

Model

Vacation Rental Pros

Florida and South Carolina; 7offices

5 to 1,250 units in 10 years

Vacasa

13 states

1,200 to 2,200 homes; $26M to $100M months

Wyndham

500 destinations worldwide

9,000 U.S. homes. Purchased ResortQuest; 3 acquisitions between 4/2015 and 10/2015; 100,000 properties worldwide

Acquires leading rental managers; minimal change to local operations; centralized corporate oversight

TurnKey Vacation Rentals

24 markets

400 to 900 homes and 16 to 35 markets between 4/2015 and 10/2015

Lower fees and commissions; 30 to 50% more revenue; housekeeping outsourced

Airbnb

34,000 cities; 190 countries

300,000 to 1M homes between 2/2014 and 12/2014

Listing site functioning as “virtual” VRM

Internet marketing; outsource services in 6

Internet marketing; buying market share; high commission/fees

Chart data source: George Volsky Technology

| Technology

l FlipKey offered VRMs free guest reviews. l Airbnb enabled residents to rent their primary home as a shared space or entire home rental. Once inventory reached a critical mass, OTAs won renter loyalty. OTAs could then force suppliers to pay fees for renters they used and could raise the amount of fees charged under the threat of sending the booking to a competing supplier. Hotels struggle to reduce their dependence on OTAs, which charge 10 to 25 percent, reducing hotel profits. In John Kearney’s article, he states, “A recent study by HeBS Digital (2014) found that 70% of online bookings for independent hotels come from OTAs.” (Hotelient, 02/14/15 “Guest Marketing”)

OTA Value Proposition: “Share Shifting” It is important to get a handle on the OTA commercial value proposition: l OTAs provide value to renters who like and reward convenient one-stop shopping sites.

l OTAs’ negative impact on vacation rentals will be to nudge costs up and rent down. l OTAs’ potential value to VRMs is “share shifting.”

In share shifting, the first VRM to successfully use third-party distribution may steal market share from his competitors, who would then be motivated to pay OTAs to get it back. The AH&LA has come to similar conclusions. It teamed with Smith Travel Research (STR) in a special report that addressed the impact of OTAs on the hotel industry. (AH&LA, 2012 “Distribution Channel Analysis: A Guide for Hotels”) Among its ten conclusions:

l Hotel demand in the U.S. market is price inelastic. The net result of lower rates is lower revenue levels.

l The U.S. hotel market operates at the comp set level as a near zero-sum game. “Any claim that a channel vendor will create substantial new industry level demand is unrealistic.” l New distributors will become gatekeepers as bookings increasingly require a technology infrastructure to support inquiries and transaction delivery, as distribution channels gradually become the preferred points of entry for consumers, charging 10 to 20 percent fees for up to half of all hotel business. This does not mean that VRMs should not use OTAs. VRMs need to be where the renters are. Share shifting is not an OTA goal. OTAs simply pursue booking fees. Share shifting is collateral damage.

The point here is that VRMs should understand distribution for what it is and adjust expectations and strategies accordingly (obviously, any increased costs must be passed back to renters).

Why OTAs and Virtual VRMs Must Favor Renters OTAs and virtual VRMs require a high volume of low-profit transactions. Their ideal goal is to take a fee for every vacation rental. To pursue this, they must offer travelers the greatest shopping advantage: l Displaying inventory for all competing homes on one site, l Enabling renters to easily compare prices,

l Encouraging low prices (i.e. Priceline, Hotwire, CheapTickets), l Discouraging unadvertised fees,

l Enabling renters to price bargain by showing vacant homes, and l Policing listings to weed out phantom homes offered illegally.

How This Could Impact Legacy VRMs Third-party distributors might argue (and believe) that their sites favor neither VRMs nor traveler — but provide a market that benefits everyone. We’d love that to be true.

Unfortunately, industry occupancy is 37 percent. When supply chronically exceeds demand, renters use this to bargain. Renters want to know when supply exceeds demand. Can Expedia, vigorously competing with Priceline, hold this back just to mollify VRMs? 90

VRM Intel Magazine | Winter 2016

Another unfortunate circumstance is the fragmented nature of the vacation rental industry. Pricing is most heavily influenced by individual homeowners, not revenue managers. Pricing is cutthroat and chaotic.

Renters want to see discounts offered by every homeowner whose modest pricing strategy is to generate even a few dollars to offset the cost of second-home ownership. Renters pressure VRMs to match the discount. A VRM who declines may feed last and, in turn, lose homeowners. A renter-friendly OTA marketplace shifts bargaining power to renters, depressing revenue. Is this likely? Do you ever use Priceline or Hotwire? Impact on VRM Community and Associations

The AH&LA has unleashed its lobbyists to oppose OTAs. When OTAs sought legislation exempting them from local tax requirements, AH&LA opposed it. Fearing higher fees, AH&LA also opposed Expedia’s acquisitions of Travelocity and Orbitz.

VRMs face the same conflict. However, are professional managers more entwined with OTAs than hotels? What might this mean for the Vacation Rental Managers Association (VRMA)? HomeAway was primarily a rent-by-owner listing service before it acquired Instant Software. It was so successful in winning the loyalty of Instant Software’s VRM clients that its annual user conference, RezFest, approximated VRMA’s annual conference in popularity and attendance. VRMA may do lobbying in the future, but OTAs contribute substantially as sponsors. VRMA’s growing number of suppliers has voting power and bylaws allow two suppliers to be elected to VRMA’s Board of Directors.

One of the supplier board members for the VRMA is Matt Curtis from HomeAway. I personally endorse Curtis as a man of integrity who has significantly advanced our industry’s cause against local restrictions, and we are lucky at the VRMA to have him. It is worth noting that hotels also allow suppliers on their AH&LA board. They are appointed by AH&LA’s president, not elected, which allows AH&LA to combat OTAs without strife at the board level.

Volsky’s Prognosis Investments Competing with Each Other: Virtual VRMs and OTAs compete for the same dollars targeted by next-gen VRMs. There is simply not enough money in vacation rentals to boost profits for both categories (more on this in my upcoming white paper). l OTAs: Expedia and Priceline are on track to dominate online travel bookings and to fully integrate vacation rentals. The impact will depend on whether Airbnb pressures all OTAs to charge renters for traveler fees and on whether or not competing OTAs offer free listings by generating revenue from advertising. l Virtual VRMs May Emerge as the Industry’s Dominant Influence. To protect its market share, HomeAway will be under pressure to emulate Airbnb.

Next-Gen VRMs: The dot‒com era has shown what can happen when industries are flooded by technology investment. More start-ups fail than succeed. But one or more next-gen companies will succeed and life will change for everyone. “For Rent By Owners” and Smaller VRMs will be Affected Least. There is no evidence that emerging trends will prevent vacation rentals from operating on a cottage industry level. The Future of Medium-to-Large VRMs. The non-urban growth of OTAs and next-gen VRMs will come at the expense of medium-to-large legacy VRMs. This group’s future may depend on the speed with which its members replace expensive labor with more economical technology, starting with smart home systems.

George Volsky is one of the vacation rental industry’s most experienced analysts. A former director of Analysis and Research for Escapia and Instant Software and consultant for leading industry VRMs, George has served as the industry’s advising analyst for the 2008 PhoCusWright report sizing our industry, authored studies regarding the economic impact of vacation rentals on state and local economies, and delivered hundreds of education seminars to VRMs. He specializes in pricing and competitive growth strategy.

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

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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 2016

| Business

BUILDING A NATIONAL BRAND in vacation rentals A

t the same time Airbnb, Expedia, TripAdvisor and Priceline battle for market share in the vacation rental online marketplace, the industry itself is experiencing a transformation among its professionally managed vacation rental companies. Currently several existing companies are emerging, consolidating and competing. Their common goal: building a national brand in vacation rental management.

TurnKey Vacation Rentals, Vacasa, Vacation Rental Pros and Wyndham Vacation Rentals are a few of the U.S. companies striving to create a sustainable national brand in vacation rental management. To attain the goal, each of these companies has a different strategic approach and is employing a variety of methods.

Summary

ResortQuest International, Inc. was formed in 1998 through the acquisition of 13 companies, including 12 vacation rental management companies and one software company, representing approximately 10,000 vacation rental units and creating the first national brand in the U.S. vacation rental industry.

As we look to the future of professionally managed vacation rentals, it can be a valuable exercise to take time to examine the history of the industry, to discover potential pitfalls and to identify lessons that can be learned and applied as we step into the next generation of vacation rental management.

After going public in May of 1998, ResortQuest International grew quickly with 28 subsequent acquisitions adding approximately 10,000 vacation rental units between 1998 and 2001. The company’s inventory peaked in mid-2001 with over 20,000 reported units before hitting its decline. In 2002, with falling stock prices, management discord and the aftermath of 9/11, ResortQuest International began to lose revenue and investor confidence.

The resulting study is detailed. Thanks to required reporting of a publicly traded company, much of the history has been preserved. In addition, the majority of ResortQuest’s original board members, and many of its executives, remain active in the industry. They were able to provide insight and color into the challenges faced by the company. The whitepaper in its entirety can be found on VRM Intel at http://vrmintel.com/resortquest, but in this article we summarize the study and many of our findings.

After Leucadia’s attempts to change management, attract and retain owners and reduce expenses, ResortQuest was still

Last year VRM Intel conducted an in-depth study into the rise and fall of ResortQuest International, Inc. Our objective was twofold. We sought a thorough documentation of the company’s journey, and we were eager to learn more about the obstacles and market environment facing the professionally managed vacation rental industry today.

VRM Intel Magazine | Winter 2016

In 2003, ResortQuest (15,784 units) sold to Gaylord Entertainment in hopes of bringing new management, more customers and necessary resources to the company. Unfortunately, the challenges also proved to be insurmountable for Gaylord. In the end of 2004, Gaylord sold First Resort Software to Instant Software. By 2007, Gaylord split ResortQuest International in two and sold the Hawaii property management (4,500 units) to Interval Leisure Group, Inc. (NASDAQ: IILG) and the remaining ResortQuest Mainland management to Leucadia National (NYSE: LUK) (9,300 units).

operating at a loss. Leucadia found a buyer for ResortQuest Mainland in Wyndham Worldwide Corp. (NYSE: WYN).

In September 2010, Wyndham purchased ResortQuest Mainland, whose inventory had decreased to 6,000 units. To further punctuate the decline of ResortQuest, Interval retired the ResortQuest name of the Hawaii properties and returned to the original Aston brand in 2009, and Wyndham began rebranding the ResortQuest trade name to the Wyndham Vacation Rentals brand in 2012. All predictors pointed to success in building a national brand for the fastgrowing vacation rental segment, so why did ResortQuest fail? And is the idea of building a national brand still achievable in the vacation rental industry? The study examined the history of ResortQuest in the following sections:

B May 1998-December 1999 (David Sullivan, CEO) C December 1999-October 2002 (David Levine, CEO)

D October 2002-August 2003, ( Jim Olin, CEO) E August 2003-July 2007, Gaylord Entertainment

F July 2007-September 2010, Leucadia G September 2010-2014, Wyndham Worldwide

Throughout the history of ResortQuest and its varied management, ten identifiable key factors contributed to the ongoing struggles. B Hotel-based executive leadership

Both the founding leadership of ResortQuest and the management team at Gaylord approached building the company with a hotel-based archetype.

“The main paradigm difference was that successful hotel industry managers are more authoritarian and ‘take ownership’ of their properties,” said Jim Olin. “It works for that industry. Hotel managers control the interior, the marketing, and the overall operations. Vacation rental operators have to persuade, convince and work with homeowner associations, homeowners, and others to get everything accomplished. Many of the initial marketing efforts, interior unit grading and other initiatives were from a ‘top down’ approach, where corporate dictated what the field was doing.” The friction between the hotel leadership and the vacation rental operators led to crippling discord at the board level. Tom Leddy, co-founder at First Resort Software said, “This attitude led to a sometimes subtle, sometimes not subtle, pushing out of the founders of each acquired company and did not encourage any kind of ‘best practice’ concept across some really sharp people.” Balancing hotel-like standardization and local-operator relational needs was a challenge the hotel leadership inevitably could not overcome.

C Financial and reporting requirements associated with being a publicly traded company

As a new publicly traded company, ResortQuest had a critical need to forecast earnings accurately and provide transparent reporting, and in its infancy, the company was hit with additional corporate accounting regulations and requirements. “ResortQuest was a relatively small public company in the midst of the nation’s reactions to the Enron debacle,” said Olin. “All of the new laws, Sarbanes Oxley for example, caused our ‘little’ company to have to comply with very difficult and expensive new accounting procedures. Additional expensive resources were required, which shifted much of our top-tier management focus inward instead of outward.”

The investment community historically had been uncomfortable with seasonal revenues, but the lack of ability to accurately project earnings was notably detrimental when earnings were erroneously calculated in 1999, resulting in ResortQuest’s failed secondary offering, a stock price free-fall and an unconstructive shift in management. “The transition of these acquired companies was much more extensive and complicated than what was first thought, causing a great deal more time and expense and lessening the ability to clearly project both cash flow and growth metrics,” said Olin. D High acquisition costs and the need to accumulate and restructure debt

Pressures from Wall Street drove ResortQuest to close many acquisitions at high multiples in order to boost short term earnings. The excessive cost of acquisitions coupled with the increasing costs of integrating new companies into the ResortQuest system proved to be a contributing factor in its downfall.

“It was seen as easier to impact EBITDA through acquisition than by operations, except 48 hours before quarter-end when major pressure was put on local teams to bring the numbers in,” said Leddy. “New companies were left to their own devices until the quarter-end financial crunch hit.” The high costs of acquisition resulted in the need to assume substantial debt which further increased the net cost per unit, in some cases significantly. E Difficult centralization of vacation rental management operations

With the initial roll-up of 12 vacation rental companies along with the addition of 18 companies within 18 months, ResortQuest had a pressing need to integrate these companies under centralized management quickly and efficiently, which proved to be more difficult and expensive than expected. Each company had its own marketing initiatives, housekeeping and maintenance operations (both local and outsourced), accounting systems, government regulations, owner-based communications and commission structures. The centralization of operations across destinations was a complex undertaking which was alien to a hotel-based leadership team.

F Distracted with attempts to be a marketing technology company

The initial purchase of First Resort Software along with the urgent need to centralize operations, accounting and marketing led to an unbalanced focus on technology and a subsequent desire to be the number one online marketing portal for vacation rentals in the world, especially under Levine’s leadership. The need to utilize centralized technology was crucial in accurately projecting earnings, onboarding new operators under the ResortQuest umbrella and creating a one-stop marketing website with real-time online booking and remarketing tools. However, once the idea took hold Levine became fixated on building a global web portal for vacation rentals, partnering with AOL and CompuServe who proved to be unfortunate allies.

G Insufficient management experience

Although the founding management team had meaningful experience in the hotel space, most of the leaders had never previously held the positions to which they named themselves. David C. Sullivan had not served as a CEO, CFO Jeff Jarvis had previously been a controller, CIO Fred Farmer had never been a CIO and so forth.

The lack of management skills at the top was compounded by extremely difficult and complex management challenges, along with the unprecedented attempt to bring vacation rental operators under one umbrella. Business

| Business

H Vacation rental guests did not associate with a national brand

Throughout the ResortQuest history, management believed consumers would eventually associate positively with the brand, which would lead to profitable synergy between destinations. In the vacation rental industry, critical mass was both necessary and unachievable based on the cost of acquiring inventory under the existing model. Also, Gaylord had performed extensive marketing research and was quantifiably convinced that, with their Country Lifestyle demographic along with synergy from the brand equity in Grand Ole Opry and Bass Pro Shops, they could be successful in creating a viable national brand.

The complete abandonment of their focus on this target market demonstrated their failure to capitalize on brand identification. I Organic growth in inventory

Building successful, ongoing relationships with homeowners is a key component in any vacation rental business, and ResortQuest’s hotel-based leadership struggled to successfully manage this piece.

Being a part of a corporate entity did not hold perceived value or appeal for homeowners, who base their choices about property management on trust, accountability, relationships and ethics, as much as the stability of rental income. Owners were not properly incentivized to connect with the ResortQuest culture. Increased corporate attention to standardization and multi-destination marketing, along with decreased owner buy-in, created a lack of loyalty to the ResortQuest brand. J Rent-by-owner movement

Before online marketing channels became common, vacation rental owners relied on professional property managers to reach consumers through signage, brick and mortar locations, direct mail and rental catalogs. The emergence of online marketing channels, in addition to increased self-management education, precipitated a movement towards owner management. By 2006, HomeAway bought VRBO.com making it possible to easily access renters, and within two years, a recession made it necessary for owners to look for ways to cut costs. The self-management trend spread quickly, and many property managers experienced debilitating losses in inventory as a result. ResortQuest was no exception.

K External Factors

In each stage of ownership, external forces contributed to ResortQuest’s demise. l 2001: September 11

The events associated with the 9/11 attacks negatively affected the entire travel industry. In mid-2001 ResortQuest was already suffering with yet another adjustment to earnings resulting from decentralized accounting. With the events of 9/11, the stock price fell to an all-time low of $3.95 per share resulting in wage freezes and layoffs.

l 2003-2006: Disease and weather and related incidents

In 2003, the SARS outbreak stalled international air travel which damaged the Hawaii operation, one of the two “bookends” of the company. For Florida (the other “bookend”), from 2004-2006, a series of hurricanes resulted in decreased occupancy, cancellations and the need to adjust advance deposit and travel insurance policies. l 2007-2012: Real estate market meltdown and recession

While Gaylord’s shareholders were relieved to have unloaded the ResortQuest division before the real estate market collapsed, new owner Leucadia and ResortQuest President Park Brady were left to experience the fallout.

Is Building a National Brand Possible? Is the idea of building a national brand viable in the U.S.? Industry insiders unanimously say “yes.”

With advancement in technology, the ability to mass market, improved abilities to centralize operations and a more thorough understanding of the vacation rental industry, several innovative business models have recently sprouted with the goal of being a leading national multi-destination vacation rental provider. By examining the lessons learned from ResortQuest’s history, there are key strategic considerations for achieving a successful national brand in the vacation rental management industry. B Pitfalls of a publicly traded environment

The need to accurately project earnings, successfully manage debt and effectively communicate seasonal volatility makes working in a publicly traded environment challenging. A company looking to build a profitable national brand will likely find it beneficial to:

l Avoid being publicly traded until all systems and operations are fully centralized, accounting procedures are accurate and seasonal gains and losses are properly communicated, or l Be a part of a publicly traded company who can bury volatility within divisions which are less likely to cause alarm among the investment community. C Demonstrated organic growth

In several cases, companies which were acquired at high multiples also had a recent, relevant history of losing inventory and market share. With all of the existing challenges involved in rolling up vacation rental operators under one umbrella, attempting to roll up and grow companies which are already underperforming exponentially increases the difficulty and burden on the company. Demonstrated organic growth is a factor to consider in expanding in new markets. D Owner buy-in

Communicating the value proposition to homeowners while simultaneously preserving personalized, consistent relationships at the local level helps to ensure success in developing a national multi-destination presence. This includes incentivizing owners in a post-acquisition environment, demonstrating the advantages of being a part of a 94

VRM Intel Magazine | Winter 2016

national company’s management team will be laser-focused on providing the best relationships and service in the market.

Building a company culture with a highquality service mindset, a national brand can build solid brand equity and circumvent objections at the local level. I Cost of acquisition and onboarding operators

ResortQuest accomplished many acquisitions at high multiples and incurred excessive debt in the process. Strategic determination of an acquisition model will include cost of acquisition, cost of debt, inventory analysis, varied commission structures, the competitive landscape, the onboarding/transition process, communications and a clear vision on how an acquired company fits into the overall structure. J External Factors

larger company in acquiring new homeowners, having consistent local on-the-ground relationships, setting clear expectations and over-delivering on services. E Effective marketing to new and past guests

A competitive advantage a national company has is the ability to utilize customer data on a large scale to more effectively attract, retain and intelligently cross-promote to guests.

Lifecycle analysis, customer relationship management, behavioral marketing and a centralized database structure allow a national company to better target and incentivize guests than local competitors. Wyndham’s appointment of Marriott’s Mary Lynn Clark, who has substantial experience in points programs with Marriott Vacation Club, as president of North American Vacation Rentals indicates a strong strategic focus towards creating guest rewards programs to support cross-destination marketing efforts. F Centralization of operations and technology

Not all departments in a vacation rental business can be fully scaled immediately, but reservations, accounting, marketing, IT and human resources are areas of methodical consideration.

A solid strategy in how to merge these functions without losing the quality of owner relations and guest services provides exponential dividends from economies of scale in a multidestination company. G Standardization

ResortQuest leadership aptly recognized early the need to create standardization to manage brand-related customer expectations. By establishing a rating system, they intended to create more consistency in inventory.

However, they failed to implement and communicate this effectively at the local level. A national company in today’s consumer environment has the opportunity to manage standardization through regulating laundry and linens, certifying housekeepers and inspectors and conforming to recognized, nonprohibitive lodging standards.

In each stage of ResortQuest management, external factors negatively influenced their ability to grow.

Whether it is weather-related, political, economic or disease-related, the vacation rental industry is characterized by volatility. Managing and planning for inevitable downturns are necessary in building a stable national company.

In its history, ResortQuest International operated under very different strategic paradigms, all of which proved to be ineffective in accomplishing their ultimate goal. Based on these case studies, the building of a successful national brand will continue to be out of reach for entrants who do not understand and overcome the unique obstacles inherent in the vacation rental industry along with the obstacles faced on the destination level.

New Entrants Interestingly, among the companies seeking to build a multi-destination management company, each approaches the objective using very different strategies in financing, pricing, growth strategy (acquisition vs. organic), inmarket team structure, property standards, marketing, technology, company culture and guest/owner service levels.

Which of these strategies will prove to be the winner? There are many types of vacation rentals, many types of property owners, many types of guests, and many differences between destinations. If we have learned anything in the last five years, it is that the vacation rental industry isn’t a zero-sum game.

However, long term success in vacation rental management will continue to require the ability to elicit trust and create lasting relationships, both with property owners and guests, a factor that is difficult to scale and standardize across multiple destinations. The company that can cost-effectively create inmarket trust with a centralized structure will gain a major advantage in the race to the top. By Amy Hinote

H Management who focuses on a relational, service-based culture

The vacation rental industry is built on personal relationships with both homeowners and guests. Consequently a successful Business

| Business

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VRM Intel Magazine | Winter 2016

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VRM Intel Magazine | Winter 2016

ENERGIZE YOUR VACATION RENTAL BUSINESS “The expanded Kigo™ product, especially the operations management addition, has completely changed the way we operate and, ultimately, grow our business.” – Jonathan Browning, Owner of BeachWalk Vacation Properties

Get Connected and Learn How You Can Manage Your Vacation Rental Business Better and Faster. www.kigo.net | 1-855-977-0843

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